City Council
Report
City Council Meeting: March 22, 2022
Agenda Item: 9.A
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To: Mayor and City Council
From: David Martin, Director, City Planning
Subject: Adoption of Resolutions and Introduction and First Reading to Adopt the Providence Saint John's Development Agreement
Recommended Action
It is recommended that the City Council take the following actions:
1. Adopt a resolution certifying the Final Environmental Impact Report (FEIR) for the Third Amendment to the Development Agreement and Providence Saint John’s Health Center Phase Two Master Plan in accordance with CEQA;
2. Adopt a resolution adopting a Statement of Overriding Considerations to support approval of the Third Amendment to the Development Agreement and Providence Saint John’s Health Center Phase Two Master Plan based upon the FEIR and other information provided in the record and adopting a Mitigation Monitoring and Reporting Program;
3. Adopt a resolution repealing the 1988 Hospital Area Specific Plan and amending the 2010 Land Use and Circulation Element of the General Plan to modify references to the 1988 Hospital Area Specific Plan;
4. Adopt a resolution approving the Providence Saint John’s Health Center Phase Two Master Plan;
5. Introduce an ordinance for first reading to adopt the Third Amendment to the Development Agreement for the Providence Saint John’s Health Center Phase Two Master Plan;
6. Adopt a Statement of Official Action approving Tentative Tract Map 82302; and
7. Adopt a Resolution of Intent declaring the Council’s intent to vacate a portion of 21st Street between Santa Monica Boulevard and Broadway upon dedication of new public streets to be located on Saint John’s South Campus.
Summary
The Applicant, Providence Saint John’s Health Center, (“Providence” or “Saint John’s”) currently operates a full-service health care center, including a hospital, emergency room, outpatient care, and research facilities on both sides of Santa Monica Boulevard 2 of 50
roughly between 20th and 23rd Streets. The original Development Agreement was executed in July 1998 with a 55-year term to guide phased reconstruction and future development of Saint John’s Health Center after the 1940s-built hospital sustained substantial damage from the 1994 Northridge earthquake. The Development Agreement authorized vested rights for two phases of development on Saint John’sowned property. Providence has worked collaboratively with the City of Santa Monica since 2015 on the preparation of the proposed Phase Two Master Plan (“Master Plan”) at the Providence Saint John’s Health Center campus. Providence also applied for a third amendment to its original development agreement (“Third Amendment”) to state the process and timing to allow vested rights for the development of up to 682,700 sf (of which up to 660,150 sf would be above-grade and up to 22,550 sf would be belowgrade) of wellness/healthcare/research facilities and a range of community-focused uses through a phased design, approval, and construction process. The development agreement incorporates the development standards and infrastructure requirements from the Master Plan. The existing North Campus hospital (on the north side of Santa Monica Boulevard) will remain. As part of the negotiated development agreement, Providence would provide substantial community benefits that would provide up-front and longer-term resources to help address our community’s critical health needs.
The Third Amendment is necessary to implement Phase Two based on Providence’s previous request for an extension of time to construct certain improvements.
Preparation and negotiation of the proposed Master Plan and Third Amendment has been guided by the parameters and fundamental intent of the originally-granted vested rights for Phase Two development, while also updating the plan concept to respond to changes in health care; address the City’s desire to manage development impacts and overall size of Phase Two; address infrastructure needs; and implement a multi-modal mobility strategy specific to the Health Center campus and its Mid-City context.
Of equal importance, the proposed Third Amendment also presents a fundamentallyrenegotiated community benefit package for the duration of the original 55-year Development Agreement term. This Amendment acknowledges Saint John’s important role as a non-profit health center that implements and supports programs addressing 3 of 50
critical health needs in the community by consolidating Providence’s ongoing annual Phase One community benefit obligations with the additional benefits negotiated for Phase Two. As proposed, the renegotiated community benefit package reflects three key strategies that focus on both securing long-term benefits through the year 2053 and up-front, flexible funding to increase the City’s capacity to address priority needs:
1. Maintain certain ongoing Phase One community benefits categories through 2053 and, as needed, expand these programs to account for Phase Two development, such as Saint John’s on-site Child Care Program requirement, transportation demand management program, and neighborhood protection measures.
