October 13, 2026
Agenda Item No. 15
TO:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM:
Jaime Murillo, Community Development Director - 949-644-3209, [email protected] PREPARED BY:
Jenny Hannsun, Associate Planner - 949-644-3212, [email protected] TITLE:
Ordinance No. 2026-17: Approving the Fairway Three Development Agreement (PA2025-0019) ABSTRACT:
Eagle Four Partners (Applicant), is requesting approval of a Development Agreement (DA) in connection with the potential future development of Fairway Three, a residential development consisting of up to 78 residential units at the northeastern portion of the Newport Beach Country Club (NBCC) (Project). No actual project or construction is proposed at this time. Before submitting an application for entitlements for the Project, the applicant is requesting a DA between the applicant and the City of Newport Beach (City), pursuant to Chapter 15.45 (Development Agreements) of the Newport Beach Municipal Code (NBMC), which would provide the Applicant with the vested right to develop the Project for a term of five years and to provide negotiated public benefits to the City.
For the City Council’s consideration is the introduction of an ordinance approving a DA for the Project.
RECOMMENDATIONS:
Conduct a public hearing;
Find this project is not subject to further environmental review pursuant to Section 21083.3 of the California Public Resources Code (PRC) and Section 15183 of the CEQA Guidelines because the project is consistent with the previously certified Program Environmental Impact Report (SCH No. 2023060699); and Introduce Ordinance No. 2026-17, An Ordinance of the City Council of the City of Newport Beach, California, Approving a Development Agreement for a 78-unit Residential Development for the Property Located at 1 Clubhouse Drive (PA2025-0019), and pass to second reading on October 27, 2026.
DISCUSSION:
The 128.49-acre property of the Newport Beach Country Club (NBCC) and golf course is generally bounded by Jamboree Road to the west, East Coast Highway to the south, Santa Barbara Drive to the north, and intervening development towards the east along Newport Center Drive (Property). The Property is primarily surrounded by multi-unit residential developments with Fashion Island located approximately 520 feet to the east.
Fashion IslandFashion IslandSubject PropertySubject Property Fashion Island
Fashion Island
Subject Property
Subject Property
Figure 1, the Newport Beach Country Club and Golf Course Housing Opportunity (HO) Overlay Zoning District
On September 24, 2024, the Newport Beach City Council adopted Ordinance Nos. 2024-16 and 2024-17, approving amendments to Title 20 (Planning and Zoning) of the NBMC to establish the Housing Opportunity (HO) Overlay Zoning Districts in Section 20.28.050 (Housing Opportunity (HO) Overlay Zoning Districts) (Housing Overlay) of the NBMC and to create multi-unit objective design standards in Section 20.48.185 (Multi-Unit Objective Design Standards) of the NBMC.
Consistent with the Policy Actions 1A through 1G and 3A of the 6th Cycle Housing Element of the General Plan, Section 20.28.050 (Housing Opportunity (HO) Overlay Zoning Districts) of the NBMC allows for new housing opportunities within five subareas to ensure the City can accommodate its 6th Cycle RHNA allocation. These subareas correspond to the Focus Areas identified in the Housing Element and are as follows:
Airport Area Environs Area (HO-1)
West Newport Mesa Area (HO-2)
Dover-Westcliff Area (HO-3)
Newport Center Area (HO-4)
Coyote Canyon Area (HO-5)
Properties identified within these subareas are eligible for specified development allowances conducive to residential development at the prescribed average density of 20 to 50 dwelling units per acre. The standards include, but are not limited to, minimum lot area, setbacks, height, open space, landscaping, and parking. Each of the five subareas is also subject to a development limit that identifies the maximum number of dwelling units allowed.
The Property is categorized as Parks and Recreation (PR) by the General Plan and is located within the Newport Beach Country Club Planned Community (PC47) Zoning District. Although the entire Property is not considered a Housing Overlay Site, two areas of the Property were identified as opportunity sites and included within the HO-4 (Newport Center Area) Subarea: Site ID No. 353, located towards the northeastern portion of the Property and Site ID No. 354, located towards the south of the Property, as shown in Figure 2 below (HO Sites). The Project will be located at the northeastern portion of the Property consistent with Site ID No. 353 (Project Site). The development limit for the HO-4 Subarea is 2,439 units and the required average density range is 20 to 50 dwelling units per acre. Figure 2 depicts properties identified as housing sites within the HO-4 Subarea that are eligible for the development of housing pursuant to the Housing Overlay of the NBMC.
HO Site ID No. 354HO Site ID No. 354HO Site ID No. 353(Project Site)HO Site ID No. 353(Project Site)Subject PropertySubject Property HO Site ID No. 354
HO Site ID No. 354
HO Site ID No. 353
(Project Site)
HO Site ID No. 353
(Project Site)
Subject Property
Subject Property
Figure 2, HO-4 (Newport Center Area) Subarea map
Coastal Land Use Plan and Title 21 Amendment
In addition to the approved amendments to Title 20 as discussed above, implementation of the Housing Overlay in the coastal zone required an amendment to the City’s Local Coastal Program (LCP) which consists of the Coastal Land Use Plan (CLUP) and the Implementation Plan (IP), or Title 21, of the NBMC. The CLUP establishes goals, objectives and policies governing land and water use in the coastal zone, while Title 21 provides the corresponding zoning and development standards. These amendments were designed to establish Housing Overlay Coastal Zoning Districts with development standards applicable to coastal zone properties, complementing the General Plan Land Use Element and Title 20.
On July 23, 2024, the Newport Beach City Council adopted Resolution No. 2024-52, authorizing submittal of the Local Coastal Program Amendment (LCPA) to the California Coastal Commission (CCC). The City formally submitted the LCPA application on August 16, 2024, and on April 17, 2026, the CCC approved the amendments with suggested modifications. The City Council subsequently adopted the CCC's suggested modifications to the CLUP on May 26, 2026, and adopted the modifications to Title 21 through Ordinance No. 2026-05 on June 9, 2026.
On July 9, 2026, the CCC certified the LCPA and the Housing Overlay became effective in the coastal zone. The amendments included the two HO Sites on the Property.
Project Description
Pursuant to Chapter 15.45 (Development Agreements) of the NBMC, the applicant is requesting a DA with the City for vested rights to develop up to 78 residential dwelling units on the Project Site. The proposed DA, which is described in more detail below, would provide the applicant with the vested right to develop the Project for a term of five years and include a requirement to provide negotiated public benefits to the City.
No specific design for the Project is included in this application, and no construction is proposed. Buildout of the Project would require future entitlements, including but not limited to, a site development review and a tentative tract map review by the Planning Commission prior to building permit issuance. The potential future project would be reviewed for consistency with Titles 19, 20, and 21 of the NBMC including standards for height, setbacks, parking and density.
Although HO Site ID No. 353 was identified in the Sites Inventory of the Housing Element as 0.84 acres in area (yielding between 16 and 42 units), this was intended to demonstrate areas within the Property that could accommodate a realistic housing development project. The final design of the Project parcel could be larger, and ultimately future housing development would be required to comply with the prescribed 2,439 development limit for the HO-4 Subarea and the required density range of 20-50 dwelling units per acre consistent with the General Plan and Titles 20 and 21.
Development Agreement
Pursuant to Section 15.45.020(A)(2)(a)(Development Agreement Required) of the NBMC, a DA is not required because the Project does not include a legislative act (i.e., a General Plan Amendment or Zoning Code Amendment) nor does the City’s 6th Cycle General Plan Housing Element require applicants to enter into DAs to develop housing units located on Housing Opportunity Sites. Nonetheless, the applicant is requesting a voluntary DA to vest rights to develop the Project for a term of five years. Additionally, the Project will be required to pay public benefit fees as part of the DA. The Project would also voluntarily provide much-needed housing opportunities in the City in furtherance of the certified Housing Element.
The DA provides assurance that the applicant may proceed with the Project in accordance with existing policies, rules and regulations, and conditions of approval. Additionally, the DA helps the applicant avoid a waste of resources and escalated costs of the Project while encouraging a commitment to private participation in comprehensive planning.
Public Benefits
Article 3 (Public Benefits) of the draft DA outlines the public benefits due to the City in exchange for vested development rights. Pursuant to Section 3.1 (Public Benefit Fee), the applicant will be required to pay a public benefit fee of $128,205 per residential unit, paid prior to the issuance of the grading permit, for any portion of development of the 78 residential units. The public benefit fee is inclusive of Park Fees and Development Impact Fees (DIFs), adopted by the City pursuant to Resolution Nos. 2024-75 and 2024-83. The City anticipates that the Park Fees will be approximately $60,000 per unit (approximately $4,680,000) and DIFs will be roughly $9 per-square-foot of development (approximately $2,000,000). Any remaining fees (approximately $3,319,990), up to the $128,205 maximum per unit, may be used for any public purpose at the discretion of the City Council. In contrast, the Park Fees and DIFs must be used for the intended public purpose (i.e., parks, recreation, police, fire, water and sewer).
As required by Subsection 3.1.1 (Consumer Price Index [CPI] Increase), of the DA, the public benefit fee shall be increased based upon percentage increases in the Consumer Price Index (CPI) as provided in the DA. Assuming all units are developed, this would result in a potential public benefit fee of $9,999,990, before any CPI escalation is applied. The CPI provision incentivizes development of housing within the current housing element cycle.
Additionally, separate payment of Traffic Fair Share Fees and San Joaquin Hills Transportation Corridor Agency Fees would be required and are not included within the public benefit fee.
General Plan Consistency
The Project is consistent with the Goals and Policies of the recently updated General Plan, adopted in June 2026. Pursuant to General Plan Land Use Element Policy LU-11.1 (Residential Uses and Residential Densities [Focus Area]), residential use of any property included within an established housing opportunity overlay zoning district is allowed regardless of the underlying land use category or density limit established through Table LU-1 (Anomaly Locations) and Table LU-2 (Land Use Designations). An amendment to the General Plan is not required to develop residential uses within an established housing opportunity zoning overlay district. Therefore, although the Project Site has a General Plan land use category of PR, a general plan amendment is not required to implement the Project because the Project proposes to vest the rights for the development of residential uses located within the HO-4 (Newport Center Area) Subarea of the Housing Overlay.
Additionally, General Plan Land Use Element Policy LU-1.7 (Housing Opportunity Overlay) supports the development of housing in the housing opportunity overlay zones consistent with the densities and development limits identified in the Zoning Code and Table LU-3 (Housing Opportunity Overlay). The DA will support the future development of the Project, which will comply with the development standards and densities pursuant to Section 20.28.050 of the NBMC and General Plan policies that pertain to design, compatibility, lighting, public views, etc.
Planning Commission Review and Recommendation
On September 17, 2026, the Planning Commission conducted a duly noticed public hearing to consider the requested application. The Planning Commission discussed the merits of the DA and the public benefit fees. At the conclusion of the public hearing, the Planning Commission voted unanimously (5 ayes and 0 nays, with 2 absent/recused), to adopt Resolution No. PC2026-025, recommending the City Council approve the DA. The Planning Commission staff report, meeting minutes, and resolution are included for reference as Attachments B, C, and D.
Additionally, a public comment was received and is included as Attachment E.
FISCAL IMPACT:
As the project is not increasing overall density and is consistent with the Zoning District and General Plan, a fiscal impact analysis was not prepared. A fiscal impact analysis was prepared by Keyser Marston Associates dated July 9, 2024, for the Housing Element Implementation Program Amendments. The analysis concluded that:
Sales prices and assessed values in Newport Beach are all very high, benefiting General Fund revenues; Full buildout of all potential residential projects could have a net negative fiscal impact unless they continue to be developed at higher price points; Replacement of land uses that generate minimal public revenues can offset the negative impact of residential; and Any potential fiscal impacts may often be at least partially offset through payment of impact fees.
In this case, the project would improve an underutilized area of a property with a new residential development, and the applicant would provide various public benefit fees including development impact fees, park fees, and general public benefit fees to the City based on the specific terms contained in the DA.
ENVIRONMENTAL REVIEW:
The project is consistent with the California Environmental Quality Act (CEQA) Guidelines Section 15183, which provides an exemption for projects that are consistent with the development density established by existing zoning, community plan, or general plan policies for which an Environmental Impact Report (EIR) was certified. The City’s Housing Implementation Program Final Program EIR (State Clearinghouse SCH Number 2023060699) was certified by the City Council on July 23, 2024.
The project is not subject to further environmental review pursuant to Section 21083.3 of the California Public Resources Code (PRC) and Section 15183 of the CEQA Guidelines because, inasmuch as the property involved is within the HO-4 Subarea, the project does not change the underlying land use or zoning designations; and would not result in new significant impacts or a substantial more adverse impact than addressed in the PEIR.
A detailed consistency analysis prepared by T & B Planning Inc., dated September 2026, and peer reviewed by Kimley-Horn & Associates, Inc., is provided as Exhibit “C” to Attachment A of this staff report. The consistency analysis concluded that the Project is consistent with the development density and use characteristics established by the City’s General Plan Housing Implementation Program as analyzed by the PEIR, and the required determinations can be made.
NOTICING:
Notice of this hearing was published in the Daily Pilot, mailed to all owners of property within 300 feet of the boundaries of the site (excluding intervening rights-of-way and waterways) including the applicant, and posted on the subject property at least 10 days before the scheduled meeting, consistent with the provisions of the Municipal Code. Additionally, the item appeared on the agenda for this meeting, which was posted at City Hall and on the City website.
ATTACHMENTS:
Attachment A – Ordinance
Attachment B – Planning Commission Staff Report dated September 17, 2026 Attachment C – Planning Commission Draft Meeting Minutes Attachment D – Planning Commission Resolution No. PC2026-025 (No Exhibits) Attachment E – Public Comment
Ordinance No. 2026-17: Approving the Fairway Three Development Agreement (PA2025-0019) October 13, 2026
CITY OF CITY OF
CITY OF
CITY OF
City Council Staff Report COUNCIL STAFF REPORT City Council Staff Report COUNCIL STAFF REPORT NEWPORT BEACH NEWPORT BEACH City Council Staff Report COUNCIL STAFF REPORT
City Council Staff Report COUNCIL STAFF REPORT
NEWPORT BEACH
NEWPORT BEACH