Agenda packet, second session — Malibu City Council, June 12, 2023 (part 2 of 3)

CITY OF MALIBU

RUTH QUINTO
APRIL 1, 2023 - APRIL 30, 2023
ACCOUNT NUMBER:

Fixed Income Securities
Certificates of Deposit continued

ESTIMATED
% OF ADJ PRICE/ ADJ COST/ CURRENT CURRENT UNREALIZED ACCRUED ANNUAL ANNUAL DESCRIPTION ACCOUNT QUANTITY ORIG PRICE ORIG COST PRICE MARKET VALUE GAIN/LOSS INTEREST INCOME YIELD (%)

CELTIC BANK CD
SALT LAKE CTY UT ACT/365

FDIC INSD
CPN 2.000% DUE 12/27/27
DTD 12/27/19 FC 01/27/20
CUSIP 15118RTH0
Acquired 12/09/19 L 0.42 250,000 100.00 250,000.00 88.1250 220,312.50 -29,687.50 54.80 5,000 2.26 Total Certificates of Deposit 12.49 6,725,000 $6,725,001.66 $6,605,357.30 -$119,644.36 $47,557.08 $291,000 4.41 $6,725,007.00
Total Fixed Income Securities 91.14 $48,397,132.8 $48,200,964.37 -$196,168.47 $115,458.99 $890,188 1.85 4 $48,397,138.1
8 ^ Denotes Certificate of Deposit with a maturity date in the next 60 days. Please contact us for further investment opportunities or any assistance. nc Cost information for this tax lot is not covered by IRS reporting requirements. Unless indicated, cost for all other lots will be reported to the IRS.

Mutual Funds
If a portion of your fund position was converted, the 'Client Investment' value may include reinvestments from previously held positions.

Open End Mutual Funds
Open End Mutual Fund shares are priced at net asset value. Estimated Annual Income and Yield refer to Dividends and Interest Income only, and typically do not reflect Total return.

EST MATED
% OF ADJ PRICE/ ADJ COST/ CURRENT CURRENT UNREALIZED ANNUAL ANNUAL DESCRIPTION ACCOUNT QUANTITY ORIG PRICE ORIG COST PRICE MARKET VALUE GAIN/LOSS INCOME YIELD (%)

FIDELITY FUNDS

FIDELITY TREASURY ONLY

PORT INSTL CLASS SHS
FRSXX
On Reinvestment
Acquired 03/17/23 S nc 4,510,522.44000 1.00 4,510,522.44 4,510,522.44 0.00 Reinvestments S nc 6,625.53000 1.00 6,625.53 6,625.53 0.00 Total 8.54 4,517,147.97000 $1.00 $4,517,147.97 1.0000 $4,517,147.97 $0.00 $207,337 4.59 16 072 ANCA ANC9

Page 14 of 18 ends

CITY OF MALIBU

RUTH QUINTO
APRIL 1, 2023 - APRIL 30, 2023
ACCOUNT NUMBER:

Mutual Funds
Open End Mutual Funds continued

EST MATED
% OF ADJ PRICE/ ADJ COST/ CURRENT CURRENT UNREALIZED ANNUAL ANNUAL DESCRIPTION ACCOUNT QUANTITY ORIG PRICE ORIG COST PRICE MARKET VALUE GAIN/LOSS INCOME YIELD (%) Client Investment (Excluding Reinvestments) $4,510,522.44 Gain/Loss on Client Investment (Including Reinvestments) $6,625.53 Total Open End Mutual Funds 8.54 $4,517,147.97 $4,517,147.97 $0.00 $207,337 4.59 Total Mutual Funds 8.54 $4,517,147.97 $4,517,147.97 $0.00 $207,337 4.59 nc Cost information for this tax lot is not covered by IRS reporting requirements. Unless indicated, cost for all other lots will be reported to the IRS.

Activity detail
Income and distributions

DATE ACCOUNT TYPE TRANSACTION QUANTITY DESCRIPTION PRICE AMOUNT 04/03 Cash DIVIDEND FIDELITY FUNDS 6,625.53

FIDELITY TREASURY ONLY

PORT INSTL CLASS SHS
033123 4,510,522.44000
AS OF 3/31/23
04/03 Cash DIVIDEND FIDELITY FUNDS 10,560.81

FIDELITY TREASURY PORT

INSTITUTIONAL CLASS SHS
033123 4,510,522.44000
AS OF 3/31/23
04/10 Cash INTEREST UBS BANK USA CD 244.18
SALT LAKE CTY UT ACT/365

FDIC INSD
CPN 1.150% DUE 12/08/26
DTD 12/08/21 FC 01/08/22
040823 250,000
AS OF 4/08/23
CUSIP 90348JX96
17 072 ANCA ANC9

Page 15 of 18 ends

CITY OF MALIBU

RUTH QUINTO
APRIL 1, 2023 - APRIL 30, 2023
ACCOUNT NUMBER:

Activity detail continued
Income and distributions

DATE ACCOUNT TYPE TRANSACTION QUANTITY DESCRIPTION PRICE AMOUNT 04/18 Cash INTEREST COMENITY BANK CD 339.73
WILMINGTON DE ACT/365

JUMBO CD FDIC INSURED
CPN 2.000% DUE 03/18/26
DTD 03/18/22 FC 04/18/22
041823 200,000
CUSIP 99000QQW7
04/27 Cash INTEREST CELTIC BANK CD 424.66
SALT LAKE CTY UT ACT/365

FDIC INSD
CPN 2.000% DUE 12/27/27
DTD 12/27/19 FC 01/27/20
042723 250,000
CUSIP 15118RTH0
04/27 Cash INTEREST COMENITY CAPITAL BANK CD 265.41
SALT LAKE CTY UT ACT/365

FDIC INSD
CPN 2.500% DUE 06/27/24
DTD 06/27/19 FC 07/27/19
042723 125,000
CUSIP 20033AZ58
04/28 Cash INTEREST TEXAS EXCHANGE BK SSB CD 233.56
CROWLEY TX ACT/365

CALLABLE FDIC INSD
CPN 1.100% DUE 10/29/26
DTD 10/29/21 FC 11/29/21
042923 250,000
AS OF 4/29/23
CUSIP 88241TMC1
04/28 Cash DIVIDEND ALLSPRING 551.82

GOVERNMENT MONEY MARKET

SWEEP CLASS
042823 165,085
Total Income and distributions: $19,245.70
18 072 ANCA ANC9

Page 16 of 18 ends

CITY OF MALIBU

RUTH QUINTO
APRIL 1, 2023 - APRIL 30, 2023
ACCOUNT NUMBER:

Activity detail continued
Securities purchased

DATE ACCOUNT TYPE TRANSACTION QUANTITY DESCRIPTION PRICE AMOUNT 04/03 Cash REINVEST DIV 6,625.53000 FIDELITY FUNDS -6,625.53

FIDELITY TREASURY ONLY

PORT INSTL CLASS SHS
REINVEST AT 1.000
Total Securities purchased: -$6,625.53
Cash sweep activity
Our Cash Sweep program allows you to earn a return on the idle cash balances in your account by automatically investing such balances into one of our cash sweep options. These 'sweep transactions' may represent a net amount for the day and occur on settlement date. The following section displays transfers into and out of your sweep option. Transactions displayed here are Transfer To, Transfer From and Reinvested Dividends and Interest. These transaction amounts are not included in your cash flow summary.

DATE TRANSACTION DESCRIPTION AMOUNT DATE TRANSACTION DESCRIPTION AMOUNT 04/01 BEGINNING BALANCE 10,750.67 04/19 TRANSFER TO ALLSPRING 339.73

GOVERNMENT MONEY MARKET
04/03 TRANSFER TO ALLSPRING 142,500.00 04/28 REINVEST DIV ALLSPRING 551.82

GOVERNMENT MONEY MARKET GOVERNMENT MONEY MARKET
04/04 TRANSFER TO ALLSPRING 10,560.81 04/28 TRANSFER TO ALLSPRING 690.07

GOVERNMENT MONEY MARKET GOVERNMENT MONEY MARKET
04/11 TRANSFER TO ALLSPRING 244.18 04/30 ENDING BALANCE 165,637.28

GOVERNMENT MONEY MARKET
19 072 ANCA ANC9

Page 17 of 18 ends

CITY OF MALIBU

RUTH QUINTO
APRIL 1, 2023 - APRIL 30, 2023
ACCOUNT NUMBER:

Bank Deposits Through Teller April 1 - April 30
Wells Fargo Bank, N.A. (Member FDIC) Account number 9091092513 Questions? Call us at 1-800-266-6263 Deposits made in a bank branch on the last business day of the month will typically appear on your next statement.

DATE TRANSACTION DESCRIPTION AMOUNT BANK BALANCE
04/01 BEGINNING BALANCE $0.00
04/30 ENDING BALANCE $0.00
Specific instructions and disclosures
Available funds
"Available for loan" reflects the approximate amount available as of the statement period ending date and should be reduced by any pending checks and Visa charges not yet cleared. This amount is the approximate amount available for withdrawal and loans. A margin loan is a variable rate loan secured by your account.

Income on non-reportable accounts
Your income summary is categorized into taxable and tax-exempt income based upon the securities that you hold. Please be aware that, since this is a 1099 non-reportable account, this income will NOT be reported to the IRS, but is being provided to you for informational purposes only.

Callable Securities
Securities that are subject to a partial call will be selected by an impartial lottery process in which the probability of your securities being selected for redemption is proportional to the holdings of all shareholders of such securities held in street name. If a security is called prior to maturity it may affect the yield you receive. Additional information is available at www.wellsfargoadvisors.com under Legal Disclosures or the written procedures are available upon request. 20 072 ANCA ANC9

Page 18 of 18 ends

CITY OF MALIBU

RUTH QUINTO
APRIL 1, 2023 - APRIL 30, 2023
ACCOUNT NUMBER:

Cost basis - To add or update information or modify your reporting options, please contact Your Financial Advisor.

This statement presents estimated unrealized or realized gains or losses for your information only. If acquisition or other information is not available, the gain/loss information may not be displayed and section and summary totals may not reflect your complete portfolio. Cost basis information is not verified by WFCS or Wells Fargo Advisors Financial Network and should not be relied upon for legal or tax purposes. Revisions to this information (due to corporate mergers, tenders and other reorganizations) may be required from time to time.

Cost basis for factored bonds (GNMA, CMO, etc.) will be adjusted for paydown of principal. Systematic investments in mutual funds and reinvested dividends for mutual funds and stocks have been consolidated for each position. Unit cost data for systematic investments and dividend reinvestment securities is provided for informational purposes only and is a non-weighted average.

Your account statement should not be used for tax preparation without assistance from your tax consultant. We do not report capital gains or losses for non-covered securities to he IRS.

Cost basis options
Unless specific tax lots are selected at trade time, sales of tax lots will occur using the cost basis election reflected in the Account profile section.

Estimated accrued interest on Fixed Income securities
Estimated accrued interest is included in the Portfolio summary as a convenience to you and represents the estimated portion of he interest that would be received upon the sale of he Fixed Income posi ions in your account, calculated from the date of the last coupon (or dated date) through the date of the account statement, based upon information provided by the issuer. This is not a guarantee that this amount will be realized in your account. Actual income will be based upon the payout schedule of the securities held in your account. If you own a Foreign Fixed Income security, and it is denominated in a foreign currency, the Estimated accrued interest will not be accurate. 21 072 ANCA ANC9
April 29, 2023
Portfolio Report
Prepared for: City of Malibu
Prepared by: William Gomberg
Managing Partner
Gomberg/McQuilkin Wealth Mangement Group
701 S. Parker Street
Suite 2500
Orange, CA 92868
714-497-4024
This report is prepared by your Financial Advisor using software provided by Wells Fargo Advisors. Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), a registered broker-dealer and nonbank affiliate of Wells Fargo and Company. WFAFN uses the trade name Wells Fargo Advisors. © 2023 Wells Fargo Advisors. All Rights Reserved. Page 1 of 36 ATTACHMENT 2
22 Portfolio Reports City of Malibu
Table Of Contents
Cover Page 1
Accounts Included in the Report 3
Portfolio Summary 4
Portfolio Summary - Security Detail 5
Portfolio Estimated Income 7
Fixed Income Overview 9
Fixed Income Statistics 12
Fixed Income Credit 17
Fixed Income Analytics 18
Ratings Distribution 19
Redemption Distribution 21
Redemption Distribution Rolling 12 Months 23
Duration Distribution 25
Coupon Distribution 27
Understanding Your Portfolio 29
Disclosures 32
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 2 of 36 23 Portfolio Reports City of Malibu
Accounts Included in the Report
Account Number Account Name Account Nickname Tax Status Int/Ext Last Updated XXXX7847 CITY OF MALIBU Exempt Internal 4/28/2023
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 3 of 36 24 Portfolio Reports City of Malibu
Portfolio Summary
By: Security Sub Type
Bond (91.14%)
Fund (8.54%)
Cash Alternative (0.31%)
Total
$ %
Bond 48,200,964 91.1%
CITY OF MALIBU (XXXX7847) 48,200,964 91.1%
Fund 4,517,148 8.5%
CITY OF MALIBU (XXXX7847) 4,517,148 8.5%
Cash Alternative 165,871 0.3%
CITY OF MALIBU (XXXX7847) 165,871 0.3%
Portfolio Summary Total 52,883,983 100.0%
Total Portfolio Value as of 04/28/23:__$ 52,883,983
This report is not complete without the Understanding Your Portfolio report which contains important terms and definitions. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 4 of 36 25 Portfolio Reports City of Malibu
Portfolio Summary - Security Detail
By: Security Sub Type
Bond (91.14%)
Fund (8.54%)
Cash Alternative (0.31%)
Total
ID Description Quantity Price $ %
Bond 48,200,964 91.1%
CITY OF MALIBU (XXXX7847) 48,200,964 91.1%
02007GM34 ALLY BANK 5.25% 032425 250,000 100.47 251,168 0.5% 02589ABV3 AMERICAN 2.05% 032425 200,000 94.70 189,396 0.4% 062683HE0 BANK HOPE 5.25% 122623 250,000 100.22 250,545 0.5% 06740KRN9 BARCLAYS B 5.4% 032124 250,000 100.43 251,078 0.5% 07371DRD1 BEAL BANK 4.75% 022124 250,000 99.86 249,648 0.5% 05580AX58 BMW BK N A 5.1% 091725 250,000 100.26 250,650 0.5% 14042RLZ2 CAPITAL ONE 2.5% 061924 250,000 97.37 243,420 0.5% 15118RTH0 CELTIC BANK 2% 122727 250,000 88.13 220,313 0.4% 15987UAU2 CHARLES S 5.35% 032224 250,000 100.14 250,360 0.5% 75524KQH0 CITIZENS B 5.3% 032124 250,000 100.34 250,860 0.5% 99000QQW7 COMENITY BANK 2% 031826 200,000 92.31 184,629 0.3% 20033AZ58 COMENITY C 2.5% 062724 125,000 97.30 121,623 0.2% 200339FB0 COMERICA 5.25% 093024 250,000 100.44 251,093 0.5% 23204HNC8 CUSTOMERS 4.7% 081624 250,000 99.73 249,325 0.5% 254673Z66 DISCOVER 4.95% 111626 200,000 100.18 200,350 0.4% 359899AN1 FULTON BA 5.35% 062424 250,000 100.52 251,293 0.5% 564759RJ9 MANUF & TR 4.9% 120924 250,000 99.92 249,793 0.5% 61760ASZ3 MORGAN ST 3.55% 120623 250,000 99.20 248,005 0.5% 653344BX8 NEXBANK SSB 5% 062023 250,000 100.00 250,010 0.5% 67523TCE1 OCEANFIRS 5.15% 032124 250,000 100.21 250,535 0.5% 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 5 of 36 26 Portfolio Reports City of Malibu
Total
ID Description Quantity Price $ %
759701BH7 RENASANT B 5.3% 032124 250,000 100.34 250,860 0.5% 80280JVQ1 SANTANDER 5.25% 031524 250,000 100.29 250,728 0.5% 856285V81 STATE BAN 4.95% 120225 250,000 99.95 249,865 0.5% 87165HX21 SYNCHRONY BA 5% 032426 250,000 100.12 250,288 0.5% 88241TMC1 TEXAS EXC 1.10% 102926 250,000 87.80 219,490 0.4% 90348JX96 UBS BANK 1.15% 120826 250,000 87.65 219,115 0.4% 912797FP7 UST BILL 0.0 062023 4,000,000 99.33 3,973,200 7.5% 912796XY0 UST BILL 0.0 081023 5,117,000 98.63 5,046,744 9.5% 91282CFK2 UST NTS 3.5 091525 4,000,000 99.09 3,963,720 7.5% 91282CDA6 UST NTS .25% 093023 4,000,000 98.12 3,924,680 7.4% 91282CCW9 UST NTS .75% 083126 4,000,000 90.88 3,635,120 6.9% 91282CEF4 UST NTS 2.5% 033127 4,000,000 95.96 3,838,400 7.3% 91282CCX7 UST NTS .375% 091524 4,000,000 94.61 3,784,200 7.2% 91282CED9 UST NTS 1.75% 031525 4,000,000 95.73 3,829,360 7.2% 912828W71 UST NTS 2.125% 033124 4,000,000 97.55 3,902,160 7.4% 9128286L9 UST NTS 2.25% 033126 4,000,000 95.93 3,837,320 7.3% 91282CFH9 UST NTS 3.125% 083127 1,894,000 98.24 1,860,703 3.5% 919853HV6 VALLEY NA 5.15% 091823 250,000 100.07 250,180 0.5% 947547US2 WEBBANK 5.25% 031924 250,000 100.30 250,743 0.5% Fund 4,517,148 8.5%
CITY OF MALIBU (XXXX7847) 4,517,148 8.5%
FRSXX FIDELITY TREAS INSTL 4,517,148 1.00 4,517,148 8.5% Cash Alternative 165,871 0.3%
CITY OF MALIBU (XXXX7847) 165,871 0.3%
- Cash Alternative 165,871 1.00 165,871 0.3%
Portfolio Summary Total 52,883,983 100.0%
Total Portfolio Value as of 04/28/23:__$ 52,883,983
This report is not complete without the Understanding Your Portfolio report which contains important terms and definitions. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 6 of 36 27 Portfolio Reports City of Malibu
Portfolio Estimated Income
By: Account Tax Status,Tax Type,Security Sub Type
Based on current income rates
0 55,000
110,000
165,000
220,000
275,000
330,000
385,000
440,000
Est Income($)
May
2023
Jun
2023
Jul
2023
Aug
2023
Sep
2023
Oct
2023
Nov
2023
Dec
2023
Jan
2024
Feb
2024
Mar
2024
Apr
2024
Month
Tax Exempt Accounts Unassigned
Sec
May 2023 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023 Jan 2024 Feb 2024 Mar 2024 Apr 2024 Estimated
Income
Annualzd($)
Tax Exempt
Accounts 40 23,646 41,689 18,737 69,206 321,826 18,737 23,776 48,628 18,786 81,130 388,879 18,786 1,073,826 Taxable 29 23,646 41,689 18,737 24,612 66,826 18,737 23,776 48,628 18,786 36,537 138,879 18,786 479,638 Corporate
Bond 28 6,368 24,410 1,459 7,334 49,548 1,459 6,498 31,349 1,508 19,259 121,601 1,508 272,301 Money Market
Fund 1 17,278 17,278 17,278 17,278 17,278 17,278 17,278 17,278 17,278 17,278 17,278 17,278 207,337 Federal 11 44,594 255,000 44,594 250,000 594,188
Government
Bond 11 44,594 255,000 44,594 250,000 594,188
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 7 of 36 28 Portfolio Reports City of Malibu
Sec
May 2023 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023 Jan 2024 Feb 2024 Mar 2024 Apr 2024 Estimated
Income
Annualzd($)
Unassigned 1 0
Not Available 1 0
Cash
Alternative 1 0
Portfolio
Estimated Income
Total
41 23,646 41,689 18,737 69,206 321,826 18,737 23,776 48,628 18,786 81,130 388,879 18,786 1,073,826 Total Portfolio Value as of 04/28/23:__$ 52,883,983
This report is not a substitute for official tax reporting. This report separates the holdings, first based on the taxability at the account level. The secondary aggregation is Tax Type which is used to aggregate securities based on their assumed taxability of income (interest and dividends) at the time of this report. Classifications are made by data sources we deem reliable; however, we do not guarantee the accuracy of these classifications. Most securities are subject to capital gains taxes and some may be considered in calculations for Alternative Minimum Tax (AMT) that are not so designated here. This report does not attempt to portray phantom income (income accreted or accrued but not paid) on discount or zero coupon securities. You should consult with your tax advisor regarding the taxability of your holdings.

The following tax type classifications may be included in this report: AMT - subject to Alternative Minimum Tax; Dividend - taxable as dividend income; Federal - income taxable by federal government (state and local income taxes may not apply); Non-Federal - income non-taxable by federal government but may be subject to state and local taxes; Taxable - income taxable by federal, state and local taxes; and Not Available - taxability undetermined.

Estimated Income Annualized (EIA) takes your current income, based on the current dividends or interest paid by your securities and multiplies it to create an annualized hypothetical figure. It does not reflect actual or future performance and should not be relied upon when making financial decisions. All annualizations are based upon current positions using a simple mathematical calculation and assumes all figures remain constant for a year; any subsequent position changes will affect these calculations. Calculations for certain types of securities could include a return of principal or capital gain, in which case the figures would be overstated. Past performance is not a guarantee of future results. Dividend payments are made solely at the discretion of the issuer and are subject to be changed or eliminated at any time. Estimated Income is an estimate and the actual income might be lower or higher than the estimated amount. Estimated Income reflects only the income generated by an investment. It does not reflect changes in price, which may fluctuate.

This report is not complete without the Understanding Your Portfolio report which contains important terms and definitions. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 8 of 36 29 Portfolio Reports City of Malibu
Fixed Income Overview
Security Sub Type Composite Ratings Estimated Income Annualized Security Sub Type Market Value($) % Fxd Inc
Government Bond 32,575,663 83.1%
Corporate Bond 6,605,357 16.9%
Security Sub Type Total 39,181,021 100.0%
Composite Ratings % Fxd Inc
Treasury 83.1%
CDs 16.9%
Agency
AAA
AA
A
BBB
Below Inv Grade
N/A
Total 100.0%
Month Estimated Income Annualized($)
May 2023 6,368
Jun 2023 24,410
Jul 2023 1,459
Aug 2023 51,928
Sep 2023 304,548
Oct 2023 1,459
Nov 2023 6,498
Dec 2023 31,349
Jan 2024 1,508
Feb 2024 63,852
Mar 2024 371,601
Apr 2024 1,508
Total 866,488
Taxable 866,488
Tax Exempt
Subject to AMT
Bond Statistics
Statistic Taxable Tax Exempt
Coupon 2.220%
Yield to Worst 4.26%
Yield at Purchase 3.80%
Total Duration: 2.1
The asset classification of Corporate Bonds includes holdings of Certificates of Deposit. Funds include open end mutual funds, exchange-traded funds, closed end funds. For specific ratings for each security, please refer to either Fixed Income Statistics or Fixed Income Credit reports.

CDs are subject to insurance limits through FDIC. Please see Understanding Your Portfolio for information on specific limits to FDIC insurance.

Composite Ratings and Bond Statistics sections do not include bond funds. Bond Statistics are weighted averages based on market value of bonds in the portfolio. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 9 of 36 30 Portfolio Reports City of Malibu
This report is not complete without the Understanding Your Portfolio report which contains important terms and definitions. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 10 of 36 31 Portfolio Reports City of Malibu
Fixed Income Overview - continued
Bond Term vs. Duration
0 10
20 30
40 50
60 70
80 90
100
% of Bonds
Short
0 to <5
Intermediate
5 to <10
Long
10+
N/A
Bond Duration
Bond Term vs. Duration
Total Portfolio Value as of 04/28/23 : $ 52,883,983 Callable Analysis Bond term indicates years to redemption date as defined in the Understanding Your Portfolio section. Mortgage-backed securities (MBSs) include asset-backed securities (ABSs), passthroughs and collateralized mortgage obligations (CMOs). For MBSs, the full market value is displayed at the average life of each security, when available. Duration indicates calculated option adjusted duration. 'Bonds' include preferred stocks.

In the Callable Analysis chart, MBS includes all prepaying securities. Callable value applies next call price and date to the remaining principal. Call premiums may decline subsequent to the initial call date. Extraordinary call features may exist that are not represented in this report.

Bond Term vs. Duration and Callable Analysis sections do not include bond funds.

Callable Value($) Market Value($)
MBS
0 to <1 yrs 250,000 219,490
1 to <2 yrs
2 to <3 yrs
3 to <4 yrs
4 to <5 yrs
5 to <7 yrs
7+ yrs
Not Available
Non-Callable 38,961,531
Total 250,000 39,181,021
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 11 of 36 32 Portfolio Reports City of Malibu
Fixed Income Statistics
By: Asset Class Sub Type,Security Type Detail
Subtotals and totals are weighted averages based on market value Qty / Face Description Moody's Coupon Redemption Mkt Price Mkt Value($) Yld Price Duration Dur Cont Rem Prin Detail S&P Cpn Type Next Call Adj Price Gain/Loss($) YTW Convexity % Fxd Inc Factor ID Enhance Call Price Orig Price Purch Yld YTM % Port U.S. Taxable Investment Grade Fixed
Income 2.220% 39,181,021 2.1 2.1
-262,915 4.26% 0.1 81.3%

3.80% 4.26% 74.1%
Treasury Note 1.782% 32,575,663 2.2 1.8
-143,270 4.11% 0.1 67.6%

3.69% 4.11% 61.6%
-
4,000,000 US TREASURY AAA 0.250% 09/30/23 M 98.12 3,924,680 97.85 0.5 0.0 NOTES Fixed 97.94 7,003 4.72%M 0.0 8.1%
91282CDA6 97.94 4.14% 4.72% 7.4%
4,000,000 US TREASURY AAA 2.125% 03/31/24 M 97.55 3,902,160 97.59 1.0 0.1 NOTES Fixed 98.15 -23,968 4.64%M 0.0 8.1%
912828W71 98.15 3.95% 4.64% 7.4%
4,000,000 US TREASURY AAA 0.375% 09/15/24 M 94.61 3,784,200 94.48 1.4 0.1 NOTES Fixed 95.07 -18,620 4.35%M 0.0 7.9%
91282CCX7 95.07 3.79% 4.35% 7.2%
4,000,000 US TREASURY AAA 1.750% 03/15/25 M 95.73 3,829,360 95.65 1.9 0.2 NOTES Fixed 96.35 -24,835 4.10%M 0.0 7.9%
91282CED9 96.35 3.66% 4.10% 7.2%
4,000,000 US TREASURY AAA 3.500% 09/15/25 M 99.09 3,963,720 99.04 2.3 0.2 NOTES Fixed 99.85 -30,412 3.91%M 0.1 8.2%
91282CFK2 99.85 3.56% 3.91% 7.5%
4,000,000 US TREASURY AAA 2.250% 03/31/26 M 95.93 3,837,320 95.64 2.9 0.3 NOTES Fixed 96.38 -18,062 3.81%M 0.1 8.0%
9128286L9 96.38 3.51% 3.81% 7.3%
4,000,000 US TREASURY AAA 0.750% 08/31/26 M 90.88 3,635,120 90.38 3.3 0.3 NOTES Fixed 91.08 -7,887 3.79%M 0.1 7.5%
91282CCW9 91.08 3.52% 3.79% 6.9%
4,000,000 US TREASURY AAA 2.500% 03/31/27 M 95.96 3,838,400 95.51 3.7 0.4 NOTES Fixed 96.45 -19,732 3.72%M 0.2 8.0%
91282CEF4 96.45 3.45% 3.72% 7.3%
1,894,000 US TREASURY AAA 3.125% 08/31/27 M 98.24 1,860,703 97.81 4.1 0.2 NOTES Fixed 98.60 -6,758 3.67%M 0.2 3.9%
91282CFH9 98.60 3.47% 3.67% 3.5%
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 12 of 36 33 Portfolio Reports City of Malibu
Qty / Face Description Moody's Coupon Redemption Mkt Price Mkt Value($) Yld Price Duration Dur Cont Rem Prin Detail S&P Cpn Type Next Call Adj Price Gain/Loss($) YTW Convexity % Fxd Inc Factor ID Enhance Call Price Orig Price Purch Yld YTM % Port Certificates of Deposit 4.381% 6,605,357 1.6 0.3
-119,644 5.03% 0.0 13.7%