2. Restructure Providence’s annual Santa Monica Community Benefit Program to obligate Saint John’s to provide increased annual cash grant support to other non-profit organizations who provide a range of programs to address homelessness and other critical health and social service needs in the community.
3. A monetary commitment of two $5,000,000 cash contributions ($10,000,000 in total) from Providence to support Santa Monica initiatives that directly respond to the City’s urgent priority to address behavioral health needs in the community.
The City would use and/or leverage these negotiated funds to support a comprehensive strategy to increase capacity to address the community’s unmet behavioral health needs.
Associated applications also include:
• A General Plan Amendment to repeal the outdated Hospital Area Specific Plan, which was not previously updated with the adoption of the 2010 Land Use and Circulation Element or the 2015 Zoning Ordinance Update; • A request to vacate a portion of 21st Street between Santa Monica Boulevard and Broadway, subject to conditions, in order to implement the Master Plan and create a publicly-accessible plaza that opens onto Santa Monica Boulevard with public access for pedestrian and cyclists provided through to Broadway; and 4 of 50
• A Tentative Tract Map to align existing parcel lines within the Phase Two Master Plan area that is bounded by Santa Monica Blvd, 20th Street, Arizona Avenue and 23rd Street.
Key Issues for Council Consideration
The proposed Master Plan and Third Amendment includes a negotiated community benefits package that reflects extensive work between Providence and the City over a seven-year period and acknowledges that a balanced approach for a proposal of this scale is necessary. Long-term planning for providing health care in today’s changing landscape requires a level of predictability and flexibility for an institution like Saint John’s to function effectively and also continue its legacy of service to the community. In fact, over the past two years, as observed through the global health care response to the COVID-19 pandemic, there is a heightened need for health care providers to plan for future expansion to accommodate new medical technologies and standards of care, while also remaining responsive to a rapidly changing and challenging health care environment.
With respect to land use planning, it is also important to address the interests of residents and businesses in the area impacted by the growth and daily operations of a major institution like Saint John’s. Saint John’s must navigate the challenges of serving its core mission, being a good neighbor, collaborating with the City on orderly longrange planning, and going through the City’s entitlement process.
Accordingly, the Master Plan has undergone in-depth City review and the Providence team has made a series of significant revisions in response to City comments that have been focused on creating a long-range plan that supports orderly, phased, and integrated development at the Saint John’s campus. It is important to state that the Phase Two Master Plan does not obligate Saint John’s to construct any particular development or the entire development scope; rather the Master Plan provides a framework for Saint John’s to continue to meet changing health care needs through the flexible reassessment and modernization of Health Center facilities and operations for a 17-year vesting period.
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As detailed more fully in this report, on January 26, 2022, the Planning Commission voted to recommend that the City Council approve the Phase Two Master Plan and amended Development Agreement with eight recommended refinements to the negotiated community benefits package.
Taken together, the proposal successfully provides a comprehensive, integrated, and orderly long-range plan for phased development of wellness, health care, and medical research facilities on the Saint John’s Campus – and provides substantial community benefits that provide support for homelessness services and services to other vulnerable populations, and a significant, new financial investment to support City initiatives to address the community’s critical behavioral health needs.
Background
Project Site Information
Providence Saint John’s Health Center is located along Santa Monica Boulevard between 20th Street and 23rd Street. The facility’s North Campus is located between Santa Monica Boulevard and Arizona Avenue with the main hospital entrance on Santa Monica Boulevard and the emergency department entrance on Arizona Avenue. The South Campus is located between Santa Monica Boulevard and Broadway and includes the Saint John’s Cancer Institute, and surface parking lots. 6 of 50
Figure 1: Providence Saint John’s Health Center along Santa Monica Boulevard / 23rd Street / Arizona Avenue
Figure 2: Providence Saint John’s Health Center Phase Two North Campus 7 of 50
Zoning
District
&
Land
Area
HMU (Healthcare Mixed-Use District)
MUBL (Mixed-Use Boulevard low District)
347,700 SF parcel area zoned HMU
7,200 SF parcel area zoned MUBL
Providence Saint John’s Health Center Campus
LUCE: Healthcare District Land Use Designation
1988 Hospital Area Specific Plan
Existing
On-Site
Improve
ments:
(A) Providence Saint John’s Health
Center & Entry Plaza ~475,000 SF
2121 Santa Monica Blvd (1942 / 2013)
(B) Providence Saint John’s Child &
Family Development Center –
~34,670 SF 1339 20th Street (1961)
(C) Commercial building ~10,551 SF
(SJHC Foundation Building)
2221 Santa Monica Blvd (1970)
(D) Saint John’s Cancer Institute and
Research Center ~55,055 SF
2200 Santa Monica Blvd (1951)
(E) 10-unit apartment building (vacant) –
1417 21st Street (1948)
(F) MRI Building
(G) Surface parking lots
Adjacent
Zoning
Districts
& Land
Uses:
R2, R4, MUB, HMU, MUBL, GC: Medical
office & services, single- & multi-family
residential, assisted living, commercial,
institutional, creative office & studios
Project Timeline and Process
Providence Saint John’s Health Center is a non -profit hospital and health care facility that was originally built in 1942 on Santa Monica Boulevard between 20th and 23rd Streets in the Mid-City neighborhood. After sustaining significant damage in the 1994 Northridge Earthquake, a plan for a two-phase (Phase One and Phase Two) reconstruction and expansion of the hospital’s North and South Campuses was authorized in July 1998 through approval of a Development Agreement between the City and the Sisters of Charity of Leavenworth on behalf of Saint John’s Health Center.
The 55-year term of the Development Agreement ends on July 9, 2053. The First Amendment to the Development Agreement was authorized by Council in 2011, in large part, to modify the way the Health Center would be required to provide parking for the Phase One project. Phase One construction was completed in 2013. The Second A
B
C
D
E
F
G
G
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Amendment to the Development Agreement, authorized by Council in 2017, was largely procedural in nature and established the framework for consideration of an extension of Phase Two vested rights subject to negotiation of a third amendment to its original Development Agreement (“Third Amendment”), which is the application currently before the Council. A full summary and history of the original Development Agreement and Second Amendment is provided in Attachment “B”.
Figure 3: Project Timeline and Process
Public Review Process for Master Plan and Third Amendment to Development Agreement
The public review process for the Applicant’s proposal included a number of steps, including several community meetings, to engage community members and policy makers on the Phase Two Master Plan and potential community benefits. Preliminary discussions by the Planning Commission and City Council regarding the proposed development agreement followed in 2016. The City Council gave authorization to proceed with project negotiations and environmental review in December 2016 and the hearing for the Second Amendment in April 2017 provided another opportunity for public comment. A Public Scoping Meeting was held by the City in 2017 to gather community 9 of 50
input on the potential impacts areas to study in the project’s Environmental Impact Report (EIR).
Figure 4: Summary of Salient Points from Public Review Process Planning staff and members of the Providence team attended meetings of the City’s Social Services Commission in August 2019 and on February 28, 2022 to provide an overview of the Phase Two Master Plan and share information about Providence’s current community benefit program and key benefits negotiated for Phase Two. The Social Services Commission submitted an Op-Ed to the Santa Monica Daily Press (see Attachment “C”) in February 2020 outlining its priority recommendations. Planning staff and Providence also attended a second meeting of the Social Services Commission on February 7, 2022. A letter from the Commission outlining its comments on the negotiated community benefits proposal will be provided to the City Council for its March 22, 2022 hearing (see Attachment “C”). Finally, as part of the Planning Commission’s public hearing, nearly 100 letters were provided to the Commission.
Attachment “C” to this staff report provides links to these public comments provided during the City review process.
Planning Commission Recommendation for Third Amendment to Development Agreement
On January 26, 2022, the Planning Commission voted 4-0-1 to recommend that the City Council Certify the Final EIR and approve the Phase Two Master Plan, Third 10 of 50
Amendment, and other associated applications with the inclusion of eight recommendations that address negotiated Phase Two community benefits and certain impact fees. The Commission agreed that the Master Plan provides a comprehensive approach for modernization of the Health Center campus and the community benefits package is significant and provides important programs and resources that respond to community needs.
The Planning Commission’s eight recommendations to guide implementation of Providence’s annual community benefit program are organized into the following three categories and listed below:
A. Annual Cash Grant and In-Kind Services Program
B. Funding for Santa Monica Behavioral Health Initiatives C. Impact Fees and Multi-Family Housing
Staff’s response to these recommendations is presented with fuller context in the Community Benefits section of this staff report.
A. Annual Cash Grant and In-Kind Services Program
1. Providence shall consult with subject matter experts, community stakeholders, and co-funders in the grantmaking processes.
2. Limit in-kind funding to clearly measurable capital and operational contributions.
3. Ensure a robust system for funding data-driven innovation that does not unfairly advantage prior grantees over promising new grantees.
Exhibit R-1 to the Development Agreement contains the negotiated Community Benefits. Staff has incorporated items #1 and #2. As discussed later in this report, while staff has not incorporated the specific language of #3 above, the intent of this recommendation is addressed through the inclusion of a review process to allow Saint John’s to seek City Council approval to make a cash grant to a new organization or program that would count toward its Development Agreement requirement, in the event that the grantee is not also a City Human Services Grant Program recipient. 11 of 50
B. Funding for Santa Monica Behavioral Health Initiatives
4. Focus the behavioral health funding on infrastructure and gap funding for mental health outpatient care, with attention to measurable ways that the program can divert from and prevent readmission to inpatient psychiatric care.
5. Do not include the requirement for an eight-year outside payment date for the second $5M payment to the City for behavioral health initiatives or a 1.5% adjustment for inflation as proposed by staff.
As discussed more fully in this report, staff has negotiated a $10,000,000 cash contribution from Providence to the City to be provided in two payments and the Development Agreement stipulates that that these funds are to support Santa Monica behavioral health initiatives, as determined by the Santa Monica City Council, following a City-led public engagement process. Staff has not incorporated the Planning Commission’s recommended language in #4 because the parameters in the Development Agreement have specifically been drafted to provide the flexibility necessary to allow the City Council to determine the most effective use of these funds.
Staff does not agree with the Planning Commission’s recommendation #5 to eliminate the staff-proposed eight-year outside payment date for the second $5,000,000 contribution to the City. As discussed in the Community Benefits section of this staff report, assuming Providence moves forward with construction of Phase Two, having a timeline for receiving this second contribution, which would include an annual adjustment as recommended by staff, will allow the City to more effectively plan for the use of these funds to support future behavioral health services in the community.
C. Impact Fees and Multi-Family Housing
6. Vest the Transportation Impact Fee (TIF) and Affordable Housing Commercial Linkage Fee at the FY2021-2022 baseline rates for full 17-year term for the Phase Two Master Plan.
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7. Require the ten (10) units of Multi-Family Housing to be deed-restricted for 80% AMI Households, based on California Tax Credit Allocation Committee (TCAC) rents, instead of for 50% AMI Households.
8. Clarify and expressly state that if Saint John’s partners with a nonprofit housing provider to build a 100% Affordable Housing Project, rent levels for the deed-restricted affordable housing units may be aligned with the permitted income limits, rent limits, and regulations of the public financing source.
As outlined in #6, the Planning Commission recommends that Providence pay its Transportation Impact Fee (TIF) and Affordable Housing Commercial Linkage Fee for all Phase Two development that occurs during the 17-year vesting period for the Master Plan based on the FY2021-2022 rates plus Consumer Price Index (CPI), compared to the ten-year period agreed on by the staff and the Applicant. Staff continues to recommend that the two impact fees be held at today’s rates plus CPI for the 10-year period only. Consistent with the purpose of a development agreement, the City’s proposal balances Providence’s interest in having vested rights and a greater measure of predictability – with the City’s need to recover costs for capital improvements and providing new affordable housing that are necessary to mitigate impacts associated with new development in the City.
City staff and Providence have reviewed Planning Commission recommendations #7 and #8 addressing the ten (10) units of replacement multi-family housing to be provided as part of the Phase Two Master Plan. The Planning Commission’s recommendations have been considered but not fully incorporated. The Planning Commission was concerned that a ten (10) unit development with 50% Area Median Income (AMI) rents would not be feasible and therefore recommended higher TCAC 80% AMI rents to make the ten (10) replacement unit development feasible. However, while higher TCAC 80% AMI rents would increase feasibility for a ten (10) unit development, it would not encourage the applicant to seek opportunities to provide more affordable housing units.
Staff’s intent is to incentivize Providence’s full utilization of resources by partnering with a non-profit housing provider and allowing flexibility in income targeting, rents, unit mix, and sizes to obtain public financing for a larger number of affordable units without 13 of 50
specifically mandating or imposing a specified number of additional units since completion of the replacement units is required before a certificate of occupancy can issue for the other Phase Two developments. Therefore, the updated language provided in Exhibit R-1 to the Third Amendment states that all units will be deedrestricted for TCAC 80% AMI Households with the clarification that rents, income levels, unit mix, and unit sizes may be adjusted in order to partner with a non-profit affordable housing provider to develop the affordable units and obtain public financing.
Discussion
I. Overview of Phase Two Master Plan
The Master Plan establishes the vision, goals, and principles for long-range development of the Health Center through the following components:
• Vested rights for maximum allowable floor area and building heights; • Cohesive circulation and multi-modal mobility plan for vehicles, bicycles, and pedestrians and parking requirements;
• Permitted Uses;
• Development standards including:
o Building form/envelope standards (e.g. setbacks/stepbacks) that address the specific needs of a health care campus
o Open space requirements including publicly-accessible open space • Potential development phasing plans; and
• Requirements for necessary utilities and infrastructure to improve connections between Saint John’s and surrounding neighborhood.
More specifically, the Master Plan’s phased development proposes the following:
• Up to 682,700 sf of total floor area, of which up to 660,150 SF would be abovegrade floor area (approximately 563,525 SF of net-new above-grade floor area) and 22,550 sf would be below-grade floor area for development of wellness/healthcare/research facilities;
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• A requirement for future discretionary review by the Planning Commission of certain Phase Two buildings;
• Future vacation of a portion of 21st Street between Broadway and Santa Monica Boulevard, subject to conditions including dedication of new public streets to be located on Saint John’s South Campus;
• On-site subterranean parking;
• Publicly-accessible open space areas;
• Visitor accommodations;
• A minimum of 10 units of replacement multi-family housing; and • New replacement facilities for Providence’s existing Saint John’s Cancer Institute and Child and Family Development Center.
The proposed Master Plan would govern any proposals for future facilities on Saint John’s Phase Two development sites submitted for a period of 17 years. Following approval of the Master Plan, each building proposed for construction during this 17-year vesting period would require both a finding of consistency with the Phase Two Master Plan and review and approval of a Development Review Permit by the Planning Commission. This review by the Planning Commission is required so that building mass, site design, and infrastructure and parking needs are reviewed in the future – at a period in time closer to when individual building will be constructed – and with the benefit of a then-current assessment of health care, community priorities, and infrastructure needs.
It is important to state that the Phase Two Master Plan does not obligate Saint John’s to construct any particular development or the entire development scope; rather the Master Plan provides a framework for Saint John’s to continue to meet changing health care needs through the flexible reassessment and modernization of Health Center facilities and operations for a 17-year vesting period. The Master Plan identifies the infrastructure, circulation, and open space improvements necessary for each Phase 15 of 50
Two Building and also addresses keeping the existing Health Center in full operation throughout each stage of future development.
While there are two conceptual phasing plans presented as part of the Master Plan, the exact order for development of Phase Two Buildings is not mandatory, as each stage of development can occur and function independent of other stages, if certain Phase Two Buildings are not pursued in the future. During the 17-year vesting period Saint John’s would not be permitted to pursue new health care facilities under the current zoning standards. The overall term of the amended Development Agreement would remain at a total of 55 years until the year 2053.
Purpose and Goals of the Phase Two Master Plan
The proposed Phase Two Master Plan and Third Amendment to the Development Agreement between the City and Providence represents a comprehensive evaluation of the proposed vested rights and obligations for Phase Two development that reflects Saint John’s important and long-standing presence in the community as a health care provider and one of the City’s top five employers with a total of over 1,400 employees, and the organization’s need to update facilities and create new space that reflects both the innovations and changing needs in health care.
The Phase Two Master Plan presented as Attachments “D” and “E” encompasses Applicant-owned parcels on both sides of Santa Monica Boulevard and integrates health care-related uses, buildings, open space, parking resources, and vehicle, pedestrian, and bicycle circulation improvements across the North and South Campuses with the goal of expanding on the services currently provided by the hospital’s diagnostic and treatment center, in-patient suites, emergency department, and medical research facility (Saint John’s Cancer Institute).
Providence developed the parameters and program goals for the Phase Two Master Plan following a needs assessment process conducted by Providence after assuming sponsorship of the Health Center in 2014 and have been revised based on periodic outreach with community members, following Planning Commission and Council 16 of 50
preliminary discussions of the Master Plan concept, and substantive and extensive review with City staff. The proposed Master Plan incorporates the recommendations and priorities that have been gathered from Providence’s executive team, physicians, clinicians, staff, administrators, and community health care service providers – and provides a long-range plan for developing a state-of-the-art medical care and research center that includes a new medical research facility for the Saint John’s Cancer Institute, expanding ambulatory and acute care services rebuilt as part of Phase One, and supporting health and wellness education in the community.
The City has conducted a comprehensive review of the proposed Phase Two Master Plan and worked with Providence to negotiate the process and terms for the Third Amendment in furtherance of following key principles:
• Preserving and expanding community access to the high quality health care provided by Saint John’s;
• Promoting economic investment in Santa Monica;
• Protecting the surrounding community from impacts; and • Negotiating enhanced community benefits for Santa Monica and its residents that support City priorities to address critical health care needs in the community.
With respect to the Master Plan, through the review process, the City sought to create a comprehensive campus plan that provides the following:
• Orderly, phased, and cohesive buildout of health care and community-focused uses;
• A variety of enhanced open space areas;
• Sufficient on-site parking and infrastructure;
• Safe and efficient mobility for all modes; and
• Development parameters that set clear buildable envelope maximums and also provide the flexibility necessary to respond to changing health care needs over the next 17 years.
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The proposed Phase Two Master Plan is divided into four chapters and provides a comprehensive presentation of the vision, vested uses and development standards, and options for implementation of Phase Two development.
Providence Saint John’s Health Center
Phase Two Master Plan - Key Topics
Chapter 1 Introduction Overview of Health Center; Master Plan parcels; regulatory requirements; prior amendments
Chapter 2
Vision, Goals, Policies
Overview of Master Plan Components; Phase I vision and planning; Phase Two programming goals; urban planning and design principles Chapter 3
Development
Standards
Plan Overview
Permitted Uses Development Standards
Open Space Standards
Mobility Plan
Vehicle Parking Plan
Bicycle Amenities
Loading
Sustainability and Resiliency
Water and Sewer Infrastructure
Emergency Vehicle Access
Chapter 4
Phasing Plan
Implementation Principles
Phasing Plans
Scope of Work in Each Stage for Phasing Plan A & Phasing Plan B Due to the comprehensive nature of the Phase Two Master Plan, a summary of the following key components is provided as Attachment “A” to this staff report:
• Phase Two vested uses and site planning
• Conceptual development of Phase Two site and buildings • Key development standards and Phase Two vested floor area comparison • Open space and pedestrian connections
• Mobility plan and parking
Each section includes a discussion of the key factors that guided staff’s review of that component of the Master Plan from a land use policy and planning perspective.
Conceptual Phasing Plans for Master Plan Implementation As summarized in Attachment “A” and presented in full in Attachment “D”, the Phase Two Master Plan sets forth an integrated long-range plan for phased design, approval, 18 of 50
and development of wellness, health care, and medical research facilities on the Saint John’s Campus. The City and Saint John’s have conducted intensive review and study of all aspects of the Master Plan to identify the infrastructure, circulation, and open space improvements are required for each building and stage of implementation of the Phase Two development program.
Chapter Four of the Master Plan includes two conceptual phasing plans that provide the order in which development is likely to occur and identifies the associated improvements and related construction activities that will be required with each building and development stage. While discussion about Master Plan implementation has shifted focus over the course of the City review process, several key outcomes have continued to shape the City’s careful evaluation of this important aspect of the Phase Two Master Plan:
• Structuring orderly, phased buildout of the Phase Two development program with the existing Health Center remaining accessible and in full operation; • Ensuring the existing Child and Family Development Center and Saint John’s Cancer Institute will remain in continuous operation until new facilities are constructed and ready to open;
• Minimizing construction impacts to neighboring residents and businesses, by allowing staging on Providence Saint John’s owned properties to the extent reasonably feasible;
• Ensuring that sufficient parking is provided for existing health center operations for its various users groups throughout implementation of the Master Plan; and • Ensuring that applicable infrastructure, open space, and circulation improvements are provided timely with each implementation stage of the Phase Two development program.
Two potential alternate phasing plans were studied in detail as part of the Phase Two Master Plan review: Phasing Plan A and Phasing Plan B. These alternative Phasing Plans are shown in Figures 5 and 6 below and on Pages 58-59 of the Master Plan with 19 of 50
the specific requirements for each stage of the plans. In Phasing Plan A, the first Phase Two developments to move forward would be the Child & Family Development Center (S1), Multi-Family Housing (S2), and West Ambulatory Care & Research Building (S3).
Figure 5: Master Plan – Phasing Plan A
In Phasing Plan B, the West Ambulatory & Acute Care (2C) building on the North Campus along with the Multi-Family Housing (S2) would be the first developments to move forward.
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Figure 6: Master Plan – Phasing Plan B
These Phasing Plans presented in full in the Master Plan demonstrate the incremental stages of implementation for the infrastructure, open space, parking, circulation and other improvements associated with the redevelopment of each Phase Two site. If implementation of Phase Two proceeds in an order that differs from the two phasing plans, the Third Amendment’s Development Review Permit findings along with the companion requirements in the Master Plan ensure that infrastructure, open space, parking, circulation and other improvements necessary to support each Phase Two site are provided.
Finally, it should be noted that during the City review process, a draft proposal was initially presented with a single phasing plan that included specific time deadlines for each stage of development with buildings constructed in sequential order during the vesting period (e.g., The S1 Building Development Review Permit would be filed within three years of Master Plan approval, etc.). While this concept represented a simplified 21 of 50
approach to phased development of the master plan, both parties negotiated the two potential phasing plans presented today in recognition of the fundamental need expressed by Saint John’s to have the flexibility, as a non-profit health care provider, to fundraise and plan construction, to account for the inherent complexity of maintaining ongoing operations during construction, and to potentially shift the order of Phase Two development to respond to programmatic priorities in response to changing health care needs in the community.
II. Third Amendment to the Development Agreement
Vested Rights and Approval of Phase Two Buildings
This Third Amendment reflects the good faith negotiations both parties have engaged in to extend the Phase Two Vesting Deadline to allow for a longer timeframe to develop in accordance with the proposed Phase Two Master Plan and provide renegotiated community benefits as required by the amended Agreement.
More specifically, the Third Amendment provides a seventeen (17) year Phase Two Vesting Deadline starting from the final effective date of the Third Amendment, subject to a maximum three-year extension. Prior to the Phase Two Vesting Deadline, Saint John’s would have a vested right to construct Phase Two development with the floor areas, building heights, uses, and number of units indicated in Chapter 3 of the Phase Two Master Plan, provided procedural requirements and milestones are completed timely for submittal of Planning applications, issuance of building permits, and completion of construction for Phase Two Buildings.
The Third Amendment also provides for the following:
• Allows modifications to the Phase One circulation plan that was established by the original Development Agreement in order to align the North Campus Entry Plaza with new South Campus circulation per the Phase Two Master Plan. • Establishes review procedures for Phase Two development during the 17-year Vesting Period as follows:
o Development Review Permit - For each Phase Two Building. 22 of 50
o ARB Approval (Design Review) - Required prior to issuance of a building permit for each Phase Two Building.
o Administrative Approval – Allowed for buildings less than 2,000 SF such as the two small cafés and for the Multi-Family Housing Building.
Special Development Review Findings for Phase Two Buildings Specifically-tailored Development Review Permit findings of fact have been created and incorporated in the Third Amendment in order to acknowledge the requirement for consistency with the Phase Two Master Plan and the vested rights established by the Plan and to address the unique requirements of developing pursuant to the Phase Two Master Plan, including the need for a final determination of the necessary off-site infrastructure by the City Engineer and City Traffic Engineer as part of the Development Review Permit process. All Phase Two Buildings that require approval of a Development Review Permit would be subject to the following proposed findings of fact necessary for approval:
1. The physical location, size, height, density (floor area or number of units), massing, setbacks, pedestrian orientation, open space, parking requirements, and placement of proposed structures on the site and the location of proposed uses within the project are consistent with the Phase II Master Plan Standards (Exhibit “Q”);
2. The rights-of-way can accommodate autos, bicycles, pedestrians, and multimodal transportation methods, including adequate parking and access in accordance with the Phase II Master Plan Standards (Exhibit “Q”);
3. The health and safety services (police, fire etc.) are sufficient to accommodate the new development;
4. The project is generally consistent with the Phase II Master Plan Standards (Exhibit “Q”);
5. Based on environmental review in accordance with Section 2.13.4 of the Third Amendment, the proposed project has no potentially significant environmental impacts or any potentially significant environmental impacts have been reduced 23 of 50
to less than significant levels because of mitigation measures incorporated in the project or a Statement of Overriding Considerations has been adopted;
6. The project has no unacceptable adverse effects on public health or safety;
7. The project complies with all applicable mitigation measures and conditions of approval established in Exhibit “S” of the Third Amendment.
8. The project provides all applicable significant project features and community benefits consistent with Exhibit “R-1” of this Third Amendment.
9. Saint John’s has met and conferred with the City Engineer and City Traffic Engineer, as applicable, to determine the off-site infrastructure (for utilities, traffic infrastructure, and public right-of-way) that will be required by the City Engineer and City Traffic Engineer as conditions to issuance of a building permit to be completed prior to issuance of the Certificate of Occupancy for the Phase II Building(s), and the information necessary for the City Engineer and City Traffic Engineer to make his or her determination has been provided by Saint John’s.
Without limiting the City Traffic Engineer’s or the City’s Engineer’s authority under Article 7 of 2022 SMMC, as amended from time to time after the Third Amendment Effective Date, the City Traffic Engineer’s and City Engineer’s determinations are generally consistent with the Phase II Master Plan.
Proposed Community Benefits
Pursuant to a development agreement, the City can negotiate community benefits within the bounds of its police power and statutory authority. The Third Amendment that accompanies the Master Plan proposes a renegotiated community benefit package for the duration of the original 55-year Development Agreement term that ends in the year 2053. The City’s negotiation of community benefits has been focused on delivering a series of programmatic and monetary investments from Saint John’s to support community health in the Santa Monica.
The following discussion presents a brief summary of each community benefit category that has been negotiated by the City and Providence. This negotiation acknowledges 24 of 50
Saint John’s important role as a non-profit health care provider that implements and supports programs addressing critical health needs in the community and builds upon the substantial community benefits that have been provided by Saint John’s through its existing Phase One obligation.
Exhibit R-1 to the Third Amendment would govern community benefits, childcare requirements, and neighborhood protection provisions in the Development Agreement including for Phase One and Phase Two. Some community benefits are required through the end of the 17-year vested rights term for the Phase Two Master Plan while other benefits are required through the end of the term of the Development Agreement in the year 2053.
1) Community Benefit Program: Homelessness Services and Services to Other Vulnerable Populations
The new Community Benefit Program would serve as a replacement for Saint John’s annual Phase One Santa Monica Community Access Plan (SMCAP) obligation. This would require that Saint John’s continue its triennial health needs assessment in the community and provide on an annual basis until the end of the Development Agreement term, grant funds and in-kind services to support homelessness services and services to other vulnerable populations. More specifically, Saint John’s must provide cash grants to other non-profit community partners and in-kind support for homeless services and prevention, services to other vulnerable populations, and/or behavioral health programs in the community in the amount of a minimum of One Million Dollars ($1,000,000) in value provided annually for twenty years. Starting in calendar year 2043, a minimum of Five Hundred Thousand Dollars ($500,000) in value will be required annually through the end of 2052. The annual amount of the Providence’s community benefit program will be subject to an annual 1.5% adjustment.
Providence must provide a minimum of 80% of the required annual value as cash grants to other non-profit organizations/programs that meet the following criteria and 25 of 50
any remaining applicable annual value any may be provided as in-kind support or programs:
• The non-profit organization must serve populations consistent with the requirements of the City’s Human Services Grants Program; and • The non-profit organization is funded by or has been funded by the City of Santa Monica’s Human Services Grant Program within the three fiscal years prior to submitting a request to Providence for grant funding.
For other organizations/programs that may not meet these criteria (e.g., a new/emerging organization or new program that is not funded by the City’s grant program), the Development Agreement provides a process for Saint John’s to make a request to the City Council for approval that a cash grant to such organization/program would count toward its annual requirement.
Per the Planning Commission’s recommendations, as part of its annual community benefit program implementation, the following two criteria shall also apply in order to provide:
• Saint John’s shall consult with subject matter experts, community stakeholders and co-funders [i.e. financial partner] in the grantmaking process. • