12 - Code Amendments Related to Time Shares (PA2022-0202) — Newport Beach City Council, May 9, 2023 (part 4 of 5)

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DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E continuity of a satisfactory level of management and maintenance of the time share use.

C. A description of any ancillary uses which are proposed in conjunction with the time share use.
d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the
accommodations.
f. Any other information or documentation the applicant, City staff or commission deems reasonably necessary to the consideration of the timeshare use, including any required environmental documents.

B. Development Standards and Operational Requirements.

Notwithstanding any other provision of this Section, the following conditions must be met by any timeshare use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the timeshare use meets the intent of this Section:

1. Timeshare uses developed in the C-2 Downtown Commercial Zone within the City shall be limited to accommodations in upper floors in conjunction with a mixed -use project.

2. No existing residential use in the C-2 Downtown Commercial Zone within the City shall be converted to a timeshare use.

3. Development Standards. The timeshare use shall comply with all development standards for the zone in which it is located.

4. Parking. Parking shall be provided as follows:

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DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81 BED8558E a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation.
b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation.

5. Modification or Waiver of Standards. The Planning Commission may modify or waive one or more of the regulations contained in this Section if it determines that strict compliance is not necessary to achieve the purpose and intent of this Section.

E. Violations, Enforcement and Civil Penalties.

1. Any responsible person, including but not limited to an owner of a timeshare interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this Section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this Section. Such violation shall be punishable pursuant to Section 1.04.020 of the City of Hermosa Beach Municipal Code.

2. Timeshare use, and/or advertisement for timeshare use, of an accommodation in violation of this Section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense

3. Any responsible person who violates this Section shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The City may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the City, including without limitation the City's staff time, investigation expenses and attorney's fees.
a. Where the City proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this Section to prevent and deter violations and whether the reduction

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DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this Section. In any such civil action the City also may abate and/or enjoin any violation of this Section.
b. Where the City proceeds by administrative citation, the City shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing.

The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the City clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based.
ii. The City Manager is hereby authorized to designate a hearing officer to hear such appeal. The City hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification.
iii. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this Section.
iv. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ of mandate with the Los Angeles County

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DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81 BED8558E Superior Court in accordance with the timelines and provisions set forth in Government Code Section 53069.4.
v. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 8.28. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes

4. Any violation of this Section may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty under Chapter 8.28 for a violation shall be one thousand dollars ($1,000.00). Each day the violation of this Section occurs shall constitute a separate offense. The remedies under this Section are cumulative and in addition to any and all other remedies available at law and equity.

Section 3. Section 17.26.030 of Chapter 17.26 (C 1, C2 and C3 Commercial Zones) of Title 17 (Zoning) is amended to add the following entry to the chart of land use regulations
USES
I C 1
C2
C3
See Section
Timeshares
I
U

17.40.230
Section 4. CEQA. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c) (2) and 15060(c) (3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-2 Downtown Commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b) (3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment.

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DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81 BED8558E Section 5. Effective Date. Pursuant to California Government Code section 36937, this Ordinance shall take effect thirty (30) days after its final passage.

Section 6. Certification. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City's book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law.

PASSED, APPROVED and ADOPTED this 11 th day of October, 2022.

AYES: Councilmembers Campbell, Massey, Mayor Pro Tem Jackson, and Mayor Detoy NOES: None.

ABSTAIN: None.

ABSENT: None
Mayor Raymond A. Jackson
PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: APPROVED AS TO FORM:

PatYU V61440L
Myra Maravilla Patrick Donegan
City Clerk City Attorney

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DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E State of California )
County of Los Angeles ) ss
City of Hermosa Beach )
December 27, 2022
Certification of Council Action
ORDINANCE NO. 22-1453
AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER

17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL

ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT

THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT.

I, Myra Maravilla, City Clerk of the City of Hermosa Beach, California, do hereby certify that the above and foregoing Ordinance No. 22-1453 was duly approved and adopted by the City Council of said City at its adjourned regular meeting thereof held via hybrid on the 1 Ith day of October 2022 and passed by the following vote:

AYES: Mayor Detoy, Mayor Pro Tern Jackson, Councilmembers Campbell, Armato, and Massey
NOES: None
ABSTAIN: None
ABSENT: None
I
Myra Maravilla, MPA, CMC
City Clerk
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Exhibit M
City of Palm Desert Time Share Ordinance and Supporting Evidence 12-432

CITY OF PALM DESERT

DEPARTMENT OF DEVELOPMENT SERVICES

CITY COUNCIL STAFF REPORT
MEETING DATE: April 28, 2022
PREPARED BY: Rosie Lua, Principal Planner
REQUEST: Consideration of approval to the City Council for Zoning Ordinance Amendment to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects.

Recommendation
Waive further reading and pass to second reading City Council Ordinance No. approving Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects.

Planning Commission Recommendation
On January 18, 2022, the Planning Commission considered the Zoning Ordinance Amendment (ZOA) 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects. Planning Commission approved Resolution No. 2805 recommending to the City Council approval by vote 5-0.

City Council Meetings
On February 24, 2022, the City Council opened the public hearing and approved a request from staff to continue to the meeting of March 24, 2022. On March 24, 2022, another continuance of the public hearing was granted to April 28, 2022, allowing staff to meet with the City's Short Term Rental (STR) Subcommittee and time for staff to make appropriate changes to the zoning ordinance.

Strategic Plan
Land Use, Housing & Open Space — Priority 5: "Utilize progressive land use policies and standards to support ongoing and future needs."
Background Analysis
On November 18, 2021, the City Attorney presented a memo to City Council addressing the Pacaso business model purchasing property in tourist destinations like the City of Palm Desert targeting the second or vacation home market. Founded in 2020, the Pacaso owns title to the residential home by forming a limited liability company ("LLC"), then markets "co - ownership" interests in the homes to up to eight individuals for a certain number of days per 12-433

April 28, 2022 —Staff Report
Case No. ZOA 22-0001 Time -Share Uses - Pacaso

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year as specified in their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved through a mobile application, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, a Pacaso manages the homes, providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC.

The City Attorney opined that the Pacaso business formation is a "timeshare" as defined in the Business and Profession Code Section 11212(z) and regulated by Section 25.34.060 (Time -Share Projects) of the Palm Desert Municipal Code (PDMC). The Pacaso's are not regulated by the state law since there are less than ten co -owners, the minimum number of co -owners required to be regulated by state law. The PDMC permits timeshare projects in planned residential zones, general commercial zone, or the planned commercial resort zone and includes a requirement for a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of the code. The Pacaso type of business formation would not be permitted to operate in a single-family residential property and operate as a timeshare use since the use does not meet all the criteria of the PDMC.

The purpose of this ordinance is to ensure that the City is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zones. The conversion of homes in the city to timesharing projects would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City.

To Staff's knowledge, Pacaso has facilitated the purchase of and management of at least one (1) single family home and currently advertising three (3) homes for one -eighth purchase within the City of Palm Desert. No other Pacaso type entities are known to have ownership of homes within the City.

Discussion
Staff has studied the timeshare ordinance amendment and its intended regulations including a consultation with the Short -Term Rental (STR) subcommittee to discuss the proposed amendment and the Pacaso type business formations. The Pacaso's are not regulated by the Short -Term Rental Ordinance of the city since the business operations do not allow short term rentals as part of their structure. In addition, the subcommittee discussed the City's intent to regulate arrangements of multiple parties and its direct impact on the housing stock. In the formation of this ordinance, it is not the City's intent to regulate arrangements whereby multiple parties join in directly purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use. For example, the city is not regulating ownership between family or friends who chose to purchase a ,property, form an LLC, and the manage the rental or upkeep through a management company so long as a fractional ownership structure is not formed. 12-434

April 28, 2022 —Staff Report
Case No. ZOA 22-0001 Time -Share Uses - Pacaso

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The proposed ordinance amendment to Section 25.34.060 (Time -Share Project) includes a more robust definition, to refer to current California law, and to provide a broader scope to include Pacaso types of business formations. In addition, it includes a section for violations, enforcement, and civil penalties to regulate such proposed business operations.

It should be noted that the ordinance in this staff report differs from the Planning Commission's recommendation, Resolution No. 2805 which was revised to provide further clarifications on the intent of the ordinance as stated in the discussion above.

General Plan
The General Plan promotes goals and policies to protect and enhance community value in neighborhoods and its surroundings. Land Use and Community Character Policy 1.1 (Scale of development) promotes the City's corridors to use design techniques to a moderate height and use and ensure compatible fit with surrounding development. Therefore, the proposed amendment to the timeshare ordinance supports the City's goal in meeting the intent of the General Plan.

Public Input
Public noticing was conducted in accordance with State law. A public hearing notice was published on February 11, 2022, in The Desert Sun. The public hearing was opened on February 11, 2022, continued to March 24, 2022, and further continued to April 28, 2022.

Staff has received a half dozen phone calls from the public concerning Pacaso co - ownership within their neighborhoods and inquiring if Short-term Rental Ordinances would apply. On March 10, staff received a phone call from Marcus Schwab, a resident that lives on Bel Air Road expressing concern of business formations functioning like timeshares that affects the character of his neighborhood. Not knowing who their neighbors are was expressed as a real concern. Mr. Schwab identified the property as 72870 Bel Air Rd which is being advertised on eXp Realty's website, a home selling in his neighborhood that he says is priced high which can result in pricing out qualified homebuyers. Other residents have expressed concerned of properties on 72694 Skyward Way and 72985 Somera Rd being advertised as timeshare ownership. These particular properties are listed in the Pacaso website as well as other realtor websites including Trulia, Zillow, Redfin, etc. The properties mentioned above have all been confirmed to be associated with Pacaso.

However, since the ownership of these properties includes eight owners (1/8 ownership), it is difficult to track if any property has been sold full or partial ownership.

Environmental Review
The adoption of this ordinance has been analyzed for compliance with the California Environmental Quality Act (CEQA) pursuant to CEQA (Pub. Resources Code, § 21000 et seq.) ("CEQA") and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) it has been determined that the amendments do not meet the definition of a project because the amendments do not have the potential to cause either a direct physical change or a 12-435

April 28, 2022 —Staff Report
Case No. ZOA 22-0001 Time -Share Uses - Pacaso

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reasonably foreseeable indirect physical change in the environment. The proposed amendments are consistent with the General Plan goals of ensuring the quality of life for the community. Because the amendment is not a project under CEQA, they are not subject to further environmental review.

Findings of Approval
Findings can be made in support of the amendment and in accordance with the City's Municipal Code. Findings in support of this ZOA are contained in the Ordinance No. attached to this staff report.

LEGAL REVIEW
DEPT. REVIEW

FINANCIAL
REVIEW

ASSISTANT CITY

MANAGER
Ma. f�&v Abvawerz
N/A
.Andy Firestine
Robert W. Hargreaves
Martin Alvarez, Dir. of
Veronica Chavez
Andy Firestine
City Attorney
Development Services
Director of Finance
Assistant City Manager
City Manager L. Todd Hileman: L. -rock{ Wtevuavv
ATTACHMENTS: 1. Draft City Council Ordinance No.

2. Exhibit A —Ordinance

3. Planning Commission Resolution No. 2805

4. Planning Commission Draft Minutes of January 18, 2022

5. City Council Public Hearing Notice

6. City Council Memo dated November 18, 2021

7. Public Comments
12-436

ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT,

CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001
WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted, and adopted Resolution No. 2805, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and
WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and
WHEREAS, the City Council of the City of Palm Desert, did on the 24th day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staff's request to continue to the 24th of March 2022. On the 24th of March 2022, another continuance of the public hearing was granted to the 28th of April 2022. On the 28th of April 222, the City Council considered the request by the City of Palm Desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan, and
WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request:

SECTION 1. Adoption of Recitals. The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and further finds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits.

SECTION 2. Amendment. The City Council of the City of Palm Desert, California, approve, and adopt the PDMC amendment to Section 25.34.60 (Time -Share Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith.

ORDINANCE NO.
part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective.

SECTION 4. Publication. The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in The Desert Sun, a newspaper of general circulation, published and circulated in the City of Palm Desert, California, and shall be in full force and in effect thirty (30) days after its adoption.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 28th day of April 2022, by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

ATTEST:

ANTHONY J. MEJIA, CITY CLERK

CITY OF PALM DESERT, CALIFORNIA
2 JAN C. HARNIK, MAYOR
12-438

"EXHIBIT A"

ZONING ORDINANCE AMENDMENT
SECTION 1. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code section 25.34.060 is hereby amended as follows:
"25.34.060 Time -Share Proje Uses
A. Purpose. The purpose of the special use regulations for time-share pre}ests uses is to establish special location and site development standards.

B. Definitions.

1. "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160.

2. "Developer" means person, who at any point in time, owns, or has an option or contract to acquire eleven or more time-share interests for purposes of sale in the ordinary course of business if the time-share interests were acquired or are to be acquired from the original recipient of a public report for the time-share plan, or from a person who succeeded to the interest of the original recipient in eleven or more time-share interests in a time-share plan.

3. "Owner" means owner of a time-share interest.

4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof.

5. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan.

6. "Time-share interest" means and includes either of the following:
(i) A "time-share estate," which is the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof.
(ii) A "time-share use," which is the right to exclusively occupy a time-share property for a period of time on a recurring basis asis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property.

7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement or 12-439

by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive nears. "Timeshare Plan" does not include arrangements whereby multiple parties join in directly purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use.

8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations.

9._ "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan.

C. Permitted zones. A time-share prejest use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time- share prejeet use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section

25.72.050 (Conditional Use Permit) of this code.

D. Application submittal requirements. In addition to standard application submittal requirements, an applicant for a conditional use permit approval involving a time- share prejest use shall submit in the application at least the following information- 1 . Copies of documents and information required pursuant to Article 12.2 of the California dmiRistrativio Code of Regulations, Sections :2219 2809.1, 2809.2, and 2809.3 wherein the requirements for a " I + 1, properly completed" application for a final subdivision public report are enumerated, excluding those documents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a conditional use permit, the applicant shall furnish such documents and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit.

2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share prejest use, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a time-share basis shall be submitted. Also, in such instance there shall be submitted to the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by receipted certified US mail.

3. In the case of a new mixed project (i.e., time-sharing condominium/rental), a description of the means proposed to be employed to disclose the number and location of all time-share is accommodations within the prejeet time-share use shall be submitted. 12-440

4. Description of time periods, types of u4its accommodations, and which nits accommodations are in the time-share program (if less than all), and the length of time each of the flits accommodations are committed to the time-share pregraR; plan shall be submitted.

D. E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share ideyelepmeRt use in any permitted zone:

1. The time-share prejest use must be composed of "time-share estates" interests as defined in Galifnrni.a B sin000 al l d Drnf000inno Ge de Contipn 11 Q02 5

2. All maintenance agreements and conditions, covenants, and restrictions must be approved by the City.

3. The minimum time-share 4se interest exclusive occupancy period shall be for one week (seven days).

4. PFejeGt spense Developer of the time-share plan shall post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the prGjest time-share use abutting any public right-of-way. The amount of the bond, letter of credit, or cash deposit shall be equal to 25 percent of the annual budget of the time-share use owner's association having the duty to maintain the exterior of the time- share property prejest which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall run to the City and shall remain in place for life of the prejest time-share plan.

5. With respect to a time-share prejest use, all interests created therein shall be subject to a public facilities impact mitigation fee of $150 per week share. With respect to each week share in a time-share pr-sjest-use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the spansor developer of a time-share project plan to an individual consumer (excluding bulk sales from one epenser developer to another, in which case the successor spense developer shall have the obligation to pay the public facilities impact fee described herein upon the sale and conveyance of a week share to a consumer).

On the first day of each calendar month, or less frequently if required by the Council, a speeser developer of a time-share prejest plan shall also submit a written report to the City which specifies the number of week shares in the time-share ^,)jest plan which have been sold and conveyed in the preceding calendar month.

F. Minimum number of units. The minimum number of units in a time-share project shall be 50.

G. Development standards. Time-share projects uses shall be designed to conform to the standards for hotel developments in the event the time-share prejest use is located in a planned commercial resort or general commercial zone. The time-share prejest use must comply with all development standards of the zone in which it is located. With respect to time-share prejeets uses developed within a planned residential zone, the density of the time-share PFGjaet uses shall not exceed the density permitted in such zone for 12-441

residential projects; with respect to time-share PrGj8Gt.S uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share pr-ejest uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share pFsject use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share npFejeGt use.

H. Violations, Enforcement and Civil Penalties

1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty).

2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subiect to administrative fines as set forth in Chapter 8.81 (Administrative Citations). Any person issued an administrative citation pursuant to this section shall for each separate violation be subject to: (1) an administrative fine in an amount not to exceed one thousand dollars ($1,000) for the first citation; (2) an administrative fine in an amount not to exceed three thousand dollars ($3,000) for a second citation issued for the same offense within a twelve-month period of the date of the first offense; and (3) a fine in an amount not to exceed five thousand dollars ($5,000).

8.20 (Public Nuisances), Chapter 9.24 (Noise Control), and Chapter 9.25 (Multiple Responses to Loud or Unruly Parties, Gatherings or Other Similar Events.)

4. Each day the violation of this chapter occurs shall constitute a separate offense.

5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity."
12-442

PLANNING COMMISSION RESOLUTION NO.2805

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF PALM

DESERT, CALIFORNIA, RECOMMENDING APPROVAL OF A ZONING

ORDINANCE AMENDMENT TO MODIFY PALM DESERT MUNICIPAL
CODE SECTION 25.34.60 REGARDING TIMESHARE PROJECTS
CASE NO: ZOA 22-000.1
WHEREAS, the Planning Commission of the. City of Palm Desert, California, did on the 181h day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted; and
WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Timeshare Projects) to update the ordinance to clarify definitions and add enforcement options; and
WHEREAS, the Planning Commission of the City of Palm Desert, in reviewing all the facts and any testimony given, adopts the following as its Findings in recommended approval of the ZOA to the City Council:

SECTION 1. Findings. The Planning Commission of the City of Palm Desert hereby finds that:

A. The City of Palm Desert, California ("City") is a municipal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development,
SECTION 2. Amendment. The Planning Commission of the City of Palm Desert recommends that the City Council of the City of Palm Desert, California, approve and adopt the PDMC amendment to Section 25.34.60 (Timeshare Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith.

SECTION 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any part thereof. The Planning Commission hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective.

SECTION 4. CEQA. The City Council finds that adoption of this ordinance is not a "project," as defined in the California Environmental Quality Act (CEQA) because it does not have a potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and concerns general policy and procedure making.
12-443

PLANNING COMMISSION RESOLUTION NO. 2805
PASSED, APPROVED, AND ADOPTED by the Planning Commission of the City of Palm Desert, California, at its regular meeting held on the 18th day of January 2022, by the following vote, to wit:

AYES: DE LUNA, GREENWOOD, GREGORY, HOLT, and PRADETTO
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
J"EENWQODTCHAIR
ATTEST:

MARTIN ALVAREZ, SECRETARY

PALM DESERT PLANNING COMMISSION
1 12-444

CITY OF PALM DESERT

PALM DESERT PLANNING COMMISSION

MINUTES
TUESDAY, JANUARY 18, 2022 — 6:00 P.M.

ZOOM VIRTUAL MEETING
I. CALL TO ORDER
Chair John Greenwood called the meeting to order at 6:01 p.m.

II. ROLL CALL

Present:

Chair John Greenwood
Vice -Chair Nancy DeLuna
Commissioner Ron Gregory
Commissioner Lindsay Holt
Commissioner Joseph Pradetto
Also Present:

Craig Hayes, Assistant City Attorney
Martin Alvarez, Director of Development Services
Eric Ceja, Deputy Director of Development Services/Economic Development Rosie Lua, Principal Planner
Jessica Gonzales, Senior Management Analyst
Monica O'Reilly, Management Specialist II
III. PLEDGE OF ALLEGIANCE
Vice -Chair Nancy DeLuna led the Pledge of Allegiance.

IV. SUMMARY OF COUNCIL ACTIONS
Director of Development Services Martin Alvarez summarized pertinent City Council actions from the meeting of January 13, 2022.

V. ORAL COMMUNICATIONS
None
12-445

MINUTES
PALM DESERT PLANNING COMMISSION JANUARY 18, 2021
VI. CONSENT CALENDAR
A. MINUTES of the Regular Planning Commission meeting of December 21, 2021.

Rec: Approve as presented.

Upon a motion by Vice -Chair DeLuna, seconded by Commissioner Holt, and a 5-0 vote of the Planning Commission, the Consent Calendar was approved as presented (AYES: DeLuna, Greenwood, Gregory, Holt, and Pradetto; NOES: None).

VII. CONSENT ITEMS HELD OVER
None
Vill. NEW BUSINESS
None
IX. CONTINUED BUSINESS
None
X. PUBLIC HEARINGS
A. REQUEST FOR CONSIDERATION to adopt a Notice of Exemption in accordance with the California Environmental Quality Act (CEQA) and approval of a Precise Plan (PP) and a Conditional Use Permit (CUP) to demolish the former Pizza Hut building and construct a new 7,500-square-foot retail and restaurant building located at 72310 Highway 111. Case No. PP/CUP 20-0002 (Nadel Architects, Inc, Los Angeles, California, Applicant).

Note, the staff report(s) and Zoom video of the meeting are available on the City's website. Click on the following link to access: www.planning-corn mission - information -center.

Vice -Chair DeLuna disclosed that she works for a company that is involved with a property in the Housing Element; therefore, she recused herself.

Ms. Nicole Criste, Terra Nova Planning, the City's consultant, Palm Desert, California, presented a PowerPoint presentation regarding the Housing Element update. She recommended that the Planning Commission continue this item to February 1, 2022, to allow staff to work with the Department of Housing and Community Development to finalize details of the Housing Element. She also recommended opening the public hearing, taking public testimony, and leaving the public hearing open to the February 1 meeting.

Chair Greenwood declared the public hearing open and invited public testimony FAVORING or OPPOSING this matter.
2 12-446

MINUTES
PALM DESERT PLANNING COMMISSION JANUARY 18, 2021
Ms. Liliana Figueroa and Mr. Mark Stein, with CPMC Realty, Palm Desert, California, voiced their concern with the designation for affordable housing units on their client's site.

Commissioner Pradetto moved to, by Minute Motion, leaving the public hearing open and continuing Case No. GPA 21-0002 to February 1, 2022. The motion was seconded by Commissioner Gregory and carried by a 4-0 vote (AYES: Greenwood, Gregory, Holt, and Pradetto; NOES: None; ABSENT: DeLuna.

B. REQUEST FOR CONSIDERATION of a recommendation to the City Council for approval of a Zoning Ordinance Amendment to modify Palm Desert Municipal Code Section 25.34,060 regarding Timeshare Projects. Case No. ZOA 22-0001 (City of Palm Desert, Palm Desert California, Applicant).

Principle Planner Rosie Lua gave a PowerPoint presentation reviewing the staff report in detail and recommended approval to the City Council.

At this point, staff and the City Attorney responded to questions asked by the Planning Commission.

Chair Greenwood declared the public hearing open and invited public testimony FAVORING or OPPOSING this matter.

With no testimony offered, Chair Greenwood declared the public hearing closed.

The Planning Commission concurred with the direction that the City is taking regarding timeshare projects.

Commissioner Pradetto moved to waive further reading and adopt Planning Commission Resolution No. 2805, recommending approval to the City Council for Case No.

ZOA 22-0001. The motion was seconded by Vice -Chair DeLuna and carried by a 5-0 vote (AYES: DeLuna, Greenwood, Gregory, Holt, and Pradetto; NOES: None).

XI. MISCELLANEOUS
None
XII. COMMITTEE MEETING UPDATES
A. CULTURAL ARTS COMMITTEE
Commissioner Holt mentioned that she shared the San Pablo Corridor Art Plan and the details for the meeting scheduled on Monday, January 24 at 11:30 a.m. to discuss the plan.
3 12-44 7

MINUTES
PALM DESERT PLANNING COMMISSION JANUARY 18, 2021
B. PARKS & RECREATION COMMISSION
Mr. Alvarez stated that the Planning staff presented a concept plan for a park on Gerald Ford Drive and near Interstate 10. Staff hoped that the City would develop the park in two to three years.

Chair Greenwood asked for the status of the Portola Avenue interchange.

Mr. Alvarez responded that currently, the project is not feasible due to needing additional funding. Staff would discuss funding during the budget process and the City Council.

XIII. REPORTS AND REMARKS
None
XIV. ADJOURNMENT
With the Planning Commission concurrence, Chair Greenwood adjourned the meeting at 7:19 p.m.

ATTEST:

MARTIN ALVAREZ, SECRETARY

HN REEN O D, CH
1 MONK 'REILLY, REC DING SECRETARY
CI
12-448

CITY OF P 0 1 M 0ESFRT
73-510 FROD WARING DmvR
PALM DRs RRT, CAMPORNIA 92z60-2579
M. 760 346—o6zi
inf.0d1yofpa1mdcsc g

CITY OF PALM DESERT

LEGAL NOTICE

NOTICE OF A PUBLIC HEARING BEFORE THE CITY COUNCIL OF THE CITY OF PALM

DESERT TO CONSIDER APPROVAL FOR A ZONING ORDINANCE AMENDMENT TO MODIFY THE PALM DESERT MUNICIPAL CODE SECTION 25.34.060 (TIME-SHARE

PROJECTS)
The City of Palm Desert City Council (City), in its capacity as the Lead Agency, finds that this Ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly; it prevents changes in the environment pending the completion of the contemplated study of impacts.

Project Location/Description:

Project Location: City wide
Project Description: Zoning Ordinance Amendment to update the Time Share Project ordinance (Chapter 25.34.60) to consider a regulatory response to the Pacaso type businesses related to "co -ownership" shares in residential properties operating within the City.

Recommendation: City Council to approve the first reading of the Time -Share uses and its regulations and pass to second reading in accordance to CEQA Guidelines.

Public Hearing: The public hearing will be held before the City Council on February 24, 2022, at4:00 p.m. via Zoom. The hearing will be conducted in accordance with the City's emergency protocols for social distancing. Options for remote participation will be listed on the Posted Agenda for the meeting at: https://www.cityofpalmdesert.org/our-city/mayor-and-city-council- /city -council -meeting -information -center.

Comment Period: The public comment period for this project is from February 14, 2022 to February 24, 2022.

Public Review: The plans and related documents are available for public review Monday through Thursday from 8:00 a.m. to 5:00 p.m. by contacting the project planner, Rosie Lua, Principal Planner. Please submit written comments to the Planning/Land Development Division.

If any group challenges the action in court, issues raised may be limited to only those issues raised at the public hearing described in this notice or in written correspondence at, or prior to the City Council hearing. All comments and any questions should be directed to:

Rosie Lua, Principal Planner
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
(760) 346-0611, Extension 480
[email protected]
PUBLISH: DESERT SUN NIAMH M. ORTEGA, DEPUTY CITY CLERK
FEBRUARY 10, 2022 PALM DESERT CITY COUNCIL
12-449

STAFF REPORT

CITY OF PALM DESERT
MEETING DATE: November 18, 2021
PREPARED BY: Robert Hargreaves, City Attorney, Best Best & Krieger LLP REQUEST: Update on Timeshare Ordinance
Recommendation
By Minute Motion, request the Planning Commission to review of the timeshare ordinance and provide City Council with any recommended amendments.

Background Analysis

INTRODUCTION
Recently, the City has become aware that a new business model, "Pacaso", that features "co -ownership" shares in residential properties, has begun operating within the City.

Given the nature of its use of residential property, it is my opinion that it is a timeshare use, as defined by California law and regulated by Section 25.34.060 of the Municipal Code.

The Palm Desert timeshare ordinance (Municipal Code Section 25.34.060) has not been updated since 2013. As a preliminary matter in considering regulatory responses to the Pacaso-type businesses, we are recommending that Section 25.34.060 be updated to provide a more robust definition, to refer to current California law, and to provide a broader scope of potential regulation, should the city decide to pursue it.

DISCUSSION
Pacaso is a corporation that sells "co -ownership" shares in residential property. The company started by purchasing homes in tourist destinations in California, though they are rapidly expanding throughout the United States and internationally. Pacaso's business model is as follows: Pacaso will purchase or enter into a contract to purchase single family homes, then markets "co -ownership" interests in the homes to up to eight individuals. Pacaso then forms a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share, and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special 12-450

November 18, 2021 - Staff Report
Update of Timeshare Ordinance

Page 2 of 4 ends

day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, Pacaso continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners. It is our understanding that there is currently at least one property in Palm Desert that is being marketed by Pacaso.

Section 11212(z) of the Business and Profession Code defines the following significant terms:
"Time-share plan" means any arrangement, plan, scheme, or similar device, other than an exchange program, whether by membership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives ownership rights in or the right to use accommodations for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. A time-share plan may be either of the following:
(1) A "single site time-share plan" that is the right to use accommodations at a single time-share property.
(2) A "multisite time-share plan" that includes either of the following:
(A) A "specific timeshare interest" that is the right to use accommodations at a specific time-share property together with use rights in accommodations at one or more other component sites created by or acquired through the time-share plan's reservation system. (B) A "nonspecific time-share interest" that is the right to use accommodations at more than one component site created by or acquired through the time-share plan's reservation system, but including no specific right to use any particular accommodations.

It is clear that the Pacaso model fits within that definition of "time-share plan" as co -owners receive ownership rights to use a property for less than a year on a recurring basis.

Pacaso is not currently regulated by the State, as it does not meet the State's ten -share threshold for regulation.

Palm Desert Section 25.34.060 does not dwell on the definition of "time-share" and provides: "The time-share project must be composed of "time-share estates" as defined in California Business and Professions Code Section 11003.5 [now section 1121 ]." Nor does the ordinance provide any specific enforcement provisions. 12-451

November 18, 2021 - Staff Report
Update of Timeshare Ordinance

Page 3 of 4 ends

In the attached draft ordinance, the definition of time-share is more elaborate, and is consistent with current California statutes. It also provides enforcement options against persons that own, manage, or market illegal time-shares.

At this point, the draft ordinance is before the council for discussion and direction. If the council directs that the update proceed, the ordinance will be put before the planning commission for consideration and recommendation, before it is brought back to the city council for adoption.
12-452

November 18, 2021 - Staff Report
Update of Timeshare Ordinance

Page 4 of 4 ends

Fiscal Analysis
There is no direct fiscal impact associated with this item.

LEGAL REVIEW
DEPT. REVIEW

FINANCIAL
REVIEW

ASSISTANT

CITY MANAGER
RWH
N/A
N/A
Andy Firestine
Robert W. Hargreaves
Janet M. Moore
Andy Firestine
City Attorney
Director of Finance
Assistant City Manager
City Manager L. Todd Hileman: L-. T00I0( f4teKQ Ilk,
ATTACHMENTS: , Draft ordinance
12-453

ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY

OF PALM DESERT, CALIFORNIA, AMENDING PALM
DESERT MUNICIPAL CODE SECTION 25.34.060

REGARDING TIME-SHARE PROJECTS

THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES ORDAIN AS FOLLOWS:

SECTION 1. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code section 25.34.060 is hereby amended as follows:
"25.34.060 Time -Share grams -Uses
A. Purpose. The purpose of the special use regulations for time-share projects uses is to establish special location and site development standards.

B. Definitions.

3. "Owner" means owner of a time-share interest.

4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof.

5. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governingthe operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan.

(ii) A "time-share use-" which is the right to exclusive) o�y a time-share property for a period of time on a recurring basis pursuant to a time-share plan which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest in a time-share property_

7. "Time-share plan" means any arrangement, plan, scheme, or similar device whether by membership agreement, sale, lease, deed, license right to use agreement or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during pLny given year, on a recurring basis for more than one year, but not necessarily for consecutive years.

8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with an other or rights to property appurtenant to those accommodations.

9. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan.

C. Permitted zones. A time-share pr-E feet use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time- share prejeet use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of this code.

Q D. Application submittal requirements. In addition to standard application submittal requirements, an applicant for a conditional use permit approval involving a time-share pr-ejeet use shall submit in the application at least the following information:

1. Copies of documents and information required pursuant to Article 12.2 of the California A a, inistfat:..o Code of Regulations, Sections MO 2809.1, 2809.2, and 2809.3 wherein the requirements for a ""'•�'� properly completed" application for a final subdivision public report are enumerated, excluding those documents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a conditional use permit, the applicant shall furnish such documents and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit.

2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share pr-ejeet use, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a time-share basis shall be submitted. Also, in such instance there shall be submitted to the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by receipted certified US mail.
12-455

3. In the case of a new mixed project (i.e., time-sharing condominium/rental)-, a description of the means proposed to be employed to disclose the number and location of all time-share ;its accommodations within the prejeet time-share use shall be submitted.

4. Description of time periods, types of }xis accommodations, and which Uffits accommodations are in the time-share program (if less than all), and the length of time each of the up&& accommodations are committed to the time-share pr-egfafn plan shall be submitted.

D. E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share develepment use in any permitted zone:

1. The time-share prejeet use must be composed of --`time-share estates" interests -as defined in —And Pr-efessiens Cede Seefien 11003.5.

2. All maintenance agreements and conditions, covenants, and restrictions must be approved by the City.

3. The minimum time-share we interest exclusive occupancyperiod shall be for one week (seven days).

4. grejeet spenser Developer of the time-share plan shall post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the prejeet time-share use abutting any public right-of-way. The amount of the bond, letter of credit, or cash deposit shall be equal to 25 percent of the annual budget of the time-share use owner's association having the duty to maintain the exterior of the time-share property preje4 which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall run to the City and shall remain in place for life of the prejee time-share plan.

5. With respect to a time-share prejeet use, all interests created therein shall be subject to a public facilities impact mitigation fee of $150 per week share. With respect to each week share in a time-share prejeEt-use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the sponsor developer of a time-share prejee plan to an individual consumer (excluding bulk sales from one speaser developer to another, in which case the successor spexser developer shall have the obligation to pay the public facilities impact fee described herein upon the sale and conveyance of a week share to a consumer). On the first day of each calendar month, or less frequently if required by the Council, a sponsor- developer of a time- share prejeet plan shall also submit a written report to the City which specifies the number of week shares in the time-share prejeet plan which have been sold and conveyed in the preceding calendar month.

EL F. Minimum number of units. The minimum number of units in a time-share project shall be 50.
li G. Development standards. Time-share prejeets uses shall be designed to conform to the standards for hotel developments in the event the time-share prejeet use is located in a planned commercial resort or general commercial zone. The time-share prejeet use must comply with all development standards of the zone in which it is located. With respect to time-share 12-456

pr-ejests uses developed within a planned residential zone, the density of the time-share prejest uses shall not exceed the density permitted in such zone for residential projects; with respect to time-share prejests uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share prejeet uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share pr-ejeet use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share prejest use.

H. Violations, Enforcement and Civil Penalties

1. Any responsible person, including but not limited to an owner of a -time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guil . of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chanter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty)

2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through sny medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines as set forth in Chapter 8.81 (Administrative Citations). AM person issued an administrative citation pursuant to this section shall for each separate violation be subject to: (1) an administrative fine in an amount not to exceed one thousand dollars ($1,000) for the first citation; (2) an administrative fine in an amount not to exceed three thousand dollars ($3,000) for a second citation issued for the same offense within a twelve-month period of the date of the first offense; and (3) a fine in an amount not to exceed five thousand dollars ( 5,000).

3. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 8.20 (Public Nuisances), Chapter 9.24 (Noise Control), and Chapter 9.25 (Multiple Responses to Loud or Unruly Parties, Gatherings or Other Similar Events.)

4. Each day the violation of this chapter occurs shall constitute a separate offense.

5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity."
SECTION 2. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance, or any part thereof, is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase 12-457

be declared unconstitutional. If for any reason any portion of this Ordinance is found to be invalid by a court of competent jurisdiction, the balance of this Ordinance shall not be affected.

SECTION 3. Certification and Publication. The City Clerk of the City of Palm Desert shall certify to the adoption of this Ordinance and cause publication to occur in a newspaper of general circulation and published and circulated in the City in a manner permitted under California Government Code Section 36933.

SECTION 4. CEQA. The City Council finds that adoption of this Ordinance is not a "project," as defined in the California Environmental Quality Act because it does not have a potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and concerns general policy and procedure making.

PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Palm Desert on the day of , 2021, by the following vote.

AYES:

NOES:

ABSTAIN:

ABSENT:

Kathleen Kelly, Mayor
ATTEST:

Norma Alley, City Clerk
APPROVED AS TO FORM:

Robert Hargreaves, City Attorney
12-458

From: Kevin Swartz
To: Rosie Lua
Subject: FW: Latest Pacaso Report
Date: Monday, April 11, 2022 7:56:25 AM
FYI.

Kevin Swartz
Associate Planner
Ph:760.346.0611 Direct:760.776.6485
[email protected]
From: Kathleen Kelly
Sent: Friday, April 8, 2022 7:04 AM
To: Robert Hargreaves ; Kevin Swartz

Subject: Latest Pacaso Report
From Ellen Kane:

Looks like Picasso bought the house at the corner of Somera and Alamo. If you google the address with Picasso after it is on their webpage and is showing as "available now". Think it just closed escrow because the for sale sign is down.

That makes three Picasso's in my immediate area now (Bel Air, Skyward & Somera).

Would really love neighbors not 1/8 ownerships (timeshares?) 12-459

73-5 Lo FRED WARING DRIVE
PALM DESERT, CALIFORNIA 92260-2578
TEL: 760 346-o6z z
info bcityofpalmdesert.org

NOTICE OF CONTINUED PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the following Public Hearing was continued from the City Council meeting of March 24, 2022 to the City Council meeting of April 28, 2022:

Ordinance No. 1378 to approve Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 renardina the Time - Share Projects (Continued from February 24, 2022)
NOTICE IS FURTHER GIVEN that the City Council meeting of April 28, 2022 will take place virtually at 3:00 p.m. at cityofpaimdesert.org/zoom. All interested persons are invited to attend said Public Hearing.

DATED this 28th day of March, 2022.

NIAMH M. ORTE
Deputy City Clerk
�� Ilipil00M II(TLIIOIAI(I
12-460

STAFF REPORT

CITY OF PALM DESERT
MEETING DATE: May 12, 2022
PREPARED BY: Niamh Ortega, Deputy City Clerk
APPROVING AUTHORITY: City Council
REQUEST: Second reading and adoption of Ordinance No. 1378 to approve Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects.

Recommendation:

Waive the second reading of the ordinance text in its entirety and read by title only; and adopt Ordinance No. 1378 entitled, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS, CASE NO. ZOA 22- 0001."
Background/Analysis:

On April 28, 2022, the City Council introduced Ordinance No. 1378 for first reading, as noted below:

Motion by Councilmember Kelly, second by Councilmember Quintanilla, carried 3-1-1 (with Mayor Pro Tem Jonathan voting no and Councilmember Nestande recused), to waive further reading and pass to second reading Ordinance No. 1378 approving Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.60 regarding Time - Share Projects.

This report provides for the City Council to waive further reading and adopt the ordinance. The ordinance shall be effective 30 days from adoption.

Financial Impact:

There is no direct financial impact associated with this item.

Attachments:

1. Ordinance No. 1378
12-461

MEETING DATE �" :_ U ' Uu✓O�
3 CONTINUED TO
fg PASSES TO 2ND READING
ORDINANCE NO.1378

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT,

CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001
WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted, and adopted Resolution No. 2805, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and
WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and
WHEREAS, the City Council of the City of Palm Desert, did on the 24th day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staff's request to continue to the 241h of March 2022. On the 24th of March 2022, another continuance of the public hearing was granted to the 28th of April 2022. On the 2$1h of April 222, the City Council considered the request by the City of Palm Desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan; and
WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request:

SECTION 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be 12-462

1 ORDINANCE NO.1378

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT,

CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001
WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted, and adopted Resolution No. 2805, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and
WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and
WHEREAS, the City Council of the City of Palm Desert, did on the 24th day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staffs request to continue to the 24th of March 2022. On the 24th of March 2022, another continuance of the public hearing was granted to the 28th of April 2022. On the 28th of April 222, the City Council considered the request by the City of Palm Desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan; and
WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request, SECTION 1. Adoption of Recitals. The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and furtherfinds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits.

SECTION 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be 12-463

ORDINANCE NO. 1378
unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 12th day of May 2022, by the following vote, to wit:
0 AYES: KELLY, QUINTANILLA AND HARNIK
NOES: JONATHAN
ABSENT: NESTANDE
ABSTAIN: NONE
J C. HA IK,'MAYOR
7-L-
IONY J. M I CLERK'

OF PALM ESERT CALIFORNIA
2 12-464

ORDINANCE NO. 1378
"EXHIBIT A" '

ZONING ORDINANCE AMENDMENT
SECTION 1. Amendment to Palm Desert, Municipal Code. Palm Desert Municipal Code section 25.34.060 is hereby amended as follows:

25.34.060 Time -Share Uses
A. Purpose. The purpose of the special use regulations for time-share uses is to establish special location and site development standards.

B. Definitions.

3. "Owner" means owner of a time-share interest.

4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof.

6. "Time-share interest" means and includes either of the following:
0) A "time-share estate," which is the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof.
(ii) A "time-share use," which is the, right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property.

7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, or 'i..Jity of
a t
:. ... t . f. .,
12-465

ORDINANCE NO. 1378
by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Timeshare Plan" does not include arrangements whereby multiple parties join in directly purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use.

8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations.

9. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan.

C. Permitted zones. A time-share use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time- share use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section

25.72.050 (Conditional Use Permit) of this code.

1. Copies of documents and information required pursuant to Article 12.2 of the California Code of Regulations, Sections 2809.1, 2809.2, and 2809.3 wherein the requirements for a "properly completed" application for a final subdivision public report are enumerated, excluding those documents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a conditional use permit, the applicant shall furnish such documents and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit.

2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share use, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a time-share basis shall be submitted. Also, in such instance there shall be submitted to the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by receipted certified US mail.

3. In the case of a new mixed project (i.e., time-sharing condominium/rental), a description of the means proposed to be employed to disclose the number and location of all time-share accommodations within the time-share use shall be submitted. ' ,..` a. :, j,.,G ',�. ..�....r�r tn.., �..A�� Document 12-466

ORDINANCE NO. 1378

4. Description of time periods, types of accommodations, and which accommodations are in the time-share program (if less than all), and the length of time each of the accommodations are committed to the time-share plan shall be submitted.

E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share use in any permitted zone:

The time-share use must be composed of time-share interests.

2. All maintenance agreements and conditions, covenants, and restrictions must be approved by the City.

3. The minimum time-share interest exclusive occupancy period shall be for one week (seven days).

4. Developer of the time-share plan shall post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the time-share use abutting any public right-of-way. The amount of the bond, letter of credit, or cash deposit shall be equal to 25 percent of the annual budget of the time-share use owner's association having the duty to maintain the exterior of the time-share property which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall run to the City and shall remain in place for life of the time-share plan.

5. With respect to a time-share use, all interests created therein shall be subject to a public facilities impact mitigation fee of $150 per week share. With respect to each week share in a time-share use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the developer of a time-share plan to an individual consumer (excluding bulk sales from one developer to another, in which case the successor developer shall have the obligation to pay the public facilities impact fee described herein upon the sale and conveyance of a week share to a consumer). On the first day of each calendar month, or less frequently if required by the Council, a developer of a time-share plan shall also submit a written report to the City which specifies the number of week shares in the time-share plan which have been sold and conveyed in the preceding calendar month.

F. Minimum number of units. The minimum number of units in a time-share project shall be 50.

G. Development standards. Time-share uses shall be designed to conform to the standards for hotel developments in the event the time-share use is located in a planned commercial resort or general commercial zone. The time-share use must comply with all development standards of the zone in which it is located. With respect to time-share uses developed within a planned residential zone, the density of the time-share uses shall not exceed the density permitted in such zone for residential projects; with respect to time-share uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share use. 12-467

ORDINANCE NO. 1378
H. Violations, Enforcement and Civil Penalties

1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty).

2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines as set forth in Chapter 8.81 (Administrative Citations). Any person issued an administrative citation pursuant to this section shall for each separate violation be subject to: (1) an administrative fine in an amount not to exceed one thousand dollars ($1,000) for the first citation; (2) an administrative fine in an amount not to exceed three thousand dollars ($3,000) for a second citation issued for the same offense within a twelve-month period of the date of the first offense; and (3) a fine in an amount not to exceed five thousand dollars ($5,000).

8.20 (Public Nuisances), Chapter 9.24 (Noise Control), and Chapter 9.25 (Multiple Responses to Loud or Unruly Parties, Gatherings or Other Similar Events).

4. Each day the violation of this chapter occurs shall constitute a separate offense.

5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity.
1 12-468

MMpill Ll1
City of Sonoma Time Share Ordinance and Supporting Evidence 12-469

} gcitrCity of Sonoma
4 Agenda Item Summary
4, 1= Meeting: City Council - 01 Jun 2022
Department
Planning and Community Services
Agenda Item Title
Staff Contact
David A. Storer, AICP, Director
Kristina Tierney, Associate Planner
Discussion, Consideration, and Possible Action to Introduce an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable Land Uses and Permit Requirements) and Adding Title 19, Section 19.50.140 (Time-shares) to the City of Sonoma Municipal Code and Finding this Action Exempt from Further Environmental Review Under the General Rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) That CEQA Only Applies to Projects that Have the Potential for Causing a Significant Effect on the Environment
Summary
On January 19, 2022, the Sonoma City Council unanimously adopted an Urgency Ordinance governing the use of properties as time-shares. Previously, the Municipal Code did not contain any regulation governing the use of properties as time-shares which meant that as a non - enumerated use, time-shares were prohibited throughout the City. However, due to the rise in fractional home ownership, the City Council directed staff to address potential ambiguity regarding whether fractional home ownership uses constitutes a prohibited time-share or an allowed residential use. The Urgency Ordinance was presented to the Planning Commission on January 13th, 2022, for comment and direction to staff, and the Planning Commission unanimously recommended approval to City Council. The Urgency Ordinance added Section

19.50.140 — Timeshares into Title 19 and was effective on January 19, 2022.

On February 10, 2022, staff presented a draft Regular Ordinance to the Planning Commission for review. The Planning Commission unanimously recommended that the City Council introduce and adopt the attached ordinance.

The ordinance is tentatively scheduled to be introduced on June 1, 2022, and could be adopted on June 15, 2022, to supersede the Urgency Ordinance; however, the Urgency Ordinance would be in effect until a regular ordinance becomes effective. The regular ordinance would go into effect 30 days after adoption - July 15, 2022.

Recommended Council Action
Introduce an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable' land uses and permit requirements) and Adding Title 19, Section 19.50.140 (Time- shares) to the City of Sonoma Municipal Code.

Alternative Actions
Council discretion.

Financial Impact
None.
12-470

Environmental Review Status
® Environmental Impact Report ® Approved/Certified
® Negative Declaration 17 No Action Required
2 Exempt r7 Action Requested
F Not Applicable
Attachments

PUBLIC COMMENT ATTACHMENT
Timeshare Regular Ordinance
12-471

CITY
4 Pp
INV
• '�LIFOR��

PUBLIC COMMENT TO THE CITY COUNCIL

OR ONE OF THE CITY'S COMMISSIONS
Any Public Correspondence Received by the City
Regarding an Item that Will be Considered at
a Public Meeting by the City Council or One of Its
Commissions Can be Found on the City 's
CivicWeb Portal at the Following Link.

It is Updated as New Correspondence is Received.
https://sonomacitV.civicweb.net/filepro/documents
STAFF CONTACTS:

City Council
City Clerk
(707) 933-2216
Planning, DRHP, CSEC
Planning
(707) 933-2204
12-472

City of *Dooms
ORDINANCE # - 2022

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SONOMA AMENDING SONOMA MUNICIPAL CODE TITLE 19, SECTION 19.10.060 (ALLOWABLE LAND USES AND PERMIT REQUIREMENTS) AND AMENDING TITLE 19, SECTION 19.60.140 (TIME-SHARES) TO THE

CITY OF SONOMA MUNICIPAL CODE
WHEREAS, time share and fractional interest uses have been and currently are prohibited as uses not specifically enumerated in the Sonoma development code; and WHEREAS, the City has recently become aware of time-share companies or fractional interest companies wishing to operate in the City; and
WHEREAS, a severe housing crisis exists in the state with the demand for housing outpacing the supply; and
WHEREAS, the City of Sonoma is particularly experiencing a housing emergency due to its relative isolation, limited housing supply, and desirable location; and WHEREAS, time-share or fractional interest uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City; and
WHEREAS, time-share and fractional interest uses increase traffic and noise impacts and have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature making them inappropriate for residential zones; and WHEREAS, the development of time-share or fractional interest uses in Commercial and Mixed Use zones (which also have a "residential component" requirement) will reduce the City's ability to collect valuable property tax, sales tax, or Transient Occupancy Tax; and WHEREAS, by allowing time-share or fractional interest uses in the City, market pressure will incentivize property owners to convert their existing commercial, hotel or residential uses, thereby reducing revenue to the City in the form of commercial property taxes, sales tax, Transient Occupancy Tax, and valuable existing housing stock; and WHEREAS, allowing time-share or fractional interest uses in the Commercial and Mixed Use zones reduces the availability of suitable lands to provide housing units to meet the City's Regional Housing Needs Allocation for the 5th and 61h Cycles; and WHEREAS, by allowing times -share or fractional interest uses in the City, developers of those uses will seek to convert underutilized commercial uses (in Commercial and Mixed Use zones), thereby reducing the City's ability to identify those sites as potential Housing Opportunity sites in the development of the City's 6th Cycle Housing Element; and WHEREAS, on January 19, 2022 the City Council adopted an Urgency Ordinance pursuant to Government Code Sections 36934 and 36937 to make express the City's existing prohibition on time-share and fractional ownership uses in all zones in the City; and 276349.3
12-473

WHEREAS, the City Council desires to adopt a non -urgency ordinance to supersede the urgency ordinance to ensure the City's municipal code addresses the impact that time-share and fractional ownership uses have and could have on the City's housing supply; and WHEREAS, on February 10, 2022, the Planning Commission reviewed and discussed potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the item be continued to March 10, 2022; and WHEREAS, on March 10, 2022, the Planning Commission held a public hearing to review and discuss potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the City Council introduce the attached ordinance; and
WHEREAS, the City Council found this action to be exempt from the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) ("CEQA") and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) pursuant to CEQA Guidelines section 15061(b) (3) prior to taking action; and
WHEREAS, on June 1, 2022, the City Council considered amendments to the Sonoma Municipal Code, consistent with the applicable policies of the Sonoma General Plan, at a public hearing; and
WHEREAS, the proposed amendments to the Sonoma Municipal Code are consistent with State Law.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SONOMA DOES ORDAIN AS FOLLOWS:

SECTION 1. RECITALS.

The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full.

SECTION 2. FINDINGS FOR DEVELOPMENT CODE AMENDMENTS.

Pursuant to Section 19.86.070(B) of the Sonoma Municipal Code, the proposed amendments of the development code under this ordinance:

A. Are consistent with the goals, policies, and actions of the General Plan because the amendments the amendments promote and preserve the use of property for vital housing; B. Would not be detrimental to the public interest, health, safety, convenience, or welfare of the city for the reasons described in the recitals above; C. Comply with the provisions of the California Environmental Quality Act (CEQA) as described in Section 4 below; and
D. Are internally consistent with other applicable provisions of this development code because the amendments merely codify the existing prohibition on time-share and fractional ownership uses under the City's permissive zoning regime. 276349.3
12-4 74

SECTION 3. MUNICIPAL CODE AMENDMENTS.

A. Tables 2-1, 2-2, 2-3 and 2-4 set forth in Sonoma Municipal Code section 19.10.050 are amended to read as set forth in Exhibit "A".

B. Section 19.50.140 of the Sonoma Municipal Code is amended to read as follows:

19.60.140 Time -Shares.

This section sets forth requirements for the establishment and operation of time-share uses.

A. Definitions.

1. "Accommodation" means any dwelling unit, multifamily dwelling, apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial structure containing toilet facilities therein that is designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals.

2. "Management entity" means the person who undertakes the duties, responsibilities, and obligations of the management of a time-share plan.

3. "Owner" means owner of a time-share interest.

4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof.

6. "Time-share interest' means and includes either of the following:
a. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof.
b. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property or a specified portion thereof.

7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years.
276349.3
12-475

8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations.

9. "Time-share use" and "fractional interest use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan.

B. Permitted zones. None. Time share uses and fractional interest uses are prohibited throughout the City of Sonoma
C. Violations, Enforcement and Civil Penalties

3. Time-share use, fractional interest use and/or advertisement for time-share use and/or fractional ownership use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 1.12 (General Penalty), Chapter 1.30 (Administrative Notice and Order Proceedings), Chapter 9.56 (Noise), and any other relevant provision of this code as it may be amended from time to time.

4. Each day a violation of this chapter occurs shall constitute a separate offense.

5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity.

SECTION 4. CEQA.

This Ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the city. City Planning Staff has determined that the adoption and implementation of the Ordinance is exempt from further environmental review under the general rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) that CEQA only applies to projects that have the potential for causing a significant effect on theenvironment. As a text amendment and addition without any physical project being approved, it can be seen with certainty that there is no possibility that the Ordinance will have a significant effect on the environment. The 276349.3
12-476

proposed Ordinance is therefore exempt from the provisions of CEQA because it does not involve a commitment to any specific project that may result in a potentially significant physical impact on the environment. The City Council concurs in these findings and adopts them as its own. The City Council, therefore, directs that a Notice of Exemption be filed with the County Clerk of the County of Sonoma in accordance with CEQA Guidelines.

SECTION 5. SEVERABILITY.

If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance.

The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional.

SECTION 6. EFFECTIVE DATE.

This ordinance shall take effect thirty (30) days after passage thereof.

SECTION 7. PUBLICATION.

This ordinance shall be published in accordance with the provisions of Government Code section 36933, subdivision (c)(1).

SECTION 8. THIS ORDINANCE PREVAILS WHERE THERE IS CONFLICT.

To the extent that this Ordinance conflicts with any other provision in the Sonoma Municipal Code or city ordinance (urgency or otherwise), policy or regulation, this Ordinance will control.

APPROVED:

Jack Ding, Mayor
ATTEST:

Rebekah Barr, MMC, City Clerk
276349.3
12-477

I HEREBY CERTIFY the foregoing ordinance was duly adopted at a Regular Meeting of the City Council of the City of Sonoma held on the , 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Rebekah Barr, MMC, City Clerk
276349.3
12-478

*.tiR.cLr;, City of Sonoma
Agenda Item Summary
Meeting: City Council - 15 Jun 2022
Department
Planning and Community Services
Agenda Item Title
Staff Contact
Kristina Tierney, Associate Planner
David A. Storer, AICP, Director
Discussion, Consideration, and Possible Action to Adopt an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable Land Uses and Permit Requirements) and Adding Title 19, Section 19.50.140 (Time-shares) to the City of Sonoma Municipal Code and Finding this Action Exempt from Further Environmental Review Under the General Rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) That CEQA Only Applies to Projects that Have the Potential for Causing a Significant Effect on the Environment
Summary
The attached regular ordinance prohibits timeshares and fractional interest uses in the City of Sonoma and was introduced unanimously on June 1, 2022. Upon its effective date on July 15, 2022, it repeals and replaces the Urgency Ordinance currently in place.

Recommended Council Action
Adopt an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable land uses and permit requirements) and Adding Title 19, Section 19.50.140 (Time- shares) to the City of Sonoma Municipal Code.

Alternative Actions
Council discretion.

Financial Impact
None.

Environmental Review Status
❑ Environmental Impact Report ❑ Approved/Certified
❑ Negative Declaration ® No Action Required
2 Exempt ® Action Requested
❑ Not Applicable
Attachments

PUBLIC COMMENT ATTACHMENT
Timeshare Regular Ordinance
Exhibit A
Alignment with Council Goals:
12-4 79

Not Applicable
Compliance with Climate Action 2020 Target Goals:
594
n/a
12-480

CIT

PUBLIC COMMENT TO THE CITY COUNCIL

It is Updated as New Correspondence is Received.
https://sonomacitv.civicweb.net/filepro/documents
STAFF CONTACTS:

City Council
City Clerk
(707) 933-2216
Planning, DRHP, CSEC
Planning
(707) 933-2204
12-481

Citp of &onoma

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SONOMA AMENDING SONOMA MUNICIPAL CODE TITLE 19,
SECTION 19.10.060 (ALLOWABLE LAND USES AND PERMIT
REQUIREMENTS) AND AMENDING TITLE 19, SECTION

19.60.140 (TIME-SHARES) TO THE CITY OF SONOMA

MUNICIPAL CODE
WHEREAS, time share and fractional interest uses have been and currently are prohibited as uses not specifically enumerated in the Sonoma development code; and WHEREAS, the City has recently become aware of time-share companies or fractional interest companies wishing to operate in the City; and
WHEREAS, a severe housing crisis exists in the state with the demand for housing outpacing the supply; and
WHEREAS, the City of Sonoma is particularly experiencing a housing emergency due to its relative isolation, limited housing supply, and desirable location; and WHEREAS, time-share or fractional interest uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City; and
WHEREAS, time-share and fractional interest uses increase traffic and noise impacts and have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature making them inappropriate for residential zones; and WHEREAS, the development of time-share or fractional interest uses in Commercial and Mixed Use zones (which also have a "residential component" requirement) will reduce the City's ability to collect valuable property tax, sales tax, or Transient Occupancy Tax; and WHEREAS, by allowing time-share or fractional interest uses in the City, market pressure will incentivize property owners to convert their existing commercial, hotel or residential uses, thereby reducing revenue to the City in the form of commercial property taxes, sales tax, Transient Occupancy Tax, and valuable existing housing stock; and WHEREAS, allowing time-share or fractional interest uses in the Commercial and Mixed Use zones reduces the availability of suitable lands to provide housing units to meet the City's Regional Housing Needs Allocation for the 5th and 6th Cycles; and WHEREAS, by allowing times -share or fractional interest uses in the City, developers of those uses will seek to convert underutilized commercial uses (in Commercial and Mixed Use zones), thereby reducing the City's ability to identify those sites as potential Housing Opportunity sites in the development of the City's 6th Cycle Housing Element; and WHEREAS, on January 19, 2022 the City Council adopted an Urgency Ordinance pursuant to Government Code Sections 36934 and 36937 to make express the City's existing prohibition on time-share and fractional ownership uses in all zones in the City; and 276349.3
12-482

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SONOMA DOES ORDAIN AS FOLLOWS:

SECTION 1. RECITALS.

The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full.

SECTION 2. FINDINGS FOR DEVELOPMENT CODE AMENDMENTS.

Pursuant to Section 19.86.070(B) of the Sonoma Municipal Code, the proposed amendments of the development code under this ordinance:

SECTION 3. MUNICIPAL CODE AMENDMENTS.

A. Tables 2-1, 2-2, 2-3 and 2-4 set forth in Sonoma Municipal Code section 19.10.050 are amended to read as set forth in Exhibit "A".

B. Section 19.50.140 of the Sonoma Municipal Code is amended to read as follows:

19.60.140 Time -Shares.

This section sets forth requirements for the establishment and operation of time-share uses.

A. Definitions.

2. "Management entity" means the person who undertakes the duties, responsibilities, and obligations of the management of a time-share plan.

3. "Owner" means owner of a time-share interest.

4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof.

8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations.

9. "Time-share use" and "fractional interest use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan.

B. Permitted zones. None. Time share uses and fractional interest uses are prohibited throughout the City of Sonoma
C. Violations, Enforcement and Civil Penalties

4. Each day a violation of this chapter occurs shall constitute a separate offense.

5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity.

SECTION 4. CEQA.

SECTION 6. SEVERABILITY.

SECTION 6. EFFECTIVE DATE.

This ordinance shall take effect thirty (30) days after passage thereof.

SECTION 7. PUBLICATION.

This ordinance shall be published in accordance with the provisions of Government Code section 36933, subdivision (c)(1).

SECTION 8. THIS ORDINANCE PREVAILS WHERE THERE IS CONFLICT.

To the extent that this Ordinance conflicts with any other provision in the Sonoma Municipal Code or city ordinance (urgency or otherwise), policy or regulation, this Ordinance will control.

APPROVED:

Jack Ding, Mayor
ATTEST:

Rebekah Barr, MMC, City Clerk
276349.3
12-486

I HEREBY CERTIFY the foregoing ordinance was duly adopted at a Regular Meeting of the City Council of the City of Sonoma held on the , 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Rebekah Barr, MMC, City Clerk
276349.3
12-487

EXHIBIT A
Amendments to "Zones and Allowable Uses" (Title 19, Section 19.10.050) of the Sonoma Municipal Code.

A. Table 2-1 (Residential Uses and Permit Requirements) is hereby amended as follows:

Allowed Uses and Permit
Permit Required by District
P Use permitted
Requirements for Residential
(2) ; '
UP Use Permit
Districts (1)
required
L License required
— Use not allowed
Land Use (1)
R-
R-R
R-L
R-S
R-M
R-H
R-O
R-P
Specific
HS
Use
Regulation
s

AGRICULTURE, RESOURCE AND OPEN SPACE USES
Animal Keeping
P
P
UP
—
—
—
—
—
Chapter

8.08 SMC
Crop Production
P
P
UP
-
—
—
—
and Horticulture
Produce Stands
P
P
UP
—
—
—
—
—
SMC
for On -Site

19.50.070
Production

MANUFACTURING AND PROCESSING USES
Existing Uses
—
—
—
—
—
—
—
—
SMC

19.82.020

RECREATION, EDUCATION AND PUBLIC ASSEMBLY USES
Equestrian
UP
UP
-
-
-
-
-
-
Facilities
Parks and
P
P
P
P
P
P
P
—
Playgrounds
Religious
—
—
UP
UP
UP
UP
—
—
Facilities
Schools — Public
—
—
UP
UP
UP
UP
—
and Private
RESIDENTIAL USES (2)
Ord. Title 19 SMC 2022

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Duplex
—
—
UP
P
P
UP
UP
—
Emergency
—
—
—
—
UP
UP
UP
—
SMC
Shelters

19.50.033
Home
P
P
P
P
P
P
P
P
SMC
Occupation

19.50.035
Live/Work
—
—
—
—
UP
—
—
—
Facilities
Mobile Home
—
—
—
—
—
—
UP
SMC
Park

19.50.035
Multi -family
—
—
—
UP
P
P
P
—
Dwelling (Four or
fewer units)
Multi -family
—
—
—
UP
UP
UP
P
—
Dwelling (Five or
more units)
Personal Indoor
P
P
P
P
P
P
P
P
SMC
Cannabis

19.50.032.

Cultivation (4)
A
Personal Outdoor
P
P
P
P
P
P
P
P
SMC
Cannabis

19.50.032.

Cultivation (4)
B
(Prohibited
if
multifamily
dwelling or
mobile
home)
Residential
P
P
P
P
P
P
P
P
Accessory
Structures
Residential Care
—
-
P
P
P
—
—
—
Homes, Six or
fewer clients
Residential Care
—
-
—
—
UP
—
—
—
Homes, Seven or
more clients
Single -Family
P
P
P
P
P
UP
—
—
SMC
Dwellings

19.50.035
Accessory
P
P
P
P
P
P
P
P
SMC
Dwelling Units

19.50.090
Accessory
P
P
P
P
P
P
P
P
SMC
Dwelling Units,

19.50.090
Junior
Ord. Title 19 SMC 2022

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Supportive
P
P
P/UP
P/UP
P/UP
P/UP
—
—
Housing (3)
Transitional
P
P
P/UP
P/UP
P/UP
P/UP
—
—
Housing (3)

RETAIL TRADE AND SERVICES
Art, Antique,
—
—
—
UP
—
—
—
—
Collectible and
Gift Sales
Artisan Shops
—
—
—
UP
—
—
—
—
Bed and
UP
UP
UP
—
—
—
—
—
SMC
Breakfast Inns

19.50.030
(B&Bs)
Child Day Care
—
UP
UP
UP
UP
UP
UP
—
Center
Child Day Care:
—
UP
UP
UP
UP
UP
—
—
Small Family Day
Care Home
Child Day Care:
—
—
UP
UP
UP
UP
UP
—
Large Family Day
Care Home
General Retail
—
—
—
UP
—
—
—
—
Governmental
—
UP
UP
UP
UP
UP
UP
and Public
Facilities
Libraries and
—
—
—
UP
—
—
—
—
Museums
Medical Services
—
—
—
UP
UP
—
—
-
- Extended Care
Offices,
—
-
—
UP
—
—
—
—
Professional and
Administrative
Personal
—
—
—
UP
—
—
—
—
Services
Restaurant
—
—
—
UP
—
—
—
—
Senior
—
—
—
—
UP
—
—
—
Residential Care
Facilities
Telecommunicati
See Chapter 5.32 SMC, Telecommunications Facility and Antenna ons Facilities,
Criteria
Commercial
Time-shares
—
—
—
—
—
_
_
_
SMC
Ord. Title 19 SMC 2022

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19.50.14 0

SPECIAL PURPOSE USES
Public Utility
—
—
—
—
—
—
—
—
Facilities
Public Utility
P
P
P
P
P
P
P
P
Equipment
Notes:

1. See SMC 19.10.050(C) regarding uses not listed. See Division VIII for definitions of the listed land uses.

2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94).

3. Supportive and Transitional Housing shall be subject to those restrictions that apply to other residential dwellings of the same type in the same zone. For example, such housing structured as single-family is permitted in the R-HS, R-R, RL and RS residential zones, whereas Supportive and Transitional housing structured as multi -family is limited to the RM and RH residential zones and the Mixed -Use Zone.

4. Personal cultivation of cannabis (Indoor and Outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032.

B. Table 2-2 (Commercial Uses and Permit Requirements) is amended as follows:

Allowed Uses and Permit
Permit Required by District
P Use permitted
Requirements for Commercial
(2)
UP Use Permit required
Zoning Districts (1)
L License required
— Use not allowed
Land Use
C
CG
Specific Use Regulations

MANUFACTURING AND PROCESSING USES
Artisans/Craft Product
UP
UP
Manufacturing
Food and Beverage
UP
UP
Manufacturing
Furniture/Fixtures
UP
UP
Manufacturing, Cabinet
Shops
Recycling Facilities — Reverse
UP
P
Vending Machines
Recycling Facilities — Small
UP
UP
Collection Facilities
Research and Development
UP
—
(R&D)
Ord. Title 19 SMC 2022

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Warehousing, Wholesaling7
and Distribution
UP
RECREATION, EDUCATION, and PUBLIC ASSEMBLY USES
Clubs, Lodges and Private
Meeting Halls
—
UP
Community Centers
UP
UP
Health/Fitness Facilities
P
UP
Indoor
Amusement/Entertainment
Facilities
UP
UP
Libraries and Museums
P
P
Nightclubs and Bars
UP
UP,
Outdoor Commercial
Recreation
UP
UP
Religious Facilities
P
—
Schools — Specialized
Education and Training
UP
UP
Studios for Art, Dance, Music,
Photography, Etc.

P
UP
Theaters and Auditoriums
UP
UP
RESIDENTIAL USES (4)
Emergency Shelters
UP
UP
SMC 19.50.033
Live/Work Facilities
UP
UP
SMC 19.50.050
Multi -family Dwelling (Four or
fewer units)
UP
UP
Multi -family Dwelling (Five or
more units)
UP
UP
Personal] , ndoor Cannabis
Cultivation (7)
P
P
SMC 19.50.032.A
Personal Outdoor Cannabis
Cultivation (7)
P
P
SMC 19.50.032.E
(Prohibited if multifamily
dwelling or mobile home)
Single Room Occupancy
Housing
UP
—
Supportive Housing '
UP
UP
Transitional Housing
UP
UP
RETAIL TRADE (3)
Accessory Retail Uses
P
P
Adult Business
UP
—
Ord. Title 19 SMC 2022

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12-492

Art, Antique, Collectible and
Gift Sales
P
P
Artisan Shops
P
UP
Auto and Vehicle
Sales/Rental
UP
—
Building Material Stores
UP
UP
Commercial Cannabis Activities (8):

SMC Chapter 5.36
Manufacturing
UP
—
Non -store front retail
UP
—
Store -front retail
UP
—
Testing laboratory
UP
—
Drive -In and Drive Through
Sales
UP
—
Furniture, Furnishings and
Equipment Stores
P
P
General Retail
P
P
Grocery Store
P
P
Music Venue
L
L
SMC Chapter 5.34
Outdoor Retail Sales and
Activities
UP `
UP
Plant Nurseries and Garden
Supply Stores
P
P
Restaurant
UP
UP
Second Hand Stores
P
P
Shopping Center
UP
UP
Special Event Venue (6)
UP
UP
Wine Tasting Facilities/Wine
Bars
WTUP
WTUP
SMC 19.50.120
Tap Rooms
UP
UP
SMC 19.50.130

SERVICES
Banks and Financial Services
P
P
Bed and Breakfast Inns
(B&Bs)
UP
UP
SMC 19.50.030
Business Support Services
P
UP
Child Day Care Facilities
P
P
Drive -In and Drive -Through
Services
UP
—
Equipment Rental
UP
—
Governmental and Public
Facilities
P
P
Ord. Title 19 SMC 2022

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Hotel or Motel
UP
UP
Medical Services - Clinics,
Offices, Laboratories
UP
UP
Medical Services - Hospitals
UP
UP
Mortuaries and Funeral
Homes
UP
—
Offices, Professional and
Administrative
P
UP
Personal Services
P
P
Storage - Outdoor
UP
—
Storage - Personal Storage
Facility (Mini -Storage)
UP
—
Telecommunications
Facilities, Commercial
See Chapter 5.32 SMC, Telecommunications Facility and
Antenna Criteria
Time-shares
—
—
SMC

19.50.140
Auto Parts Sales
P
—
Vacation Rental
—
—
SMC 19.50.110
Vehicle Services, Car
Washes
UP
—
Vehicle Services, Repair and
Maintenance
UP
—
Vehicle Services, Service
Station
UP
—
SMC 19.50.100
Repair Services, for
Consumer Products
P
UP

SPECIAL CIRCUMSTANCES COMMERCIAL DEVELOPMENT
Commercial Development,
Large
UP
UP
Chapter 5.34 SMC
Development Adjacent to a
Residential Zone (4)
UP
UP
Formula Business, Small
P/UP (5)
P
SMC 19.50.035
Formula Business, Large
UP
UP
SMC 19.50.035
Formula Restaurant, Large
UP/- (6)
UP
SMC 19.50.035
Shopping Center,
Reconfiguration
UP
UP

SPECIAL PURPOSE USES
Public Utility Facilities
—
—
Public Utility Equipment
P
P
Notes:

Ord. Title 19 SMC 2022

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1. See SMC 19.10.050(C) regarding uses not listed. See Division VIII for definitions of the listed land uses.

2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94).

4. Defined as new commercial construction or an addition to an existing commercial building, having an area of 1,000 square feet or greater.

5. Use Permit required within the historic overlay zone

6. Prohibited in /P Plaza Retail District. See SMC 19.50.035.

7. Personal cultivation of cannabis (indoor and outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032.

8. No commercial cannabis activity may occur in these zoninq districts unless and until a C. Table 2-3 (Mixed Uses and Permit Requirements) is amended as follows:

Allowed Uses and Permit
Permit Required by District
P Use permitted
Requirements for Mixed Use
(2)
UP Use Permit required
Zoning Districts (1)
L License required
— Use not allowed
Land Use
MR
Specific Use Regulations
MANUFACTURING AND PROCESSING USES (3)
Artisans/Craft Product
UP
Manufacturing
Food and Beverage
UP
Manufacturing
Furniture/Fixtures -
UP
Manufacturing, Cabinet
,
Shops;
Change in Existing
UP
SMC 19.82.020
Nonconforming Uses
Recycling Facilities — Small
—
Collection Facilities
Research and Development
UP
(R&D)
Warehousing, Wholesaling
and Distribution
RECREATION, EDUCATION AND PUBLIC ASSEMBLY USES (3)
Clubs, Lodges, and Private
UP
Meeting Halls
Community Centers
UP
Ord. Title 19 SMC 2022

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12-495

Health/Fitness Facilities
UP
Indoor
Amusement/Entertainment
Facilities
UP
Libraries and Museums
UP
Outdoor Commercial
Recreation
—
Religious Facilities
UP
Schools — Specialized
Education and Training
UP
Studios for Art, Dance, Music,
Photography, Etc.

UP
Theaters and Auditoriums
UP
RESIDENTIAL USES (4)
Emergency Shelters
UP
SMC 19.50.033
Live/Work Facilities
UP
SMC 19.50.050
Multi -family Dwelling (Four or
fewer units)
P
Multi -family Dwelling (Five or
more units)
UP
Personal Indoor Cannabis
Cultivation (7)
P
SMC 19.50.032.A
Personal Outdoor Cannabis
Cultivation (7)
P
SMC 19.50.032.E
(Prohibited if multifamily
dwelling or mobile home)
Residential Care Homes,
Seven or more clients
- UP
Single -Family Dwellings,
P (5)
Supportive Housing, four or
fewer units
P
Supportive Housing, five or
more units
UP
Transitional Housing, four or.
fewer units
P
Transitional Housing, five or
more units
UP
RETAIL TRADE (3)
Accessory Retail Uses
UP
Art, Antique, Collectible and
Gift Sales
UP
Artisan Shops
UP
Ord. Title 19 SMC 2022

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12-496

Auto and Vehicle
Sales/Rental
—
Building Material Stores
—
Commercial Cannabis Activities (8):

Manufacturing
UP
SMC Chapter 5.36
Non -store front retail
UP
SMC Chapter 5.36
Testing laboratory
UP
SMC Chapter 5.36
Drive -In and Drive -Through
Sales
UP
Farmers Market
UP
Fueling Station
UP
Furniture, Furnishings and
Equipment Stores
UP
General Retail
UP
Grocery Store
UP
Music Venue
L
Chapter 5.34 SMC
Outdoor Retail Sales and
Activities
UP
Plant Nurseries and Garden
Supply Stores
UP
Restaurant
UP
Second Hand Stores
UP
Shopping Center
UP
Special Event Venue (6),
UP
Wine Tasting Facilities/\/Vine
Bars
WTUP
SMC 19.50.120
Tap Rooms
UP
SMC 19.50.130
SERVICES (3).

Auto Parts Sales
UP
Banks and Financial Services`
UP
Bed and Breakfast Inns
(B&Bs)
UP
Business Support Services
UP
Child Day Care Facilities
UP
Drive -In and Drive -Through
Facilities
UP
Equipment Rental
UP
Governmental and Public
Facilities
UP
10 Ord. Title 19 SMC 2022

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12-497

Hotel or Motel
UP
Medical Services — Clinics,
UP
Offices, Laboratories
Medical Services — Hospitals
—
Mortuaries and Funeral
UP
Homes
Offices, Professional and
UP
Administrative
Personal Services
UP
Storage — Outdoor
—
SMC 19.40.100(D)
Storage — Personal Storage
—
Facility (Mini -Storage)
Telecommunications
See Chapter 5.32 SMC, Telecommunications Facility and
Facilities, Commercial
Antenna Criteria
SMC
Time-shares
_

19.50.140
Vacation Rental
—
SMC 19.50.110
Vehicle Services, Repair and
UP
Maintenance
Vehicle Services, Service
—
SMC 19.50.100
Stations
Repair Services for
UP
Consumer Products

SPECIAL CIRCUMSTANCES COMMERCIAL DEVELOPMENT
Formula Business, Small
UP
SMC 19.50.035
Formula Business, Large
UP
SMC 19.50.035
Formula Restaurant, Large
UP
SMC 19.50.035

SPECIAL PURPOSE USES
Public Utility Facilities
—
Public Utility Equipment
P
Notes:

1. See SMC 19.10.050(C) regarding uses not listed. See Division VIII for definitions of the listed land uses.

2. New development in the Mixed -Use zone shall include a residential component unless waived by the planning commission through use permit review (see SMC 19.10.020(C)).

3. Uses within these categories are allowed only if the planning commission finds that the use will not result in the encroachment of incompatible commercial uses within an established residential area.

4. New residential developments subject to the city's growth management ordinance.

5. Limited to a single residence on an existing lot of record; otherwise, use permit approval is required.

6. On sites of one acre in size or larger.

7. Personal cultivation of cannabis (indoor and outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032.
11 Ord. Title 19 SMC 2022

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12-498

8. No commercial cannabis activity may occur in these zoning districts unless and until a commercial cannabis business permit has been issued for that activity under Chapter 5.36.

