Pacific Grove City Council
August 7, 2024

CITY COUNCIL

SPECIAL MEETING AGENDA
Wednesday, August 7, 2024, 5:00 P.M.

Council Chamber – City Hall – 300 Forest Avenue, Pacific Grove, CA Under the Brown Act, public comment for matters on the agenda must relate to that agenda item and public comments for matters not on the agenda must relate to the subject matter jurisdiction of this legislative body. This is a warning that if a member of the public attending this meeting remotely or in-person violates the Brown Act by failing to comply with these requirements of the Brown Act, then the Mayor or Chair may request that speaker be muted. If a member of the public attending this meeting in-person engages in disruptive behavior that disturbs the orderly conduct of the meeting, they may be removed from the meeting after a warning, pursuant to Council Policy 000-17.

PACIFIC GROVE MEETINGS ARE CONDUCTED IN PERSON AT CITY HALL COUNCIL CHAMBER AND VIRTUALLY.

PLEASE NOTE THE MEETING WILL PROCEED AS NORMAL EVEN IF THERE ARE TECHNICAL DIFFICULTIES ACCESSING ZOOM.

THE CITY WILL DO ITS BEST TO RESOLVE ANY TECHNICAL ISSUES AS QUICKLY AS POSSIBLE.

Join the Zoom Meeting to participate live at:
https://www.cityofpacificgrove.org/Zoom_Closed
Please click here for directions to dial into the meeting audio.

AGENDA

CALL TO ORDER

APPROVAL OF AGENDA

CLOSED SESSION

PUBLIC COMMENT ON CLOSED SESSION MATTERS
Comments from the public will not receive Council action. Comments must deal with matters on the Closed Session agenda and will be limited to three minutes

1. Written Public Comment
A. Conference with Legal Counsel – Existing Litigation Pursuant to Government Code Section 54956.9 (d)(1)
Name of Case Enayati v. City of Pacific Grove
Case No. 21CV002786
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ADJOURNMENT
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CITY COUNCIL

REGULAR MEETING AGENDA
Wednesday, August 7, 2024, 6:00 P.M.

Council Chamber – City Hall – 300 Forest Avenue, Pacific Grove, CA The Council will not begin consideration of any item on this agenda later than 10:00 p.m. unless such consideration is approved. Any items on this agenda not considered this evening will be continued to a future meeting.

Copies of the agenda packet are available for review at the Pacific Grove Library, in the Finance Department, and electronically at www.cityofpacificgrove.org/agendas. The most effective method of communication with the City Council is by sending an email to [email protected]. In order to allow the City Council adequate time to review communication related to an agenda item, it is recommended that the communication be sent no later than 9:00 AM on the day prior to the City Council meeting.

Under the Brown Act, public comment for matters on the agenda must relate to that agenda item and public comments for matters not on the agenda must relate to the subject matter jurisdiction of this legislative body. This is a warning that if a member of the public attending this meeting remotely or in-person violates the Brown Act by failing to comply with these requirements of the Brown Act, then the Mayor or Chair may request that speaker be muted. If a member of the public attending this meeting in-person engages in disruptive behavior that disturbs the orderly conduct of the meeting, they may be removed from the meeting after a warning, pursuant to Council Policy 000-17.

PACIFIC GROVE COUNCIL MEETINGS ARE CONDUCTED IN PERSON AT CITY HALL COUNCIL CHAMBER AND VIRTUALLY.

PLEASE NOTE THE MEETING WILL PROCEED AS NORMAL EVEN IF THERE ARE TECHNICAL DIFFICULTIES ACCESSING ZOOM.

THE CITY WILL DO ITS BEST TO RESOLVE ANY TECHNICAL ISSUES AS QUICKLY AS POSSIBLE.

THE PUBLIC MAY ALSO VIEW THE MEETING ON PENINSULA CHANNEL 25.

JOIN THE ZOOM WEBINAR TO PARTICIPATE LIVE AT:
https://www.cityofpacificgrove.org/Zoom_CC
Please click here for directions to dial into the meeting audio.

AGENDA

CALL TO ORDER
PLEDGE OF ALLEGIANCE: Councilmember Poduri
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1. APPROVAL OF AGENDA

2. PRESENTATIONS

3. COUNCIL AND STAFF ANNOUNCEMENTS (City-Related Items Only) A. Report on Closed Session by City Attorney
B. Other

4. GENERAL PUBLIC COMMENT
General Public Comment must deal with matters subject to the jurisdiction of the City and the Council that are not on the Regular Agenda. This is the appropriate place to comment as to items on the Consent Agenda, only if you do not wish to have the item pulled for individual consideration by the Council.

Comments from the public will be limited to three minutes and will not receive Council action. Comments regarding items on the Regular Agenda shall be heard prior to Council’s consideration of such items at the time such items are called. Whenever possible, written correspondence should be submitted to the Council in advance of the meeting, to provide adequate time for its consideration.

A. Written General Public Comment

CONSENT AGENDA
The Consent Agenda deals with routine and non-controversial matters, and may include action on resolutions, ordinances, or other public hearings for which testimony is not anticipated. The vote on the Consent Agenda shall apply to each item that has not been removed. Any member of Council, staff, or the public may remove an item from the Consent Agenda for individual consideration. When items are pulled for discussion, they will be automatically placed at the end of their respective section within the Regular Agenda. One motion shall be made to adopt all non-removed items on the Consent Agenda.

5. APPROVAL OF CITY COUNCIL MEETING MINUTES
Items pulled from this section will be placed under 12. Unfinished and Ongoing Business A. Minutes of the July 17, 2024 Regular and Special Meetings PG 10 Reference: Sandra Kandell, City Clerk
Recommended Action: Approve minutes.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

6. RESOLUTIONS
Items pulled from this section will be placed under 12. Unfinished and Ongoing Business or 13. New Business
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7. ORDINANCES
Items pulled from this section will be placed under 11. Public Hearings A. Ordinance Approving Lease at Lover's Point Grill PG 17 Reference: Matt Mogensen, City Manager
Recommended Action: Hold second reading of an Ordinance of the City Council of Pacific Grove approving a five-year lease between Sunset Hospitality Group, Inc., a California corporation, and the City of Pacific Grove for the use of City owned property including approximately 270 square feet of building space located at Lover’s Point Park and Beach in the City of Pacific Grove, and authorizing and directing the City Manager to execute the same.

CEQA: Categorical Exemption, CEQA Guidelines Section 15301, Class I, Existing Facilities

8. REPORTS – INFORMATION ONLY
Items pulled from this section will be placed under 12. Unfinished and Ongoing Business or 13. New Business
A. Housing Element Monthly Status Update PG 61
Reference: Alyssa Kroeger, Housing Program Manager
Recommended Action:

1. Receive the report.

2. Alternatively, discuss and take other action related to this item.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

9. REPORTS – REQUIRING ACTION
Items pulled from this section will be placed under 12. Unfinished and Ongoing Business or 13. New Business A. Amendment to the Fire Services Agreement with the City of Monterey to add Emergency Medical Services Including Advance Life Support Services PG 63 Reference: Andrew Miller Fire Chief
Recommended Action: Adopt a resolution amending the current Fire Services Agreement with the City of Monterey to add Emergency Medical Services (EMS) to include Advanced Life Support (ALS) services.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. Agreement with the Society for the Prevention of Cruelty to Animals of Monterey County for Sheltering Services PG 67
Reference: Brian Anderson, Acting Chief of Police
Recommended Action: City Council approval of motion authorizing the Mayor to sign an PGCC 8-7-2024

Recommended Action: City Council approval of motion authorizing the Mayor to sign an agreement with the Society for the Prevention of Cruelty to Animals of Monterey County for Sheltering Services Agreement
CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
C. Adopt Policy Update Regarding Vehicle Miles Traveled (VMT) and CEQA Compliance Reference: Joseph Sidor, Contract Planner PG 80
Recommended Action: Adopt, by resolution, the proposed amendments to the City's VMT Implementation Policy.

CEQA: Categorical Exemption, CEQA Guidelines Section 15308, Class 8, Actions by Regulatory Agencies for Protection of the Environment
D. Tree Maintenance Services Agreement PG 160
Reference: Joyce Halabi, Deputy Public Works Director
Recommended Action:

Authorize an agreement with Topes Tree Service Inc. to provide Tree Maintenance Services for trees in the public right-of-way and on City-owned properties in an amount not-to-exceed $250,000 per fiscal year, with up to four (4) annual, one-year extensions by mutual letter

1. 2. Authorize the Mayor to execute all letters of extension associated with this agreement

3. Alternatively, take other action related to this item CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

10. MEETING MINUTES OF COMMISSIONS, BOARDS, AND COMMITTEES Items pulled from this section will be placed under 13. New Business A. Planning Commission Meeting Minutes: September 2023 through December 2023 Reference: Aaron Campbell, Senior Planner PG 163
Recommended Action: Receive minutes.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

REGULAR AGENDA

11. PUBLIC HEARINGS
For public hearings involving a quasi-judicial determination by the Council, the proponent of an item may be given 10 minutes to speak and others in support of the proponent’s position may be given three minutes each. A designated spokesperson for opposition to the item may be given 10 minutes to speak and all others in opposition may be given three minutes each. Very brief rebuttal and surrebuttal may be allowed in the sole discretion of the Council. In public hearings not involving a quasi-judicial determination by the Council, all persons may be given three minutes to speak on the matter.

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A. First Reading of Ordinance Amending Section 2.06.010 (a) of the Pacific Grove Municipal Code Relating to Residency Requirement for City Manager PG 199 Reference: Brian Pierik, City Attorney
Recommended Action:

1. Request the City Attorney read the title of the ordinance;

2. Motion to waive further reading of the ordinance;
Introduce and hold first reading of an Ordinance Amending Section 2.06.010 (a) of the Pacific Grove Municipal Code Relating to Residency Requirement for City Manager; and

3. Direct a summary of a proposed ordinance be published as approved by the City Attorney.

4. CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. First Reading of an Ordinance Approving an Amendment to the Lease between Lighthouse Fellowship and the City of Pacific Grove PG 203 Reference: Daniel Gho, Public Works Director/Deputy City Manager Recommended Action:

1. Request the City Attorney to read the title of the ordinance;

2. Motion to waive further reading of the ordinance;
Introduce and hold first reading of an Ordinance approving an amendment to the lease between Lighthouse Fellowship and the City of Pacific Grove for the use of City owned property located at 515 Junipero Avenue, commonly known as the Community Center, in the City of Pacific Grove, and authorizing the Mayor to execute Amendment #2 and any Letters of extension of the Lease.

3. Direct that publication of the Ordinance will be satisfied by publication of a summary approved by the City Attorney.

4. CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

12. UNFINISHED AND ONGOING BUSINESS
A. Proposed Ordinance Amending Chapter 7.40 of the City’s Municipal Code to Increase Short-Term Rental Penalties in Accordance with SB 60 (This item was continued from Council's July 19, 2024 Regular Meeting.) PG 222
Reference: Luke Coletti, Councilmember
Recommended Action:

Direct the City Manager to return within 60 days with a draft ordinance amending Chapter 7.40 of the City’s Municipal Code to increase short-term rental penalties in accordance with SB 60; and

1. Direct the City Manager to return with a comprehensive list of “infractions that pose a threat to public health or safety,” including those that are a violation of the building and safety code.

2. CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines PGCC 8-7-2024

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. Resolution Correcting Clerical Error in Resolution No. 24-028 Submitting Ballot Measure to Voters to Amend City Charter to Change the Number of Elected City Council Members from Six to Four PG 232
Reference: Brian Pierik, City Attorney
Recommended Action: Motion to adopt Resolution Correcting Clerical Error in Resolution No. 24-028 Submitting Ballot Measure to Voters to Amend City Charter to Change the Number of Elected City Council Members from Six to Four CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

13. NEW BUSINESS
A. Resolution Amending Policy 000-5 to Add Section and Regarding Recommendations by Boards, Committees, and Commissions PG 250
Reference: Bill Peake, Mayor
Recommended Action:

Motion to approve Resolution Amending Policy 000-5 to Add Section 7 Regarding Recommendations of Boards, Committees and Commissions

1. Motion to approve Protocol for recommendations to the City Council by Boards, Committees and Commissions

2. 3. Other action related to this item.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. League of California Cities (LoCC) Annual Conference Voting Delegate and Alternate(s) Reference: Sandra Kandell, City Clerk
Recommended Action: PG 259
Discuss, designate, and adopt by resolution a voting delegate and up to two alternates to represent the City on policy matters at the League of California Cities (LoCC) Annual Conference on October 16-18 in Long Beach, California.

1. 2. Alternatively, discuss and take other action related to this item.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

14. FULL PRESENTATIONS

15. CLOSED SESSION

ADJOURNMENT
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NOTICE OF ADA COMPLIANCE: Pursuant to Title II of the Americans with Disabilities Act (Codified At 42 United States Code Section 12101 and 28 Code of Federal Regulations Part 35), and Section 504 of the Rehabilitation Act of 1973, the City of Pacific Grove does not discriminate on the basis of race, color, religion, national origin, ancestry, sex, disability, age or sexual orientation in the provision of any services, programs, or activities. The City of Pacific Grove does not discriminate against persons with disabilities. City Hall is an accessible facility. A limited number of assisted listening devices will be available at this meeting. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting or provide the requested agenda format.

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Agenda No. 5 A

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Sandra Kandell, City Clerk/DEI Coordinator
MEETING DATE: August 07, 2024
SUBJECT: Minutes of the July 17, 2024 Regular and Special Meetings CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

RECOMMENDATION
Approve minutes.

Attachments
Draft Minutes 7-17-24
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1 DRAFT MEETING MINUTES

CITY OF PACIFIC GROVE

CITY COUNCIL

REGULAR AND SPECIAL MEETING
Wednesday, July 17, 2024, 6:00 P.M.

Council Chamber – City Hall – 300 Forest Avenue, Pacific Grove, CA

PACIFIC GROVE COUNCIL MEETINGS ARE CONDUCTED IN PERSON AT CITY HALL COUNCIL CHAMBER AND VIRTUALLY.

JOIN THE ZOOM WEBINAR TO PARTICIPATE LIVE AT:
https://www.cityofpacificgrove.org/Zoom_CC

CALL TO ORDER
Mayor Peake called the noticed regular and special meetings to order at 6:00 p.m. Present in Chamber:

Mayor Peake, Mayor Pro Tem Smith, Councilmembers Amelio, Beck, Coletti, McDonnell, and Poduri.

PLEDGE OF ALLEGIANCE
Mayor Pro Tem Smith led the pledge of allegiance.

1. APPROVAL OF AGENDA
Action: Mayor Peake recommended that the noticed regular and special meeting agendas be approved and further recommended the item noticed in the Special Meeting Agenda be heard at the conclusion of the Regular Meeting agenda items.

Action: Upon motion by Mayor Pro Tem Smith and seconded by Councilmember Amelio, Council voted 7-0, to approve the Regular and Special Meeting agendas.

2. PRESENTATIONS
A. Community Human Services Presentation by Chief Executive Officer Robin McCrae Action: Received presentation.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

3. COUNCIL AND STAFF ANNOUNCEMENTS (City-Related Items Only)

4. GENERAL PUBLIC COMMENT
General public comment received from Jane Haines, Dan Miller, Kris Lindstrom, Mike Gibbs, and Inge Lorentzen Daumer.

A. Written General Public Comment

CONSENT AGENDA
Action: Consent Agenda items 8A, 8D, and 9A were pulled and considered immediately following the Consent Agenda.

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2 Action: Upon motion by Mayor Pro Tem Smith and seconded by Councilmember Beck, Council voted 7-0, to approve the Consent Agenda as modified.

5. APPROVAL OF CITY COUNCIL MEETING MINUTES
A. Minutes of the July 3, 2024 Special and Regular Meetings Action: Approved minutes.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

6. RESOLUTIONS

7. ORDINANCES

8. REPORTS – INFORMATION ONLY
A. Core Revenue Report for June 2024 This item was pulled and considered immediately following the Consent Agenda.

Reference: Lori Frati, Finance Manager
Recommended Action:

1. Receive the report.

2. Alternatively, discuss and take other action related to this item.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. Check Register for June 2024
Action: Received the Check Register.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
C. Housing Element Monthly Status Update
Action: Received the report.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
D. City of Pacific Grove Informational Report on Demographics This item was pulled and considered immediately following the Consent Agenda.

Reference: Matthew Mogensen, City Manager
Recommended Action:

1. Receive and file the City of Pacific Grove informational report on demographics prepared by National Demographic Corporation.

2. Direct City Manager to take an alternative action related to this item CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
E. Monterey-Salinas Transit Minutes of June 10, 2024
Action: Received minutes.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
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3 9. REPORTS – REQUIRING ACTION
A. FY24/25 CIP Engineering Services This item was pulled and considered immediately following the Consent Agenda.

Reference: Joyce Halabi, Deputy Public Works Director
Recommended Action:

1. Authorize an agreement with Neill Engineers Corp for FY23/24 Capital Improvement Plan engineering services in an amount not to exceed $545,871 plus a 15% contingency.

2. Alternatively, discuss and take other action on this item.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. Contract Amendment for Professional Services
Action: Approved Amendment #1 to the Professional Services Agreement with Catacutan Consulting, LLC., increasing the previously approved contract by $60,000 for a total not to exceed amount of $100,000.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

10. MEETING MINUTES OF COMMISSIONS, BOARDS, AND COMMITTEES A. Beautification and Natural Resources Commission Minutes: May 21, 2024 Action: Received minutes.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. Library Board Minutes: May 7, 2024
Action: Received minutes.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
*************

8.A. Core Revenue Report for June 2024 This item was pulled from the Consent Agenda.

Public comment received from Mike Gibbs.

Action: Received the report.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

8.D. City of Pacific Grove Informational Report on Demographics This item was pulled from the Consent Agenda.

Public comment received from Andrew Kubica and Carmelita Garcia.

Action: Received and filed the City of Pacific Grove informational report on demographics prepared by National Demographic Corporation.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

9.A. FY24/25 CIP Engineering Services This item was pulled from the Consent Agenda.

Public comment received from Dan Miller, Andrew Kubica, and Inge Lorentzen Daumer.

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4 Action: Upon motion by Councilmember Poduri and seconded by Councilmember Amelio, Council voted 7-0 to authorize an agreement with Neill Engineers Corp for FY23/24 Capital Improvement Plan engineering services in an amount not to exceed $545,871 plus a 15% contingency.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

REGULAR AGENDA

11. PUBLIC HEARINGS

12. UNFINISHED AND ONGOING BUSINESS
A. Cedar, Sunset & Congress Intersection Improvements Project Public comment received from Daniel Miller, Kris Lindstrom, Christie Thomas, Andrew Kubica, Thom Akeman, Inge Lorentzen Daumer, Carmelita Garcia, Kim Akeman, and Lisa Ciani.

Action: Upon motion by Mayor Pro Tem Smith and seconded by Councilmember Poduri, Council voted 4-3, Councilmembers Beck, Coletti, and McDonnell dissenting, to select Single Build Alternative, option 1, a roundabout with Cedar access relocated, for the Congress, Cedar, and Sunset Intersection.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. Adopt the Community Wildfire Protection Plan Completed for the Cities of Monterey, Pacific Grove, and Carmel-by-the-Sea (Exempt from CEQA per Article 18, Section 15262) Public comment received from Peggy Gibbs, Mike Gibbs, Thom Akeman, Kim Akeman, and Lisa Ciani.

Action: Upon motion by Councilmember Coletti and seconded by Mayor Peake, Council voted 7-0, to pass Resolution No. 24-031 adopting the Community Wildfire Protection Plan.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
C. Housing Element Update - Consider Alternative Sites and Methods to Achieve the City's Regional Housing Needs Assessment (RHNA) Requirements No public comment received.

Action: Upon motion by Mayor Pro Tem Smith and seconded by Councilmember Amelio, Council voted 6-0-1, Councilmember Poduri recusing, to approve alternative sites referenced as Option 1 for the Housing Element Update to accommodate the City's RHNA requirements.

Action: Upon motion by Councilmember Coletti and seconded by Mayor Pro Tem Smith, Council voted 6-0-1, Councilmember Beck recusing, to approve alternative sites referenced as Option 2 for the Housing Element Update to accommodate the City's RHNA requirements.

Action: Upon motion by Councilmember Amelio and seconded by Councilmember DRAFT PGCC 8-7-2024

5 Poduri, Council voted 7-0, to approve alternative sites referenced as Option 3 in the Housing Element Update to accommodate the City's RHNA requirements.

Action: Upon motion by Councilmember Amelio and seconded by Councilmember McDonnell, Council voted 7-0, to approve alternative sites referenced as Option 6 in the Housing Element Update to accommodate the City's RHNA requirements.

Action: Upon motion by Councilmember Coletti and seconded by Mayor Pro Tem Smith, Council voted 6-0-1, Councilmember Beck recusing, to not include alternative sites referenced as Option 8 in the Housing Element Update to accommodate the City's RHNA requirements.

CEQA: Environmental Impact Report
Action: Upon motion by Mayor Peake and seconded by Mayor Pro Tem Smith, Council voted 7-0 to continue past 10:00 p.m., hear the noticed Special Agenda item 1A City Position Regarding Assembly Bill 2560 and continue the Regular Agenda item 13A Proposed Ordinance Amending Chapter 7.40 of the City’s Municipal Code to Increase Short-Term Rental Penalties in Accord with SB60.

13. NEW BUSINESS
A. Proposed Ordinance Amending Chapter 7.40 of the City’s Municipal Code to Increase Short-Term Rental Penalties in Accord with SB60 Due to time constraints, this item was continued.

Reference: Luke Coletti, Councilmember
Recommended Action: Direct the City Manager to return within 60 days with a draft ordinance amending Chapter 7.40 of the City’s Municipal Code to increase short-term rental penalties in accordance with SB60. A proposed draft ordinance is attached (see Attachment-1).

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

1.A. City Position Regarding Assembly Bill 2560
No public comment received.

Action: Upon motion by Mayor Pro Tem Smith and seconded by Councilmember Amelio, Council voted 7-0 to direct the City Manager to advise Cal Cities that the City of Pacific Grove wishes to join in the opposition to AB 2560.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

14. FULL PRESENTATIONS

15. CLOSED SESSION
DRAFT PGCC 8-7-2024

6 ADJOURNMENT
Council adjourned the regular and special meetings at 10:31p.m.

Respectfully Submitted,
Sandra Kandell
City Clerk
Approved by Mayor: _____________________________________________Date________________ Attest by City Manager: __________________________________________Date_________________ DRAFT PGCC 8-7-2024

Agenda No. 7 A

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Matt Mogensen, City Manager
MEETING DATE: August 07, 2024
SUBJECT: Ordinance Approving Lease at Lover's Point Grill CEQA: Categorical Exemption, CEQA Guidelines Section 15301, Class I, Existing Facilities

RECOMMENDATION
Hold second reading of an Ordinance of the City Council of Pacific Grove approving a five-year lease between Sunset Hospitality Group, Inc., a California corporation, and the City of Pacific Grove for the use of City owned property including approximately 270 square feet of building space located at Lover’s Point Park and Beach in the City of Pacific Grove, and authorizing and directing the City Manager to execute the same.

DISCUSSION
No changes were made between the first and second readings of this ordinance. The City Clerk caused a summary of the ordinance to be published on July 11th and again on August 1, 2024 The City of Pacific Grove (“City”) owns that certain portion of real property situated at the northeast corner of the intersection of Ocean View Boulevard and 17th Street, at the southerly end of Lover’s Point Park and Beach, improved with an approximately 270 square foot building (the “Premises”), located in the City of Pacific Grove.

The Premises are improved with a restaurant, including a kitchen, configured for walk-up ordering and take-out service only.

The City operates the Premises through a lease agreement for operation of restaurant food and beverage services.

The City issued a Request for Proposal (RFP) on March 19, 2024, and the City received proposals from three entities. A panel of staff reviewed the proposals and interviewed each proposer. As a result of the selection process, the proposal submitted by Sunset Hospitality, Inc. was selected as the highest rated proposal for their unique qualifications and vision for the Premises.

The lease form allows Sunset Hospitality, Inc. the exclusive use of Premises for the sale of food, beverages, and related services.

The proposed Lease (Attachment 1) provides that the use will be for a snack bar including beverages, PGCC 8-7-2024

sandwiches and light fare. The term of the Lease is five (5) years with one option extension for an additional five-year term if both parties agree to the extension. The rent for the Premises will be:

Base
Rent:

The initial monthly base rent shall be $1,500 plus an annual payment equal to a proportion of annual gross sales in the following amounts:
0% for annual gross sales under $300,000
2% for annual gross sales $300,000 - $399,999
3% for annual gross sales $400,000 - $499,999
4% for annual gross sales $500,000 - $599,999
5% for annual gross sales $600,000 - $699,999
6% for annual gross sales $800,000 and above.

Tenant is separately responsible for paying for utilities and services (including electric, water and sewer).

The Lease will be approved by Ordinance (Attachment 2). The proposed timeline for the Ordinance is a first reading of the Ordinance on July 3, 2024 and a second reading on July 20, 2024 and 30 days thereafter will be August 19, 2024 which, if the Ordinance is adopted, would be the Rent Commencement Date.

In order to allow Sunset Hospitality access to the Premises before August 19, 2024 when the Lease will become effective, there is a License Agreement proposed which is Attachment 3.

The proposed menu of food and beverages to be offered by Sunset Hospitality at the Premises is Attachment 4.

The License Agreement and Lease of the Premises will not have a significant effect on the environment and is found to be exempt from the California Environmental Quality Act (CEQA) per Section 15301 of the CEQA Guidelines which allows for the leasing, licensing, repair, and maintenance of public or private structures.

OPTIONS
Other action related to this item.

FINANCIAL IMPACT:

There is no fiscal impact on the enactment of this ordinance.

FOCUSED PRIORITY AREA: Not Applicable.

Attachments
Ordinance of the City Council of the Pacific Grove approving a five-year lease between Sunset Hospitality Group, Inc., a California corporation, and the City of Pacific Grove for the use of City owned property
Lease Agreement
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TENANT LEASE
By and Between

CITY OF PACIFIC GROVE
a California charter city
("Landlord")
and
SUNSET HOSPITALITY GROUP, INC.
a California corporation
("Tenant")
Dated: August __, 2024
PGCC 8-7-2024

1 TENANT LEASE

BASIC LEASE PROVISIONS

1. Tenant: Sunset Hospitality Group, Inc.
500 Hartnell Street
Monterey, California 93933
Phone: (310) 403-0210

2. Landlord: City of Pacific Grove
300 Forest Avenue
Pacific Grove, California 93950
Phone: (831) 648-3174
Attention: City Manager

3. Premises: That certain building of approximately 270 square feet in interior floor space located generally on the southwest portion of the City’s Lover’s Point Park and Beach, as depicted in Exhibit B attached hereto

4. Use: Snack bar (e.g., beverages, sandwiches, and light fare)

5. Term: Five (5) years, with one optional extension for an additional five-year term, if both parties agree to such extensions

6. Lease Commencement
Date:

August __, 2024 ("Commencement Date").

7. Rent Commencement
Date:

August __, 2024 ("Rent Commencement Date").

8. Base Rent: The initial monthly base rent shall be $1,500 plus an annual payment equal to a proportion of annual gross sales in the following amounts:
0% for annual gross sales under $300,000
2% for annual gross sales $300,000 - $399,999
3% for annual gross sales $400,000 - $499,999
4% for annual gross sales $500,000 - $599,999
5% for annual gross sales $600,000 - $699,999
6% for annual gross sales $800,000 and above.

Tenant is separately responsible for paying for utilities and services (including electric, water and sewer).

PGCC 8-7-2024

2 The Basic Lease Information set forth above and the Exhibits listed below and attached hereto are incorporated into and made a part of the following Lease. Each reference in this Lease to any of the Basic Lease Information shall mean the respective information above and shall be construed to incorporate all of the terms provided under the particular Lease section pertaining to such information. In the event of any conflict between the Basic Lease Information and the provisions of the Lease, the latter shall control.