4.38% 5.03% 12.5%
-
250,000 NEXBANK SSB CD 5.000% 06/20/23 M 100.00 250,010 100.00 0.2 0.0 DALLAS TX ACT/365 Fixed 100.00 10 5.01%M 0.0 0.5%
653344BX8 FDIC 100.00 5.00% 5.01% 0.5%
250,000 VALLEY NATL BK WAYNE
CD 5.150% 09/18/23 M 100.07 250,180 100.05 0.4 0.0
WAYNE NJ ACT/365 Fixed 100.00 180 5.02%M 0.0 0.5%
919853HV6 FDIC 100.00 5.15% 5.02% 0.5%
250,000 MORGAN STANLEY PVT BK
CD 3.550% 12/06/23 M 99.20 248,005 98.95 0.6 0.0
PURCHASE NY ACT/365 Fixed 100.00 -1,995 5.14%M 0.0 0.5% 61760ASZ3 FDIC 100.00 3.55% 5.14% 0.5%
250,000 BANK HOPE CD 5.250% 12/26/23 M 100.22 250,545 100.07 0.7 0.0 LOS ANGELES CA ACT/365 Fixed 100.00 545 5.15%M 0.0 0.5% 062683HE0 FDIC 100.00 5.25% 5.15% 0.5%
250,000 BEAL BANK USA CD 4.750% 02/21/24 M 99.86 249,648 99.65 0.9 0.0 LAS VEGAS NV ACT/365 Fixed 100.00 -353 5.13%M 0.0 0.5%
07371DRD1 FDIC 100.00 4.75% 5.13% 0.5%
250,000 SANTANDER BANK NA CD 5.250% 03/15/24 M 100.29 250,728 100.11 0.9 0.0 WILMINGTON DE ACT/365 Fixed 100.00 728 5.11%M 0.0 0.5%
80280JVQ1 FDIC 100.00 5.25% 5.11% 0.5%
250,000 WEBBANK CD 5.250% 03/19/24 M 100.30 250,743 100.12 0.9 0.0 SALT LAKE CITY UTACT/365 Fixed 100.00 743 5.11%M 0.0 0.5% 947547US2 FDIC 100.00 5.25% 5.11% 0.5%
250,000 BARCLAYS BANK/DELAWAR
CD 5.400% 03/21/24 M 100.43 251,078 100.26 0.9 0.0
WILMINGTON DE ACT/365 Fixed 100.00 1,078 5.10%M 0.0 0.5% 06740KRN9 FDIC 100.00 5.40% 5.10% 0.5%
250,000 CITIZENS BANK NA/RI CD 5.300% 03/21/24 M 100.34 250,860 100.17 0.9 0.0 PROVIDENCE RI ACT/365 Fixed 100.00 860 5.11%M 0.0 0.5%
75524KQH0 FDIC 100.00 5.30% 5.11% 0.5%
250,000 OCEANFIRST BANK NA CD 5.150% 03/21/24 M 100.21 250,535 100.03 0.9 0.0 TOMS RIVER NJ ACT/365 Fixed 100.00 535 5.11%M 0.0 0.5%
67523TCE1 FDIC 100.00 5.15% 5.11% 0.5%
250,000 RENASANT BK TUPELO MS
CD 5.300% 03/21/24 M 100.34 250,860 100.17 0.9 0.0
TUPELO MS ACT/365 Fixed 100.00 860 5.11%M 0.0 0.5%
759701BH7 FDIC 100.00 5.30% 5.11% 0.5%
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 13 of 36 34 Portfolio Reports City of Malibu
Qty / Face Description Moody's Coupon Redemption Mkt Price Mkt Value($) Yld Price Duration Dur Cont Rem Prin Detail S&P Cpn Type Next Call Adj Price Gain/Loss($) YTW Convexity % Fxd Inc Factor ID Enhance Call Price Orig Price Purch Yld YTM % Port 250,000 CHARLES SCHWAB BK SSB
CD 5.350% 03/22/24 M 100.14 250,360 100.22 0.9 0.0
RENO NV ACT/365 Fixed 100.00 360 5.11%M 0.0 0.5%
15987UAU2 FDIC 100.00 5.35% 5.11% 0.5%
250,000 CAPITAL ONE NA CD 2.500% 06/19/24 M 97.37 243,420 96.98 1.2 0.0 MCLEAN VA ACT/365 Fixed 100.00 -6,582 5.09%M 0.0 0.5%
14042RLZ2 FDIC 100.00 2.50% 5.09% 0.5%
250,000 FULTON BANK CD 5.350% 06/24/24 M 100.52 251,293 100.34 1.2 0.0 WILLIAMSPORT PA ACT/365 Fixed 100.00 1,293 5.06%M 0.0 0.5% 359899AN1 FDIC 100.00 5.35% 5.06% 0.5%
125,000 COMENITY CAPITAL BANK
CD 2.500% 06/27/24 M 97.30 121,623 96.91 1.2 0.0
SALT LAKE CTY UT ACT/365 Fixed 100.00 -3,378 5.09%M 0.0 0.3% 20033AZ58 FDIC 100.00 2.50% 5.09% 0.2%
250,000 CUSTOMERS BANK CD 4.700% 08/16/24 M 99.73 249,325 99.53 1.3 0.0 WEST READING PA ACT/365 Fixed 100.00 -675 5.05%M 0.0 0.5% 23204HNC8 FDIC 100.00 4.70% 5.05% 0.5%
250,000 COMERICA BANK TEXAS CD 5.250% 09/30/24 M 100.44 251,093 100.32 1.4 0.0 DALLAS TX ACT/365 Fixed 100.00 1,093 5.03%M 0.0 0.5%
200339FB0 FDIC 100.00 5.25% 5.03% 0.5%
250,000 MANUF & TRADERS TR CO
CD 4.900% 12/09/24 M 99.92 249,793 99.83 1.6 0.0
BUFFALO NY ACT/365 Fixed 100.00 -208 5.00%M 0.0 0.5%
564759RJ9 FDIC 100.00 4.90% 5.00% 0.5%
250,000 ALLY BANK CD 5.250% 03/24/25 M 100.47 251,168 100.55 1.9 0.0 BENSALEM PA ACT/365 Fixed 100.00 1,168 4.95%M 0.0 0.5%
02007GM34 FDIC 100.00 5.25% 4.95% 0.5%
200,000 AMERICAN EXPR NATL BK
CD 2.050% 03/24/25 M 94.70 189,396 94.56 1.9 0.0
SALT LAKE CTY UT ACT/365 Fixed 100.00 -10,604 4.98%M 0.0 0.4% 02589ABV3 FDIC 100.00 2.05% 4.98% 0.4%
250,000 BMW BK N AMERICA CD 5.100% 09/17/25 M 100.26 250,650 100.40 2.3 0.0 SALT LAKE CTY UT ACT/365 Fixed 100.00 650 4.93%M 0.1 0.5% 05580AX58 FDIC 100.00 5.10% 4.93% 0.5%
250,000 STATE BANK OF INDIA CD 4.950% 12/02/25 M 99.95 249,865 100.08 2.4 0.0 NEW YORK NY ACT/365 Fixed 100.00 -135 4.91%M 0.1 0.5%
856285V81 FDIC 100.00 4.95% 4.91% 0.5%
200,000 COMENITY BANK CD 2.000% 03/18/26 M 92.31 184,629 92.04 2.9 0.0 WILMINGTON DE ACT/365 N/A 100.00 -15,371 4.82%M 0.1 0.4% 99000QQW7 FDIC 100.00 2.00% 4.82% 0.3%
250,000 SYNCHRONY BANK CD 5.000% 03/24/26 M 100.12 250,288 100.27 2.7 0.0 DRAPER UT ACT/365 Fixed 100.00 288 4.90%M 0.1 0.5%
87165HX21 FDIC 100.00 5.00% 4.90% 0.5%
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 14 of 36 35 Portfolio Reports City of Malibu
Qty / Face Description Moody's Coupon Redemption Mkt Price Mkt Value($) Yld Price Duration Dur Cont Rem Prin Detail S&P Cpn Type Next Call Adj Price Gain/Loss($) YTW Convexity % Fxd Inc Factor ID Enhance Call Price Orig Price Purch Yld YTM % Port 250,000 TEXAS EXCHANGE BK SSB
CD 1.100% 10/29/26 M 87.80 219,490 87.51 3.5 0.0
CROWLEY TX ACT/365 Fixed 05/29/23 P 100.00 -30,510 4.92%M 0.1 0.5% 88241TMC1 FDIC 100.00 100.00 1.10% 4.92% 0.4%
200,000 DISCOVER BANK CD 4.950% 11/16/26 M 100.18 200,350 100.12 3.2 0.0 GREENWOOD DE ACT/365 Fixed 100.00 350 4.91%M 0.1 0.4%
254673Z66 FDIC 100.00 4.95% 4.91% 0.4%
250,000 UBS BANK USA CD 1.150% 12/08/26 M 87.65 219,115 87.33 3.6 0.0 SALT LAKE CTY UT ACT/365 Fixed 100.00 -30,885 4.92%M 0.1 0.5% 90348JX96 FDIC 100.00 1.15% 4.92% 0.4%
250,000 CELTIC BANK CD 2.000% 12/27/27 M 88.13 220,313 87.89 4.5 0.0 SALT LAKE CTY UT ACT/365 Fixed 100.00 -29,688 4.87%M 0.2 0.5% 15118RTH0 FDIC 100.00 2.00% 4.87% 0.4%
Cash Alternatives 0.000% 9,019,944 0.3 0.1
66,746 4.80% 0.0 18.7%

4.80% 17.1%
Treasury Bill 0.000% 9,019,944 0.3 0.1
66,746 4.80% 0.0 18.7%

4.80% 17.1%
-
4,000,000 US TREASURY 0.000% 06/20/23 M 99.33 3,973,200 98.99 0.2 0.0 BILL N/A 98.81 20,746 4.76%M 0.0 8.2%
912797FP7 98.81 4.76% 7.5%
5,117,000 US TREASURY 0.000% 08/10/23 M 98.63 5,046,744 98.32 0.3 0.0 BILL N/A 97.73 46,000 4.84%M 0.0 10.5%
912796XY0 97.73 4.84% 9.5%
Fixed Income Statistics Total 1.804% 48,200,964 1.8 2.2 -196,168 4.36% 0.1 100.0%

3.80% 4.36% 91.1%
Total Portfolio Value as of 04/28/23:__$ 52,883,983
Yield Price as of 03/31/23
Rem Prin - Remaining Principal is the amount of principal which, as of a given date, has not yet been paid on a fixed income security (original face value multiplied by the factor).

Factor represents the portion of principal remaining on a security subject to principal prepayments (such as a mortgage-backed security). A factor of .87654321 on an original face of $100,000 would indicate that $87,654.32 in principal remained.
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 15 of 36 36 Portfolio Reports City of Malibu
Enhance - Indicates that there is a form of credit enhancement such as collateralization or bond insurance which may vary in credit quality. The ratings displayed are the higher of the credit rating of the bond insurer or of the underlying credit of the issuer. Acronyms indicate insurance or type of collateral. See Understanding Your Portfolio section for more details.

CDs are subject to insurance limits through FDIC. Please see Understanding Your Portfolio for information on specific limits to FDIC insurance.

The coupon rate is the interest rate stated on a bond, note or other fixed income security, expressed as a percentage of the principal. Adjustable rate coupon securities will be shown at the current coupon rate if known; actual coupon rates may vary. There is no assurance that coupons will be paid. Past Performance is not a guarantee of future results. Range Notes will carry a coupon of 0%.

Coupon Types: Adj (Adjustable rate), Fixed (Fixed rate), Step (Step up or down), Struct (Structured Product Securities), Zero (Zero Coupon), PIK (Payment-in-kind) Redemption is the date the security is scheduled to be redeemed. Types: M - maturity, R - refunded, T - mandatory tender/put, P - perpetual (displays date of report plus sixty years), D - Dutch auction or optional tender, A - estimated average life of prepaying securities.

Next call is the next date, prior to maturity, on which a callable security may be redeemed by the issuer. Call Price is the price, specified at issuance, at which a bond or preferred stock can be redeemed.

Call Types: C - Optional Premium Call, P - Optional Par Call.

Adjusted Price is the original price adjusted for accretion for a discount and amortization for a premium.

Purchase Yield is the yield to worst based on original price and purchase date.

Yield Price is the recent market price which is used to calculate yields, duration, convexity, etc. The date of the yield price is displayed beneath the table.

YTW - Yield to Worst indicates the lowest of yields to calls or the yield to maturity, calculated at yield price and not at current market price. The Yield Code next to YTW indicates the date/price to which the yield has been calculated. Codes: C = next call, P = par call, W = middle call, R = pre-refunding, M = maturity of issue, A = estimated average life on principal paydown securities, T = next mandatory put/tender, F = called in full.

YTM (Yield to Maturity) is calculated to the redemption date based on the yield price and not on current market price.

Duration - Duration, where available, is Modified Duration. It is used to provide a measurement of price volatility. For example, a duration of 4 means that a shift in prevailing rates 100 basis points (1%) in a 1 year period should shift the price in the opposite direction by 4%. Duration will not be calculated on Structured Products or other securities for which required data is not available. Modified Duration, unlike Effective Duration, assumes cash flows do not change and does not take into account embedded call options.

Convexity - Convexity measures the speed with which the duration will change with movements in interest rates. For example, on a bond with negative convexity, the duration will shorten with falling interest rates which will reduce the impact of duration of this security on the portfolio. Convexity is reflected at both the security level and at the subtotal level for fixed income classification calculated as a weighted average.

Duration Contribution - The duration contribution is the impact of this bond's duration on the fixed income portion of the portfolio. Example, if bond has a duration of 3 and its market value is 5% of the fixed income, the duration contribution will be 0.15 (3 x .05).

This report is not complete without the Understanding Your Portfolio report which contains important terms and definitions. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 17 of 36 38 Portfolio Reports City of Malibu
Fixed Income Analytics
By: Security Type Detail
Subtotals and totals are weighted averages based on market value Securities Weighted Avg Cpn YTW YTM Dur Conv Dur Cont Percent of Fxd Inc Port
Treasury Bill 2 0.000% 4.80% 4.80% 0.3 0.0 0.1 18.7% 17.1% Market Value: $ 9,019,944
Treasury Note 9 1.782% 4.11% 4.11% 2.2 0.1 1.8 67.6% 61.6% Market Value: $ 32,575,663
Certificates of Deposit 28 4.381% 5.03% 5.03% 1.6 0.0 0.3 13.7% 12.5% Market Value: $ 6,605,357
Fixed Income Analytics Total 39 1.804% 4.36% 4.36% 1.8 0.1 2.2 100.0% 91.1% Market Value: $ 48,200,964
Total Portfolio Value as of 04/28/23:__$ 52,883,983
Yield Price as of 03/31/23
The coupon rate is the interest rate stated on a bond, note or other fixed income security, expressed as a percentage of the principal. Variable rate coupon securities will be shown at the current coupon rate if known; actual coupon rates may vary. There is no assurance that coupons will be paid. Past Performance is not a guarantee of future results. Range Notes will carry a coupon of 0%.

Yields, duration, and convexity are reflected at both the subtotal and total levels for fixed income classifications calculated as a weighted average.

YTW - Yield to Worst indicates the lowest of yields to calls or the yield to maturity, calculated at yield price and not at current market price.

YTM (Yield to Maturity) is yield calculated to the redemption date based on the yield price and not on current market price.

Dur - Duration, where available, is Modified Duration. It is used to provide a measurement of price volatility. For example, a duration of 4 means that a shift in prevailing rates 100 basis points (1%) in a 1 year period should shift the price in the opposite direction by 4%. Duration will not be calculated on Structured Products or other securities for which required data is not available. Modified Duration, unlike Effective Duration, assumes cash flows do not change and does not take into account embedded call options.

Conv - Convexity - Convexity measures the speed with which the duration will change with movements in interest rates. For example, on a bond with negative convexity, the duration will shorten with falling interest rates which will reduce the impact of duration of this security on the portfolio. Convexity is reflected at both the security level and at the subtotal level for fixed income classification calculated as a weighted average.

Dur Cont - Duration Contribution - The duration contribution is the impact of this bond's duration on the fixed income portion of the portfolio. Example, if bond has a duration of 3 and its market value is 5% of the fixed income, the duration contribution will be 0.15 (3 x .05).

Yield Price is the recent market price which is used to calculate yields, duration, convexity, etc. The date of this price is noted below the table.

AAAAAABBB
BB
B
CCC
CC
C
D
UnratedNot Available
Government Bond Corporate Bond
Composite Rating Market Value($) Weighted Avg Cpn Weighted Avg Cpn Remaining
Treasuries 41,595,607 1.395% 4.381%
Government Bond 41,595,607 1.395% 4.381%
CDs 6,605,357 4.381% 1.395%
Corporate Bond 6,605,357 4.381% 1.395%
Ratings Distribution Total 48,200,964 1.804% 0.000%
Composite Ratings: Treasuries, Agencies, AAA, AA, A, BBB, BB, B, CCC, CC, C, D, Unrated and Not Available.

Treasuries are direct U.S. Government securities. Agencies include U.S. Government backed agencies and U.S. Government sponsored entities. Agency securities that are below AAA credit quality will be displayed based on their credit rating. Should the ratings services differ, the Composite Rating will identify the bond in the lower of the two ratings. AAA Composite Ratings are securities rated AAA by one or both services without the credit enhancement of insurance.

The asset classification of Corporate Bonds includes holdings of Certificates of Deposit. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 19 of 36 40 Portfolio Reports City of Malibu
The coupon rate is the interest rate stated on a bond, note or other fixed income security, expressed as a percentage of the principal. Adjustable rate coupon securities will be shown at the current coupon rate if known; actual coupon rates may vary. There is no assurance that coupons will be paid. Past Performance is not a guarantee of future results. Range Notes will carry a coupon of 0%.

This report is not complete without the Understanding Your Portfolio report which contains important terms and definitions. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 20 of 36 41 Portfolio Reports City of Malibu
Redemption Distribution
By: Redemption Date
Coupon subtotals and totals are weighted averages based on redemption value 0 3,000
6,000
9,000
12,000
15,000
Redemption Value($)
(000s)
2023
20242025
2026
2027
2028
2029
2030
203120322033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043+
Perpetual
Year Redemption Value($) Weighted Avg Cpn Weighted Avg Cpn Remaining
2023 14,117,000 0.406% 2.338%
2024 11,375,000 2.323% 1.632%
2025 8,950,000 2.820% 1.564%
2026 9,150,000 1.662% 1.819%
2027 6,144,000 2.672% 1.665%
Redemption Distribution Total 49,736,000 1.790% 0.000%
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 21 of 36 42 Portfolio Reports City of Malibu
Mortgage Backed
Securities
Redemption Value (Remaining Principal):__$ 0
Securities with Undefined Redemption Value
Market Value:__$ 0
This report shows the schedule of principal payments of securities calculated as of the date of the report. Payments are not guaranteed. Unforeseen events could occur which could cause the estimated principal payments to differ from stated values. Bonds in default will not display a redemption value. The redemption value applies the redemption price to the remaining principal or the number of shares.

These schedules assume that bonds are not called. Call features may be exercised as stated elsewhere at any time. On Treasury Inflation Index securities (TIPs), we have applied the most recent Index Ratio to the redemption price. Actual redemption value will not be less than the face amount on TIPs if held to maturity. 100% Principal protected structured products (when held to maturity) will be displayed at their face amount as the redemption value.

Mortgage Backed Securities (MBSs) are not represented in this report as it is not possible to accurately predict principal prepayments.

Securities with Undefined Redemption Value, such as mandatory convertible securities and structured products (other than those with 100% principal protection), do not have a defined redemption value and are not represented in the bar charts. The market value of these securities is displayed beneath the table. These securities will display N/A as the redemption value in the year of their scheduled redemption.

This report is not complete without the Understanding Your Portfolio report which contains important terms and definitions. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 22 of 36 43 Portfolio Reports City of Malibu
Redemption Distribution Rolling 12 Months
By: Security Sub Type
Redemption Values are stated in thousands
0 825,000
1,650,000
2,475,000
3,300,000
4,125,000
4,950,000
5,775,000
Est Income($)
May
2023
Jun
2023
Jul
2023
Aug
2023
Sep
2023
Oct
2023
Nov
2023
Dec
2023
Jan
2024
Feb
2024
Mar
2024
Apr
2024
Month
Government Bond Corporate Bond
___May
2023
___Jun
2023
___Jul
2023
___Aug
2023
___Sep
2023
___Oct
2023
___Nov
2023
___Dec
2023
___Jan
2024
___Feb
2024
___Mar
2024
___Apr
2024
Total
Prin($)
Government Bond 4,000 5,117 4,000 4,000 17,117
Corporate Bond 250 250 500 250 1,750 3,000
Redemption Distribution
Rolling 12 Months Total 4,250 5,117 4,250 500 250 5,750 20,117 Current Market Value of Securities with Undefined Redemption Value:__$ 0 Total Portfolio Value as of 04/28/23:__$ 52,883,983
This report shows the schedule of principal payments of securities calculated as of the date of the report. Payments are not guaranteed. Unforeseen events could occur which could cause the estimated principal payments to differ from stated values. Bonds in default will not display a redemption value. The redemption value applies the redemption price to the remaining principal or the number of shares.

These schedules assume that bonds are not called. Call features may be exercised as stated elsewhere at any time. On Treasury Inflation Index securities (TIPs), we have applied the most recent Index 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 23 of 36 44 Portfolio Reports City of Malibu
Ratio to the redemption price. Actual redemption value will not be less than the face amount on TIPs if held to maturity. 100% Principal protected structured products (when held to maturity) will be displayed at their face amount as the redemption value.

The asset classification of Corporate Bonds includes holdings of Certificates of Deposit.

Mortgage Backed Securities (MBSs) are not represented in this report as it is not possible to accurately predict principal prepayments.

Securities with Undefined Redemption Value, such as mandatory convertible securities and structured products (other than those with 100% principal protection), do not have a defined redemption value and are not represented in the table. The market value of these securities that have a redemption date within the next 12 months is displayed beneath the table.

This report is not complete without the Understanding Your Portfolio report which contains important terms and definitions. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 24 of 36 45 Portfolio Reports City of Malibu
Duration Distribution
By: Duration,Security Sub Type
Duration subtotals and totals are weighted averages based on market value 0 4,000
8,000
12,000
16,000
20,000
Market Value ($)
(000s)
<1 1 2 3 4 5 6 7 8 9 10+ N/A
Government Bond Corporate Bond
Duration Market Value($) Weighted Avg
Duration
Weighted Avg
Duration Remaining
< 1 to 1 19,850,334 0.5 2.6
Government Bond 16,846,784 0.5 2.5
Corporate Bond 3,003,550 0.8 1.8
1 to < 2 9,420,669 1.6 1.8
Government Bond 7,613,560 1.7 1.8
Corporate Bond 1,807,109 1.5 1.8
2 to < 3 8,736,471 2.6 1.6
Government Bond 7,801,040 2.6 1.6
Corporate Bond 935,431 2.6 1.8
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 25 of 36 46 Portfolio Reports City of Malibu
Duration Market Value($) Weighted Avg
Duration
Weighted Avg
Duration Remaining
3 to < 4 8,112,475 3.5 1.4
Government Bond 7,473,520 3.5 1.4
Corporate Bond 638,955 3.4 1.8
4 to < 5 2,081,016 4.1 1.7
Government Bond 1,860,703 4.1 1.7
Corporate Bond 220,313 4.5 1.8
Duration Distribution Total 48,200,964 1.8 0.0
On the x -axis: <1 contains duration values less than 1; 1 contains duration values greater than or equal to 1 and less than 2; 2 contains duration values greater than or equal to 2 and less than 3, etc. 10+ contains duration values greater than or equal to ten.

The asset classification of Corporate Bonds includes holdings of Certificates of Deposit.

Weighted Average Duration: Duration is reflected at both the security level and at the subtotal and total levels. At the subtotal and total levels, weighted average duration has been calculated based on the market value of the securities within that grouping.

Weighted Average Duration Remaining is the weighted average duration remaining of the portfolio excluding the security.

The duration distribution will allow you to analyze which securities impact your portfolio for a given range of duration. For example, if you wish to shorten your duration to lessen interest rate risk (i.e. you expect rates to rise), look to the higher duration securities as possible candidates for swapping into shorter duration securities. Conversely, should you wish to increase your portfolio's sensitivity to interest rates (i.e. you expect rates to fall), look to swap shorter duration securities into longer duration securities.

This report is not complete without the Understanding Your Portfolio report which contains important terms and definitions. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 26 of 36 47 Portfolio Reports City of Malibu
Coupon Distribution
By: Coupon,Coupon Type
Coupon subtotals and totals are weighted averages based on market value 0 3,000
6,000
9,000
12,000
15,000
Market Value ($)
(000s)
0 1 2 3 4 5 6 7 8+ N/A
Fixed Coupon Not Available
Coupon Market Value($) Weighted Avg Cpn Weighted Avg Cpn Remaining
0 to < 1 11,344,000 0.452% 2.221%
Fixed Coupon 11,344,000 0.452% 2.221%
1 to < 2 4,267,965 1.686% 1.816%
Fixed Coupon 4,267,965 1.686% 1.816%
2 to < 3 12,537,260 2.284% 1.636%
Fixed Coupon 12,352,631 2.288% 1.638%
Not Available 184,629 2.000% 1.804%
3 to < 4 6,072,428 3.387% 1.576%
Fixed Coupon 6,072,428 3.387% 1.576%
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 27 of 36 48 Portfolio Reports City of Malibu
Coupon Market Value($) Weighted Avg Cpn Weighted Avg Cpn Remaining
4 to < 5 1,198,980 4.846% 1.727%
Fixed Coupon 1,198,980 4.846% 1.727%
5 to < 6 3,760,388 5.224% 1.515%
Fixed Coupon 3,760,388 5.224% 1.515%
N/A 9,019,944 0.000% 2.220%
Not Available 9,019,944 0.000% 2.220%
Coupon Distribution Total 48,200,964 1.804% 0.000%
On the X-axis, 0% coupon includes all bonds with current coupons of less than 1%; 1% coupon includes bonds with coupons of less than 2% but equal to or greater than 1%, etc.

This report is not complete without the Understanding Your Portfolio report which contains important terms and definitions. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 28 of 36 49 Portfolio Reports City of Malibu
Understanding Your Portfolio
General Information
Investing involves risk, including the possible loss of principal. This report is intended to provide you with a descriptive overview of your current portfolio. The report may encompass one account or multiple accounts as specified in the report. The material has been prepared or is distributed solely for information purposes and does not supersede the proper use of your Wells Fargo Advisors client statements and/or trade confirmations, which are considered to be the official and accurate records of your account activity. Any market prices are only indications of market values, are subject to change, and may not reflect the value at which the securities could be sold. Reported prices should not be considered actual bids. For these reports, in certain groupings, Corporate Bonds includes Certificates of Deposit. Additionally, the report is prepared as of trade date, rather than settlement date, and may be prepared on a different date than your statement. The information contained in this report may not reflect all holdings or transactions, their costs, or proceeds in your account.

The report may also include information you provided about assets held at other firms. Information on assets held away from Wells Fargo Advisors was provided by you and may not be covered by SIPC. We have relied solely on information from you regarding those assets. We do not verify or confirm those assets held with other firms or affiliates and you are responsible for notifying your Financial Advisor of any changes in your externally held investments including cost basis.

Incomplete or inaccurate cost basis will affect your plan results because the tax assumptions are incorrect. Due to timing issues, if this report includes assets held at a Trust Company, positions and market data should be verified. Before making any decisions please validate your account information with your Financial Advisor. The financial data used to generate this report is provided to Wells Fargo Advisors by third party vendors. While this information is believed to be reliable, it has not been verified. Security ID will be ticker symbol, CUSIP number, Security Number or, if you have provided us with a market value of a generic asset classification type, we will assign a dash.

This report is not complete unless all pages noted are included. For more detailed information, including current pricing, call your Financial Advisor.

To the extent that this report includes fixed income securities, you should be aware that the descriptions of fixed income securities are general in nature and do not reflect important information that you should consider, such as but not limited to, yield, call features, credit quality, and various tax implications. Before making any decisions regarding fixed income investments, contact your advisor to obtain more detailed information regarding specific fixed income securities.

Asset classification of holdings in external accounts where classification is not readily available may be assigned to a multi-asset class category or reassigned into additional asset classes by your Financial Advisor which may not be the most accurate asset class based on the holding's characteristics and risk profile. It is your responsibility to review the asset classification for external accounts and notify us of any changes.

Asset Classes for mutual funds, variable annuities and exchange-traded funds are derived from Morningstar Categories. Underlying holdings classification provided by Morningstar. ©2023 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

External Accounts Included in Your Report
As a service, we may have included your assets and/or your liabilities held at other financial institutions. We assume no responsibility for the accuracy or completeness of the information you provided either to your Financial Advisor or through any third party aggregation service regarding your assets or liabilities held at other firms. We may update the pricing of these securities; however, there may be cases when updating prices is not possible. In addition, any transactions, values or changes in your external accounts will not be reflected unless you provide updated information to your Financial Advisor. In instances where you use a third party aggregation service, we rely on you to take action when notified by the third party service that updates are needed. The accuracy and completeness of the information you provide may materially affect the results and any recommendations contained in this report.

If we have included or if you have provided us with information on accounts managed by you or an affiliate of Wells Fargo Advisors, including self-directed WellsTrade accounts at Wells Fargo Advisors, and fiduciary accounts at Wells Fargo Bank, N.A., you should understand that Wells Fargo Advisors has no authority to manage, direct or influence the accounts. With respect to such accounts, the Strategic Allocation listed in this report is for informational purposes only and should not be considered a recommendation from Wells Fargo Advisors or your Financial Advisor. The views, opinions, asset allocation models and forecasts may differ from our affiliates.

By providing you this report, neither the firm nor your Financial Advisor is acting as a fiduciary for purposes of ERISA or section 4975 of the Code with respect to any external ERISA-covered employee benefit plan or any external individual retirement account in either the planning, execution or provision of this analysis, unless separately contracted to act as a fiduciary with respect to such an account. Any asset allocation information presented in this report for external 401(k), 403(b), Government 457(b), Defined Benefit Plan, Trustee Defined Profit Sharing Plan or individual retirement accounts is for general asset allocation education and informational purposes only and should not be viewed as fiduciary investment advice.

All yields, durations and convexities are calculated at the "Yield Price" listed on the report. The date of the yield price is stated under the report table. The calculations are updated approximately once per month. Should there be significant changes in interest rates we will update the calculations more frequently. By comparing the yield price to the market price you can see how the market has changed since the calculations. For example, if the market price is greater than the yield price then currently calculated yields would be lower.

Weighted average coupon: At the subtotal and total levels, the weighted average coupon has been calculated based on the market value of the securities within that grouping.

Redemption date indicated is either maturity date (M), pre-refunded date (R), mandatory put or tender date (T), Dutch auction date or optional tender date (D), display date on perpetual securities (sixty years from report date) (P) or the date which would represent the average life of the maturity when measured from the date of this report (A). Because perpetual securities do not have a stated maturity date, we assign a date of sixty years from the date of the report to enable us to provide approximate yields and durations.

Yield to worst is the lowest of all yields to calls or the yield to maturity. Yield to maturity is the yield that would be realized on a fixed income security if it were held to the maturity date. Yield at purchase is calculated based on the purchase date and price of each position (if available) and represents the yield to worst at the time of purchase. At the subtotal and total levels, yields are weighted averages for that grouping. Duration, if available, is option adjusted duration and is used to provide a measurement of price volatility.
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 29 of 36 50 Portfolio Reports City of Malibu
Enhancements used for this analysis may include Bond Insurance, Federal Deposit Insurance Corporation (FDIC) and escrowed collateral on refunded bonds (typically in US Government securities). The terms of enhancements vary and assumptions cannot be made as to specific issuers or issues. This report is not meant to indicate that "non-enhanced" securities are of lesser credit quality than those with secondary credit enhancement. Insurance pertains to the timely payment of principal and interest by the issuer of the underlying securities and not the price of the bond, which will fluctuate prior to maturity.

Types of enhancements include but are not limited to:

Pre-ref - Indicates that the security has been pre-refunded, is collateralized (typically in US Government Securities) and is scheduled to be redeemed at the stated redemption date.

ETM - Indicates that the security has been escrowed to maturity (collateralized, typically in U.S.

Government securities).

FDIC - Federal Deposit Insurance Corporation
MBIA - Municipal Bond Insurance Association
FGIC - Financial Guaranty Insurance Company
AMBAC - American Municipal Bond Assurance Corporation
FSA - Financial Security Assurance, Inc.

Assured Gty. - Assured Guaranty Corp.

BHAC - Berkshire Hathaway Assurance
CIFG - CIFG Assurance North America, Inc.

AGM(f.FSA) - Assured Guaranty Municipal Corp.

AGC - Assured Guaranty Corp.

NATL-RE(f.MBIA) - National Public Finance Guaranty Corp. (MBIA's public finance subsidiary) Syncora(f.XLCA) - Syncora Guarantee (Formerly XL Capital Assurance).

PSF - Permanent School Fund.

MAC - Municipal Assurance Corp.

BAM - Build America Mutual Assurance Corp.

Q-SBLF - Qualified School Bond Loan Fund.

RADIAN - Radian Group Inc.

ACA - ACA Financial Guaranty Corp.

FHA - Federal Housing Administration.

FHLMC - Federal Home Loan Mortgage Corp.

FNMA - Federal National Mortgage Association.

GNMA - Government National Mortgage Association.

SECT8 - Section 8.

Rating Types: Government/Agencies, Investment Grade, High Yield, Distressed Debt, Defaulted, Not Available, Not Applicable.

Composite Ratings: Treasuries, Agencies, AAA, AA, A, BBB, BB, B, CCC, CC, C, D, and Unrated.

A measure of the quality and safety of a bond, based on the issuer's financial condition. More specifically, an evaluation from a rating service indicating the likelihood that a debt issuer will be able to meet scheduled interest and principal repayments.

AAA Maximum Safety; AA High Grade High Quality; A Upper Medium Grade; BBB Lower Medium Grade; BB Speculative; B Highly Speculative; CCC Substantial Risk; CC Extremely Speculative; C May be in Default; D Default.

Composite Ratings are based on Moody's and Standard & Poor's and reflect the lower of the two rating services if such ratings differ.

Asset Class Descriptions
The asset class descriptions below are included solely to provide insight into how individual securities are tied to specific asset classes. We use our best efforts to correctly classify investments. However, no warranty of accuracy is made.

Equity Investments: Equity investments refer to buying stocks of United States companies.

The investment return to the owner of stock (shareholder) is in the form of dividends and/or capital appreciation. The market capitalization of companies is used to group large, medium (Mid), and small companies. Shareholders share in both the upside potential and the downside risk.

Capitalization: Market capitalization definitions differ but one example of capitalization methodology is that of Morningstar, which defines "large-capitalization" stocks as those stocks that form the top 70% of the market capitalization of the stocks eligible to be included in the Morningstar US Market Index (a diversified broad market index that represents approximately 97% of the market capitalization of publicly traded U.S. Stocks). The Morningstar index methodology defines "mid-capitalization" stocks as those stocks that form the 20% of market capitalization between the 70th and 90th percentile of the market capitalization and "small-capitalization" stocks as those stocks that form the 7% of market capitalization between the 90th and 97th percentile of the market capitalization of the stocks eligible to be included in the Morningstar US Market Index.

Investing in small and mid-cap companies involve additional risks such as limited liquidity and greater volatility.

Fixed Income Securities (Bonds): Bonds are promissory notes of a United States corporation or federal government entity (taxable bonds) or a state or local government entity (taxexempt or municipal bonds). Bonds usually make a series of interest payments followed by a return of principal at maturity. If sold prior to maturity, the price that can be obtained for a bond may be more or less than face value, depending on interest rates at the time the bond is sold and the remaining term of the bond.

Fixed income securities include Treasuries (i.e., public obligations of the U.S. Treasury that have remaining maturities of more than one year), government-related issues (i.e., agency, sovereign, supranational, and local authority debt), and corporate bonds.

Investments in fixed-income securities are subject to market, interest rate, credit/default, inflation and other risks. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can result in the decline in the bond's price. Lower rated securities are speculative and involve greater risk of default.

Term: Short-term bonds have effective maturities of five years or less, intermediate bonds have effective maturities between five and ten years; and long-term bonds have maturities of ten years or longer.

Income from tax exempt bonds is generally free from federal and state taxes for residents of the issuing state. While the interest income is tax-free, capital gains if any are subject to taxes. Income of certain tax-exempt bonds may be subject to the Federal Alternative Minimum Tax (AMT).

Real Assets:Real Assets includes Public Real Estate, Private Real Estate and Commodities.

Public Real Estate represents investments that offer participation in rental income from properties and appreciation in property sale. Private Real Estate is an investment that uses an active management strategy consisting of both direct and secondary ownership of equity and debt interests in various types of real property. Commodities are usually agricultural products such as 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 30 of 36 51 Portfolio Reports City of Malibu
corn, livestock, coffee and cocoa or metals such as gold, copper and silver, or energy products such as oil and natural gas. Commodities can either be sold on the spot market for immediate delivery or on the commodities exchanges for later delivery. Trade on commodities exchanges is usually in the form of future contracts.

There are special risks associated with an investment in real estate, including possible illiquidity of the underlying properties, credit risk, interest rate fluctuations and the impact of varied economic conditions. Privately offered real estate funds are speculative and involve a high degree of risk.

Investments in real estate have special risks, including the possible illiquidity of the underlying properties, credit risk, interest rate fluctuations, and the impact of varied economic conditions.

There can be no assurance a secondary market will exist and there may be restrictions on transferring interests. The commodities markets are considered speculative, carry substantial risks, and have experienced periods of extreme volatility.

Cash Alternatives: Cash Alternatives include liquid, short term and interest bearing investments. Examples are Treasury bills and commercial paper. It is possible to lose money by investing in cash alternatives.

CAR-0422-08350
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 31 of 36 52 Portfolio Reports City of Malibu
Disclosures
Asset Class Descriptions
The asset class descriptions below are included solely to provide insight into how individual securities are tied to specific asset classes. We use our best efforts to correctly classify investments. However, no warranty of accuracy is made.

Equity Investments: Equity investments refer to buying stocks of United States companies.

Fixed Income Securities (Bonds): Bonds are promissory notes of a United States corporation or federal government entity (taxable bonds) or a state or local government entity (tax-exempt or municipal bonds). Bonds usually make a series of interest payments followed by a return of principal at maturity. If sold prior to maturity, the price that can be obtained for a bond may be more or less than face value, depending on interest rates at the time the bond is sold and the remaining term of the bond.

Real Assets:Real Assets includes Public Real Estate, Private Real Estate and Commodities.

Public Real Estate represents investments that offer participation in rental income from properties and appreciation in property sale. Private Real Estate is an investment that uses an active management strategy consisting of both direct and secondary ownership of equity and debt interests in various types of real property. Commodities are usually agricultural products such as corn, livestock, coffee and cocoa or metals such as gold, copper and silver, or energy products such as oil and natural gas. Commodities can either be sold on the spot market for immediate delivery or on the commodities exchanges for later delivery. Trade on commodities exchanges is usually in the form of future contracts.

Investments in real estate have special risks, including the possible illiquidity of the underlying properties, credit risk, interest rate fluctuations, and the impact of varied economic conditions.

Multi-Class: This category is primarily used to classify investments that include a substantial amount of both equity and fixed income investments, or some other combination of classes.

Alternative Investments:Alternative Investments encompass a range of product structures to provide the investor with access to markets or investment strategies that are generally not easily accessible by individuals or smaller institutional investors. These often involve potentially higher risk strategies, such as employing leverage and / or short sales.

Alternative investments, such as hedge funds, are speculative and involve a high degree of risk that is suitable only for those investors who have the financial sophistication and expertise to evaluate the merits and risks of an investment in a fund. Short sales theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase. Leverage can magnify gains and losses.

Other: This classification represents securities which could not be definitively classified because there is insufficient similarity between the security and the defined asset classes. There may be inconsistencies in one or more of the following factors: historical performance, investment objective or asset composition. This analysis assigns relatively high downside risk and relatively low returns to assets classified as 'Other' in order to conservatively assess their impact on the portfolio.

Specialty: Classifications of Specialty Equities, Specialty Fixed Income, Specialty Real Assets, and Specialty Alternative Investments include securities in the highest level asset class that do not map into one of the detailed asset categories and those securities for which there is not enough data available to classify more precisely.

Annuities:

Annuities are long-term investments and may be subject to market fluctuations and investment risk. Many annuities offer guarantees that provide protection of an income stream or an account value. All guarantees are subject to the claims paying ability of the issuing insurance companies.

Annuity features and benefits vary and all annuity modeling in Envision is based on a set of general product assumptions. For specific details about how your annuity works, consult your annuity policy. Annuity assumptions are based on general product features and benefit modeling assumptions. The actual features and values of your specific contract may vary, and are determined by the contract terms and the underwriting insurance carrier. For the specific details of your features and benefits, please refer to your contract. Any annuity income amounts displayed on this report may not represent the actual amount available under your rider. Please contact the insurance company for specific income amounts available under your policy.

RMD:

Required Minimum Distributions (RMDs) are provided by a source that is deemed to be reliable.

Assets that are held are not included in the RMD calculation. Please note that these calculations are hypothetical and do not replace actual required minimum distribution calculations which should be made each year on an individualized basis.

Investment Interest/Dividends:

The Current Year view takes your current income, based on the current dividends or interest paid by your securities and multiplies it to create an annualized hypothetical figure. It does not reflect actual or future performance and should not be relied upon when making financial decisions.

All annualizations are based upon current positions using a simple mathematical calculation and assumes all figures remain constant for a year; any subsequent position changes will affect these calculations. Calculations for certain types of securities could include a return of principal or capital gain, in which case the figures would be overstated. Past performance is not a guarantee of future results. Dividend payments are made solely at the discretion of the issuer and are subject to be changed or eliminated at any time. Estimated Income is an estimate and the actual income might be lower or higher than the estimated amount. Estimated Income reflects only the income generated by an investment. It does not reflect changes in price, which may fluctuate. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 32 of 36 53 Portfolio Reports City of Malibu
Yield assumptions do not apply to Envision and are reflected only in the Income Dashboard.

Adjustments to default yields are permitted within an allowable range and may have been adjusted by your Financial Advisor.

General Information
Most securities are subject to capital gains taxes and some may be considered in calculations for Alternative Minimum Tax (AMT) that are not so designated here. This report does not attempt to portray phantom income (income accreted or accrued but not paid) on discount or zero coupon securities. You should consult with your tax advisor regarding the taxability of your holdings.

The Retirement Spending, Other Goals and Income Sources are based off of your Envision Plan.

However, your FA may have chosen to exclude certain cash flows for the purpose of this report.

Taxes
The tax assumptions are based on US federal and state tax rates. Inflation assumptions are based on historical and expected US inflation assumptions. Therefore, results for non-US residents may not be accurate as the actual tax and inflation rates for countries outside of the US may vary significantly from these assumptions. This report does not account for any currency fluctuations which may affect the relative value of cash flows outside of the United States. These currency fluctuations could significantly impact one's ability to meet financial goals.This report is not a substitute for official tax reporting.

The estimated taxes due calculations follow general US federal tax laws. Estimated taxes are calculated for ordinary income, qualified investment income, as well as gains or losses based off the Income Gap calculated value. The taxes are calculated after deductions (including state taxes) and exemptions are applied to the taxable income. The Income Gap calculated value is the amount of investment principal needed to meet the remainder of the Total Spending Goal after all income is spent.

This report is not a substitute for your own records and the year-end 1099 form. Cost data and acquisition dates provided by you are not verified by our firm. Our firm does not render legal, accounting or tax advice. Please consult your legal tax advisors before taking any action that may have tax consequences.

Effective tax rates may have been adjusted by your Financial Advisor. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 33 of 36 54 Portfolio Reports City of Malibu
Strategic Allocations (Standard)
Additional firm-sponsored strategic allocation models may be selected for your Investment Plan that may include updated asset allocation assumptions or may vary slightly from these standard strategic allocation models. Please refer to your Current vs. Strategic Allocation page for an illustration of the allocation mix for these models.

Name Conservative
Income
Conservative
Growth &
Income
Conservative
Growth
Moderate
Income
Moderate
Growth &
Income
Moderate
Growth
Aggressive
Income
Aggressive
Growth &
Income
Aggressive
Growth
U.S. Large Cap
Equities

12.00% 20.00% 30.00% 16.00% 24.00% 31.00% 19.00% 28.00% 28.00% U.S. Mid Cap
Equities

4.00% 8.00% 13.00% 5.00% 10.00% 14.00% 7.00% 12.00% 16.00% U.S. Small Cap
Equities

0.00% 5.00% 8.00% 4.00% 6.00% 10.00% 4.00% 6.00% 13.00% Developed Market
Ex-U.S. Equities

2.00% 7.00% 11.00% 4.00% 8.00% 12.00% 7.00% 9.00% 16.00% Emerging Market
Equities

0.00% 4.00% 9.00% 0.00% 5.00% 12.00% 0.00% 6.00% 15.00% U.S. Short Term
Taxable Fixed
Income

14.00% 8.00% 3.00% 11.00% 6.00% 2.00% 9.00% 4.00% 0.00% U.S. Intermediate
Taxable Fixed
Income

44.00% 23.00% 10.00% 35.00% 18.00% 4.00% 27.00% 12.00% 3.00% U.S. Long Term
Taxable Fixed
Income

14.00% 8.00% 3.00% 12.00% 6.00% 2.00% 9.00% 4.00% 0.00% Emerging Market
Fixed Income

3.00% 5.00% 3.00% 5.00% 5.00% 3.00% 8.00% 6.00% 2.00%
High Yield Taxable
Fixed Income

3.00% 6.00% 3.00% 4.00% 6.00% 3.00% 6.00% 7.00% 0.00%
Commodities 2.00% 4.00% 5.00% 2.00% 4.00% 5.00% 2.00% 4.00% 5.00% Cash Alternatives 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 34 of 36 55 Portfolio Reports City of Malibu
Strategic Capital Market Assumptions
Capital Market Assumptions (CMAs) for all asset classes assume a broadly diversified portfolio generally representative of the risks and opportunities of the asset class. To the extent that the investor's portfolio is not as diversified as the assumptions made for the asset class, the return and risk potential for the portfolio may vary significantly from the assumed CMAs.

The Strategic CMAs used within this illustration are forward looking and based on a building-block approach of risk premiums and Sharpe Ratio Equivalency.

The returns for each asset class reflect the premium above the short-term risk-free rate of return that investors are likely to demand in order to compensate for the risk of holding those assets. Sharpe ratio equivalency provides a consistent comparison of long term risk premium across various asset classes for 10 years (representative of a one to two business cycle time period). All portfolio return and downside risk calculations are based on the Strategic CMAs. These assumptions may differ greatly from the short-term performance and volatility experienced by your actual investment holdings. There are no assurances that the estimates will be achieved. They have been provided as a guide to help you with your investment planning.

Asset Class Downside Risk Average Annual Return1
U.S. Large Cap Equities -15.88% 7.13%
U.S. Mid Cap Equities -16.44% 7.81%
U.S. Small Cap Equities3 -20.04% 7.72%
Developed Market Ex-U.S. Equities4 -17.84% 6.36%
Emerging Market Equities4 -22.48% 7.48%
Specialty Equities -24.36% 5.50%
U.S. Short Term Taxable Fixed Income 0.04% 2.48%
U.S. Intermediate Taxable Fixed Income -2.42% 3.56%
U.S. Long Term Taxable Fixed Income -10.57% 3.85%
Short Term Tax Exempt Fixed Income -0.74% 2.10%
Intermediate Tax Exempt Fixed Income -4.12% 2.63%
Long Term Tax Exempt Fixed Income -5.33% 3.31%
Developed Market Ex-U.S. Fixed Income4 -10.30% 2.35%
Emerging Market Fixed Income4 -9.54% 6.29%
High Yield Taxable Fixed Income2 -9.31% 5.83%
High Yield Tax Exempt Fixed Income2 -8.27% 4.40%
Specialty Fixed Income -16.35% 1.42%
Public Real Estate -17.91% 6.90%
Private Real Estate -14.10% 7.68%
Commodities -16.27% 6.72%
Specialty Real Assets -21.24% 3.44%
Multi-Class -8.19% 6.01%
Global Hedge Funds -4.59% 5.33%
04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 35 of 36 56 Portfolio Reports City of Malibu
Asset Class Downside Risk Average Annual Return1
Private Equity -16.62% 11.30%
Private Debt -10.75% 8.47%
Specialty Alternative Investments -24.33% 3.21%
Cash Alternatives 0.23% 1.87%
Other -22.82% 0.56%
Additional Disclosures
1 The Average Annual Return is time-weighted. It is a measure of the compound rate of growth of the asset class. 2 Various rating services, such as Standard and Poor's and Moody's Investor Service rate the creditworthiness of bonds. Investing in lower-rated debt securities or funds that invest in such securities involves additional risk because of the lower credit quality of the security or fund portfolio. These securities or funds are subject to a higher level of volatility and increased risk of default, or loss of principal. 3 Investing in small companies or mutual funds that invest in small companies involves additional risk. Smaller companies typically have a higher risk of failure and are not as well established as larger blue chip companies. Historically, smaller-company stocks have experienced a greater degree of price volatility than the overall market average. 4 International investing may involve special risks such as currency fluctuation, political instability, and different methods of accounting and reporting requirements. * Hedge Fund Research, Inc. ©2023, www.hedgefundresearch.com Alternative investments carry specific investor qualifications which can include high income and net-worth requirements as well as relatively high investment minimums. They are complex investment vehicles which generally have high costs and substantial risks. They tend to be more volatile than other types of investments and present an increased risk of investment loss. There may also be a lack of transparency as to the underlying assets. Alternative investments are subject to fewer regulatory requirements than mutual funds and other registered investment company products and thus may offer investors fewer legal protections than they would have with more traditional investments. Additionally, there may be no secondary market for alternative investment interests and transferability may be limited or even prohibited. 04/29/2023 © 2023 Wells Fargo Advisors. All Rights Reserved. Page 36 of 36 57

Page 1 of 2 ends

Agenda Item # 3.B.11.

Council Agenda Report
To: Mayor Silverstein and the Honorable Members of the City Council Prepared by: Mary Linden, Executive Assistant
Reviewed by: Chris Orosz, Recreation Supervisor
Approved by: Steve McClary, City Manager
Date prepared: May 25, 2023 Meeting date: June 12, 2023 Subject: Mayors’ Monarch Pledge
RECOMMENDED ACTION: 1) Authorize Mayor Silverstein to sign the National Wildlife Federation Mayors’ Monarch Pledge, renewing the City’s commitment to save the monarch butterfly; and 2) Direct staff to implement measures to meet the commitments of the Mayors’ Monarch Pledge in support of monarch and pollinator conservation in the Malibu community.

FISCAL IMPACT: There is no fiscal impact associated with the recommended action.

WORK PLAN: This item was not included in the Adopted Work Plan for Fiscal Year 2022- 2023. This project is part of normal staff operations.

DISCUSSION: At its Regular meeting on July 23, 2018, the Council authorized the Mayor to sign the Mayors’ Monarch Pledge (Pledge), a project of the National Wildlife Federation to save the monarch butterfly and other important pollinators. At that time, the City committed to creating a pollinator garden in partnership with the Malibu Monarch Project.

In order to continue the City’s participation in this important environmental project, staff is requesting direction from the Council to implement measures to achieve the goals of the Pledge, which may include:
• Engage with community garden groups and encourage them to plant native milkweed and nectar-producing plants.

City Council Meeting
06-12-23
Item

3.B.11.

Page 2 of 2 ends

Agenda Item # 3.B.11.
• Add milkweed and nectar-producing plants in City parks, which may include Legacy Park, Malibu Bluffs Park, Trancas Canyon Park, and Las Flores Creek Park. • Launch an outdoor education program for students, educators, and the community to cover topics on planting native milkweed and native nectar plants that attract pollinators.

Staff will use the park maintenance budget funding to plant new or additional pollinator gardens.

ATTACHMENTS: None.

Page 1 of 7 ends

Agenda Item 4.A.

Council Agenda Report
To: Mayor Silverstein and the Honorable Members of the City Council Prepared by: Brandie Ayala, Administrative Analyst
Reviewed by: Robert DuBoux, Public Works Director/City Engineer Approved by: Steve McClary, City Manager
Date prepared: May 1, 2023 Meeting date: June 12, 2023
Subject: Fiscal Year 2023-2024 Wastewater Service Charges RECOMMENDED ACTION: 1) Conduct the Public Hearing to receive public testimony and consider all protest concerning the adoption of the Engineer’s Report regarding the levy of wastewater services fees through property taxes; and 2) Unless there are protests from majority of the affected property owners, adopt Resolution No. 23-28 approving the Engineer’s Report and collection of wastewater services charges on the county tax roll for Fiscal Year (FY) 2023-2024 for City of Malibu Assessment District No. 2015-1 (Civic Center Wastewater Treatment Facility – Phase-1).

FISCAL IMPACT: All operation and maintenance costs associated with the Civic Center Water Treatment Facility (CCWTF) are paid by revenue generated by the wastewater and recycled water service fees. The City is responsible for costs applicable to Cityowned properties located within the boundaries of the assessment district and those expenses are included in the annual budget.

When the wastewater rates were first developed, they were based on estimated costs for running the facility. After the first three years of operation, it became evident that some costs are higher than originally anticipated. For FY 2018-19 and FY 2019-20, a General Fund Loan in the amount of $327,334 was used to cover these additional expenses to operate and maintain the CCWTF.

On May 11, 2020, the City Council discussed the wastewater and recycled water rates for the CCWTF. Due to the economic impacts of the COVID-19 pandemic on businesses, the City Council directed staff to postpone raising the wastewater and recycled water rates and to continue to use the current wastewater and recycled water City Council Meeting
06-12-23
Item

4.A.
1

Page 2 of 7 ends

Agenda Item 4.A.
rates for FY 2020-21. Additionally, the Council directed staff to treat the excess operating costs of the CCWTF as a loan from the General Fund to the CCWTF Operations and Maintenance Fund with a repayment term of three years commencing in FY 2021-22.

The repayment of the General Fund Loan is built into the new wastewater and recycled water rates for FY 2021-22 through 2023-24.

The projected budget for FY 2023-24 anticipates expenditures of $2,308,098 for the CCWTF. The approved wastewater and recycled water rates will generate sufficient revenue to cover the operation, maintenance, management costs, and the third year of loan repayment.

WORK PLAN: This item was included as item 8.h in the Adopted Work Plan for Fiscal Year 2022-2023.

DISCUSSION: In July 2016, the City began construction on the CCWTF, wastewater collection system, recycled water distribution system, and the groundwater injection wells. In October 2018, construction was completed, and all developed property owners were connected. Connected property owners are responsible for paying for wastewater and recycled water at a rate that will provide sufficient revenue to offset the associated operation, maintenance and management costs.

On January 23, 2017, the City contracted with Raftelis Financial Consultants, Inc. (RFC) to develop a wastewater and recycled water rate study. The study identified the proposed budget needed to operate and maintain the wastewater treatment, recycled water, and injection wells systems. The wastewater and recycled water rates were developed to provide a fair and equitable rate structure that would provide sufficient revenue to operate and maintain the systems. Since the CCWTF was not yet completed, the original wastewater and recycled water service rates were developed based upon assumptions for the operation, maintenance, and management costs of the CCWTF.

Unfortunately, the original assumptions made to develop the original wastewater and recycled water service rates were not sufficient to cover the actual expenses.

On May 11, 2020, the City Council discussed the wastewater and recycled water rates for the CCWTF. Due to the economic impacts of the COVID-19 pandemic on local businesses, the City Council directed staff to postpone raising the wastewater and recycled water rates and to continue using the current wastewater and recycled water rates for FY 2020-21. Additionally, the Council directed staff to treat the excess operating costs of the CCWTF as a loan from the General Fund to the CCWTF Operations and Maintenance Fund with a repayment term of three years commencing in FY 2021-22.

On June 22, 2020, the City Council approved the collection of wastewater services charges for the CCWTF for FY 2020-21. Council also approved the terms for the loan, which include establishing the interest rate for the loan based on the published quarterly 2

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apportionment rate from Local Agency Investment Fund (LAIF) as established by the Treasurer of the State of California. This interest will be accrued to the loan annually and will compound over the life of the loan.

On October 28, 2020, the Administration and Finance Subcommittee recommended the City Council approve the interfund loan agreement with these terms. On November 9, 2020, City Council adopted Resolution No. 20-61 approving an interfund loan agreement for the CCWTF Operations and Maintenance Fund.

On May 13, 2021, staff provided a presentation to City Council regarding revising the wastewater and recycled water rates. Council directed staff to send out Proposition 218 Notices to the property owners and to hold a public hearing on the rates. On June 2, 2021 a notice of a public hearing set for June 28, 2021 to adopt the 2021 Wastewater and Recycled Water Rate Update Study and establish wastewater and recycled water service charges for FY 2021-22, 2022-23, and 2023-24 was mailed to all developed property owners in the Phase 1 wastewater prohibition area. At the public hearing, the City Council did not receive protests from a majority of the affected property owners (16 or more) and adopted the 2021 Update Study and the collection of the wastewater service fees on the County property tax bills.

Budget
An analysis of the actual operation and maintenance costs are required to provide adequate wastewater and recycled water service rates. RFC reviewed the three years of data and has developed a revised operation and maintenance budget. The revised budget provides the framework for the City’s operating, maintenance, and capital budgets, and has been used to develop the wastewater and recycled water rates. The proposed budget includes the following:

1. Contract Costs: Actual costs for the operation and maintenance identified in the City’s contract with Integrated Performance Consultants, Inc., the City’s contracted operator for the CCWTF. Generally, these costs include the actual labor to operate the systems.

2. Pass-through Costs: Reimbursable expenses by the CCWTF operator and not included in the Contract Costs. These items include chemicals, replacement of equipment, fuel for the backup generators, and the biosolids removal and disposal.

3. Direct Costs: Additional expenses the City will incur operating and maintaining the CCWTF including utilities, insurance, operating supplies, and water quality monitoring.

4. General Fund Loan Payment: The General Fund Loan repayment.

The CCWTF projected total annual budget for FY 2023-24 is $2,308,098. 3

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Wastewater Rates
The objectives used in developing the recommended rates were based on the equitable sharing of the wastewater costs and actual services provided.

In January 2016, the City established Assessment District No. 2015-1 (Assessment District). This Assessment District provided a method of equitable distribution of the design and construction costs based on the estimated flow and strength of the wastewater contributed by each parcel. To be consistent, the wastewater and recycled water rates were developed using the same methodology used in the Assessment District. This ensures a fair and equitable distribution of the operation and maintenance of the wastewater, recycled water and injection wells systems.

Using equivalent Dwelling Units (EDUs) allows the development of a base unit to which all parcels are compared and rates to be established. For example, a standard home is represented by the number of fixtures, wastewater flow and strength. A restaurant is then defined by how many standard homes, or EDUs, its flow is equal to. An analysis was created to arrive at a standard EDU for wastewater rates using a similar methodology used in the Assessment District. Each parcel would pay a monthly service rate based on how many EDUs the parcel’s flow and strength would be equal to. For example, City Hall has a total of 6.36 EDUs. The following table shows the calculated EDUs for Phase One:

EDUs Percent
Developed Parcels 379.79 71%
Undeveloped Parcels 152.07 29%
531.86 100%
Since vacant parcels will not be using wastewater and recycled water services until they are developed, the vacant parcels will not be factored into the development of the wastewater rates under Proposition 218. The total annual budget was divided by developed EDUs to calculate the monthly cost per EDU (Annual Budget / 379.79 EDU / 12 months).

Budget Category FY 2023-24
Maintenance and Operation
Contract $1,205,000
Pass-Through Costs $347,500
Direct Costs $512,476
General Fund Loan Repayment $243,122
Total $2,308,098
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The total monthly charge for each parcel is determined by multiplying the EDU rate by the total EDUs for each parcel. Each developed parcel’s monthly service charge is included in Attachment 1. The proposed wastewater rates are 9% lower than last year.

The reduction of the service charge is due to the addition of 5 developed parcels within Phase 1 connecting into the CCWTF. The following table illustrates the wastewater service rates per EDU over the last three years:

General Fund Repayment
During the first two years of operating the CCWTF, the City used a loan of General Funds to cover the additional operating and maintenance expenses. The additional expenses include higher than anticipated electrical and water treatment costs, insurance for the facility, and required water quality monitoring. An estimated total of $327,334 of General Funds was used during FY 2018-19 and FY 2019-20. This amount must be reimbursed by the connected property owners in the Civic Center area. An interest rate based on the published quarterly apportionment rate from LAIF as established by the Treasurer of the State of California will be used for the loan. This interest will be accrued to the loan annually and will compound over the life of the loan.

Recycled Water Rates
The CCWTF treats wastewater to a level at which it can be used for recycled water. The treated wastewater is disinfected and sent to the recycled water system. If there is a surplus, the recycled water will be injected into the ground through the injection wells.

There is a minimal difference in operation and maintenance costs between groundwater injection and recycled water distribution costs. Based upon this analysis and input from stakeholders, property owners within Phase One would receive their wastewater flow back as recycled water (minus a 5% loss in the treatment process) at no additional cost.

However, recycled water rates need to be established based on those property owners who exceed their allocations and for those property owners outside the Phase One boundary who wish to purchase recycled water.

The recycled water rates will be split up into the following categories and tiers:
• Inside Assessment District – This rate includes those properties located within the boundary of Phase One.
o Tier 1 - Recycled water equal to the Phase One property owner’s wastewater flow minus five percent (5%) due to water loss o Tier 2 - Excess usage by Phase One property owners beyond their wastewater flow
FY 2021-22 FY 2022-23 FY 2023-24
Wastewater Rate ($/EDU) $546.26 $558.56 $506.44
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• Outside Assessment District – Those property owners who seek to purchase recycled water outside the boundary of Phase One.

The recycled water rates are calculated to recover the capital, operations and maintenance costs associated with the wastewater to meet the requirements for recycled water. Under the Inside Assessment District category, Tier 2 rates were calculated to be $2.36 per hundred cubic feet.

Since those properties located outside the Assessment District did not contribute to the capital costs, those costs, as well as the operation and maintenance costs, will need to be recovered under the Outside Assessment District category. Those rates were calculated to be $5.93 per hundred cubic feet. This rate is lower than Los Angeles County Waterworks District No. 29 usage rate of $6.41.

These recycled water rates will be in effect through FY 2023-24.

FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24
Inside District
Tier 1 $0.00 $0.00 $0.00 $0.00
Tier 2 $2.04 $2.24 $2.30 $2.36
Outside District $5.70 $5.81 $5.87 $5.93
Any additional revenue generated by the recycled water rates will offset future operation and maintenance budgets and could reduce the need for future rate increases.

Proposition 218
In July 2006, the California Supreme Court determined that water and wastewater service charges are property-related charges and therefore are subject to Proposition 218 procedural requirements. Proposition 218 procedures require notices to be mailed to each property owner 45 days prior to the public hearing on any proposed fee increase.

Proposition 218 prohibits the adoption of a fee increase if a majority of property owners of the service attributable to the property.

On June 2, 2021 a notice of a public hearing set for June 28, 2021 to adopt the 2021 Wastewater and Recycled Water Rate Update Study and establish wastewater and recycled water service charges for FY 2021-22, 2022-23, and 2023-24 was mailed to all developed property owners in the Phase 1 wastewater prohibition area. At the public hearing, the City Council did not receive protests from a majority of the affected property owners (16 or more) and adopted the 2021 Update Study and the collection of the wastewater service fees on the County property tax bills. 6

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The FY 2023-24 wastewater service fees are posted on the City's website. In June 2023, a letter was sent to all property owners in the Phase One wastewater prohibition area advising them of the availability of this information (Attachment 2).

ATTACHMENTS:

1. Resolution No. 23-28 (Placing FY 2023-2024 wastewater service fees on property tax bills)

2. Letter sent to property owners (regarding public hearing and FY 2023-2024 wastewater service fees

3. Notice of public hearing
7 ATTACHMENT 1
RESOLUTION NO. 23-28

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MALIBU

APPROVING THE COLLECTION OF WASTEWATER SERVICE

CHARGES ON THE COUNTY TAX ROLL FOR THE FISCAL YEAR
2023-2024 FOR CITY OF MALIBU ASSESSMENT DISTRICT NO
2015-1 (CIVIC CENTER WASTEWATER TREATMENT FACILITY –
PHASE – 1)
The City Council of the City of Malibu does hereby find, order, and resolve as follows:

SECTION 1. Recitals.

A. The City Council of the City of Malibu, State of California, did on May 13, 2021, approved the 2021 Wastewater and Recycled Water Rates Study, authorized the mailing of the Proposition 218 notices to the affected property owners, and set June 28, 2021, as a public hearing date to establish the revised wastewater and recycled water service charges.

B. On June 8, 2023 a detailed notice of the proposed wastewater service fees being placed on the County property taxes was mailed to all developed property owners in the Phase 1 wastewater prohibition area. The notice provided details on how to submit a protest of these proposed rates.

C. The City Clerk fixed a time and place for a public hearing relating to the proposed wastewater service fees.

D. At the time set for the public hearing, all comments, objections and protests were duly heard and considered.

E. At the public hearing, the City Council did not receive protests from a majority of the affected property owners (33 or more). The City Council is now satisfied as to levying the wastewater service fees on the County property taxes in accordance with Health and Safety Code Sections 5470-5474.10.

SECTION 2. The City Council adopts the attached Exhibit A, Engineer’s Report and approves the levying of the wastewater service fees on the County property taxes. 8 Resolution No. 23-28

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SECTION 3. The City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.

PASSED, APPROVED, and ADOPTED on 12th day of June 2023. _____________________________
BRUCE SILVERSTEIN, Mayor
ATTEST:
___________________________
KELSEY PETTIJOHN, City Clerk
(seal)
APPROVED AS TO FORM:
___________________________
TREVOR RUSIN, Interim City Attorney
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86 City of Malibu
23825 Stuart Ranch Road ♦ Malibu, California ♦ 90265-4861 Phone (310) 456-2489 ♦ Fax (310) 317-0950 ♦ www.malibucity.org Recycled Paper
May 24, 2023
SUBJECT: CIVIC CENTER WASTEWATER TREATMENT FACILITY PROJECT

WASTEWATER BILLING
Dear Property Owner,
You are receiving this notification because you are a property owner within Assessment District 2015-1 and are required to pay wastewater services fees for the associated operation, maintenance, and management costs of the Civic Center Water Treatment Facility (CCWTF). On June 28, 2021, the City Council adopted the revised wastewater and recycled water rates. The revised rates can be located on the City’s website at www.malibucity.org/ccwtf.

In order to simplify the wastewater billing, the City has elected to have the wastewater service charges collected on the County property taxes. The wastewater services charges from July 1, 2023 to June 30, 2024 will be added to the property taxes. Please see the attachment for your specific property and amount.

On June 12, 2023, at 6:30 p.m. the City Council will hold a public hearing to adopt a resolution to allow the wastewater services charges to be collected with the property taxes and to hear any objections to this method. Objections can also be mailed to the City Clerk prior to the City Council meeting.

If you have any questions or need additional information, please contact me at (310) 456-2489, ext. 339.

Sincerely,
Robert DuBoux, PE, ESQ.

Public Works Director/City Engineer
Enclosures: Engineer’s Report for Fiscal year 2023-2024 Wastewater Service Fees ATTACHMENT 2
87 ATTACHMENT 3

NOTICE OF PUBLIC HEARING

CITY OF MALIBU

CITY COUNCIL
The City of Malibu City Council will hold a public hearing on MONDAY, June 12, 2023, at 6:30 p.m. on the item listed below in the Council Chambers at Malibu City Hall, located at 23825 Stuart Ranch Road, Malibu, CA, and via teleconference.

Public comment can be submitted ahead of the public hearing to [email protected] for inclusion in the public record. To view and participate during the public hearing, please review the meeting agenda posted at MalibuCity.org/AgendaCenter and follow the directions for public participation.

PUBLIC HEARING TO HEAR COMMENTS AND CONSIDER RESOLUTION LEVYING

WASTEWATER SERVICES FEES FOR THE CIVIC CENTER WASTEWATER TREATMENT FACILITY – PHASE ONE FOR PARCELS WITHIN ASSESSMENT DISTRICT NO. 2015-1.

Written objections, protests, or comments regarding the Wastewater Services Fees for Assessment District No. 2015-1 may be submitted to the City Clerk by email to [email protected] between now and Monday, June 12, 2023. If you are unable to submit your objections by email please contact the City Clerk at (310) 456-2489, ext. 228 to make alternative arrangements. All written objections or comments must be received prior to the opening of the public hearing.

IF YOU CHALLENGE THE CITY COUNCIL’S ACTION IN COURT, YOU MAY BE

LIMITED TO RAISING ONLY THOSE ISSUES RAISED AT THE PUBLIC HEARING

DESCRIBED IN THIS NOTICE, OR OTHERWISE HELD BY THE CITY, OR IN WRITTEN

CORRESPONDENCE DELIVERED TO THE CITY, EITHER AT OR PRIOR TO THE PUBLIC HEARING.

A copy of all relevant material, including resolutions, staff reports, and Engineer's Reports, are on file and available by request. Requests or questions about this notice should be directed to Public Works Director Robert DuBoux at (310) 456-2489 ext. 339 or [email protected]

Robert DuBoux, Public Works Director
Publish Date: June 1 and June 8, 2023
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Agenda Item # 5.A.

Council Agenda Report
To: Mayor Silverstein and the Honorable Members of the City Council Prepared by: Kelsey Pettijohn, City Clerk
Reviewed by: Joseph Toney, Assistant City Manager
Approved by: Steve McClary, City Manager
Date prepared: May 23, 2023 Meeting date: June 12, 2023 Subject: Review of the Hybrid Meeting Pilot Program and Commission Meeting Transition Plan
RECOMMENDED ACTION: 1) Consider the success of the hybrid meeting pilot program; 2) Provide direction on the format of City Council meetings, if appropriate; and 3) Provide direction on the meeting format for Commission, Committee, and Board meetings.

FISCAL IMPACT: Depending on what direction Council provides on the continuation of hybrid meetings, increased appropriation may be necessary to fund additional contractors needed to facilitate public meetings that was not included in the Proposed Budget for Fiscal Year 2023-2024.

WORK PLAN: This item was included as item 1a in the Adopted Work Plan for Fiscal Year 2022-2023.

DISCUSSION: On March 27, 2023, the City Council launched the hybrid meeting pilot program. These hybrid meetings have been conducted pursuant to AB 361 and allowed members of the public and the City Council to participate in-person or remotely. The Council should consider whether it is appropriate to stop making AB 361 findings at this stage of the COVID-19 pandemic and provide direction to staff on the appropriate meeting format for City Council and Commission meetings.

COVID-19
The Los Angeles County Department of Public Health (LADPH) continues to track COVID19 cases. On May 15, 2023, the County reported:

City Council Meeting
06-12-23
Item

5.A.

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• 2,323 new COVID-19 cases (3,743,266 cases to date)
• 20 new deaths due to COVID-19 (36,306 deaths to date) • 253 people currently hospitalized with COVID-19
• Seven-day daily average positivity rate of 3.9%
Los Angeles County is currently in the CDC’s Low Community Level. The CDC designation reflects COVID-19’s current limited impact on healthcare systems and low levels of severe illness.

AB 361
AB 361 terminates on January 1, 2024. While there is some ambiguity in the statute, its provisions provide that so long as the Council can make the findings required by AB 361, and specifically that State or local officials continue to impose or recommend measures to promote social distancing, remote meetings may continue pursuant to AB 361’s provisions.

Some State officials continue to recommend social distancing. California Division of Occupational Safety and Health (“Cal/OSHA”) regulations—at Title 8 Section 3205— recommend physical distancing in the workplace as a precaution against the spread of COVID-19 and impose certain restrictions and requirements due to a “close contact” which occurs when individuals are within six feet of another in certain circumstances. Relatedly, the Centers for Disease Control and Prevention continue to recommend avoiding contact and keeping a safe distance from a person who has a suspected or confirmed case of COVID-19
Although some state officials continue to recommend measures to promote social distancing, the State’s COVID-19 State of Emergency and the Los Angeles County Local Health Officer Order have been terminated. As COVID-19 conditions have improved overall, it may be appropriate for the Council to consider setting a date to terminate its AB 361 findings.

Hybrid Meeting Pilot Program
At the Council’s direction, staff developed a hybrid meeting plan that minimized logistical and technical complications and complied with AB 361. City Council meetings have been conducted in this format since March 22, 2023.

Some of the key components of this plan include:
• Speaker Sign-Ups: In-person participants are required to submit a physical speaker slip in the Chambers and remote participants are required to raise their hand in

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Agenda Item # 5.A.

Zoom if they would like to speak. Under AB 361, the City cannot require individuals to register in advance of the meeting to participate remotely. • Zoom Webinar: The transition to Zoom Webinar has provided staff better permission controls to manage the virtual component of the meeting. • Time deferrals: At the Council’s recommendation, no time deferrals have been allowed during hybrid meetings. This has streamlined the public comment process, but the Council should consider if it would like to allow time deferrals in the future.

If the Council would like to allow time deferrals, staff recommends limiting time deferrals to in-person participants when the individual deferring their time and the individual receiving the extra time are both present in the Chambers. Creating a process for remote participants to sign-up to defer their time to another speaker poses technical challenges.1
• Audio Only Participation – Remote participants have participated via audio only.

The Council Chambers was not designed to display video of teleconference participants. Additionally, allowing speakers on video would increase the risk of individuals displaying inappropriate materials and require staff to police what is or is not appropriate to be seen.
• Staffing – Hybrid meetings require an additional staff member to facilitate the Zoom component of the meeting. To support staff during the pilot program the City retained a broadcast services contractor to supplement the Media Team. If the Council plans to conduct hybrid meetings permanently staff will issue a request for proposals to identify a contractor for a longer-term contract.

If the Council terminates its AB 361 findings, it can continue to offer members of the public the opportunity to participate remotely in meetings. The central impact from no longer making AB 361 findings is that councilmembers and commission members will need to attend meetings in person, and their ability to participate remotely is much more constrained. The Council should provide feedback on the current process and provide direction to staff if it would like modifications.

Teleconferencing Considerations
When the Council stops making AB 361 findings, Councilmembers (and commissioners) will only be able to participate remotely under the Brown Act’s general teleconferencing provisions, or AB 2449’s alternate teleconferencing provisions.

The Brown Act’s general teleconferencing provisions allow Councilmembers to teleconference during a meeting provided the teleconference location is open to the public and noticed on the agenda and at least a quorum of the Council participates within the City’s jurisdiction.
1 While the Planning Commission has allowed time deferrals during virtual meetings, it has been difficult to implement and time consuming to call on and confirm each person that wants to donate a minute. These problems are likely to be exacerbated at the council level because there are many more participants. Online time donation is also rife for abuse as it can be hard to verify each person donating time is a unique and separate individual.

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AB 2449’s offers an alternative teleconference option that allows Councilmembers to teleconference during hybrid meetings without publicly noticing their teleconference location if they provide notice of their need to appear remotely for “just cause” or they request the council allow them to participate remotely due to “emergency circumstances.” “Just cause” is defined as:
• Childcare or caregiving need that requires them to participate remotely. • A contagious illness that prevents a member from attending in person. • A need related to a physical or mental disability as defined in Sections 12926 and 12926.1 not otherwise accommodated by the ADA
• Travel while on official business of the legislative body or another state or local agency
“Emergency circumstances” is defined as physical or family medical emergency that prevents a member from attending in person.

The legislative body must approve a teleconference request made due to emergency circumstances and these teleconference provisions may not be used by a member of the legislative body to teleconference for a period of more than three consecutive months or 20% of the regular meetings within a calendar year. Remote appearances due to just cause are limited to twice per calendar year.

There are a number of onerous requirements for any meeting where AB 2449’s provisions are used, including that in the event there is a disruption that interrupts the Council’s broadcast to the public, or a disruption within the City’s control preventing the public from offering public comment, the Council cannot take any further action until such service is restored.

If Hybrid meetings are not conducted by the City, councilmembers and commissioners will not be able to participate under AB 2449’s provisions, but would still be able to call in via the Brown Act’s general teleconferencing provisions.

Commission and Subcommittee Meetings
Staff recommends directing that Planning Commission meetings be conducted in the same format as the City Council and follow the same protocols for public participation. In order to properly notice any scheduled public hearings, the Planning Commission will need one months’ notice to transition to another meeting format. The first Planning Commission meeting that could be conducted in-person or hybrid is the July 17, 2023, Regular meeting.

Staff also recommends the Council direct all other Commissions and Committees to return to in-person meetings as soon as it stops making AB 361 findings.

Page 5 of 5 ends

Agenda Item # 5.A.

ATTACHMENTS: None.

Page 1 of 3 ends

Agenda Item # 5.B.

Council Agenda Report
To: Mayor Silverstein and the Honorable Members of the City Council Prepared by: Richard Mollica, Planning Director

Approved by: Steve McClary, City Manager
Date prepared: May 31, 2023 Meeting date: June 12, 2023 Subject: Update Regarding Local Coastal Program Amendment No. 16-006 (Sea View Hotel Project)
RECOMMENDED ACTION: Receive a status update regarding City Local Coastal Program Amendment (LCPA) No. 16-006 for the Sea View Hotel Project LCPA submittal, review the California Coastal Commission (CCC) approved LCPA as modified on February 8, 2023 (LCPA No. LCP-4-MAL-21-0073-2), and provide direction on the following:
1) The Council’s position on the LCPA as modified by the CCC and a determination if the modifications made by the CCC are generally consistent with the City’s LCPA as adopted on September 13, 2021, or that the modifications substantially deviate from the LCPA; and
2) Preparation of an Ordinance to accept the modified LCPA; or 3) Preparation of a Resolution to withdrawal the City’s submitted LCPA with the Council’s stated findings.

Should the Council desire to change the modified LCPA, the Council would need to withdraw and resubmit the amendment as a new LCPA.

FISCAL IMPACT: As described in the Council’s September 13, 2021, staff report, the applicant for LCPA No. 16-006 and associated Coastal Development Permit (CDP) No. 17-086 would contribute a fee of $110,000, in-lieu of providing six low-cost visitor accommodations. The City would be able to transfer these funds to a public agency, nonprofit organization, or private entity after entering a Memorandum of Understanding or other contractual agreement that requires use of the funds for construction of lower cost overnight visitor accommodations in the Malibu/Santa Monica Mountains coastal zone area of Los Angeles County or Ventura County and which requires that the accommodations remain lower cost. However, the transfer of funds is not required, and the funds could be deposited into the General Fund Undesignated Reserve. In addition to City Council Meeting
06-12-23
Item

5.B.
1

Page 2 of 3 ends

Agenda Item # 5.B.
the LCPA and CDP, associated Development Agreement No. 21-001 stipulated that the applicant would also contribute $800,000 to the City for public benefits at the time the construction permits are issued for the associated project. Pursuant to General Plan Section 1.5.0, public benefits shall include physical improvements dedicated and reserved for public use, including, but not limited to, open space, wetlands, trails and walkways, parks, athletic fields, and civic or public buildings (such as senior centers, youth facilities, city hall, etc.). These funds would total $910,000 and must be deposited into a General Fund Designated Reserve for a public benefit purpose. In 2021, the applicant forecasted that the project would generate over $1.0 million in Transient Occupancy Tax revenue annually; however, this projection was not confirmed by staff at the time as nightly room rates or the occupancy projections were unknown.

The CCC’s actions on February 8, 2023, modified the LCPA and included additional financial contributions associated with the project. As further described in this report, CCC’s Modification 3 to the LCPA included an $800,000 fee to be paid by agreement between the CCC, and the applicant to fund new lower cost overnight visitor accommodations elsewhere in the Malibu/Santa Monica Mountains coastal zone. The CCC described that the payment could be directed toward a public project to implement affordable visitor-serving accommodations in the area. In addition, the CCC described a commitment made by the applicant to provide $250,000 to a nonprofit organization that provides free surf lessons and transportation to beaches in the Malibu area for children in underserved communities in the general Los Angeles area. These additional fees totaling $1,050,000, would be submitted directly to the CCC and Los Courage Camps per the CCC’s proposed modifications.

In total, the applicant will be contributing $1,960,000.

WORK PLAN: This item was not included in the Work Plan for Fiscal Year 2022-2023.

BACKGROUND: On April 24, 2023, the Council took no action other than to direct staff to work with the applicant and the CCC to see if action can be taken that would potentially make the LCPA acceptable to the Council. On May 22, 2023, the Council made a motion to bring back the LCPA to receive a report on the status and provide the Council an opportunity to provide direction. According to the applicant, he continues to work with the Mountains Recreation and Conservation Authority (MRCA) and CCC staff. The applicant hopes to have a resolution that would be more acceptable to the Council prior to the June 12, 2023, City Council meeting. In addition, the applicant did request a meeting with the CCC Executive Director and City Staff. The CCC responded that they would be unable to have that meeting prior to June 12, 2023, and it is anticipated that they can meet with the Applicant and City Staff no sooner than June 15, 2023. Given the timing of the expiration of the LCPA and noticing requirements, if the Council now desires to consider accepting the LCPA as modified by the CCC, an ordinance will need to be brought to the Council at its next meeting for first reading.
2

Page 3 of 3 ends

Agenda Item # 5.B.

ENVIRONMENTAL IMPACT: The proposed City Council actions, including without limitation, direction to prepare an Ordinance or Resolution was adequately covered in Initial Study (IS) No. 21-001 and Mitigated Negative Declaration (MND) No. 21-001 for the Sea View Hotel (SCH #2012041087), adopted by the City Council on September 13, 2021 (Resolution No. 21-45). The proposed City Council actions are not a separate “project” for CEQA purposes but rather a subsequent discretionary action related to a previously approved project (CEQA Guidelines § 15378(c)). Additionally, pursuant to CEQA Guidelines Section 15162, and based on the review of the entire record, including without limitation, the IS/MND, the City Council finds that the proposed actions do not require further environmental review as: 1) no substantial changes are proposed to the project and no substantial changes have occurred that require major revisions to the IS/MND due to the involvement of new significant environmental effects or an increase in severity of previously identified significant effects; and 2) no new information of substantial importance has come to light that shows the project will have one or more significant effects not discussed in the IS/MND. Pursuant to CEQA Guidelines §15162(b), the City Council finds and recommends that no further analysis or environmental documentation is necessary. Accordingly, the proposed City Council actions are merely a step toward furtherance of the original project for which environmental review was performed, no supplemental or subsequent CEQA has been triggered, and no further environmental review is required.

CONCLUSION: Staff requests Council to provide direction on next steps regarding the LCPA. If the Council accepts the modified LCPA, staff will return with an Ordinance to accept the modified LCPA. If the Council does not accept the modified LCPA, staff could return with a Resolution to withdraw the LCPA with the Council’s stated findings.

ATTACHMENTS:

1. CCC Modifications to City LCPA (redlined version)

2. CCC Staff Report and Attachments, February 8, 2023

3. CC Staff Report and Attachments, April 24, 2023
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C9D51CDG?@1B35<C1>4144144B5CC5CD?45@93DG8938@1B35<C1B5CE2:53DD?D85?F5B<1I 10 STATE OF CALIFORNIA – NATURAL RESOURCES AGENCY GAVIN NEWSOM, GOVERNOR

CALIFORNIA COASTAL COMMISSION

SOUTH CENTRAL COAST DISTRICT OFFICE
89 SOUTH CALIFORNIA STREET, SUITE 200
VENTURA, CA 93001
(805) 585-1800
W11a
DATE: January 26, 2023
TO: Commissioners and Interested Persons
FROM: Steve Hudson, District Director
Barbara Carey, District Manager
Deanna Christensen, District Supervisor
Denise Gonzalez, Coastal Program Analyst
SUBJECT: City of Malibu Local Coastal Program Amendment No. LCP-4-MAL-21- 0073-2 (Sea View Hotel Project) for February 8, 2023 Commission Meeting

SUMMARY OF STAFF RECOMMENDATION
The City of Malibu’s (“City”) proposed Local Coastal Program (LCP) Amendment No. LCP4-MAL-21-0073-2 consists of changes to the Land Use Plan (LUP) and Local Implementation Plan (LIP) portions of its certified LCP. Staff recommends that the Commission, after public hearing, approve the proposed LUP amendment as submitted.

The proposed LUP amendment is consistent with and meets the requirements of the policies of Chapter 3 of the Coastal Act. Commission staff further recommends that the Commission deny the proposed LIP amendment as submitted and approve the proposed LIP amendment with seven suggested modifications. The modifications are necessary to ensure the proposed LIP amendment conforms with, and is adequate to carry out, the provisions of the certified LUP, as amended. The motions to accomplish these recommendations are found on Pages 7-9 of this staff report.

The City is requesting an amendment to modify the land use and zoning designation of two parcels at 22741 Pacific Coast Highway (APN: 4452-022-017) and 22729 Pacific Coast Highway (APN: 4452-022-010) from Community Commercial (CC) to Commercial Visitor Serving-Two (CV-2) on the LUP Land Use Map and LIP Zoning Map. These two parcels, which are owned variously by three property owners, together comprise approximately 1.18 acres of land known as the Sea View Hotel Site (“subject site”). The amendment further proposes the creation of a new overlay district (Sea View Hotel Overlay District) with special development standards to facilitate the development of a new 39-room luxury hotel.

The amendment also includes increasing the development’s allowable Floor Area Ratio (FAR) beyond what is permitted under the existing LCP, which triggers the need for a Development Agreement to be approved through an LCP amendment certified by the Coastal Commission pursuant to LIP Section 3.8(A)(5). Therefore, the proposed amendment also includes the approval of a Development Agreement between the City and the property owners to increase the maximum allowable FAR from 0.15 to 0.52 in conjunction with a payment of $800,000 to the City to be expended as the City Council 11 ATTACHMENT 2
LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
2 determines to be an appropriate use.

The standard of review for the changes to the Land Use Plan is whether the amendment meets the requirements of and is consistent with the policies of Chapter 3 of the Coastal Act. The standard of review for the proposed changes to the Local Implementation Plan is whether the amendment conforms with and is adequate to carry out the provisions of the Land Use Plan portion of the certified City of Malibu LCP as amended.

The amendment request is project-specific to allow for the construction of a new 39-room luxury hotel on the subject site. The proposed overlay map will be added to the LIP Zoning Maps and the proposed overlay text will apply use restrictions and development standards over the property. The proposed overlay site is currently zoned Community Commercial, which does not allow hotels as a permitted use. Hotel use is only permitted within Commercial Visitor Serving Two. Therefore, to accommodate the proposed hotel development, the City proposes to change the land use and zoning designation of the subject site from CC to CV-2.

Visitor-serving commercial development, including overnight accommodations, is considered a priority use under the Coastal Act and the Malibu LCP and is given priority over other land uses such as general commercial or residential development. The subject site is located on the landward side of Pacific Coast Highway (PCH) in a commercial area of the City, approximately one-third mile east of the Malibu Pier and Civic Center area. The site is developed with existing commercial buildings and associated surface parking areas.

Properties in the immediate vicinity are zoned CC, CV-1, and CV-2 and are developed with commercial structures and uses, including hotels such as the Malibu Beach Inn and Nobu Ryokan and several restaurants. Further north, there is an area of hillside residential development.

Visitor-serving commercial uses provide greater public benefit than community commercial uses because they are designed to serve a larger segment of the population that can take advantage of and enjoy the use of the property, and such uses support visitors to the coast.

All future development on the subject site will need to support the visitor-serving nature of the area, be consistent with the allowable uses under the Commercial Visitor Serving land use designation and be consistent with the policies and provisions of the certified LCP. The site is appropriate for visitor-serving commercial use, for instance, the proposed hotel development. The proposed LUP amendment to change the land use designation to CV-2, as submitted, is consistent with Chapter 3 policies of the Coastal Act.

The key issue raised by this amendment request is the adequate provision of lower-cost visitor-serving overnight accommodations. In this case, no existing lower-cost rooms are being demolished or replaced since the proposed hotel project does not include the demolition of an existing lower-cost hotel or motel. However, this is a project-specific request to allow a new 39-room luxury hotel at the site and the proposal raises an issue of whether the project specific LCP amendment is consistent with the Coastal Act and LCP policies to ensure that proposed visitor-accommodation facilities in the coastal zone include lower-cost accommodations. Under the City’s LCP, if a property owner proposes to build new overnight luxury accommodations, LUP Policy 2.35 and LIP Section 12.10 allow for the payment of an in-lieu fee of $10,419 (and adjusted for inflation) applied to fifteen percent (15%) of the total number of new rooms built on a property as a mechanism to ensure 12 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
3 compliance with the objectives of Section 30213 and 30222 of the Coastal Act and Policies

2.33, 2.34, 2.36 and 2.37 of the Malibu LCP. However, recognizing that the LCP’s required base in-lieu mitigation fee of $10,419 is too low in comparison to the in-lieu mitigation fee per required lower-cost room (not provided onsite) that the Commission has required in recent past actions for new hotel development along the coast, the property owners have offered to pay a total in-lieu mitigation fee of $800,000 (or approximately $133,000 per room applied to 15% of the new 39 luxury hotel rooms) to assist in funding affordable overnight accommodations elsewhere in the Malibu/Santa Monica Mountains coastal zone.

However, because the property owners did not propose the $800,000 mitigation fee as part of its underlying coastal development permit applications to the City, this proposed fee is not reflected in the proposed LCP amendment request.

To provide an effective alternative mechanism for the hotel project proponent to provide a component of lower cost overnight visitor accommodations through an up-to-date in-lieu mitigation fee as required by the Commission in recent Commission’s actions, the property owners and the Commission staff have worked cooperatively to reach an agreement on a mechanism whereby the property owners have agreed to provide an $800,000 in-lieu fee to an appropriate third party entity through an escrow account for use in developing low-cost visitor serving overnight accommodations in the Malibu/Santa Monica Mountains coastal zone. These escrow funds would be released once the owners secure entitlements to develop the site with a hotel use and those entitlements are no longer subject to challenge.

The owners have also agreed to deliver in escrow a Declaration of Covenants, to be recorded upon effective certification of this LCP amendment. Once the Declaration of Covenants is recorded, the obligation for payment of the $800,000 in-lieu fee runs with the land and is binding on any future owners. This provision provides extra assurances that the lack of provision for lower cost overnight accommodations with a new luxury hotel development will be mitigated even if the current property owners decide not to pursue the project. As such, the agreement is structured to provide the Commission with the assurance of payment of the fee, which represents an opportunity to provide lower cost visitor-serving accommodations elsewhere near the project area. And using an escrow arrangement provides the property owners assurance that the required fee will only be transferred upon securing final entitlements for the hotel development. In order to ensure that the proposed amendment will provide a component of lower cost visitor-serving overnight accommodations in the Coastal Zone through an up-to-date in-lieu mitigation fee, Staff is recommending a suggested modification to note the agreement between the Coastal Commission and the property owners regarding payment of the fee is in addition to the existing LCP requirements regarding the development of luxury overnight accommodations.

The LCP amendment includes creation of a new overlay district (Sea View Hotel Overlay District) with special development standards to facilitate the development of a new 39-room luxury hotel. The coastal development permit for the hotel development within the overlay district site has already been approved by the City of Malibu, conditioned to not be effective until certification of the subject LCP amendment. As such, Commission staff have conducted a project-level review of the proposed development and recommend adopting suggested modifications to the proposed overlay district development standards to ensure consistency with the relevant policies and provisions of the LCP. The remaining 13 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
4 modifications are minor clarifications to LIP text and figures that further the intent and implementation of the LCP and to avoid ambiguity.

For the reasons described in this report, Staff recommends that the Commission find that the proposed LUP amendment is consistent with and meets the requirements of the policies of Chapter 3 of the Coastal Act, and find the proposed LIP amendment, only if modified as suggested, is consistent with and adequate to carry out the applicable policies of the certified LUP as amended.
14 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
5 Table of Contents
I. PROCEDURAL OVERVIEW................................................................................ 6 A. Standard of Review............................................................................................................ 6 B. Procedural Requirements................................................................................................... 6 C. Public Participation............................................................................................................. 7 II. STAFF RECOMMENDATION, MOTION, AND RESOLUTION FOR THE LAND USE PLAN AMENDMENT ................................................................................... 7 A. APPROVAL OF THE LAND USE PLAN AMENDMENT AS SUBMITTED ......................... 7 III. STAFF RECOMMENDATION, MOTIONS, AND RESOLUTIONS FOR THE LOCAL IMPLEMENTATION PLAN AMENDMENT .............................................. 8 A. DENIAL OF THE LOCAL IMPLEMENTATION PLAN AS SUBMITTED............................. 8 B. APPROVAL OF THE LOCAL IMPLEMENTATION PLAN AMENDMENT WITH SUGGESTED MODIFICATIONS ....................................................................................... 8 IV. SUGGESTED MODIFICATIONS ON THE LOCAL IMPLEMENTATION PLAN AMENDMENT...................................................................................................... 9 V. FINDINGS FOR APPROVAL OF THE LUP AMENDMENT AS SUBMITTED,

DENIAL OF THE LIP AMENDMENT AS SUBMITTED, AND APPROVAL OF THE LIP AMENDMENT IF MODIFIED AS SUGGESTED..................................13 A. Amendment Description and Background........................................................................14 B. Public Access and Recreation..........................................................................................16 C. New Development and LCP Administration .....................................................................29 D. California Environmental Quality Act ................................................................................33 Exhibits
Exhibit 1 – Proposed LIP Amendment Text Changes in Strikethrough/Underline Exhibit 2 – Proposed Land Use and Zoning Map Change
Exhibit 3 – Proposed Sea View Hotel Overlay District Map Exhibit 4 – Proposed Development Agreement
Exhibit 5 – Vicinity Map
Exhibit 6 – Aerial View of the Subject Parcels
Exhibit 7 – Parcel Map
Exhibit 8 – Overall Site Plan for Sea View Hotel Project 15 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
6 I. PROCEDURAL OVERVIEW
A. Standard of Review
The Coastal Act provides:

The Commission shall certify a land use plan, or amendments thereto, if it finds that a land use plan meets the requirements of, and is in conformity with, the policies of Chapter 3 (commencing with Section 30200) … (Section 30512(c)) The local government shall submit to the Commission the zoning ordinances, zoning district maps, and, where necessary, other implementing actions that are required pursuant to this chapter…(Section 30513)
…The Commission may only reject zoning ordinances, zoning district maps, or other implementing actions on the grounds that they do not conform with, or are inadequate to carry out, the provisions of the certified land use plan. If the Commission rejects the zoning ordinances, zoning district maps, or other implementing actions, it shall give written notice of the rejection, specifying the provisions of the land use plan with which the rejected zoning ordinances do not conform, or which it finds will not be adequately carried out together with its reasons for the action taken…(Section 30513)
The Commission may suggest modifications in the rejected zoning ordinances, zoning district maps, or other implementing actions, which, if adopted by the local government and transmitted to the commission, shall be deemed approved upon confirmation by the executive director...(Section 30513) Any proposed amendments to a certified local coastal program shall be submitted to, and processed by, the commission in accordance with the applicable procedures and time limits specified in Sections 30512 and 30513… (Section 30514(b)) Pursuant to Section 30512(c), the standard of review that the Commission utilizes in reviewing the adequacy of the proposed amendment to the City’s certified land use plan (LUP) is whether the proposed amendment is consistent with, and meets the requirements of, the policies of Chapter 3 of the Coastal Act. The standard of review for the proposed amendment to the City’s certified local implementation plan (LIP), pursuant to Sections 30513 and 30514(b) of the Coastal Act, is whether the proposed amendment is in conformance with, and adequate to carry out, the provisions of the LUP portion of the City’s certified local coastal program (LCP).

B. Procedural Requirements
If the Commission certifies the LCP amendment as submitted, no further City Council action will be necessary pursuant to Section 13544(b)(2) of Title 14 of the California Code of Regulations. Should the Commission deny the LCP Amendment, as submitted, without suggested modifications, no further action is required by either the Commission or the City 16 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
7 Council, and the LCP amendment is not effective, pursuant to Section 13542(f). Should the Commission deny the LCP Amendment, as submitted, but then approve it with suggested modifications, then the City Council may consider accepting the suggested modifications and submitting them by resolution to the Executive Director for a determination that the City Council’s acceptance is consistent with the Commission's action. In that scenario, pursuant to Section 13544(c) of Title 14 of the California Code of Regulations, the modified LCP Amendment will become final when the Executive Director reports the determination that the local government's action is legally adequate to the Commission at its next regularly scheduled public meeting. If the City Council does not accept the suggested modifications within six months of the Commission’s action, then the LCP amendment remains uncertified and not effective.

C. Public Participation
Section 30503 of the Coastal Act requires public input in the preparation, approval, certification, and amendment of any LCP. The City held public hearings on this amendment and received oral and written comments regarding the proposed changes from concerned parties and members of the public. The hearings were duly noticed, consistent with the provisions of Section 13515 of Title 14 of the California Code of Regulations. Notice of the Coastal Commission’s consideration of the subject amendment has been distributed to all known interested parties.

II. STAFF RECOMMENDATION, MOTION, AND RESOLUTION

FOR THE LAND USE PLAN AMENDMENT
Following public hearing, staff recommends the Commission adopt the following resolution and findings. The appropriate motion to introduce the resolution and a staff recommendation is provided.

A. APPROVAL OF THE LAND USE PLAN AMENDMENT AS SUBMITTED MOTION I:

I move that the Commission certify Land Use Plan Amendment No. LCP-4-MAL-21- 0073-2 as submitted by the City of Malibu.

STAFF RECOMMENDATION TO CERTIFY:

Staff recommends a YES vote. Passage of this motion will result in certification of the Land Use Plan amendment as submitted and the adoption of the following resolution and findings. The motion passes only by an affirmative vote of a majority of the appointed Commissioners.

RESOLUTION TO CERTIFY THE LAND USE PLAN AMENDMENT AS SUBMITTED:

The Commission hereby certifies the City of Malibu Land Use Plan Amendment No. LCP17 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
8 4-MAL-21-0073-2 as submitted by the City of Malibu and adopts the findings set forth below on the grounds that the amendment will meet the requirements of and be in conformity with the policies of Chapter 3 of the Coastal Act. Certification of the Land Use Plan amendment complies with the California Environmental Quality Act because either 1) feasible mitigation measures and/or alternatives have been incorporated to substantially lessen any significant adverse effects of the land use plan on the environment, or 2) there are no further feasible alternatives or mitigation measures which could substantially lessen any significant adverse impact which the Land Use Plan amendment may have on the environment.

III. STAFF RECOMMENDATION, MOTIONS, AND

RESOLUTIONS FOR THE LOCAL IMPLEMENTATION PLAN

AMENDMENT
Following public hearing, staff recommends the Commission adopt the following resolutions and findings. The appropriate motion to introduce the resolution and a staff recommendation is provided prior to each resolution.

A. DENIAL OF THE LOCAL IMPLEMENTATION PLAN AS SUBMITTED MOTION I:

I move that the Commission reject Local Implementation Plan Amendment No. LCP4-MAL-21-0073-2 as submitted by the City of Malibu.

STAFF RECOMMENDATION OF DENIAL:

Staff recommends a YES vote. Passage of this motion will result in denial of the Implementation Plan Amendment as submitted and adoption of the following resolution and findings. The motion passes only by an affirmative vote of a majority of the appointed Commissioners.

RESOLUTION TO DENY AS SUBMITTED:

The Commission hereby denies certification of the Local Implementation Plan Amendment No. LCP-4-MAL-21-0073-2 as submitted by the City of Malibu and adopts the findings set forth below on the grounds that the Local Implementation Plan Amendment, as submitted, does not conform with, and is inadequate to carry out, the provisions of the certified Land Use Plan. Certification of the Local Implementation Plan Amendment would not meet the requirements of the California Environmental Quality Act, as there are feasible alternatives and mitigation measures that would substantially lessen the significant adverse impacts on the environment that will result from certification of the local implementation plan amendment as submitted.

B. APPROVAL OF THE LOCAL IMPLEMENTATION PLAN AMENDMENT

WITH SUGGESTED MODIFICATIONS
18 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
9 MOTION II:

I move that the Commission certify Local Implementation Plan Amendment No. LCP4-MAL-21-0073-2 for the City of Malibu if it is modified as suggested in this staff report.

STAFF RECOMMENDATION TO CERTIFY WITH SUGGESTED MODIFICATIONS:

Staff recommends a YES vote. Passage of this motion will result in certification of the local implementation plan amendment with suggested modifications and adoption of the following resolution and findings. The motion passes only by an affirmative vote of a majority of the appointed Commissioners.

RESOLUTION TO CERTIFY WITH SUGGESTED MODIFICATIONS:

The Commission hereby certifies the Local Implementation Plan Amendment No. LCP-4- MAL-21-0073-2 for the City of Malibu, if modified as suggested, and adopts the findings set forth below on grounds that the local implementation plan amendment with the suggested modifications will meet the requirements of and be in conformity with the policies of Chapter 3 of the Coastal Act. Certification of the land use plan amendment, if modified as suggested, complies with the California Environmental Quality Act, because either 1) feasible mitigation measures and/or alternatives have been incorporated to substantially lessen the any significant adverse effects of the land use plan amendment on the environment, or 2) there are no further feasible alternatives or mitigation measures that would substantially lessen any significant adverse impacts which the local implementation plan amendment may have on the environment.

IV.SUGGESTED MODIFICATIONS ON THE LOCAL

IMPLEMENTATION PLAN AMENDMENT
The staff recommends the Commission certify the proposed LIP amendment, with seven suggested modifications as shown below. Existing language of the certified Local Implementation Plan is shown in straight type. Language proposed to be added by the City of Malibu in this amendment is shown in underlined. Language proposed to be deleted by the City of Malibu in this amendment is shown as strikethrough. Language recommended by Commission staff to be inserted is shown in double underlined. Language recommended by Commission staff to be deleted is shown in double strikethrough.

Suggested Modification No. 1
LIP Section 3.4.6 (Sea View Hotel Overlay District), and subsection B and C of LIP Section

3.4.6 shall be modified as follows:

3.4.6 Sea View Hotel Overlay District (22729 Pacific Coast Highway/APN 4452-022-010 and 22741 Pacific Coast Highway/APN 4452-022-017)
19 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
10 …
B. Description of Area Subject to LIP Section 3.4.6. The provisions of this section shall apply to the Project Site, a 51,776 square foot (1.19 acre) site, parcel, comprised of two merged parcels, currently identified as 22729 Pacific Coast Highway and 22741 Pacific Coast Highway (Los Angeles County Assessor Parcel Numbers 4452-022-010 and 4452-022-017) in the Sea View Hotel Overlay District map.

C. Applicability. The Commercial Development Standards contained in LIP Section

3.18, as well as other applicable certified LCP policies and provision shall apply, unless specifically modified by this section.

Suggested Modification No. 2
Subsection D of LIP Section 3.4.6 (Sea View Hotel Overlay District) shall be modified as follows:

D. Development Agreement. Pursuant to a Development Agreement between the property owner and the City of Malibu, the allowable Floor to Area Ratio (FAR) is increased from 0.15 to 0.52 if. Tthe applicant will contributes $800,000 to the City for public benefits and amenities, to be expended as the City Council determines to be an appropriate use.

Suggested Modification No. 3
The following subsection shall be added to LIP Section 3.4.6 (Sea View Hotel Overlay District):

LCP-4-MAL-21-0073-2 (“Applicant”) has agreed to enter into an agreement with the Coastal Commission to fund an associated escrow account, thereby committing to pay an in-lieu fee to another entity acceptable to the Executive Director of the Coastal Commission for use in developing lower cost visitor accommodations, to be released upon Applicant’s securing of entitlements to develop the site consistent with development standards of the Sea View Hotel Overlay District below.

Suggested Modification No. 4
Subsection E of LIP Section 3.4.6 (Sea View Hotel Overlay District) shall be modified as follows:

EF. Development Standards.
20 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
11 …

PROJECTIONS INTO YARDS
The provisions of LIP Section 3.5.3(B) apply with the
is modified as following s additional provision:
x Access and exit stairs required by the Fire
Department, and existing retaining walls may
project without limit into required side yards.

SITE DEVELOPMENT CRITERIA
…
Minimum Onsite
Landscaping
The provisions of LIP Section 3.8(A)(5)(b) shall not
apply. The Sea View Hotel landscaping criteria are as
follows:

A minimum of 8,977 square feet of landscaping at
ground level. Additionally, there shall be a minimum
of 2,528.6 square feet of plants in planters on the
southerly seaward areas of the various decks.

Minimum Onsite Open
Space
The provisions of LIP Section 3.8(A)(5)(b) shall not
apply. The Sea View Hotel open space criteria are as
follows:

A minimum of 1,313.8 square feet of private
recreational area at ground level and first level
reception area and 21,494 square feet at guest deck
patios, not already included in landscape area, are
required.

HEIGHT
Maximum Height
Projections
The provisions of LIP Section 3.8(A)(1) shall not
apply. The Sea View Hotel height requirements are
as follow:
x New structures which have sloping roofs that
slope less than 25% shall be no higher than 24
feet above the existing natural grade or finished
grade, whichever results in a lower building
height, excluding basements
x New structures which have sloping roofs that
slope 25%, or more, shall be no higher than 28
feet above the existing natural grade or finished
grade, whichever results in a lower building
height, excluding basements. Areas such as
elevator shafts in order to comply with ADA laws,
the wooden deck above the existing tile rooftop
21 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
12 deck, the fire exit stairs required by the Fire
Department, the safety railing around the decks,
and the sound wall as described in the Mitigated
Negative Declaration are excluded from the
referenced height restrictions. Seven-foot
overhangs to eliminate sun from hitting south
facing windows are excluded from the height
standards.

PARKING AND ACCESS
Parking Requirements The provisions of LIP Sections 3.14.2 and 3.14.3 shall not apply. The Sea View Hotel parking requirements
are as follows:
x 1.5 parking spaces per hotel room.
x 1 space for each, per-shift employee (15-full time
employees per shift – 15 spaces)
x 1 space for each 100 square feet of gross floor
area used for consumption of food or beverages,
or public recreation areas.
x 1 space for each 5 fixed seats, or for every 35
square feet of assembly area where there are no
fixed seats in meeting rooms or other assembly
areas.
…
Layout and Paving The provisions of LIP Section 3.14.5 are modified or shall not apply as follows:
…
x The landscaped areas and the parking plan
shown on the Sea View Hotel plans are an
integral part of the proposed hotel and are
acceptable within the overlay district.

MONUMENT SIGN AND GENERAL SIGN REQUIREMENTS
The provisions of LIP Section 3.15.6 are modified or
shall not apply as follows:
x The provisions of LIP Section 3.15.6(A)(2)(d)(iii)
shall not apply.
…
Suggested Modification No. 5
Subsection F of LIP Section 3.4.6 (Sea View Hotel Overlay District) shall be modified as 22 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
13 follows:

FG. PERMITTED USES
The following permitted, conditionally permitted, and prohibited uses and design standards are as follows: shall apply to the Sea View Hotel Overlay District. Permitted and conditionally permitted uses that are a component of the hotel development are subject to the custom development standards of this Sea View Hotel Overlay District.

Permitted or conditionally permitted uses that are not a component of the hotel development are subject to all applicable policies and provisions of the certified LCP, including the Commercial Development Standards in LIP Section 3.8. a. Permitted Uses: The uses and structures permitted within Sea View Hotel Overlay District are as follows:
i. All uses permitted in the Commercial Visitor Serving-2, (CV-2), land use zoning district, as specified in the LCP.
ii. Restaurants that are open to the general public will require one parking space for every 100 square feet of serving area.
…
c. Conditionally Permitted Uses. The following uses may be permitted subject to additionally obtaining a Conditional Use Permit in accordance with the requirements of the MMC:
i. All conditionally permitted uses in the Commercial Visitor Serving-2, (CV-2), land use zoning district, as specified in the LCP.

Suggested Modification No. 6
Modify the Sea View Hotel Overlay District Map (attached as Exhibit 3 of this staff report) to depict the Sea View Hotel Overlay District site as two parcels and add corresponding addresses and assessor parcel numbers (22729 Pacific Coast Highway/APN 4452-022-010 and 22741 Pacific Coast Highway/APN 4452-022-017) to differentiate which parcels are subject to the Sea View Hotel Overlay District.

Suggested Modification No. 7
Modify the LIP Zoning Map (attached as Exhibit 2 of this staff report) to depict the Sea View Hotel Overlay District site as two parcels APN 4452-002-010 and 4452-022-017.

V. FINDINGS FOR APPROVAL OF THE LUP AMENDMENT AS

SUBMITTED, DENIAL OF THE LIP AMENDMENT AS

SUBMITTED, AND APPROVAL OF THE LIP AMENDMENT IF

MODIFIED AS SUGGESTED
23 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
14 The following findings support the Commission’s certification of the proposed Land Use Plan amendment as submitted, the Commission’s denial of the proposed Local Implementation Plan amendment as submitted, and approval of the Local Implementation Plan Amendment if modified as suggested (detailed in Section IV. Suggested Modifications above).

The Commission hereby finds and declares as follows:

A. Amendment Description and Background
The City of Malibu (“City”) is requesting an amendment to the Land Use Plan (LUP) and Local Implementation Plan (LIP) portions of its certified LCP to change the land use and zoning designation of two adjacent commercially developed parcels identified as 22729 Pacific Coast Highway (PCH) (APN: 4452-022-010) and 22741 Pacific Coast Highway (APN: 4452-022-017), from Community Commercial (CC) to Commercial Visitor Serving Two (CV-2) on the LUP Land Use Map and LIP Zoning Map. These two parcels together comprise approximately 1.18 acres of land known as the Sea View Hotel Site (“subject site”).

The LIP amendment further proposes the creation of a new overlay district (Sea View Hotel Overlay District) to accommodate the construction of a new 39-room hotel with associated amenities on the subject site (22729 and 22741 Pacific Coast Highway). The proposed overlay map will be added to the LIP Zoning Maps (Exhibit 2) and will apply use restrictions and development standards over the property. The proposed overlay site is currently zoned Community Commercial and contains existing development consisting of commercial buildings and associated parking areas. The Community Commercial (CC) land use and zoning designation is intended to provide the community's resident-serving needs, including uses such as restaurants, banks, offices, and retail. Hotel use is not permitted in the CC zone and is only permitted within the Commercial Visitor Serving Two (CV-2) zone. To accommodate the proposed hotel development, the City determined that the subject site needed to be rezoned from CC to CV-2.

Additionally, the proposed hotel project seeks to remodel and convert one of the existing commercial buildings (which is currently non-conforming in regard to height and floor area ratio) located on the subject site at 22741 PCH. It proposes an allowable floor area ratio greater than currently allowed under the commercial development standards of the City’s LCP. The existing FAR for the existing development on 22741 PCH is 0.46. Therefore, the City determined that a new overlay district with specific development standards (maximum density, including floor area ratios for commercial use, heights, lot coverage, open space requirements, setbacks, and parking and sign requirements) is needed to accommodate some of the as-built existing development (which would remain on the subject site), as well as modifying some of the development standards related to parking, parking locations, maximum allowable floor area ratio to accommodate the proposed hotel development.

Development Agreement
Pursuant to the certified Malibu LCP, increasing the Floor Area Ratio (FAR) beyond what is allowed under the LCP, which is proposed in the overlay district development standards, 24 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
15 triggers the need for a development agreement to be approved through an LCP amendment certified by the Coastal Commission (LIP Section 3.8(A)(5)). Therefore, the proposed amendment also includes the approval of a Development Agreement between the City and property owners that sets forth the terms of the agreement regarding the eventual development of the subject site, including allowable uses, development standards, and maximum allowable floor area ratio (FAR). The development agreement also details the applicant’s ability to develop a new hotel with an increased allowable floor area ratio from 0.15 to 0.52 in conjunction with a payment of $800,000 to the City to be expended as the City Council determines to be an appropriate use. The Development Agreement is discussed in greater detail in Subsection B (New Development and Cumulative Impacts) below.

The full text of the City’s proposed changes to the LCP is included as Exhibits 1-3 of this report.

On August 13, 2021, before the City’s August 19, 2021, City Council hearing, Commission staff emailed City staff with regarding the proposed LIP Amendment. Furthermore, Commission staff has met with City staff to discuss the proposed amendment, and staff has provided the suggested modifications to the City’s planning staff. However, the City staff has not indicated whether or not they are supportive of the suggested modifications. In addition, Commission staff has coordinated closely with the property owners to reach an agreement on a mechanism whereby the property owners have agreed to provide an in-lieu fee for use in developing low-cost visitor serving overnight accommodations in the Malibu/Santa Monica Mountains coastal zone.

The City of Malibu submitted the subject LCP Amendment to the Commission on November 15, 2021. The amendment submittal was deemed complete by Commission staff and filed on March 21, 2022. At its June 2022 Commission meeting, the Commission extended the 90 working-day time limit to act on the LCP amendment for a period not to exceed one year from the original deadline of July 28, 2022.

Background and Sea View Hotel Project Description
The subject “Sea View Hotel” property is comprised of two parcels (22729 and 22741 PCH) and is at the base of a steep hillside to the north (Exhibit 6). The site is located on the landward side of PCH in a commercial area of the City, approximately one-third mile east of the Malibu Pier and Civic Center area. Further north, there is an area of hillside residential development. The site is developed with an existing 15,392 square foot, four-level office building (still operating today with business tenants) and an associated 9,500 square foot parking area containing 60 parking spaces (22741 PCH), and a 1,000 square foot building, two canopies, and surface parking for a gas station use that operated until 2005. Due to the steep hillside, the office building was constructed in a stepped fashion, such that each level is located higher up and stepped into the hillside. As such, the height of the existing commercial/office building varies from 26.5 feet to 48 feet above the existing grade and up to 25 to 40 feet higher in elevation than 22729 PCH.

The subject Sea View Hotel property owners propose merging the two parcels associated 25 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
16 with the proposed overlay district and constructing a new 39-room luxury hotel, including remodeling the existing commercial building that would remain in place. An Initial Study and Mitigated Negative Declaration were prepared and adopted for the project by the City pursuant to CEQA. The City has also approved the coastal development permit for the lot merger and hotel development. However, the coastal development permit was conditioned by the City to only be effective after certification of the subject LCP amendment.

Notwithstanding the requirements of Malibu LIP Section 13.16 that a Final Local Action Notice be submitted to the Commission within seven days of City action, the Final Local Action Notice, in this case, has never been submitted to the Commission. Therefore, the approved CDP related to this site is not final. Specifically, the City approved the following:

On September 13, 2021, the City approved Demolition Permit No. 20-019, Coastal Development Permit No. 17-086, Conditional Use Permit No. 21-001, and Lot Merger No. 20-002 to merge the two subject parcels (22741 and 22729 PCH), demolish the existing gas station, and construct a new four-story, 26,734 square foot, 39-room hotel involving the remodel of an existing four-story, commercial building, and construction of a new two-story, 11,342 square foot addition with a basement. The project includes a restaurant/bar, spa, rooftop deck, swimming pool, new surface parking lot, hardscape and landscaping, grading, retaining wall, utilities, and an upgrade and expansion of the existing onsite wastewater treatment system.

Pursuant to Special Condition 34 of the CDP, the applicant/property owner is required to pay a fee of $110,000 to the City in-lieu of providing lower cost overnight accommodations.

On September 13, 2021, the City approved the subject LCP amendment to modify the land use and zoning designation of two subject parcels from Community Commercial to Commercial Visitor Serving-Two, a new overlay district with special development standards to facilitate the development of a hotel, and a Development Agreement to allow an increase in allowable floor area from 0.15 to 0.52. The City also adopted Initial Study No. 21-001, Mitigated Negative Declaration No. 21-001, and Mitigation Monitoring and Reporting Program No. 21-001 for the project.

B. Public Access and Recreation
A core goal of the Coastal Act is to protect the public’s ability to recreate in and enjoy the coastal zone, particularly for coastal visitors not fortunate enough to live by the shoreline.

The Coastal Act’s access and recreation policies provide significant direction regarding protecting existing public recreational access opportunities and ensuring that such access opportunities are provided and maximized. Specifically, Coastal Act Section 30210 requires that maximum public access and recreation opportunities be provided, stating:

In carrying out the requirement of Section 4 of Article X of the California Constitution, maximum access, which shall be conspicuously posted, and recreational opportunities shall be provided for all the people consistent with public safety needs and the need to protect public rights, rights of private property owners, and natural resource areas from overuse.
26 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
17 Similarly, the Coastal Act requires that overnight accommodations, particularly lower-cost accommodations, be protected and encouraged as a means of providing public recreation access to the coast.

Section 30213 of the Coastal Act states:

Lower cost visitor and recreational facilities shall be protected, encouraged, and, where feasible, provided. Development providing public recreational opportunities are preferred.

The commission shall not: (1) require that overnight room rentals be fixed at an amount certain for any privately owned and operated hotel, motel, or other similar visitor-serving facility located on either public or private lands; or (2) establish or approve any method for the identification of low or moderate income persons for the purpose of determining eligibility for overnight room rentals in any such facilities.

Furthermore, Coastal Act Section 30222 places a higher priority on the provision of visitorserving uses designed to enhance public opportunities for coastal recreation over residential, industrial, or general commercial uses.

Section 30222 of the Coastal Act states:

The use of private lands suitable for visitor-serving commercial recreational facilities designed to enhance public opportunities for coastal recreation shall have priority over private residential general commercial development, but not over agriculture or coastal-dependent industry.

The Coastal Act policies above have been incorporated in their entirety into the certified Land Use Plan. The Malibu LCP also contains several additional policies to ensure the protection of public access and overnight accommodations.

The following Land Use Plan (LUP) policies are applicable in this case:

Land Use Plan Policy 2.1 states:

The shoreline, parklands, beaches and trails located within the City provide a wide range of recreational opportunities in natural settings which include hiking, equestrian activities, bicycling, camping, educational study, picnicking, and coastal access. These recreational opportunities shall be protected, and where feasible, expanded or enhanced as a resource of regional, state and national importance.

Land Use Plan Policy 2.25 states:

New development shall provide off-street parking sufficient to serve the approved use in order to minimize impacts to public street parking available for coastal access and recreation.

Land Use Plan Policy 2.33 states:
27 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
18 Priority shall be given to the development of visitor-serving and commercial recreational facilities designed to enhance public opportunities for coastal recreation.

On land designated for visitor-serving commercial and/or recreational facilities, priority shall be given to such use over private residential or general commercial development. New visitor-serving uses shall not displace existing low-cost visitorserving uses unless an equivalent replacement is provided.

Land Use Plan Policy 2.34 states:

Existing, lower cost visitor-serving and recreational facilities, including overnight accommodations, shall be protected to the maximum feasible extent. New lower cost visitor and recreational facilities, including overnight accommodations, shall be encouraged and provided, where designated on the LUP Map. Priority shall be given to developments that include public recreational opportunities. New or expanded facilities shall be sited and designed to minimize impacts to environmentally sensitive habitat areas and visual resources.

Land Use Plan Policy 2.35 states:

New development of luxury overnight visitor-serving accommodations shall be designed to provide for a component of lower cost overnight visitor accommodations (e.g., campground, RV park, hostel, or lower cost hotel/motel). The lower-cost visitor accommodations may be provided on-site, off-site, or through payment of an in-lieu fee into a fund to subsidize the construction of lower-cost overnight facilities in the Malibu-Santa Monica Mountains Coastal Zone area of Los Angeles County or Ventura County. The applicant shall be required to provide lower-cost overnight accommodations consisting of 15 percent of the number of luxury overnight accommodations that are approved.

Land Use Plan Policy 2.36 states:

Coastal recreational and visitor serving uses and opportunities, especially lower cost opportunities, shall be protected, encouraged, and where feasible, provided by both public and private means. Removal or conversion of existing lower cost opportunities shall be prohibited unless the use will be replaced with another offering comparable visitor serving or recreational opportunities.

Land Use Plan Policy 2.37 states:

Priority shall be given to the development of visitor-serving commercial and/or recreational uses that complement public recreation areas or supply recreational opportunities not currently available in public parks or beaches. Visitor-serving commercial and/or recreational uses may be located near public parks and recreational areas only if the scale and intensity of the visitor-serving commercial recreational uses is compatible with the character of the nearby parkland and all applicable provisions of the LCP.

Land Use Plan Policy 5.11 states:
28 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
19 Recreational development and commercial visitor-serving facilities shall have priority over non-coastal dependent uses. All uses shall be consistent with protection of public access and ESHA.

In addition, the following Local Implementation Plan (LIP) sections are specifically applicable in this case:

LIP Section 12.10 (New Luxury Overnight Accommodations), in relevant part, states:

A. The City may approve new luxury overnight visitor accommodations if the evidence shows and the City finds, that the project provides a component of lower cost overnight visitor accommodations, such as a campground, RV park, hostel, or lower cost hotel or motel rooms. The lower cost overnight accommodations may be provided, either onsite, offsite, or through payment of an in-lieu fee to the City for deposit into a fund to subsidize the construction of lower cost overnight facilities in the Malibu-Santa Monica Mountains Coastal Zone area of Los Angeles County or Ventura County. The applicant shall be required to provide lower cost overnight accommodations consisting of fifteen (15) percent of the number of luxury overnight accommodations that are approved. Luxury overnight accommodations shall be defined as the point at which the cost of an overnight room exceeds 120 percent of the median cost of an overnight room for all overnight accommodations in the City of Malibu.

B. If the applicant chooses the in-lieu fee option, the project approval shall be conditioned to require that, prior to issuance of the coastal development permit, the applicant shall pay the required in-lieu fee to the City. The amount of the inlieu fee shall be $10,419 per required unit of lower cost overnight accommodations, plus an additional amount for inflation from January 2000 to the date of approval of the coastal development permit. If the City completes a fee study to determine the appropriate in-lieu fee, which provides the necessary mitigation, the in-lieu fee requirement may be revised accordingly.

Visitor-Serving Lands
Visitor-serving commercial development is considered a priority use under the Coastal Act and the Malibu LCP, and is given priority over other non-coastal dependent development.

In order to ensure that new development is located in areas able to accommodate it and where it will not have significant cumulative impacts on coastal resources, as required by the Coastal Act and Malibu LCP, it is necessary for the LCP to designate the appropriate location, density, and intensity for different kinds of development. Such designations must also take into account the requirements of other applicable policies of Chapter 3 of the Coastal Act and the Malibu LUP, including public access, recreation, land and marine resources, and scenic and visual quality.

The City is requesting an amendment to the LUP and LIP portions of its certified LCP to change the land use and zoning designation of two adjacent commercially developed 29 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
20 parcels identified as 22729 Pacific Coast Highway (PCH) and 22741 Pacific Coast Highway from Community Commercial (CC) to Commercial Visitor Serving Two (CV-2) on the LUP Land Use Map and LIP Zoning Map. These two parcels together comprise approximately

1.18 acres of land known as the Sea View Hotel Site (“subject site”). The subject site contains existing development consisting of commercial buildings and surface and covered parking. The City has stated that the proposed LUP/Zoning Map change is intended to accommodate the development of a new 39-room luxury hotel.

The Community Commercial (CC) designation is intended to provide for the residentserving needs of the community, similar to the types of uses allowed in the neighborhood serving commercial developments but on parcels of land more suitable for concentrated commercial activity. Uses that are allowed in the CC land use designation include, but are not limited to, small retail stores, salons and bookstores, restaurants, offices, financial institutions, medical clinics, service stations, health care facilities, offices, and public open space and recreation. The maximum Floor to Area Ratio (FAR) for CC development is

0.15. The maximum FAR may be increased to a maximum of 0.20, where public benefits and amenities are provided as part of the project.

The Commercial Visitor Serving (CV) designation provides for visitor serving uses such as hotels and restaurants that are designed to be consistent with the rural character and natural environmental setting, as well public open space and recreation uses. Additionally, CV designations are divided into two levels of intensity. Hotels are only permitted in CV-2 designations, the highest intensity designation. The maximum Floor to Area Ratio (FAR) for CV development is 0.15. The maximum FAR may be increased to a maximum of 0.25, where public benefits and amenities are provided as part of the project.

The subject site is located on the landward side of PCH in a commercial area of the City, approximately one-third mile east of the Malibu Pier and Civic Center area. Properties in the immediate vicinity are zoned CC, CV-1, and CV-2 and are developed with commercial structures and uses, including hotels such as the Malibu Beach Inn and Nobu Ryokan, and several restaurants. Further north, there is an area of hillside residential development. The site is near parks, public beaches, accessways, and trails/bikeways where public access and recreation is available to visitors. For these reasons, the site is appropriate for visitorserving commercial use, such as the proposed hotel development. Consistent with Coastal Act Section 30222, and LUP Policies 2.33, 2.36, and 5.11, which state that priority shall be given to the development of visitor-serving and commercial recreational facilities designed to enhance public opportunities for coastal recreation, the proposed land use/zoning change from community commercial to visitor serving commercial will ensure that visitor serving uses are prioritized on the subject sites. Visitor-serving commercial uses provide greater public benefit than community commercial uses because they serve a larger segment of the population who can take advantage of and enjoy the use of the property, and such uses support visitors to the coast. All future development of the subject site will need to support the visitor-serving nature of the area, be consistent with the allowable uses under the CV land use designation/zone, and be consistent with the policies and provisions of the certified LCP.

Lower Cost Overnight Accommodations
30 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
21 These Coastal Act and LCP policies make clear that public recreational access, particularly as it relates to the specific needs of the visiting public, is of critical importance and must be protected and maximized. Overnight accommodations are necessary for providing public access and recreational opportunities for the many visitors that live further from the coast, including those from inland areas, where a coastal trip may require a lengthy car, train, or bus ride. For many low and moderate-income visitors, lower-cost overnight accommodations are essential to being able to access the California coast at all. These access issues are perhaps more apparent than ever now and more critical as they relate to overnight accommodations, as coastal visitors are increasingly priced out of the overnight accommodations market, particularly impacting low and middle-income households, communities of color, and many young people.1
Specifically, Section 30213 of the Coastal Act provides for the protection and provision of lower cost visitor and recreational facilities. Visitor-serving commercial development is considered a priority use under the Coastal Act, and, pursuant to public access policies of the Coastal Act, the Commission has the responsibility to ensure that a range of affordable facilities be provided in new development along the coast, including overnight accommodation options.

Furthermore, given the limited availability of overnight accommodations in Malibu, access issues also raise environmental justice concerns. Under Section 30604 of the Coastal Act, “[w]hen acting on a coastal development permit, the issuing agency, or the Commission on appeal, may consider environmental justice, or the equitable distribution of environmental benefits throughout the state.” As defined in Section 30107.3 (a) of the Coastal Act, “environmental justice” means “the fair treatment and meaningful involvement of people of all races, cultures, incomes and national origins, with respect to the development, adoption, implementation, and enforcement of environmental laws, regulations, and policies.” Thus, environmental justice considerations are relevant to the Commission’s review.

Overview of Malibu’s Overnight Accommodations
Demand for overnight accommodations is especially high in the City of Malibu because of its proximity to the coast and historical reputation as a popular coastal community. The City lies entirely within the Coastal Zone and extends approximately 26 miles from the Ventura County Line to Topanga Canyon Boulevard on the east. The beaches of Malibu are worldfamous tourist destinations for millions of visitors annually from foreign countries, all 50 states of the U.S., as well as for residents of cities and towns throughout California. In addition, the Santa Monica Mountains area within and adjacent to the City provides an extensive network of public trails that traverse and connect Federal, State, and County parklands and a system of heavily used historic trails on private land. Overall, a wide variety of recreational opportunities exist in the area, including hiking, biking, horseback riding, camping, fishing, picnicking, nature study, surfing, diving, and swimming. Public access to and along the shoreline and trails and the provision of public recreational opportunities and visitor-serving facilities such as campgrounds, hotels, and motels have 1 See “Explore the Coast Overnight: An Assessment of Lower-Cost Coastal Accommodations” by the California Coastal Conservancy (March 2019) and California Coastal Commission Public Workshop Staff Report on Lower-Cost Visitor-Serving Accommodations (October 2016).
31 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
22 historically been a critical and controversial issue in Malibu.

Despite being a significant visitor-serving destination, there are limited facilities within the City that offer overnight accommodations for visitors within its 21 miles of coastline. There are six hotels (The M Malibu, The Surfrider, Malibu Beach Inn, Malibu County Inn, The Native, and Nobu Ryokan) within the City, containing a total of 130 rooms. Additionally, the City contains one Recreational Vehicle (RV) park (Malibu RV Park), which includes 142 RV sites and 35 tent camping sites. Although there are several hotels and motels in other cities surrounding Malibu, the approximate 21 miles of Malibu coastline is only serviced by approximately 130 hotel rooms, 142 RV sites, 35 tent sites, and the City’s existing shortterm rental stock.

Trends in Coastal Overnight Accommodations
The Commission has approved new hotel developments along the coastline as high-priority visitor-serving facilities, however, high room rates can render these visitor-serving hotels exclusive2. The Commission has required mitigation for the use of land that would have otherwise been available for lower-cost and visitor-serving facilities. The Commission has also approved projects and LCP amendments requiring the development of overnight accommodations with facilities that serve a range of incomes. In past actions, where the development proposed has not provided for a range of affordability on-site, the Commission had required offsite mitigation, in the form of payment of an in-lieu mitigation fee to fund construction of lower-cost overnight accommodations, e.g., hostels, recreational vehicle (RV) parks, campgrounds, etc.

In November 2016, the Commission staff presented a comprehensive study of lower-cost visitor accommodations eliminated from the coastal zone since 19893. The study considered six cost categories ranging from “economy” to “luxury” and found that 24,720 total economy rooms had been lost, while only 11,247 rooms of the higher cost categories had been lost since 19894. These survey results indicate that nearly 70% of all hotel rooms eliminated from the coastal zone from 1989 to 2016 were economy rooms, whereas less than 10% of the rooms lost were in the upscale and luxury categories. Of the hotels that are being developed, a greater number of hotels offer high-cost accommodations. The remaining moderate and lower-cost hotels in the coastal zone typically constitute older structures that become less economically viable as time passes. It is often more lucrative for developers to replace these older structures with higher-cost accommodations. Such trends have thus made it difficult for visitors with limited financial means to access the coast; many of these visitors travel from inland locations and cannot easily make the trip to the coast and back home again in a single day.

Although statewide demand for lower-cost accommodations in the coastal zone is difficult 2 Explore the Coast Overnight- An Assessment of Lower Cost Accommodations, published by State Coastal Conservancy on January 8, 2019.
3 Ref. Public Workshop: Lower Cost Visitor Serving Accommodations, published by Commission staff on October 26, 2016.
4 Ref. Public Workshop: Lower Cost Visitor Serving Accommodations, published by Commission staff on October 26, 2016.
32 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
23 to quantify, there is no question that low-cost hotels, camping, and hostel opportunities are in high demand in coastal areas and that there is an ongoing need to provide more lowercost opportunities along California’s coast. In a Coastal Conservancy-commissioned survey conducted in 2017, an assessment of lower-cost overnight accommodations found that “respondents cited financial concerns as the primary reason they do not stay overnight at the coast. Over 45% of Californians said that overnight accommodations at the coast were inconvenient or unaffordable.”5
Sea View Hotel Project-Specific LCP Amendment
The amendment request is project-specific to allow for the construction of a new 39-room luxury hotel on the subject site with changes to the land use and zoning designation to permit the construction of new overnight luxury accommodations and a new overlay district with special development standards to facilitate the development of a hotel.

As stated above, in light of current trends in coastal overnight accommodations, the Commission is increasingly concerned with the challenge of providing lower-cost overnight accommodations consistent with the Coastal Act. Although low-cost overnight facilities are not currently developed on the subject site, the proposed change in both the land use and zoning designation and the proposed overlay district would accommodate the development of a luxury hotel that may not include a component of lower cost overnight accommodations. As the trend continues to build upscale and luxury hotel development on land that is designated for hotel/motel development, persons of low and moderate incomes will make up fewer of the guests staying in the City of Malibu’s coastal zone. By forcing this economic group to lodge elsewhere, there will be a direct impact on public access to the beach and coastal recreational areas within the area. With the loss of potential low-cost lodging facilities, a large segment of the state’s population will be excluded from overnight stays within this coastal area. Therefore, by protecting and providing low-cost lodging for the price-sensitive visitor, a larger segment of the population will have a greater opportunity to enjoy access to the beach area through overnight stays along or near the coast.

Furthermore, access to coastal recreational facilities, such as the beaches, harbor, piers, and other coastal points of interest, are also enhanced when there are overnight lodging facilities that serve a broader segment of the population.

The certified Malibu LCP also contains policies and provisions for the protection of lowercost overnight accommodations, outlined above. Specifically, LUP Policy 2.33 prioritizes the development of visitor-serving commercial recreational facilities that enhance public opportunities for coastal recreation over private residential or general commercial development. LUP Policy 2.36 protects existing, lower cost visitor serving facilities and encourages the development of new lower cost facilities. LUP Policy 2.35 requires that new development of overnight visitor-serving accommodations include a component of lower cost facilities or provide mitigation in the form of an in-lieu fee to help subsidize the construction of lower cost facilities.

Furthermore, LUP Policy 2.35 and LIP Section 12.10 state that the City may approve new 5 Explore the Coast Overnight- An Assessment of Lower Cost Accommodations, published by State Coastal Conservancy on January 8, 2019.
33 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
24 luxury overnight visitor accommodations if the evidence shows and the City finds, that the project provides a component of lower cost overnight visitor accommodations, such as a campground, RV park, hostel, or lower cost hotel or motel rooms. Furthermore, LIP Section

12.10 states that lower cost overnight accommodations may be provided, either onsite, offsite, or through payment of an in-lieu fee to the City for deposit into a fund to subsidize the construction of lower cost overnight facilities in the Malibu-Santa Monica Mountains Coastal Zone area of Los Angeles County or Ventura County. The applicant shall be required to provide lower cost overnight accommodations consisting of fifteen percent of the total number of approved luxury overnight accommodations. If instead the applicant chooses the in-lieu fee option, the project approval shall be conditioned to require the applicant to pay an in-lieu fee to the City of $10,419 per required unit of lower cost overnight accommodations, plus an additional amount for inflation from January 2000 to the date of approval of the CDP. In this case, fifteen percent of the proposed 39 luxury overnight accommodations/rooms equates to 5.85 lower cost overnight accommodations/rooms required to be provided under the LCP.

As stated above, the City has already approved the coastal development permit (CDP No. 17-086) for the subject hotel development and conditioned the CDP to require the property owners to pay a fee of $110,000 to the City in-lieu of providing lower cost overnight accommodations (Special Condition No. 34). The property owners agreed to contribute an in-lieu fee to the City of $17,671.22 per 6 rooms for a total of $106,027.32 ($10,419 plus inflation using the California Department of Industrial Relations CPI Increase 2000-2020 equates to $17,671). Therefore, the City approval of the CDP for the hotel development provides for this in-lieu fee to offset the loss of low-cost overnight accommodations opportunities.

In this case, no existing lower-cost rooms are being demolished or replaced since the proposed project related to the subject LCP amendment does not include demolishing an existing lower-cost hotel or motel. However, the project raises an issue of whether the project specific LCP amendment is consistent with the Coastal Act’s and LCP’s policies to ensure that proposed visitor-accommodation facilities in the coastal zone include lower-cost rooms.

As stated above, the preferred method to ensure consistency with Coastal Act sections 30213 and 30222 is the provision of new lower-cost rooms on or near the project site.

However, the City’s LCP (LIP Section 12.10) allows for lower cost overnight accommodations to be provided, either onsite, offsite, or through payment of an in-lieu fee to the City for deposit into a fund to subsidize the construction of lower cost overnight facilities. In this case, the property owners decided to provide lower cost overnight accommodations through payment of an in-lieu fee to the City.

However, the City’s LCP in-lieu fee option of $10,419 per required unit of lower cost overnight accommodations, plus an additional amount for inflation, has not kept pace with the cost of providing lower cost accommodations in the coastal zone and is therefore too low in comparison to the in-lieu mitigation fee per required lower-cost room (not provided onsite) that the Commission has required in recent past actions for new hotel development along the coast, which is discussed in more detail below. 34 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
25 In-Lieu Mitigation Fee
In 2014, following Commissioner questions regarding the adequacy of the in-lieu fee for lower-cost accommodations at Commission hearings, Hostelling International provided an updated report representing the true construction costs of a new hostel, which stated that new construction costs approximately $42,120 per hostel bed without the cost of land acquisition. In order to verify this information, the Commission consulted Maurice Robinson & Associates. Robinson concurred with the figures and stated: “This lends itself to a twotiered Index for a representative cost to develop low-cost lodging statewide. The $42,120 per bed estimate for the structure can be indexed on an annual basis, either by CPI (Consumer Price Index) or, alternatively, with a more construction industry-specific index such as the Turner Building Cost Index.”
The Turner Building Cost Index is used widely by federal and state governments to measure costs in the non-residential building construction market in the United States.6 Robinson further expanded on the cost of providing motel or hotel rooms rather than hostel beds and estimated:
“These new motel rooms would likely cost nearly $100,000 per room to develop (excluding land), which is more than twice the cost of a hostel bed, mostly due to the fact that motels require approximately twice the gross square footage per person than hostels.”
A standard hotel or motel room (250 sq. ft. average) represents a much larger space than a single hostel bed. The cost of constructing new low-cost hotel rooms with new lower-cost hotel/motel rooms is significantly higher than replacing them with hostel beds. Following this information and suggestion, the Commission required new high cost hotel projects and projects that eliminated existing lower-cost overnight accommodations to pay an in-lieu mitigation fee of $100,000 per required lower-cost room not provided onsite.7 This requirement was based on information provided in 2015. However, when considering the approximate 27% increase in the Turner Building Cost Index in the last seven years (likely related to inflation and other factors), the estimated cost of constructing a lower-cost hotel or motel room has increased from $100,000 per room to $127,000 per room.8 Robinson also recommended that land costs be calculated separately from construction costs in the in-lieu mitigation fee. It is important to note that in-lieu mitigation fees are often accepted and used by many public and non-profit organizations. The in-lieu fees provide funding to public agencies and non-profit organizations, including California State Parks, Mountains Recreation and Authority, and Hostelling International, for the provision of lowercost overnight visitor accommodations within or near the coastal zone. These lower-cost overnight visitor accommodations include, but are not limited to, RV park sites, hostel accommodations, campgrounds, cabins, and lower-cost hotel or motel accommodations. 6 The Turner Building Cost Index is used widely by federal and state governments to measure costs in the nonresidential building construction market in the United States. (Ref. https://www.turnerconstruction.com/cost-index) 7 Ref. CDP 5-18-0872 (Sunshine Enterprises, LP), CDP 5-20-0181 (B&J Capital Group Investments) 8 The Turner Building Cost Index was 943 for 2015 and 1199 for 2021. 1199 – 943 = 256 / 943 = 0.27 * 100% = 27% increase
35 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
26 These agencies and organizations often already own land and require solely construction funds. As such, the mitigation fee of $127,000 per lower-cost hotel room does not include land costs. Maurice Robinson & Associates addresses the widely varying cost of land acquisition:
“The range in land costs might be as great as from $100/sf to $600/sf in Los Angeles County’s Coastal Zone. For a 10,000 sf parcel of land, the total land costs could be anywhere from $1 million to $6 million—a huge range. This variability in the price of land dwarfs the cost of providing the hostel improvements[.] …This illustrates the need for the Commission to find alternative, lower-cost ways to acquire the land replacement low-cost lodging. As examples, the proposed hostels could be built on land owned by the following non-private-sector types of entities:
- Public agencies, such as State Parks, which have similar social goals; - Non-profit organizations, which may not require a market-level rate of return; or - Quasi-public agencies, such as Port Districts, but leased at a below-market rate.

Indeed, while the cost to construct the hostel building would be expected to remain fairly constant throughout the State, the land costs could vary dramatically in each case.”
Here, a mitigation fee including the cost of land acquisition is unnecessary because the mitigation funds proposed by the applicant would be directed to a third party entity acceptable to the Executive Director of the Coastal Commission that has land available for providing lower-cost visitor amenities in the Malibu/Santa Monica Mountains coastal zone, with the intention that such projects do not require the purchase of land.

As indicated above, the property owners propose the construction of 39 luxury overnight accommodations and has volunteered to pay a fee of $110,000 to the City in-lieu of providing lower cost overnight accommodations onsite or offsite. In addition, the property owners, in consultation with Commission staff, have offered to pay an in-lieu mitigation fee of $800,000 ($133,000 per room) to assist in funding affordable overnight accommodations elsewhere in the Santa Monica Mountains coastal zone. The fee proposed by the property owners is consistent with the in-lieu mitigation fee per required lower-cost room that the Commission has required in recent past actions9 for new hotel development along the coast and is significantly more than the fee required by the City ($110,000).

The property owners, in consultation with Commission staff, have identified a potential public project to which to direct the $800,000 fee to implement affordable visitor-serving accommodations. In May 2020, the Mountains Recreation and Conservation Authority (“MRCA”) acquired the 23.71-acre Lauber Smith Property in the Santa Monica Mountains for a mix of habitat conservation, open space, and public access and recreation uses. The property is about 9 miles northwest of the subject “Sea View Hotel” site, within the coastal zone of unincorporated Los Angeles County, adjacent to Ramirez Canyon Park, and just outside Malibu city limits. In particular, MRCA’s goal is, in part, to develop campground 9 Ref. CDP A-5-VEN-21-0011 (Wynkoop Properties, LLC); CDP 5-18-0872 (Shore Hotel) 36 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
27 facilities, including flame-less facilities (tent pad sites, including ADA accessible tent pad sites) and visitor-serving improvements (parking, restrooms, and picnic areas) on portions of the property to serve the general public as well as underserved and foster youth programs of MRCA. The use of these funds in this manner would be consistent with LUP Policies 2.33, 2.34, 2.36, and 2.37 to create or protect visitor serving and recreational uses.

Because the property owners did not propose the $800,000 mitigation fee as part of its underlying coastal development permit applications to the City, this proposed fee is not reflected in the proposed LCP amendment request.

To provide an effective mechanism for the project proponent to provide a component of lower cost overnight visitor accommodations through an up-to-date in-lieu mitigation fee required by the Commission in recent actions, the property owners and the Commission staff have worked cooperatively to reach an agreement on a mechanism whereby the property owners have entered into an agreement with the Coastal Commission and funded an associated escrow account, thereby committing to pay an $800,000 in-lieu fee for use in developing lower cost visitor accommodations, to be released once the owner secures entitlements to develop the site with a hotel use and those entitlements are no longer subject to challenge. Commission staff, in consultation with MRCA, have identified a potential public project to which to direct the $800,000 fee in this case (new camping at the Lauber Smith Property adjacent to Ramirez Canyon,) that is in close proximity to the subject site and will provide a greater range of low-cost camping experiences for a more diverse ability range of the public.

The escrow agreement also provides for the delivery into escrow of a Declaration of Covenants by the current property owners, to be recorded upon effective certification of the LCP amendment. If the conditions for recordation of the Declaration of Covenants are met, the obligation for payment of the $800,000 in-lieu fee runs with the land and is binding on any future owners, so that the mitigation will be secured whenever a hotel project eventually proceeds, even if the specific project covered by the City’s existing CDP does not ultimately come to fruition and the escrow funds are returned. This provision thus provides extra assurances that the lack of provision for lower cost overnight accommodations with a new luxury hotel development will be mitigated even if the current property owners decide not to pursue the hotel project. As such, the agreement is structured to provide the Commission with assurance of payment of the fee, which is necessary to provide a component of lower cost overnight visitor accommodations through an up-to-date in-lieu mitigation fee. Using an escrow arrangement assures the property owners that the required fee will only be transferred upon securing final entitlements for the planned development beyond legal challenge.

The Commission is requiring Suggested Modification Three (3) to note the agreement between the Coastal Commission and the property owners regarding payment of the fee is in addition to the existing LCP requirements regarding the development of luxury overnight accommodations. The purpose of the fee would be to fund new lower cost overnight visitor accommodations elsewhere in the Malibu/Santa Monica Mountains coastal zone.

In addition to the in-lieu fee proposed to provide a component of lower cost overnight 37 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
28 accommodations, the property owners have also committed to and entered into a contract to provide $250,000 to a nonprofit organization called “Los Courage Camps” to further its work providing free surf lessons and transportation to beaches in the Malibu area for children in underserved communities in the general Los Angeles area. The organization’s website states that: “Los Courage Camps’ mission is to teach the diverse children of Los Angeles who have never experienced the ocean how to surf and consequently connect them with their courage, potential, inner strength, and leadership”. The property owners state that the proposed funding will provide for a large bus and driver, lunches, towels, wetsuits, surfboards, surfing instructors, and a grant writer (to seek additional grant funding). While the provision of this proposed funding does not directly provide lower cost overnight accommodations, it will increase equitable public access and recreation opportunities, furthering the goals of the Coastal Act and LCP with regard to access and environmental justice.

Sea View Hotel Overlay District
The LIP portion of the City’s amendment request proposes to create a new overlay district (Sea View Hotel Overlay District), which will apply use restrictions and development standards over the subject site. The proposed Sea View Hotel project involves the construction of a new four-story, 26,734 square foot, 39-room luxury hotel involving the remodel of an existing four-story, non-conforming commercial building (non-conforming in regards to the building height and square footage/floor area ratio), and construction of a new two-story, 11,342 square foot addition with a basement. The new Sea View Hotel overlay district has been tailored to accommodate the proposed Sea View Hotel development project. One of the proposed Sea View Hotel overlay development standards is a reduction in the required parking for hotel development at the subject site (1.5 parking spaces per hotel room instead of 2 spaces per hotel room). LUP Policy 2.25 requires that new development provide sufficient off-street parking to serve the approved use in order to minimize impacts to public street parking available for coastal access and recreation.

Reductions in parking standards have the potential to affect public access. In this case, although the proposed overlay standard includes a reduction in the required parking for hotel development, this reduction will only apply within this overlay district, and the City determined that the reduced parking standard provides sufficient off-street parking to serve the proposed hotel development and would not result in any adverse impacts to public street parking available for coastal access and recreation consistent with LUP Policy 2.25.

Conclusion
For the reasons stated above, the Commission finds that the proposed LUP amendment to change the land use designation of the subject property from Community Commercial (CC) to Commercial Visitor Serving Two (CV-2), as submitted, will give priority to visitor serving commercial recreation uses and is therefore consistent with the Chapter 3 policies of the Coastal Act.

As discussed in detail above, the City’s certified Land Use Plan (LUP) goal is to preserve coastal access, including the provision of lower cost overnight accommodations within the City’s Coastal Zone. If modified as suggested, the LIP amendment to rezone the subject 38 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
29 property and add a zoning overlay will give priority to visitor serving commercial recreation uses and ensure that a component of lower cost overnight accommodations will be provided. For the reasons stated above, the Commission finds that, if modified as suggested, the LIP amendment conforms with and will be adequate to carry out the applicable policies of the certified Land Use Plan.

C. New Development and LCP Administration
The following Local Implementation Plan (LIP) sections are specifically applicable in this case:

LIP Section 3.8(A)(5) (Site Development Criteria), in relevant part, states:
(a) The gross square footage of all buildings on a given parcel shall be limited to a maximum Floor Area Ratio (F.A.R) of 0.15, or 15% of the lot area (excluding any street rights of way). Additional gross square footage may be approved, up to the maximum allowed for the parcel under the Land Use Plan provided the increase complies with the provisions of Section e and/or f below, where applicable. …
(f) Additional Square Footage. The City Council shall have the authority to approve additional square footage for commercial development, except with the Civic Center area, as provided in Section 3.8(A)(5) of the Malibu LIP, where the applicant has offered to the City public benefits and amenities in connection with a project subject to a Development Agreement processed pursuant to Section

13.28 of the Malibu LIP.
…
Sea View Hotel Overlay District
The LIP portion of the City’s amendment request proposes to change the zoning designation of the site from CC to CV-2, and to create a new overlay district (Sea View Hotel Overlay District) to accommodate the construction of a new 39-room hotel with associated amenities on the subject site (22729 PCH and 22741 PCH).

The associated Sea View Hotel project involves the construction of a new four-story, 26,734 square foot, 39-room luxury hotel involving the remodel of an existing four-story, non-conforming commercial building (non-conforming in regards to the building height and square footage/floor area ratio), and construction of a new two-story, 11,342 square foot addition with a basement. Additionally, the proposed hotel development proposes an allowable floor area ratio greater than currently allowed under the commercial development standards of the City’s LCP. Therefore, the City determined that a new overlay district with specific development standards (maximum density, including floor area ratios for commercial use, heights, lot coverage, open space requirements, setbacks, and parking and sign requirements) is needed to accommodate some of the as-built existing development, as well as modifying some of the development standards related to parking, parking locations, and an increase in the maximum allowable floor area ratio. 39 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
30 The new Sea View Hotel overlay district has been tailored to accommodate the proposed Sea View Hotel development project. Permitted uses and development standards have been customized for the overlay area, including heights, lot coverage, setbacks, signage requirements, and landscape/open space requirements. The permitted uses allowed under the proposed overlay district include all uses permitted in the Commercial Visitor Serving-2 land use/zoning designation (which includes uses allowed in other commercial land use designations (Commercial Neighborhood, Community Commercial, and Commercial General)), and uses typically associated with hotel development (such as restaurants, spas, guest rooms, gym, etc.). The intent of allowing the permitted and conditionally permitted uses of the CV-2 land use designation is to accommodate a situation in which the proposed hotel development project is never constructed, and the existing office and commercial development onsite (currently permitted under the Community Commercial designation) can remain conforming and permitted under the overlay district.

However, the proposed amendment would allow non-hotel related uses permitted under the CV-2 land use designation to be developed on the subject property using the development standards under the proposed overlay district instead of the existing commercial development standards that would normally apply. For example, a new restaurant or medical office could be constructed on the subject site using the modified setbacks or modified building height standards of the overlay district that are tailored for a hotel development, and this could result in potential adverse individual and cumulative impacts on coastal resources. Therefore, Suggested Modification Five (5) adds clarifying language that the proposed “permitted, conditionally permitted uses that are a component of the hotel development are subject to the custom development standards of the overlay district, and that permitted or conditionally permitted uses that are not a component of the hotel development are subject to all applicable policies and provisions of the certified LCP, including the Commercial Development Standards in LIP Section 3.8.” This will ensure that all other permitted and conditionally permitted uses that are not associated with hotel development cannot be developed with the modified hotel-specific development standards under the overlay district and, therefore, will ensure that new development will not have significant adverse effects, either individually or cumulatively, on coastal resources.

As previously discussed, the City has already approved the coastal development permit for the proposed hotel, which is conditioned to not be effective until certification of the subject LCP amendment. Therefore, Commission staff has had the opportunity to analyze the specifics of the approved development in relation to the development standards proposed in the LCP amendment. Although the individual coastal development permit that the City approved is not a part of this LCP amendment, the Commission must analyze whether the specific development standards proposed in the LIP for the overlay district are adequate to ensure the development is consistent with the policies and provisions of the LUP related to the protection of coastal resources.

As discussed previously, the Commission finds that the proposed intensity of visitor serving commercial development on the property is consistent with the area's character and with the adjacent development and land uses. LIP Section 3.8(A)(5) limits the allowable square footage for commercial development to the maximum Floor Area Ratio (FAR) of 0.15 of the lot area. As part of the proposed development standards for the hotel development, and 40 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
31 discussed in greater detail below, the City has proposed a larger FAR for the subject site than would otherwise be allowed by strict application of Section 3.8(A)(5) of the LIP. The allowable 0.15 FAR for the two parcels (22741 and 22729 PCH) is 7,750.05 square feet.

The existing commercial building at 22741 PCH is legally non-conforming with a FAR of

0.46 (15,392 square feet). The FAR standard proposed in the subject LCP amendment request would increase the allowed FAR to a maximum of 0.52 (26,866.84 square feet).

Since the approved development would also need to comply with all other resource protection provisions of the LCP, such as scenic resources and setbacks, the proposed deviations from the existing standard of the LCP would not result in any adverse impacts to coastal resources.

Since many of the proposed development standards for visitor serving commercial development reflect the requirements that are currently contained in the LCP but do not reflect all of them, it is important to provide clarification regarding the applicability of standards in order to ensure internal consistency and adequacy in carrying out the policies of the Land Use Plan. Therefore, Suggested Modification Four (4) to proposed LIP Section 3.4.6 (E) (Development Standards)) is required to clarify which LCP standard a proposed visitor-serving commercial development standard is intended to replace or supplement, as applicable. All other applicable standards in the certified LCP would apply, such as those related to hazards and geologic stability, public access, land divisions, water quality, and scenic resources.

Development Agreement and Public Benefits
Pursuant to the certified Malibu LCP, increasing the Floor Area Ratio (FAR) beyond what is allowed under the LCP, as in this case, triggers the need for a development agreement to be approved through an LCP amendment certified by the Coastal Commission (LIP Section

3.8(A)(5)). Therefore, the LIP amendment also includes the approval of a Development Agreement between the City and the property owners to allow an increase in allowable floor area ratio (FAR) from 0.15 to 0.52 in conjunction with a payment to the City. As previously mentioned, a maximum floor area ratio (FAR) of 0.15 is permitted under the certified LCP, except that the project FAR may be increased if public benefits and amenities are provided. The project site is included as part of a proposed development subject to a Development Agreement approved under an LCP amendment certified by the Coastal Commission.

California Government Code Sections 65864-65869.5 authorizes any city, county, or city and county, to enter into a development agreement with any person having a legal or equitable interest in real property for the development of property owned by that entity. A development agreement specifies the permitted uses of the property, the density or intensity of use, the maximum height and size of proposed buildings, and provisions for reservation or dedication of land for public purposes. According to Government Code Section 65865.2, the development agreement “…may include conditions, terms, restrictions, and requirements for subsequent discretionary actions, provided that such conditions, terms, restrictions, and requirements for subsequent discretionary actions shall not prevent the development of the land for the uses and to density or intensity of development set forth in the agreement. The agreement may provide that construction shall 41 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
32 be commenced within a specified time and that the project or any phase thereof be completed within a specified time. The agreement may also include terms and conditions relating to applicant financing of necessary public facilities and subsequent reimbursement over time.” Government Code Section 65866 states further that, “[u]nless otherwise provided by the development agreement, rules, regulations, and official policies governing permitted uses of the land, governing density, and governing design, improvement, and construction standards and specifications, applicable to the development of the property subject to a development agreement, shall be those rules, regulations, and official policies in force at the time of execution of the agreement. A development agreement shall not prevent a city, county, or city and county, in subsequent actions applicable to the property, from applying new rules, regulations, and policies which do not conflict with those rules, regulations, and policies applicable to the property as set forth herein, nor shall a development agreement prevent a city, county, or city and county from denying or conditionally approving any subsequent development project application on the basis of such existing or new rules, regulations, and policies.” However, pursuant to Section 65869, “…[a] development agreement shall not be applicable to any development project located in an area for which a local coastal program is required to be prepared and certified pursuant to the requirements of Division 20 (commencing with Section 30000) of the Public Resources Code, unless: (1) the required local coastal program has been certified as required by such provisions prior to the date on which the development agreement is entered into, or (2) in the event that the required local coastal program has not been certified, the California Coastal Commission approves such development agreement by formal commission action.” Since the City of Malibu has a certified local coastal program, the approval of a development agreement does not require the approval of a coastal development permit by the Commission. Rather, as required by Malibu LIP Section 13.28, development agreements are processed as amendments to the LCP. In this case, the subject LCP amendment request includes the approval of the Sea View Hotel Development Agreement.

The Development Agreement between the City and the property owners sets forth the terms of the agreement regarding the eventual development of the subject site, including allowable uses, development standards, and maximum allowable floor area ratio (FAR).

The development agreement also details the applicant’s ability to develop a new hotel with an increased allowable floor area ratio from 0.15 to 0.52 in conjunction with a payment of $800,000 to the City to be expended as the City Council determines to be an appropriate use.

Although the City has formalized a 0.52 FAR with a payment of $800,000 to the City through a Development Agreement with the property owners for the subject site, the City has also chosen to effectuate the 0.52 FAR in the required LCP amendment by incorporating the 0.52 FAR as a development standard under the new overlay district. The Development Agreement approved by the City is not incorporated into the proposed LCP amendment language in full. Instead, the proposed new overlay district designation reflects the allowable uses, density, and development standards agreed upon in the Development Agreement.
42 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
33 The proposed overlay district density standard (proposed LIP Section 3.4.5(D)) only requires that pursuant to a Development Agreement between the property owners and the City of Malibu, the allowable FAR is increased from 0.15 to 0.52 if the applicant contributes $800,000 to be expended as the City Council determines to be an appropriate use. Yet, the proposed language does not specifically require the contribution to be used for public benefits or amenities, as required by LIP Section 3.8(A)(5) (Site Development Criteria). In order to ensure that the public benefits associated with the increased FAR for the subject site are incorporated into the LCP, Suggested Modification Two (2) adds clarifying language to proposed LIP Section 3.4.5(D) to require the applicant to contribute $800,000 to the City to be used for public benefits and amenities.

LCP Administration
Several proposed revisions relate to the administration of the LCP. Suggested Modifications One (1), Four (4), Six (6), and Seven (7) include minor modifications to the proposed overlay district amendment language necessary to ensure consistency with the LCP, such as correcting typos, adding the corresponding addresses and assessor parcel numbers (22729 Pacific Coast Highway/APN 4452-022-010 and 22741 Pacific Coast Highway/APN 4452-022-017) to the proposed LIP Section 3.4.6 Sea View Hotel Overlay District text and Sea View Hotel Overlay District Map, and making minor clarifications that further the intent and implementation of the LCP and that avoid ambiguity.

In conclusion, the proposed Sea View Hotel Overlay District and associated development standards in the proposed LIP amendment, as suggested to be modified herein, will accommodate a hotel use, and will do so in a manner that protects coastal resources, ensures internal LCP consistency, and is consistent with the LUP policies. Thus, the Commission finds that only as modified will the proposed LIP amendment conform with and be adequate to carry out the policies of the certified Land Use Plan.

D. California Environmental Quality Act
Section 21080.9 of the California Public Resources Code—within the California Environmental Quality Act (CEQA)—exempts local governments from the requirement of preparing an environmental impact report (EIR) in connection with its activities and approvals necessary for the preparation and adoption of a local coastal program.

Instead, the CEQA responsibilities are assigned to the Coastal Commission; however, the Commission's LCP review and approval program has been found by the Resources Agency to be functionally equivalent to the EIR process. Thus, under CEQA Section 21080.5, the Commission is not obligated to prepare an EIR for each LCP action.

Nevertheless, the Commission is required, in approving an LCP submittal, to find that the approval of the proposed LCP, as amended, does conform with CEQA provisions, including the requirement in CEQA section 21080.5(d)(2)(A) that the amended LCP will not be approved or adopted as proposed if there are feasible alternatives or feasible mitigation measures available which would substantially lessen any significant adverse impact which the activity may have on the environment. 14 C.C.R. §§ 13540(f) and 13555(b). 43 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
34 The City’s LCP amendment consists of a Land Use Plan amendment and Local Implementation Plan amendment.

The Land Use Plan amendment has been found to be in conformance with Chapter 3 policies of the Coastal Act. As discussed above, the Local Implementation Plan amendment is not in conformance with and is not adequate to carry out the Land Use Plan as amended. With the incorporation of the suggested modifications, the Local Implementation Plan amendment is in conformity with the Land Use Plan as amended. The suggested modifications minimize or mitigate any potentially significant environmental impacts of the LCP amendment. If modified as suggested, the Commission finds that approval of the LCP amendment will not result in significant adverse environmental impacts within the meaning of the California Environmental Quality Act.

The Commission finds that for the reasons discussed in this report if the LCP amendment is modified as suggested, there are no additional feasible alternatives, feasible alternatives, or feasible mitigation measures available that could substantially reduce any adverse environmental impacts. The Commission further finds that the proposed LCP amendment, if modified as suggested, is consistent with Section 21080.5(d)(2)(A) of the Public Resources Code.
44 STATE OF CALIFORNIA—NATURAL RESOURCES AGENCY GAVIN NEWSOM, GOVERNOR

CALIFORNIA COASTAL COMMISSION

SOUTH CENTRAL COAST DISTRICT
89 SOUTH CALIFORNIA ST., SUITE 200
VENTURA, CA 93001
(805) 585-1800
W11a
City of Malibu LCP Amendment
LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
February 8, 2023
Exhibits
Table of Contents
Exhibit 1 – Proposed LIP Amendment Text Changes in Strikethrough/Underline Exhibit 2 – Proposed Land Use and Zoning Map Change
Exhibit 3 – Proposed Sea View Hotel Overlay District Map Exhibit 4 – Proposed Development Agreement
Exhibit 5 – Vicinity Map
Exhibit 6 – Aerial View of the Subject Parcels
Exhibit 7 – Parcel Map
Exhibit 8 – Overall Site Plan for Sea View Hotel Project 45 Due to size, Exhibits can be viewed on the CCC website at:
https://documents.coastal.ca.gov/reports/2023/2/W11a/W11a-2-2023- exhibits.pdf

STATE OF CALIFORNIA - NATURAL RESOURCES AGENCY GAVIN NEWSOM, GOVERNOR

CALIFORNIA COASTAL COMMISSION

SOUTH CENTRAL COAST DISTRICT OFFICE
89 SOUTH CALIFORNIA STREET, SUITE 200
VENTURA, CA 93001-2801
VOICE (805) 585-1800
FAX (805) 641-1732
W11a
LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
February 8, 2023

APPENDIX
46 2
APPENDIX 1 - Substantive File Documents
Certified City of Malibu Local Coastal Plan;
Malibu Planning Commission Agenda Report and Associated Documents for Coastal Development Permit No. 17-086, Local Coastal Program Amendment No. 16-006, Zoning Map Amendment No. 17-002, Zoning Text Amendment No. 20-001, Development Agreement No. 21-001, Lot Merger No. 20-002, Demolition Permit No. 20-19, Initial Study No. 21-001, and Mitigated Negative Declaration No. 21-001, dated June 24, 2021; Malibu City Council Agenda Report and Associated Documents for Coastal Development Permit No. 17-086, Local Coastal Program Amendment No. 16-006, Zoning Map Amendment No. 17-002, Zoning Text Amendment No. 20-001, Development Agreement No. 21-001, Lot Merger No. 20-002, Demolition Permit No. 20-19, Initial Study No. 21-001, and Mitigated Negative Declaration No. 21-001, dated July 29, 2021; Malibu City Council Agenda Report and Associated Documents for Coastal Development Permit No. 17-086, Local Coastal Program Amendment No. 16-006, Zoning Map Amendment No. 17-002, Zoning Text Amendment No. 20-001, Development Agreement No. 21-001, Lot Merger No. 20-002, Demolition Permit No. 20-19, Initial Study No. 21-001, and Mitigated Negative Declaration No. 21-001, dated July 29, 2021; Malibu City Council Agenda Report and Associated Documents for Coastal Development Permit No. 17-086, Local Coastal Program Amendment No. 16-006, Zoning Map Amendment No. 17-002, Zoning Text Amendment No. 20-001, Development Agreement No. 21-001, Lot Merger No. 20-002, Demolition Permit No. 20-19, Initial Study No. 21-001, and Mitigated Negative Declaration No. 21-001, dated August 11, 2021; Malibu City Council Agenda Report and Associated Documents for Coastal Development Permit No. 17-086, Local Coastal Program Amendment No. 16-006, Zoning Map Amendment No. 17-002, Zoning Text Amendment No. 20-001, Development Agreement No. 21-001, Lot Merger No. 20-002, Demolition Permit No. 20-19, Initial Study No. 21-001, and Mitigated Negative Declaration No. 21-001, dated August 25, 2021; Malibu City Council Agenda Report and Associated Documents for Ordinance No. 491 for Local Coastal Program Amendment No. 16-006, Zoning Map Amendment No. 17-002, Zoning Text Amendment No. 20-001, and Development Agreement No. 21-001, dated September 15, 2021;
City of Malibu Resolution No. 21-45;
City of Malibu Resolution No. 21-46;
City of Malibu Ordinance No. 491;
Initial Study No. 21-001 and Mitigated Negative Declaration No. 21-001 (IS/MND); 47 3
“Explore the Coast Overnight: An Assessment of Lower-Cost Coastal Accommodations” by the California Coastal Conservancy (March 2019);
California Coastal Commission Public Workshop Staff Report on Lower-Cost VisitorServing Accommodations (October 2016); Coastal Development Permit No. 5-18-0872 (Sunshine Enterprises, LP); Coastal Development Permit No. 5-20-0181 (B&J Capital Group Investments); Coastal Development Permit No. A-5-VEN-21-0011 (Wynkoop Properties, LLC); Coastal Development Permit No. 5-18-0872 (Shore Hotel)
48 STATE OF CALIFORNIA - NATURAL RESOURCES AGENCY GAVIN NEWSOM, GOVERNOR

CALIFORNIA COASTAL COMMISSION

CORRESPONDENCE
49 Due to size, Correspondence can be viewed on the CCC website at:
https://documents.coastal.ca.gov/reports/2023/2/W11a/W11a-2-2023- corresp.pdf

STATE OF CALIFORNIA - NATURAL RESOURCES AGENCY GAVIN NEWSOM, GOVERNOR

CALIFORNIA COASTAL COMMISSION

SOUTH CENTRAL COAST DISTRICT OFFICE
89 S. CALIFORNIA STREET, SUITE 200
VENTURA, CA 93001
(805) 585-1800
W11a

ADDENDUM
February 7, 2023
TO: Coastal Commissioners and Interested Parties
FROM: South Central Coast District Staff
SUBJECT: Addendum to Item W11a, City of Malibu LCP Amendment No. LCP-4- MAL-21-0073-2 (Sea View Hotel Project) For the Commission Meeting of Wednesday, February 8, 2023
The purpose of this addendum is to: 1) add a link to Appendix A, Substantive File Documents; and 2) attach correspondence received to date and provide a response to certain correspondence. The correspondence letters are available in the Correspondence tab for this item on the Commission’s website.

I. APPENDIX A – SUBSTANTIVE FILE DOCUMENTS

On page 5, after the Table of Contents, add Appendix A (Substantive File Documents) with link as follows:
https://documents.coastal.ca.gov/reports/2023/2/W11a/W11a-2-2023-appendix.pdf II. CORRESPONDENCE RECEIVED, STAFF’S RESPONSE TO

CORRESPONDENCE
a. On January 27, 2023, after the publication of the January 26, 2023 staff report, staff received comments from the City’s planning department regarding Suggested Modification No. 3. The City’s staff comment stated, “Our only comment based on your last correspondence was is if is possible to condition the money collected as an in-lieu fee for affordable overnight accommodations to not be used to fund camping in high fire severity zones or in ESHA areas.” Specifically, the City staff requested that Commission staff condition the lower cost overnight visitor accommodations in-lieu mitigation fee of $800,000 (which is being implemented through an escrow agreement between Commission staff and the property owners) not to fund camping located within high fire severity zones or Environmentally Sensitive Habitat Areas (ESHA).
50 2
Generally, the Santa Monica Mountains are considered to be a high fire hazard severity zone. The entire City of Malibu is within territory designated by the California Department of Forestry and Fire Protection (“CAL FIRE”) as a Very High Fire Hazard Severity Zone (VHFHSZ). Therefore, requiring any new camping (a form of lower-cost overnight visitor accommodations) to be sited outside high fire severity zones would effectively preclude any new camping from being located within the City or adjacent unincorporated Santa Monica Mountains. This restriction would directly conflict with the lower cost overnight visitor accommodations in-lieu mitigation fee and policies and goals of the Malibu Local Coastal Program (LCP), which is to assist in funding affordable overnight accommodations in the Malibu/Santa Monica Mountains coastal zone.

In addition, any new camping within the Malibu/Santa Monica Mountains coastal zone will trigger the need for a coastal development permit. At that time, the respective permitting authority (City of Malibu or Los Angeles County) must review a proposed camping project in a manner that is consistent with the policies and provisions of their respective Local Coastal Programs (City of Malibu LCP or Santa Monica Mountains LCP). Both the City of Malibu LCP and Santa Monica Mountains LCP require new development to minimize risks to life and property in fire hazard areas and also require the protection of areas designated as ESHA and require new development in areas adjacent to ESHA to be sited and designed to prevent impacts which would significantly degrade those areas.

For these reasons, the Commission staff disagrees with the City’s requested modification to condition the in-lieu mitigation fee for affordable overnight accommodations not to fund camping located within high fire severity zones or Environmentally Sensitive Habitat Areas (ESHA).
b. Correspondence dated February 3, 2023, was submitted by Marshall A. Camp, of Hueston Hennigan LLP, on behalf of Mani Brothers Real Estate Group, Mani MBI (DE), LLC, and affiliated companies (collectively, the “Mani Brothers”), that own properties in the vicinity of the proposed Sea View Hotel, including the Malibu Beach Inn at 22878 Pacific Coast Highway (PCH), the former Hertz lot at 22853 PCH, and the multifamily properties at 22640 and 22648 PCH, which are located approximately 500 feet from the proposed Sea View Hotel. This letter is available under the correspondence tab. This letter urges the Commission to deny the LCP amendment due to alleged inconsistencies with the Coastal Act and the Malibu LCP and because of alleged non-compliance with the California Environmental Quality Act (“CEQA”).

Specifically, the letter expresses opposition to the proposed LCP amendment raising concerns that the proposed increase in maximum Floor to Area ratio under the proposed overlay district is inconsistent with the City’s LCP and claims the amendment results in “spot zoning.” In response, Commission staff notes that these issues are addressed in Sections V (Findings for Approval of the LUP Amendment as Submitted, Denial of the LIP Amendment as Submitted, and Approval of the LIP Amendment if Modified as Suggested) of the January 26, 2023, staff report. 51 3
In addition, the letter claims that the January 26, 2023 staff report fails to demonstrate CEQA compliance. However, as discussed in the January 26, 2023 staff report, the City completed its CEQA review prior to submitting the subject LCP amendment to the Commission for review. Before adopting the Mitigated Negative Determination (MND) for the Sea View Hotel Project, the City Council considered the MND and all the comments received during the public review process. Based on the record, including the initial study and the comments received, which were included as part of the City’s LCP Amendment submittal and can be found under Appendix A – Substantive File Documents for the January 26, 2023 staff report, the City Council determined that there would be no significant environmental impacts with the implementation of specific mitigation measures. The City Council also determined that the project does not have the potential to cause significant adverse impacts to the environment.

The commenter claims that the staff report’s statements regarding CEQA in Section D of that report are “conclusory” and that the Commission has failed to comply with CEQA. This is incorrect. The entire staff report constitutes the Commission’s CEQAequivalent document under its certified regulatory program. The Commission, as with certain other state agencies, has a certified regulatory program under CEQA.

Public Res. Code § 21085.5; 14 Cal. Code Regs. § 15252. Documents prepared by certified programs, such as the Commission’s staff reports, are considered the functional equivalent of documents that CEQA would otherwise require.1 As part of its certified program, the Commission reviews a proposal to determine if there are feasible mitigation measures, or feasible alternatives, that would substantially lessen any significant adverse effect on the proposed development.

The Commission’s review of the proposed LCP amendment built off of the City’s record, including the Initial Study and MND, which the City submitted to the Commission. Moreover, the Commission may rely on environmental documents prepared by the City that are part of the City’s LCP submission.2 In this case, the City prepared an extensive record, provided for public notice and comment, and determined that there would be no significant environmental impacts with the implementation of specific mitigation measures. The City also evaluated alternatives to the project and additional mitigation measures. Commission staff has reviewed the City’s record as part of the Commission’s review of the City’s LCP amendment submittal.

As noted in the staff report, Commission staff is suggesting several modifications to the City’s proposed LCP Amendment, including an in lieu mitigation fee for low-cost overnight accommodations. To the extent that potential impacts to public access and recreation may be considered environmental impacts under CEQA, the Commission is specifying a feasible mitigation measure and an alternative mechanism to provide a component of lower cost overnight accommodations.

Specifically, the Commission’s suggested modification would reflect the agreement by the property owners to provide a $800,000 in lieu fee for the development of lowcost overnight accommodations in the Malibu/Santa Monica Mountains coastal 1 Mountain Lion Found. v. Fish & Game Com., 16 Cal. 4th 105, 113 (1997). 2 See Ross v. Coastal Com., 199 Cal. App. 4th 900 (2011). 52 4
zone. The Commission has met its CEQA obligations under its certified regulatory program.

Finally, the commenter argues that the Commission is required to consider the “environmental impacts of the campground project in Ramirez Canyon” under CEQA. This is also incorrect. As an initial matter, no specific project for the in lieu fee is called out in the Commission’s suggested modification, and it remains uncertain if the mitigation fee will go towards a campground project in Ramirez Canyon or to some other project. Likewise, although the commenter claims that this project will usher in other citywide growth through other City-approved projects, this is speculative and does not require CEQA analysis in the context of this proposed LCP amendment.

In addition, as part of its review of this proposed LCP Amendment for the Sea View Hotel overlay district, the Commission is not required to evaluate the impacts of a future project when that project would have a different proponent, would serve a different purposes, or can be implemented independently,3 as would be the case with any low-cost, visitor-serving development funded by the in lieu fee (or with any unrelated project). Thus, the Commission’s review of the proposed LCP amendment complies with CEQA.
c. Correspondence has been received from Norman R. Haynie on behalf of the Sea View Hotel Project Site property owners on January 31, 2023. The correspondence supports the staff recommendation for the subject LCP amendment and includes a project rendering for the related Sea View Hotel Project. This letter is available under the correspondence tab.
d. Correspondence has been received from the Mountains Recreation and Conservation Authority (MRCA) on February 6, 2023. The correspondence supports the staff’s recommendation of an in-lieu mitigation fee of $800,000 to assist in funding affordable overnight accommodations in the Malibu/Santa Monica Mountains coastal zone. This letter is available under the correspondence tab. 3 Aptos Council v. City of Santa Cruz, 10 Cal. App. 5th 266, 280 (2017). 53

Page 1 of 7 ends

Agenda Item # 6.B.

Council Agenda Report
To: Mayor Silverstein and the Honorable Members of the City Council Prepared by: Richard Mollica, Planning Director
Approved by: Steve McClary, City Manager
Date prepared: April 10, 2023 Meeting date: April 24, 2023 Subject: Update Regarding Local Coastal Program Amendment No. 16-006 (Sea View Hotel Project)
RECOMMENDED ACTION: Receive a status update regarding City Local Coastal Program Amendment (LCPA) No. 16-006 for the Sea View Hotel Project LCPA submittal, review the California Coastal Commission (CCC) approved LCPA as modified on February 8, 2023 (LCPA No. LCP-4-MAL-21-0073-2), and provide direction on the following:
1) The Council’s position on the LCPA as modified by the CCC and a determination if the modifications made by the CCC are generally consistent with the City’s LCPA as adopted on September 13, 2021, or that the modifications substantially deviate from the LCPA; and
2) Preparation of an Ordinance to accept the modified LCPA; or 3) Preparation of a Resolution to withdrawal the City’s submitted LCPA with the Council’s stated findings.

Should the Council desire to change the modified LCPA, the Council would need to withdraw and resubmit the amendment as a new LCPA.

6.B.
541 $77$&+0(17

Page 2 of 7 ends

Agenda Item # 6.B.
the LCPA and CDP, associated Development Agreement No. 21-001 stipulated that the applicant would also contribute $800,000 to the City for public benefits at the time the construction permits are issued for the associated project. Pursuant to General Plan Section 1.5.0, public benefits shall include physical improvements dedicated and reserved for public use, including, but not limited to, open space, wetlands, trails and walkways, parks, athletic fields, and civic or public buildings (such as senior centers, youth facilities, city hall, etc.). These funds would total $910,000 and must be deposited into a General Fund Designated Reserve for a public benefit purpose. In 2021, the applicant forecasted that the project would generate over $1.0 million in Transient Occupancy Tax revenue annually; however, this projection was not confirmed by staff at the time as nightly room rates or the occupancy projections were unknown.

In total, the applicant will be contributing $1,960,000.

WORK PLAN: This item was not included in the Work Plan for Fiscal Year 2022-2023.

BACKGROUND: On September 13, 2021, the Council amended its LCP to change the land use and zoning designation of two adjacent commercially developed parcels identified as 22729 Pacific Coast Highway (PCH) (APN: 4452-022-010) and 22741 PCH (APN: 4452-022-017), from Community Commercial (CC) to Commercial Visitor Serving Two (CV-2) on the LCP Land Use Plan (LUP) Land Use Map and LCP Local Implementation Plan (LIP) Zoning Map. These two parcels together comprise approximately 1.18 acres of land known as the Sea View Hotel Site.

The LIP amendment proposed the creation of a new overlay district (the Sea View Hotel Overlay District) to accommodate the construction of a new 39-room hotel with associated amenities at 22729 and 22741 PCH. The overlay map would be added to the LIP Zoning Maps and would apply use restrictions and development standards over the properties.

The CC land use and zoning designation is intended to provide the community's residentserving needs, including uses such as restaurants, banks, offices, and retail. Hotel use is 552

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Agenda Item # 6.B.
not permitted in the CC zone and is only permitted within the CV-2 zone. To accommodate the proposed hotel development, the City determined that the properties needed to be rezoned from CC to CV-2 as part of the LCPA.

At the September 2021 meeting, the Council approved the LCPA and submitted the LCPA application to the CCC on November 15, 2021. The LCPA submittal was deemed complete by CCC staff and filed on March 21, 2022, for a hearing. At its June 2022 CCC meeting, the CCC extended the 90 working-day time limit to act on the LCPA for a period not to exceed one year from the original deadline of July 28, 2022.

DISCUSSION: On February 8, 2023, the CCC declined to approve the LCPA as approved by the City; however, the CCC conditionally approved the LCPA subject to the City Council approving the particular modifications required by the CCC. Because the LCPA was modified by the CCC, the LCPA must come back to the Council for consideration. The Council has until August 8, 2023, six months following CCC’s action, to either accept the modified LCPA or withdraw the LCPA. If the Council does not act within six months, the LCPA would not become effective.

If the Council accepts the modified LCPA, the Council will need to adopt an Ordinance at a future meeting since the modifications affect the LIP portion of the LCP. If adopted, the Ordinance would be transmitted to the CCC Executive Director for a final determination that the Council’s acceptance is consistent with the CCC’s action in February 2023. In this scenario, the modified LCPA would only become final when the CCC Executive Director reports its determination to the CCC at its next regularly scheduled meeting after receipt of the City’s Ordinance. Once reported, the LCPA becomes effective and is part of the City’s LCP.

If the Council does not accept the modified LCPA within six months of the CCC’s action, then the LCPA would remain uncertified and would not become effective. The Council has two options to not accept the modifications: 1) adopt a Resolution to formally withdraw the LCPA with the Council’s stated findings as to why the Council is not able to move forward with the LCPA modifications; or 2) allow the LCPA process to expire by not taking action within six months.

Should the Council choose to decline to accept the changes, the applicant could request that the Council submit a modified LCPA to address the CCC concerns. As the CCC has already taken action on the LCPA, modifications are no longer an option unless resubmitted as a new application.

The CCC’s approval of the amendment included seven suggested modifications (Attachments 1 and 2). These are summarized as follows:
563

Page 4 of 7 ends

Agenda Item # 6.B.

Suggested Modification 1: Adds the corresponding addresses and assessor parcel numbers (22729 Pacific Coast Highway/APN 4452-022-010 and 22741 Pacific Coast Highway/APN 4452-022-017) to LIP Section 3.4.6 (Sea View Hotel Overlay District) and a minor typo edit referencing LIP Section 3.8.

Suggested Modification 2: Adds clarifying language to LIP Section 3.4.5(D) (Development Agreement) to require the applicant to contribute $800,000 to the City to be used for public benefits and amenities.

Suggested Modification 3: Adds a new subsection to LIP Section 3.4.6 (Sea View Hotel Overlay District) as follows:

E. Overnight Visitor-Serving Accommodations
NOTE: In addition to the requirements of LIP Section 12.10 regarding providing a component of lower cost overnight visitor accommodations, the owner of the Sea View Hotel Site as of the date of the Coastal Commission’s action on LCP Amendment No. LCP-4-MAL-21-0073-2 (“Applicant”) has agreed to enter into an agreement with the Coastal Commission to fund an associated escrow account, thereby committing to pay an in-lieu fee to another entity acceptable to the Executive Director of the Coastal Commission for use in developing lower cost visitor accommodations, to be released upon Applicant’s securing of entitlements to develop the site consistent with development standards of the Sea View Hotel Overlay District below.

CCC explained that Modification 3 was added to note an agreement made between the CCC and the property owner regarding payment of the $800,000 fee is in addition to the existing LCP requirements regarding the development of luxury overnight accommodations. CCC clarified that the purposes of the fee would be to fund new lower cost overnight visitor accommodations elsewhere in the Malibu/Santa Monica Mountains coastal zone. As part of the agreement with the CCC, the property owner funded an escrow account that would be released once the owner secures entitlements to development the hotel and said entitlements are no longer subject to challenge. The CCC described the payment could be directed toward an identified, potential public project to implement affordable visitor-serving accommodations – a planned campground on a

23.71-acre site (Lauber Smith Property) acquired by the Mountains Recreation and Conservation Authority (MRCA). The site is located outside of City limits in unincorporated Los Angeles County and adjacent to Ramirez Canyon Park. If proposed, portions of the property could be developed as a campground with flame-less facilities (tent pad sites, including ADA accessible tent pad sites) and visitor-serving improvements (parking, restrooms, and picnic areas) to serve the general public as well as underserved and foster youth programs of MRCA. However, CCC staff provides additional clarification in an Appendix to its February 2023 report (Attachment 2) that “no specific project for the in lieu 574

Page 5 of 7 ends

Agenda Item # 6.B.
fee is called out in the Commission’s suggested modification, and it remains uncertain if the mitigation fee will go towards a campground project in Ramirez Canyon or to some other project.”
In addition to the in-lieu fee, the CCC explained that the property owner also committed to and entered into a contract to provide $250,000 to a nonprofit organization called “Los Courage Camps” to further its work providing free surf lessons and transportation to beaches in the Malibu area for children in underserved communities in the general Los Angeles area. The CCC explained that the additional $250,000 will increase equitable public access and recreation opportunities, furthering the goals of the Coastal Act and LCP with regard to access and environmental justice.

Note that the above amounts are in addition to a City-in lieu fee payment of $110,000 to provide lower cost overnight accommodations onsite or offsite. This in-lieu fee was required as part of the City’s previous approval of CDP No. 17-086 on September 13, 2021, for construction of the Sea View Hotel project. As part of the CDP, the City included Special Condition 34 requiring the $110,000 payment. The CCC explained that the City’s in-lieu fee option has not kept pace with the cost of providing lower cost accommodations in the coastal zone and is too low in comparison to the in-lieu mitigation fee that the CCC has required in recent past actions for new hotel development along the coast. CCC’s staff report provides its rationale and analysis to support the added $800,000 in-lieu fee in addition to the City’s $110,000 in-lieu fee.

On January 27, 2023, City staff provided comments to CCC staff regarding Suggested Modification 3 and requested that the $800,000 not be used to fund camping in high fire severity zones or in Environmentally Sensitive Habitat Areas (ESHA). CCC disagreed with City staff’s request for the following reasons:
Camping is a form of lower-cost overnight visitor accommodations. The entire City is within the Very High Fire Severity Zone (VHFSZ). Requiring any camping to be situated outside of the VHFSZ would effectively preclude any new camping from being located within the City or the adjacent unincorporated Santa Monica Mountains.
If the CCC were to restrict camping in the VHFSZ, this type of restriction would directly conflict with the lower cost overnight visitor accommodations in-lieu mitigation fee, policies and goals of the City’s LCP which is to assist in funding affordable overnight accommodations in the Malibu/Santa Monica Mountains coastal zone.
Any new camping development will trigger a CDP to be reviewed by either the City or Los Angeles County depending on the location.
Both the City’s LCP and Los Angeles County’s LCP require new development to minimize risks to life and property in fire hazard areas and also require the protection of areas designated as ESHA and require new development in areas 585

Page 6 of 7 ends

Agenda Item # 6.B.
adjacent to ESHA to be sited and designed to prevent impacts which would significantly degrade those areas.

Suggested Modification 4: Adds language to LIP Section 3.4.6(F) (Development Standards) to clarify which LCP standard a proposed visitor-serving commercial development standard is intended to replace or supplement, as applicable (e.g., projections into yards, landscaping, open space, height projections, parking, and layout and paving). CCC explained that since many of the proposed development standards for visitor serving commercial development reflect the requirements that are currently contained in the LCP, but do not reflect all of them, it is important to provide clarification regarding the applicability of standards in order to ensure internal consistency and adequacy in carrying out the policies of the Land Use Plan.

Suggested Modification 5: Adds language to LIP Section 3.4.6(G) (Permitted Uses) that reads:

Permitted and conditionally permitted uses that are a component of the hotel development are subject to the custom development standards of the Sea View Hotel Overlay District. Permitted or conditionally permitted uses that are not a component of the hotel development are subject to all applicable policies and provisions of the certified LCP, including the Commercial Development Standards in LIP Section 3.8.

CCC explained this modification will ensure that all other permitted and conditionally permitted uses that are not associated with hotel development cannot be developed with the modified hotel-specific development standards under the overlay district and, therefore, will ensure that new development will not have significant adverse effects, either individually or cumulatively, on coastal resources. Other minor clarifications are incorporated into this section to avoid ambiguity (e.g., deleted reference to design standards and restaurant parking, and clarification on conditional use permits being required in addition for conditionally permitted uses).

Suggested Modification 6: Adds the corresponding addresses and assessor parcel numbers (22729 Pacific Coast Highway/APN 4452-022-010 and 22741 Pacific Coast Highway/APN 4452-022-017) to the proposed LIP Section 3.4.6 Sea View Hotel Overlay District text and Sea View Hotel Overlay District Map.

Suggested Modification 7: Modifies the LIP Zoning Map to depict the Sea View Hotel Overlay District site as two parcels APN 4452-002-010 and 4452-022-017.

Page 7 of 7 ends

Agenda Item # 6.B.

Sea View Hotel (SCH #2012041087), adopted by the City Council on September 13, 2021 (Resolution No. 21-45). The proposed City Council actions are not a separate “project” for CEQA purposes but is a subsequent discretionary action related to a previously approved project (CEQA Guidelines § 15378(c)). Additionally, pursuant to CEQA Guidelines Section 15162, and based on the review of the entire record, including without limitation, the IS/MND, the City Council finds that the proposed actions do not require further environmental review as: 1) no substantial changes are proposed to the project and no substantial changes have occurred that require major revisions to the IS/MND due to the involvement of new significant environmental effects or an increase in severity of previously identified significant effects; and 2) no new information of substantial importance has come to light that shows the project will have one or more significant effects not discussed in the IS/MND. Pursuant to CEQA Guidelines §15162(b), the City Council finds and recommends that no further analysis or environmental documentation is necessary. Accordingly, the proposed City Council actions are merely a step-in furtherance of the original project for which environmental review was performed and no supplemental or subsequent CEQA has been triggered, and no further environmental review is required.

ATTACHMENTS:

1. CCC Modifications to City LCPA (redlined version)

2. CCC Staff Report and Attachments, February 8, 2023
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C9D51CDG?@1B35<C1>4144144B5CC5CD?45@93DG8938@1B35<C1B5CE2:53DD?D85?F5B<1I 1467
STATE OF CALIFORNIA – NATURAL RESOURCES AGENCY GAVIN NEWSOM, GOVERNOR

CALIFORNIA COASTAL COMMISSION

The amendment also includes increasing the development’s allowable Floor Area Ratio (FAR) beyond what is permitted under the existing LCP, which triggers the need for a Development Agreement to be approved through an LCP amendment certified by the Coastal Commission pursuant to LIP Section 3.8(A)(5). Therefore, the proposed amendment also includes the approval of a Development Agreement between the City and the property owners to increase the maximum allowable FAR from 0.15 to 0.52 in conjunction with a payment of $800,000 to the City to be expended as the City Council 1568 ATTACHMENT 2
LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
2 determines to be an appropriate use.

The key issue raised by this amendment request is the adequate provision of lower-cost visitor-serving overnight accommodations. In this case, no existing lower-cost rooms are being demolished or replaced since the proposed hotel project does not include the demolition of an existing lower-cost hotel or motel. However, this is a project-specific request to allow a new 39-room luxury hotel at the site and the proposal raises an issue of whether the project specific LCP amendment is consistent with the Coastal Act and LCP policies to ensure that proposed visitor-accommodation facilities in the coastal zone include lower-cost accommodations. Under the City’s LCP, if a property owner proposes to build new overnight luxury accommodations, LUP Policy 2.35 and LIP Section 12.10 allow for the payment of an in-lieu fee of $10,419 (and adjusted for inflation) applied to fifteen percent (15%) of the total number of new rooms built on a property as a mechanism to ensure 1669
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3 compliance with the objectives of Section 30213 and 30222 of the Coastal Act and Policies

The LCP amendment includes creation of a new overlay district (Sea View Hotel Overlay District) with special development standards to facilitate the development of a new 39-room luxury hotel. The coastal development permit for the hotel development within the overlay district site has already been approved by the City of Malibu, conditioned to not be effective until certification of the subject LCP amendment. As such, Commission staff have conducted a project-level review of the proposed development and recommend adopting suggested modifications to the proposed overlay district development standards to ensure consistency with the relevant policies and provisions of the LCP. The remaining 1770
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4 modifications are minor clarifications to LIP text and figures that further the intent and implementation of the LCP and to avoid ambiguity.

For the reasons described in this report, Staff recommends that the Commission find that the proposed LUP amendment is consistent with and meets the requirements of the policies of Chapter 3 of the Coastal Act, and find the proposed LIP amendment, only if modified as suggested, is consistent with and adequate to carry out the applicable policies of the certified LUP as amended.
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5 Table of Contents
I. PROCEDURAL OVERVIEW................................................................................ 6 A. Standard of Review............................................................................................................ 6 B. Procedural Requirements................................................................................................... 6 C. Public Participation............................................................................................................. 7 II. STAFF RECOMMENDATION, MOTION, AND RESOLUTION FOR THE LAND USE PLAN AMENDMENT ................................................................................... 7 A. APPROVAL OF THE LAND USE PLAN AMENDMENT AS SUBMITTED ......................... 7 III. STAFF RECOMMENDATION, MOTIONS, AND RESOLUTIONS FOR THE LOCAL IMPLEMENTATION PLAN AMENDMENT .............................................. 8 A. DENIAL OF THE LOCAL IMPLEMENTATION PLAN AS SUBMITTED............................. 8 B. APPROVAL OF THE LOCAL IMPLEMENTATION PLAN AMENDMENT WITH SUGGESTED MODIFICATIONS ....................................................................................... 8 IV. SUGGESTED MODIFICATIONS ON THE LOCAL IMPLEMENTATION PLAN AMENDMENT...................................................................................................... 9 V. FINDINGS FOR APPROVAL OF THE LUP AMENDMENT AS SUBMITTED,

DENIAL OF THE LIP AMENDMENT AS SUBMITTED, AND APPROVAL OF THE LIP AMENDMENT IF MODIFIED AS SUGGESTED..................................13 A. Amendment Description and Background........................................................................14 B. Public Access and Recreation..........................................................................................16 C. New Development and LCP Administration .....................................................................29 D. California Environmental Quality Act ................................................................................33 Exhibits
Exhibit 1 – Proposed LIP Amendment Text Changes in Strikethrough/Underline Exhibit 2 – Proposed Land Use and Zoning Map Change
Exhibit 3 – Proposed Sea View Hotel Overlay District Map Exhibit 4 – Proposed Development Agreement
Exhibit 5 – Vicinity Map
Exhibit 6 – Aerial View of the Subject Parcels
Exhibit 7 – Parcel Map
Exhibit 8 – Overall Site Plan for Sea View Hotel Project 1972
LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
6 I. PROCEDURAL OVERVIEW
A. Standard of Review
The Coastal Act provides:

B. Procedural Requirements
If the Commission certifies the LCP amendment as submitted, no further City Council action will be necessary pursuant to Section 13544(b)(2) of Title 14 of the California Code of Regulations. Should the Commission deny the LCP Amendment, as submitted, without suggested modifications, no further action is required by either the Commission or the City 2073
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7 Council, and the LCP amendment is not effective, pursuant to Section 13542(f). Should the Commission deny the LCP Amendment, as submitted, but then approve it with suggested modifications, then the City Council may consider accepting the suggested modifications and submitting them by resolution to the Executive Director for a determination that the City Council’s acceptance is consistent with the Commission's action. In that scenario, pursuant to Section 13544(c) of Title 14 of the California Code of Regulations, the modified LCP Amendment will become final when the Executive Director reports the determination that the local government's action is legally adequate to the Commission at its next regularly scheduled public meeting. If the City Council does not accept the suggested modifications within six months of the Commission’s action, then the LCP amendment remains uncertified and not effective.

II. STAFF RECOMMENDATION, MOTION, AND RESOLUTION

A. APPROVAL OF THE LAND USE PLAN AMENDMENT AS SUBMITTED MOTION I:

I move that the Commission certify Land Use Plan Amendment No. LCP-4-MAL-21- 0073-2 as submitted by the City of Malibu.

STAFF RECOMMENDATION TO CERTIFY:

RESOLUTION TO CERTIFY THE LAND USE PLAN AMENDMENT AS SUBMITTED:

The Commission hereby certifies the City of Malibu Land Use Plan Amendment No. LCP2174 LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
8 4-MAL-21-0073-2 as submitted by the City of Malibu and adopts the findings set forth below on the grounds that the amendment will meet the requirements of and be in conformity with the policies of Chapter 3 of the Coastal Act. Certification of the Land Use Plan amendment complies with the California Environmental Quality Act because either 1) feasible mitigation measures and/or alternatives have been incorporated to substantially lessen any significant adverse effects of the land use plan on the environment, or 2) there are no further feasible alternatives or mitigation measures which could substantially lessen any significant adverse impact which the Land Use Plan amendment may have on the environment.

III. STAFF RECOMMENDATION, MOTIONS, AND

RESOLUTIONS FOR THE LOCAL IMPLEMENTATION PLAN

A. DENIAL OF THE LOCAL IMPLEMENTATION PLAN AS SUBMITTED MOTION I:

I move that the Commission reject Local Implementation Plan Amendment No. LCP4-MAL-21-0073-2 as submitted by the City of Malibu.

STAFF RECOMMENDATION OF DENIAL:

RESOLUTION TO DENY AS SUBMITTED:

B. APPROVAL OF THE LOCAL IMPLEMENTATION PLAN AMENDMENT

WITH SUGGESTED MODIFICATIONS
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9 MOTION II:

I move that the Commission certify Local Implementation Plan Amendment No. LCP4-MAL-21-0073-2 for the City of Malibu if it is modified as suggested in this staff report.

STAFF RECOMMENDATION TO CERTIFY WITH SUGGESTED MODIFICATIONS:

RESOLUTION TO CERTIFY WITH SUGGESTED MODIFICATIONS:

IV.SUGGESTED MODIFICATIONS ON THE LOCAL

Suggested Modification No. 1
LIP Section 3.4.6 (Sea View Hotel Overlay District), and subsection B and C of LIP Section

3.4.6 shall be modified as follows:

3.4.6 Sea View Hotel Overlay District (22729 Pacific Coast Highway/APN 4452-022-010 and 22741 Pacific Coast Highway/APN 4452-022-017)
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10 …
B. Description of Area Subject to LIP Section 3.4.6. The provisions of this section shall apply to the Project Site, a 51,776 square foot (1.19 acre) site, parcel, comprised of two merged parcels, currently identified as 22729 Pacific Coast Highway and 22741 Pacific Coast Highway (Los Angeles County Assessor Parcel Numbers 4452-022-010 and 4452-022-017) in the Sea View Hotel Overlay District map.

C. Applicability. The Commercial Development Standards contained in LIP Section

3.18, as well as other applicable certified LCP policies and provision shall apply, unless specifically modified by this section.

Suggested Modification No. 2
Subsection D of LIP Section 3.4.6 (Sea View Hotel Overlay District) shall be modified as follows:

Suggested Modification No. 3
The following subsection shall be added to LIP Section 3.4.6 (Sea View Hotel Overlay District):

Suggested Modification No. 4
Subsection E of LIP Section 3.4.6 (Sea View Hotel Overlay District) shall be modified as follows:

EF. Development Standards.
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11 …

SITE DEVELOPMENT CRITERIA
…
Minimum Onsite
Landscaping
The provisions of LIP Section 3.8(A)(5)(b) shall not
apply. The Sea View Hotel landscaping criteria are as
follows:

A minimum of 8,977 square feet of landscaping at
ground level. Additionally, there shall be a minimum
of 2,528.6 square feet of plants in planters on the
southerly seaward areas of the various decks.

Minimum Onsite Open
Space
The provisions of LIP Section 3.8(A)(5)(b) shall not
apply. The Sea View Hotel open space criteria are as
follows:

HEIGHT
Maximum Height
Projections
The provisions of LIP Section 3.8(A)(1) shall not
apply. The Sea View Hotel height requirements are
as follow:
x New structures which have sloping roofs that
slope less than 25% shall be no higher than 24
feet above the existing natural grade or finished
grade, whichever results in a lower building
height, excluding basements
x New structures which have sloping roofs that
slope 25%, or more, shall be no higher than 28
feet above the existing natural grade or finished
grade, whichever results in a lower building
height, excluding basements. Areas such as
elevator shafts in order to comply with ADA laws,
the wooden deck above the existing tile rooftop
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12 deck, the fire exit stairs required by the Fire
Department, the safety railing around the decks,
and the sound wall as described in the Mitigated
Negative Declaration are excluded from the
referenced height restrictions. Seven-foot
overhangs to eliminate sun from hitting south
facing windows are excluded from the height
standards.

MONUMENT SIGN AND GENERAL SIGN REQUIREMENTS
The provisions of LIP Section 3.15.6 are modified or
shall not apply as follows:
x The provisions of LIP Section 3.15.6(A)(2)(d)(iii)
shall not apply.
…
Suggested Modification No. 5
Subsection F of LIP Section 3.4.6 (Sea View Hotel Overlay District) shall be modified as 2679
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13 follows:

V. FINDINGS FOR APPROVAL OF THE LUP AMENDMENT AS

SUBMITTED, DENIAL OF THE LIP AMENDMENT AS

SUBMITTED, AND APPROVAL OF THE LIP AMENDMENT IF

MODIFIED AS SUGGESTED
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14 The following findings support the Commission’s certification of the proposed Land Use Plan amendment as submitted, the Commission’s denial of the proposed Local Implementation Plan amendment as submitted, and approval of the Local Implementation Plan Amendment if modified as suggested (detailed in Section IV. Suggested Modifications above).

The Commission hereby finds and declares as follows:

Development Agreement
Pursuant to the certified Malibu LCP, increasing the Floor Area Ratio (FAR) beyond what is allowed under the LCP, which is proposed in the overlay district development standards, 2881
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15 triggers the need for a development agreement to be approved through an LCP amendment certified by the Coastal Commission (LIP Section 3.8(A)(5)). Therefore, the proposed amendment also includes the approval of a Development Agreement between the City and property owners that sets forth the terms of the agreement regarding the eventual development of the subject site, including allowable uses, development standards, and maximum allowable floor area ratio (FAR). The development agreement also details the applicant’s ability to develop a new hotel with an increased allowable floor area ratio from 0.15 to 0.52 in conjunction with a payment of $800,000 to the City to be expended as the City Council determines to be an appropriate use. The Development Agreement is discussed in greater detail in Subsection B (New Development and Cumulative Impacts) below.

The full text of the City’s proposed changes to the LCP is included as Exhibits 1-3 of this report.

The subject Sea View Hotel property owners propose merging the two parcels associated 2982
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16 with the proposed overlay district and constructing a new 39-room luxury hotel, including remodeling the existing commercial building that would remain in place. An Initial Study and Mitigated Negative Declaration were prepared and adopted for the project by the City pursuant to CEQA. The City has also approved the coastal development permit for the lot merger and hotel development. However, the coastal development permit was conditioned by the City to only be effective after certification of the subject LCP amendment.

Pursuant to Special Condition 34 of the CDP, the applicant/property owner is required to pay a fee of $110,000 to the City in-lieu of providing lower cost overnight accommodations.

In carrying out the requirement of Section 4 of Article X of the California Constitution, maximum access, which shall be conspicuously posted, and recreational opportunities shall be provided for all the people consistent with public safety needs and the need to protect public rights, rights of private property owners, and natural resource areas from overuse.
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17 Similarly, the Coastal Act requires that overnight accommodations, particularly lower-cost accommodations, be protected and encouraged as a means of providing public recreation access to the coast.

Section 30213 of the Coastal Act states:

Lower cost visitor and recreational facilities shall be protected, encouraged, and, where feasible, provided. Development providing public recreational opportunities are preferred.

Section 30222 of the Coastal Act states:

The following Land Use Plan (LUP) policies are applicable in this case:

Land Use Plan Policy 2.1 states:

Land Use Plan Policy 2.25 states:

New development shall provide off-street parking sufficient to serve the approved use in order to minimize impacts to public street parking available for coastal access and recreation.

Land Use Plan Policy 2.33 states:
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18 Priority shall be given to the development of visitor-serving and commercial recreational facilities designed to enhance public opportunities for coastal recreation.

Land Use Plan Policy 2.34 states:

Land Use Plan Policy 2.35 states:

Land Use Plan Policy 2.36 states:

Land Use Plan Policy 2.37 states:

Land Use Plan Policy 5.11 states:
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19 Recreational development and commercial visitor-serving facilities shall have priority over non-coastal dependent uses. All uses shall be consistent with protection of public access and ESHA.

In addition, the following Local Implementation Plan (LIP) sections are specifically applicable in this case:

LIP Section 12.10 (New Luxury Overnight Accommodations), in relevant part, states:

Visitor-Serving Lands
Visitor-serving commercial development is considered a priority use under the Coastal Act and the Malibu LCP, and is given priority over other non-coastal dependent development.

The City is requesting an amendment to the LUP and LIP portions of its certified LCP to change the land use and zoning designation of two adjacent commercially developed 3386
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20 parcels identified as 22729 Pacific Coast Highway (PCH) and 22741 Pacific Coast Highway from Community Commercial (CC) to Commercial Visitor Serving Two (CV-2) on the LUP Land Use Map and LIP Zoning Map. These two parcels together comprise approximately

0.15. The maximum FAR may be increased to a maximum of 0.20, where public benefits and amenities are provided as part of the project.

Lower Cost Overnight Accommodations
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21 These Coastal Act and LCP policies make clear that public recreational access, particularly as it relates to the specific needs of the visiting public, is of critical importance and must be protected and maximized. Overnight accommodations are necessary for providing public access and recreational opportunities for the many visitors that live further from the coast, including those from inland areas, where a coastal trip may require a lengthy car, train, or bus ride. For many low and moderate-income visitors, lower-cost overnight accommodations are essential to being able to access the California coast at all. These access issues are perhaps more apparent than ever now and more critical as they relate to overnight accommodations, as coastal visitors are increasingly priced out of the overnight accommodations market, particularly impacting low and middle-income households, communities of color, and many young people.1
Specifically, Section 30213 of the Coastal Act provides for the protection and provision of lower cost visitor and recreational facilities. Visitor-serving commercial development is considered a priority use under the Coastal Act, and, pursuant to public access policies of the Coastal Act, the Commission has the responsibility to ensure that a range of affordable facilities be provided in new development along the coast, including overnight accommodation options.

Overview of Malibu’s Overnight Accommodations
Demand for overnight accommodations is especially high in the City of Malibu because of its proximity to the coast and historical reputation as a popular coastal community. The City lies entirely within the Coastal Zone and extends approximately 26 miles from the Ventura County Line to Topanga Canyon Boulevard on the east. The beaches of Malibu are worldfamous tourist destinations for millions of visitors annually from foreign countries, all 50 states of the U.S., as well as for residents of cities and towns throughout California. In addition, the Santa Monica Mountains area within and adjacent to the City provides an extensive network of public trails that traverse and connect Federal, State, and County parklands and a system of heavily used historic trails on private land. Overall, a wide variety of recreational opportunities exist in the area, including hiking, biking, horseback riding, camping, fishing, picnicking, nature study, surfing, diving, and swimming. Public access to and along the shoreline and trails and the provision of public recreational opportunities and visitor-serving facilities such as campgrounds, hotels, and motels have 1 See “Explore the Coast Overnight: An Assessment of Lower-Cost Coastal Accommodations” by the California Coastal Conservancy (March 2019) and California Coastal Commission Public Workshop Staff Report on Lower-Cost Visitor-Serving Accommodations (October 2016).
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22 historically been a critical and controversial issue in Malibu.

Although statewide demand for lower-cost accommodations in the coastal zone is difficult 2 Explore the Coast Overnight- An Assessment of Lower Cost Accommodations, published by State Coastal Conservancy on January 8, 2019.
3 Ref. Public Workshop: Lower Cost Visitor Serving Accommodations, published by Commission staff on October 26, 2016.
4 Ref. Public Workshop: Lower Cost Visitor Serving Accommodations, published by Commission staff on October 26, 2016.
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23 to quantify, there is no question that low-cost hotels, camping, and hostel opportunities are in high demand in coastal areas and that there is an ongoing need to provide more lowercost opportunities along California’s coast. In a Coastal Conservancy-commissioned survey conducted in 2017, an assessment of lower-cost overnight accommodations found that “respondents cited financial concerns as the primary reason they do not stay overnight at the coast. Over 45% of Californians said that overnight accommodations at the coast were inconvenient or unaffordable.”5
Sea View Hotel Project-Specific LCP Amendment
The amendment request is project-specific to allow for the construction of a new 39-room luxury hotel on the subject site with changes to the land use and zoning designation to permit the construction of new overnight luxury accommodations and a new overlay district with special development standards to facilitate the development of a hotel.

Furthermore, LUP Policy 2.35 and LIP Section 12.10 state that the City may approve new 5 Explore the Coast Overnight- An Assessment of Lower Cost Accommodations, published by State Coastal Conservancy on January 8, 2019.
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24 luxury overnight visitor accommodations if the evidence shows and the City finds, that the project provides a component of lower cost overnight visitor accommodations, such as a campground, RV park, hostel, or lower cost hotel or motel rooms. Furthermore, LIP Section

As stated above, the preferred method to ensure consistency with Coastal Act sections 30213 and 30222 is the provision of new lower-cost rooms on or near the project site.

However, the City’s LCP in-lieu fee option of $10,419 per required unit of lower cost overnight accommodations, plus an additional amount for inflation, has not kept pace with the cost of providing lower cost accommodations in the coastal zone and is therefore too low in comparison to the in-lieu mitigation fee per required lower-cost room (not provided onsite) that the Commission has required in recent past actions for new hotel development along the coast, which is discussed in more detail below. 3891
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25 In-Lieu Mitigation Fee
In 2014, following Commissioner questions regarding the adequacy of the in-lieu fee for lower-cost accommodations at Commission hearings, Hostelling International provided an updated report representing the true construction costs of a new hostel, which stated that new construction costs approximately $42,120 per hostel bed without the cost of land acquisition. In order to verify this information, the Commission consulted Maurice Robinson & Associates. Robinson concurred with the figures and stated: “This lends itself to a twotiered Index for a representative cost to develop low-cost lodging statewide. The $42,120 per bed estimate for the structure can be indexed on an annual basis, either by CPI (Consumer Price Index) or, alternatively, with a more construction industry-specific index such as the Turner Building Cost Index.”
The Turner Building Cost Index is used widely by federal and state governments to measure costs in the non-residential building construction market in the United States.6 Robinson further expanded on the cost of providing motel or hotel rooms rather than hostel beds and estimated:
“These new motel rooms would likely cost nearly $100,000 per room to develop (excluding land), which is more than twice the cost of a hostel bed, mostly due to the fact that motels require approximately twice the gross square footage per person than hostels.”
A standard hotel or motel room (250 sq. ft. average) represents a much larger space than a single hostel bed. The cost of constructing new low-cost hotel rooms with new lower-cost hotel/motel rooms is significantly higher than replacing them with hostel beds. Following this information and suggestion, the Commission required new high cost hotel projects and projects that eliminated existing lower-cost overnight accommodations to pay an in-lieu mitigation fee of $100,000 per required lower-cost room not provided onsite.7 This requirement was based on information provided in 2015. However, when considering the approximate 27% increase in the Turner Building Cost Index in the last seven years (likely related to inflation and other factors), the estimated cost of constructing a lower-cost hotel or motel room has increased from $100,000 per room to $127,000 per room.8 Robinson also recommended that land costs be calculated separately from construction costs in the in-lieu mitigation fee. It is important to note that in-lieu mitigation fees are often accepted and used by many public and non-profit organizations. The in-lieu fees provide funding to public agencies and non-profit organizations, including California State Parks, Mountains Recreation and Authority, and Hostelling International, for the provision of lowercost overnight visitor accommodations within or near the coastal zone. These lower-cost overnight visitor accommodations include, but are not limited to, RV park sites, hostel accommodations, campgrounds, cabins, and lower-cost hotel or motel accommodations. 6 The Turner Building Cost Index is used widely by federal and state governments to measure costs in the nonresidential building construction market in the United States. (Ref. https://www.turnerconstruction.com/cost-index) 7 Ref. CDP 5-18-0872 (Sunshine Enterprises, LP), CDP 5-20-0181 (B&J Capital Group Investments) 8 The Turner Building Cost Index was 943 for 2015 and 1199 for 2021. 1199 – 943 = 256 / 943 = 0.27 * 100% = 27% increase
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26 These agencies and organizations often already own land and require solely construction funds. As such, the mitigation fee of $127,000 per lower-cost hotel room does not include land costs. Maurice Robinson & Associates addresses the widely varying cost of land acquisition:
“The range in land costs might be as great as from $100/sf to $600/sf in Los Angeles County’s Coastal Zone. For a 10,000 sf parcel of land, the total land costs could be anywhere from $1 million to $6 million—a huge range. This variability in the price of land dwarfs the cost of providing the hostel improvements[.] …This illustrates the need for the Commission to find alternative, lower-cost ways to acquire the land replacement low-cost lodging. As examples, the proposed hostels could be built on land owned by the following non-private-sector types of entities:
- Public agencies, such as State Parks, which have similar social goals; - Non-profit organizations, which may not require a market-level rate of return; or - Quasi-public agencies, such as Port Districts, but leased at a below-market rate.

The property owners, in consultation with Commission staff, have identified a potential public project to which to direct the $800,000 fee to implement affordable visitor-serving accommodations. In May 2020, the Mountains Recreation and Conservation Authority (“MRCA”) acquired the 23.71-acre Lauber Smith Property in the Santa Monica Mountains for a mix of habitat conservation, open space, and public access and recreation uses. The property is about 9 miles northwest of the subject “Sea View Hotel” site, within the coastal zone of unincorporated Los Angeles County, adjacent to Ramirez Canyon Park, and just outside Malibu city limits. In particular, MRCA’s goal is, in part, to develop campground 9 Ref. CDP A-5-VEN-21-0011 (Wynkoop Properties, LLC); CDP 5-18-0872 (Shore Hotel) 4093
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27 facilities, including flame-less facilities (tent pad sites, including ADA accessible tent pad sites) and visitor-serving improvements (parking, restrooms, and picnic areas) on portions of the property to serve the general public as well as underserved and foster youth programs of MRCA. The use of these funds in this manner would be consistent with LUP Policies 2.33, 2.34, 2.36, and 2.37 to create or protect visitor serving and recreational uses.

In addition to the in-lieu fee proposed to provide a component of lower cost overnight 4194
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28 accommodations, the property owners have also committed to and entered into a contract to provide $250,000 to a nonprofit organization called “Los Courage Camps” to further its work providing free surf lessons and transportation to beaches in the Malibu area for children in underserved communities in the general Los Angeles area. The organization’s website states that: “Los Courage Camps’ mission is to teach the diverse children of Los Angeles who have never experienced the ocean how to surf and consequently connect them with their courage, potential, inner strength, and leadership”. The property owners state that the proposed funding will provide for a large bus and driver, lunches, towels, wetsuits, surfboards, surfing instructors, and a grant writer (to seek additional grant funding). While the provision of this proposed funding does not directly provide lower cost overnight accommodations, it will increase equitable public access and recreation opportunities, furthering the goals of the Coastal Act and LCP with regard to access and environmental justice.

As discussed in detail above, the City’s certified Land Use Plan (LUP) goal is to preserve coastal access, including the provision of lower cost overnight accommodations within the City’s Coastal Zone. If modified as suggested, the LIP amendment to rezone the subject 4295
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29 property and add a zoning overlay will give priority to visitor serving commercial recreation uses and ensure that a component of lower cost overnight accommodations will be provided. For the reasons stated above, the Commission finds that, if modified as suggested, the LIP amendment conforms with and will be adequate to carry out the applicable policies of the certified Land Use Plan.

C. New Development and LCP Administration
The following Local Implementation Plan (LIP) sections are specifically applicable in this case:

The associated Sea View Hotel project involves the construction of a new four-story, 26,734 square foot, 39-room luxury hotel involving the remodel of an existing four-story, non-conforming commercial building (non-conforming in regards to the building height and square footage/floor area ratio), and construction of a new two-story, 11,342 square foot addition with a basement. Additionally, the proposed hotel development proposes an allowable floor area ratio greater than currently allowed under the commercial development standards of the City’s LCP. Therefore, the City determined that a new overlay district with specific development standards (maximum density, including floor area ratios for commercial use, heights, lot coverage, open space requirements, setbacks, and parking and sign requirements) is needed to accommodate some of the as-built existing development, as well as modifying some of the development standards related to parking, parking locations, and an increase in the maximum allowable floor area ratio. 4396
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30 The new Sea View Hotel overlay district has been tailored to accommodate the proposed Sea View Hotel development project. Permitted uses and development standards have been customized for the overlay area, including heights, lot coverage, setbacks, signage requirements, and landscape/open space requirements. The permitted uses allowed under the proposed overlay district include all uses permitted in the Commercial Visitor Serving-2 land use/zoning designation (which includes uses allowed in other commercial land use designations (Commercial Neighborhood, Community Commercial, and Commercial General)), and uses typically associated with hotel development (such as restaurants, spas, guest rooms, gym, etc.). The intent of allowing the permitted and conditionally permitted uses of the CV-2 land use designation is to accommodate a situation in which the proposed hotel development project is never constructed, and the existing office and commercial development onsite (currently permitted under the Community Commercial designation) can remain conforming and permitted under the overlay district.

As discussed previously, the Commission finds that the proposed intensity of visitor serving commercial development on the property is consistent with the area's character and with the adjacent development and land uses. LIP Section 3.8(A)(5) limits the allowable square footage for commercial development to the maximum Floor Area Ratio (FAR) of 0.15 of the lot area. As part of the proposed development standards for the hotel development, and 4497
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31 discussed in greater detail below, the City has proposed a larger FAR for the subject site than would otherwise be allowed by strict application of Section 3.8(A)(5) of the LIP. The allowable 0.15 FAR for the two parcels (22741 and 22729 PCH) is 7,750.05 square feet.

The existing commercial building at 22741 PCH is legally non-conforming with a FAR of

0.46 (15,392 square feet). The FAR standard proposed in the subject LCP amendment request would increase the allowed FAR to a maximum of 0.52 (26,866.84 square feet).

California Government Code Sections 65864-65869.5 authorizes any city, county, or city and county, to enter into a development agreement with any person having a legal or equitable interest in real property for the development of property owned by that entity. A development agreement specifies the permitted uses of the property, the density or intensity of use, the maximum height and size of proposed buildings, and provisions for reservation or dedication of land for public purposes. According to Government Code Section 65865.2, the development agreement “…may include conditions, terms, restrictions, and requirements for subsequent discretionary actions, provided that such conditions, terms, restrictions, and requirements for subsequent discretionary actions shall not prevent the development of the land for the uses and to density or intensity of development set forth in the agreement. The agreement may provide that construction shall 4598
LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
32 be commenced within a specified time and that the project or any phase thereof be completed within a specified time. The agreement may also include terms and conditions relating to applicant financing of necessary public facilities and subsequent reimbursement over time.” Government Code Section 65866 states further that, “[u]nless otherwise provided by the development agreement, rules, regulations, and official policies governing permitted uses of the land, governing density, and governing design, improvement, and construction standards and specifications, applicable to the development of the property subject to a development agreement, shall be those rules, regulations, and official policies in force at the time of execution of the agreement. A development agreement shall not prevent a city, county, or city and county, in subsequent actions applicable to the property, from applying new rules, regulations, and policies which do not conflict with those rules, regulations, and policies applicable to the property as set forth herein, nor shall a development agreement prevent a city, county, or city and county from denying or conditionally approving any subsequent development project application on the basis of such existing or new rules, regulations, and policies.” However, pursuant to Section 65869, “…[a] development agreement shall not be applicable to any development project located in an area for which a local coastal program is required to be prepared and certified pursuant to the requirements of Division 20 (commencing with Section 30000) of the Public Resources Code, unless: (1) the required local coastal program has been certified as required by such provisions prior to the date on which the development agreement is entered into, or (2) in the event that the required local coastal program has not been certified, the California Coastal Commission approves such development agreement by formal commission action.” Since the City of Malibu has a certified local coastal program, the approval of a development agreement does not require the approval of a coastal development permit by the Commission. Rather, as required by Malibu LIP Section 13.28, development agreements are processed as amendments to the LCP. In this case, the subject LCP amendment request includes the approval of the Sea View Hotel Development Agreement.

Although the City has formalized a 0.52 FAR with a payment of $800,000 to the City through a Development Agreement with the property owners for the subject site, the City has also chosen to effectuate the 0.52 FAR in the required LCP amendment by incorporating the 0.52 FAR as a development standard under the new overlay district. The Development Agreement approved by the City is not incorporated into the proposed LCP amendment language in full. Instead, the proposed new overlay district designation reflects the allowable uses, density, and development standards agreed upon in the Development Agreement.
4699
LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
33 The proposed overlay district density standard (proposed LIP Section 3.4.5(D)) only requires that pursuant to a Development Agreement between the property owners and the City of Malibu, the allowable FAR is increased from 0.15 to 0.52 if the applicant contributes $800,000 to be expended as the City Council determines to be an appropriate use. Yet, the proposed language does not specifically require the contribution to be used for public benefits or amenities, as required by LIP Section 3.8(A)(5) (Site Development Criteria). In order to ensure that the public benefits associated with the increased FAR for the subject site are incorporated into the LCP, Suggested Modification Two (2) adds clarifying language to proposed LIP Section 3.4.5(D) to require the applicant to contribute $800,000 to the City to be used for public benefits and amenities.

Nevertheless, the Commission is required, in approving an LCP submittal, to find that the approval of the proposed LCP, as amended, does conform with CEQA provisions, including the requirement in CEQA section 21080.5(d)(2)(A) that the amended LCP will not be approved or adopted as proposed if there are feasible alternatives or feasible mitigation measures available which would substantially lessen any significant adverse impact which the activity may have on the environment. 14 C.C.R. §§ 13540(f) and 13555(b). 100 47
LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
34 The City’s LCP amendment consists of a Land Use Plan amendment and Local Implementation Plan amendment.

The Commission finds that for the reasons discussed in this report if the LCP amendment is modified as suggested, there are no additional feasible alternatives, feasible alternatives, or feasible mitigation measures available that could substantially reduce any adverse environmental impacts. The Commission further finds that the proposed LCP amendment, if modified as suggested, is consistent with Section 21080.5(d)(2)(A) of the Public Resources Code.
101 48
STATE OF CALIFORNIA—NATURAL RESOURCES AGENCY GAVIN NEWSOM, GOVERNOR

CALIFORNIA COASTAL COMMISSION

SOUTH CENTRAL COAST DISTRICT
89 SOUTH CALIFORNIA ST., SUITE 200
VENTURA, CA 93001
(805) 585-1800
W11a
City of Malibu LCP Amendment
LCP-4-MAL-21-0073-2 (Sea View Hotel Project)
February 8, 2023
Exhibits
Table of Contents
Exhibit 1 – Proposed LIP Amendment Text Changes in Strikethrough/Underline Exhibit 2 – Proposed Land Use and Zoning Map Change
Exhibit 3 – Proposed Sea View Hotel Overlay District Map Exhibit 4 – Proposed Development Agreement
Exhibit 5 – Vicinity Map
Exhibit 6 – Aerial View of the Subject Parcels
Exhibit 7 – Parcel Map
Exhibit 8 – Overall Site Plan for Sea View Hotel Project 102 49
Due to size, Exhibits can be viewed on the CCC website at:
https://documents.coastal.ca.gov/reports/2023/2/W11a/W11a-2-2023- exhibits.pdf

STATE OF CALIFORNIA - NATURAL RESOURCES AGENCY GAVIN NEWSOM, GOVERNOR

CALIFORNIA COASTAL COMMISSION

APPENDIX
103 50
2 APPENDIX 1 - Substantive File Documents
Certified City of Malibu Local Coastal Plan;
Malibu Planning Commission Agenda Report and Associated Documents for Coastal Development Permit No. 17-086, Local Coastal Program Amendment No. 16-006, Zoning Map Amendment No. 17-002, Zoning Text Amendment No. 20-001, Development Agreement No. 21-001, Lot Merger No. 20-002, Demolition Permit No. 20-19, Initial Study No. 21-001, and Mitigated Negative Declaration No. 21-001, dated June 24, 2021; Malibu City Council Agenda Report and Associated Documents for Coastal Development Permit No. 17-086, Local Coastal Program Amendment No. 16-006, Zoning Map Amendment No. 17-002, Zoning Text Amendment No. 20-001, Development Agreement No. 21-001, Lot Merger No. 20-002, Demolition Permit No. 20-19, Initial Study No. 21-001, and Mitigated Negative Declaration No. 21-001, dated July 29, 2021; Malibu City Council Agenda Report and Associated Documents for Coastal Development Permit No. 17-086, Local Coastal Program Amendment No. 16-006, Zoning Map Amendment No. 17-002, Zoning Text Amendment No. 20-001, Development Agreement No. 21-001, Lot Merger No. 20-002, Demolition Permit No. 20-19, Initial Study No. 21-001, and Mitigated Negative Declaration No. 21-001, dated July 29, 2021; Malibu City Council Agenda Report and Associated Documents for Coastal Development Permit No. 17-086, Local Coastal Program Amendment No. 16-006, Zoning Map Amendment No. 17-002, Zoning Text Amendment No. 20-001, Development Agreement No. 21-001, Lot Merger No. 20-002, Demolition Permit No. 20-19, Initial Study No. 21-001, and Mitigated Negative Declaration No. 21-001, dated August 11, 2021; Malibu City Council Agenda Report and Associated Documents for Coastal Development Permit No. 17-086, Local Coastal Program Amendment No. 16-006, Zoning Map Amendment No. 17-002, Zoning Text Amendment No. 20-001, Development Agreement No. 21-001, Lot Merger No. 20-002, Demolition Permit No. 20-19, Initial Study No. 21-001, and Mitigated Negative Declaration No. 21-001, dated August 25, 2021; Malibu City Council Agenda Report and Associated Documents for Ordinance No. 491 for Local Coastal Program Amendment No. 16-006, Zoning Map Amendment No. 17-002, Zoning Text Amendment No. 20-001, and Development Agreement No. 21-001, dated September 15, 2021;
City of Malibu Resolution No. 21-45;
City of Malibu Resolution No. 21-46;
City of Malibu Ordinance No. 491;
Initial Study No. 21-001 and Mitigated Negative Declaration No. 21-001 (IS/MND); 104 51
3 “Explore the Coast Overnight: An Assessment of Lower-Cost Coastal Accommodations” by the California Coastal Conservancy (March 2019);
California Coastal Commission Public Workshop Staff Report on Lower-Cost VisitorServing Accommodations (October 2016); Coastal Development Permit No. 5-18-0872 (Sunshine Enterprises, LP); Coastal Development Permit No. 5-20-0181 (B&J Capital Group Investments); Coastal Development Permit No. A-5-VEN-21-0011 (Wynkoop Properties, LLC); Coastal Development Permit No. 5-18-0872 (Shore Hotel)
105 52

STATE OF CALIFORNIA - NATURAL RESOURCES AGENCY GAVIN NEWSOM, GOVERNOR

CALIFORNIA COASTAL COMMISSION

CORRESPONDENCE
106 53
Due to size, Correspondence can be viewed on the CCC website at:
https://documents.coastal.ca.gov/reports/2023/2/W11a/W11a-2-2023- corresp.pdf

STATE OF CALIFORNIA - NATURAL RESOURCES AGENCY GAVIN NEWSOM, GOVERNOR

CALIFORNIA COASTAL COMMISSION

SOUTH CENTRAL COAST DISTRICT OFFICE
89 S. CALIFORNIA STREET, SUITE 200
VENTURA, CA 93001
(805) 585-1800
W11a

I. APPENDIX A – SUBSTANTIVE FILE DOCUMENTS

CORRESPONDENCE
a. On January 27, 2023, after the publication of the January 26, 2023 staff report, staff received comments from the City’s planning department regarding Suggested Modification No. 3. The City’s staff comment stated, “Our only comment based on your last correspondence was is if is possible to condition the money collected as an in-lieu fee for affordable overnight accommodations to not be used to fund camping in high fire severity zones or in ESHA areas.” Specifically, the City staff requested that Commission staff condition the lower cost overnight visitor accommodations in-lieu mitigation fee of $800,000 (which is being implemented through an escrow agreement between Commission staff and the property owners) not to fund camping located within high fire severity zones or Environmentally Sensitive Habitat Areas (ESHA).
107 54
2 Generally, the Santa Monica Mountains are considered to be a high fire hazard severity zone. The entire City of Malibu is within territory designated by the California Department of Forestry and Fire Protection (“CAL FIRE”) as a Very High Fire Hazard Severity Zone (VHFHSZ). Therefore, requiring any new camping (a form of lower-cost overnight visitor accommodations) to be sited outside high fire severity zones would effectively preclude any new camping from being located within the City or adjacent unincorporated Santa Monica Mountains. This restriction would directly conflict with the lower cost overnight visitor accommodations in-lieu mitigation fee and policies and goals of the Malibu Local Coastal Program (LCP), which is to assist in funding affordable overnight accommodations in the Malibu/Santa Monica Mountains coastal zone.

Specifically, the letter expresses opposition to the proposed LCP amendment raising concerns that the proposed increase in maximum Floor to Area ratio under the proposed overlay district is inconsistent with the City’s LCP and claims the amendment results in “spot zoning.” In response, Commission staff notes that these issues are addressed in Sections V (Findings for Approval of the LUP Amendment as Submitted, Denial of the LIP Amendment as Submitted, and Approval of the LIP Amendment if Modified as Suggested) of the January 26, 2023, staff report. 108 55
3 In addition, the letter claims that the January 26, 2023 staff report fails to demonstrate CEQA compliance. However, as discussed in the January 26, 2023 staff report, the City completed its CEQA review prior to submitting the subject LCP amendment to the Commission for review. Before adopting the Mitigated Negative Determination (MND) for the Sea View Hotel Project, the City Council considered the MND and all the comments received during the public review process. Based on the record, including the initial study and the comments received, which were included as part of the City’s LCP Amendment submittal and can be found under Appendix A – Substantive File Documents for the January 26, 2023 staff report, the City Council determined that there would be no significant environmental impacts with the implementation of specific mitigation measures. The City Council also determined that the project does not have the potential to cause significant adverse impacts to the environment.

Specifically, the Commission’s suggested modification would reflect the agreement by the property owners to provide a $800,000 in lieu fee for the development of lowcost overnight accommodations in the Malibu/Santa Monica Mountains coastal 1 Mountain Lion Found. v. Fish & Game Com., 16 Cal. 4th 105, 113 (1997). 2 See Ross v. Coastal Com., 199 Cal. App. 4th 900 (2011). 109 56
4 zone. The Commission has met its CEQA obligations under its certified regulatory program.

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Malibu City CouncilJune 12, 2023

Malibu City Council
June 12, 2023