D. Table 2-4 (Special Purpose Uses and Permit Requirements) is hereby amended as follows:

Allowed Uses and Permit
Requirements for Special
Purpose Zoning Districts
Permit Required by District
P Use permitted
UP Use Permit required
L License required
— Use not allowed
Land Use (1)
A
Pk
P
W -
Specific Use Regulations

AGRICULTURAL AND OPEN SPACE USES
Crop Production and
Horticulture
P
-
—
P
Livestock Raising
P
—
—
—
SMC 19.50.020
Prescribed Grazing
-
UP
—
—
Produce Stands for On -Site
Production
P
—
—
—
SMC 19.50.070
Trails, Hiking and Bicycling
P
P
P
—

MANUFACTURING AND PROCESSING USES
Agricultural or Food
Processing ,
—
—
—
UP
Wineries
—
—
—
UP
Winery Accessory Uses
—
—
—
UP
SMC 19.50.020

RECREATION, EDUCATION AND PUBLIC ASSEMBLY USES
Community Centers
—
—
UP
—
Community Garden
—
UP
UP
—
Equestrian Facilities
UP
UP
—
—
SMC 19.50.020
Libraries and Museums
—
UP
UP
—
Parks and Playgrounds
—
P
P I
—
Recreational Facilities
—
UP
P I
-
12 Ord. Title 19 SMC 2022

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Schools, Public and Private
—
—
P
—
Theaters and Auditoriums
—
UP
P
—
RESIDENTIAL USES (2)
Agricultural Employee
Housing
P
—
—
—
Caretaker and Employee
Housing
UP
UP
UP
UP
Emergency Shelters, 15 or
fewer beds
—
—
P
—
SMC 19.50.035
Emergency Shelters, 16 or
more beds
—
—
UP
—
Personal Indoor Cannabis
Cultivation (3)
P
P
P
P
SMC 19.50.032.A
Personal Outdoor Cannabis
Cultivation (3)
P
P
P
P
SMC 19.50.032.13
(Prohibited if multifamily
dwelling or mobile home)
Residential Accessory
Structures and Uses
P
—
—
—
SMC 19.50.035
Single -Family Dwellings
P
—
—
—
SMC 19.50.035
Supportive Housing (4)
—
—
UP
—
Transitional Housing (4)
—
—
UP
—
Vacation Rental
—
UP
—
—
SMC 19.50.110

SERVICES
Offices — Administrative
—
UP
UP
—
Cemeteries
—
—
P
—
Child Day Care Facilities
—
—
P
—
Corporation Yard
—
—
P
—
Farmers Market
P
P
P
—
Governmental and Public
Facilities
—
UP
UP
—
Kennel
—
—
UP
—
Medical Services — Hospitals
—
—
UP
—
Telecommunications
Facilities, Commercial
See Chapter 5.32 SMC, Telecommunications Facility and
Antenna Criteria
Timeshares
—
—
—
—
SMC

19.50.140

SPECIAL PURPOSE USES
Public Utility Facilities
—
—
UP
—
Public Utility Equipment
P
P
P
P
13 Ord. Title 19 SMC 2022

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Notes:

1. See Section 19.10.050.0 regarding uses not listed. See Division VIII for definitions of the listed land uses.

2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94).

3. Personal cultivation of cannabis (indoor and outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032.

4. Supportive and transitional housing shall be subject to those restrictions that apply to other residential dwellings of the same type in the same zone. 14 Ord. Title 19 SMC 2022

Page 14 of 14 ends

12-501

Exhibit O
City of St. Helena Time Share Ordinance and Supporting Evidence 12-502

Report to the City Council
Regular City Council - 22 Mar 2022
Agenda Section: PUBLIC HEARINGS
Subject: Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.060 to Title 17, Zoning of the St. Helena Municipal Code, amending sections 17.48.030 (Central
Business) and 17.52.030 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code
CEQA Exempt
Determination:

Prepared By: Ethan Walsh, City Attorney
Reviewed By: April Mitts, Administrative Services Director Approved By: James C. McCann, Interim City Manager

BACKGROUND
Over the past two years, there has been significant discussion in the community regarding Section 17.112.130 of the City's Zoning Code, which prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple -family dwelling or any apartment house in the City (the "Time Share Ordinance"). The City Council discussed the Time Share Ordinance at its July 14, 2020 meeting in response to concerns raised regarding a real estate listing for a fractional or partial ownership interest in a residential home in the City. The prior City Attorney discussed this issue with the City, focusing on the question of the extent to which the City Council could regulate an ownership structure through the City's zoning authority, and noted the challenges of doing so. At the conclusion of the Council's discussion of this issue, Council directed the City Attorney and staff to continue to research its options to address the concerns raised by members of the community in response to the listing of the home at issue. In the months following the July 2020 Council meeting, the company that had been marketing that original home, now known as Pacaso, began marketing other homes in the City, and the City received additional complaints from members of the community. Based on new information that was available to the City, primarily through Pacaso's marketing materials, the City Attorney's office concluded that the properties being marketed by Pacaso were 12-503

not just fractional or partial ownership structures, but were also being marketed to be used as a time share project that would be prohibited under the City's ordinance, and informed Pacaso of that conclusion. Pacaso disagreed with the City Attorney's conclusion, and initiated a lawsuit in an effort to compel the City to retract its conclusion. That litigation is ongoing.

When reviewing the Time Share Ordinance in this context, the City Attorney's office found that the substance of the Time Share Ordinance has not been updated since its adoption in 1982. The City Attorney's office concluded that the Time Share Ordinance would benefit from an update to refine the definitions to more directly address the impacts of time-share uses, to clarify the means used by the City to enforce the restrictions on time share uses, and to clarify how time share uses are treated in non-residential districts. City staff initially delayed initiating any changes to the Time Share Ordinance while the litigation was ongoing. However, due to the continued marketing of time share uses within the City, staff has decided to move forward with recommending the proposed updates to the City's ordinance.

On March 1, 2022, the Planning Commission voted unanimously to recommend the City Council approve the proposed ordinance.

DISCUSSION
The Discussion section of the Staff Report is organized as follows: First, the section provides a brief explanation for the City's conclusion that the homes that have been marketed by Pacaso constitute time share projects. While the City's conclusion does not directly affect the changes to the Zoning Code set forth in the proposed ordinance, it is helpful to understand that the Time Share Ordinance, both in its original form and as proposed to be amended, is intended to protect against the impacts that these homes and similar uses could have on the City's housing supply and the character of the City's residential districts. Second, this section discusses the legal basis for the City's Time Share Ordinance, the reasons why the City prohibited time share uses in residential properties, and why those reasons continue to apply today. Third, this section outlines the changes made in the proposed ordinance and the reasons for the proposed changes.

A.Current Time Share Ordinance and Application to Pacaso Homes Section 17.112.130 of the Zoning Code prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple family dwelling or apartment house within the City. A time-share project is defined in that section as any real property that is subject to a time-share program. A time-share program is in turn defined in part as an arrangement whereby the use, occupancy or possession of the property circulates among purchasers according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year.

limited liability company ("LLC"), and each co-owner purchases a 1/8 share in the LLC. (Pacaso.com/learn) Each 1/8 share entitles the co-owner to 44 stay nights within any 365 day window. Stays can be from 2 to 14 nights in duration for each 1/8 share. Back-toback stays are not permitted. (Pacaso.com/faq/scheduling) Stays are booked on an app, with specific rules governing the number of "special dates" that each co-owner can book, and the number of stays that each owner can book during "peak seasons." (Id.) Each owner can book the residence to use themselves, or may allow guests to use the residence, whether or not the co-owner is present. (Id.) Between each stay, Pacaso conducts a thorough inspection and cleaning. ("5 reasons Pacaso is better than a timeshare." Pacaso.com/blog/better-than-resort-timeshare)
The Pacaso model grants each 1/8 owner the right to use the property for a specific period of time (44 days in a year) in increments of 2-14 days. The use, occupancy and possession of the property circulates among the co -owners according to a floating time schedule that gives each co-owner exclusive rights to the property for a specific period of time each year. This use structure fits squarely in the City's definition of a time-share program, and the properties operated by Pacaso in this manner would therefore be timeshare projects under the existing Time Share Ordinance.

B.Reasons for the Time Share Ordinance

1. The City's General Plan
The City of St. Helena has long been defined by its rural, small town quality and agricultural character. In adopting the St. Helena General Plan Update 2040, the City noted that the defining, unifying goal of all the elements of the 1993 General Plan was:

To protect the rural, small town quality and agricultural character of St. Helena. It is the General Plan's intent that the preservation of this small town character be the unifying philosophy that overlays all other stated goals and policies. (General Plan 2040, p. 1-2.) While the 2040 General Plan acknowledges that this is no longer the sole, overriding focus of the General Plan, retaining the small town character of St. Helena remains a primary focus of the City's land use planning. (Id.)
A key component of retaining the City's small town character is maintaining a balance between the economic benefits that arise from visitors who come to St. Helena for its wineries, restaurants and historic downtown, and maintaining its authentic small town quality of life for the City's residents. This theme is consistent throughout the City's General Plan, and maintaining this balance is key to the City's long term viability. The General Plan notes in its Introduction that "[t]he community stands out in the Valley for its unique, historic character and its ability to attract visitors while also supporting the needs of its resident population." (General Plan p. 1-8.) The City has set goals to maintain that balance, striving to achieve an economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors and provide better economic opportunities. (General Plan 1-15.) The City further seeks to "promote sustainable tourism practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic small-town quality of life." (General Plan p. 3-9.) 12-505

St. Helena is a renowned tourist destination, bringing visitors from throughout the world to its wineries, restaurants and downtown, but it is also a functioning City and community, with residents who contribute to its social fabric. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial districts, like the Service Commercial district and the Central Business district, that provide for uses that serve both visitors and the local community, such as restaurants, retail shops and winery tasting rooms, among others, along with lodging where those visitors can stay. (St. Helena Municipal Code §§17.48.030, 17.52.030.) The City also has residential districts that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types.

2. Use of Zoning to Preserve Residential Areas
The use of zoning to preserve the character of the residential districts of a City has been common for over a century. In the seminal case of Euclid v. Ambler the United States Supreme Court upheld the validity of comprehensive zoning that would set aside residential districts "from which business and trade of every sort, including hotels and apartment houses, are excluded." (Euclid v. Ambler Co. 272 U.S. 365, 390.) The U.S.

Supreme Court upheld the Village of Euclid's zoning ordinance in that instance, noting that the inclusion of non-residential uses in residential districts may have an increasingly deleterious impact on the residential area "until, finally, the residential character of the neighborhood and its desirability as a place of detached residences are utterly destroyed." (Id. at 394.)
The California Court of Appeals followed Euclid and subsequent cases in upholding the City of Carmel-by-the-Sea's zoning restriction on short-term rentals. (Ewing v. City of Carmel -By -The -Sea (1991) 234 Cal.App.3d 1579.) In that case, the Court noted that the City's chief purpose in adopting the short-term rental restriction was "to provide an appropriately zoned land area within the City for permanently single-family residential uses and structures and to enhance and maintain the residential character of the City." (Id. at 1579.) In upholding Carmel's short-term rental restriction, the Court found that short-term rentals "undoubtedly affect the essential character of a neighborhood and the stability of a community. Short-term tenants have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally, they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." (Id. at 1591.)

Time Share Ordinance is one of the means that the City has in place to ensure that it is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zoning districts. When the City originally adopted the Time Share Ordinance in 1982, the City Council made specific findings based on the impact it foresaw if time share uses were to locate in the residential areas of the City. Those findings were as follows:

1. There is a critical shortage of affordable housing in the city for long-term occupancies (more than six months annually), and the availability of additional residential dwelling units is substantially restricted by the growth management system.

2. The conversion of residential dwelling units within the city to time-sharing projects eliminates residential dwelling units otherwise available for long-term occupancies (more than six months annually) in the city.

3. Time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple shortterm (less than six months annually) occupancies by those participating in timesharing projects.

4. Such commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace
and quiet of residential neighborhoods.

5. The city council finds and determines that this section is necessary to protect the public health, safety and welfare of the citizens of the city.

As discussed in more detail below, these findings continue to hold true in St. Helena, and continue to support the City's decision to restrict time-share uses in residential districts. i. Housing Shortages and Impacts of Time -Share Uses on Existing Housing Stock In adopting the current Time Share Ordinance, the City Council found that there was a critical shortage of affordable housing in the City for long-term occupancies. That continues to be the case, and is undoubtedly worse than was the case at the time the Time Share Ordinance was originally adopted. The most recent census data lists the median value of owner occupied homes in St. Helena at $1,112,100 for the period of 2015-2019, while the Zillow Home Value Index estimates medial home values in St.

Helena to be approximately $1,870,000 as of February 2022. www.census.gov/quickfacts/sthelenacitycalifornia; zillow.com/home-values/.) In contrast, the median household income in St. Helena from 2015-2019 was $90,031, and the median income for a four person household in Napa County for 2021 is approximately $109,200. ( www.census.gov/quickfacts/sthelenacitycalifornia; www.hcd.ca.gov/.qrantfunding/income-limits/state-and-federal-income- limits/docs/income-limits-2021.pdf.)
At the time of adoption of the City's Housing Element in 2015, the income necessary to purchase a median priced single family home was nearly $200,000 per year, and prices 12-507

have risen dramatically since then. (City of St. Helena Housing Element Update 2015-23, p. 3.) The cost of homes currently in St. Helena are well in excess of what median income residents of St. Helena can afford, as well as median income residents of Napa County generally. Further, as Erika Sklar observed in the St. Helena Housing Update Report that she prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that they make. 36% of St. Helena households cannot afford market rents while 70% of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and non-profit directors cannot afford homeownership in St. Helena." (St. Helena Housing Update Report, p. 7 (April 2018).) The City has made and continues to make efforts to address the need for affordable housing in the City, including providing assistance for the Brenkle Court, Turley Flats and 963 Pope Street projects. The City has also ensured that new non-residential development will assist the City in providing adequate affordable housing, as evidenced by the significant contributions to affordable housing made by the Farmstead Lodging project through its development agreement with the City. These efforts, however, have highlighted the challenges of providing housing at all income levels, with the most significant challenge being a limited supply of existing housing stock in the City, and a limited supply of available land for new housing. Given the housing shortage already in existence, losing additional housing stock will only make this problem worse.

The findings in the original Time Share Ordinance also note that the conversion of homes to time sharing projects would eliminate residential dwelling units that would otherwise be available for long term residential use. This continues to be true, as a home that is used for time share purposes will no longer be available for households to use as their long term residence. This threat to the City's existing housing stock is not insignificant. The publicity regarding Pacaso's rise as a company speaks to a pent up demand for homes that could be converted to time share use, reducing available housing stock for long term use. Pacaso's co-founder has indicated that "[t]here are tens of millions of families that aspire to own second homes but are unable to, due to reasons of cost." (Just Five Months Old, Zillow Co -founder's Pacaso Claims It's Already A Unicorn" Noah Kirsch, March 24, 2021 ( www.forbes.com/sites/noahkirsch/2021 /03/24/just-five-months-old- zillowcofounders-pacaso-claims-its-alread-a-unicorn/.)) In discussing Pacaso's model, Dan Wenhold of the venture capital firm Fifth Wall said "[t]hey were taking a previously illiquid asset, which was a timeshare, and making it affordable for the masses, also making it attainable for folks who wanted to own a second home but previously weren't able to." ("Pacaso, the Proptech Startup Founds by Zillow Alums, Raises $125M Series C" Sophia Kunthara (September 14, 2021) (news.crunchbase.com/news/proptech- startup-pacasoraises-125m-series-c.)) Creating a new market for these prospective buyers who otherwise would not buy second homes unquestionably increases demand for these homes by creating an incentive for timeshare companies to buy up residences to meet this market demand. Creating more demand, and reducing supply, will further 12-508

ratchet up housing costs, exacerbating the already significant housing shortage in the City.
ii. Impacts to Character of the City's Residential Districts The City Council additionally found as part of the adoption of the original Time Share Ordinance that time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in time-sharing projects. The Council concluded that this commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. This continues to be the case, as the nature of time share uses of residential property is different than the typical long term residential uses for which the residential districts of the City are intended.

The complaints that have been made by some local residents regarding the Pacaso homes are illustrative of the distinctions between time share uses and long term residential uses. A sampling of the email complaints received by the City are included in Attachment No. 2 to this Staff Report. The complaints received center on concerns over more intense traffic and parking issues, outdoor parties and conversations going late into the evening, sometimes as late as 2 A.M. One neighbor complained of outdoor lighting shining into her daughter's room at night. They complained of traffic and inadequate parking for the visitors to these homes. Further, neighbors have noted that with each turnover from one stay to another, cleaning and landscaping crews come to clean the unit and prepare it for the next user. While this level of maintenance is appropriate for a commercial vacation property, it impacts the residential character of the surrounding area by adding parking and noise burdens in the neighborhood. Living next door to a home where the residents turnover every 2-14 days, and professional cleaning and landscaping crews come to the property between each visit is much more akin to living by a commercial lodging project than a residential home. This is not at all surprising, given that these time share homes are used by people who are on vacation. While long term residents may have an occasional party at their home, the time share model means that these residences are constantly being used by people who are on vacation, hosting parties or celebrating special occasions. These activities by their nature are more intense than typical residential use of property.

The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long term residents, whether owners or renters, will occasionally have guests, and will occasionally have parties, but these time-share homes are used exclusively by people who are coming to the City on a short term basis for vacation or leisure. People will naturally stay out later, entertain more and gather in larger numbers while on vacation. That is the reason that these uses are more appropriate in non-residential areas that are intended to cater to the City's visitors and tourists. Time share uses can change the character of a residential neighborhood by having it serve not only as a residential area but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use.
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In their marketing materials, Pacaso cites this intensity of use as a benefit, indicating that having these units filled with visitors seven days a week will benefit the local economy, since these visitors will patronize local businesses. (pacaso.com/communities) However, as noted above, the City strives through its General Plan to achieve a balance between benefits to the local economy and maintaining the character of the City. The City seeks to achieve this balance by promoting "sustainable tourist practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic smalltown quality of life, (General Plan p. 3-9) and striving to achieve a local economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors." (General Plan p. 1-15.) Bringing more visitors into residential neighborhoods to improve the local economy does not help to achieve that balance. It instead tips the scales in favor of the local economy, at the expense of the residential character of these neighborhoods.

The nature of the timeshare use itself can impact the residential character of the City's residential districts because it will ensure that the time share users can only use their property for a limited amount of time each year. In the case of Pacaso owners, each stay is limited to 2-14 days. As discussed above, in the Ewing v. City of Carmel -by -the -Sea case, the California Court of Appeal found that short term rentals would affect the essential character of a neighborhood and the stability of a community. The Court noted that "[s]hort term rentals have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a Scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." This same problem is present with time-share uses. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. At the April 28, 2021 council meeting several Pacaso co -owners spoke of their experiences in St. Helena. All of them spoke of their affection for the community and the traditions they had established, but these were centered on attending local events and visiting shops, restaurants and wineries. These types of transactional activities are all beneficial to the City's local economy and are what the City hopes to see from visitors to the City, but it is not the type of community involvement described in the Ewing case that binds and strengthens a residential community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its small town character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents who will engage in the community in the manner described by the Court in Ewing, to the betterment of the entire community.

C.Proposed Amendments to the Time Share Ordinance
The proposed Ordinance would make certain changes to the City's Existing Time Share Ordinance, as described below.
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1.Findings and Establishment of New Chapter
The proposed Ordinance includes detailed recitals and findings describing the policy bases for the City's regulation of time share uses. The findings are consistent with the findings made as part of the original Time Share Ordinance, but more detail has been added. The policy bases for the proposed Ordinance are discussed in the sections above, and further discussion is not necessary here.

The proposed Ordinance also relocates the restrictions on time share uses to its own chapter at Chapter 17.138. The Time Share Ordinance is currently located in Chapter

17.112, General Site Design and Development Standards. City staff believes that with the added level of detail in the Proposed Ordinance, these provisions merit being located in a separate chapter, and has changed the location of the Timeshare Ordinance accordingly.

2.Definitions
The Proposed Ordinance amends the definitions that are used to define time share uses, with the new definitions set forth in Section 17.138.020. The new definitions are modeled on the definitions utilized by the state to regulate time-shares in the Vacation Ownership and Time -Share Act of 2004 (Bus. & Prof. Code §§11210-11288), but are modified somewhat to better apply in the land use regulation context.

The new ordinance includes a number of definitions that work in concert to define a timeshare use. The ordinance defines a "time-share use" as the use of one or more accommodations, or any part thereof, as part of a time-share property pursuant to a timeshare plan. An "accommodation" is defined in this Chapter to include a range of residential units that could potentially be used for time-share purposes. The types of residential units that can be accommodations are listed at the beginning of Section

17.138.020 in the proposed ordinance. A "time-share plan" is defined in the ordinance, and generally includes any arrangement, plan, scheme or similar device whereby a purchase receives the right to exclusive use of the accommodation, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year. A "time-share property", in turn is defined as one or more accommodations that are subject to the same time-share plan together with any property rights that are appurtenant to the accommodations. A "time-share instrument", is the document or documents that create or govern the operation of the time-share plan.

Therefore a time-share use is the use of a residential property that fits within the definition of an "accommodation" under the ordinance, pursuant to a "time-share plan", which grants each owner of the time-share property exclusive use of the property for a certain period of time each year, but not the full year.
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It is important to note that not all properties with multiple owners or owned by business entities (such as LLCs) would constitute a time-share use under these definitions. The definitions focus on the manner in which the accommodation is used, not how it is owned.

A time-share plan allows each owner exclusive use of the property for a specific period of time. This manner of use prevents the property from being used for long term residency, and leads to the continual cycling of visitors through the property and the more intense, constant vacation oriented use that the ordinance seeks to limit in residential districts of the City.

A property that is owned by a group of friends or extended family members, whether through a separate business entity or otherwise, will not necessarily mandate that only one owner will be able to use the property at a time. The more formal arrangement found in time-share uses increases the intensity of use, in that each individual time-share owner cycles through the property, whereas families or friends are more likely to use the property together or in groups leading to less transition in the residential neighborhood. The more formal relationship, use of professional property managers and rights to exclusive use found in timeshare uses contributes to the commercial character of the property, with added traffic due to the more frequent turnover of visitors and more frequent cleaning and inspection between each user, which is common for a commercial vacation property, but not for a home owned by family or friends.

3.Enforcement
The new ordinance additionally adopts a new enforcement structure for the City timeshare restrictions, modeled on the City's short-term rental ordinance. The ordinance prohibits both the use of accommodations for time-share use, and the advertisement of accommodations for time-share uses. This will better allow the City to prevent time-share uses in residential neighborhoods before they occur. The proposed Ordinance also outlines the process that will be used to enforce this new Chapter, again based on the City's existing short-term rental regulations. This approach has proved to be effective in enforcing the City's short-term rental regulations, and will help the City to take a more preventative approach to enforcing its time-share regulations as well.

4.Time Share Uses in Service Commercial and Central Business Districts Finally, while the City's existing Time Share Ordinance did prohibit time-share projects within certain types of residential dwelling units within the City, it does not make distinctions based on the various zoning districts of the City. Given that the primary concerns and impacts of this use arise from the high intensity use of property that negatively impacts the residential character of residential districts within the City, this use may not have the same impacts in commercial districts where visitors can be closer to the amenities in the City that cater to visitors. The proposed new ordinance would allow time-share uses in the Service Commercial and Central Business Districts as conditional uses, provided that such time-share uses would be limited to accommodations in upper floors in conjunction with a mixed use project, would be required to provide at least one parking space for accommodations of two or fewer bedrooms, and at least two parking 12-512

spaces for accommodations of three or more bedrooms, and would be subject to such other conditions imposed by the City has part of the conditional use permit process. As part of the application for a time-share use, the applicant would have to provide specific information including a management plan and specific information on the accommodations and any ancillary uses. The City would then review the application process in accordance with its normal process for review of conditional uses. This would allow the City to address potential impacts associated with this use, similar to the approach that the City uses with hotels and other lodging accommodations in these d istricts.

Consistent with this change, the proposed ordinance updates the list of conditional uses in both the Service Commercial and Central Business Districts to include time share uses as regulated by the new Chapter 17.138.

The Planning Commission held a public hearing to consider the proposed ordinance at its regular meeting of March 1, 2022. Following the public hearing, the Planning Commission unanimously recommended that the City Council adopt the proposed ordinance. City staff has made minor, non -substantive edits to the proposed ordinance that went to the Planning Commission to correct typographical errors, and to add the sections amending the list of conditional uses in the Service Commercial and Central Business Districts.

FISCAL IMPACT
None

RECOMMENDED ACTION
Staff recommends that the City Council introduce by title only and waive further reading of an Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.010-

17.138.060 to Title 17, Zoning, of the St. Helena Municipal Code, amending sections

17.48 (Central Business) and 17.52 (Service Commercial) and Deleting Section

17.112.130 of the St. Helena Municipal Code.

ATTACHMENTS
Attachment 1-St. Helena Time Share Ordinance -Final
Attachment 2-Community email comments
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CITY OF ST. HELENA
ORDINANCE NO.

ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 —

17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AMENDING SECTIONS 17.48.030 AND 17.52.030 AND DELETING SECTION

17.112.130 OF THE ST. HELENA MUNICIPAL CODE
WHEREAS, the City of St. Helena is a popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character; and
WHEREAS, preserving the rural, small town quality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and
WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and
WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031, while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into -1-
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St. Helena, many because there is no local housing that is affordable at the incomes that they make. Thirty six percent (36%) of St. Helena households cannot afford market rents while seventy percent (70%) of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents.

Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena", and
WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute one million dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low income households, and an additional two million two hundred thousand dollars to be used more generally toward the development of affordable housing in the City; and
WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and
WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and
WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and
WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and
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This restriction was imposed because the conversion of residential dwelling units to time-sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one - eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time- share uses provide a short-term, high impact vacation oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist oriented locations in St.

Helena and the surrounding Napa Valley; and
WHEREAS, this high impact use, combined with the frequent turnover and commercial management of these properties is not consistent with the residential districts in which they are located. It is commercial in nature, in that these time-share -3-
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uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City; and WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for time-share uses of residential properties; and WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and
WHEREAS, pursuant to and in accordance with this authority, the City Council desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the Planning Commission of the City of St. Helena held a duly noticed public hearing on March 1, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting; and
WHEREAS, on March 1 2022, the Planning Commission of the City of St. Helena recommended that the City Council adopt this Ordinance amending the Municipal Code as described herein by a 5-0 vote; and
WHEREAS, on March 22, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staffs recommended approval of this Ordinance; and
WHEREAS, the proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the agricultural, small town character of the City of St. Helena; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply; and
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Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows:

SECTION 1: The above recitals are hereby incorporated as though set forth in this section.

SECTION 2: Chapter 17.138 and sections 17.138.010 — 17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows:
"Chapter 17.138

TIME-SHARE USES

17.138.010 Purpose and Findings

17.138.020 Definitions

17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts

17.138.040 Application Process and Development Standards

17.138.050 Violations, Enforcement and Civil Penalties

17.138.010 Purpose and Findings
A. There is a critical shortage of permanent, long-term housing in the City of St.

Helena.

B. A limited supply of suitable vacant land, land values, and market demand for land for other uses, including but not limited to use of property for vineyards, have limited the construction of additional housing in the City of St. Helena.

C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character.

D. The City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy.

E. Time-share uses are not an appropriate land use in the City's residential districts due to the multiple occupancy of time-share properties, the short-term, tourist oriented use of such property and commercial management of time-share facilities, all of which -5-
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create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the time-share facilities, and therefore are appropriately confined to commercial zoning districts.

F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage.

G. It is therefore in the public interest to prohibit conversions of existing housing units into time-share facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use.

17.138.020 Definitions
For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section:
"Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160.
"Building" shall have the meaning ascribed to it by Section 17.04.160. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.160. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time-share plan.
"Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest" means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the time-share property or a specified portion thereof.
"Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given M
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year, on a recurring basis for more than one year, but not necessarily for consecutive years.
"Time-share property" means one or more accommodations subject to the same time- share plan, together with any other property or rights to property appurtenant to those accommodations.
"Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan.

17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts
Time-share uses are conditional uses within the City's Service Commercial (SC) District and Central Business (CB) District, subject to approval of a conditional use permit applied for and approved in conformance with this Chapter. Time-share uses are not permitted in all other Zoning Districts in the City.

17.138.040 Application Process and Development Standards A. Application Process. Approval of a conditional use permit for time-share uses in the Service Commercial District or Central Business District shall be required in accordance with the requirements of Chapter 17.168. In addition to the application requirements contained in Chapter 17.168, an application for a time-share use shall be accompanied by the following documents which shall be subject to the approval of the planning director:

1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use.

2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a time-share use:
a. Typical floor plans for each accommodation.
b. The phasing of the construction of the accommodations on the time- share property, if applicable.
c. A description of any ancillary uses which are proposed in conjunction with the time share use.
d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. -7-
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f. Any other information or documentation the applicant, city staff or commission deems reasonably necessary to the consideration of the time-share use, including any required environmental documents.

B. Development Standards and Operational Requirements. Notwithstanding any other provision of this chapter, the following conditions must be met by any time-share use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the time-share use meets the intent of this chapter:

1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project.

2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use.

3. Development Standards. The time-share use shall comply with all development standards for the zone in which it is located.

4. Parking. Parking shall be provided as follows:
a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation.
b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation.

4. Modification or Waiver of Standards. The planning commission may modify or waive one or more of the regulations contained in this section if it determines that strict compliance is not necessary to achieve the purpose and intent of this section.

17.138.060 Violations, Enforcement and Civil Penalties
A. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this chapter is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.20.

B. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this chapter is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense. -8-
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C. Any responsible person who violates this chapter shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The city may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the city, including without limitation the city's staff time, investigation expenses and attorney's fees.

1. Where the city proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this chapter. In any such civil action the city also may abate and/or enjoin any violation of this chapter.

2. Where the city proceeds by administrative citation, the city shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. a. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the city clerk in writing within forty- five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. b. The city manager is hereby authorized to designate a hearing officer to hear such appeal. The city hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. c. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this chapter.
d. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ 12-522

of mandate with the Napa County superior court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. e. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 1.12. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes.

D. Any violation of this chapter may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty under Chapter 1.12 for a violation shall be one thousand dollars ($1,000.00).

E. Each day the violation of this chapter occurs shall constitute a separate offense.

F. The remedies under this chapter are cumulative and in addition to any and all other remedies available at law and equity."
SECTION 3: Deletion of Section 17.112.130
Section 17.112.130 is hereby deleted in its entirety.

SECTION 4: Amendment of Section 17.48.030
Section 17.48.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;":
"Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 5: Amendment of Section 17.52.030
Section 17.52.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;":
"Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 6: CEQA
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This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations.

Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment.

SECTION 6: Effective Date
This ordinance shall take effect 30 days after its final adoption, and a summary of this ordinance shall be published once with the names of the members of the Council voting for and against the ordinance in the St. Helena Star, a newspaper of general circulation published in the City of St. Helena.

THE FOREGOING ORDINANCE was introduced at a
City Council on the day of 202',
meeting of the St. Helena City Council on the
following vote:

Mayor Ellsworth:

Vice Mayor Dohring:

Councilmember Chouteau:

Councilmember Hardy:

Councilmember Hall:

APPROVED:

Geoff Ellsworth, Mayor
ATTEST:

CITY OF ST. HELENA
Cindy Tzafopoulos, City Clerk
-11-
regular meeting of the St. Helena
and was adopted at a regular
day of , 2022, by the
12-524

From:

Mari Jansdotter
To:

Anna Chouteau
Sent:
6/8/2021 7:25:45 AM
Subject:

Re: [External] 1242 Madrona pictures Re: Pacaso
Thank you, Anna, for your kind reply.

I'm sorry you all have to go through this lawsuit by Pacaso and hope the judge find in your favor.

I have a follow-up question. Do you know who I should address it to? The Pacas house building on Kearney across the street from us has installed Lights under the roofline that are on all night and installed in such a way they shine straight into our house, especially my daughter's bedroom.

Are there any ordinances that I could refer to that help me ask them to please cover / redirect those lights or at least turn them off after 10 p.m?
Thank you!
Best
Mari
12-525

Mi.

SRI
-T 19 lot 1
.. ........

12-527

Sent from Yahoo Mail on Android
On Tue, Jun 8, 2021 at 7:12 AM, Anna Chouteau
wrote:

Hi Mari,
Thank you for your email. I forwarded your email to City staff about the specific permitting questions.

Our planning director is out of the office this week.

We are defending ourselves in the lawsuit. Our City Attorney filed an anti-SLAPP motion that is now public information and the hearing will be coming up this summer.

All my best,
Anna
Sent from my Wad
On Jun 7, 2021, at 6:01 PM, Mari Jansdotter wrote:

To clarify, do they have permit allowing the new structure going up at 1242 Madrona? The rendering from original sales listing shows a trellis (see attached) but a structure looking like a live -on emit close to (and taller than) the Oak neighbour' fence is being built. See pictures from today

Sent from Yahoo Mail on Android
On Mon, Jun 7, 2021 at 5:38 PM, Mari Jansdotter
wrote:

Thank you for doing all you can to stop Pacaso!
I am not o.k. with Pacaso's violation of city ordinance and I support the city's legal fight.

In addition to signing the petition and putting a No Pacaso sign outside my home, what else can we on the community do to help, please?
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I finally afforded my dream home after moving several times the last 10 years, only to a year later have 4! of these Pacaso 'time share' like vacation LLC/commercially owned houses popping up in my neighborhood.

I'm devastated - this is supposed to be a residential area!! I am very worried about my family's safe & peaceful living situation, now that I'll be impacted by 4 of these houses (one across the street) - each with 8 groups of owners and/or their guests circulating in and out all year round.

Many Pacaso have 4 bedrooms that easily accommodate 8+ people, and pool in the backyards with outdoor areas for gatherings/parties.

It's a huge difference having your neighbor throwing an occasional party versus non-stop having a new group of people next door visiting for thier token time of vacation / partying.

Pacaso houses also come with increased parking problems as these properties tend not have garages or driveways (often transformed into addl bedroom).

Specifically would you mind looking into building code the one at 1242 Madrona / Oak? Looks like they're adding a guest house with vary narrow set back from the oak side neighbor.

Is that an approved building? Maybe they're getting around that by making it a partial garage? Add to that, the 4 Pacaso houses are all in close proximity of RLS with kids walking / biking to and from school.

What are the safety concerns that this is imposing with new people circulating in and out all year round and increased car traffic? Worst case scenario there will be a liability situation that will put a stop to Pacaso.

Please, please stop Pacaso before we even get close to that.

Respectfully,
Mari Jansdotter
Sent from Yahoo Mail on Android
12-529

PACASO = PARTY HOUSES!
Debbie Polverino 5/11/2021
To the members of the City Council. In the recent Napa Register article, Austin Allison agrees that short term rentals are a problem, that commercial Timeshares are a problem- that's not what Pacaso is he said. Yet, Pacaso listed the Valley View Street "Pool House" as a 1/8 Timeshare Ownership property. After the city was notified by several concerned citizens and myself regarding "timeshares" listed for sale in residential zoned areas, Pacaso changed its online marketing from "1/8 Timeshare Ownership to 1/8 Shared Ownership. Owners who purchase still share the property in available time slots just like a timeshare.

Living next door to a Pacaso home has been living next door to a full-time party house! The constant music with speakers blaring, loud conversations until 2 am and later, noise violations along with excessive vehicles parked on the street or in front of our homes. The additional noise of gardeners blowing dirt and leaves into our yard, Pool service, catering trucks, housekeeping scheduled more frequently. Open houses are held with statements made with, "this is a great place for pool parties and entertaining, it's a perfect place to bring friends and extended family." This home on Valley View Street was a weekend getaway home for the previous owners who had loud weekend parties. It was a constant nightmare and all the homes nearby complained. Now the property has been split up to 8 owners. The Saint Helena P.D. has already been to this home at least 3 times for noise violations after 10pm. There must be a way to stop these repeated violations and offenders.

Pacaso's has written policies for its owners on their website that they must adhere to. No parking on the street, no parties, no noise after 9pm to 7am, no dogs over 80 pounds. Policies have been broken several times already from each group including the Pacaso's owners.

According to Mr. Allison, Saint Helena is running a dishonest campaign against Pacaso. Pacaso claims discrimination of outside ownership which is not the case. As we all know we welcome all people the opportunity to live in our quiet small town. Pacaso selling an 1,100 square foot home which is smallest of any home on our street for $1.7M is dishonest in my opinion. This is what he says is affordable housing for second home buyers who are paying in full, plus maintenance fees? When commercial companies buy a dozen homes in Napa Valley and plans additional purchases to be split up to 8 shares it is not committed to the community or our quiet neighborhoods. Zoning is in place for a reason. Commercial companies operating in full time residential streets should adhere to the rules that are in place and only buy up in areas where other vacation homes are abundant and not a disruption.

What happens should we decide to sell our home? How will people feel about buying next door to a home owned by 8 owners who don't know each other and all come at different time slots for as little as 2 days at a time? We will have to disclose this information. This put a negative mark on our property. This is something I want you to think about! Say NO to Pacaso! Thank you. 12-530

From: Amy Caldarola
To: Paul Dohring
CC: Anna Chouteau; Lester Hardy; Eric Hall
Sent: 5/23/2021 1:04:24 PM
Subject: [External] Picaso
Dear Council Members,
This is Amy Caldarola here. I am very concerned about Picaso buying property in our residential neighborhoods under the guise of democratizing home ownership. This is not affordable housing. Picaso properties are time-shares and short-term rentals which violate municipal code provisions. The presence of these properties in residential neighborhoods is inappropriate and will degrade the quality of life. It has already done so with Picaso's property on Valley View; those neighbors are suffering with loud noise, music, and parties that go on to after midnight; even calling the police does not seem to stop them. I support the city in doing everything possible to defeat them. I also support a counter law suit against them if it makes legal sense. With that said, we are fighting for the soul of our community and this needs to be a number one priority.

Picaso is in Napa, Sonoma, Healdsburg, and probably will move into Calistoga and Yountville. This is a fight worth fighting. It might be helpful for the affected counties and municipalities to join their resources together to oppose them. Please outline for me what the city is doing and what the plan is.

Thank you. I really appreciate you taking the time to keep me informed on this very important and pressing issue. We must act now!
Sincerely,
Amy Caldarola
12-531

May 11, 2021
Good evening City Council members. My name is Clare Barr and I live in St. Helena. Tonight I would like to speak about the Pacaso Vacation Share homes.

I listened carefully to the public comments of Pacaso Share owners made at our last City Council meeting. They sounded sincere in their desire to be a part of the St. Helena community. The problem is they have bought into a business model that will make that nearly impossible.

To be a part of a real community means forming bonds with neighbors.

How can that come about with a home next door that has possibly dozens of strangers coming and going, with visits no longer than 14 days at a time, a few times a year? And with the likelihood of visits gifted by other share owners, and a cleaning crew who appears before each arrival, the number swells. With the result that a Pacaso share owner, is viewed by their neighbors as only one in a sea of unfamiliar faces.

And though the intentions of some of the share buyers might be good, can we say the same for all 7 of the remaining shareowners? One of whom might gift a weekend to his brother for a blowout bachelor party? Or as was the case in Napa, a single shareowner who conducted retreats in which close to a dozen visitors would come and go within one stay. That particular shareowner was charging her guests, which is a complication on an entirely different level.

Pacaso would have us believe that their sharebuyers are families who simply want a quiet, lovely getaway. But in actuality, a Pacaso home is built for partying. Their own website says of one offering "This home takes entertaining to new heights". And yet another listing says that a 12-532

particular home "has been completely re -imagined to accommodate families, friends, and large groups". Another listing offers "year round fun and adventure".

Now, none of us resent the visitor who wants to have fun. Indeed, our beautiful valley is an ideal place for celebration. And we all do that on occasion. But when you realize that every single visitor owning a Pacaso share has been wooed with the promise of "fun and adventure" within a house "built for entertaining", then you have the possibility of major partying with each and every visitor, all crammed into stays that last from 2-14 days. This is transient occupancy in our residential neighborhoods that cannot possibly be regulated under the Pacaso system.

There is a reason why we have ordinances in place that designate where tourists and visitors can stay. It allows us to appreciate our visitors, giving them the space and accommodations in which to party and celebrate, while we ourselves can conduct our daily lives in the sanctuary of our residential neighborhoods. Which in turn, are places where we know our neighbors so well that we trust them with our keys, our pets, and even our children. With whom we share joy and sometimes sorrow, and whom are quick to lend a hand in times of crisis.

And if we have learned anything in the last few years, it is that the ability to know and rely on our neighbors is the very thing that sustains our community through thick and thin. A vacation home with a parade of visitors coming and going, does not belong in our residential neighborhoods. Please Say No to Pacaso.

Clare Barr
St. Helena
12-533

From: Beth Gray
To: Geoff Ellsworth
Sent: 5/22/2021 3:01:13 PM
Subject: [External] Pacaso
Dear Mr. Mayor,
I am writing to express my strong opposition against the infiltration of Pacaso and their timeshare strategy in the city of Saint Helena. As a full-time resident here in the city (and as your neighbor), I find it atrocious that the city has not been able to stop the infiltration of this community destroying business model. This business will do nothing but destroy our community. As an example, I witnessed the dumping of water from the pool into the creekbed from a home purchased by Pacaso right on the corner of Sylvaner/Reisting as they began to redevelop the home and expect to list it as fractional ownership. Illegal dumping of the pool water with disregard to any of the environmental consequences demonstrates their utter lack of care about the community. Similarly, hearing from the neighbors who live next to a Pacaso home on Valley View, I can only shake my head and sympathize with the poor neighbors having to deal with multiple cars showing up and loud music being played at all hours.

One of the reasons I moved from San Francisco to Saint Helena was to enjoy the quiet sounds of nature, the beautifiil outdoors - not to listen to vacationers who only want to party for the two weeks that they have their time in the home. Please protect our city from these timeshares.

I understand the city is being sued. I hope that we can collectively put the necessary resources behind this lawsuit to stop Pacaso from any more timeshares in St. Helena.

Respectfully,
Beth Gray
12-534

Report to the City Council
Regular City Council - 12 Apr 2022
F
�' EL
Agenda Section: CONSENT ITEMS
Subject: Consideration of Second Reading and Proposed Adoption of a Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.060 to Title 17, Zoning of the St. Helena Municipal Code, amending sections 17.48.030 (Central
Business) and 17.52.030 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code
CEQA Exempt
Determination:

Prepared By: Ethan Walsh, City Attorney
Reviewed By: April Mitts, Administrative Services Director Approved By: James C. McCann, Interim City Manager

BACKGROUND
The City Council held a public hearing on the proposed ordinance on March 22, 2022, and introduced the ordinance by title only and waived reading by a unanimous vote of the City Council. Staff recommends that the Council waive second reading and adopt the ordinance. The report below mirrors that provided to the Council at the March 22, 2022 meeting.

Over the past two years, there has been significant discussion in the community regarding Section 17.112.130 of the City's Zoning Code, which prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple -family dwelling or any apartment house in the City (the "Time Share Ordinance"). The City Council discussed the Time Share Ordinance at its July 14, 2020 meeting in response to concerns raised regarding a real estate listing for a fractional or partial ownership interest in a residential home in the City. The prior City Attorney discussed this issue with the City, focusing on the question of the extent to which the City Council could regulate an ownership structure through the City's zoning authority, and noted the challenges of doing so. At the conclusion of the Council's discussion of this issue, Council directed the City 12-535

Attorney and staff to continue to research its options to address the concerns raised by members of the community in response to the listing of the home at issue. In the months following the July 2020 Council meeting, the company that had been marketing that original home, now known as Pacaso, began marketing other homes in the City, and the City received additional complaints from members of the community. Based on new information that was available to the City, primarily through Pacaso's marketing materials, the City Attorney's office concluded that the properties being marketed by Pacaso were notjust fractional or partial ownership structures, but were also being marketed to be used as a time share project that would be prohibited under the City's ordinance, and informed Pacaso of that conclusion. Pacaso disagreed with the City Attorney's conclusion, and initiated a lawsuit in an effort to compel the City to retract its conclusion. That litigation is ongoing.

On March 1, 2022, the Planning Commission voted unanimously to recommend the City Council approve the proposed ordinance.

property circulates among purchasers according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year.

Pacaso provides a significant amount of information on its website regarding the manner in which its homes are used by the purchasers of a Pacaso home. According to Pacaso's website, the single family residences marketed by Pacaso are held by a property -specific limited liability company ("LLC"), and each co-owner purchases a 1/8 share in the LLC. (Pacaso.com/learn) Each 1/8 share entitles the co-owner to 44 stay nights within any 365 day window. Stays can be from 2 to 14 nights in duration for each 1/8 share. Back-toback stays are not permitted. (Pacaso.com/faq/scheduling) Stays are booked on an app, with specific rules governing the number of "special dates" that each co-owner can book, and the number of stays that each owner can book during "peak seasons." (Id.) Each owner can book the residence to use themselves, or may allow guests to use the residence, whether or not the co-owner is present. (Id.) Between each stay, Pacaso conducts a thorough inspection and cleaning. ("5 reasons Pacaso is better than a timeshare." Pacaso.com/blog/better-than-resort-timeshare)
The Pacaso model grants each 1/8 owner the right to use the property for a specific period of time (44 days in a year) in increments of 2-14 days. The use, occupancy and possession of the property circulates among the co -owners according to a floating time schedule that gives each co-owner exclusive rights to the property for a specific period of time each year. This use structure fits squarely in the City's definition of a time-share program, and the properties operated by Pacaso in this manner would therefore be timeshare projects under the existing Time Share Ordinance.

B.Reasons for the Time Share Ordinance

of its resident population." (General Plan p. 1-8.) The City has set goals to maintain that balance, striving to achieve an economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors and provide better economic opportunities. (General Plan 1-15.) The City further seeks to "promote sustainable tourism practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic small-town quality of life." (General Plan p. 3-9.) St. Helena is a renowned tourist destination, bringing visitors from throughout the world to its wineries, restaurants and downtown, but it is also a functioning City and community, with residents who contribute to its social fabric. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial districts, like the Service Commercial district and the Central Business district, that provide for uses that serve both visitors and the local community, such as restaurants, retail shops and winery tasting rooms, among others, along with lodging where those visitors can stay. (St. Helena Municipal Code §§17.48.030, 17.52.030.) The City also has residential districts that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types.

3.Impacts of Time Share Uses on Residential Districts
Like Carmel, the City of St. Helena strives to maintain the character of its residential areas in the face of intense demand for accommodations to serve visitors to St. Helena. The Time Share Ordinance is one of the means that the City has in place to ensure that it is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zoning districts. When the City originally adopted the Time Share Ordinance in 1982, the City Council made specific findings based on the impact it foresaw if time share uses were to locate in the residential areas of the City. Those findings were as follows:

5. The city council finds and determines that this section is necessary to protect the public health, safety and welfare of the citizens of the city.

$109,200. ( www.census.gov/quickfacts/sthelenacitycalifornia; www.hcd.ca.gov/grantfunding/income-limits/state-and-federal-income- limits/docs/income-limits-2021.pdf.)
At the time of adoption of the City's Housing Element in 2015, the income necessary to purchase a median priced single family home was nearly $200,000 per year, and prices have risen dramatically since then. (City of St. Helena Housing Element Update 2015-23, p. 3.) The cost of homes currently in St. Helena are well in excess of what median income residents of St. Helena can afford, as well as median income residents of Napa County generally. Further, as Erika Sklar observed in the St. Helena Housing Update Report that she prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that they make. 36% of St. Helena households cannot afford market rents while 70% of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and non-profit directors cannot afford homeownership in St. Helena." (St. Helena Housing Update Report, p. 7 (April 2018).) The City has made and continues to make efforts to address the need for affordable housing in the City, including providing assistance for the Brenkle Court, Turley Flats and 963 Pope Street projects. The City has also ensured that new non-residential development will assist the City in providing adequate affordable housing, as evidenced by the significant contributions to affordable housing made by the Farmstead Lodging project through its development agreement with the City. These efforts, however, have highlighted the challenges of providing housing at all income levels, with the most significant challenge being a limited supply of existing housing stock in the City, and a limited supply of available land for new housing. Given the housing shortage already in existence, losing additional housing stock will only make this problem worse.

C" Sophia Kunthara (September 14, 2021) (news.crunchbase.com/news/proptech- startup-pacasoraises-125m-series-c.)) Creating a new market for these prospective buyers who otherwise would not buy second homes unquestionably increases demand for these homes by creating an incentive for timeshare companies to buy up residences to meet this market demand. Creating more demand, and reducing supply, will further ratchet up housing costs, exacerbating the already significant housing shortage in the City.
ii. Impacts to Character of the City's Residential Districts The City Council additionally found as part of the adoption of the original Time Share Ordinance that time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to theirtransient nature and to the multiple short-term occupancies by those participating in time-sharing projects. The Council concluded that this commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. This continues to be the case, as the nature of time share uses of residential property is different than the typical long term residential uses for which the residential districts of the City are intended.

numbers while on vacation. That is the reason that these uses are more appropriate in non-residential areas that are intended to cater to the City's visitors and tourists. Time share uses can change the character of a residential neighborhood by having it serve not only as a residential area but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use.

C.Proposed Amendments to the Time Share Ordinance
The proposed Ordinance would make certain changes to the City's Existing Time Share Ordinance, as described below.

The proposed Ordinance also relocates the restrictions on time share uses to its own chapter at Chapter 17.138. The Time Share Ordinance is currently located in Chapter

the amenities in the City that cater to visitors. The proposed new ordinance would allow time-share uses in the Service Commercial and Central Business Districts as conditional uses, provided that such time-share uses would be limited to accommodations in upper floors in conjunction with a mixed use project, would be required to provide at least one parking space for accommodations of two or fewer bedrooms, and at least two parking spaces for accommodations of three or more bedrooms, and would be subject to such other conditions imposed by the City has part of the conditional use permit process. As part of the application for a time-share use, the applicant would have to provide specific information including a management plan and specific information on the accommodations and any ancillary uses. The City would then review the application process in accordance with its normal process for review of conditional uses. This would allow the City to address potential impacts associated with this use, similar to the approach that the City uses with hotels and other lodging accommodations in these districts.

FISCAL IMPACT
None

RECOMMENDED ACTION
Staff recommends that the City Council conduct the second reading by title only and waive further reading and adopt the Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.010-17.138.060 to Title 17, Zoning, of the St. Helena Municipal Code, amending sections 17.48 (Central Business) and 17.52 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code.

ATTACHMENTS
Attachment 1-St. Helena Time Share Ordinance -Final
Attachment 2-Community email comments
12-545

CITY OF ST. HELENA
ORDINANCE NO.

ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 —

17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AMENDING SECTIONS 17.48.030 AND 17.52.030 AND DELETING SECTION

Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena"; and
WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute one million dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low income households, and an additional two million two hundred thousand dollars to be used more generally toward the development of affordable housing in the City; and
WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and
WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and
WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and
WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and
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Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows:

SECTION 1: The above recitals are hereby incorporated as though set forth in this section.

SECTION 2: Chapter 17.138 and sections 17.138.010 — 17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows:
"Chapter 17.138

TIME-SHARE USES

17.138.010 Purpose and Findings

17.138.020 Definitions

17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts

17.138.040 Application Process and Development Standards

17.138.050 Violations, Enforcement and Civil Penalties

17.138.010 Purpose and Findings
A. There is a critical shortage of permanent, long-term housing in the City of St.

Helena.

C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character.

F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage.

17.138.020 Definitions
For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section:
"Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160.
"Building" shall have the meaning ascribed to it by Section 17.04.160. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.160 "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time-share plan.
"Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest" means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the time-share property or a specified portion thereof.
"Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given lI
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1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project.

2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use.

3. Development Standards. The time-share use shall comply with all, development standards for the zone in which it is located.

E. Each day the violation of this chapter occurs shall constitute a separate offense.

SECTION 4: Amendment of Section 17.48.030
Section 17.48.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;":
"Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 5: Amendment of Section 17.52.030
Section 17.52.030 is, hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;":
"Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 6: CEQA
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THE FOREGOING ORDINANCE was introduced at a
City Council on the day of , 2022
meeting of the St. Helena City Council on the
following vote:

Mayor Ellsworth:

Vice Mayor Dohring:

Councilmember Chouteau:

Councilmember Hardy:

Councilmember Hall:

APPROVED:

Geoff Ellsworth, Mayor
ATTEST:

CITY OF ST. HELENA
Cindy Tzafopoulos, City Clerk
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regular meeting of the St. Helena
and was adopted at a regular
day of , 2022, by the
12-556

From: Mari Jansdotter
To: Anna Chouteau
Sent: 6/8/2021 7:25:45 AM
Subject: Re: [External] 1242 Madrona pictures Re: Pacaso Thank you, Anna, for your kind reply.

I'm sorry you all have to go through this lawsuit by Pacaso and hope the judge find in your favor.

I have a follow-up question. Do you know who I should address it to? The Pacas house building on Kearney across the street from us has installed lights under the roofline that are on all night and installed in such a way they shine straight into our house, especially my daughter's bedroom.

Are there any ordinances that I could refer to that help me ask them to please cover / redirect those lights or at least turn them off after 10 p.m?
Thank you!
Best
Mari
12-557

m i
4'::

12-559

Sent from Yahoo Mail on Android
On Tue, Jun 8, 2021 at 7:12 AM, Anna Chouteau
wrote:

Hi Mari,
Thank you for your email. I forwarded your email to City staff about the specific permitting questions.

Our planning director is out of the office this week.

We are defending ourselves in the lawsuit. Our City Attorney filed an anti-SLAPP motion that is now public information and the hearing will be coming up this summer.

All my best,
Anna
Sent from my iPad
On Jun 7, 2021, at 6:01 PM, Mari Jansdotter wrote:

To clarify, do they have permit allowing the new stricture going up at 1242 Madrona? The rendering from original sales listing shows a trellis (see attached) but a structure looking like a live -on unit close to (and taller than) the Oak neighbour' fence is being built. See pictures from today

Sent from Yahoo Mail on Android
On Mon, Jun 7, 2021 at 5:38 PM, Mari Jansdotter
wrote:

Thank you for doing all you can to stop Pacaso!
I am not o.k. with Pacaso's violation of city ordinance and I support the city's legal fight.

In addition to signing the petition and putting a No Pacaso sign outside my home, what else can we on the community do to help, please?
12-560

I finally afforded my dream home after moving several times the last 10 years, only to a year later have 4! of these Pacaso 'time share' like vacation LLC/coin nercially owned houses popping up in my neighborhood.

Many Pacaso have 4 bedrooms that easily accommodate 8+ people, and pool in the backyards with outdoor areas for gatherings/parties.

It's a huge difference having your neighbor throwing an occasional party versus non-stop having a new group of people next door visiting for thier token time of vacation / partying.

Pacaso houses also come with increased parking problems as these properties tend not have garages or driveways (often transformed into addl bedroom).

Specifically would you mind looking into building code the one at 1242 Madrona / Oak? Looks like they're adding a guest house with vary narrow set back from the oak side neighbor.

Please, please stop Pacaso before we even get close to that.

Respectfully,
Mari Jansdotter
Sent from Yahoo Mail on Android
12-561

PACASO = PARTY HOUSES!
Debbie Polverino 5/11/2021
To the members of the City Council. In the recent Napa Register article, Austin Allison agrees that short term rentals are a problem, that commercial Timeshares are a problem- that's not what Pacaso is he said. Yet, Pacaso listed the Valley View Street "Pool House" as a 1/8 Timeshare Ownership property. After the city was notified by several concerned citizens and myself regarding "timeshares" listed for sale in residential zoned areas, Pacaso changed its online marketing from 1/8 Timeshare Ownership to 1/8 Shared Ownership. Owners who purchase still share the property in available time slots just like a timeshare.

Thank you. I really appreciate you taking the time to keep me informed on this very important and pressing issue. We must act now!
Sincerely,
Amy Caldarola
12-563

May 11, 2021
Good evening City Council members. My name is Clare Barr and I live in St. Helena. Tonight I would like to speak about the Pacaso Vacation Share homes.

To be a part of a real community means forming bonds with neighbors.

particular home "has been completely re -imagined to accommodate families, friends, and large groups". Another listing offers "year round fun and adventure".

Clare Barr
St. Helena
12-565

From:

Beth Gray
To:

Geoff Ellsworth
Sent:
5/22/2021 3:01:13 PM
Subject:
[External] Pacaso
Dear Mr. Mayor,
I am writing to express my strong opposition against the infiltration of Pacaso and their timeshare strategy in the city of Saint Helena. As a full-time resident here in the city (and as your neighbor), I find it atrocious that the city has not been able to stop the infiltration of this community destroying business model. This business will do nothing but destroy our community. As an example, I witnessed the dumping of water from the pool into the creekbed from a home purchased by Pacaso right on the corner of Sylvaner/Reisling as they began to redevelop the home and expect to list it as fractional ownership. Illegal dumping of the pool water with disregard to any of the environmental consequences demonstrates their utter lack of care about the community. Similarly, hearing from the neighbors who live next to a Pacaso home on Valley View, I can only shake my head and sympathize with the poor neighbors having to deal with multiple cars showing up and loud music being played at all hours.

One of the reasons I moved from San Francisco to Saint Helena was to enjoy the quiet sounds of nature, the beautiful outdoors - not to listen to vacationers who only want to party for the two weeks that they have their time in the home. Please protect our city from these timeshares.

I understand the city is being sued. I hope that we can collectively put the necessary resources behind this lawsuit to stop Pacaso from any more timeshares in St. Helena.

Respectfully,
Beth Gray
12-566

CITY OF ST. HELENA
ORDINANCE NO.2022-5
ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 —

17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AMENDING SECTIONS 17.48.030 AND 17.52.030 AND DELETING SECTION

17.112.130 OF THE ST. HELENA MUNICIPAL CODE
WHEREAS, the City of St. Helena is a popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small-town agricultural character; and
WHEREAS, preserving the rural, small-town quality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and
WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St.

Helena, many because there is no local housing that is affordable at the incomes that 12-567

they make. Thirty six percent (36%) of St. Helena households cannot afford market rents while seventy percent (70%) of St. Helena households cannot afford to purchase a home.

Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena"; and
WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute one million dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low-income households, and an additional two million two hundred thousand dollars to be used more generally toward the development of affordable housing in the City; and
WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and
WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and
WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and
WHEREAS, the City additionally has, for many years, worked to presence its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and
12-568

WHEREAS, to this end, in 1982 the City adopted Ordinance No. 82-07, which prohibited the creation of time-share projects as a means of ownership of any single- family, two-family or multiple -family dwelling or any apartment house within the City. This restriction was imposed because the conversion of residential dwelling units to time- sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one -eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and
WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time-share uses provide a short-term, high impact vacation -oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist -oriented locations in St. Helena and the surrounding Napa Valley; and
WHEREAS, this high impact use, combined with the frequent turnover and commercial management of these properties is not consistent with the residential districts in which they are located. It is commercial in nature, in that these time-share uses are 12-569

structured as a short-term, tourist oriented, visitor serving use of the subject properties.

The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more. appropriately located in commercial districts of the City; and
WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for time-share uses of residential properties; and WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and WHEREAS, pursuant to and in accordance with this authority, the City Council desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the Planning Commission of the City of St. Helena held a duly noticed public hearing on March 1, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting; and WHEREAS, on March 1, 2022, the Planning Commission of the City of St. Helena recommended that the City Council adopt this Ordinance amending the Municipal Code as described herein by a 5-0 vote; and
WHEREAS, on March 22, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance; and
WHEREAS, the proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the agricultural, small town character of the City of St. Helena; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply; and
Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows:
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SECTION 1: The above recitals are hereby incorporated as though set forth in this section.

SECTION 2: Chapter 17.138 and sections 17.138.010 — 17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows:
"Chapter 17.138

TIME-SHARE USES

17.138.010 Purpose and Findings

17.138.020 Definitions

17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts

17.138.040 Application Process and Development Standards

17.138.050 Violations, Enforcement and Civil Penalties

17.138.010 Purpose and Findings
A. There is a critical shortage of permanent, long-term housing in the City of St.

Helena.

C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small-town agricultural character.

D. The City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of fife for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy.

E. Time-share uses are not an appropriate land use in the City's residential districts due to the multiple occupancy of time-share properties, the short-term, tourist -oriented use of such property and commercial management of time-share facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities

through commercial -level maintenance of the time-share facilities, and therefore are appropriately confined to commercial zoning districts.

F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage.

17.138.020 Definitions
For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section:
"Accommodation" means any dwelling unit, apartment, condominium or cooperative unit,. hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single-family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160.
"Building" shall have the meaning ascribed to it by Section 17.04.160. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.160. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time-share plan.
"Person" means a.natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest" means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the time-share property or a specified portion thereof.
"Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years.
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"Time-share property" means one or more accommodations subject to the same time- share plan, together with any other property or rights to property appurtenant to those accommodations.
"Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan.

1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project.

2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use.

3. Development Standards. The time-share use shall comply with all development standards for the zone in which it is located.

B. Time-share use, and/or advertisement for time-share use, of an accoinmodation in violation of this chapter is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense.
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2. Where the city proceeds by administrative citation, the city shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. a. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the city clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. b. The city manager is hereby authorized to designate a hearing officer to hear such appeal. The city hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification.
c. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or respohsible person's enrichment or profit as a result of tH6 violation of this chapter. d. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ of mandate with the Napa County superior court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. - - 12-575

e. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 1.12. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes.

E. Each day the violation of this chapter occurs shall constitute a separate offense.

this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations.

THE FOREGOING ORDINANCE was introduced at a regular meeting of the St. Helena City Council on the 22nd day of March 2022, and was adopted at a regular meeting of the St. Helena City Council on the 12th day of April 2022, by the following vote:

Mayor Geoff Ellsworth:

Yes
Vice Mayor Paul Dohring:

Yes
Council Member Anna Chouteau:

Yes
Council Member Lester Hardy:

Yes
Council Member Eric Hall:

Yes
APPROVED:

Geoff Ellsworth, Mayor
I, CINDY TZAFOPOULOS, CITY CLERK of the City of St. Helena, California, do hereby certify that the foregoing Ordinance was regularly introduced and placed upon its first reading at a regular meeting of the City Council on the 22nd day of March 2022. That thereafter said Ordinance was duly adopted and passed at a regular meeting of the City Council on the 12th day of April 2022, by the following vote:

Mayor Geoff Ellsworth:

Yes
Vice Mayor Paul Dohring:
i
Yes
Council Member Anna Chouteau:

Yes
Council Member Lester Hardy:

Yes
Council Member Eric Hall:

Yes
ATTEST:
c
Cindy TzafO$OUIOS, CYy dbe--rk
�cr ^w
� AO�ated May r�~
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Exhibit P
Ordinance Proposed by Pacaso Adding Chapter 5.98
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DRAFT ORDINANCE
Chapter 5.98

CO -OWNERSHIP PROPERTY MANAGEMENT

5.98.005 Purpose and Findings.

The City Council of the City of Newport Beach finds and declares as follows:

A. The City has a long and storied history of being a vacation destination welcoming families and visitors from all over the world to second homes within our shared community.

B. Unlike short term lodging units that are primarily used during the summer months when parking and other demands for City services are at their highest, second homes are utilized by their owners throughout the year.

C. An increasing trend in second home ownership in the City and other communities throughout the nation is co -ownership whereby a number of persons jointly contribute towards the purchase and shared use of a second home.

D. A portion of these co -owned homes are managed by third -party management companies.

E. The restrictions of this chapter are necessary to ensure the growth of co -ownership homes that are managed by a third -party management company is done in an orderly fashion that does not negatively impact the surrounding community.

5.98.010 Definitions.

For the purpose of this chapter, the following definitions shall apply:

A. "Authorized Guests" shall mean any guests of an owner of a Co -owned Housing Unit who have not provided compensation to an owner for dwelling, lodging, and sleeping purposes and are present in the Co -owned Housing unit while the owner is on -site and in the home.

B. "City" shall mean the City of Newport Beach.

C. "Community Development Department" or "Department" shall mean the Community Development Department of the City.

D. "Community Development Director" or "Director" shall mean the Community Development Director of the City or his or her designee. 12-7
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E. "Co -owned Housing Unit" shall mean a residential dwelling unit, managed by a Co - owned Property Manager, and utilized for occupancy for dwelling, lodging, or sleeping purposes by up to eight (8) Owners or eight (8) members of a Limited Liability Company, that owns the residential dwelling unit, along with authorized guests. The term "Co -owned Housing Unit" is not a time-share project, as defined in this Code, and usage of a Co - owned Housing Unit is not a time-share use.

F. "Co -awned Housing Unit Permit" shall mean a permit granted by the City to a Co - owned Property Manager for each Co -owned Housing Unit under management.

G. "Co -owned Property Manager" shall mean a person or Limited Liability Company that manages a Co -owned Housing Unit, on behalf of the Owners of the Co -Owned Housing Unit.

H. "Co -owned Property Management Permit" shall mean the annual permit issued by the City allowing a Co -owned Property Manager to manage a Co -owned Housing Unit(s).

I. "Good Neighbor Policy" shall mean a written policy that governs the operation of a Co -owned Housing Unit and summarizes general rules of conduct, occupancy limits, consideration, and respect for neighbors and the community, including without limitation provisions of this Chapter applicable to the Owner and guests.

J. "Limited Liability Company" shall mean a limited liability company or other form of business entity, including, but not limited to, all domestic and foreign corporations, associations, syndicates, joint stock corporations, partnerships of every kind, clubs, business or common law trusts, or societies.

K. "Local Contact Person" shall mean an individual(s) who is available twenty-four (24) hours per day, seven (7) days per week for the purpose of responding within twenty- four (24) hours to complaints regarding the condition, operation, or conduct of occupants of the Co -owned Housing Unit, or any agent of an owner authorized by the owner to take remedial action and who responds to any violation of this Code.

L. "Owner" shall mean the person(s) that hold legal and/or equitable title to the Co - owned Housing Unit.

M. "R-1 Zoning District" shall have the same meaning provided in Section

20.18.010(B) and Section 21.18.010(B), or any successor sections.

5.98.015 Co -awned Property Management Permit Required.

A. A Co -owned Property Manager shall not manage a Co -owned Housing Unit without obtaining a Co -owned Property Management Permit from the City. 2 �a '] �€ NeIikl
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B. A Co -owned Property Manager shall obtain a permit by submitting an application to the Community Development Director, in a form provided by the Department, signed by the applicant. An application for a new permit, renewal permit, the reinstatement of a permit or the transfer of a permit shall contain the following information:

1. The name, address, and telephone number of the applicant;

2. The name, address, and telephone number of the Local Contact for the Co - owned Property Manager;

3. A current list of every property that the applicant manages in the City;

4. Evidence of a valid business license issued by the City for the separate business of operating Co -owned Housing Units or submission of evidence or information indicating that the Owner is exempt or otherwise not covered by Chapter 5.04 for such activity.

5. A copy of the Good Neighbor Policy that governs each Co -owned Housing Unit.

C. The Co -owned Property Management Permit shall be renewed annually pursuant to procedures provided by the Community Development Department.

D. An application for the renewal of a Co -owned Property Management Permit shall be filed within thirty (30) calendar days of the Co -owned Property Management Permit expiration, or the Co -owned Property Management Permit shall be deemed abandoned.

E. An application for the reinstatement of a Co -owned Property Management Permit closed by the Director pursuant to Section 5.98.070 shall be filed within thirty (30) calendar days of the date the permit was closed by the Director, or the Co -owned Property Management Permit shall be deemed abandoned.

F. An application for the reinstatement of a previously suspended Co -owned Property Management Permit shall be filed within thirty (30) calendar days of the end of the suspension period, or the Co -owned Property Management Permit shall be deemed abandoned.

G. If any application is deemed incomplete, which shall be determined in the sole discretion of the Director, the application shall be completed within thirty (30) calendar days of the service of notice that the application is incomplete, which shall be served in accordance with Section 1.08.080, or the application and any associated permit shall be deemed abandoned.
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H. If good causes exist, as determined in the sole discretion of the Director, the Director may extend the deadlines set forth in this section.

5.98.020 Co -owned Housing Unit Permit Required.

A. A Co -owned Property Manager shall obtain a permit for each Co -owned Housing Unit in the City prior to the unit's use as a Co -owned Housing Unit.

The address of the Co -owned Housing Unit;

2. The name, address, and telephone number of the applicant;

3. The name, address, and telephone number of the local contact for the Co - owned Housing Unit;

4. A copy of the Good Neighbor Policy that governs the operation of the Co - owned Housing Unit;

5. If applicable, evidence that a Co -owned Housing Unit would not violate the permissible use for housing within a Homeowners Association in accordance with the Homeowners Association's Declaration of Covenants, Conditions, and Restrictions.

C. The Co -owned Housing Unit Permit shall be renewed annually pursuant to procedures provided by the Community Development Department.

D. An application for the renewal of a Co -owned Housing Unit Permit shall be filed within thirty (30) calendar days of the Co -owned Housing Unit Permit's expiration, or the Co -owned Housing Unit Permit shall be deemed abandoned.

E. An application for the reinstatement of a Co -owned Housing Unit Permit closed by the Director pursuant to Section 5.98.070 shall be filed within thirty (30) calendar days of the date the permit was closed by the Director, or the Co -owned Housing Unit Permit shall be deemed abandoned.

F. An application for the reinstatement of a previously suspended Co -owned Housing 4 t .�_.� Y� ;I �\cF t�v� I� � �� 4�� 4� �"�� j� t"•^%� 11 t� {�1,� �� !� �� `7 i 12-10
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Unit Permit shall be filed within thirty (30) calendar days of the end of the suspension period, or the Co -owned Housing Unit Permit shall be deemed abandoned.

H. If good causes exist, as determined in the sole discretion of the Director, the Director may extend the deadlines set forth in this section.

I. For purposes of calculating the maximum number of permits under Subsection

5.98.035(A), a Co -owned Housing Unit Permit shall be deemed valid until the applicable permit has been deemed abandoned.

5.98.025 Denial of Permit.

If Co -owned Housing Unit Permits are available for issuance, no timely application filed by a Co -owned Property Manager for an annual permit, renewal of a permit, reinstatement of a permit or transfer of a permit for a unit eligible to be used as a Co -owned Housing Unit, as provided for in this Chapter and this Code, shall be denied unless:. the Co -owned Property Manager does not have a current valid business license; or the Co -owned Housing Unit Permit for the same unit and issued to the same Co -owned Property Manager has been suspended.

5.98.030 Filing Fee.

An application for a new annual permit, the renewal of an existing permit, the reinstatement of a permit, or the transfer of a permit shall be accompanied by a fee established by resolution of the City Council; provided, however, the fee shall be no greater than necessary to defer the cost incurred by the City in administering the provisions of this chapter.

5.98.035 Maximum Number of Co -owned Housing Unit Permits in the R-1 Zoning District.

A. The maximum number of Co -owned Housing Unit Permits in the R-1 Zoning District shall be limited to five hundred (500) permits at any time. For purposes of calculating the maximum number of permits available, a permit shall be deemed valid and unavailable until it is abandoned in accordance with Sections 5.98.020(D) through (G).

B. An Co -owned Property Manager who has a Co -owned Housing Unit Permit, or a Co - owned Property Manager seeking to reinstate a Co -owned Housing Unit Permit that has 5 N F_ CCI `i
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not been abandoned in accordance with Sections 5.98.020(D) through (G), shall have priority to renew or reinstate the permit over anyone on the waiting list, as described in subsection (D) of this section.

C. A Co -owned Property Manager seeking to transfer a valid Co -Owned Housing Unit Permit under Section 5.98.040 shall have priority to transfer the permit over anyone on the waiting list, as described in subsection (D) of this section.

D. If the City has issued the maximum number of Co -owned Housing Unit Permits available in the R-1 Zoning District, the City shall maintain a waiting list. An application for placement on the waiting list shall be submitted to the Director, on a form approved by the Director, and shall be accompanied by a fee established by resolution of the City Council. In the event a Co -owned Housing Unit Permit becomes available, the Director shall notify the person or persons next in order on the waiting list. The notice shall specify that applications will be accepted for ten (10) calendar days after the date of the notice, and that failure to apply within the ten (10) calendar -day period shall result in removal of the person or persons receiving notice from the waiting list. Notice shall be deemed given when deposited in the United States mail, with the first-class postage prepaid, and addressed as specified by the person or persons on the waiting list. The City shall not be liable for a failure to notify any person or persons on the waiting list since placement on the list does not create any property right in any person or persons on the list nor any contractual obligation on the part of the City.

5.98.040 Transfer of Permit.

A Co -owned Housing Unit Permits permit that is valid, and has not been abandoned in accordance with Sections 5.98.020(D) through (G), may be transferred by the Co -owned Property Manager to another Co -owned Property Manager that is permitted under this chapter.

5.98.045 Conditions for Co -owned Housing Unit Permits.

A. All Co -owned Housing Unit Permits issued pursuant to this chapter are subject to the following standard conditions:

1. The Co -owned Property Manager shall prohibit the Owner(s) from renting the Co -owned Housing Unit to a transient user for short term lodging.

2. The Co -owned Property Manager shall ensure that the Owner(s) limits the overnight occupancy of the Co -owned Housing Unit to the maximum permitted by the building code and fire code.

3. The Co -owned Property Manager shall use best efforts to ensure that the occupants and/or guests of the- Co -owned Housing Unit do not create unreasonable noise or disturbances, engage in disorderly conduct, or violate provisions of this Code or any state or federal law pertaining to noise, disorderly 6 7 fjA'�}
12-12
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conduct, the consumption of alcohol, or the use of illegal drugs.

4. The Co -owned Property Manager shall, upon notification that any Owner and/or guest of a Co -owned Housing Unit has created unreasonable noise or disturbances, engaged in disorderly conduct or committed violations of this Code or any state or federal law pertaining to noise, disorderly conduct, the consumption of alcohol or the use of illegal drugs, promptly use best efforts to prevent a recurrence of such conduct by any Owner or guest.

5. The Co -owned Property Manager shall provide the Owner(s) with a copy of the Good Neighbor Policy.

6. With respect to any Co -owned Housing Unit that is located in any safety enhancement zone, the Co -owned Property Manager shall take immediate action during the period that the safety enhancement zone is in effect to prevent any Owner or guest from engaging in disorderly conduct or committing violations of this Code or state or federal law pertaining to noise, disorderly conduct, the consumption of alcohol or the use of illegal drugs.

7. The Co -owned Property Manager shall provide the City with the name and twenty-four (24) hour phone number of a Local Contact Person(s) (who resides within twenty-five (25) miles of the property) who shall respond to any call related to the Co -owned Housing Unit within thirty (30) minutes, and ensure compliance with this chapter in a timely manner. The Co -owned Property Manager must provide a new Local Contact Person and his or her phone number within five (5) business days, if there is a change in the Local Contact Person(s).

8. The Co -owned Property Manager shall ensure that all available parking spaces on site, which may include garage, carport, and driveway spaces as well as tandem parking, are available for the Owner and/or guest of the Co -owned Housing Unit.

The Co -owned Property Manager shall disclose the number of parking spaces available on site and shall inform the Owner and/or guest that street parking may not be available.

9. The Co -owned Property Manager shall maintain a valid Co -owned Housing Unit Permit for each Co -owned Housing Unit under management.

10. The Co -owned Property Manager shall include the City issued Co -owned Housing Unit Permit number on all advertisements for the sale of the Co -owned Housing Unit.

11. The Co -owned Property Manager shall ensure that a permitted Co -owned Housing Units is only used for residential purposes and not used for nonresidential uses, including, but not limited to, large commercial or non-commercial gatherings, commercial filming and/or nonowner wedding receptions.
7 kEA
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12. The Co -owned Property Manager shall ensure that no amplified sound or reproduced sound is used outside or audible from the property line between the hours of 10:00 p.m. and 10:00 a.m.

13. The Co -owned Property Manager shall provide the City with a copy of the Good Neighbor Policy, within seven (7) calendar days after the City serves the Co - owned Property Manager with a notice of request for the Good Neighbor Policy in accordance with Section 1.08.080.

14. The Co -owned Property Manager shall require every Owner and/or guest to comply with all State and local laws that regulate parking while staying at or visiting the Co -owned Housing Unit;

15. The Co -owned Property Manager shall ensure that any Owner and/or guest complies with all State and local laws that regulate parking while the Owner and/or guest is staying at or visiting the Co -Owned Housing Unit.

B. The Director shall have the authority to impose additional conditions on any permit in the event of any violation of the conditions to the permit or the provisions of this chapter subject to compliance with the procedures specified in Section 5.98.060.

5.98.050 Violations of Permit Conditions.

A. In addition to other provisions of this Code, it shall be unlawful for any Owner or guest of Co -owned Housing Unit to:

1. Exceed the overnight occupancy limit designated for the Co -owned Housing Unit,

2. Use street parking prior to utilizing all available on -site parking space(s) for the Co -owned Housing Unit.

3. Place trash for collection in violation of this Code's rules and regulations concerning:
a. The timing, storage or placement of trash containers; or b. Recycling requirements.

4. Amplify or reproduce sound between the hours of 10:00 p.m. and 10:00 a.m.:
a. Outside of the Co -owned Housing Unit; or
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b. That is audible from the property line for the Co -owned Housing Unit.

5. Use the Co -owned Housing Unit for any nonresidential purpose, including, but not limited to, large commercial or noncommercial gatherings, commercial filming and/or nonowner wedding receptions.

6. Rent a Co -owned Housing Unit to any person for a short term.

7. Allow guests to use a Co -owned Housing Unit when the Owner(s) is not present.

5.98.055 Violations, Penalties, and Enforcement.

A. It shall be unlawful for any person to violate any provisions or to fail to comply with any of the requirements of this chapter.

B. In addition to, or separate from, the foregoing criminal penalties, any person violating any of the provisions or failing to comply with any of the requirements of this chapter is subject to the issuance of an administrative citation pursuant to the provisions of Section 1.04.010(E) and Chapter 1.05.

5.98.060 Suspensions.

In addition to any fine or penalty that may be imposed pursuant to any provision of this Code including, but not limited to, Section 5.98.055, a Co -owned Housing Unit Permit may be suspended as provided in this section.

A. Suspension of Co -owned Property Manager Permit.

1. Except as otherwise provided in this subsection, if any person violates any Co -owned Housing Unit Permit condition four (4) or more times in any six (6) month period or any other provision of this Code, state law or federal law, four (4) or more times in any six (6) month period, and the violation relates in any way to the Co -owned Housing Unit Permit, the Co -owned Property Manager Permit for the unit may be suspended for a period of up to six (6) months in accordance with subsection (B) of this section.

2. If a Co -owned Housing Unit that is subject to a Co -owned Housing Unit Permit has been the location of four (4) or more loud or unruly gatherings, as defined in Chapter 10.66, within any twelve (12) month period, the Co -owned Property Manager Permit may be suspended for a period of up to six (6) months.

A loud or unruly gathering that occurred prior to the passage of fourteen (14) calendar days from the mailing of notice to the Co -owned Property Manager in 9 � i_lur�rj,, f c`rt V11\ k`T ��l(-`Zi/
Lt
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compliance with Section 10.66.030(D) shall not be included within the calculation of the four (4) or more loud or unruly gatherings required to suspend a Co -owned Property Manager Permit,
B. Co -owned Property Manager Permits shall be suspended only in the manner provided in this section.

1. The Director shall investigate whenever he or she has reason to believe that a Co -owned Property Manager has submitted an application that contains false information or committed a violation of a permit condition, this Code, state or federal law related to a Co -owned Housing Unit. Such investigation may include, but is not limited to, on -site property inspections. Should the investigation reveal substantial evidence to support a finding that warrants a suspension of the Co - owned Property Manager Permit, the Director shall issue written notice of intention to suspend the Co -owned Property Manager Permit. The written notice shall be served on the Co -owned Property Manager in accordance with Section

1.08.080, and shall specify the facts which, in the opinion of the Director constitute substantial evidence to establish grounds for imposition of the suspension, and specify the proposed time the Co -owned Property Manager Permit shall be suspended within thirty (30) calendar days from the date the notice is given, unless the Co -owned Property Manager files with the Director, before the suspension becomes effective, a request for hearing before a hearing officer, who shall be retained by the City, and pays the fee for the hearing established by resolution of the City Council.

2. If the Co -owned Property Manager requests a hearing and pays the hearing fee, established by resolution of the City Council, within the time specified in subsection (13)(1) of this section, the Director shall serve written notice on the Co -owned Property Manager, pursuant to Section 1,08.080, setting forth the date, time and place for the hearing. The hearing shall be scheduled not less than fifteen (15) calendar days, nor more than sixty (60) calendar days, from the date on which notice of the hearing is served by the Director. The hearing shall be conducted according to the rules normally applicable to administrative hearings. At the hearing, the hearing officer will preside over the hearing, take evidence and then submit proposed findings and recommendations to the City Manager. The City Manager may suspend the Co -owned Property Manager Permit only upon a finding that a violation has been proven by a preponderance of the evidence, and that the suspension is consistent with the provisions of this section. The City Manager shall render a decision within thirty (30) calendar days of the hearing and the decision shall be final.

C. If a Co -owned Property Manager Permit is suspended, it shall be the Co -owned Property Manager's responsibility to transfer management of the Co -owned Housing 10 �__11 A �.,_ 011 111F b"t", Q (,!::2 -,vzt%� i 1rof - f (� \ 12-16
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Unit(s) to another Co -owned Property Manager that is permitted under this chapter.

D. After any suspension, the Co -owned Property Manager may reapply for reinstatement of the Co -owned Property Manager Permit which shall be processed in accordance with this chapter, provided the owner has paid the City all amounts owed the City in accordance with this chapter.

5.98.065 Permits and Fees Not Exclusive.

Permits and fees required by this chapter shall be in addition to any license, permit or fee required under any other chapter of this Code. The issuance of any permit pursuant to this chapter shall not relieve the Co -owned Property Manager of the obligation to comply with all other provisions of this Code.

5.98.070 Permit Closure.

Any Co -owned Property Manager that has ceased operating a Co -owned Housing Unit shall inform the Director in writing of the date of the last management day, and having done such, the Co -owned Property Manager Permit for that Co -owned Housing Unit shall be closed as to the specific Co -owned Property Manager. r �
11 i12-17
12-590

Exhibit Q
September 13, 2022, City Council Agenda Item No. SS2
Fractional Homeownership Update
https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2833800&dbid=0&repo=CNB Fractional Homeownership Update — Correspondence
https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2833864&dbid=0&repo=CNB Fractional Homeownership Update — PowerPoint
https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2833866&dbid=0&repo=CNB 12-591

Exhibit R
September 27, 2022, City Council Agenda Item No. 1
https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2835823&dbid=0&repo=CNB Correspondence
https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2835861 &dbid =0&repo=CNB 12-592

Exhibit S
October 6, 2022, Planning Commission Agenda Item No. SS.2 https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2836766&dbid=0&repo=CNB https:Hecros.newportbeachca.aov/WEB/DocView.aspx?id=2836767&dbid=0&repo=CNB 12-593

Exhibit T
October 20, 2022, Planning Commission Agenda Item No. 6 https://ecros.newportbeachca.qov/WEB/DocView.aspx?id=2837565&dbid=0&repo=CN B 12-594

Exhibit U
February 23, 2023, Planning Commission Agenda Item No. 6 https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2859668&dbid=0&repo=CNB Staff Presentation
https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2859669&dbid=0&repo=CNB 12-595

Exhibit V
March 14, 2023, City Council Agenda Item No.12
https://ecros . newportbeachca.gov/WEB/DocView.aspx?id=2863026&dbid=0&repo=CNB Correspondence
https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2863125&dbid=0&repo=CNB https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2863126&dbid=0&repo=CNB PowerPoint
https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2863131 &dbid=0&repo=CNB Staff Memo
https:Hecros. newportbeachca.gov/WEB/DocView.aspx?id=2863127&dbid=0&repo=CNB Week in Review
https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2863128&dbid=0&repo=CNB 12-596

Exhibit W
Local Coastal Program Amendment No. PA2022-0202
12-597

EXHIBIT W
LOCAL COSTAL PLAN AMENDMENT NO. PA2022-0202
Section 1: The row entitled "Time Share Facilities" in Table 21.20-1 of Section

21.20.020 (Commercial Coastal Zoning Districts Land Uses) of the Newport Beach Municipal Code is amended to read as follows:

Commercial Coastal Zoning Districts
TABLE 21.20-1

ALLOWED USES
A
Allowed
—
Not Allowed*
Land Use
See Part 7 of this
Implementation Plan for
CM
CV
CV-
Specific
land use definitions.

CC
CG
(3)
CN
(3)
LV (3)
OG
Use
Regulations
See Chapter 21.12 for
unlisted uses.

Visitor Accommodations
Time Shares
—
A
—
—
A
—
—
Section

21.48.025
Section 2: Section 21.48.025(A) (Applicability) of the Newport Beach Municipal Code is amended to read as follows:

A. Applicability. The provisions of this section shall apply to applications involving the development or creation of new visitor accommodations or the expansion, reduction, redevelopment, demolition, conversion, closure, or cessation of existing visitor accommodations.

The conversion of property that was not used as a visitor accommodation into a time share accommodation shall constitute the development or creation of a new visitor accommodation. As used herein, "time share accommodation(s)" shall have a separate meaning from visitor accommodation (s)." For purposes of this section, "time share accommodation(s)" shall mean any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other or structure constructed for residential use and occupancy, including, but not limited to, a single -unit dwelling, two -unit dwelling, multi -unit dwelling.

Section 3: Section 21.48.025(C)(5) (Mitigation) of the Newport Beach Municipal Code is amended to read as follows:

5. Mitigation. If the review authority determines that the development will impact existing lower cost visitor -serving accommodations, or provide only high or moderate 12-598

cost visitor accommodations or limited use overnight visitor accommodations such as time share uses and condominium -hotels, then mitigation commensurate with the impact shall be provided by one of more of the following:
a. Replacement of low cost rooms lost shall be provided at a one-to-one ratio either on site or a suitable off -site location within the City; b. Payment of an in -lieu fee commensurate with the impact shall be required, c. Programmatic components that provide low cost overnight visitor accommodations; or
d. Other form of mitigation addressing cost of stay.

The review authority may authorize deviations from development standards that provide economic incentives to the development to maintain affordability.

Section 4: Section 21.48.025(E) (Tsunami Information and Evacuation Plans) of the Newport Beach Municipal Code is retitled and amended to read as follows:

E. Conversion of Existing Dwelling Units Prohibited. The conversion of existing residential dwelling units into a time share use shall be prohibited.

Section 5: Section 21.48.025(F) (Tsunami Information and Evacuation Plans) of the Newport Beach Municipal Code is added to read as follows:

F. Tsunami Information and Evacuation Plans. Visitor -serving accommodations in areas identified as susceptible to tsunami inundation shall be required to provide guests with information on tsunami information and evacuation plans.

Section 6: The definition of "Limited use overnight visitor accommodations (LUOVA)" within Section 21.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is amended to read as follows:

Limited use overnight visitor accommodations (LUOVA). See "Time share use." Section 7: The definition of "LUOVA" within Section 21.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is deleted.

Section 8: The definition of "Time Share Facility (Land Use)" within Section

21.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is amended to read as follows:

Time Share (Land Use). See "Visitor accommodations."
12-599

Section 9: The definition of "Visitor Accommodations (Land Use)" within Section

21.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is amended to read as follows. -
Visitor Accommodations (Land Use)
"Time share accommodations" shall have a separate meaning from "visitor accommodation (s)." "Time share accommodations" as used in the definition of "time share instrument," "time share interval," "time share property," and "time share use" shall mean any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other or structure constructed for residential use and occupancy, including, but not limited to, a single -unit dwelling, two -unit dwelling, multi -unit dwelling.

1. "Bed and breakfast inn" means a dwelling unit that offers guest rooms or suites for a fee for less than thirty (30) days, with incidental eating and drinking service provided from a single kitchen for guests only.

2. "Campground" means a lot upon which one or more sites are located, established, or maintained for rent as an overnight tenting or camping area for recreation or vacation purposes.

3. "Hostel" means establishments offering supervised overnight sleeping accommodations, primarily for travelers who use nonmotorized transportation or commercial or public transportation. Such sleeping accommodations are designed, intended to be used and are used, rented or hired out as temporary or overnight accommodations for guests in which daily services of linen change, towel change, soap change and general cleanup are provided by the management. If kitchen or eating facilities are provided, they are communal in nature.

4. "Hotel" means an establishment that provides guest rooms or suites for a fee to transient guests for sleeping purposes. Access to units is primarily from interior lobbies, courts, or halls. Related accessory uses may include conference and meeting rooms, restaurants, bars, and recreational facilities. Guest rooms may or may not contain kitchen facilities for food preparation (i.e., refrigerators, sinks, stoves, and ovens). Hotels with kitchen facilities are commonly known as extended stay hotels. A hotel operates subject to taxation under Revenue and Taxation Code Section 7280.

5. "Motel' means an establishment that provides guest rooms for a fee to transient guests for sleeping purposes. Guest rooms do not contain kitchen facilities. A motel is distinguished from a hotel primarily by direct independent access to, and adjoining parking for, each guest room. A motel operates subject to taxation under Revenue and Taxation Code Section 7280.
12-600

6. "Recreational vehicle (RV) park" means a lot upon which two or more recreational vehicle sites are located, established, or maintained for occupancy for a rental fee by recreational vehicles of the general public as temporary living quarters for recreation or vacation purposes.

7. "Short-term lodging" means a dwelling unit that is rented or leased as a single housekeeping unit (see "Single housekeeping unit") for a period of less than thirty (30) days.

8. "Single room occupancy, residential hotels (SRO)" means buildings with six or more guest rooms without kitchen facilities in individual rooms, or kitchen facilities for the exclusive use of guests, and which are also the primary residences of the hotel guests.

9. "Time share instrument" means one or more documents, by whatever name denominated, creating a time share plan or governing the operation of a time share plan, and includes the declaration dedicating time share accommodations to the time share plan.

10. "Time share interval" means the period or periods of time when the purchaser in a time share plan is afforded the opportunity to use the time share accommodations of a time share plan.

11. "Time share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property, or any portion thereof, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. A time share plan shall be deemed to exist whenever such recurring rights of exclusive use to the real property, or portion thereof, are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in the real property, or portion thereof, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time share plan.

12. "Time share property" means one or more time share accommodations subject to the same time share instrument, together with any other property or rights to property appurtenant to those time share accommodations.

13."Time share unit" means the time share property or portion of a time share property in which a time share interval exists and that is designated for separate use. 12-601

U."Time share use" means the use of one or more time share accommodations or any part thereof, as a time share property.
12-602

EXHIBIT X

FINDINGS OF LOCAL COASTAL PROGRAM AMENDMENT
NO. PA2022-0202 CONSISTENCY WITH THE GENERAL PLAN

AND COASTAL LAND USE PLAN

1. The Local Coastal Program Amendment No. PA2022-0202 is consistent with the City's General Plan. It would serve to implement the following goals and policies of the General Plan:

Land Use Element Policy LU 2.61 which states, "Visitor Serving Uses Provide uses that serve visitors to Newport Beach's ocean, harbor, open spaces, and other recreational assets, while integrating them to protect neighborhoods and residents." Local Coastal Program Amendment No. 2022-0202 would continue to allow time share uses, which is a visitor serving use in some commercial zones, while clarifying that fractional ownership uses are a time share as confirmed by a representative of Pacaso and not permitted in residential zones areas. This would prevent additional commercialization of the residential neighborhoods and protect them from impacts created by increased traffic and noise.

Land Use Element Goal LU 4, which states, "Management of growth and change to protect and enhance the livability of neighborhoods and achieve distinct and economically vital business and employment districts, which are correlated with supporting infrastructure and public services and sustain Newport Beach's natural setting." Classifying fractional ownership uses as time shares continues to allow the business within certain commercial zones. This clarification would also help preserve the long-term housing stock by eliminating the conversion of existing and new housing developments into time share uses, and further ensure that the commercial businesses would not encroach into residential areas and impact the livability of said neighborhoods.

Housing Element Goal #4, which states, "Housing opportunities for as many renter- and owner -occupied households as possible in response to the market demand and RHNA obligations for housing in the City." Conversion of residential dwelling units into time shares removes the dwelling units from the market, thus making them no longer available for occupancy of full-time residences. The proposed amendment would serve to prevent single -unit residences from being taken off the market, thus protecting these housing opportunities for renters and owner -occupied households alike.

Housing Element Goal #5, which states, "Preservation of the City's housing stock for extremely low-, very low-, low-, and moderate -income households." Removing market - rate dwelling units from the City's housing stock impacts the affordability of housing across all income levels. As fewer dwelling units become available for rent or sale, the price increases. These price increases reduce the opportunities to provide affordable housing to extremely low-, very low-, low-, and moderate -income households. The proposed amendment would prevent conversion of single -unit residences into a visitor 12-603

serving accommodation, thus preserving the number of units in the City's housing stock, which would help minimize increases to housing costs.

2. Local Coastal Program Amendment No. 2022-0202 serves to implement Coastal Land Use Plan (CLUP) Table 2.1.1-1 (Land Use Plan Categories) of the LCP, which establishes the type, density, and intensity of land uses within the coastal zone, including residential land use categories that are intended for residential dwellings.

The amendment clarifies that time share use of residential property is prohibited in order to maintain the residential character of communities. Local Coastal Program Amendment No. 2022-0202 would continue to allow time shares in other areas where visitor serving uses are currently permitted. This includes the CM, CV, MU-H, and MU- W Coastal Land Use Designations, which are identified in CLUP Table 2.1.1-1 to provide visitor serving uses.

3. While CLUP Policy 2.3.3-6 authorizes the short-term rental of dwelling units as a means of providing lower -cost overnight visitor accommodations, the maximum number of short-term rentals are capped at a maximum of 1,550 permits to prevent adverse impacts to residential areas and preserve housing stock within the coastal zone. Unlike short term rentals, time share use of coastal residential properties is a high -cost option to visit the coast on a limited basis, but have similar negative impacts to housing supply and neighborhood disturbances that short term rentals create.

Therefore, it is appropriate to prohibit this type of visitor -serving commercial use in residential neighborhoods. Furthermore, Local Coastal Program Amendment No. 2022-0202 will not impact the City's ability to support the wide variety of visitor accommodations that are currently provided, including 4,086 hotel/motel rooms hotels and motels, a cap of 1,550 short term lodging units, and approximately 471 campground and RV sites.

4. The operation of time share use of residential property increases noise and traffic in residential neighborhoods that changes the character of the neighborhoods in a manner that negatively impacts the public health, safety, and welfare.

5. As the number of time share uses of residential property increases in the City, the number of dwelling units for long-term occupancy can decrease. This decrease impacts the ability for the City to comply with the 6th and future cycle RHNA allocation. 12-604

EXHIBIT Y
LOCAL COASTAL PROGRAM AMENDMENT No. PA2022-0202

DE MINIMIS FINDINGS

1. The Local Coastal Program Amendment No. 2022-0202 would have no impact, either individually or cumulatively, on coastal resources, and that it is consistent with the Chapter 3 policies of the Coastal Act.

The City of Newport Beach has seen an influx of time share use of residential property, where ownership of residence is equally shared among multiple nonrelated owners (typically between four and 12 owners) through a formal arrangement. The amount of time an owner may access and use the property is directly correlated to their share of ownership (e.g., a 1/8 share owner would be allotted 45 days per year). This time allotment is not typically used consecutively, but rather one or two weeks at a time. This has resulted in increased traffic, additional parking congestion, and increased noise within the residential areas of the coastal zone due to the fractional ownership uses operating as a short-term vacation stay in lieu of a full-time owner -occupied unit.

Local Coastal Program Amendment No. 2022-0202 would clarify that fractional ownership uses are defined as a time share use within the City of Newport Beach.

Time share uses are currently allowed in the CG (Commercial General), CV (Commercial Visitor -Serving), CV (Commercial Visitor -Serving), MU-MM (Mixed -Use Mariners' Mile), and MU-CV/15th St. (Mixed -Use Cannery Village and 15th Street) coastal zoning districts. The permitted locations and development standards that apply to time shares would not be changed by Local Coastal Program Amendment No. 2022-0202. Furthermore, the LCP does not authorize new development or establish new uses within the coastal zone. As a result, there would be no impact on coastal resources or public access to coastal resources. Moreover, Local Coastal Program Amendment No. 2022-0202 is consistent with the Chapter 3 policies of the Coastal Act.

The local government provides public notice of the proposed amendment at least 21 days prior to submitting the amendment to the Commission, by one of the following methods: posting on -site and off -site in the affected area, newspaper publication, or direct mailing to owners and occupants of contiguous property.

The City Council of the City of Newport Beach held study sessions to accept public testimony and discuss the impacts of fractional ownership uses on November 16, 2022, September 13, 2022, September 27, 2022, and March 14, 2023. Likewise, the Planning Commission of the City of Newport Beach held similar study sessions on October 6, 2022, October 20, 2022, and February 24, 2023. The public testimony provided during the study sessions provided guidance to formulate the specific language contained in Local Coastal Program Amendment No. 2022-0202. These 12-605

study sessions were duly agendized and posted to the City's website 72-hours in advance of the study session.

To consider Local Coastal Program Amendment No. 2022-0202, the Planning Commission conducted a public hearing on April 20, 2023. Public Notice of this hearing was published on #f in the Daily Pilot, the local adjudicated newspaper with distribution in Newport Beach; as well as, posted on the City's website. Additionally, a Notice of Availability of a draft LCP amendment was posted in the city libraries on #_#Wffi#J The City Council also conducted a public hearing to consider the proposed amendment to the LCP on May 9, 2023. Public notice of the City Council hearing was published in the Daily Pilot and posted to the City's website on �] Therefore, the 21-day notice requirement has been satisfied.

3. The amendment does not propose any change in use of land or water or allowable use of property.

The Local Coastal Program (Title 21 of the Newport Beach Municipal Code) includes various permitted use and development regulations for the coastal zone. Among these is time shares, a visitor accommodation that is permitted in the CG (Commercial General), CV (Commercial Visitor -Serving), CV (Commercial Visitor - Serving), MU-MM (Mixed -Use Mariners' Mile), and MU-CV/15th St. (Mixed -Use Cannery Village and 15th Street) coastal zoning districts.

Local Coastal Program Amendment No. 2022-0202 would clarify that fractional ownership uses are defined as a time share use. There would be not change to the allowable uses within the coastal zone as established by the LCP. Furthermore, the LCP amendment does not authorize development or alter existing development standards, thus would not result in the change in use of land or water. 12-606

Attachment C
Fractional Ownership Map
12-607

Fractional Ownership
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R-2 Fractional
R-2 R_Bl Home ownership
R-g I Locations
Rnn
� Rnn r
Total of 12 Known Facilities
12-608

Attachment D
Complied Meeting Minutes
12-609

November 16, 2021, City
Council Study Session
Minutes
12-610

City of Newport Beach
City Council Meeting
November 16, 2021
In response to Council Member Brenner s question. Deputy Community Development Director Campbell assured Council that any additional comments resulting from the Housing Element Update Advisory Committee meeting can be added to the revised housing plan before submitting to HCD.

Mayor Avery acknowledged staff for their knowledge, time, and energy to revise the housing plan.

SS3. Fractional Home Ownership
Community Development Director Jurjis utilized a presentation to discuss fractional ownership of real estate, companies selling fractional ownership. how it works, operations, community concerns. City regulations, and the Newport Beach Municipal Code (NBMC) table of allowed uses, definitions.

In response to Council Member Dixon's question. Community Development Director Juris noted the definition of conversion and its subjective interpretation and application.

Council Member Blom highlighted the percentage of LLCs and trust ownerships in Newport Beach and discussed the reality of future home ownership and impact to the City with the elimination of fractional ownership.

In response to Council Member Brenner's questions, Community Development Director Jurjis confirmed the zones in which fractional ownership and Short -Term Lodging (STL) are allowed and not allowed, explained how time share use is subject to the definition, zoning rules when properties convert to condominiums, and the cap on STL applications.

Pacaso's Director of Government and Community Relations Ellen Haberle utilized a presentation to discuss co -ownership history, Pacaso's role, owner agreements, and enforced policies.

In response to Council questions, Ms. Haberle provided the definition of a luxury home, stated who holds the title and how the co -owners are listed, and related Pacaso Is enforcement procedures for respecting local ordinances; confirmed that Pacaso is employed by the LLC to serve as property and program manager; noted that the company uses an LLC operating agreement; stated that ownership interests are sold in one -eighth increments with a 50% cap, and an average owner group consisting of 6-7 members; stated that while neighbor and owner conflict is a reality. local ordinances can preserve the peace, quiet, safety and comfort of the residents; and explained Pacaso's equitable scheduling calendar tool, the rules for member guests, and occupancy cycles.

Community Development Director Jurjis agreed to seek collaboration with fractional home ownership companies, like Pacaso. to establish a mutual understanding of City regulations and company enforcement procedures. Ms. Haberle agreed to collaborate with City staff to identify cities with preventative ordinances.

Council Member O'Neill expressed concern about regulation standards for commercial enterprise. Community Development Director Jurjis shared that a threshold provision exists for fractionally owned properties with 11 or more members. which requires filing with the Department of Real Estate and public records.

Nancy Scarbrough believed that the rotation frequency of member stays is subjective and questioned how fractional ownership will affect property taxes.

City of Newport Beach 12-611
Volume 65 - age 184

City of Newport Beach
City Council Meeting
November 16, 2021
Russell Dahl expressed concern for Pacaso's minimal data and history, unpredictable member behavior and guest visits, long-term unknown ramifications, and avoidance of the City's short- term occupancy and rental rules.

Susan Stoneburner asked Council to consider classifying fractional ownership homes as STLs, described her experience with a Pacaso property, and expressed the opinion that the home is being used as a short-term rental without a short-term rental agreement, business license, or proper City taxation.

Cathy Brown shared her dismay about having a Pacaso property in a single-family residential zone.

Mike O'Neill shared and praised his relationship and experience as a fractional owner with Pacaso.

Richard Manga noted his support and relationship as a fractional owner with Pacaso.

Mike Desantis shared his displeasure and experience as a Pacaso property neighbor, expressed concern that his experiences conflicted with Ms. Haberle's presentation, and noted how the property has impacted the neighborhood.

Connie Adnoff requested Council investigate legal options for when fractional owner members disturb the local community.

Chuck Fancherbelieved that the City should focus on nuisance issues and not regulate good behavior, predict behavior, or profile guests.

David Tanner requested that staff explore using fractional ownerships as a vehicle for affordable housing units.

Council Member Blom correlated bad behavior sightings at fractionally owned properties with problems exhibited at individually owned dwelling& expressed concern with limiting opportunities and creating more regulations for property purchases and uses, and encouraged communication amongst neighbors.

Mayor Pro Tem Muldoon expressed the opinion that fractional ownership cannot be eliminated and that it does not violate timeshare ordinances. In response to Mayor Pro Tem Muldoon's questions, City Attorney Harp shared conduct and public nuisance regulations and possibly creating a voluntary centralized complaint hotline as a communication tool with Pacaso and other fractional ownership businesses. Community Development Director Jurjis reviewed the Department of Real Estate time share laws and procedures for fractional ownership with 1 t or more members, confirmed that Newport Beach regulations would need amending to include a time share cap, and concurred that the current City definition of time share does not fit the Pacaso application.

In response to Council Member Dixon's questions. Ms. Haberle compared second homeowner travel habits to short-term renters, discussed policy guidelines for complaints, and agreed to share complaint reports with the City. City Attorney Harp clarified the difference between fractional ownership and short-term rentals.

In response to Council Member Duffield's question, Community Development Director Jurjis explained that home sale prices are based on supply and demand and the possibility does exist for a private homeowner to overprice an individual home sale with the hope of a fractional owner sale at a higher cost.

SS4. Water Conservation Ordinance Update
Mayor Avery continued the item to the next City Council meeting. city of Newport Beach 12-612
Volume 65 - Page 185

City of Newport Beach
City Council Meeting
November 16, 2021
III. PUBLIC COMMENTS ON AGENDA AND NON -AGENDA ITEMS
Jim Mosher clarified that correspondence regarding offshore oil drilling and spent fuel at the San Onofre Nuclear Generating Station are both matters for which Council Members have been asked to be included on a future agenda and suggested handouts posted in the Council Chambers be amended to reflect this.

City Attorney Flarp announced that the City Council would adjourn to Closed Session to discuss the items listed in the Closed Session agenda and read the titles; and reported that City Manager Leung will be recusing herself on Closed Session Item IV.B due to potential financial interest conflicts.

IV. CLOSED SESSION -- Council Chambers Conference Room
A. CONFERENCE WITH LABOR NEGOTIATORS
(Government Code § 54957.6): 1 matter
Agency Designated Representatives: Grace K. Leung, City Manager. and Barbara Salvini, Human Resources Director, Negotiators,
Employee Organization: Newport Beach Employees League (NBEL) B. CONFERENCE WITH LABOR NEGOTIATORS
(Government Code § 54957.6): 1 matter
Agency Designated Representatives: Brad Avery, Mayor; and Kevin Muldoon, Mayor Pro Tem Unrepresented Employee: Grace K. Leung, City Manager
V. RECESSED - 6:09 p.m
VI. RECONVENED AT 6:41 P.M. FOR REGULAR MEETING
V1 L ROLL CALL

Present: Mayor Brad Avery, Mayor Pro Tem Kevin Muldoon, Council Member Noah Blom, Council Member Joy Brenner, Council Member Diane Dixon, Council Member Duffy Duffield, Council Member Will O'Neill
VIII. CLOSED SESSION REPORT
City Attorney Harp announced that no reportable actions were taken.

IX. INVOCATION - Pastor Rick Mixon, Fairview Community Church, Costa Mesa X. NATIONAL ANTHEM AND PLEDGE OF ALLEGIANCE - World War II Veteran Frank Pucci Ili and Council Member O'Neill, respectively
XI. NOTICE TO THE PUBLIC
XI1. CITY COUNCIL ANNOUNCEMENTS AND ORAL REPORTS FROM CITY COUNCIL ON

COMMITTEE ACTIVITIES
Council Member Brenner:
• Attended the Newport Beach Foundation reception, spoke to the Newport Beach Chamber of Commerce. Wake LTp Newport, and the Commodores and noted the websites stopsb9oc.com, ourcommuIYozI
%.OIL TNe"'looft
Beach-613Volumeagee186 12

September 13, 20227 City
Council Study Session
Minutes
12-614

CITY OF NEWPORT BEACH
City Council Meeting Minutes
Study Session and Regular Meeting
September 13, 2022

1. ROLL CALL - 4:05 p.m.

Present: Mayor Kevin Muldoon, Mayor Pro Tern Noah Blom, Council Member Brad Avery, Council Member Joy Brenner, Council Member Diane Dixon, Council Member Duffy Duffield, Council Member Will O'Neill
II. CURRENT BUSINESS
SSi. Clarification of Items on the Consent Calendar - None SS2. Fractional Home Ownership Update
Community Development Director Jurjis and Consultant David Blumenthal utilized a presentation to discuss the findings of the 22 cities surveyed, map of the 11 known fractional home ownership locations in the City, and case studies from St. Helena, Palm Springs, and Park City, Utah.

Carmen Rawson sought information regarding timeshares in the City, cited chapters in the Newport Beach Municipal Code (NBMC) relative to timeshares, areas where timeshares are permitted, listed three fractional ownership companies breaking the NBMC, and defined timeshares and types of timeshares. In response to Council Member O'Neill's question, Ms. Rawson referenced NBMC Chapters 21.18 and 21.70.

Nancy Scarbrough noted sentiment shared among residents regarding fractional ownership during recent community events, asked that Council consider the residents' dissatisfaction, and direct City staff to further explore options to regulate or restrict fractional home ownership.

Bridget O'Connor opposed the fractional home ownership model.

Cary Cruz asked Council to curb shared ownership in the City, Denise Macias opposed fractional ownership.

Gabe Dima-Smith, Pacaso representative, clarified Pacaso's business model and indicated that the owners are interested in enjoying second -home ownership for single-family residential use. and that short-term rental is prohibited under the business model.

Lisa Mathias opposed the use of single-family dwellings in the R 1 zone for shared property development.

An unidentified speaker expressed opposition to fractional home ownership.

Denys Oberman expressed the opinion that entities acting as consolidators are using a short- term lodging model, asked Council for clarity on characterizing fractional home ownership as short-term lodging, and not allow them in residential zones and dense family -oriented residential neighborhoods.

Roberta Schmidt referenced a Pacaso statement in the Orange County Register, noting a typical rental time of one week, and shared her concerns for keeping a community feel, knowing your neighbors, nearby fractional owners coming and going, community growth and stability.

City of Nawp9ij Beach =.,,,

City of Newport Beach
City Council Meeting
September 13, 2022
Mark Markos expressed opposition to fractional home ownership. In response to Mayor Muldoon's request, Mr. Markus indicated that a fractional home ownership sublease can be found online and agreed to forward a copy to staff.

Angela Cahger expressed opposition to fractional home ownership.

Brita Leffler advocated for preserving historical construction and banning fractional home ownership development.

Bob Yant relayed a non -supportive community opinion and suggested utilizing a cease and desist order or regulation enforcement to stop fractional home ownership in the City.

Ann Archie described late night noise and noted concern for the quality of life for residents living around fractional. home ownership properties.

Jack Brown described people coming and going in the fractional home ownership near his home.

Russ Dahl expressed the seriousness of this issue and how it changes the complexity of the neighborhood.

Roberta Schmidt noted benefits to Pacaso in a fractional home ownership real estate transaction.

Philip Mark expressed concern relative to how the fractional home ownership count has grown from two to twelve, questioned why the NBMC is not being enforced. asked For quick action, and for the City Attorney to review the NBMC to determine applicability.

Beverly Johnson, Compass Realty agent, stated that Compass Realty does not have any fractional home ownership listings and is seeking reasonable comparisons.

Philomena Mark urged Council to take action regarding fractional home ownership developments, noted quality of life disruptions from a nearby fractional home ownership property, and asked Council to ban further development.

Mayor Muldoon recessed the meeting at 4.42 p.m. and reconvened the meeting at 4:53 p.m. with all members of the City Council in attendance.

In response to Council Member O'Neill's questions, City Attorney Harp confirmed that Newport Beach defines code sections differently than other cities and that, while a NBMC section references fractional home ownership for timeshare projects, the code refers to a development, pointed out that over 34% of homes in Newport Beach are held in a LLC configuration, noted issues with applicability of provisions, indicated that Sonoma and St. Helena regulate their ordinances by looking at the operational plan and uses to craft regulations, relayed due process and regulation validity issues in the St. Helena lawsuit. indicated that a concise definition is required with an update to the NBMC and Local Coastal Program (LCP), recommended regulating use without capturing others in it, and agreed to work on regulations for consideration by the City Council. Council Member O'Neill supported regulations that would be similar to defining fractional home ownerships as a timeshare plan and thought the current model does not match the General Plan or zoning code, and encouraged residents to call code enforcement on all code violations. City Attorney Harp suggested bringing the matter to the Planning Commission after initiating the amendment.

Council Member Dixon agreed with Council Member O'Neill. thanked the residents for attending the meeting, noted impacts throughout the City, suggested staff look at what other jurisdictions have done and come back with recommendations, and suggested adopting a moratorium in the meantime,
City of NeWp(?A, Beach =.,,s

City of Newport Beach
City Council Meeting
September 13, 2022
Council Member Avery noted that, even before Pacaso, the City was starting to lose local control to the State, experienced more density and traffic, agreed with implementing a moratorium, cautioned the potential cost to the City, supported looking at what other cities have done and updating the NBMC to mitigate the impacts.

In response to Council Member Brenner's questions, Community Development Director Jurjis indicated that the City has not studied the State of Washington to confirm if they have banned fractional home ownership.

City Attorney Harp noted that a cease and desist order would be based on current NBMC provisions and confirmed that a moratorium places a hold on development and would be the path to immediate action.

Council Member Brenner expressed concerns for neighborhoods affected by short-term lodging, the Regional Housing Needs Assessment (RHNA), residential care facilities, and homelessness, and relayed the importance of finding a solution as soon as possible.

Council Member Duffield expressed the opinion that further study is needed to amend the NBMC and supported considering a moratorium.

Mayor Muldoon summarized the direction to staff to explore a regulation timeshare plan with the Planning Commission. conduct more studies on Sonoma and other communities, enact a moratorium and prohibition in the R-1 zone, and to move with expediency.

In response to Council Member O'Neill's question. City Attorney Harp detailed the standards for a moratorium.

In response to Council Member Dixon's question, City Attorney Harp clarified that the City Council must initiate the code change first before going to the Planning Commission.

Mayor Muldoon clarified that the moratorium would come to Council for a vote and the code amendment first needs to be initiated by Council before going to the Planning Commission, III. PUBLIC COMMENTS ON AGENDA AND NON -AGENDA ITEMS
Steven Gerard distributed a flyer, invited the City to become a Personhood City and attend the lurk Cameron movie titled Lifemark, asked that this be placed on a future agenda, and sang a song.

Regarding Item 18 (Amending and Re -Adopting the 2021-2029 6th Cycle Housing Element), an unidentified speaker from the Southwest Region of Carpenters expressed concern relative to the environmental impacts of the Housing Element and an interest in having local and skilled workforce requirements added into projects moving forward since he believed it would benefit the climate, boost economic development, and mitigate transportation and greenhouse gases.

City Attorney Harp announced that the City Council would adjourn to Closed Session to discuss the item listed on the Closed Session agenda and read the title.

IV. CLOSED SESSION -- After Study Session - Council Chambers Conference Room A. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
(Government Code § 54956.8): 1 matter
Property: 1201 Dove Street, Newport Beach, California 92660 (APN 427-221-06).

City Negotiators: Seimone Jurjis. Community Development Director and Lauren Wooding Whitlinger, Real Property Administrator.

City of RanWpgA, Beach =.s„

September 27, 2022, City
Council Meeting Minutes
12-618

CITY OF NEWPORT BEACH
City Council Meeting Minutes
Special Meeting
September 27, 2022
I. CALL THE MEETING TO ORDER
II. ROLL CALL — 4:02 p.m.

Present: Mayor Kevin Muldoon, Mayor Pro Tem Noah Blom, Council Member Brad Avery, Council Member Joy Brenner, Council Member Diane Dixon, Council Member Duffy Duffield, Council Member Will O'Neill
III. CURRENT BUSINESS

1. Resolution No. 2022-61: Initiation of Zoning Code and Local Coastal Program Amendments Related to Fractional Homeownership (PA2022-0202)1100-20221 Community Development Director Jurjis reviewed the previous direction provided to staff by Council to initiate a Newport Beach Municipal Code (NBMC) change and moratorium, and requested further direction from Council.

Council Member O'Neill supported moving forward with a code change initiation and the Planning Commission preparing the first draft. Mayor Muldoon concurred.

Council Member Dixon suggested that Council give direction to the Planning Commission and recommended providing direction and a framework for staff.

Council Member Brenner agreed that more direction is needed for the Planning Commission, noted the original municipal code excluded timeshares and fractional ownerships, and suggested the moratorium begin immediately and sunset when an ordinance is in place.

Council Member O'Neill thought the last study session provided a general framework, referenced the approach and litigation in St. Helena, and suggested the Planning Commission use it as a starting point.

Mayor Muldoon concurred that Council had given direction previously and the parameters of the St. Helena lawsuit makes the most sense to use.

Council Member Dixon agreed but added that there are other factors to consider. She announced that she met with a Pacaso representative and discussed options, noted this is a new industry with few case studies, and stated it requires a more substantive study.

Council Member Avery agreed with Council Member O'Neill, suggested moving deliberately. identifying options, and picking a solution that works for the City.

Mayor Muldoon thought that a majority exists to regulate fractional ownerships in residential areas of the City.

Gabe Dima-Smith, Pacaso Public Affairs Manager, appreciated the thoughtful approach by Council, stated that Pacaso is not a timeshare business model, co -ownership is common and has been present for decades, no regulatory framework exists, and expressed interest in meeting with staff to reach a mutually agreeable policy.

City of Newpor3j Beach =.,,y

City of Newport Beach
City Council. Meeting
September 27, 2022
Gary Cruz shared his wife's five points that addressed timeshare characteristics, suggested creating a moratorium, and expressed concern for banning fractional ownerships in only R-1 zones since Newport Island is zoned R-2.

Nancy Scarbrough suggested forming an ad hoc committee to help the Planning Commission work through the extensive study conducted by staff, agreed with adopting a moratorium and taking a slower approach, and indicated that there are currently five fractional ownership listings.

Jim Shaheen shared his background and the benefits of co -ownership.

Jim Mosher discussed Ordinance No. 82-14, which addresses timeshares, read the definition from the NBMC, and questioned enforcement.

City Attorney Harp indicated that the purchase of a residential property by an LLC does not constitute a timeshare under the current provisions of the NBMC.

Meagan Licata, Pacaso employee, on behalf of the Stein family, read their letter of support and highlighted their co -ownership experience,
Denys Oberman thanked Council for bringing the item forward, agreed with City Attorney Harp, supported enacting a moratorium, expressed the opinion that fractional ownership intensifies a neighborhood, noted challenges with setbacks and consequences of establishing co -ownership properties, discussed fractional ownership and timeshare history, and indicated a need to manage the concentration.

Mike O'Neill stated that the wrong definition of timeshare is being used and discussed the differences between fractional ownership and timeshare transactions, the ability to buy up to half the property for a 180-day use, Pacaso having an interest in property management without a financial interest in the property, and questioned the parameters of a moratorium.

Carmen Rawson expressed the opinion that the Pacaso business model is a timeshare, defined two types of timeshares, reviewed the guidelines for co-owner stays, questioned why timesharing is allowed in residential areas, reviewed the limits and regulations, and indicated the short-term lodging ordinance does not apply to fractional ownership properties because the owners are not paying rent or Transient Occupancy Tax (TOT).

Chrissy Bruchey, Pacaso employee, read a letter from Steve Hayes and his family that supports the Pacaso model.

Cathy Brown noted that she lives in a residential neighborhood behind a Pacaso property and asked Council to address owners who stay for short amount of time, and cleaners, friends and family who come and ga.

Samantha Walsh, Pacaso employee, read a letter from property owner Anthony Kumar who shared his experience as a fractional owner,
Roberta Smith provided a complaint regarding the Plaza del Sur property.

Timothy Ellis, Pacaso Home Estate Manager, read a statement from property owner Sam Papoyan and provided his own background and best practices.

Steve Rosansky, President and CEO of Newport Beach Chamber of Commerce, noted different viewpoints on the subject, encouraged Council to be deliberative and engage with Pacaso, and asked that if the Council adopts a moratorium that it be for a short duration.

City of Newpart Beach =.s=o

City of Newport Beach
City Council Meeting
September 27, 2022
An unidentified speaker noted the City's responsibility to support its investors and longtime residents, discussed diminution of property value, and a comparison to how Costa Mesa was able to establish care facility development limits when it was thought too not be possible. Furthermore, he suggested consulting with attorneys who have handled similar cases with success on an appeal, and questioned if the NBMC is sufficient.

Purvi Doshi, Pacaso employee, read a statement on behalf of owner Cathy Coste.

Dave Archie, neighbor to a Pacaso property, encouraged an accelerated solution, noted three -to - seven -day guest rotations over the last year, discussed their behavior, and offered to share additional experiences.

Charles Klobe noted the number of sold shares in Newport Beach and urged Council to conduct a study and do what is best for the residents of the City.

Max Johnson stated his opposition to fractional home ownership.

Michael Jacobs discussed the Plaza del Sur property, supported a moratorium to conduct a study, and opposed businesses in residential areas.

Mayor Muldoon noted that sold shares are grandfathered in, supported regulations in R-1 and R-2 zones, looked forward to what is brought back to Council, expressed support for Council Member O'Neill's analysis, expressed concern regarding enacting a moratorium, and supported the emergency passage of regulation of R-1 and R-2 zones.

Motion by Mayor Muldoon, seconded by Council Member O'Neill, to a) determine this action exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15262 (Feasibility and Planning Studies) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3; and b) adopt Resolution No. 2022-61. A Resolution of the City Council of the City of Newport Beach, California, Initiating Amendments to Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation Plan.) of the City of Newport Beach Municipal Code Related to Fractional Homeownership (PA2022-0202).

In response to Council Member Dixon's question, Council Member O'Neill clarified that the request includes moving quickly, using existing models and language from St. Helena to encompass what the City wants, and the Planning Commission has enough information to craft the language to be sent back to Council. Council Member Dixon sought expediency, and in response to her question, Community Development Director Jurjis indicated that staff will have a study session with the Planning Commission to discuss the current NBMC, break down the St. Helena code, ask for feedback from the Planning Commission, draft NBMC amendments, and return to Council with a written document by the first part of the new year. Council Member Dixon clarified that the City Council will give the Planning Commission the parameters and framework within the context of the St. Helena ordinance, agreed to be supportive, and asked if support exists among her colleagues to have a 60 or 90-day moratorium to give the Planning Commission time to do the work or impose immediate code changes to control the density.

Mayor Muldoon expressed concern for litigation if the City makes any missteps, suggested a special meeting of the Planning Commission to address it sooner, and noted a drastic move will weaken the City's position,
In response to Council Member Brenner's question, Mayor Muldoon clarified his suggestion to move through more quickly instead of enacting a moratorium. Council Member Brenner noted that she would support passing this to the Planning Commission with a moratorium in place.

City of Newpod Beach =.s=,

City of Newport Beach
City Council Meeting
September 27, 2022
Council Member O'Neill stated the importance of reviewing Government Code Section 65858, which is the standard for a moratorium, and indicated it does not apply to this situation, the City's hands are tied by State law.

At the request of Council Member Brenner, Council Member O'Neill read Government Code Section 65858.

In response to Council Member Dixon's question, City Attorney Harp clarified that all moratoriums and urgency ordinances have the same basic standard and require an immediate threat to the public health, safety, and welfare. He also clarified that any non -urgency ordinance takes effect 30 days after the second reading. Community Development Director Jurjis indicated that a draft ordinance could return to Council by the first or second Council meeting in November and would take effect 30 days after the second meeting.

In response to Council Member Avery's question regarding the City of Beverly Hill's moratorium, City Attorney Harp noted that Beverly Hills enacted a moratorium two years ago, they were the only city in the State to do so, and they were not challenged.

In response to Council Member Brenner's question, Community Development Director Jurjis relayed that the Planning Commission could hold special meetings but staff will not return to Council until November at the earliest.

Council Member Dixon questioned why the City cannot enact a moratorium, to which Mayor Muldoon stated that due process must be followed, Council Member Dixon concluded that Council agrees about expediting the process, following the due process rules, and moving forward in a manner that is supported by neighbors and respects property rights.

Motion by Council Member Brenner to establish a moratorium and go forward with the rest of staffs recommendation.

Council Member O'Neill questioned the findings included in Council Member Brenner's motion and City Attorney Harp stated that the City cannot establish a moratorium at this meeting but could direct staff to come back with a proposed moratorium.

Alternate motion by Council Member _Brenner, seconded by Council Member Dixon, to a) determine this action exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15262 (Feasibility and Planning Studies) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3; b) adopt Resolution No. 2022-61, A Resolution of the City Council of the City of Newport Beach, California, Initiating Amendments to Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation Plan) of the City of Newport Beach. Municipal Code Related to Fractional Homeownership (P.42022-0202); and c) direct staff to bring back a moratorium discussion at the next City Council meeting.

In response to Council Member Dixon's question, Community Development Director Jurjis confirmed that Beverly Hills is the only City to enact a moratorium and City Attorney Harp noted that any findings for a moratorium in Newport beach would need to be based upon facts specific to Newport Beach.

Council Member O'Neill expressed the opinion that staffs time is better spent on the code initiation instead of trying to identify findings on a moratorium, and opposed the motion in an effort to be sure the City is moving forward speedily.

In response to Council Member Dixon's inquiry, City Attorney Harp stated that he has not consulted with an outside attorney regarding enacting a moratorium and agreed with Council Member Dixon that this may be a prudent course of action if direction is given to go forward with the moratorium.

City of Nempod Beach =.,__

City of Newport Beach
City Council Meeting
September 27, 2022
Council Member Brenner questioned whether lack of staff time is a problem. Mayor Muldoon indicated the City Attorney's Office's time is separate from Community Development at this time, but City Attorney Harp noted that his office works closely with the Community Development Department in regards to these matters.

With Council Members Brenner and Dixon voting yes, the alternate motion failed 2-5.

The original motion carried unanimously 7-0.

IV. ADJOURNMENT - 5:37 p.m.

The special meeting agenda was posted on the City's website and on the City Hall electronic bulletin board located in the entrance of the City Council Chambers at 100 Civic Center Drive on September 22, 2022, at 4:00 p.m.
-"i
L
Leilani I. Brown
City Clerk
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City of Newport Beach =.s=,

October 6, 2022, Planning
Commission Study Session
Minutes
12-624

DocuSign Envelope ID: 2E4CA2B6-698E-4A00-923B-95DC55343673

NEWPORT BEACH PLANNING COMMISSION SPECIAL MEETING MINUTES CITY COUNCIL CHAMBERS — 100 CIVIC CENTER DRIVE
THURSDAY, OCTOBER 6, 2022
REGULAR MEETING — 6:30 P.M.

CALL TO ORDER - The meeting was called to order at 6:30 p.m.

PLEDGE OF ALLEGIANCE — Commissioner Klaustermeier
III. ROLL CALL
PRESENT: Chair Lauren Kleiman, Secretary Mark Rosene, Commissioner Tristan Harris, Commissioner Sarah Klaustermeier, Commissioner Lee Lowrey, Commissioner Erik Weigand ABSENT: Vice Chair Curtis Ellmore
Staff Present: Community Development Director
Seimone Jurjis, Deputy Community Development Director Jim Campbell, City Attorney Aaron Harp, Principal Planner Jaime Murillo, Administrative Assistant Clarivel Rodriguez, Department Assistant Savannah Martinez
IV. PUBLIC COMMENTS
None
V. REQUEST FOR CONTINUANCES
None
VI. CONSENT ITEMS
ITEM NO. 1 MINUTES OF SEPTEMBER 8, 2022
Recommended Action: Approve and file
Motion made by Commissioner Weigand and seconded by Secretary Rosene to approve the minutes of the September 8, 2022, meeting as amended.

AYES: Harris, Kleiman, Lowrey, Rosene, and Weigand
NOES: None
ABSTAIN: Klaustermeier
ABSENT: Ellmore
VII. STUDY SESSION
ITEM NO. 2 CODE UPDATE RELATED TO FRACTIONAL HOMEOWNERSHIP (PA2022-0202) Site Location: Citywide
Summary:

Staff will provide the Planning Commission with an update regarding the growing trend of fractional homeownership, how other jurisdictions are addressing the use, deficiencies in current codes, and the outcome of recent City Council discussions on this topic. 12-625

DocuSign Envelope ID: 2E4CA2B6-698E-4A00-923B-95DC55343673 Planning Commission Special Meeting Agenda
October 6, 2022
Recommended Action:

Receive Presentation on fractional homeownership and provide staff direction Community Development Director Jurjis thanked the Planning Commission for attending the special meeting, reminded them that it is a study session with no formal action required, and requested input on policy recommendations on fractional ownership with the goal of gaining consensus from the Planning Commission for staff to use to draft an ordinance that can be recommended to the City Council. He encouraged questions before turning the presentation over to Principal Planner Murillo.

Principal Planner Murillo utilized a presentation to provide the Planning Commission with an overview of the discussion, what is fractional homeownership, fractional ownership of real estate, companies selling fractional ownership, how it works, operations, complaints/concerns, claimed benefits, City regulations, municipal code review, "timeshare" and "development" definitions, and city timeshare requirements. Furthermore, he reviewed the City Council background and direction, research report findings, 12 known properties in the City, and case studies for St. Helena, CA, Palm Springs, CA, and Park City, UT. Principal Planner Murillo presented options and recommendations based on direction from the City Council — Option A definition and Option B definition, including review process options, parking requirements, noise restrictions, separation standards, trash management, management plan, prohibited subletting, the Good Neighbor policy, owner acknowledgements, and grandfathering provisions.

In response to Secretary Rosene's question, Principal Planner Murillo stated that Option B can be exercised either with a use permit or zoning clearance. Community Development Director Jurjis indicated that the City is looking at fractional ownership as a new land use category as opposed to a permit program like Short-term Lodging (STL).

In response to Commissioner Lowrey's inquiry, City Attorney Harp reviewed the set-up structure and state regulations for fractional ownership and how it differs from tenant in common.

In response to Commissioner Weigand's questions, Deputy Community Development Director Campbell verified that the City would need to go to the California Coastal Commission (CCC) for any amendment to the Local Coastal Program (LCP).

City Attorney Harp indicated that fractional ownership properties generally want to be in the coastal zone, some City's have banned it by zone. He expects push back from some City Council members who think that some coastal zone areas are overburdened, and restricted areas could be crafted if preferred by the Planning Commission.

Deputy Community Development Director Campbell relayed that CCC staff does not consider fractional ownership an issue but looks at the use as a timeshare.

Community Development Director Jurjis noted that the City only regulates land use and will use municipal codes to enforce violations. City Attorney Harp recognized enforcement challenges related to violations from property users who are not owners. Community Development Director Jurjis shared a Pacaso property complaint and the City's response to a violation on the property and noted a reactive program for code violations, the Timeshare Act for fractional ownership, and Planning Commission discretion to lower the size of fractional portions.

Commissioner Weigand suggested a negotiation between the industry, City, and a resident representative.

Community Development Director Jurjis agreed with this approach and for staff to have conversations and collaborate with the three active companies in Newport Beach on acceptable regulatory standards. City Attorney Harp was in agreement that it would be wise for the City to get guidance from the St. Helena litigation and January trial outcome. City Attorney Harp explained that his office provides legal advice to the City and will reach out to expert counsel for guidance as needed.

Community Development Director Jurjis explained that Pacaso purchases and prepares the property for the fractional sale to the one eighth ownership and collects a fee for property management and indicated that an

Page 2 of 7 ends

Newport Beach City CouncilMay 9, 2023

Newport Beach City Council
May 9, 2023