The following Exhibits are attached to this Lease and incorporated herein by this reference:

Exhibit A – Premises Description
Exhibit B – Rules and Regulations
Exhibit C – Ongoing Maintenance Schedule
Exhibit D – List of Lessor-owned Furnishings
Exhibit E – Initial Improvement Schedule
Exhibit F – Insurance Certificate
PGCC 8-7-2024

3 This Lease Agreement (this “Lease”) is made and entered into effective as of August __, 2024 (“Effective Date”) by and between the City of Pacific Grove, a California charter city (“Landlord”) and Sunset Hospitality Group, Inc., a California corporation (“Tenant”).

1. PREMISES.

1.1 Premises. Landlord is the owner of certain real property developed into a municipal park and beach commonly known as Lover’s Point Park and Beach, located generally at the northeast intersection of Ocean View Boulevard and 17th Street, situated in the City of Pacific Grove, Monterey County, State of California (“Property”). The Property is also improved with an approximately 270 square foot building (“Premises”) owned by Landlord and located in the southwest portion of the Property, and described and depicted in Exhibit A, attached hereto and incorporated herein by this reference. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, on the terms and subject to the covenants, conditions and uses stated herein, the Premises. The Premises are leased to Tenant in their “as is” condition. The Premises are leased on an “AS-IS” basis, “WITH ALL FAULTS,” with all furniture, fixtures and equipment located within the Premises as of the Commencement Date (except such as are already owned by Tenant), also being subject to this Lease. Tenant shall also be permitted to use the locked storage area located at the beach level of the Property to store items associated with the operation of the Premises.

1.2 Public Area. Tenant may, subject to rules made by Landlord, and on a nonexclusive basis, use those areas on the Property exterior to the Building designated by Landlord from time to time for the common use of Landlord and members of the public, such as patio and other public areas adjacent to the Building (the “Public Area”). Landlord has sole discretion to determine the design and location of the Public Area and to determine the manner in which the Public Area is maintained and operated. The Public Area does not include space within Tenant’s Premises.

1.3 Parking. During the Term, Tenant shall be entitled to utilize the number of parking spaces within the parking area for the Property as designated by Landlord from time to time. Landlord shall at all times have the right to establish and modify the nature and extent of the parking areas for Premises. Tenant shall not use more parking spaces than its allotment and shall not use any parking spaces specifically assigned by Landlord to other tenants, if any, or for such other uses such as visitor, handicapped or other special purpose parking.

1.4 Reserved Rights.

1.4.1 Landlord’s Right of Entry. Landlord reserves the right to enter the Premises upon reasonable notice to Tenant (except that advance notice shall not be required in case of an emergency) for the following purposes: (i) to inspect the condition of the Premises; (ii) to ascertain the performance by Tenant of the terms and conditions hereof; (iii) to respond to an emergency at the Premises; (iv) to maintain, inspect and repair the Premises to the extent required or permitted under this Lease; (v) to post notices of non-responsibility for alterations, additions or repairs undertaken by Tenant; and (vi) to show the Premises to prospective tenants or purchasers or persons acting on their behalf; (vii) to post a leasing sign in or about the Premises; and (viii) to perform any other right or duty of Landlord under this Lease. Landlord PGCC 8-7-2024

4 may exercise this right of entry without any rent credit to Tenant for any loss of occupancy or quiet enjoyment of the Premises.

1.4.2 Additional Reserved Rights. In addition, Landlord reserve(s) the right upon reasonable notice to Tenant (except that advance notice shall not be required in case of an emergency) to undertake the following: (i) install, use, maintain, repair, alter, relocate or replace any improvements in the Public Area; (ii) grant easements encumbering the Property which do not unreasonably interfere with Tenant’s use of the Premises and dedicate for public use portions thereof; and (iii) affix reasonable signs and displays.

1.5 Compliance with ADA. Notwithstanding anything to the contrary contained in this Lease, Landlord and Tenant agree that responsibility for compliance with the Americans With Disabilities Act of 1990, as amended (the “ADA”) shall be allocated as follows: (i) Landlord shall be responsible for compliance with the provisions of Title III of the ADA for all Public Areas not included within the Premises; (ii) Landlord shall be responsible for compliance with the provisions of Title III of the ADA for any construction, renovations, alterations and repairs made within the Premises if such construction, renovations, alterations or repairs are made by Landlord, its employees, agents or contractors, at the direction of Landlord or done pursuant to plans and specifications prepared or provided by Landlord or Landlord’s architect or space planner; (iii) Tenant shall be responsible for compliance with the provisions of Title III of the ADA for any construction, renovations, alterations and repairs made within the Premises if such construction, renovations, alterations and repairs are made by Tenant, its employees, agents or contractors, at the direction of Tenant or done pursuant to plans and specifications prepared or provided by Tenant or Tenant’s architect or space planner.

1.5.1 Accessibility Disclosure. Landlord hereby advises Tenant that the Premises has not undergone an inspection by a certified access specialist, and except to the extent expressly set forth in this Lease, Landlord shall have no liability or responsibility to make any repairs or modifications to the Premises in order to comply with accessibility standards. The following disclosure is hereby made pursuant to applicable California law:

A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of constructionrelated accessibility standards within the premises.” [Cal. Civ.

Code Section 1938(e)]. Any CASp inspection shall be conducted in compliance with reasonable rules in effect at the Building with PGCC 8-7-2024

5 regard to such inspections and shall be subject to Landlord’s prior written consent.

2. TERM.

2.4 Lease Commencement Date. The initial term of this Lease shall be for a period of five (5) years commencing on the Effective Date (“Initial Term”). Any reference to “Term” in this Lease shall include the Initial Term and the Extension Term where Tenant and Landlord have extended the Lease pursuant to Section 2.2.

2.5 Optional Extension.

2.5.1 Provided that (i) Tenant is not in default under the terms of this Lease at the time the optional extension is exercised or at the commencement of the Extension Term (defined below), and (ii) Tenant has not been in default more than twice in any 12-month period, Landlord and Tenant may mutually agree to renew this Lease for an additional five-year period (“Extension Term”). The Extension Term shall commence, if at all, upon the expiration of the Initial Term and end sixty months later. There shall be no additional extension term beyond the Extension Term set forth herein.

2.5.2 The Extension Term shall be on all the terms and conditions of this Lease.

2.5.3 Base Rent for the Extension Term shall be determined as set forth in section 3.5 below.

2.5.4 Tenant must exercise its option to extend this Lease by giving Landlord a minimum of six (6) months written notice prior to the end of the Initial Term. If Tenant fails to give notice in a timely manner, Tenant shall lose the ability to exercise its extension option.

Landlord may in its discretion waive such failure.

2.5.5 The extension option set forth herein is personal to Tenant and shall not be included in any assignment of this Lease without prior written approval from Landlord.

3. RENT.

3.4 Rent Commencement Date. Tenant’s obligation to pay Rent under this Lease shall commence as of the Effective Date. Rent shall be paid as set forth in this Section 3.

3.5 Base Rent; Rent Adjustment. The monthly Base Rent for the Initial Term shall be $1,500, for a total of $18,000 per year. Base Rent shall be adjusted as set forth in this Section 3.2 and may be adjusted as set forth in Section 3.5, below. Tenant shall pay to Landlord, at Landlord’s Address designated in Item 2 of the Basic Lease Information, or at such other address as Landlord may from time to time designate in writing to Tenant for the payment of Rent, the Base Rent herein defined, without notice, demand, offset or deduction, in advance, on the first day of each calendar month. Upon the execution of this Lease, Tenant shall pay to Landlord the first month’s Base Rent due as of the Rent Commencement Date. All sums other than Base Rent which Tenant is obligated to pay under this Lease shall be deemed to be additional rent PGCC 8-7-2024

6 (“Additional Rent”) due on the same date as Base Rent unless otherwise specified hereunder or otherwise requested by Landlord. Notwithstanding the foregoing, late charges under Section

3.3.4 shall be due and payable immediately as incurred. The term “Rent” means the Base Rent and all Additional Rent payable hereunder. If Rent is due for a period of less than a full month, it shall be prorated for such partial month on the basis of a thirty (30) day month. On the first anniversary of the commencement date of this Lease, and annually thereafter, the rent payable by Tenant shall be increased to an amount determined by multiplying the basic monthly rental by a fraction, the denominator of which shall be the most recent Consumer Price Index figure, as hereinafter defined, published prior to the date of this Lease, and the numerator of which shall be the most recent Consumer Price Index figure published prior to the particular anniversary date; provided, however, that in no event shall the rent for any month after such anniversary be less than the rent for the month immediately preceding such anniversary. As used herein, the term “Consumer Price Index” shall mean Consumer Price Index for All Urban Consumers (CPI-U) for the San Francisco- Oakland-San Jose Average for All Items, 1982-84=100, or the successor of that Index, as published by the Bureau of Labor Statistics, U.S. Department of Labor. Tenant shall make the rent payment on or before the 10th day of each month. Application of Payments.

All payments received by Landlord from Tenant shall be applied to the oldest obligation owed by Tenant to Landlord. No designation by Tenant, either in a separate writing, on a check or money order, or otherwise shall modify this clause or have any force or effect.

3.6 Percentage Rent.

3.6.1 Payment. In addition to the Base Rent, Tenant agrees to pay to Landlord, as Rent for each Lease Year or partial Lease Year, the amount by which the percentage of Tenant's Gross Sales from the Premises set forth in Paragraph 8 of the Basic Lease Provisions for such Lease Year or partial Lease Year (the “Percentage Rent”). Percentage Rent will be determined and paid, without any prior demand within forty-five days (45-days) after the end of such Lease Year, including the last Lease Year of the term of the Lease, and Tenant's obligation will survive the expiration of the Lease Term. Each Lease Year will be considered as an independent accounting period for the purpose of computing the amount of Percentage Rent due.

The amount of Gross Sales of any Lease Year will not be carried over into any other Lease Year.

3.6.2 Gross Sales Reports. Tenant agrees to submit to Landlord on or before the forty-fifth day (45th) day following the end of each Lease Year or partial Lease Year (including the last Lease Year hereof, as to which Tenant's obligation will survive the expiration of the Lease Term) a written statement signed and verified by an authorized representative of Tenant as true and correct, showing the amount of such Gross Sales during the preceding Lease Year or partial Lease Year and an itemization of all permissible deductions from Gross Sales.

The annual statement will also be duly certified by Tenant or an officer of Tenant to be true and correct in compliance with the definition of Gross Sales in this Lease in accordance with sound and accepted accounting practice consistently applied. The statements referred to in this Section

3.3.2 of this Lease must be in such form and style and contain such details and information as Landlord may reasonably designate and will be delivered to the address set forth in Paragraph 2 of the Basic Lease Provisions or such other address as Landlord may from time to time designate. The acceptance by Landlord of payments of Percentage Rent or Gross Sales reports is without prejudice and does not constitute a waiver of Landlord's right to claim a deficiency in the payment of Percentage Rent or to audit Tenant's books and records. The Gross Sales for any PGCC 8-7-2024

7 portion of a calendar month prior to the commencement of the first full calendar month, will be included in the report due for the next succeeding month.

3.6.3 Records and Audit Reports. Tenant agrees to prepare and keep for a period of at least thirty-six (36) months following the end of each Lease Year, true and accurate books of account and records, conforming to generally sound and accepted accounting principles consistently applied, including, but not limited to, sales tax and other reports filed with governmental agencies, all purchases and receipts of merchandise, inventories and all sales and other transactions by Tenant from which Gross Sales at, upon or from the Premises can be determined. Tenant agrees to record all sales, at the time each sale is made, and to retain cumulative cash register tapes or such other cumulative records concerning such Gross Sales as are approved by Landlord. Notwithstanding the foregoing, Landlord agrees that it will not unreasonably refuse to allow Tenant to maintain its books and records in computerized form, provided: (i) that Tenant's computerized books and records provide the same level of information as the print books and records described in this Section 3.3.3 of the Lease; (ii) such computerized books and records are retained for the full thirty-six (36) month retention period, and are made accessible for Landlord's inspection on request; (iii) print copies are made available to Landlord's representatives engaged in inspecting Tenant's books and records upon request. Landlord's consent to computerized record keeping, once given, may be revoked by Landlord on not less than sixty (60) days’ prior written notice to Tenant, if Tenant fails to comply with the foregoing requirements.

If Tenant's Gross Sales are required to be reported on any federal, state or local sales tax return, and Gross Sales so reported on any of the sales tax returns exceed the Gross Sales as reported by Tenant under this Lease, then the Gross Sales will be taken at the highest figure so reported. If any governmental authority increases the Gross Sales reported by Tenant on any such tax return for any Lease Year for which such Gross Sales have been reported, then Tenant will notify Landlord promptly of such increase, supply to Landlord a true copy of such governmental action and pay any additional Percentage Rent due under this Lease together with interest at the late rent Interest Rate set forth in Section 3.3.4 of the Lease from the date such Percentage Rent was due.

Landlord has the right, upon thirty (30) days' notice to Tenant to cause a complete audit of all statements of Gross Sales and in connection with such audit, to examine Tenant's books of account and records (including all supporting data and any other records from which Gross Sales may be tested or determined) of Gross Sales disclosed in any statement provided or required to be provided to Landlord by Tenant. Tenant will make all such records available for such examination at the location set forth in Paragraph 1 of the Basic Lease Provisions. Landlord will have the right to copy and duplicate such information as Landlord may require. If any such audit discloses that the actual Gross Sales transacted by Tenant exceed those reported, then Tenant will pay Landlord such additional Percentage Rent as may be payable together with interest at the late rent Interest Rate pursuant to Section 3.3.4 of the Lease from the date such additional Percentage Rent was due. If the excess so disclosed is ten percent (10%) or more, Tenant will also pay the reasonable costs of Landlord's audit and examination. If the excess is less than ten percent (10%), then Landlord will pay for the services of its auditors. The furnishing by Tenant of any fraudulent statement will constitute a non-curable Event of Default. If an audit is commenced by Landlord, all supporting data and any other records from which Gross Sales may PGCC 8-7-2024

8 be tested or determined will be preserved and retained by Tenant until a final resolution of such audit, dispute or difference. Any information obtained by Landlord as a result of such audit will be treated as confidential, except in any litigation or proceeding between the parties.

For purposes of this lease, the term “gross sales” means sum of the full sale price at which all beverages, food stuffs, catering services and other such goods, room rental fees charged by Tenant, specialty contracted services, wares and merchandise are sold at any time during the term of the Agreement by Tenant, its employees or agents in. Gross sales shall exclude credit card service charges that are not included in the sale price to customers.

3.6.4 Late Charge and Interest. The late payment of any Rent will cause Landlord to incur additional costs, including administration and collection costs and processing and accounting expenses and increased debt service (“Delinquency Costs”). If Landlord has not received any installment of Rent within five (5) calendar days after such amount is due, Tenant shall pay a late charge in the amount of One Hundred Twenty Five Dollars ($125.00) immediately. This late charge represents a reasonable estimate of the Delinquency Costs incurred by Landlord. In addition, all delinquent amounts shall bear interest from the date such amount was due until paid in full at a rate per annum (“Applicable Interest Rate”) equal to the lesser of (a) the maximum interest rate permitted by law, or (b) five percent (5%) above the rate publicly announced by JPMorgan Chase Bank, N.A. (or if JPMorgan Chase Bank, N.A. ceases to exist, the largest bank then headquartered in the United States of America) (“Bank”) at its “Reference Rate.” If the use of the announced Reference Rate is discontinued by the Bank, then the term Reference Rate shall mean the announced rate charged by the Bank which is, from time to time, substituted for the Reference Rate. Landlord and Tenant recognize that the damage which Landlord shall suffer as a result of Tenant’s failure to pay such amounts is difficult to ascertain and said late charge and interest are the best estimate of the damage which Landlord shall suffer in the event of late payment. Landlord’s acceptance of late Rent, partial Rent and late charges does not equate with a waiver of Tenant’s default with respect to the overdue amount, or prevent Landlord from exercising any rights and remedies available under this Lease and/or by operation of law.

3.7 Additional Rent. In addition to paying the Base Rent specified in Item 8 of the Basic Lease Information and in Section 3.2, and pursuant to any Addendum or Amendment to this Lease that Landlord and Tenant may execute, Tenant shall pay as Additional Rent all Utilities and Services, defined and described in Section 4, not directly paid by Tenant to the utility company, and any other amounts of any kind that become due or payable by Tenant to Landlord under the terms of this Lease. Unless Landlord elects otherwise pursuant to this Lease, all amounts due under this section as Additional Rent are payable for the same periods and in the same manner, time and place, as the Base Rent. Tenant’s obligation to pay Rent under this Lease survives the Term to the extent such obligation has not been fulfilled during that Term.

3.8 Renegotiation of Base Rent Amount Upon Leasehold Improvements. If Tenant anticipates undertaking significant and costly renovations to the Property during the Term, upon the issuance of a building permit by City to commence such renovations, City and Tenant may meet to discuss a renegotiation of the rent amount to account for the improvements.

PGCC 8-7-2024

9 3.9 Security Deposit. Tenant shall not be required to deposit any sums with Landlord as security for Tenant’s performance of its obligations under this Lease. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code and agrees that the provisions of this Section 3.5 shall govern the treatment of Tenant’s Security Deposit in all respects for this Lease.

4. UTILITIES AND SERVICES.

4.4 Utilities and Services. Tenant shall be solely responsible for contracting for, and shall promptly pay any and all shall pay when due any and all water, heat, gas, electricity, telephone and other utilities and services (“collectively, “Services”) provided to or for the Premises, including taxes thereon. Tenant shall establish its own accounts for all utility Services, including garbage collection services, to the extent such Services can be separately metered and billed. In the case of any Services that are not separately metered and billed directly to Tenant, but are metered jointly with other premises, Tenant shall pay Landlord upon demand a pro rata share, as determined by Landlord, of all charges. Landlord shall bill Tenant its pro rate share of any Services that are not separately metered within one hundred twenty (120) days of the date that Landlord receives such bills from the Service provider (e.g., utility company). Tenant will also procure, or cause to be procured without cost to Landlord, any and all necessary permits, licenses, or other authorization s required for the lawful and proper installation and maintenance upon the Premises of wires, pipes, conduits, tubes, and other equipment and appliances for use in supplying any such service to and upon the Premises. Landlord, upon request of Tenant, and at the sole expense and liability of Tenant, will join with Tenant in any application required for obtaining or continuing any such services.

4.2 Pest Control. Tenant, at Tenant’s cost, shall at all times keep the Premises free of pests, including the obligation to maintain a pest control service contract with a licensed pest control operator. If Tenant fails to promptly and fully comply with this Section, Landlord shall have the right, but not the obligation, to enter the Premises to perform such spraying or inspections at Tenant’s expense. Performance of such work by Landlord shall not constitute a waiver of Tenant’s default in failing to do the same nor shall it entitle Tenant to any damage for any injury or inconvenience occasioned thereby nor to any abatement of Rent. Tenant shall reimburse Landlord for any cost incurred by Landlord pursuant to this Section upon demand therefor.

4.3 Exculpation of Liability. Landlord shall not be liable for any loss or damage suffered by Tenant or others, by reason of Landlord’s failure to furnish any of the Services, or furnishing reduced Service; no such failure or reduction shall constitute or be construed as a constructive or other eviction of Tenant, nor shall Landlord be liable for loss of business or injury to property however occurring, through or in connection with or incidental to such failure to furnish or reduction of any of the Services. Should Landlord elect to provide a security patrol or system, Landlord shall not be responsible for any damage or injury to Tenant, Tenant’s officers, agents, employees, independent contractors, invitees, customers, visitors, licensees, assignees or subtenants (individually and collectively, “Tenant’s Parties”), or the Premises or property due to failure, action or inaction of such patrol or system. Landlord reserves the right to stop Services when necessary, by reason of accident or emergency or for inspection, repairs, alterations, decorations, additions or improvements which, in the judgment of Landlord, are PGCC 8-7-2024

10 desirable or necessary to be made, until same shall have been completed, and shall further have no responsibility or liability for failure to supply any Services in such instance. Landlord shall use reasonable efforts to minimize the inconvenience to Tenant from any such disruptions or interruptions of Services and shall provide Tenant with reasonable notice of such disruptions or interruptions to the extent that Landlord is aware of or has been provided with advance notice of the disruptions or interruptions. The exculpation of liability under this Section shall not apply to the extent claims are caused by Landlord’s sole or active negligence.

4.4 No Representation. Landlord makes no representation with respect to the adequacy or fitness of any heating, air conditioning or ventilation equipment in the Premises to maintain temperatures which may be required for, or because of, any equipment of Tenant, and Landlord shall have no liability for loss or damage suffered by Tenant or others in connection therewith.

4.5 Conservation and Use Policies. In the event of imposition of federal, state, or local governmental controls, rules, regulations, or restrictions on the use or consumption of energy or other utilities during the Term, both Landlord and Tenant shall be bound thereby. In the event of a difference in interpretation by Landlord and Tenant of any such controls, the interpretation of Landlord shall prevail, and Landlord shall have the right to enforce compliance therewith, including the right of entry into the Premises to effect compliance.

5. TAXES.

5.3 Taxes. As used in this Lease “Taxes” means Possessory Interest Taxes and Personal Taxes. Tenant’s obligations for Taxes for the last full or partial year of the Term and for any prior unpaid Taxes shall survive the expiration or earlier termination of this Lease.

5.4 Statement Regarding Possessory Interest Tax. This Lease creates a possessory property interest in Tenant. Tenant’s property interest may be subject to property taxation, and Tenant or the party in whom the possessory interest is vested may be subject to the payment of property taxes levied on the interest. Such taxes are referred to herein as “Possessory Interest Taxes”.

5.5 Personal Taxes. Tenant shall pay directly to the taxing authority all taxes and assessments levied upon trade fixtures, alterations, additions, improvements, inventories and other personal property located and/or installed on the Premises by Tenant. Such taxes are referred to herein as “Personal Taxes”.

5.6 Payment of Taxes. Tenant shall pay all Taxes prior to delinquency. To the extent any such taxes are not separately assessed or billed to Tenant by the taxing authority, Landlord shall deliver to Tenant copies of the assessment and tax bill together with Landlord’s proposed allocation between Landlord and Tenant. Tenant shall pay the amount reasonably allocated to Tenant no later than ten (10) business days prior to the date on which such Taxes are due. Taxes attributable to any of Tenant’s personal property situated within the Public Area shall be charged to Tenant. Should Tenant fail to pay its Taxes, Landlord may elect to do so on Tenant’s behalf.

Tenant will thereafter be required to reimburse Landlord for such Taxes together with interest at PGCC 8-7-2024

11 the Applicable Interest Rate, from the date Landlord tendered payment, until the date Tenant fully reimburses Landlord.

5.5 Records and Accounting.

5.5.1 Tenant shall keep proper records and accounts of the gross sales. Such records and accounts, including any sales tax reports that Tenant is required to furnish to any governmental authority, shall be open at all reasonable times to the inspection of Landlord or Landlord’s auditor or authorized representative, with prior notice and during business hours.

5.5.2 Monthly accounting of gross sa1es shall be compiled and furnished to Landlord and attached to the payment of Monthly Gross Sales Rent as described in Section 3.2.

5.5.3 Tenant shall provide to Landlord annual compiled financial statements of Tenant’s business at the premises. The annual financial statements shall be due to Landlord within three (3) months after the end of each twelve (12) month operating period

6. INSURANCE.

6.3 Landlord. Landlord may elect to maintain insurance or an insurance equivalent (including but not limited to, e.g., that offered to a municipality through and by a joint powers authority, a self-insurance pool of liability coverage authorized pursuant to California Government Code Section 6500, or similar collective) insuring the Premises on an occurrence basis against fire and extended coverage (including, if Landlord elects, “all risk” coverage, earthquake/volcanic action, flood and/or surface water insurance) similar in type and coverage limits to that carried by Landlord on its other properties. Landlord may also carry such other insurance as Landlord may deem prudent or advisable, in such amounts and on such terms as Landlord shall determine.

6.4 Tenant. Tenant shall, at Tenant’s expense, obtain and keep in force at all times the following insurance, and shall be liable for all premiums, deductibles, and self-insured amounts, if any, in connection therewith:

6.4.1 Commercial General Liability Insurance (Occurrence Form). A policy of commercial general liability insurance (occurrence form) having a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) annual aggregate, providing coverage for, among other things, blanket contractual liability, premises, products/completed operations and personal injury, death and advertising injury coverage, with deletion of (a) the exclusion for operations within fifty (50) feet of a railroad property (railroad protective liability), if applicable, and (b) the exclusion for explosion, collapse or underground hazard, if applicable, and, if necessary, Tenant shall provide for restoration of the aggregate limit.

6.4.2 Workers’ Compensation and Employer’s Liability Insurance. Workers’ compensation insurance that complies with all applicable state statutes and regulatory requirements, and, if Tenant hires any employees, employer’s liability insurance coverage in the amount of at least One Million Dollars ($1,000,000).

PGCC 8-7-2024

12 6.4.3 Property Insurance. “All risk” property insurance including boiler and machinery comprehensive form, if applicable, covering damage to or loss of any improvements, personal property, fixtures and equipment of Tenant (collectively “Tenant’s Property”) (and coverage for the full replacement cost thereof including business interruption of Tenant), together with, if the property of Tenant’s invitees is to be kept in the Premises, warehouser’s legal liability or bailee customers insurance for the full replacement cost of the property belonging to invitees and located in the Premises.

6.5 General.

6.5.1 Insurance Companies. Insurance required to be maintained by Tenant shall be written by companies licensed to do business in California and having a “General Policyholders Rating” of at least A:VIII (or such higher rating as may be required by a lender having a lien on the Premises) as set forth in the most current issue of “Best’s Insurance Guide.”

6.5.2 Certificates of Insurance. Tenant shall deliver to Landlord certificates of insurance for all insurance required to be maintained by Tenant pursuant to this Lease, in the form of the ACORN standard certificate of insurance, prior to the Commencement Date. Tenant shall, at least ten (10) days prior to expiration of the policy, furnish Landlord with certificates of renewal or “binders” thereof. Each certificate shall expressly provide that such policies shall not be cancelable or otherwise subject to modification except after sixty (60) days’ prior written notice to the parties named as additional insureds as required in this Lease (except in the case of cancellation for nonpayment of premium in which case cancellation shall not take effect until at least ten (10) days’ notice has been given to the parties named as additional insureds). If Tenant fails to maintain any insurance required in this Lease, Tenant shall be liable for all losses and cost resulting from said failure.

6.5.3 Additional Insureds. Landlord shall be named as an additional insured on the policy as required by Section 6.2.1. An additional insured endorsement naming such parties as additional insured(s) shall be attached to the certificate of insurance.

6.5.4 Primary Coverage. All insurance to be maintained by Tenant shall be primary without right of contribution from insurance of Landlord.

6.5.5 Umbrella/Excess Insurance. Any umbrella liability policy or excess liability policy (which shall be in “following form”) shall provide that if the underlying aggregate is exhausted, the excess coverage will drop down as primary insurance. The limits of insurance maintained by Tenant shall not limit Tenant’s liability under this Lease,

6.5.6 Waiver of Subrogation. Tenant waives any right to recover against Landlord for claims for damages to Tenant’s Property to the extent covered (or required by this Lease to be covered) by Tenant’s insurance. The coverage obtained by Tenant pursuant to this Lease shall include a waiver of subrogation endorsement attached to the certificate of insurance.

6.5.7 Notification of Incidents. Tenant shall notify Landlord within twenty four (24) hours after the occurrence of any accident or incident in/at Property or any portion thereof which could give rise to a claim against Landlord, its coverage, Tenant or Tenant’s PGCC 8-7-2024

13 insurance. Tenant’s notice shall be accompanied by a copy of any accident/incident form prepared by Tenant, reporting and/or relating to the accident/incident.

6.3.8 Adjustment of Insurance Levels. Landlord reserves the right at any time during the term of this Lease to change the amounts and types of insurance required hereunder upon giving Tenant three (3) months prior written notice.

7. INDEMNITY; LIABILITY EXEMPTION.

7.3 Indemnity. Except with respect to claims solely caused by Landlord’s active negligence or willful misconduct, Tenant shall indemnify, protect, defend, and hold harmless Landlord and its elected and appointed officers, officials, employees, volunteers, lenders, agents, and contractors and each of their successors and assigns from and against any and all claims, judgments, causes of action, damages, penalties, costs, liabilities, and expenses, including all costs, attorneys’ fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon, arising at any time during or after the Term directly or indirectly as a result of or in connection with (i) any default in the performance of any obligation on Tenant’s part to be performed under the terms of this Lease; (ii) Tenant’s use of the Premises or the Property, including the conduct of Tenant’s business or any activity, work or things done, permitted or suffered by Tenant in or about the Premises, the Public Area, or other portions of the Property; (iii) any act, error or omission of Tenant or of any invitee, licensee or guest of Tenant, in or about the Premises, the Public Area, or other portions of the Property; (iv) loss of, injury, or damage to or destruction of property (including loss of use resulting from that loss, injury, damage or destruction); (v) all resulting economic losses, consequential and/or exemplary damages; and (vi) any subleases, assignments and related activities, (all of the foregoing, collectively, the “Indemnification”). Tenant shall provide such Indemnification by and through counsel reasonably acceptable to Landlord. The obligations of Tenant under this Section shall survive the expiration or sooner termination of this Lease.

7.4 Exemption of Landlord from Liability. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to property including, but not limited to, Tenant’s fixtures, equipment, furniture and alterations or injury to persons in, upon or about the Premises, the Public Area, or other portions of the Property arising from any cause, and Tenant hereby waives all claims in respect thereof against Landlord, except to the extent such claims are caused by Landlord’s sole or active negligence or willful misconduct, Tenant hereby agrees that Landlord shall not be liable for injury to Tenant’s business or any loss of income therefrom or for damage to the property of Tenant, or injury to or death of Tenant, Tenant’s Parties or any other person in or about the Premises, the Public Area, or the Property, whether such damage or injury is caused by fire, steam, electricity, gas, water or rain, or from the breakage, leakage or other defects of sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause, whether said damage or injury results from conditions arising upon the Premises, the Public Area, or other portions of the Property or from other sources or places, and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to Tenant, except damage or injury caused solely by Landlord’s sole or active negligence or willful misconduct. Landlord shall not be liable for any damages arising from any act or neglect of any other tenant, if any, of the Premises, the Public PGCC 8-7-2024

14 Area or other portions of the Property or Landlord’s failure to enforce the terms of any agreements with parties other than Tenant.

8. REPAIRS AND MAINTENANCE.

8.3 Landlord’s Obligations.

8.3.1 At Landlord’s Election on Tenant’s Behalf, Landlord shall not be required to make or bear the costs of any repair resulting from (i) any alteration or modification to the Premises or to mechanical equipment within the Premises performed by, for or because of Tenant or to special equipment or systems installed by, for or because of Tenant, (ii) the installation, use or operation of Tenant’s property, fixtures and equipment, (iii) the moving of Tenant’s property in or out of the Premises, or the Property, or in and about the Premises, (iv) Tenant’s use or occupancy of the Premises in violation of Section 10 of this Lease or in the manner not contemplated by the parties at the time of the execution of this Lease, (v) the acts or omissions of Tenant or Tenant’s Parties, (vi) fire and other casualty, except as provided by Section 12 of this Lease, (vii) condemnation, except as provided in Section 13 of this Lease, or (viii) or any condition which might require repair. If Landlord elects to undertake repairs and maintenance necessitated by causes set forth in the preceding sentence, then Tenant shall pay as Additional Rent, Landlord’s actual costs paid or incurred in connection therewith.

8.3.2 Tenant’s Waiver. Notwithstanding anything to the contrary, whether stated or implied in this Lease, Tenant waives and releases its rights to make repairs at Landlord’s expense or deduct such expenses from Rent, except as expressly stated in this Lease.

8.4 Tenant’s Obligations. Tenant, at Tenant’s expense, shall maintain the Premises in good order, condition and repair, including, without limitation, interior floor surfaces and floor coverings, interior walls and wall coverings, Signs and Graphics, and any items required for compliance with applicable laws, rules and regulations. In the event Tenant fails, in the reasonable judgment of Landlord, to maintain the Premises in good order, condition and repair, Landlord shall, upon five (5) days’ written notice to Tenant, have the right to perform such maintenance, repairs or refurbishing at Tenant’s expense, provided Tenant fails to do so within that five-day period.

8.3 Beginning Condition. On the Commencement Date, Tenant shall accept the Premises in its “AS IS” condition. Tenant acknowledges that it has inspected the Premises and agrees that the Premises are suitable for Tenant’s intended use and Tenant agrees that it is not relying on any warranty or representation made by Landlord or its officers concerning the use of the Premises or the Property. Landlord does not represent or warrant that the Premises or the Property conform to applicable restrictions, zoning ordinances, setback lines, parking requirements, impervious ground cover ratio requirements, or other matters that may relate to Tenant’s intended use.

8.4 Condition Upon Surrender. Upon the expiration of termination of this Lease, Tenant shall surrender the Premises to Landlord broom clean, and, subject to reasonable wear and tear, in the condition which Tenant shall have been required to maintain the Premises under this Lease with the heating, ventilation, plumbing, electrical, lighting, man doors, dock doors, PGCC 8-7-2024

15 levelers, shelters, seals and bumpers (if any), windows and floors serving the Premises in good operating condition. Tenant shall repair all damage to the Premises caused by the installation or removal of its trade fixtures and other property of Tenant. Tenant shall restore the Premises to the same condition or better as existed immediately prior to the installation of any item removed.

9. ALTERATIONS.

9.3 Condition of Premises. Tenant acknowledges that Landlord has made no representation or warranty regarding the condition of the Premises, Public Area, or Property except as specifically stated in this Lease.

9.3.1 Landlord Improvements to Premises. The Premises are leased in an as-is condition.

9.4 Tenant Improvements to Premises. Tenant, at Tenant’s sole cost and expense, may install interior improvements, subject to Landlord’s prior written approval (“Work”). Plans, specifications, and drawings for the Work shall be subject to prior written approval by Landlord’s Public Works Director, and Tenant shall be responsible for obtaining any and all required permits. Tenant may perform those components of the Work which constitute minor cosmetic alterations (i.e., painting), are non-structural, do not require a permit, and are not typically performed by a licensed contractor or tradesperson. Any other Work shall be performed by licensed contractors and in accordance with all applicable laws, including without limitation, any applicable State laws regarding prevailing wage requirements. In no event shall Tenant undertake any structural, electrical or plumbing work in connection with, or work on the exterior of, the Building, the Property or the Premises without Landlord’s advance written consent.

9.5 Trade Fixtures: Alterations. Subject to Section 9.6, Tenant may install necessary trade fixtures, equipment and furniture in the Premises, provided that such items are installed and are removable without structural or material damage to the Premises. For purposes of this Lease, the term “trade fixture” shall mean specialty fixtures or equipment used in Tenant’s trade or business as identified by Tenant and agreed to by Landlord in writing. Tenant shall not construct, or allow to be constructed, any alterations or physical additions in, about or to the Premises without the prior written consent of Landlord.

9.6 Standard of Work. All work to be performed by or for Landlord or Tenant pursuant hereto shall be performed diligently and in a first-class, workmanlike manner, and in compliance with all Laws applicable to the Premises and insurance carrier requirements.

Landlord shall have the right, but not the obligation, to inspect periodically the Work, and Landlord may require changes in the method or quality of the Work. In no event shall the Work obstruct access to the Property and/or Public Area.

9.7 Damage; Removal. Tenant shall repair all damage to the Property and the Premises caused by the installation or removal of Tenant’s fixtures, equipment, furniture and alterations. Upon the termination of this Lease, Tenant shall remove any or all alterations, additions, improvements and partitions made or installed by Tenant and restore the Premises to their condition existing prior to the construction of any such items and perform any closure work, investigation and environmental remedial work required by any Hazardous Materials Laws (as PGCC 8-7-2024

16 hereinafter defined) or by any other applicable laws, ordinances, regulations or permits by any governmental authority having jurisdiction; provided, however, Landlord may require, upon written notice to Tenant no less than fifteen (15) days before the expiration of the Term, any such items (except trade fixtures) designated by Landlord to remain on the Premises, in which event they shall be and become the property of Landlord upon the termination of this Lease. All such removals and restoration shall be accomplished in a good and workmanlike manner so as not to cause any damage to the Premises, the Public Area, or the Property whatsoever and in strict accordance with all applicable laws, regulations and governmental orders.

9.8 Liens. Tenant shall promptly pay and discharge all claims for labor performed, supplies furnished, and services rendered at the request of Tenant and shall keep the Property and the Premises free of all mechanics’ and materialmen’s liens in connection therewith. Tenant shall provide at least ten (10) days’ prior written notice to Landlord before any labor is performed, supplies furnished or services rendered on or at the Premises and Landlord shall have the right to post on the Premises notices of non-responsibility. If any lien is filed, Tenant shall cause such lien to be released and removed within ten (10) days after the date of filing, and if Tenant fails to do so, Landlord may take such action as may be necessary to remove such lien, without the duty to investigate the validity of it (unless Tenant has commenced an action to contest, dispute or defend the claims of lienholders and has provided Landlord with written notice of the pendency of the action), and Tenant shall pay Landlord such amounts expended by Landlord together with interest thereon, at the Applicable Interest Rate, from the date of expenditure.

9.9 Satellites and Antennae. Notwithstanding anything in this Lease to the contrary, Landlord and Tenant agree that it shall be reasonable for Landlord to withhold its consent to (i) installation in or about the Premises or Property of equipment comprising or relating to relays, monopoles, satellite dishes, antennae, wireless telecommunications devices, transmitters, roof mounts, two-way radios, or similar apparatus (collectively, “Transmission Devices”) or (ii) any assignment or subletting which permits or contemplates installation of such Transmission Devices.

10. USE.

10.3 Usage. The Premises will be used for the operation of a snack bar serving sandwiches, other light menu items, and beverages, and for no other uses without the prior written consent of Landlord, which may be granted or withheld in Landlord’s sole and absolute discretion. Tenant acknowledges that neither Landlord nor any of Landlord’s agents has made any representation or warranty with regard to the Premises, the Public Area, or the Property with respect to their suitability for the conduct of Tenant’s business. Tenant’s execution of this Lease and entry of the Premises hereunder shall conclusively establish that the foregoing were at such time in satisfactory condition. Tenant, at Tenant’s expense, shall comply with all laws, rules, orders, ordinances, directions, regulations and requirements of federal, state, county and municipal authorities now in force or which may hereafter be in force (“Laws”), which shall impose any duty upon Landlord or Tenant with respect to the use, occupancy, or alteration of the Premises. Tenant shall be responsible for obtaining any permit or business license required by any governmental agency permitting Tenant’s use of the Premises. Tenant shall comply with the Rules and Regulations, including observance of prohibited uses, attached hereto as Exhibit B and incorporated by reference, together with such reasonable additional rules and regulations as PGCC 8-7-2024

17 Landlord may from time to time prescribe. Tenant shall not commit waste, overload the floors or structure of the building, subject the Property or any portion thereof to any use which would damage the same or increase the risk of loss or violate any insurance coverage, permit any unreasonable odors, smoke, dust, gas, substances, noise or vibrations to emanate from the Premises, take any action which would constitute a nuisance or would disturb, obstruct or endanger any other tenants, take any action which would abrogate any warranties, or use or allow the Premises to be used for any unlawful purpose. Landlord shall not be responsible for non-compliance by any other tenant or occupant with, or Landlord’s failure to enforce, any of the rules and regulations or any other terms or provisions of such tenant’s or occupant’s lease.

Tenant shall promptly comply with the reasonable requirements of any board of fire insurance underwriters or other similar body now or hereafter constituted. Tenant shall not do any act which shall in any way encumber the title of Landlord in and to the Property or any portion thereof.

10.4 Quiet Enjoyment. Tenant, upon paying Rent and performing all of its obligations under this Lease, shall peaceably and quietly enjoy the Premises, subject to the terms of this Lease, and any mortgage, deed of trust, lease, or other agreement to which this Lease may be subordinate. Tenant acknowledges that the Premises are adjacent to a City-owned public park and beach. Tenant acknowledges that Tenant is leasing the Premises with full awareness of this adjacent use.

10.5 Access. Tenant shall be permitted 24-hour a day access to the Premises.

10.6 Operations.

10.6.1 Hours of Operation. Tenant agrees that the hours of operation shall be posted at the location and any Tenant website that is primarily used for the space. Hours of operation shall be in compliance with the Rules and Regulations attached hereto as Exhibit B.

10.4.2 General Method of Operation. Tenant shall operate the business on the Premises continuously during the entire term of this Lease with such due diligence and efficiency as will reasonably produce the maximum return to Tenant.

10.4.3 Management. A manager shall be present during all times the facility is open for business.

10.4.4 Licenses and Permits. Tenant shall obtain all permits and licenses required by the laws of any federal, state, or other governmental agency to allow Tenant to meet the obligations under this Lease. All permits and licenses shall be maintained in Tenant’s name.

Tenant shall pay, at Tenant’s own expense, all charges and fees incidental to the lawful conduct of the services, and keep fully informed on all existing Federal, State and local laws, ordinances, and regulations which in any manner affect the fulfillment of this agreement. Tenant shall pay, when due, all taxes and assessments levied upon the Premises and personal property situated in the Premises. Tenant recognizes and understands that this Lease may create a real property possessory interest tax that may subject the Tenant to real property truces. Nonpayment of taxes may result in Tenant being in default under Section 5.4.

10.4.5 Restaurant Name. The restaurant name shall be “Lover’s Point Snack PGCC 8-7-2024

18 Bar.” Any change to this name shall require the advance written approval of Landlord. This name shall attach to the Premises and be exclusively available to Landlord and any successor restaurant operator, upon termination of the Lease.

10.4.6 Health and Sanitation. Tenant shall insure that all its employees are neatly attired in clean and appropriate uniforms whenever on duty. The Landlord requires that all Tenant’s employees engaged in the preparation, handling, serving, and storage of food meet both State of California and Monterey County Health Department requirements and the Landlord’s health requirements for such activity.

10.4.7 Recycling Program. Tenant, at Tenant’s cost, shall participate in any and all recycling programs in which Landlord is obligated to participate by law or if Tenant is otherwise required to do so pursuant to any federal, state or local law, rule or regulation

10.5 Sewer Damage. Tenant agrees not to discharge any harmful or dangerous chemicals into the sewer system, whether it be inside the Premises area or inside the main system leading from the Premises to the main sewer line. Should Tenant discharge any harmful chemicals into the sewer system, Tenant shall be fully responsible for the cost and repair of such damage. Landlord reserves the right to select an expert of its choosing to inspect any damage at Tenant’s cost. Tenant shall not be responsible for cost of expert if it is determined such damage is not caused by Tenant. Tenant accepts responsibility for any damage if the following conditions exist: (i) the damage to the sewer system is determined to be due to the chemicals used in the operation of Tenant’s business; or (ii) the damage exists only in the designated portion of the sewer system connecting to the Premises.

11. ENVIRONMENTAL MATTERS.

11.3 Environmental Compliance. Tenant shall, at its sole cost and expense, comply with all federal, state and local laws from time to time in effect (“Hazardous Materials Laws”) concerning the management, use, generation, storage, transportation, presence, discharge or disposal of hazardous, toxic, radioactive or carcinogenic materials, substances or wastes (“Hazardous Materials”). Neither Tenant nor its agents, employees, contractors, sublessees, assignees or invitees shall use, handle, store, transport, release or dispose of any Hazardous Materials anywhere in, on, under or about the Premises. Tenant shall cause any and all Hazardous Materials brought onto, used, generated, stored or discharged in the Premises to be removed from the Premises and transported for disposal in accordance with applicable Hazardous Materials Laws. Landlord shall have the right to enter the Premises from time to time to conduct tests, inspections and surveys concerning Hazardous Materials and to monitor Tenant’s compliance with its obligations concerning Hazardous Materials and Hazard Materials Laws. Tenant shall immediately notify Landlord in writing of any voluntary clean-up or removal action instituted or proposed by Tenant, any enforcement, clean-up, removal or other governmental or regulatory action instituted or threatened, or any claim made or threatened by any person against Tenant, the Premises relating to Hazardous Materials or Hazardous Materials Laws, Tenant shall also supply to Landlord as promptly as possible, and in any event within five (5) business days after Tenant receives or sends same, copies of all claims, reports, complaints, notices, warnings or asserted violations relating in any way to the Premises or Tenant’s use thereof and concerning Hazardous Materials or Hazardous Materials Laws.

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19 11.4 Tenant’s Indemnification. Except to the extent caused by Landlord’s sole or active negligence, Tenant shall indemnify, defend and hold Landlord harmless from any claims, causes of action, liabilities, losses, damages, injunctions, suits, fines, penalties, costs or expenses (including attorneys’ fees and expenses) caused or alleged to have been caused by the presence, use or release of Hazardous Materials in or about the Premises, including, without limitation, any personal injury, death, property damage, decrease in value of the Premises, caused or alleged to have been caused by the use, storage, generation, presence or release of Hazardous Materials, whether such claims, causes of action or liabilities are first asserted during the Term or thereafter, and including without limitation, claims made against Landlord with respect to personal injury, death or property damage sustained by third parties caused or alleged to have been caused by the use, storage, generation, presence or release of Hazardous Materials in violation of Tenant’s obligations under this Lease. Tenant’s obligations under this Section shall survive the expiration or earlier termination of this Lease.

12. DAMAGE AND DESTRUCTION.

12.3 If, during the Term, the building and other improvements that are part of the Premises are totally or partially destroyed from any cause, rendering the Premises totally or partially inaccessible or unusable, and at least one (1) year of the Term remains, Landlord shall restore said building and improvements to substantially the same condition as they were in immediately before destruction, if the restoration can be made under then existing laws and can be completed within 180 working days after obtaining all necessary permits therefore, and if the cost of such repairs does not exceed the amount of insurance proceeds received by Landlord from Tenant’s Insurance pursuant to Section 6 above, on account of such damages. Such destruction shall not terminate this Lease. In case of destruction, there shall be an abatement or reduction of Rent, between the date of destruction and the date of completion of restoration if restoration takes place, based on the extent to which the destruction actually interferes with Tenant’s use of the Premises. Tenant hereby waives the provisions of Sections 1932, Subdivision 2, and 1933, Subdivision 4, of the Civil Code of California. If the restoration cannot be made in the time stated in this paragraph, then within 15 days after the parties determine that the restoration cannot be made in the time stated in this paragraph, Tenant can terminate this Lease immediately by giving written notice to Landlord. If Tenant fails to terminate this Lease and if restoration is permitted under the existing laws, Landlord, at its election, can either terminate this Lease or restore the building and other improvements that are part of the Premises within a reasonable time and this Lease shall continue in full force and effect. If the existing laws do not permit the restoration, either party can terminate this Lease immediately by giving notice to the other party. In the event of the giving of such notice of termination by Landlord or Tenant as provided herein, this Lease and all interest of Tenant in the Premises shall terminate 15 days after receipt of such notice by the other party.

12.4 Uninsured or Underinsured Casualty. In the event that the Premises are (i) damaged to the extent Tenant is unable to use the Premises and such damage is not covered by insurance proceeds received by Landlord, (ii) the Premises are damaged to the extent that the estimated repair cost exceeds the insurance proceeds, if any, available for such repair (not including the deductible(s), if any, on Landlord’s property and other applicable insurance) plus any amount that Tenant is obligated or elects to pay for such repair, (iii) the estimated repair cost, even though covered by insurance, exceeds fifty percent (50%) of the full replacement cost PGCC 8-7-2024

20 of the Premises, or (iv) in the event that the holder of any indebtedness secured by the Premises requires that the insurance proceeds be applied to such indebtedness, then Landlord shall have the right at Landlord’s option either (a) to repair such damage as soon as reasonably possible at Landlord’s expense, or (b) to give written notice to Tenant within thirty (30) days after the date of the occurrence of such damage of Landlord’s intention to terminate this Lease as of the date of the occurrence of such damage.

12.5 Tenant’s Fault; Repair Limitation. If the Premises are damaged resulting from the negligence or breach of this Lease by Tenant or any of Tenant’s Parties, Rent shall not be reduced during the repair of such damage and Tenant shall be liable to Landlord for the cost of the repair caused thereby to the extent such cost is not covered by insurance proceeds.

Notwithstanding anything in this Lease to the contrary, and except to the extent caused by Landlord’s sole or active negligence, Landlord shall not be required to repair any injury or damage, by fire or other cause to the property of Tenant or to make repairs or replacements of any decorations, or any improvements installed on the Premises by or for Tenant, unless Landlord has received insurance proceeds from Tenant’s property insurance as provided in Section 6.2.3 above, and neither Tenant nor Landlord have opted to terminate this Lease as provided in Section 19.13.

13. EMINENT DOMAIN.

13.3 Effect on Rights and Obligations. If any portion of the Premises is permanently taken by condemnation, this Lease shall remain in effect, except that Tenant can elect to terminate this Lease if 15% or more of the total number of square feet in the Premises is taken or if the remaining portion of the Premises is rendered unsuitable for Tenant’s continued use. If Tenant elects to terminate this Lease, Tenant must exercise its right to terminate by giving written notice to Landlord within 30 days after the nature and the extent of the taking have been finally determined, as of the date of termination, which date shall not be earlier than 30 days nor later than 90 days after Tenant has notified Landlord of its election to terminate; except that this Lease shall terminate on the date of taking if the date of taking falls on a date before the date of termination as designated by Tenant. If Tenant does not terminate this Lease within the 30-day period, this Lease shall continue in full force and effect, except that the monthly Rent thereafter to be paid shall be reduced on a pro-rata basis. Tenant shall notify Landlord in writing of any condemnation or threatened condemnation within ten (10) days after Tenant receives notice of said action or threatened action.

14. DEFAULT.

14.3 Events of Default. When used in this Lease with reference to Tenant, the term “default” refers to any breach of Tenant’s obligations under this Lease, however brief. When any such default continues for the applicable period specified below, such default shall constitute an Event of Default hereunder, entitling Landlord to exercise the remedies set forth in Sections 14.2 and 14.3 of this Lease. The occurrence of any of the following events shall constitute an “Event of Default”:

14.3.1 Failure to comply with Assignment and Subletting provisions as set forth in Section 15.1;
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21 14.3.2 Abandonment of or vacating the Premises for a period of thirty (30) consecutive days;

14.3.3 Failure to pay Rent on the date when due and the failure continuing for a period of ten (10) days after such payment is due;

14.3.4 Failure to perform Tenant’s covenants and obligations hereunder (except default in the payment of Rent) where such failure continues for a period of thirty (30) days;

14.3.5 The making of a general assignment by Tenant for the benefit of creditors; the filing of a voluntary petition by Tenant or the filing of an involuntary petition by any of Tenant’s creditors seeking the rehabilitation, liquidation or reorganization of Tenant under any law relating to bankruptcy, insolvency or other relief of debtors and, in the case of an involuntary action, the failure to remove or discharge the same within sixty (60) days of such filing; the appointment of a receiver or other custodian to take possession of substantially all of Tenant’s assets or this leasehold; Tenant’s insolvency or inability to pay Tenant’s debts or failure generally to pay Tenant’s debts when due; any court entering a decree or order directing the winding up or liquidation of Tenant or of substantially all of Tenant’s assets; Tenant taking any action toward the dissolution or winding up of Tenant’s affairs; the cessation or suspension of Tenant’s use of the Premises; or the attachment, execution or other judicial seizure of substantially all of Tenant’s assets or this leasehold; or

14.3.6 The making of any material misrepresentation or omission by Tenant or any successor in interest of Tenant in any materials delivered by or on behalf of Tenant to Landlord or Landlord’s lender pursuant to this Lease.

14.4 Remedies.

14.4.1 Termination. In the event of the occurrence of any Event of Default, Landlord shall have the right to give a written termination notice to Tenant and, on the date specified in such notice (which date is at least two (2) business days following the date of delivery of such notice), this Lease shall terminate unless on or before such date all arrears of Rent and all other sums payable by Tenant under this Lease and all costs and expenses incurred by or on behalf of Landlord hereunder shall have been paid by Tenant and all other Events of Default at the time existing shall have been fully remedied to the satisfaction of Landlord.

A. Repossession. Following termination, without prejudice to other remedies Landlord may have, Landlord may (i) peaceably re-enter the Premises upon voluntary surrender by Tenant or remove Tenant therefrom and any other persons occupying the Premises, using such legal proceedings as may be available; (ii) repossess the Premises or re-let the Premises or any part thereof for such term (which may be for a term extending beyond the Term), at such rental and upon such other terms and conditions as Landlord in Landlord’s sole discretion shall determine, with the right to make reasonable alterations and repairs to the Premises; and (iii) remove all personal property therefrom.

B. Unpaid Rent. Landlord shall have all the rights and remedies of a landlord provided by applicable law, including the right to recover from Tenant: (a) the worth, at the time of award, of the unpaid Rent that had been earned at the time of termination, (b) the PGCC 8-7-2024

22 worth, at the time of award, of the amount by which the unpaid Rent that would have been earned after the date of termination until the time of award exceeds the amount of loss of rent that Tenant proves could have been reasonably avoided, (c) the worth, at the time of award, of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided, and (d) any other amount, and court costs, necessary to compensate Landlord for all detriment proximately caused by Tenant’s default. The phrase “worth, at the time of award,” as used in (a) and (b) above, shall be computed at the Applicable Interest Rate, and as used in (c) above, shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

14.4.2 Continuation. Landlord shall have the remedy described in California Civil Code section 1951.4 (as amended from time to time, and successor statutes thereto) and Landlord may continue the Lease in effect after Tenant’s breach and abandonment and recover Rent as it becomes due. In the event and for so long as Landlord elects this remedy, Tenant shall have the right to sublet its Premises, assign its interest in the Lease, or both, subject to Landlord’s prior written consent, which shall not be unreasonably withheld. In addition, even though an Event of Default may have occurred, this Lease shall continue in effect for so long as Landlord does not terminate Tenant’s right to possession, and Landlord may enforce all of Landlord’s rights and remedies under this Lease, including the right to recover Rent as it becomes due. Landlord, without terminating this Lease, may, during the period Tenant is in default, enter the Premises and re-let the same, or any portion thereof, to third parties for Tenant’s account and Tenant shall be liable to Landlord for all costs Landlord incurs in re-letting the Premises, including, without limitation, brokers’ commissions, expenses of remodeling the Premises and like costs. Re-letting may be for a period shorter or longer than the remaining Term. Tenant shall continue to pay the Rent on the date the same is due. No act by Landlord hereunder, including acts of maintenance, preservation or efforts to lease the Premises or the appointment of a receiver upon application of Landlord to protect Landlord’s interest under this Lease, shall terminate this Lease unless Landlord notifies Tenant that Landlord elects to terminate this Lease. In the event that Landlord elects to re-let the Premises, the rent that Landlord receives from re-letting shall be applied to the payment of, first, any indebtedness from Tenant to Landlord other than Base Rent and Additional Rent; second, all costs, including maintenance, incurred by Landlord in re-letting; and, third, Base Rent and Additional Rent. After deducting the payments referred to above, any sum remaining from the rental Landlord receives from re-letting shall be held by Landlord and applied in payment of future Rent as Rent becomes due under this Lease. In no event shall Tenant be entitled to any excess rent received by Landlord. If, on the date Rent is due under this Lease, the rent received from the re-letting is less than the Rent due on that date, Tenant shall pay to Landlord, in addition to the remaining Rent due, all costs, including maintenance, which Landlord incurred in re-letting the Premises that remain after applying the rent received from re-letting as provided hereinabove. So long as this Lease is not terminated, Landlord shall have the right to remedy any default of Tenant, to maintain or improve the Premises, to cause a receiver to be appointed to administer the Premises and new or existing subleases and to add to the Rent payable hereunder all of Landlord’s reasonable costs in so doing, with interest at the Applicable Interest Rate from the date of such expenditure.

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23 14.5 Remedies Cumulative. Each right and remedy of Landlord provided for herein or now or hereafter existing at law, in equity, by statute or otherwise shall be cumulative and shall not preclude Landlord from exercising any other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity, by statute or otherwise. No payment by Tenant of a lesser amount than the Rent nor any endorsement on any check or letter accompanying any check or payment as Rent shall be deemed an accord and satisfaction of full payment of Rent; and Landlord may accept such payment without prejudice to Landlord’s right to recover the balance of such Rent or to pursue other remedies.

14.6 Default of Landlord. Except to the extent caused by reasons beyond Landlord’s reasonable control, Landlord’s failure to perform any obligation required of it pursuant to the terms of this Lease within thirty (30) days following written notice from Tenant or, in the case of any obligation which cannot reasonably be performed within thirty (30) days, Landlord’s failure to commence such performance within said thirty (30) day period and thereafter diligently pursue such performance to completion, shall constitute a default by Landlord under the terms of this Lease. In the event of a default by Landlord, Tenant shall have the right to seek any and all remedies provided for in this Lease or otherwise existing at law.

15. ASSIGNMENT AND SUBLETTING.

15.3 Landlord’s Consent. Tenant shall not assign, sublet or otherwise transfer, whether voluntarily or involuntarily or by operation of law, the Premises or any part thereof, without Landlord’s prior written approval, which shall not be unreasonably withheld. Any sublease or assignment or other transfer agreements shall be subject to Landlord’s prior written approval.

Tenant’s attempted assignment/subletting without first obtaining Landlord’s written consent shall be void at Landlord’s election. Landlord’s consent to one assignment or subletting shall not be deemed a consent to subsequent assignments and/or sublettings. The parties agree that it shall be reasonable for Landlord to withhold its consent to a proposed assignment or subletting if the proposed assignee or sublessee or the nature of its business would require Landlord to incur additional expense in construction work or other work to the Premises that would not otherwise be required if Tenant remained, for example, if the proposed assignee or sublessee is subject to compliance with additional requirements of the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.) (including related regulations) beyond those requirements which are applicable to the tenant desiring to assign or sublease, if the proposed assignee’s or sublessee’s activities in, on or about the Premises or the Property involve the use, analysis, handling, storage, transport, discharge, release, generation or disposal of any Hazardous Materials, or if the proposed assignment or subletting would violate any section of this Lease.

15.4 Notice. If Tenant desires to assign this Lease or sublet any or all of the Premises, Tenant shall give Landlord written notice thereof (“Tenant’s Transfer Request”) with copies of all related documents and agreements associated with the assignment or sublease, including without limitation, a description of the space Tenant proposes to assign or sublet, the anticipated effective date of the assignment or sublease, the financial statements of any proposed assignee or sublessee, at least forty-five (45) days prior to the anticipated effective date of the assignment or sublease. A condition to Landlord’s consent to any Transfer of this Lease will be the delivery to Landlord of a true copy of the fully executed instrument of assignment, sublease, transfer or hypothecation, in form and substance reasonably satisfactory to Landlord. Landlord shall have a PGCC 8-7-2024

24 period of thirty (30) days following receipt of Tenant’s Transfer Request and all related documents and agreements to notify Tenant in writing of Landlord’s election to disapprove the Sublease or Assignment. In any event, if Landlord fails to notify Tenant in writing of Landlord’s election, Landlord shall be deemed to have disapproved such assignment or subletting, nor shall failure by Landlord to approve a proposed tenant shall cause a termination of this Lease. This Lease may not be assigned by operation of law. Any purported assignment or subletting contrary to the provisions hereof shall be void at Landlord’s election and shall constitute an Event of Default hereunder.

15.5 Subject to Lease. Any assignments or sublets must be subject to and in accordance with the terms and conditions of this Lease, and must be consistent with the use requirements provided in Section 10 herein. In no event may any sublessee encumber this Lease.

Tenant shall remain fully liable under this Lease and shall not be released from performing any of the terms, covenants and conditions of this Lease.

15.6 Indemnification. Tenant shall ensure that any sublessees or assigns through their subleases or assignment agreements shall indemnify, protect, defend, and hold harmless Landlord and its elected and appointed officers, officials, employees, volunteers, lenders, agents, contractors and each of their successors and assigns to the same extent that Tenant shall so indemnify Landlord as set forth in this Lease.

15.7 Relocation Waiver. Each sublease or rental agreement shall contain a relocation waiver in substantially the following form: “Relocation Waiver. Sublessee fully releases and discharges the City of Pacifica (in its capacity as Landlord and otherwise as a municipal corporation) from all and any manner of rights, demands, liabilities, obligations, claims, or cause of actions, in law or equity, of whatever kind or nature, whether known or unknown, whether now existing or hereinafter arising, which arise from or relate in any manner to the sale of the Property, Building, Premises, or the Subleased Premises, the full or partial termination of Sublessee’s leasehold interest as permitted under this Sublease, or the relocation of Sublessee’s business operations or the relocation of any person or persons, business or businesses, or other occupant or occupants located on the Subleased Premises, including, without limitation, the specific waiver and release of any right to any relocation benefits, assistance and/or payments under Government Code sections 7260 et seq. (“Relocation Assistance Law”), notwithstanding that such relocation assistance, benefits and/or payments may be otherwise required under the Relocation Assistance Law or other state or federal law. Sublessee acknowledges and agrees that the release and waiver set forth in this section is material consideration for Landlord’s consent to the sublease by Sublandlord of the Subleased Premises to Sublessee on the terms set forth herein and that, but for this release and waiver, Landlord would not have consented to the sublease of the Subleased Premises by Sublandlord to Sublessee. It is hereby intended that the above release relates to both known and unknown claims that the Sublessee may have, or claim to have, against the Landlord or the City of Pacifica with respect to the subject matter contained herein or the events relating thereto. By releasing and forever discharging claims both known and unknown which are related to or which arise under or in connection with the items set out above, the Sublessee expressly waives any rights under California Civil Code section 1542, which provides:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
PGCC 8-7-2024

25 TO EXIST IN HIS OR HER FAVOR AT THE TIME OF

EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM

OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.”

15.8 Liability. Landlord may, without waiving any rights or remedies, collect rent from the assignee, sublessee or occupant and apply the net amount collected to the Rent herein reserved and apportion any excess rent so collected in accordance with the terms of the preceding sentence. Tenant (and successor tenants) shall continue to be liable as a principal and not as a guarantor or surety to the same extent as though no assignment or subletting had been made. In addition, Tenant shall make all legally required disclosures to the proposed assignee or sublessee. Landlord may consent to subsequent assignments or subletting of this Lease or amendments or modifications to the Lease by assignees of Tenant without notifying Tenant or any successor of Tenant and without obtaining their consent; Landlord’s consent shall not be construed as relieving Tenant or any successor tenant of any liability or obligation under the Lease. No transfer shall be effective until there has been delivered to Landlord a counterpart of the transfer instrument in which the transferee agrees to be and remain jointly and severally liable with Tenant (and if applicable, successor tenants) for the payment of Rent pertaining to the Premises and for the performance of all the terms and provisions of this Lease relating thereto arising on or after the date of the transfer. No transfer will release Tenant of Tenant’s obligations under this Lease or alter the primary liability of Tenant to pay the rent and to perform all other obligations to be performed by Tenant hereunder. In the event of default by any transferee of Tenant or any successor of Tenant in the performance of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against such transferee or successor. Notwithstanding any contrary provision of this Lease, if Tenant or any proposed transferee claims that Landlord has unreasonably withheld or delayed its consent to a proposed transfer or otherwise has breached its obligations under this Section, Tenant’s and such transferee’s only remedy shall be to seek a declaratory judgment and/or injunctive relief, and Tenant, on behalf of itself and, to the extent permitted by law, such proposed transferee waives all other remedies against Landlord, including without limitation, the right to seek monetary damages or to terminate this Lease.

16. ESTOPPEL, ATTORNMENT AND SUBORDINATION.

16.3 Estoppel. Within ten (10) days after request by Landlord, Tenant shall deliver an estoppel certificate duly executed (and acknowledged if required by any lender or purchaser) to any proposed mortgagee, purchaser or Landlord, in a form substantially similar to that requested by the proposed mortgagee, purchaser or Landlord. Tenant’s failure to deliver said estoppel certificate in such time period shall be an Event of Default hereunder and shall be conclusive upon Tenant that (a) this Lease is in full force and effect, without modification except as may be represented by Landlord; (b) there are no uncured defaults in Landlord’s performance and Tenant has no right of offset, counterclaim or deduction against Rent hereunder; and (c) no more than one month’s Base Rent has been paid in advance. In addition, except to the extent caused by Landlord’s sole or active negligence, Tenant shall indemnify and hold Landlord harmless from and against any and all damages, penalties, fines, taxes, costs, liabilities, losses and expenses (including, without limitation, reasonable attorneys’ fees and court costs) which Landlord may sustain or incur as a result of or in connection with Tenant’s failure or delay in delivering such PGCC 8-7-2024

26 estoppel certificate. Landlord reserves the right to substitute a different form of estoppel certificate upon the request of any proposed mortgagee or purchaser. If any financier should require that this Lease be amended (other than in the description of the Premises, the Term, the Permitted Uses, the Rent or as will substantially, materially and adversely affect the rights of Tenant), Landlord shall give written notice thereof to Tenant, which notice shall be accompanied by a Lease supplement embodying such amendments. Tenant shall, within ten (10) days after the receipt of Landlord’s notice, execute and deliver to Landlord the tendered Lease supplement,

16.4 Subordination. This Lease shall be subject and subordinate to all Leases, and the lien of all mortgages and deeds of trust which now or hereafter affect the Premises or the Property or Landlord’s interest therein, and all amendments thereto, all without the necessity of Tenant’s executing further instruments to effect such subordination; provided, however, that Tenant’s rights hereunder shall not be disturbed, except in accordance with the terms and provisions of this Lease. If requested, Tenant shall execute and deliver to Landlord within ten (10) days after Landlord’s request, whatever documentation that may reasonably be required to further effect the provisions of this section.

Notwithstanding anything to the contrary set forth herein, Tenant acknowledges and agrees that this Lease is subordinate and subject to any Lease, license, or other property right or permission the Landlord has obtained from the Commission authorizing the occupancy and use of the Property and the Premises by the Landlord. In the event of a conflict between this Lease and any lease, license, or other similar document between the Landlord and the Commission, the document between the Landlord and the Commission shall control.

16.5 Attornment. In the event of a foreclosure proceeding, the exercise of the power of sale under any mortgage or deed of trust or the termination of a Lease, Tenant shall, if requested, attorn to the purchaser thereupon and recognize such purchaser as Landlord under this Lease.

The transferee shall not be liable for any acts, omissions or defaults of Landlord that occurred before the sale or conveyance, or the return of any security deposit except for deposits actually paid to transferee, and except as reduced as expressly provided for by operation of law.

17. RELOCATION.

17.3 Tenant fully releases and discharges Landlord (in its capacity as Landlord and otherwise as a municipal corporation) from all and any manner of rights, demands, liabilities, obligations, claims, or cause of actions, in law or equity, of whatever kind or nature, whether known or unknown, whether now existing or hereinafter arising, which arise from or relate in any manner to the sale of the Property, Building, or Premises, the full or partial termination of Tenant’s leasehold interest as permitted under this Lease, or the relocation of Tenant’s business operations or the relocation of any person or persons, business or businesses, or other occupant or occupants located on the Premises including, without limitation, the specific waiver and release of any right to any relocation benefits, assistance and/or payments under Government Code sections 7260 et seq. (“Relocation Assistance Law”), notwithstanding that such relocation assistance, benefits and/or payments may be otherwise required under the Relocation Assistance Law or other state or federal law. Tenant acknowledges and agrees that the release and waiver set forth in this section is material consideration for Landlord’s lease of the Premises to Tenant on the terms set forth herein and that, but for this release and waiver, Landlord would not have PGCC 8-7-2024

27 leased the premises to Tenant. It is hereby intended that the above release relates to both known and unknown claims that the Tenant may have, or claim to have, against the Landlord or the City of Pacifica with respect to the subject matter contained herein or the events relating thereto. By releasing and forever discharging claims both known and unknown which are related to or which arise under or in connection with the items set out above, the Tenant expressly waives any rights under California Civil Code section 1542, which provides:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT

TO EXIST IN HIS OR HER FAVOR AT THE TIME OF

EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM

OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.”

18. NON-DISCRIMINATION COVENANT. Tenant herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this Lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, physical or mental disability or medical condition, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Premises herein leased nor shall the Tenant himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the Premises herein leased

19. MISCELLANEOUS.

19.1 General.

19.1.1 Entire Agreement. This Lease sets forth all the agreements between Landlord and Tenant concerning the Property, the Premises, the Building and the Public Area; and there are no agreements either oral or written other than as set forth herein.

19.1.2 Time of Essence. Time is of the essence of this Lease.

19.1.3 Attorneys’ Fees. In any action or proceeding which either party brings against the other to enforce its rights hereunder, the unsuccessful party shall pay all costs incurred by the prevailing party, including reasonable attorneys’ fees, which amounts shall be a part of the judgment in said action or proceeding.

19.1.4 Severability. If any provision of this Lease or the application of any such provision shall be held by a court of competent jurisdiction to be invalid, void or unenforceable to any extent, the remaining provisions of this Lease and the application thereof shall remain in full force and effect and shall not be affected, impaired or invalidated.

19.1.5 Governing Law; Venue. This Lease shall be construed and enforced in accordance with the laws of the state of California without regard to principles of conflicts of PGCC 8-7-2024

28 laws. Any action filed to enforce or interpret this Lease shall be filed and heard exclusively in the Superior Court of Monterey County or the federal district court for the Northern District of California.

19.1.6 No Option. Submission of this Lease to Tenant for examination or negotiation does not constitute an option to lease, offer to lease or a reservation of, or option for, the Premises; and this document shall become effective and binding only upon the execution and delivery hereof by Landlord and Tenant.

19.1.7 Successors and Assigns. This Lease shall be binding upon and inure to the benefit of the successors and assigns of Landlord and, subject to compliance with the terms of Section 15, Tenant.

19.1.8 Third Party Beneficiaries. Nothing herein is intended to create any thirdparty benefit.

19.1.9 Memorandum of Lease. Landlord may elect to have either this either this Lease or a short form memorandum hereof recorded pursuant to the requirements of California Government Code section 37393. Tenant shall cooperate with Landlord in executing and acknowledging any such memorandum of lease. Upon the expiration or other termination of this Lease, Tenant shall immediately execute and deliver to Landlord a quitclaim deed to the Premises, Building, and/or Property, as required, in recordable form, designating Landlord as transferee or grantee.

19.1.10 No Agency, Partnership or Joint Venture. Nothing contained herein nor any acts of the parties hereto shall be deemed or construed by the parties hereto, nor by any third party, as creating the relationship of principal and agent or of partnership or of joint venture by the parties hereto or any relationship other than the relationship of landlord and tenant.

19.1.11 Merger. The voluntary or other surrender of this Lease by Tenant or a mutual cancellation thereof or a termination by Landlord shall not work a merger and shall, at the option of Landlord, terminate all or any existing sub tenancies or may, at the option of Landlord, operate as an assignment to Landlord of any or all of such sub tenancies.

19.1.12 Headings. Section headings have been inserted solely as a matter of convenience and are not intended to define or limit the scope of any of the provisions contained herein.

19.2 Signs. All signs and graphics of every kind visible in or from public view or corridors, the exterior of the Premises, the exterior of the Building, or on monuments installed or caused to be installed by, for the benefit of, or at the request of Tenant (“Signs and Graphics”) shall be subject to Landlord’s prior written approval, shall be in keeping with the character of the Building and shall be subject to any applicable governmental laws, ordinances, and regulations and in compliance with Landlord’s signage program, Tenant shall remove all such Signs and Graphics prior to the termination of this Lease. Such installations and removals shall be made in such manner as to avoid injury or defacement of the Premises; and Tenant shall repair any injury or defacement, including without limitation, discoloration caused by such installation or removal.

Tenant shall be responsible for all fees, costs and expenses associated with installation and PGCC 8-7-2024

29 removal of Signs and Graphics. In the event any such fees, costs or expenses are incurred by Landlord (whether directly or indirectly), Landlord shall deliver to Tenant an invoice, with reasonable supporting documentation, and Tenant shall reimburse Landlord for those amounts within fifteen (15) days after receipt of such invoice. Notwithstanding anything in this Lease to the contrary, Landlord is not required to provide Signs and Graphics beyond the standards set forth in the Rules and Regulations. Under no circumstances shall Tenant install or operate lighted signage.

18.3 Proprietary and Governmental Roles; Actions by City. Except where clearly and expressly provided otherwise in this Lease, the capacity of the City in this Lease shall be as owner and lessor of property only (“Proprietary Capacity”), and any obligations or restrictions imposed by this Lease on the City shall be limited to that capacity and shall not relate to, constitute a waiver of, supersede or otherwise limit or affect its governmental capacities, including enacting laws, inspecting structures, reviewing and issuing permits, and all of the other legislative and administrative or enforcement functions pursuant to federal, state or local law (“Governmental Capacity”). When acting in its Proprietary Capacity, discretionary actions may be undertaken by the City Manager or other designees as designated by the City Manager to the extent otherwise provided for in this Lease. In addition, nothing in this Lease shall supersede or waive any discretionary or regulatory approvals required to be obtained from the City under applicable law, nor guarantee that the City, in its Governmental Capacity, will grant any particular request for a license, permit or other regulatory approval. Lessee understands that the City may grant or deny such request in its sole discretion and may impose such terms and conditions as it deems consistent with that discretion and applicable law.

18.4 Waiver. No waiver of any default or breach hereunder shall be implied from any omission to take action on account thereof, notwithstanding any custom and practice or course of dealing. No waiver by either party of any provision under this Lease shall be effective unless in writing and signed by such party. No waiver shall affect any default other than the default specified in the waiver and then such waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant shall not be construed as a waiver of any subsequent breach of the same.

18.5 Limitation of Liability. The obligations of Landlord under this Lease are not personal obligations of the individual officials, officers, agents or employees of Landlord, and Tenant shall look solely to the Premises for satisfaction of any liability of Landlord and shall not look to other assets of Landlord nor seek recourse against the assets of the individual officials, officers, agents or employees of Landlord. Whenever Landlord transfers its interest, Landlord shall be automatically released from further performance under this Lease and from all further liabilities and expenses hereunder and the transferee of Landlord’s interest shall assume all liabilities and obligations of Landlord hereunder from the date of such transfer.

18.6 Notices. All notices to be given hereunder shall be in writing and mailed postage prepaid by certified or registered mail, return receipt requested, or delivered by personal or courier delivery, or sent by facsimile (immediately followed by one of the preceding methods), to Landlord’s Address and Tenant’s Address, as applicable, as set forth in Item 1 and 2 of the Basic Lease Information, or to such other place as Landlord or Tenant may designate in a written PGCC 8-7-2024

30 notice given to the other party. Notices shall be deemed served upon the earlier of receipt or three (3) days after the date of mailing.

18.7 Brokerage Commission. Landlord and Tenant each represents that neither has been represented by any broker in connection with this Lease, and that no real estate broker’s commission, finder’s fee or other compensation (“Commission”) is due or payable. Tenant agrees to indemnify and hold harmless Landlord from any claims or liability, including reasonable attorneys’ fees, in connection with a claim by any person for a Commission based upon any statement, representation or agreement of Tenant.

18.8 Authorization. Each individual or entity executing this Lease on behalf of Tenant represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of Tenant and that such execution is binding upon Tenant.

18.9 Holding Over; Surrender.

18.9.1 Holding Over, If Tenant holds over the Premises or any part thereof after expiration or earlier termination of the Term, such holding over shall constitute a month-tomonth tenancy, at a rent equal to one hundred thirty percent (130%) of the Base Rent in effect immediately prior to such holding over and shall otherwise be on all the other terms and conditions of this Lease. This section shall not be construed as Landlord’s permission for Tenant to hold over. Acceptance of Rent by Landlord following expiration or termination shall not constitute a renewal of this Lease or extension of the Term except as specifically set forth above.

If Tenant fails to surrender the Premises upon expiration or earlier termination of this Lease, Tenant shall indemnify and hold Landlord harmless from and against all loss or liability resulting from or arising out of Tenant’s failure to surrender the Premises, including, but not limited to, any amounts required to be paid to any tenant or prospective tenant who was to have occupied the Premises after the expiration or earlier termination of this Lease and any related attorneys’ fees and brokerage commissions.

18.9.2 Surrender. Upon the termination of this Lease or Tenant’s right to possession of the Premises, Tenant will surrender the Premises, together with all keys, in good condition and repair, reasonable wear and tear excepted. Conditions existing because of Tenant’s failure to perform maintenance, repairs or replacements shall not be deemed “reasonable wear and tear.”

18.10 Joint and Several. If Tenant consists of more than one person, the obligation of all such persons shall be joint and several.

18.10 Compliance with Law. Tenant and its officers, employees, agents and assigns shall be bound by and comply with all applicable federal, state and local laws, statutes, ordinances, administrative orders, rules or regulations relating to its duties, obligations, rights and performance under the terms of this Lease.

18.11 Covenants and Conditions. Each provision to be performed by Tenant hereunder shall be deemed to be both a covenant and a condition. This Lease shall be construed as though the covenants between Landlord and Tenant are independent and not dependent. Tenant expressly waives the benefit of any statute to the contrary, and agrees that even if Landlord fails PGCC 8-7-2024

31 to perform its obligations under this Lease, Tenant shall not be entitled to make repairs or perform any acts at Landlord’s expense, or to any setoff against Rent or other amounts owing under this Lease against Landlord.

18.12 Force Majeure. A Party shall not be considered to be in default or breach of this Agreement, and shall be excused from performance or liability for damages to the other Party, if and to the extent it shall be delayed in or prevented from performing or carrying out any of the provisions of this Lease, arising out of or from any action, inaction, order, ruling, moratorium, regulation, statute, condition or other decision of any governmental agency having jurisdiction over any portion of the Property, over the construction anticipated to occur thereon or over any uses thereof, or by fire, flood, inclement weather, strikes, lockouts or other labor or industrial disturbance (whether or not on the part of agents or employees of either party hereto engaged in the construction of the Premises), civil disturbance, epidemic, pandemic, quarantine, order of any government, court or regulatory body claiming jurisdiction or otherwise, acts of terrorism, act of public enemy, war, riot, sabotage, blockade, embargo, failure or inability to secure materials, supplies or labor through ordinary sources by reason of shortages or priority, discovery of hazardous or toxic materials, earthquake, or other natural disaster, or any cause whatsoever beyond the reasonable control (excluding financial inability) of the party whose performance is required, or any of its contractors or other representatives, whether or not similar to any of the causes hereinabove stated.

Any Party claiming a Force Majeure event shall use reasonable diligence to remove the condition that prevents performance and shall not be entitled to suspend performance of its obligations in any greater scope or for any longer duration than is required by the Force Majeure event. Each Party shall use its best efforts to mitigate the effects of such Force Majeure event, remedy its inability to perform, and resume full performance of its obligations hereunder. A Party suffering a Force Majeure event (“Affected Party”) shall notify the other Party (“Non-Affected Party”) in writing (“Notice of Force Majeure Event”) as soon as reasonably practicable specifying the cause of the event, the scope of commitments under the Agreement affected by the event, and a good faith estimate of the time required to restore full performance. Except for those commitments identified in the Notice of Force Majeure Event, the Affected Party shall not be relieved of its responsibility to fully perform as to all other commitments in the Agreement. If the Force Majeure event continues for a period of more than 90 days from the date of the Notice of Force Majeure Event, the Non-Affected Party shall be entitled, at its sole discretion, to terminate the Agreement.

For the avoidance of doubt, Force Majeure shall not include a party’s financial inability to perform its obligations hereunder. Notwithstanding the preceding, upon the occurrence of a Force Majeure event, Landlord may, at Landlord’s sole discretion, reduce the amount of rent due during the Force Majeure event, provided, however, that the amount of any such reduction shall be repaid in monthly installments during the remainder of the term of the Lease following the cessation of the Force Majeure event. Any unpaid balance at the end of the term of the Lease shall be due and payable in full. In the event of a Force Majeure event that limits or prevents Tenant’s access to the Premises, Rent shall be abated for the duration of such Force Majeure event.

PGCC 8-7-2024

32 18.13 Rights to Terminate. Both Tenant and Landlord may terminate this Lease upon sixty (60) days’ prior written notice, only on the grounds of a material default of the Lease.

Notwithstanding the foregoing, Landlord may terminate this Lease absent a material default in the event that Landlord determines that the Premises require repair or restoration, Landlord may terminate this Lease upon sixty (60) days prior written notice to Tenant. Landlord shall also have the right to terminate this Lease upon thirty (30) days prior written notice to Tenant in the event that the California Coastal Commission (i) prohibits commercial activity on the Property or (ii) takes any other action that would materially conflict with Tenant’s use of the Premises. [Signatures on Following Page]
PGCC 8-7-2024

33 IN WITNESS WHEREOF, the parties have executed this Lease as of the Effective Date, City of Pacific Grove,
a California charter Sunset Hospitality Group, Inc., a
California corporation
Name:________________________
Bill Peake, Mayor By:___________________________
Title:_________________________
By:___________________________
Title:_________________________
Attest:

By:

City Clerk
Approved as to form:

By:

City Attorney
PGCC 8-7-2024

Exhibit A-1

EXHIBIT A

PREMISES DESCRIPTION AND DEPICTION
Approximate 270 square foot building located at the northeast corner of the intersection of Ocean View Boulevard and 17th Street, at the southerly end of Lover’s Point Park and Beach, located in the City of Pacific Grove.

PGCC 8-7-2024

Exhibit B-1

EXHIBIT B

RULES AND REGULATIONS
Tenant shall comply with the following Rules and Regulations. Landlord shall not be responsible to Tenant for the nonperformance of any of these Rules and Regulations.

1. Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances, elevators, escalators or stairways of the Building. The halls, passages, exits, and entrances are not for the general public, and CITY shall in all cases retain the right to control and prevent access thereto of all persons whose presence in the judgment of CITY would be prejudicial to the safety, character, reputation and interests of the Building and its tenants; provided, that nothing herein contained shall be construed to prevent such access to persons with whom any tenant normally deals in the ordinary course of its business, unless such persons are engaged in illegal activities.

Tenant and no employee, invitee, agent, licensee or contractor of Tenant shall go upon or be entitled to use any portion of the roof of the Building unless authorized by the City.

2. CITY will furnish Tenant, free of charge, two keys to each door lock in the Premises.

CITY may impose a reasonable charge for any additional keys. Tenant may not make or have made additional keys, and Tenant shall not alter any lock or install a new additional lock or bolt on any door or window of its Premises. Tenant, upon termination of its tenancy, shall deliver to CITY the keys of all doors which have been furnished to, or otherwise procured by Tenant, and, in the event of loss of any keys, shall pay CITY the cost of replacing the same or of changing the lock or locks opened by such lost key if CITY shall deem it necessary to make such change.

3. IT cables and equipment, telephone lines and security systems shall not be installed in the Premises except with the approval and under the direction of CITY.

4. No furniture or equipment of any kind shall be brought into the Building without prior notice to CITY and all moving of the same into or out of the Building shall be done at such time and in such manner as CITY shall designate. Deliveries during normal office hours shall be limited to normal office supplies and other small items. No deliveries shall be made which impede or interfere with other tenants or the operation of the Building.

5. Tenant shall not use or keep in the Premises any hazardous materials, kerosene, gasoline or inflammable or combustible fluid or material other than those limited quantities necessary for the operation or maintenance of food service equipment. Tenant shall not use the Premises in a manner offensive or objectionable to CITY or other occupants of the Project by reason of noise, odors or vibrations, nor shall Tenant bring into or keep in or about the Premises any animals.

6. The normal hours of operation shall be 10:30 am until sunset, unless otherwise approved in writing by the CITY. CITY reserves the right to exclude from the Building between the hours of 7:00 p.m. and 6:00 a.m., or such other hours as may be established from time to time by CITY, and on legal holidays, any person unless that person is known to the person or employee in charge of the Building and has a pass or is properly identified. CITY shall not be liable for damages for any error with regard to the admission to or exclusion from the Building of any PGCC 8-7-2024

Exhibit B-2
person. Tenant shall be responsible for all persons for whom it requests passes and shall be liable to CITY for all acts of such persons.

7. Tenant shall close and lock all doors of its Premises and entirely shut off all water faucets or other water apparatus, and, except with regard to Tenant’s computers and other equipment which reasonably require electricity on a 24-hour basis, all electricity, gas or air outlets before Tenant and its employees leave the Premises. Tenant shall be responsible for any damage or injuries sustained by other tenants or occupants of the Building or by CITY for noncompliance with this rule.

8. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed.

9. Tenant shall not sell, or permit the sale at retail, of newspapers, magazines, periodicals, theater tickets, or any other goods or merchandise to the general public in or on the Premises.

10. Tenant shall not install any radio or television antenna, loudspeaker or other device on the roof or exterior walls of the Building. Tenant shall not interfere with radio or television broadcasting or reception from or in the Building or elsewhere.

11. Except as expressly permitted in the Lease, Tenant shall not mark, drive nails, screw or drill into the partitions, window mullions, woodwork or plaster, or in any way deface the Premises or any part thereof, except to install normal wall hangings. Tenant shall repair any damage resulting from noncompliance under this rule.

12. Canvassing, soliciting and distribution of handbills or any other written material, and peddling in and around the Project or the Buildings are expressly prohibited, and each tenant shall cooperate to prevent same.

13. CITY reserves the right to exclude or expel from the Buildings any person who, in CITY’s judgment, is intoxicated or under the influence of liquor or drugs or who is in violation of any of the Rules and Regulations of the Project.

14. All garbage and refuse disposal shall be made in accordance with directions reasonably issued from time to time by CITY.

15. The Premises shall not be used for (a) the storage, use, or sale of marijuana, (b) any repair, servicing, or storage of vehicles or (c) lodging or for manufacturing of any kind.

16. Tenant shall not use in any space any hand trucks except those equipped with rubber tires and side guards, or such other material-handling equipment as CITY may approve.

17. Tenant agrees that it shall comply with all fire and security regulations that may be issued from time to time by CITY, and Tenant also shall provide CITY with the name of a designated responsible employee to represent Tenant in all matters pertaining to such fire or security PGCC 8-7-2024

Exhibit B-3
regulations. Tenant shall cooperate fully with CITY in all matters concerning fire and other emergency procedures.

18. Tenant assumes any and all responsibility for protecting its Premises from theft, robbery and pilferage. Such responsibility shall include keeping doors locked and other means of entry to the Premises closed.

19. CITY may waive any one or more of these Rules and Regulations for the benefit of Tenant or any other tenant, but no such waiver by CITY shall be construed as a waiver of such Rules and Regulations in favor of Tenant or any other such tenant, nor prevent CITY from thereafter enforcing any such Rules and Regulations against any and all of the tenants in the Building.

20. These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of any lease of premises in the Buildings.

21. CITY reserves the right to make such other and reasonable Rules and Regulations as, in its judgment, may from time to time be needed for safety, security, care and cleanliness of the Buildings and for the preservation of good order therein. Tenant agrees to abide by all such Rules and Regulations hereinabove stated and any additional rules and regulations which are adopted.

22. Tenant shall be responsible for the observance of all of the foregoing rules by Tenant’s employees, agents, clients, customers, invitees or guests.

23. Tenant shall not without CITY’s consent, which may be given or withheld in CITY’s sole and absolute discretion, receive, store, discharge, or transport firearms, ammunition, or weapons or explosives of any kind or nature at, on or from the Premises.

24. EXCEPT WITH THE PRIOR WRITTEN PERMISSION OF CITY, NO OVERNIGHT PARKING IS PERMITTED AT THE PREMISES. A VIOLATION SHALL CONSTITUTE A DEFAULT HEREUNDER AND A DAILY FEE OF ($100) SHALL BE CHARGED AS RENT FOR EACH VIOLATION.

25. SMOKING IS NOT PERMITTED ON THE PROPERTY EXCEPT IN SPECIFIC

AREAS DESIGNATED BY CITY SHALL CONSTITUTE A DEFAULT HEREUNDER AS ALSO A FEE OF ($50) SHALL BE CHARGED AS RENT FOR EACH VIOLATION.

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Exhibit C-1

EXHIBIT C

ONGOING MAINTENANCE SCHEDULE
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Exhibit D-1

EXHIBIT D

LIST OF LESSOR-OWNED FURNISHINGS
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Exhibit E-1

EXHIBIT E

INITIAL IMPROVEMENT SCHEDULE
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Exhibit F-1

EXHIBIT F

INSURANCE CERTIFICATE
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Agenda No. 8 A

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Alyssa Kroeger, Housing Program Manager
MEETING DATE: August 07, 2024
SUBJECT: Housing Element Monthly Status Update
CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

RECOMMENDATION

1. Receive the report.

2. Alternatively, discuss and take other action related to this item.

DISCUSSION
On December 20, 2023, City Council approved the first amendment to the contract with Rincon Consultants, initiating the preparation of the Housing Element Update (HEU), along with related General Plan Amendments, Zoning Amendments, and Environmental Impact Report (EIR).

Subsequently, City Staff and Rincon Consultants continued/commenced work and provided the sixth monthly progress report update to Council on July 17, 2024. Since then, the following tasks have been undertaken:

June 28, 2024: Housing Element Team meeting to discuss next steps regarding the Housing Element Update and associated Zoning, Land Use, and Health and Safety Element amendments, and Program EIR.

July 1, 2024: Project management call.

July 2, 2024: Housing Element Team meeting to review public meeting content and strategize for the July 17th CC meeting, addressing potential conflicts of interest with the new sites inventory options.

July 9-10, 2024: Housing Element Team preparation of July 17th CC meeting presentation.

July 11, 2024: Housing Element Team meeting to review public meeting content and discuss updated project timeline. Contract management.

July 15, 2024: Staff updated the Housing Element webpage and developed a second version of the new Housing Element Half Sheet Handout (V2) and ordered prints for distribution.

July 16, 2024: Staff delivered new Housing Element Half Sheet Handouts to the Library, Goodies Deli, and Youth Center for community distribution, and posted one at the Community Center.

July 17, 2024: Staff and Rincon presented Planning Commission’s recommendations for the alternative sites and methods to accommodate the City’s RHNA at the City Council meeting.

Council authorized alternative sites and methods (Option 1, Option 2, Option 3, and Option 6) for the Housing Element Update to accommodate the City's RHNA requirements.

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6) for the Housing Element Update to accommodate the City's RHNA requirements.

Please note: that neighborhood rezone Option #7 regarding the First Addition/Fourth Addition neighborhood was removed from consideration prior to the June 13th Planning Commission meeting. Ordinance No. 1007 (1978) rezoned the First Addition and portions of the Fourth Addition to R-2, based on a citizen initiative. Because of this, the City cannot consider rezoning this area without a vote of the people.

July 18, 2024: Staff updated the Housing Element webpage with the newest monthly status report and removed expired information under the upcoming meetings and events table.

July 22, 2024: Staff updated the Housing Element webpage with the July 19th City Manager’s Report publication.

July 23, 2024: Staff drafted the next monthly Housing Element update for Council and began prepping follow-up letters to the owners of the 552 neighborhood rezone site options to provide clarification on options that were removed from consideration and that were approved for inclusion in the updated Housing Element sites inventory. Letters were mailed out by July 31, 2024.

July 25, 2024: Housing Element Team meeting to discuss updated project timeline and next steps including finalizing the EIR project description, work on the draft Land Use Element and Safety Element, and review of housing permit processes.

July 26, 2024: Staff updated the Housing Element webpage with the PG Public Library's newsletter update about Planning Commissioners' availability in August to answer questions and provide public information on the Housing Element.

Housing Element Team includes City Planning, Housing, and City Manager staff, City legal representation, and Rincon/subconsultant staff.

Staff will provide a monthly status update to the Council throughout the process, leading to an adopted and certified Housing Element. For more information, please visit the Housing Element Webpage:
www.cityofpacificgrove.org/HousingElement

OPTIONS
N/A - This is information only.

FINANCIAL IMPACT:

There is no fiscal impact associated with receiving this report.

FOCUSED PRIORITY AREA: Affordable Housing
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Agenda No. 9 A

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Andrew Miller, Fire Chief
MEETING DATE: August 07, 2024
SUBJECT: Amendment to the Fire Services Agreement with the City of Monterey to add Emergency Medical Services Including Advance Life Support Services CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

RECOMMENDATION
Adopt a resolution amending the current Fire Services Agreement with the City of Monterey to add Emergency Medical Services (EMS) to include Advanced Life Support (ALS) services.

DISCUSSION
The Monterey Fire Department (MFD) has provided contractual fire and emergency response services to the City of Pacific Grove since December 16, 2008. These services include responses to fire, medical, hazardous conditions, and other emergency situations. In 2023, there was a total of 2,109 fire call responses for Pacific Grove. A total of 1,058 of the calls were for medical emergencies. A response to a medical emergency typically includes a response by one engine company staffed with three Emergency Medical Technicians (EMTs) and one ambulance staffed by a Paramedic and an EMT. The ambulance is provided by American Medical Response (AMR) under a contract with Monterey County.

AMR staffs an ambulance that is stationed at the Pacific Grove Fire Station, but that ambulance is often dispatched to areas outside of Pacific Grove. If a medical emergency is reported in Pacific Grove while that ambulance is outside of the area, another ambulance is dispatched; that ambulance may be coming from a considerable distance. Monterey Fire maintains an engine company in service at the Pacific Grove Fire Station or, when that one is busy, another engine company will respond from Fire Station 12 on Hawthorne Street in New Monterey. If both engines are busy, another engine is moved into the area to be available for a call for service. Using this system, Monterey has an engine response to an emergency in Pacific Grove within six minutes over 90% of the time.

Currently, the engine in Pacific Grove is staffed with three personnel trained to the level of EMT. Even if one or more of the personnel are trained to the level of Advanced Life Support (ALS) Paramedic, they are not allowed to provide that level of service under Monterey County EMS Agency (MCEMSA) regulations. EMT's receive about 120 hours of initial training and are trained to provide basic life support services. Paramedics receive over 1400 hours of initial training and can provide additional services such as advanced airway management, use of a non-automatic external cardiac defibrillator, initiating intra-venous lines and administering medications, and other related interventions. Essentially, paramedics bring all services of the hospital emergency room to the scene of a medical emergency, enabling those interventions to be provided much sooner.

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MFD has been providing ALS paramedic services in Monterey since 2018 and has sufficient resources to transition the Pacific Grove engine from Basic Life Support (BLS) to ALS. MFD’s Paramedic ALS program has a proven track record of improved outcomes and saved lives due to the higher level of care provided by paramedics. The cost to increase services to Pacific Grove is estimated at around $70,000 per year.

Increasing the level of service from BLS to ALS will both provide a higher level of care and a more equitable level of care throughout MFD’s response area. Since the eastern portion of Pacific Grove is closer to Monterey's Fire Station 12, which provides ALS paramedic services, some residents in Pacific Grove are already frequently receiving ALS paramedic services. Additionally, when a paramedic engine crew is temporarily moved to the Pacific Grove Fire Station, those services are provided out of that station as well.

Staff recommends that the City Council adopt the attached resolution authorizing the City Manager to amend the current fire services agreement with the City of Monterey to add Emergency Medical Services (EMS) to include Advanced Life Support (ALS) services.

Pacific Grove City Council authorization is contingent upon reciprocal authorization by the City of Monterey’s City Council. If Monterey’s City Council does not adopt a resolution to amend the agreement, the Monterey Fire Department (MFD) will not add EMS services to include ALS for the City of Pacific Grove.

OPTIONS
Adopt a resolution amending the current Fire Services Agreement with the City of Monterey to add Emergency Medical Services (EMS) to include Advanced Life Support (ALS) services.

1. Do not adopt a resolution amending the Fire Services Agreement with Monterey to add ALS services. This is not recommended as adding EMS services to include ALS services benefits the residents and visitors of the City of Pacific Grove to receive a higher level of care.

2. FINANCIAL IMPACT:

The 2024/2025 Fiscal Year budget includes an allocation of $70,000 for the recommended increases in the Fire Services Contract for adding ALS services. Currently, the City of Pacific Grove reimburses the City of Monterey for all actual direct and indirect costs incurred in providing contractual fire services to the City of Pacific Grove. By increasing contract services to include ALS services, the cost to provide services is anticipated to increase approximately $70,000 per year. This amount includes supplies, paramedic premium pay for paramedics, certification/training costs for paramedics to maintain their licenses, costs for quality improvement/quality insurance of ALS calls and a 10% administrative fee. There will be minimal startup costs in the first year since the Monterey Fire Department (MFD) applied for and was awarded a grant for a heart monitor (valued around $24,000) in March 2024. The City of Pacific Grove will continue to reimburse the City of Monterey for all costs in providing contractual fire services, including the addition of providing ALS services.

FOCUSED PRIORITY AREA: Not Applicable.

Attachments
Proposed Resolution
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1 RESOLUTION NO. 24-XXX

A RESOLUTION OF THE COUNCIL OF THE CITY OF PACIFIC GROVE

ADOPTING A RESOLUTION AUTHORIZING THE CITY MANAGER TO AMEND

THE FIRE SERVICES AGREEMENT WITH THE CITY OF MONTEREY TO ADD

EMERGENCY MEDICAL SERVICES TO INCLUDE ADVANCED LIFE SUPPORT (ALS)

FINDINGS

1. The City of Monterey has been providing fire services to the City of Pacific Grove since December 16, 2008; and

2. The City of Pacific Grove has requested to increase the level of service in the agreement from Basic Life Support (BLS) services to Advanced Life Support (ALS) Services; and

3. The current “Agreement to Provide Fire Services Between the Cities of Monterey and Pacific Grove” requires that the Monterey and Pacific Grove City Councils take action by resolution to amend the agreement; and

4. The cost to add service to include ALS is estimated to be approximately $70,000 per year;

5. The City of Pacific Grove determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA)(CCR, Title 14, Chapter 3 (“CEQA Guidelines), Article 20, Section 15378). In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project.

Because the matter does not cause a direct or any reasonably foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PACIFIC GROVE:

1. That the above recitals are true and correct and are hereby incorporated and adopted as findings of the City Council as if fully set forth herein.

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2 2. That it hereby authorizes the City Manager to amend the fire services agreement with the City of Monterey to add Emergency Medical services to include Advanced Life Support (ALS) services (Ag-8164).

PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF PACIFIC GROVE this 7th day of August, 2024, by the following vote:

AYES:

NOES:

ABSENT:

APPROVED:
_______________________________
BILL PEAKE, Mayor
ATTEST:

DATED:_______________________
_______________________________
SANDRA KANDELL, City Clerk
APPROVED AS TO FORM:
_______________________________
BRIAN A. PIERIK, City Attorney
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Agenda No. 9 B

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Brian Anderson, Acting Chief of Police
MEETING DATE: August 07, 2024
SUBJECT: Agreement with the Society for the Prevention of Cruelty to Animals of Monterey County for Sheltering Services
CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

RECOMMENDATION
City Council approve a motion authorizing the Mayor to sign an agreement with the Society for the Prevention of Cruelty to Animals of Monterey County for Sheltering Services

DISCUSSION
The City is required by state law to provide for the capture, impoundment, sheltering and disposition of certain animals within the city limits. The Pacific Grove Police Department has qualified personnel to perform field services but does not operate an animal shelter. To provide the animal shelter services, the City has long contracted with the Society for the Prevention of Cruelty to Animals for Monterey County (SPCA).

The Agreement with SPCA has expired and now needs to be renewed. The attached Agreement will continue to provide animal services for the City. If approved, the Agreement would take effect July 1, 2024, and shall remain in effect for three years, until June 30, 2027, with an option to extend the Agreement for an additional two years.

The services to be provided by the Society are identified in Section 3 of the Agreement. The fees for the services are specified in Section 4 of the Agreement.

The recommendation is for the City Council to approve a motion to Authorize the Mayor to Sign a Sheltering Services Agreement with the Society for the Prevention of Cruelty to Animals for Monterey County.

OPTIONS
City Council approve a motion authorizing the Mayor to sign an agreement with the Society for the Prevention of Cruelty to Animals of Monterey County for Sheltering Services Agreement

1. 2. Other action as directed by the City Council.

FINANCIAL IMPACT:

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The cost for this Agreement will depend upon the number of animals the SPCA receives from the City of Pacific Grove. Typically, in a fiscal year the City expends approximately $12,000 on animal services provided by the SPCA.

FOCUSED PRIORITY AREA: Not Applicable.

Attachments
Proposed Sheltering Agreement with SPCA
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Agenda No. 9 C

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Joseph Sidor, Contract Planner
MEETING DATE: August 07, 2024
SUBJECT: Adopt Policy Update Regarding Vehicle Miles Traveled (VMT) and CEQA Compliance
CEQA: Categorical Exemption, CEQA Guidelines Section 15308, Class 8, Actions by Regulatory Agencies for Protection of the Environment

RECOMMENDATION
Adopt, by resolution, the proposed amendments to the City's VMT Implementation Policy.

DISCUSSION

BACKGROUND
In September 2013, the California Legislature adopted, and the Governor approved Senate Bill 743 (SB 743), which updated the way transportation impacts are measured for new development projects.

In December 2018, pursuant to SB 743, the Office of Planning and Research (OPR) adopted changes to the California Environmental Quality Act (CEQA) Guidelines that identified new metrics for transportation analysis, including Vehicle Miles Traveled (VMT). The prior metric evaluated the impact of projects based on increased traffic Levels of Service (LOS) according to a letter grade system of A through F. The intent of this change was to:

1. reduce greenhouse gas measures;

2. facilitate the development of multimodal transportation networks; and

3. promote diversification of land uses including housing.

According to the OPR, the underlying intent of the VMT methodology is to:

1. balance the needs of congestion management with statewide goals;

2. ensure the environmental impacts of traffic (e.g., noise, air pollution, and safety) continue to be addressed and mitigated through CEQA; and

3. encourage the development of jobs, housing, and commercial uses in closer proximity to each other and to transit (i.e., provide better access to daily destinations such as jobs and services).

On July 11, 2024, the Planning Commission reviewed the proposed updates to the VMT Policy and voted 6-0-1 (6 yes, 0 noes, and 1 absent) to recommend the City Council adopt the proposed amendments to the City's VMT policy.

More information on SB 743 can be found on the OPR website, and the 2018 OPR Technical Advisory has been attached to this report for reference.

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DISCUSSION
The City adopted the current VMT policy and threshold on August 4, 2021. Since that time, the Association of Monterey Bay Area Governements (AMBAG) updated its Travel Demand Model and methodology. Because the City's VMT policy relies upon AMBAG's model, the policy needs to be amended to incorporate updated information. This policy update is technical in nature and will not change the approach City staff uses to evaluate traffic impacts for projects. AMBAG's update includes a change to the methodology used to determine VMT thresholds used for CEQA analysis based on the updated model. The proposed method combines data from Replica, a tour-based transportation analytics platform, with the AMBAG model, which is a trip-based travel demand model. This combination will provide the benefits of using a big data-based approach to represent existing conditions with the forecasting abilities of the AMBAG model to represent the changes resulting from land use development.

In general, VMT considers the distance residents or employees would travel on average as the result of the new development. VMT favors compact, mixed use development within an established urban limit because it “rewards” a project for being in proximity to daily needs such as schools, grocery stores, jobs, and services. Such projects result in lower VMT because car trips generated tend to be shorter, and it is easier to access local services without reliance on a personal vehicle. Projects located on the outskirts of town or considered “greenfield” development (undeveloped areas with little to no existing infrastructure or services) would likely have higher VMT because daily destinations are further away and alternatives to auto transport such as mass transit or active transportation (walk, cycle) are less feasible. If a project generates a VMT above the stated thresholds of significance, mitigation measures to reduce the amount of VMT must be considered. Potential mitigation measures include investments in Transportation Demand Management (TDM) tools such as transit passes, bike and pedestrian programs, car share, on-site childcare facilities, and similar means. Other potential mitigation measures may include the construction or contribution to bike and pedestrian or high occupant vehicle projects.

SB 743 does not prevent the City from continuing to analyze auto delay or LOS as part of other plans (i.e., the General Plan), studies, congestion mitigation, fee collection, or ongoing network monitoring; however, these metrics no longer constitute the basis for CEQA impacts. Of note, the City would continue to retain its LOS standards as a local policy within the General Plan, outside CEQA. Development projects triggering LOS impacts will be required to mitigate those impacts consistent with the City’s current policy, but will not be part of CEQA mitigations. Staff's recommendations include VMT thresholds and mitigation to ensure consistency with CEQA Guidelines in place of the former LOS thresholds.

The proposed draft policy (attached - both clean and redlined versions) would update the established environmental review process for evaluating transportation impacts with VMT criteria. This action would ensure a consistent methodology for the City’s transportation analysis in environmental review that continues to align with State law and regional partners. The process and proposed thresholds are described further in the draft implementation policy.

CEQA
In reviewing this action, the City has followed the CEQA statute adopted by the State of California as published in the California Public Resources Code, Division 13, §21000, et seq., and the associated guidelines as published in the California Code of Regulations, Title 14, §15000, et seq. (i.e., CEQA Guidelines). The proposed policy update to address transportation related impacts is consistent with CEQA Guidelines Section 15064.7 (Threshold of Significance) and is found to be categorically exempt under CEQA Guidelines section 15308, Class 8 (Actions by Regulatory Agencies for Protection of the Environment). Also, the exceptions to exemptions in Section 15300.2 of the CEQA Guidelines pertaining to location, cumulative impacts, significant effects, scenic highways, hazardous waste sites, and historical resources do not apply to this project.

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OPTIONS
The City Council could opt not to adopt an updated threshold policy which would result in every project with the potential to result in a significant impact on the environment in terms of transportation being required to conduct an individual VMT analysis in compliance with CEQA; or

1. 2. The City Council could discuss the item and provide alternative direction to staff.

FINANCIAL IMPACT:

There is no fiscal impact.

FOCUSED PRIORITY AREA: Environmental Stewardship
Attachments
Draft Resolution
Draft VMT Policy Update (Clean Version)
Draft VMT Policy Update (Redline Version)
OPR Technical Advisory
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RESOLUTION NO. 24-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFIC GROVE ADOPTING AMENDMENTS TO THE CITY’S VEHICLE MILES TRAVELED POLICY.

WHEREAS, the State legislature of the State of California adopted the California Environmental Quality Act of 1970 (CEQA), as amended and codified in Sections 21,000 et seq. of the Public Resources Code;
WHEREAS, the Legislature directed the Secretary of the Natural Resources Agency to prepare State guidelines for the implementation of said act by public agencies; WHEREAS, Senate Bill 743, codified in Public Resources Code section 21099, required changes to the CEQA Guidelines requiring the criteria for determining the significance of transportation impacts of projects;
WHEREAS, CEQA Guidelines section 15064.3 went into effect on July 1, 2020, and it identifies vehicle miles traveled (VMT) as the most appropriate metric to evaluate a project’s transportation impacts;
WHEREAS, automobile delay, as measured by level of service (LOS), generally no longer constitutes a significant environmental effect under CEQA. SB 743 does not prevent a city or county from continuing to analyze delay or LOS as part of development standards, but it may no longer constitute the basis for CEQA impact and mitigation. (Public Resources Code section 21099(e)(4).);
WHEREAS, CEQA Guidelines section 15064.7(a) defines a threshold of significance as “an identifiable quantitative, qualitative or performance level of a particular environmental effect, noncompliance with which means the effect will normally be determined to be significant by the agency and compliance with which means the effect normally will be determined to be less than significant”;
WHEREAS, CEQA Guidelines section 15064.7(b) requires that threshold of significance be adopted by ordinance, resolution, rule or regulations, developed through a public review process and be supported by substantial evidence;
WHEREAS, the City adopted a VMT Policy (Resolution No. 21-026) on August 4, 2021, to bring the City’s transportation analysis methodology in line with state goals pursuant to SB 743;
WHEREAS, in 2022, the State legislature of the State of California has amended Senate Bill 743, Public Resources Code section 21099, and CEQA Guidelines section 15064.7; WHEREAS, the Association of Monterey Bay Area Governments (AMBAG) has updated technical parameters of the Travel Demand Model used to measure and evaluate potential project traffic impacts;
WHEREAS, the City adopts this amendment to the City’s VMT Policy to bring the City’s transportation analysis methodology in line with state goals pursuant to SB 743 and with the current AMBAG Travel Demand Model methodology;
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WHEREAS, the amendments comply with SB 743 and OPR’s “Technical Advisory on Evaluating Transportation Impacts in CEQA”;
WHEREAS, at a public meeting on July 11, 2024, the Planning Commission reviewed the policy, as amended, and provided a unanimous recommendation that Council adopt the proposed changes to the VMT Policy;
WHEREAS, the Council finds and determines, based upon staff and consultant reports and research as well as testimony in the record, that the revised CEQA thresholds of significance under consideration are consistent with State requirements as to how transportation impacts should be evaluated for purposes of CEQA review of projects. The revised thresholds are based upon the VMT metric that is specifically required in CEQA Guidelines section 15064.3.

Additionally, the City’s policy is consistent with and based upon review of OPR guidance; and WHEREAS, the proposed amendments are consistent with CEQA Guidelines Section 15064.7 (Threshold of Significance), are categorically exempt per CEQA Guidelines section 15308, Class 8 (Actions by Regulatory Agencies for Protection of the Environment), and the exceptions to the exemptions in Section 15300.2 of the CEQA Guidelines do not apply.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PACIFIC GROVE:

1. The above recitals are incorporated herein as findings for approval.

2. The Vehicle Miles Traveled Policy, as amended, attached hereto as Exhibit A, designating Vehicle Miles Traveled (VMT) as the metric for conducing transportation analyses pursuant to the California Environmental Quality Act (CEQA), establishing CEQA thresholds of significance related to VMT, and identifying screening criteria to limit review for projects presumed to have less than significant VMT impact, is hereby adopted.

3. This Resolution shall become effective immediately following passage and adoption thereof.

PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF PACIFIC GROVE this 7th day of August, 2024, by the following votes:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:
______________________________
BILL PEAKE, Mayor
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ATTEST:
_______________________________
SANDRA KANDELL, City Clerk
APPROVED AS TO FORM:
______________________________
BRIAN PIERIK, City Attorney
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1 SB 743 Implementation
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DRAFT Vehicle Miles Traveled (SB 743) Implementation Policy City of Pacific Grove
July 2024

1.0 Background
In 2013, SB 743 was signed into law by California Governor Jerry Brown with a goal of reducing Greenhouse Gas (GHG) emissions, promoting the development of infill land use projects and multimodal transportation networks, and to promote a diversity of land uses within developments. One significant outcome resulting from this statute is the removal of automobile delay and congestion, commonly known as level of service (LOS), as a basis for determining significant transportation impacts under the California Environmental Quality Act (CEQA).

The Governor’s Office of Planning and Research (OPR) has documented recommended analysis guidelines for SB 743 in its Technical Advisory on Evaluating Transportation Impacts in CEQA (2018 OPR Guidance) which provides for Vehicle Miles Traveled (VMT) as the principal measure to replace LOS for determining significant transportation impacts. VMT is a measure of total vehicular travel that accounts for the number of vehicle trips and the length of those trips. OPR selected VMT, in part, because jurisdictions are already familiar with this metric. VMT is already used in CEQA to study other potential impacts such as GHG, air quality, and energy impacts and is used in planning for regional Sustainable Communities Strategies (SCS).

VMT also allows for an analysis of a project’s impact throughout the jurisdiction rather than only in the vicinity of the proposed project allowing for a better understanding of the full extent of a project’s transportation‐related impact. It should be noted that SB 743 does not disallow the use of LOS for other planning purposes outside the scope of CEQA (e.g., for determining consistency with LOS‐based General Plan policies).

2.0 Use of This Document
Note that although this document includes footnotes and references to other documents, this document has been developed to serve both as the basis of SB 743 implementation and VMT analysis within the City. Accordingly, the document does not require the reader to reference the footnotes unless they are interested in understanding the technical basis of elements of this document’s preparation. Analysis guidelines are separated into two distinct approaches, those that relate to land use projects (Section 3.0) and those that relate to transportation improvement projects (Section 4.0). If a project includes both land use and transportation improvement elements, analysis would be required to be carried out for both.  Projects not subject to CEQA are not required to follow these guidelines.

3.0 Land Use Projects
This section provides an approach to identify transportation impacts under CEQA for land use projects that closely aligns with guidance provided within the OPR Technical Advisory on Evaluating Transportation Impacts in CEQA (2018). While the 2018 OPR Guidance has been a helpful introduction to PGCC 8-7-2024

2 SB 743 Implementation
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using VMT to evaluate projects, it does not provide a complete solution. There are a multitude of complex practical issues that are not addressed by the 2018 OPR Guidance. For example, the 2018 OPR Guidance does not specifically address land uses beyond residential, office and retail, and it provides latitude on some elements of implementation. In response to this, a specific series of analytical steps have been developed for SB 743 project evaluation to clarify requirements and reduce potential confusion. Exhibit 1 provides a graphical flowchart representation of these analytical steps.

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Exhibit 1 – Process for CEQA VMT Analysis for Land Use Projects PGCC 8-7-2024

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Step 1: Determine ITE Land Use Type
If it is determined that this policy applies to a land use project, the second step will be to evaluate the project for the following considerations:
 Land use type. For the purposes of analysis, the Institute of Transportation Engineers (ITE) land use codes serve as the basis of land use definitions. Although it is recognized that VMT evaluation tools and methodologies are typically not fully sensitive to some of the distinctions between some ITE categories, the use of ITE land use codes is useful for maintaining consistency across analyses, determining trip generation for other planning level tools, and maintaining a common understanding of trip making characteristics amongst transportation professionals. The ITE land use code is also used as an input into the VMT Analysis Tool described in Step 4 of this Section.
 Mixed Use. If there are multiple distinct land uses within the project (e.g., residential, office, retail, etc.), they will be required to be analyzed separately unless they are determined to be insignificant to the total VMT. Mixed use projects are permitted to account for internal capture which depending on the methodology may require a distinct approach not covered in this documentation. The methodology outlined in the current ITE Trip Generation Manual1 is appropriate, however other approaches may be acceptable if approved by the City. This analysis would be the responsibility of the applicant and will need to be prepared by a qualified transportation professional and approved by the City of Pacific Grove.  Redevelopment projects. As described under the Non‐Significant Screening Criteria section, redevelopment projects which have lower VMT than the existing on‐site use can be determined to have a non‐significant impact.

Once the land use type(s) are determined, the next step is to screen the project to determine if further CEQA transportation analysis is necessary.

Step 2: Screen for Non‐Significant Transportation Impact The purpose of this step is to determine if a presumption of a non‐significant transportation impact can be made on the facts of the project. The guidance in this section is primarily intended to avoid unnecessary analysis and findings that would be inconsistent with the intent of SB 743. A detailed CEQA transportation analysis will not be required for land use elements of a project that meet the screening criteria shown in Exhibit 2. If a project has multiple distinct uses (e.g., residential, office, retail, etc.), only those elements of the project that are not screened out would require further evaluation to determine transportation significance for CEQA purposes.

1 ITE Trip Generation Manual, 11th Edition, September 2011 PGCC 8-7-2024

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Exhibit 2 – Screening Criteria
Screening Criteria OPR Guidance
Small Projects2
This applies to projects
with low trip
generation per existing
CEQA exemptions.

Note that this includes
any land use type
(residential, office,
open space,
neighborhood parks,
etc.)
Presumed to cause a less‐than‐significant impact:
 Project generation is less than 110 trips per day per the ITE Manual or other acceptable source determined by the City of Pacific Grove Unless:
 It is inconsistent with the Sustainable Communities Strategy as determined by the City of Pacific Grove
Projects Near High
Quality Transit3
High quality transit
provides a viable
option for many to
replace automobile
trips with transit trips
resulting in an overall
reduction in VMT.

Presumed to cause a less‐than‐significant impact:
 Within a ½ mile of an existing major transit stop4
; and
 Maintains a service interval frequency of 15 minutes or less during the morning and afternoon peak commute periods).

Unless:
 Has a Floor Area Ratio (FAR) of less than 0.75; or
 Includes more parking, excluding on‐street parking, for use by residents, customers, or employees of the project than required by the City of Pacific Grove zoning code; or
 It is inconsistent with the Sustainable Communities Strategy as determined by the City of Pacific Grove; or
 Replaces affordable residential units with a smaller number of moderate‐ or high‐income residential units.

Local‐Serving Retail5
The introduction of
new Local‐serving
retail has been
determined to reduce
VMT by shortening
Presumed to cause a less‐than‐significant impact:
 No single store on‐site exceeds 50,000 square feet; and  Project is local‐serving as determined by the City of Pacific Grove Unless:

2 2018 OPR Guidance, page 12 3 2018 OPR Guidance, page 13 4 Refer to CEQA definition in PRC 21064.3 5 2018 OPR Guidance, page 16 PGCC 8-7-2024

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Exhibit 2 – Screening Criteria
Screening Criteria OPR Guidance
trips that will occur out
of necessity (groceries,
other essentials, etc.).
 The nature of the service is regionally focused as determined by the City of Pacific Grove
Affordable Housing6
Lower‐income
residents make fewer
trips on average,
resulting in lower VMT
overall.

Presumed to cause a less‐than‐significant impact:
 A high percentage of affordable housing is provided as determined by the City of Pacific Grove
Unless:
 The percentage of affordable housing is determined by the City of Pacific Grove to not be high in relation to the residential element of a project
Local Essential
Service7
As with Local‐Serving
Retail, the introduction
of new Local Essential
Services shortens non‐
discretionary trips by
putting those goods
and services closer to
residents, resulting in
an overall reduction in
VMT.

Presumed to cause a less‐than‐significant impact:
 Building is less than 50,000 square feet: and
 Land Use is:
• Day care center; or
• Public K‐12 School; or
• Police or Fire facility; or
• Medical/Dental office building; or
• Government offices (in‐person services such as post office, library, and utilities)
Unless:
 The nature of the service is regionally focused as determined by the City of Pacific Grove
Map‐Based Screening
This method
eliminates the need for
complex analyses, by
Presumed to cause a less‐than‐significant impact:
 Area of development is under threshold as shown on screening map as allowed by the City of Pacific Grove

6 2018 OPR Guidance, page 14. As described, “Evidence supports a presumption of less than significant impact for a 100 percent affordable residential development (or the residential component of a mixed‐use development) in infill locations. Lead agencies may develop their own presumption of less than significant impact for residential projects (or residential portions of mixed‐use projects) containing a particular amount of affordable housing, based on local circumstances and evidence.” 7 Based on assumption that, like local‐serving retail, the addition of necessary local in‐person services will reduce VMT given that trips to these locations will be made irrespective of distance given their non‐discretionary nature.

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Exhibit 2 – Screening Criteria
Screening Criteria OPR Guidance
allowing existing VMT
data to serve as a basis
for the screening
smaller developments.

Note that screening is
limited to residential
and office projects
utilizing the maps.

Unless:
 Represent significant growth as to substantially change regional travel patterns as determined by the City of Pacific Grove Redevelopment
Projects8
Projects with lower
VMT than existing on‐
site uses, can under
limited circumstances,
be presumed to have a
non‐significant impact.

In the event this
screening does not
apply, projects should
be analyzed as though
there is no existing
uses on site (project
analysis cannot take
credit for existing
VMT).

Presumed to cause a less‐than‐significant impact:
 Project replaces an existing VMT‐generating land use and does not result in a net overall increase in VMT
Unless:
 The project replaces an existing VMT‐generating land use and results in a net overall increase in VMT

8 2018 OPR Guidance, Page 18
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Step 3: Determine Significance Threshold and Methodology The purpose of this step is to determine the applicable threshold of significance for land use projects that do not get screened out in Step 2, or if further analysis is necessary to determine VMT impacts.

Significance thresholds are based on land use type, broadly categorized as efficiency and net change metrics. Efficiency metrics include VMT/Capita and Work VMT/employee9 . As described in Exhibit 3,
“Net Change” refers to the net change in regional VMT. “Net Change” is used for elements that include a significant customer base, such as commercial uses, although it can extend to a variety of uses that have similar characteristics.

Exhibit 3 ‐ Significance Threshold and Methodology
Example Details
Threshold Basis
Efficiency Net Change
Example Land Use Residential, Professional Office,
Industrial
Retail, Medical Office, Sports
Venue
Example VMT Thresholds Per capita, per employee Region VMT change Customer Component No Yes
Allowable Methods
Non‐Significant Screening Criteria,
The City of Pacific Grove VMT
Analysis Tool, Travel Demand Model
Non‐Significant Screening
Criteria, Travel Demand Model
For projects with a significant customer base (retail, medical offices, sports venue, etc.) it is typically appropriate to separate employee trip characteristics from the customer base unless the customer base is minimal in nature. Under these circumstances, it is most appropriate to evaluate the total of the delta in regional VMT resultant from the customer base plus the delta of VMT resultant from employees based on the following formula:
(number of employees) x (estimated VMT/employee – threshold VMT/employee) The threshold of significance will accordingly correspond to the “Net Change” threshold as described in Exhibit 3. Under these circumstances, it is most appropriate to evaluate this total Net Change as the basis for evaluating the outcome of mitigations in terms of determining transportation significance although each element of the project should be tallied separately for the purposes of clarity.

9 Work VMT specifically applies to commute trips as represented by the attractions in the Travel Demand Model. Refer to Appendix A for additional information
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VMT Thresholds of Significance
OPR recommends a 15‐percent VMT reduction relative to existing local or regional average VMT levels.

While the 2018 OPR Guidance is not binding on public agencies, CEQA allows lead agencies to “consider thresholds of significance…recommended by other public agencies, provided the decision to adopt those thresholds is supported by substantial evidence.”10
According to OPR, achieving 15‐percent lower per capita VMT (for residential development) or per employee (for employment‐based development) compared with VMT resulting from existing development is both generally achievable and is supported by evidence that connects this level of reduction to the State’s emissions goals.11 The thresholds of significance recommended by OPR, as they relate to the City of Pacific Grove, are summarized in Exhibit 4.

Exhibit 4 ‐ OPR suggested VMT Thresholds of Significance Land Use OPR Guidance12
Residential 15% below existing county‐wide average VMT per capita Office   15% below existing county‐wide average VMT per employee Retail Net increase in regional VMT
Based on these criteria, the VMT thresholds of significance shown in Exhibit 5 have been established.

Exhibit 5 ‐ VMT Thresholds of Significance
Land Use VMT Threshold Basis
Residential 14.3 VMT/capita13 15% below existing county‐wide average VMT per capita.

Office   18.9 Work VMT/Employee14 15% below existing county‐wide average Work VMT per employee
Retail Net regional change Using the county geographical area as the basis Other
Employment Work VMT/Employee15   15% below existing county‐wide average Work VMT per employee for similar land uses
Other
Customer   Net regional change Using the county or another geography deemedappropriate by the City of Pacific Grove as the basis *Current as of March 2024. Note that the values in this table will be updated periodically based on the availability of new information as determined by the City of Pacific Grove. As such, care should be taken in the use of this document to verify the then current values for Exhibit 5.

10 CEQA Guidelines, § 15064.7(c). 11 2018 OPR Guidance, pp. 10‐12. 12 2018 OPR Guidance, Pages 15‐16 13 Residential VMT specifically applies to all Home‐Based trips residential trips. Refer to Appendix A for additional information. 14 Work VMT specifically applies to commute trips. Refer to Appendix A for additional information 15 Work VMT specifically applies to commute trips. Refer to Appendix A for additional information PGCC 8-7-2024

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Note that the inclusion of “Other Employment” and “Other Customer” refers to all other service and goods providers that are not included in the office/retail categories.  As shown, they follow a similar approach to the office/retail categories with the principal difference being that the average/basis for the threshold would be the aggregation of the specific “other” land use across the county (i.e., an industrial project would use industrial uses).

Based on the availability of new information and/or improvements to calculation methods, there will be periodic updates to the numerical threshold values shown in Exhibit 5.  As such, care should be taken in the use of this document to verify the then current values for Exhibit 5. However, the relative approach for calculating the thresholds should remain the same. Furthermore, the values in the City’s current VMT analysis tool, discussed in the next section, will supersede the information provided in Exhibit 5.

The VMT Analysis methodology is summarized in Appendix A.

Step 4: Develop Scope Agreement and Complete VMT Analysis Prior to undertaking VMT analysis, a scope compliant with the City of Pacific Grove’s requirements must be prepared by the project applicant and submitted to the City for approval. Given the potential complexities of some uses, particularly those not clearly identified as residential, retail, or office, a scope agreement regarding the threshold and methodology is important to avoid analysis that is not compliant with the City of Pacific Grove’s requirements.

Step 5: Identify Mitigation Measures
During this step, the analysis agreed to under Step 4 should be completed and approved by the City of Pacific Grove. Relevant documentation providing enough detail that assumptions are clearly understandable, and methods that can be replicated should be provided along with the results of the VMT analysis for the proposed project.

If a significant transportation impact is identified, feasible mitigation measures to avoid or reduce the impact must be identified. CEQA requires that mitigation measures are included in the project’s environmental assessment. The 2018 OPR Guidance provides a list of potential measures to reduce VMT but gives the lead agency (the City of Pacific Grove in this case) full discretion in the selection of mitigation measures.

The type and size of the project will determine the most appropriate mitigation strategies for VMT impacts. For large projects such as general plans or specific plans, VMT mitigations should concentrate on the project’s density and land use mix, site design, regional policies, and availability of transit, bicycle, and pedestrian facilities. For smaller projects such as an individual development project, VMT mitigations will typically require the preparation of a transportation demand management (TDM) program.  A TDM program is a combination of strategies to reduce VMT. The program is created by an applicant for their land use project based on a list of strategies agreed to with the City of Pacific Grove.

Step 6: Mitigation Monitoring
As required by CEQA, the City of Pacific Grove will require ongoing mitigation monitoring and reporting.

The specifics of this will be developed on a project basis.

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4.0 Transportation Projects
Depending on the specific nature of a transportation project, it can alter trip patterns, trip lengths, and even trip generation. Research has determined that roadway capacity‐enhancing projects can and often do increase VMT. This phenomenon is commonly referred to as “induced demand.” These increases in VMT often lead to both congestion increases and negative impacts to air quality, including GHG emissions. While methods are generally less developed for the analysis of VMT associated with induced demand compared to other areas of transportation analysis, there is still the need to quantify and understand its impact to the transportation system considering the requirements of SB 743.

Similar to land use projects, the approach to transportation project analysis closely aligns with the 2018 OPR Guidance. In terms of analysis, the analyst should first determine whether the transportation project has been prescreened and determined to have a non‐significant impact as described in the following section.

Screen for Non‐Significant Transportation Impact
At the discretion of the City of Pacific Grove, the following improvements may be presumed to result in a non‐significant impact16:

1. Rehabilitation, maintenance, replacement, safety, and repair projects designed to improve the condition of existing transportation assets (e.g., highways; roadways; bridges; culverts).

2. Transportation Management System field elements such as cameras, message signs, detection, or signals; tunnels; transit systems; and assets that serve bicycle and pedestrian facilities and that do not add additional motor vehicle capacity.

3. Roadside safety devices or hardware installation such as median barriers and guardrails.

4. Roadway shoulder enhancements to provide “breakdown space,” dedicated space for use only by transit vehicles, to provide bicycle access, or to otherwise improve safety, but which will not be used as automobile vehicle travel lanes.

5. Addition of an auxiliary lane of less than one mile in length designed to improve roadway safety.

6. Installation, removal, or reconfiguration of traffic lanes that are not for through traffic, such as left, right, and U‐turn pockets, two‐way left turn lanes, or emergency breakdown lanes that are not utilized as through lanes.

7. Addition of roadway capacity on local or collector streets, based on the City’s functional classification, provided the project also substantially improves conditions for pedestrians, cyclists, and, if applicable, transit.

8. Conversion of existing general‐purpose lanes (including ramps) to managed lanes or transit lanes, or changing lane management in a manner that would not substantially increase vehicle travel.

16 2018 OPR Guidance, Page 20
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9. Addition of a new lane that is permanently restricted to use only by transit vehicles.

10. Reduction in the number of through lanes.

11. Grade separation to separate vehicles from rail, transit, pedestrians or bicycles, or to replace a lane in order to separate preferential vehicles (e.g., HOV [high occupancy vehicle], HOT [high occupancy toll], or trucks) from general vehicles.

12. Installation, removal, or reconfiguration of traffic control devices, including Transit Signal Priority (TSP) features.

13. Installation of traffic metering systems, detection systems, cameras, changeable message signs and other electronics designed to optimize vehicle, bicycle, or pedestrian flow.

14. Timing of signals to optimize vehicle, bicycle, or pedestrian flow.

15. Installation of roundabouts or traffic circles.

16. Installation or reconfiguration of traffic calming devices.

17. Adoption of or increase in tolls.

18. Addition of tolled lanes, where tolls are sufficient to mitigate VMT increase.

19. Initiation of new transit service.

20. Conversion of streets from one‐way to two‐way operation with no net increase in number of traffic lanes.

21. Removal or relocation of off‐street or on‐street parking spaces.

22. Adoption or modification of on‐street parking or loading restrictions (including meters, time limits, accessible spaces, and preferential/reserved parking permit programs).

23. Addition of traffic wayfinding signage.

24. Rehabilitation and maintenance projects that do not add motor vehicle capacity.

25. Addition of new or enhanced bike or pedestrian facilities on existing streets/highways or within existing public rights‐of‐way.

26. Addition of Class I bike paths, trails, multi‐use paths, or other off‐road facilities that serve non‐ motorized travel.

27. Installation of publicly available alternative fuel/charging infrastructure.

28. Addition of passing lanes, truck climbing lanes, or truck brake‐check lanes in rural areas that do not increase overall vehicle capacity along the corridor.

Significance Threshold and Methodology
For projects that increase roadway capacity and do not fall under one or more of the Non‐Significant Screening Criteria in the prior section, the significance criterion should be if a transportation project PGCC 8-7-2024

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results in a net increase in regional VMT. As a practical matter, any roadway with more than a quarter mile in new roadway travel lane (through lanes) should be evaluated for induced demand. A qualified transportation professional will be required to provide a basis for this evaluation that considers available data, roadway context, and tools. Depending on the location and nature of the roadway this may be best accomplished using the Association of Monterey Bay Area Governments (AMBAG) Travel Demand Model. CEQA requires mitigation monitoring so if a transportation project is required to implement VMT mitigation measures, the City of Pacific Grove is required to monitor whether the project is implementing the mitigation measures. Mitigation monitoring will be determined and implemented on a case‐by‐case basis by the City of Pacific Grove.

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Appendix A
VMT Analysis Methodology
The following methodology was used to establish the City’s VMT thresholds summarized in Exhibit 5. In addition, this methodology outlines how projects are evaluated using the City’s VMT Analysis Tool and the underlying data used in the evaluation process.

The City’s VMT thresholds were developed using trip data for Monterey County supplied by the Replica platform. Replica is a transportation analytics platform that collects anonymized trip data from a variety of data sources including location‐based data from cell phones and in‐dash GPS units throughout the United States. The residential VMT for the City was computed by summing the trip distance for every production trip for all home‐based trip purposes (home‐based work, home‐based shopping, home‐ based school, etc.). The VMT for employee‐based land uses for the City was computed by totaling the trip distances for every commute trip within Monterey County. The total residential and work VMT was divided by the total population or employees within the County to determine the average VMT per capita and VMT per employee for Monterey County.

The City’s VMT thresholds were determined by setting them 15‐percent lower than the baseline countywide average VMT per capita and VMT per employee. As shown in Exhibit 5, the 15‐percent lower than baseline VMT thresholds were calculated to be 14.3 VMT per capita for residential uses and

18.9 VMT per employee for employment uses based on countywide averages of 16.81 VMT per capita and 22.3 VMT per employee, respectively.

Due to the limitations with the City’s VMT Analysis Tool, not all projects can be evaluated using the Tool.

Therefore, the following methodology describes how to evaluate those projects that cannot use the City’s VMT Analysis Tool. This methodology builds on the previous one underlying the City’s VMT Analysis Tool but incorporates data from the AMBAG Travel Demand Model to calibrate VMT data obtained from Replica.

VMT calibration should be completed by first calculating the percent difference in VMT per capita and VMT per employee for each Traffic Analysis Zone (TAZ) and each employment type within the AMBAG RTDM representing the project being analyzed. As the data obtained from Replica does not separate VMT per employee by employment type, a weighted average VMT per employee percent difference should be calculated based on the number of employees in each project TAZ. The Replica data is also provided at the Census Block Group level rather than at the TAZ level, so an association must be established between the AMBAG RTDM TAZ and its representative Block Group. A VMT per capita and VMT per employee percent difference for each Block Group is calculated using a weighted average based on the total population and employment, respectively, for the TAZs within each Block Group. This percent difference is then applied to the VMT per capita and VMT per employee for each Block Group obtained from the Replica platform to determine a calibrated VMT per capita and VMT per employee for the project.

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Exhibit “A”
DRAFT Vehicle Miles Traveled (SB 743 ) Implementation Policy City of Pacific Grove
Planning Commission – May 13, 2021
July 2024

1.0 Background
In 2013, SB 743 was signed into law by California Governor Jerry Brown with a goal of reducing Greenhouse Gas (GHG) emissions, promoting the development of infill land use projects and multimodal transportation networks, and to promote a diversity of land uses within developments. One significant outcome resulting from this statue statute is the removal of automobile delay and congestion, commonly known as level of service (LOS), as a basis for determining significant transportation impacts under the California Environmental Quality Act (CEQA).

The Governor’s Office of Planning and Research (OPR) has documented recommended analysis guidelines for SB 743 in its Technical Advisory on Evaluating Transportation Impacts in CEQA (2018 OPR Guidance) which provides for Vehicle Miles Traveled (VMT) as the principal measure to replace LOS for determining significant transportation impacts. VMT is a measure of total vehicular travel that accounts for the number of vehicle trips and the length of those trips. OPR selected VMT, in part, because jurisdictions are already familiar with this metric. VMT is already used in CEQA to study other potential impacts such as GHG, air quality, and energy impacts and is used in planning for regional Sustainable Communities Strategies (SCS).

VMT also allows for an analysis of a project’s impact throughout the jurisdiction rather than only in the vicinity of the proposed project allowing for a better understanding of the full extent of a project’s transportation-related impact. It should be noted that SB 743 does not disallow the City of Pacific Grove to use of LOS for other planning purposes outside the scope of CEQA (e.g., for determining consistency with LOS-based General Plan policies).

2.0 Use of This Document
Note that although this document includes footnotes and references to other documents, this document has been developed to serve both as the basis of SB 743 implementation and VMT analysis within the City. Accordingly, the document does not require the reader to reference the footnotes unless they are interested in understanding the technical basis of elements of this document’s preparation. Analysis guidelines are separated into two distinct approaches, those that relate to land use projects (Section 3.0) and those that relate to transportation improvement projects (Section 4.0). If a project includes both land use and transportation improvement elements, analysis would be required to be carried out for both. Projects not subject to CEQA are not required to follow these guidelines.

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3.0 Land Use Projects
An This section provides an approach to identify transportation impacts under CEQA for land-use use projects that closely align aligns with guidance provided within the OPR Technical Advisory on Evaluating Transportation Impacts in CEQA (2018). While the 2018 OPR guidance related to SB 743 Guidance has been a helpful introduction to using VMT to evaluate projects, it does not provide a complete solution. There are a multitude of complex practical issues that are not addressed by the 2018 OPR guidanceGuidance. For example, the 2018 OPR Guidance does not specifically address land uses beyond residential, office and retail, and it provides latitude on some elements of implementation. In response to this, a specific series of analysis analytical steps have been developed for SB 743 project evaluation have been developed to clarify requirements and reduce potential confusion. Exhibit 1 provides a graphical flowchart representation of this analysis processthese analytical steps.

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Exhibit 1 – Process for CEQA VMT Analysis for Land Use Projects PGCC 8-7-2024

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Step 1: Determine ITE Land Use Type
If it is determined that this policy applies to a land use project, the second step will be to evaluate the project for the following considerations:
 Land use type. For the purposes of analysis, the Institute of Transportation Engineers (ITE) land use codes serve as the basis of land use definitions. Although it is recognized that VMT evaluation tools and methodologies are typically not fully sensitive to some of the distinctions between some ITE categories, the use of ITE land use codes is useful for maintaining consistency across analyses, determining trip generation for other planning level tools, and maintaining a common understanding of trip making characteristics amongst transportation professionals. The ITE land use code is also used as an input into the VMT Analysis Tool described in Step 4 of this Section.
 Mixed Use. If there are multiple distinct land uses within the project (e.g., residential, office, retail, etc.), they will be required to be analyzed separately unless they are determined to be insignificant to the total VMT. Mixed use projects are permitted to account for internal capture which depending on the methodology may require a distinct approach not covered in this documentation. The methodology outlined in the current ITE Trip Generation Manual1 is appropriate, however other approaches may be acceptable if approved by the City. This analysis would be the responsibility of the applicant and will need to be prepared by a qualified transportation professional and approved by the City of Pacific Grove.  Redevelopment projects. As described under the Non-Significant Screening Criteria section, redevelopment projects which have lower VMT than the existing on-site use can be determined to have a non-significant impact.

Once the land use type(s) are determined, the next step is to screen the project to determine if further CEQA transportation analysis is necessary.

Step 2: Screen for Non-Significant Transportation Impact The purpose of this step is to determine if a presumption of a non-significant transportation impact can be made on the facts of the project. The guidance in this section is primarily intended to avoid unnecessary analysis and findings that would be inconsistent with the intent of SB 743. A detailed CEQA transportation analysis will not be required for land use elements of a project that meet the screening criteria shown in Exhibit 2. If a project has multiple distinct uses (e.g., residential, office, retail, etc.), only those elements of the project that are not screened out would require further evaluation to determine transportation significance for CEQA purposes. 1 ITE Trip Generation Manual, 11th Edition, September 2011 PGCC 8-7-2024

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Exhibit 2 – Screening Criteria
Exhibit 2 – Screening Criteria
Screening Criteria OPR Guidance
Small Projects12
This applies to projects
with low trip
generation per existing
CEQA exemptions.

Note that this includes
any land use type
(residential, office,
open space,
neighborhood parks,
etc.)
Presumed to cause a less-than-significant impact:
 Project generation is less than 110 trips per day per the ITE Manual or other acceptable source determined by the City of Pacific Grove Unless:
 It is inconsistent with the Sustainable Communities Strategy as determined by the City of Pacific Grove
Projects Near High
Quality Transit23
High quality transit
provides a viable
option for many to
replace automobile
trips with transit trips
resulting in an overall
reduction in VMT.

Presumed to cause a less-than-significant impact:
 Within a ½ mile of an existing major transit stop4; and  Maintains a service interval frequency of 15 minutes or less during the morning and afternoon peak commute periods).

Unless:
 Has a Floor Area Ratio (FAR) of less than 0.75; or
 Includes more parking, excluding on-street parking, for use by residents, customers, or employees of the project than required by the City of Pacific Grove zoning code; or
 It is inconsistent with the Sustainable Communities Strategy as determined by the City of Pacific Grove; or
 Replaces affordable residential units with a smaller number of moderate- or high-income residential units.

Local-Serving Retail35
The introduction of
new Local-serving
retail has been
Presumed to cause a less-than-significant impact:
 No single store on-site exceeds 50,000 square feet; and  Project is local-serving as determined by the City of Pacific Grove 12 2018 OPR Guidance, page 12
23 2018 OPR Guidance, page 13
4 Refer to CEQA definition in PRC 21064.3
35 2018 OPR Guidance, page 16
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Exhibit 2 – Screening Criteria
Screening Criteria OPR Guidance
determined to reduce
VMT by shortening
trips that will occur
out of necessity
(groceries, other
essentials, etc.).

Unless:
 The nature of the service is regionally focused as determined by the City of Pacific Grove
Screening Criteria OPR Guidance
of necessity
(groceries,
other essentials,
etc.).
 The nature of the service is regionally focused as determined by the City of Pacific Grove
Affordable Housing46
Lower-income
residents make fewer
trips on average,
resulting in lower VMT
overall.

Presumed to cause a less-than-significant impact:
 A high percentage of affordable housing is provided as determined by the City of Pacific Grove
Unless:
 The percentage of affordable housing is determined by the City of Pacific Grove to not be high in relation to the residential element of a project
Local Essential
Service57
As with Local-Serving
Retail, the
introduction of new
Local Essential
Services shortens nonnon-discretionary trips
by putting those goods
and services closer to
residents, resulting in
Presumed to cause a less-than-significant impact:
 Building is less than 50,000 square feet: and
 Land Use is :
• Day care center; or
• Public K-12 School; or
• Police or Fire facility; or
• Medical/Dental office building; or
• Government offices (in-person services such as post office, library, and utilities)
46 2018 OPR Guidance, page 14. As described, “Evidence supports a presumption of less than significant impact for a 100 percent affordable residential development (or the residential component of a mixed-use development) in infill locations. Lead agencies may develop their own presumption of less than significant impact for residential projects (or residential portions of mixed-use projects) containing a particular amount of affordable housing, based on local circumstances and evidence.” 57 Based on assumption that, like local-serving retail, the addition of necessary local in-person services will reduce VMT given that trips to these locations will be made irrespective of distance given their non-discretionary nature.

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Exhibit 2 – Screening Criteria
Screening Criteria OPR Guidance
an overall reduction in
VMT.

Unless:
 The nature of the service is regionally focused as determined by the City of Pacific Grove
Map-Based Screening
This method
eliminates the need
for complex analyses,
by allowing existing
VMT data to serve as a
basis for the screening
smaller developments.

Note that screening is
limited to residential
and office projects
utilizing the maps.

Presumed to cause a less-than-significant impact:
 Area of development is under threshold as shown on screening map as allowed by the City of Pacific Grove
Unless:
 Represent significant growth as to substantially change regional travel patterns as determined by the City of Pacific Grove Redevelopment
Projects68
Projects with lower
VMT than existing onon-site uses, can under
limited circumstances,
be presumed to have a
non-significant impact.

In the event this
screening does not
apply, projects should
be analyzed as though
there is no existing
uses on site (project
analysis cannot take
Presumed to cause a less-than-significant impact:
 Project replaces an existing VMT-generating land use and does not result in a net overall increase in VMT
Unless:
 The project replaces an existing VMT-generating land use and results in a net overall increase in VMT
68 2018 OPR Guidance, Page 18
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Exhibit 2 – Screening Criteria
Screening Criteria OPR Guidance
credit for existing
VMT).

Exhibit 2 – Screening Criteria
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Step 3: Determine Significance Threshold and Methodology The purpose of this step is to determine the applicable threshold of significance for application to a land use project if it is projects that do not get screened out in Step 32, or if further analysis is necessary to determine VMT impacts. Significance thresholds are based on land use type, broadly categorized as efficiency and net change metrics. Efficiency metrics include VMT/Capita and Work VMT/employee79. As described in Exhibit 3, “Net Change” refers to the net change in regional VMT. “Net Change” is used for elements that include a significant customer base, such as commercial uses, although it can extend to a variety of uses that have similar characteristics.

Exhibit 3 - Significance Threshold and Methodology
Threshold Basis
Example Details
Efficiency Net Change
Example Land Use Residential, Professional Office,
Industrial
Retail, Medical Office, Sports
Venue
Example VMT Thresholds Per capita, per employee Region VMT change Customer Component No Yes
Allowable Methods
Non-Significant Screening Criteria,
The City of Pacific Grove VMT
Analysis Tool, Travel Demand Model
Non-Significant Screening
Criteria, Travel Demand Model
For projects with a significant customer base (retail, medical offices, sports venue, etc.) it is typically appropriate to separate employee trip characteristics from the customer base unless the customer base is minimal in nature. Under these circumstances, it is most appropriate to evaluate the total of the delta in regional VMT resultant from the customer base plus the delta of VMT resultant from employees based on the following formula:
(number of employees) x (estimated VMT/employee – threshold VMT/employee) The threshold of significance will accordingly correspond to the “Net Change” threshold as described in Exhibit 3. Under these circumstances, it is most appropriate to evaluate this total Net Change as the basis for evaluating the outcome of mitigations in terms of determining transportation significance although each element of the project should be tallied separately for the purposes of clarity. 79 Work VMT specifically applies to commute trips as represented by the attractions in the Travel Demand Model. Refer to Appendix A for additional information
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VMT Thresholds of Significance
OPR suggests recommends a 15 -percent VMT reduction relative to existing local or regional average VMT levels. While the 2018 OPR Guidance is not binding on public agencies, CEQA allows lead agencies to “consider thresholds of significance…recommended by other public agencies, provided the decision to adopt those thresholds is supported by substantial evidence.”10 According to OPR, achieving 15-percent lower per capita VMT (for residential development) or per employee (for employment-based development) compared with VMT resulting from existing development is both generally achievable and is supported by evidence that connects this level of reduction to the State’s emissions goals.11 The thresholds of significance recommended by OPR, as they relate to the City of Pacific Grove, are summarized in Exhibit 4.

Exhibit 4 - OPR suggested VMT Thresholds of Significance Land Use OPR Guidance812
Residential 15% below existing city-wide county-wide average VMT per capita Office 15% below existing county-wide average VMT per employee Retail Net increase in regional VMT
Based on these criteria , the VMT thresholds of significance shown in Exhibit 5 have been established.

Exhibit 5 - VMT Thresholds of Significance
Land Use VMT Threshold Basis
Residential 9.7 14.3 VMT/capita913 15% below existing city-wide county-wide average VMT per capita.

Office 6.6 18.9 Work
VMT/Employee1014
15% below existing county-wide average Work VMT
per employee
Retail Net regional change Using the county geographical area as the basis Other
Employment Work VMT/Employee1115 15% below existing county-wide average Work VMT per employee for similar land uses Other
Customer
Net regional change Using the county or another geography deemed appropriate by the City of Pacific Grove as the basis
10 CEQA Guidelines, § 15064.7(c).
11 2018 OPR Guidance, pp. 10-12.
812 2018 OPR Guidance, Pages 15-16
913 Residential VMT specifically applies to all Home-Based trips residential trips as represented in the Travel Demand Model. Refer to Appendix A for additional information.
1014 Work VMT specifically applies to commute trips as represented in the Travel Demand Model. Refer to Appendix A for additional information 1115 Work VMT specifically applies to commute trips as represented in the Travel Demand Model. Refer to Appendix A for additional information PGCC 8-7-2024

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*Current as of March 2024. Note that the values in this table will be updated periodically based on the availability of new information as determined by the City of Pacific Grove. As such, care should be taken in the use of this document to verify the then current values for Exhibit 5.

Note that the inclusion of “Other Employment” and “Other Customer” refers to all other service and goods providers that are not included in the office/retail categories. As shown , they follow a similar approach to the office/retail categories with the principal difference being that the average/basis for of the threshold would be the aggregation of the specific “other” land use across the county (i.e. , an industrial project would use industrial uses, etc.).

Based on the availability of new information and/or improvements to calculation methods and data as well as other modeling modifications , there will be periodic updates to the numerical threshold values shown in Exhibit 5. As such, however care should be taken in the use of this document to verify the then current values for Exhibit 5. However, the relative approach for calculating them the thresholds should remain the same. The Furthermore, the values in the City’s current VMT Analysis Toolanalysis tool, discussed belowin the next section, will supersede the information provided in the table aboveExhibit 5. Additional thresholds for various employment types are also provide in the VMT Analysis Tool.

VMT Analysis Tool
The City of Pacific Grove has developed a VMT Analysis Tool for use in SB 743 land use project analysis. The purpose of the tool is to calculate VMT for a land use project.

As with any VMT Analysis Tool, there are distinct limitations in terms of its application including limits on the type and size of development that can be applied to. Note that it is anticipated that the tool will continue to evolve in response to data or methodological changes and as such it is important that the most current version of the tool be utilized.

Broadly, the VMT Analysis Tool provides the following information:
 Institute of Transportation Engineers (ITE) Trip Generation  VMT Threshold Analysis
 Greenhouse Gas (GHG) Estimation
 Transportation Demand Management (TDM) Evaluation
The VMT Analysis methodology is summarized in Appendix A.

Step 4: Develop Scope Agreement and Complete VMT Analysis Prior to undertaking VMT analysis, a scope compliant with the City of Pacific Grove’s requirements must be prepared by the project applicant and submitted to the City for approval. Given the potential complexities of some uses, particularly those not clearly identified as residential, retail, or office, an a scope agreement regarding the threshold and methodology is important to avoid analysis that is not compliant with the City of Pacific Grove’s requirements.

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Step 5: Identify Mitigation Measures
During this step, the analysis agreed to under Step 5 4 should be complete completed and approved by the City of Pacific Grove. Relevant documentation providing enough detail that assumptions are clearly understandable, and methods that can be replicated should be provided along with the results of the VMT analysis for the proposed project.

If a significant transportation impact is identified, feasible mitigation measures to avoid or reduce the impact must be identified. CEQA requires that mitigation measures are included in the project’s environmental assessment. The 2018 OPR Guidance provides a list of potential measures to reduce VMT but gives the lead agency (the City of Pacific Grove in this case) full discretion in the selection of mitigation measures.

The type and size of the project will determine the most appropriate mitigation strategies for VMT impacts. For large projects such as general plans or specific plans, VMT mitigations should concentrate on the project’s density and land use mix, site design, regional policies, and availability of transit, bicycle, and pedestrian facilities. For smaller projects such as an individual development project, VMT mitigations will typically require the preparation of a transportation demand management (TDM) program. A TDM program is a combination of strategies to reduce VMT. The program is created by an applicant for their land use project based on a list of strategies agreed to with the City of Pacific Grove.

The City of Pacific Grove has developed a list of potential TDM strategies appropriate for their jurisdiction and what magnitude of VMT reduction could be achieved. The selection process was guided by the California Air Pollution Control Officers Association (CAPCOA) recommendations found in the 2010 publication Quantifying Greenhouse Gas Mitigation Measures. The area context of the City of Pacific Grove also influenced the type of TDM strategies that were selected. CAPCOA has found strategies with the largest VMT reduction in rural areas include vanpools, telecommute or alternative work schedules, and master planned communities with design and land-use diversity to encourage intra- community travel. Based on empirical evidence, CAPCOA found the cross-category maximum for all transportation-related mitigation measures is 15% for suburban settings.

Appendix B summarizes available TDM strategies along with the maximum VMT reduction, applicable land use application, and complementary strategies. The City of Pacific Grove’s VMT Analysis Tool includes the TDMs summarized in Appendix B.

Step 6: Mitigation Monitoring
As required by CEQA, the City of Pacific Grove will require ongoing mitigation monitoring and reporting.

The specifics of this will be developed on a project basis.

4.0 Transportation Projects
Depending on the specific nature of a transportation project; , it can alter trip patterns, trip lengths, and even trip generation. Research has determined that roadway capacity-enhancing projects can and often do increase VMT. This phenomenon is commonly referred to as “induced demand”. The result of these .” These increases in VMT can often lead to both be measured in congestion increases and PGCC 8-7-2024

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negative impacts to air quality , including GHG emissions. While methods are generally less developed for the analysis of VMT associated with induced demand compared to other areas of transportation analysis, there is still the need to quantify and understand its impact to the transportation system considering the requirements of SB 743.

Similarly, Similar to land use projects, the approach to transportation project analysis closely align aligns with the 2018 OPR Guidance. In terms of analysis, the analyst should first determine whether the transportation project has been prescreened and determined to have a non-significant impact as described in the following section.

Screen for Non-Significant Transportation Impact
At the discretion of the City of Pacific Grove, the following improvements maybe may be presumed to result in a non-significant impact1216:

1. Rehabilitation, maintenance, replacement, safety, and repair projects designed to improve the condition of existing transportation assets (e.g., highways; roadways; bridges; culverts;).

2. Transportation Management System field elements such as cameras, message signs, detection, or signals; tunnels; transit systems; and assets that serve bicycle and pedestrian facilities) and that do not add additional motor vehicle capacity.

3. Roadside safety devices or hardware installation such as median barriers and guardrails.

4. Roadway shoulder enhancements to provide “breakdown space,” dedicated space for use only by transit vehicles, to provide bicycle access, or to otherwise improve safety, but which will not be used as automobile vehicle travel lanes.

5. Addition of an auxiliary lane of less than one mile in length designed to improve roadway safety.

6. Installation, removal, or reconfiguration of traffic lanes that are not for through traffic, such as left, right, and U-turn pockets, two-way left turn lanes, or emergency breakdown lanes that are not utilized as through lanes.

7. Addition of roadway capacity on local or collector streets, based on the City’s functional classification, provided the project also substantially improves conditions for pedestrians, cyclists, and, if applicable, transit.

8. Conversion of existing general-purpose lanes (including ramps) to managed lanes or transit lanes, or changing lane management in a manner that would not substantially increase vehicle travel.

9. Addition of a new lane that is permanently restricted to use only by transit vehicles.

10. Reduction in the number of through lanes.
1216 2018 OPR Guidance, Page 20
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11. Grade separation to separate vehicles from rail, transit, pedestrians or bicycles, or to replace a lane in order to separate preferential vehicles (e.g., HOV [high occupancy vehicle], HOT [high occupancy toll], or trucks) from general vehicles.

12. Installation, removal, or reconfiguration of traffic control devices, including Transit Signal Priority (TSP) features.

13. Installation of traffic metering systems, detection systems, cameras, changeable message signs and other electronics designed to optimize vehicle, bicycle, or pedestrian flow.

14. Timing of signals to optimize vehicle, bicycle, or pedestrian flow.

15. Installation of roundabouts or traffic circles.

16. Installation or reconfiguration of traffic calming devices.

17. Adoption of or increase in tolls.

18. Addition of tolled lanes, where tolls are sufficient to mitigate VMT increase.

19. Initiation of new transit service.

20. Conversion of streets from one-way to two-way operation with no net increase in number of traffic lanes.

21. Removal or relocation of off-street or on-street parking spaces.

22. Adoption or modification of on-street parking or loading restrictions (including meters, time limits, accessible spaces, and preferential/reserved parking permit programs).

23. Addition of traffic wayfinding signage.

24. Rehabilitation and maintenance projects that do not add motor vehicle capacity.

25. Addition of new or enhanced bike or pedestrian facilities on existing streets/highways or within existing public rights-of-way.

26. Addition of Class I bike paths, trails, multi-use paths, or other off-road facilities that serve nonnon-motorized travel.

27. Installation of publicly available alternative fuel/charging infrastructure.

27. 27. Installation of publicly available alternative fuel/charging infrastructure

28. Addition of passing lanes, truck climbing lanes, or truck brake-check lanes in rural areas that do not increase overall vehicle capacity along the corridor.

Significance Threshold and Methodology
For projects that increase roadway capacity and are do not identified fall under one or more of the Non-Significant Screening Criteria in the prior section, the significance criterion should be change in regional VMT. A finding of a significant impact would be determined if a transportation PGCC 8-7-2024

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project results in a net increase in regional VMT. As a practical matter, any roadway with more than a quarter mile in new roadway travel lane (through lanes) should be evaluated for induced demand. A competent qualified transportation professional will be required to provide a basis for this evaluation that considers available data, roadway context, and tools. Depending on the location and nature of the roadway this may be best accomplished using a the the Association of Monterey Bay Area Governments (AMBAG ) Travel Demand Model. CEQA requires mitigation monitoring. If a so if a transportation project is required to implement VMT mitigation measures, the City of Pacific Grove is required to monitor whether the project is implementing the mitigation measures. Mitigation monitoring will be determined and implemented on a case-by-case basis by the City of Pacific Grove staff.

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Appendix A
VMT Analysis Methodology
Travel Demand Models (TDMs) are broadly considered to be amongst the most accurate of available tools to assess regional and sub-area VMT. The Association of Monterey Bay Area governments (AMBAG) maintains the regional travel demand model as a part of the Metropolitan Transportation Plan/Sustainable Communities Strategy program (MTP/SCS) that includes Monterey County and the City of Pacific Grove. The latest available version of the AMBAG TDM was developed in 2018.

The 2018 Base Year model scenario was used for the baseline conditions and 2040 Future Year model scenario was used for the cumulative conditions in the City. The incorporated cities included in the model are major contributors of the trips throughout Monterey County during a typical weekday.

As many of AMBAG Region’s daily trips originate from or are destined for areas outside of the County such as the Bay area and Santa Clara County (external trips), their total length could not be computed solely using the AMBAG TDM, additional analysis was required. The length of these trips was determined using two main processes, using Big Data and AMBAG TDM output files. Data was obtained from Teralytics that summarized the number of trips to and from the AMBAG Region to the surrounding Counties at the Census Tract level for the entire month of October 2019. The distance between each Census Tract was determined by using the TransCAD software, the modeling platform the AMBAG TDM runs on. The multipath analysis function within the TransCAD software was used to determine the point to point distance between the centroid of each Census Tract using the internal pathing algorithm that determines the shortest path along the roadway network between the centroid of each Census Tract pair. The shortest path between each AMBAG Region Census Tract and each non-AMBAG Region Census Tract that contained at least one trip was multiplied by the share of the total trips to and from each Census Tract within the AMBAG Region to determine the average trip length to and from Census Tracts. The average trip length was applied to each TAZ based on the TAZ to Census Tract association and multiplied by the number of external trips to and from that TAZ to determine the total external VMT by TAZ.

Model Zone Structure
VMT was computed at Traffic Analysis Zone (TAZ) level to determine the thresholds as well as to allow for comparisons among different areas throughout the County.

Socio-Economic Data
Socioeconomic data (SED) and other model inputs are associated with each TAZ. Out of several different variables in the model SED, the VMT analysis mainly focused on population, the number of households, the number of students, and types of employment that are used in the trip generation component. VMT computation was PGCC 8-7-2024

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focused on the number of households in each TAZ and employment variables by 6 industries to determine rest of the trips. Employment variables used in the model are listed below.

Employment by Industry type:

1. Agriculture

2. Construction

3. Industrial and Manufacturing

4. Retail and Food

5. Service (White Collar, non-government jobs)

6. Public Administration (Government jobs)
Trip Generation
The AMBAG TDM runs a series of complex steps to estimate daily trip productions and attractions by various trip purposes for each TAZ. The trip purposes are listed below.

Model Trip Purpose:

1. Home-Based Work (HBW)

2. Home-Based Shopping (HBShop)

3. Home-Based School, K-12 (HBSchool)

4. Home-Based University (HBUniv)

5. Home-Based Other (HBOther)

6. Non-Home-Based Work (NHBW)

7. Non-Home-Based Other (NHBO)

8. Visitor Shop

9. Visitor Tourist
The production model uses several variables such as number of workers, household income, age, household size and car availability depending on the trip purpose. Trip productions for every TAZ in the model were compiled separately by each trip purpose.

The attraction model uses employment categories for the HW trip purpose, whereas it uses the employment categories and number of students (K-12 and University) for all non-HW trip purposes. The attraction model estimates trip attractions to each TAZ by regression coefficients that vary by employment type. Trip attractions for every TAZ were compiled by each purpose and by each employment type based on these regression coefficients.

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Person Trips, Vehicle Occupancy, Trip Distance
Trip productions and attractions were compiled after the mode choice step, and only auto trips were used for the analysis. After the vehicle trip productions and attractions were computed for each trip purpose, trip lengths were applied for each zone pair from the skim matrices in the model to compute the production and attraction VMT by purpose.

VMT by Land Use Type
The residential VMT was computed by combining the production VMT for all the HomeBased trip purposes. VMT for non-residential land uses was computed from the attraction VMT by appropriate trip purposes and regression coefficients used in the attraction model.

Residential and non-residential VMT by each TAZ were computed and average VMT were determined by City, County and Region levels to determine the City’s thresholds.

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Appendix B
City of Pacific Grove
TDM
Measure
#
Transportation
Demand
Management
Measure
Description
TDM Type
Max
VMT
Reductio
n
VMT
Reduction
Type
Parking Strategies
1 Reduce Parking
Supply
Changes on-site parking supply to
provide less than the amount
required by municipal code.

Permitted reductions could
utilize mechanisms such as TOC,
Density Bonus, Bike Parking
ordinance, or locating in a
Specific Plan Area.

Infrastructure 12.5% All
2 Unbundle
Parking
Unbundles parking costs from
property costs, requiring those
who wish to purchase parking
spaces to do so at an additional
cost.

Incentive 26% Residential
3 Parking CashOut
Provide employees a choice of
forgoing current parking for a cash
payment to be determined by the
employer. The higher the cash
payment, the higher the reduction.

Incentive 7.7% Commute
4 Price Workplace
Parking
Implements workplace parking
pricing for employees at
employment locations for all landuse contexts and all types of development that include
employment where trips originate
at home and terminate at work.

Incentive 19.7% Commute
5 Residential Area
Parking Permits
Implementation of residential
permit parking zones for long-term
use of on-street parking in
residential areas.

Incentive 0.25% All
6 Parking
Management
Strategies
Strategies to encourage efficiency in
parking facilities and improve the
quality of service to parking users X X X
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City of Pacific Grove
TDM
Measure
#
Transportation
Demand
Management
Measure
Description
TDM Type
Max
VMT
Reductio
n
VMT
Reduction
Type
Transit Strategies
7 Reduce Transit
Headways
Makes transit service more
appealing by reducing headways,
reducing overall transit trip time,
and encouraging riders to switch
from auto to transit use.

Incentive /
Infrastructure
2%
All
8 MST Trolley
Implement project-operated or
project-sponsored
neighborhood shuttle serving
residents, employees, and
visitors of the project site
Incentive 2% All
9 Transit
Rerouting
Coordinate with local transit
agency to provide or reroute
existing transit services near the
site Infrastructure 1% All
10 Transit Stops
Coordinate with local transit
agency to provide bus stop near
the site.

Real time transportation
information displays support onthe-go decision making to support sustainable trip making. Only get a
reduction on a non-HQT line,
cannot get both.

Infrastructure 1% All
11 Safe and WellLit Access to
Transit
Enhance the route for people
walking or bicycling to nearby
transit (typically off-site). Provide
Emergency 911 phones along these
routes to enhance safety.

Infrastructure 1% All
12 Transit
Subsidies
Involves the subsidization of transit
fare for residents and employees of
the project site. This strategy
assumes transit service is already
present in the project area.

Incentive 5% All
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City of Pacific Grove
TDM
Measure
#
Transportation
Demand
Management
Measure
Description
TDM Type
Max
VMT
Reductio
n
VMT
Reduction
Type
Communication & Information Strategies
13 Voluntary
Travel Behavior
Change
Program
Involves the development of a
travel behavior change program
that targets individuals’ attitudes,
goals, and travel behaviors,
educating participants on the
impacts of their travel choices and
the opportunities to alter their
habits. Provide a web site that
allows employees to research
other modes of transportation for
commuting. Employee-focused
travel behavior change program
that targets individuals’ attitudes,
goals, and travel behaviors,
educating participants on the
impacts of their travel choices and
the opportunities to alter their
habits.

Incentive All
14 Promotions &
Marketing
Involves the use of marketing and
promotional tools to educate and
inform travelers about site-specific
transportation options and the
effects of their travel choices with
passive educational and
promotional materials. Marketing
and public information campaign
to promote awareness of TDM
program with an on-site
coordinator to monitor program.

Incentive All
15 On-site TDM
Program
Manager and
TDM Marketing
Materials
Marketing and public information
campaign to promote awareness of
TDM program with an on-site
coordinator to monitor program. Infrastructure
2%
All
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City of Pacific Grove
TDM
Measure
#
Transportation
Demand
Management
Measure
Description
TDM Type
Max
VMT
Reductio
n
VMT
Reduction
Type
16 Required
Commute Trip
Reduction
Program
Employee-focused travel behavior
change program that targets
individuals’ attitudes, goals, and
travel behaviors, educating
participants on the impacts of their
travel choices and the opportunities
to alter their habits.

Incentive Commute
Commuting Strategies
17 Employer
Sponsored
Vanpool or
Shuttle
Implementation of employersponsored employee vanpool or shuttle providing new opportunities
for access to connect employees to
the project site.

Incentive /
Infrastructure 3%
Commute
18 Passenger
Loading Zones
for Carpool /
Vanpool
Provide easy access for carpools or
vanpools. Infrastructure 1% All
19 On-site Carts or
Shuttles
Provide on-site cart or shuttle for
employees to travel across campus.

Incentive /
Infrastructure 1% All
20 Emergency Ride
Home (ERH)
Program
Provides an occasional subsidized
ride to commuters who use
alternative modes. Guaranteed
ride home for people if they need
to go home in the middle of the
day due to an emergency or stay
late and need a ride at a time
when transit service is not
available. This
Incentive 4% Commute
supplemental to the other trip
reduction strategies.
21 Alternative
Work Schedule
Flextime, Compressed Work Week
(CWW), and staggered shifts
Incentive All
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City of Pacific Grove
TDM
Measure
#
Transportation
Demand
Management
Measure
Description
TDM Type
Max
VMT
Reductio
n
VMT
Reduction
Type
22 Telework
(Telecommuting
, DistanceLearning, etc.)
Use of telecommunications as a
substitute for physical travel.

Incentive
20%
All
23 On-site
Childcare
Provides on-site childcare to
remove the need to drive a child to
daycare at a separate location. Infrastructure 2% All
Shared Mobility Strategies
24 Ride AmigosShare Program
Increases vehicle occupancy by
providing ride-share matching
services, designating preferred per
City of Pacific Grove for ride-share
participants, designing adequate
passenger loading/unloading and
waiting areas for ride-share
vehicles, and providing a website
or message board to connect
riders and coordinate rides. Need
a point person form the business
on-site
Incentive 5% Commute
25 Employee/Empl
oyer Car Share
Implement car sharing to allow
people to have on-demand access
to a vehicle, as-needed. This may
include providing membership to
an existing program located within
1/4 mile, contracting with a thirdparty vendor to extend membership- based service to an
area, or implementing a projectspecific fleet that supports the residents and employees on -site.

Incentive /
Infrastructure
1% All
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City of Pacific Grove
TDM
Measure
#
Transportation
Demand
Management
Measure
Description
TDM Type
Max
VMT
Reductio
n
VMT
Reduction
Type
26 School Carpool
Program
Implements a school carpool
program to encourage ridesharing
for students. Incentive 15% School
Bicycle Infrastructure Strategies
27 Bike Share
Implement bike share to allow
people to have on-demand access
to a bicycle, as-needed.

Incentive /
Infrastructure

0.25% All
28 Include Bike
Parking in
excess of City
Code
Implements long-term bicycle
parking to support safe and
comfortable bicycle travel by
providing parking facilities at
destinations
Infrastructure
29 Include Secure
Bike Parking
and End-of-Trip
Facilities
(Showers, ex.)
in excess of City
Code
Implements additional end-of-trip
bicycle facilities to support safe and
comfortable bicycle travel. Infrastructure
30 Bicycle Repair
Station /
Services
On-site bicycle repair tools and
space to use them supports ongoing use of bicycles for transportation.

Infrastructure
1%
All
Neighborhood Enhancement Strategies
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City of Pacific Grove
TDM
Measure
#
Transportation
Demand
Management
Measure
Description
TDM Type
Max
VMT
Reductio
n
VMT
Reduction
Type
31 Traffic Calming
Improvements
Implements traffic calming
measures throughout and around
the perimeter of the project site
that encourage people to walk,
bike, or take transit within the
development and to the
development from other locations.

Infrastructure 1% All
32 Pedestrian
Network
Improvements
Implements pedestrian network
improvements throughout and
around the project site that
encourages people to walk.

Infrastructure 2% All
Miscellaneous Strategies
33 Virtual Care
Strategies for
Hospitals
Resources to allow patients to
access healthcare services or
communicate with healthcare staff
through online or off-site
programs.

Infrastructure 6% Hospital
Visitors
34 On-site
Affordable
Housing
Provides on-site affordable housing
close to TOD or work place/business Land Use 30% All
35 Commute
Assistance
Center
Provide a computer kiosk that
allows employees to research
other modes of transportation for
commuting.

Infrastructure X X
36 Delivery
Services
Provide delivery services by bicycle,
on foot, or in a delivery vehicle that
makes multiple stops.

Incentive 1% Delivery
The following methodology was used to establish the City’s VMT thresholds summarized in Exhibit 5. In addition, this methodology outlines how projects are evaluated using the City’s VMT Analysis Tool and the underlying data used in the evaluation process.

The City’s VMT thresholds were developed using trip data for Monterey County supplied by the Replica platform. Replica is a transportation analytics platform that collects anonymized trip data from a variety of data sources including location-based data from cell phones and in-dash GPS units throughout the PGCC 8-7-2024

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United States. The residential VMT for the City was computed by summing the trip distance for every production trip for all home-based trip purposes (home-based work, home-based shopping, homebased school, etc.). The VMT for employee-based land uses for the City was computed by totaling the trip distances for every commute trip within Monterey County. The total residential and work VMT was divided by the total population or employees within the County to determine the average VMT per capita and VMT per employee for Monterey County.

The City’s VMT thresholds were determined by setting them 15-percent lower than the baseline countywide average VMT per capita and VMT per employee. As shown in Exhibit 5, the 15-percent lower than baseline VMT thresholds were calculated to be 14.3 VMT per capita for residential uses and

18.9 VMT per employee for employment uses based on countywide averages of 16.81 VMT per capita and 22.3 VMT per employee, respectively.

Due to the limitations with the City’s VMT Analysis Tool, not all projects can be evaluated using the Tool.

Therefore, the following methodology describes how to evaluate those projects that cannot use the City’s VMT Analysis Tool. This methodology builds on the previous one underlying the City’s VMT Analysis Tool but incorporates data from the AMBAG Travel Demand Model to calibrate VMT data obtained from Replica.

VMT calibration should be completed by first calculating the percent difference in VMT per capita and VMT per employee for each Traffic Analysis Zone (TAZ) and each employment type within the AMBAG RTDM representing the project being analyzed. As the data obtained from Replica does not separate VMT per employee by employment type, a weighted average VMT per employee percent difference should be calculated based on the number of employees in each project TAZ. The Replica data is also provided at the Census Block Group level rather than at the TAZ level, so an association must be established between the AMBAG RTDM TAZ and its representative Block Group. A VMT per capita and VMT per employee percent difference for each Block Group is calculated using a weighted average based on the total population and employment, respectively, for the TAZs within each Block Group. This percent difference is then applied to the VMT per capita and VMT per employee for each Block Group obtained from the Replica platform to determine a calibrated VMT per capita and VMT per employee for the project.

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ON EVALUATING TRANSPORTATION

IMPACTS IN CEQA

TECHNICAL ADVISORY
April 2018
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Contents
A. Introduction ...................................................................................................................................... 1 B. Background ....................................................................................................................................... 1 C. Technical Considerations in Assessing Vehicle Miles Traveled......................................................... 3

1. Recommendations Regarding Methodology ................................................................................ 3 D. General Principles to Guide Consideration of VMT .......................................................................... 5 E. Recommendations Regarding Significance Thresholds.................................................................... 6

1. Screening Thresholds for Land Use Projects...............................................................................10

2. Recommended Numeric Thresholds for Residential, Office, and Retail Projects.......................12

3. Recommendations Regarding Land Use Plans............................................................................15

4. Other Considerations..................................................................................................................15 F. Considering the Effects of Transportation Projects on Vehicle Travel ...........................................16

1. Recommended Significance Threshold for Transportation Projects..........................................18

2. Estimating VMT Impacts from Transportation Projects .............................................................19 G. Analyzing Other Impacts Related to Transportation ......................................................................21 H. VMT Mitigation and Alternatives....................................................................................................22 Appendix 1. Considerations About Which VMT to Count .......................................................................25 Appendix 2. Induced Travel: Mechanisms, Research, and Additional Assessment Approaches ............28 PGCC 8-7-2024

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A. Introduction
This technical advisory is one in a series of advisories provided by the Governor’s Office of Planning and Research (OPR) as a service to professional planners, land use officials, and CEQA practitioners. OPR issues technical assistance on issues that broadly affect the practice of land use planning and the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.). (Gov. Code, § 65040, subds. (g), (l), (m).) The purpose of this document is to provide advice and recommendations, which agencies and other entities may use at their discretion. This document does not alter lead agency discretion in preparing environmental documents subject to CEQA. This document should not be construed as legal advice.

Senate Bill 743 (Steinberg, 2013), which was codified in Public Resources Code section 21099, required changes to the guidelines implementing CEQA (CEQA Guidelines) (Cal. Code Regs., Title 14, Div. 6, Ch. 3, § 15000 et seq.) regarding the analysis of transportation impacts. As one appellate court recently explained: “During the last 10 years, the Legislature has charted a course of long-term sustainability based on denser infill development, reduced reliance on individual vehicles and improved mass transit, all with the goal of reducing greenhouse gas emissions. Section 21099 is part of that strategy . . . .” (Covina Residents for Responsible Development v. City of Covina (Feb. 28, 2018, B279590) __Cal.App.5th__, ordered pub. Mar. 22, 2018.) Pursuant to Section 21099, the criteria for determining the significance of transportation impacts must “promote the reduction of greenhouse gas emissions, the development of multimodal transportation networks, and a diversity of land uses.” (Id., subd. (b)(1).) To that end, OPR has proposed changes to the CEQA Guidelines that identify vehicle miles traveled (VMT) as the most appropriate metric to evaluate a project’s transportation impacts. Once the California Natural Resources Agency adopts these changes to the CEQA Guidelines, automobile delay, as measured by “level of service” and other similar metrics, generally will no longer constitute a significant environmental effect under CEQA.

This advisory contains technical recommendations regarding assessment of VMT, thresholds of significance, and mitigation measures. Again, OPR provides this Technical Advisory as a resource for the public to use at their discretion. OPR is not enforcing or attempting to enforce any part of the recommendations contained herein. (Gov. Code, § 65035 [“It is not the intent of the Legislature to vest in the Office of Planning and Research any direct operating or regulatory powers over land use, public works, or other state, regional, or local projects or programs.”].) This April 2018 technical advisory is an update to the advisory it published in November 2017. OPR will continue to monitor implementation of these new provisions and may update or supplement this advisory in response to new information and advancements in modeling and methods.

B. Background
VMT and Greenhouse Gas Emissions Reduction. Senate Bill 32 (Pavley, 2016) requires California to reduce greenhouse gas emissions 40 percent below 1990 levels by 2030, and Executive Order B-16-12 PGCC 8-7-2024

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provides a target of 80 percent below 1990 emissions levels for the transportation sector by 2050. The transportation sector has three major means of reducing greenhouse gas emissions: increasing vehicle efficiency, reducing fuel carbon content, and reducing the amount of vehicle travel. The California Air Resources Board (CARB) has provided a path forward for achieving these emissions reductions from the transportation sector in its 2016 Mobile Source Strategy. CARB determined that it will not be possible to achieve the State’s 2030 and post-2030 emissions goals without reducing VMT growth.

VMT and Other Impacts to Health and Environment. Beyond greenhouse gas emissions, increases in VMT also impact human health and the natural environment. Human health is impacted as increases in vehicle travel leads to more vehicle crashes, poorer air quality, increases in chronic diseases associated with reduced physical activity, and worse mental health. Increases in vehicle travel also negatively affects other road users, including pedestrians, cyclists, other motorists, and many transit users. The natural environment is impacted as higher VMT leads to more collisions with wildlife and fragments habitat. Additionally, development which leads to more vehicle travel also tends to consume more energy, water, and open space (including farmland and sensitive habitat). This increase in impermeable surfaces raises the flood risk and pollutant transport into waterways. (Fang et al., 2017.) VMT and Economic Growth. While it was previously believed that VMT growth was a necessary component of economic growth, data from the past two decades shows that economic growth is possible without a concomitant increase in VMT. (Figure 1.) Recent research shows that requiring development projects to mitigate LOS may actually reduce accessibility to destinations and impede economic growth.1,2
Figure 1. VMT and Gross Domestic Product (GDP), 1960-2010 (Kooshian and Winkelman, 2011)

1 Haynes et al., Congested Development: A Study of Traffic Delays, Access, and Economic Activity in Metropolitan Los Angeles, Sept. 2015.
2 Osman et al., Not So Fast: A Study of Traffic Delays, Access, and Economic Activity in the San Francisco Bay Area, March 2016.

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C. Technical Considerations in Assessing Vehicle Miles Traveled Many practitioners are familiar with accounting for VMT in connection with long-range planning, or as part of the CEQA analysis of a project’s greenhouse gas emissions or energy impacts. This document provides technical information on how to assess VMT as part of a transportation impacts analysis under CEQA. Appendix 1 provides a description of which VMT to count and options on how to count it.

Appendix 2 provides information on induced travel resulting from roadway capacity projects, including the mechanisms giving rise to induced travel, the research quantifying it, and information on additional approaches for assessing it.

1. Recommendations Regarding Methodology
Proposed Section 15064.3 explains that a “lead agency may use models to estimate a project’s vehicle miles traveled . . . .” CEQA generally defers to lead agencies on the choice of methodology to analyze impacts. (Santa Monica Baykeeper v. City of Malibu (2011) 193 Cal.App.4th 1538, 1546; see Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 409 [“the issue is not whether the studies are irrefutable or whether they could have been better” … rather, the “relevant issue is only whether the studies are sufficiently credible to be considered” as part of the lead agency’s overall evaluation].) This section provides suggestions to lead agencies regarding methodologies to analyze VMT associated with a project.

Vehicle Types. Proposed Section 15064.3, subdivision (a), states, “For the purposes of this section, ‘vehicle miles traveled’ refers to the amount and distance of automobile travel attributable to a project.” Here, the term “automobile” refers to on-road passenger vehicles, specifically cars and light trucks. Heavy-duty truck VMT could be included for modeling convenience and ease of calculation (for example, where models or data provide combined auto and heavy truck VMT). For an apples-to-apples comparison, vehicle types considered should be consistent across project assessment, significance thresholds, and mitigation.

Residential and Office Projects. Tour- and trip-based approaches3 offer the best methods for assessing VMT from residential/office projects and for comparing those assessments to VMT thresholds. These approaches also offer the most straightforward methods for assessing VMT reductions from mitigation measures for residential/office projects. When available, tour-based assessment is ideal because it captures travel behavior more comprehensively. But where tour-based tools or data are not available for all components of an analysis, a trip-based assessment of VMT serves as a reasonable proxy.

Models and methodologies used to calculate thresholds, estimate project VMT, and estimate VMT reduction due to mitigation should be comparable. For example:

3 See Appendix 1, Considerations About Which VMT to Count, for a description of these approaches.

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• A tour-based assessment of project VMT should be compared to a tour-based threshold, or a trip-based assessment to a trip-based VMT threshold.
• Where a travel demand model is used to determine thresholds, the same model should also be used to provide trip lengths as part of assessing project VMT. • Where only trip-based estimates of VMT reduction from mitigation are available, a trip-based threshold should be used, and project VMT should be assessed in a trip-based manner.

When a trip-based method is used to analyze a residential project, the focus can be on home-based trips. Similarly, when a trip-based method is used to analyze an office project, the focus can be on home-based work trips.

When tour-based models are used to analyze an office project, either employee work tour VMT or VMT from all employee tours may be attributed to the project. This is because workplace location influences overall travel. For consistency, the significance threshold should be based on the same metric: either employee work tour VMT or VMT from all employee tours.

For office projects that feature a customer component, such as a government office that serves the public, a lead agency can analyze the customer VMT component of the project using the methodology for retail development (see below).

Retail Projects. Generally, lead agencies should analyze the effects of a retail project by assessing the change in total VMT4 because retail projects typically re-route travel from other retail destinations. A retail project might lead to increases or decreases in VMT, depending on previously existing retail travel patterns.

Considerations for All Projects. Lead agencies should not truncate any VMT analysis because of jurisdictional or other boundaries. CEQA requires environmental analyses to reflect a “good faith effort at full disclosure.” (CEQA Guidelines, § 15151.) Thus, where methodologies exist that can estimate the full extent of vehicle travel from a project, the lead agency should apply them to do so. Analyses should also consider a project’s both short- and long-term effects on VMT.

Any project that includes in its geographic bounds a portion of an existing or planned Transit Priority Area (i.e., the project is within a ½ mile of an existing or planned major transit stop or an existing stop along a high quality transit corridor) may employ VMT as its primary metric of transportation impact for the entire project. (See Pub. Resources Code, § 21099, subds. (a)(7), (b)(1).)

4 See Appendix 1, Considerations About Which VMT to Count, “Assessing Change in Total VMT” section, for a description of this approach.

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D. General Principles to Guide Consideration of VMT
SB 743 directs OPR to establish specific “criteria for determining the significance of transportation impacts of projects[.]” (Pub. Resources Code, § 21099, subd. (b)(1).) In establishing this criterion, OPR was guided by the general principles contained within CEQA, the CEQA Guidelines, and applicable case law.

To assist in the determination of significance, many lead agencies rely on “thresholds of significance.” The CEQA Guidelines define a “threshold of significance” to mean “an identifiable quantitative, qualitative5 or performance level of a particular environmental effect, non-compliance with which means the effect will normally be determined to be significant by the agency and compliance with which means the effect normally will be determined to be less than significant.” (CEQA Guidelines, § 15064.7, subd. (a) (emphasis added).) Lead agencies have discretion to develop and adopt their own, or rely on thresholds recommended by other agencies, “provided the decision of the lead agency to adopt such thresholds is supported by substantial evidence.” (Id. at subd. (c); Save Cuyama Valley v. County of Santa Barbara (2013) 213 Cal.App.4th 1059, 1068.) Substantial evidence means “enough relevant information and reasonable inferences from this information that a fair argument can be made to support a conclusion, even though other conclusions might also be reached.” (Id. at § 15384 (emphasis added); Protect the Historic Amador Waterways v. Amador Water Agency (2004) 116 Cal.App.4th 1099, 1108-1109.)
Additionally, the analysis leading to the determination of significance need not be perfect. The CEQA Guidelines describe the standard for adequacy of environmental analyses:

An EIR should be prepared with a sufficient degree of analysis to provide decision makers with information which enables them to make a decision which intelligently takes account of environmental consequences. An evaluation of the environmental effects of a proposed project need not be exhaustive, but the sufficiency of an EIR is to be reviewed in the light of what is reasonably feasible. Disagreement among experts does not make an EIR inadequate, but the EIR should summarize the main points of disagreement among the experts. The courts have looked not for perfection but for adequacy, completeness, and a good faith effort at full disclosure.
(CEQA Guidelines, § 15151 (emphasis added).)
These general principles guide OPR’s recommendations regarding thresholds of significance for VMT set forth below.

5 Because the amount of a project’s VMT is needed (and is currently being used in practice) to assess the environmental impacts on a variety of resources (such as air quality, greenhouse gases, energy, and noise), qualitative analysis should only be applied when models or methods do not exist for undertaking a quantitative analysis.

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E. Recommendations Regarding Significance Thresholds
As noted above, lead agencies have the discretion to set or apply their own thresholds of significance. (Center for Biological Diversity v. California Dept. of Fish & Wildlife (2015) 62 Cal.4th 204, 218-223 [lead agency had discretion to use compliance with AB 32’s emissions goals as a significance threshold]; Save Cuyama Valley v. County of Santa Barbara (2013) 213 Cal.App.4th at p. 1068.) However, Section 21099 of the Public Resources Code states that the criteria for determining the significance of transportation impacts must promote: (1) reduction of greenhouse gas emissions; (2) development of multimodal transportation networks; and (3) a diversity of land uses. It further directed OPR to prepare and develop criteria for determining significance. (Pub. Resources Code, § 21099, subd. (b)(1).) This section provides OPR’s suggested thresholds, as well as considerations for lead agencies that choose to adopt their own thresholds.

Various legislative mandates and state policies establish quantitative greenhouse gas emissions reduction targets. For example:
• Assembly Bill 32 (2006) requires statewide greenhouse gas reductions to 1990 levels by 2020 and continued reductions beyond 2020.
• Senate Bill 32 (2016) requires at least a 40 percent reduction in greenhouse gas emissions by 2030.

• Pursuant to Senate Bill 375 (2008), the California Air Resources Board establishes greenhouse gas reduction targets for metropolitan planning organizations (MPOs) to achieve based on land use patterns and transportation systems specified in Regional Transportation Plans and Sustainable Community Strategies. Current targets for the largest metropolitan planning organizations range from 13% to 16% reductions by 2035. • Executive Order B-30-15 (2015) sets a GHG emissions reduction target of 40 percent below 1990 levels by 2030.
• Executive Order S-3-05 (2005) sets a GHG emissions reduction target of 80 percent below 1990 levels by 2050.
• Executive Order B-16-12 (2012) specifies a GHG emissions reduction target of 80 percent below 1990 levels by 2050 specifically for transportation.
• Senate Bill 391 requires the California Transportation Plan to support 80 percent reduction in GHGs below 1990 levels by 2050.
• The California Air Resources Board Mobile Source Strategy (2016) describes California’s strategy for containing air pollutant emissions from vehicles, and quantifies VMT growth compatible with achieving state targets.
• The California Air Resources Board’s 2017 Climate Change Scoping Plan Update: The Strategy for Achieving California’s 2030 Greenhouse Gas Target describes California’s strategy for containing PGCC 8-7-2024

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greenhouse gas emissions from vehicles, and quantifies VMT growth compatible with achieving state targets.

Considering these various targets, the California Supreme Court observed:

Meeting our statewide reduction goals does not preclude all new development. Rather, the Scoping Plan … assumes continued growth and depends on increased efficiency and conservation in land use and transportation from all Californians. (Center for Biological Diversity v. California Dept. of Fish & Wildlife, supra, 62 Cal.4th at p. 220.) Indeed, the Court noted that when a lead agency uses consistency with climate goals as a way to determine significance, particularly for long-term projects, the lead agency must consider the project’s effect on meeting long-term reduction goals. (Ibid.) And more recently, the Supreme Court stated that “CEQA requires public agencies . . . to ensure that such analysis stay in step with evolving scientific knowledge and state regulatory schemes.” (Cleveland National Forest Foundation v. San Diego Assn. of Governments (2017) 3 Cal.5th 497, 504.)
Meeting the targets described above will require substantial reductions in existing VMT per capita to curb greenhouse gases and other pollutants. But those targets do not translate directly into VMT thresholds for individual projects for many reasons, including:
• Some, but not all, of the emissions reductions needed to achieve those targets could be accomplished by other measures, including increased vehicle efficiency and decreased fuel carbon content. The CARB’s First Update to the Climate Change Scoping Plan explains:
“Achieving California’s long-term criteria pollutant and GHG emissions goals will require four strategies to be employed: (1) improve vehicle efficiency and develop zero emission technologies, (2) reduce the carbon content of fuels and provide market support to get these lower-carbon fuels into the marketplace, (3) plan and build communities to reduce vehicular GHG emissions and provide more transportation options, and (4) improve the efficiency and throughput of existing transportation systems.” (CARB, First Update to the Climate Change Scoping Plan, May 2014, p. 46 (emphasis added).) In other words, vehicle efficiency and better fuels are necessary, but insufficient, to address the greenhouse gas emissions from the transportation system. Land use patterns and transportation options also will need to change to support reductions in vehicle travel/VMT.
• New land use projects alone will not sufficiently reduce per-capita VMT to achieve those targets, nor are they expected to be the sole source of VMT reduction. • Interactions between land use projects, and also between land use and transportation projects, existing and future, together affect VMT.
• Because location within the region is the most important determinant of VMT, in some cases, streamlining CEQA review of projects in travel efficient locations may be the most effective means of reducing VMT.

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• When assessing climate impacts of land use projects, use of an efficiency metric (e.g., per capita, per employee) may provide a better measure of impact than an absolute numeric threshold. (Center for Biological Diversity, supra.)
Public Resources Code section 21099 directs OPR to propose criteria for determining the significance of transportation impacts. In this Technical Advisory, OPR provides its recommendations to assist lead agencies in selecting a significance threshold that may be appropriate for their particular projects. While OPR’s Technical Advisory is not binding on public agencies, CEQA allows lead agencies to “consider thresholds of significance . . . recommended by other public agencies, provided the decision to adopt those thresholds is supported by substantial evidence.” (CEQA Guidelines, § 15064.7, subd. (c).) Based on OPR’s extensive review of the applicable research and literature on this topic, OPR finds that in most instances a per capita or per employee VMT that is fifteen percent below that of existing development may be a reasonable threshold.

First, as described above, Section 21099 states that the criteria for determining significance must “promote the reduction in greenhouse gas emissions.” SB 743 also states the Legislature’s intent that the analysis of transportation in CEQA better promotes the State’s goals of reducing greenhouse gas emissions. It cites in particular the reduction goals in the Global Warming Solutions Act (AB 32) and the Sustainable Communities and Climate Protection Act (SB 375), both of which call for substantial reductions. As indicated above, CARB established long-term reduction targets for the largest regions in the state that ranged from 13 to 16 percent.

Second, Caltrans has developed a statewide VMT reduction target in its Strategic Management Plan.

Specifically, it calls for a 15 percent reduction in per capita VMT, compared to 2010 levels, by 2020.

Third, fifteen percent reductions in VMT are achievable at the project level in a variety of place types. (Quantifying Greenhouse Gas Measures, p. 55 CAPCOA, 2010).

Fourth, in CARB’s most recent update to the Climate Change Scoping Plan, a 15 percent reduction in light-duty VMT beyond what existing plan and policies achieve is recommended to achieve the State’s 2030 and 2050 targets. (CARB, The 2017 Climate Change Scoping Plan: The Strategy for Achieving California’s 2030 Greenhouse Gas Target, October 2017, pp. 116, 150; see generally, CARB, Climate Change Scoping Plan: A Framework for Change, December 2008, p. 27; CARB, First Update to the Climate Change Scoping Plan, May 2014, p. 113; CARB, The 2017 Climate Change Scoping Plan: The Strategy for Achieving California’s 2030 Greenhouse Gas Target, October 2017, p. 149.) The Final 2017 Scoping Plan Update states,
VMT reductions are necessary to achieve the 2030 target and must be part of any strategy evaluated in this Plan. Stronger SB 375 GHG reduction targets will enable the State to make significant progress toward this goal, but alone will not provide all of the VMT growth reductions that will be needed. There is a gap between what SB 375 can provide and what is needed to meet the State’s 2030 and 2050 goals.” (CARB, California’s 2017 Climate Change Scoping Plan, November 2017, p. 75.)
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Furthermore,
At the State level, a number of important policies are being developed. Governor Brown signed Senate Bill 743 (Steinberg, 2013), which called for an update to the metric of transportation impact in CEQA. That update to the CEQA Guidelines is currently underway. Employing VMT as the metric of transportation impact statewide will help to ensure GHG reductions planned under SB 375 will be achieved through on-the-ground development, and will also play an important role in creating the additional GHG reductions needed beyond SB 375 across the State. (Id. at p.

76.)
. . . .

Employing VMT as the metric of transportation impact statewide will help to ensure GHG reductions planned under SB 375 will be achieved through on-the-ground development, and will also play an important role in creating the additional GHG reductions needed beyond SB 375 across the State. Implementation of this change will rely, in part, on local land use decisions to reduce GHG emissions associated with the transportation sector, both at the project level, and in long-term plans (including general plans, climate action plans, specific plans, and transportation plans) and supporting sustainable community strategies developed under SB 375.

The State can provide guidance and tools to assist local governments in achieving those objectives. (Id. at p. 76.)
. . . .

California’s future climate strategy will require increased focus on integrated land use planning to support livable, transit-connected communities, and conservation of agricultural and other lands. Accommodating population and economic growth through travel- and energy-efficient land use provides GHG-efficient growth, reducing GHGs from both transportation and building energy use. GHGs can be further reduced at the project level through implementing energyefficient construction and travel demand management approaches. Further, the State’s understanding of transportation impacts continues to evolve. The CEQA Guidelines are being updated to focus the analysis of transportation impacts on VMT. OPR’s Technical Advisory includes methods of analysis of transportation impacts, approaches to setting significance thresholds, and includes examples of VMT mitigation under CEQA. (Id. at p. 102.) Also, the Scoping Plan includes the following item as a “Recommended Action”: “forthcoming statewide implementation of SB 743[.]” (Id. at p. 103.)
Achieving 15 percent lower per capita (residential) or per employee (office) VMT than existing development is both generally achievable and is supported by evidence that connects this level of reduction to the State’s emissions goals. The following pages describe a series of screening thresholds below which a detailed analysis may not be required. Next, this advisory describes numeric thresholds recommended for various project types. Finally, this advisory describes the analysis for certain unique circumstances.

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1. Screening Thresholds for Land Use Projects
Many agencies use “screening thresholds” to quickly identify when a project should be expected to cause a less-than-significant impact without conducting a detailed study. (See e.g., CEQA Guidelines, §§ 15063(c)(3)(C), 15128, and Appendix G.) As explained below, this technical advisory suggests that lead agencies may screen out VMT impacts using project size, maps, and transit availability.

Screening Threshold for Small Projects
Many local agencies have developed screening thresholds to indicate when detailed analysis is needed.

Absent substantial evidence indicating that a project would generate a potentially significant level of VMT, or inconsistency with a Sustainable Communities Strategy (SCS) or general plan, projects that generate or attract fewer than 110 trips per day6 generally may be assumed to cause a less-thansignificant transportation impact.

Map-Based Screening for Residential and Office Projects Residential and office projects that locate in areas with low VMT, and that incorporate similar features (i.e., density, mix of uses, transit accessibility), will tend to exhibit similarly low VMT. Maps created with data from a travel survey or travel demand model can illustrate areas that are currently below threshold VMT (see recommendations below). Because new development in such locations would likely result in a similar level of VMT, such maps can be used to screen out residential and office projects from needing to prepare a detailed VMT analysis.

6 CEQA provides a categorical exemption for existing facilities, including additions to existing structures of up to 10,000 square feet, so long as the project is in an area where public infrastructure is available to allow for maximum planned development and the project is not in an environmentally sensitive area. (CEQA Guidelines, § 15301, subd. (e)(2).) Typical project types for which trip generation increases relatively linearly with building footprint (i.e., general office building, single tenant office building, office park, and business park) generate or attract an additional 110-124 trips per 10,000 square feet.

Therefore, absent substantial evidence otherwise, it is reasonable to conclude that the addition of 110 or fewer trips could be considered not to lead to a significant impact.

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Figure 2. Example map of household VMT that could be used to delineate areas eligible to receive streamlining for VMT analysis. (Source: City of San José, Department of Transportation, draft output of City Transportation Model.)
Presumption of Less Than Significant Impact Near Transit Stations Proposed CEQA Guideline Section 15064.3, subdivision (b)(1), states that lead agencies generally should presume that certain projects (including residential, retail, and office projects, as well as projects that are a mix of these uses) proposed within ½ mile of an existing major transit stop7 or an existing stop along a high quality transit corridor8 will have a less-than-significant impact on VMT. This presumption would not apply, however, if project-specific or location-specific information indicates that the project

7 Pub. Resources Code, § 21064.3 (“‘Major transit stop’ means a site containing an existing rail transit station, a ferry terminal served by either a bus or rail transit service, or the intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods.”).
8 Pub. Resources Code, § 21155 (“For purposes of this section, a high-quality transit corridor means a corridor with fixed route bus service with service intervals no longer than 15 minutes during peak commute hours.”).

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will still generate significant levels of VMT. For example, the presumption might not be appropriate if the project:
● Has a Floor Area Ratio (FAR) of less than 0.75
● Includes more parking for use by residents, customers, or employees of the project than required by the jurisdiction (if the jurisdiction requires the project to supply parking) ● Is inconsistent with the applicable Sustainable Communities Strategy (as determined by the lead agency, with input from the Metropolitan Planning Organization) If any of these exceptions to the presumption might apply, the lead agency should conduct a detailed VMT analysis to determine whether the project would exceed VMT thresholds (see below).

2. Recommended Numeric Thresholds for Residential, Office, and Retail Projects
Residential development that would generate vehicle travel that is 15 or more percent below the existing residential VMT per capita, measured against the region or city, may indicate a less-thansignificant transportation impact. In MPO areas, development measured against city VMT per capita (rather than regional VMT per capita) should not cumulatively exceed the population or number of units specified in the SCS for that city because greater-than-planned amounts of development in areas above the region-based threshold would undermine the VMT containment needed to achieve regional targets under SB 375.

For residential projects in unincorporated county areas, the local agency can compare a residential project’s VMT to (1) the region’s VMT per capita, or (2) the aggregate population-weighted VMT per capita of all cities in the region. In MPO areas, development in unincorporated areas measured against aggregate city VMT per capita (rather than regional VMT per capita) should not cumulatively exceed the population or number of units specified in the SCS for that city because greater-than-planned amounts of development in areas above the regional threshold would undermine achievement of regional targets under SB 375.

These thresholds can be applied to either household (i.e., tour-based) VMT or home-based (i.e., tripbased) VMT assessments. 9 It is critical, however, that the agency be consistent in its VMT measurement

9 See Appendix 1 for a description of these approaches.

Recommended threshold for residential projects: A proposed project exceeding a level of 15 percent below existing VMT per capita may indicate a significant transportation impact. Existing VMT per capita may be measured as regional VMT per capita or as city VMT per capita. Proposed development referencing city VMT per capita should not cumulatively exceed the number of units specified in the SCS for that city, and should be consistent with the SCS.

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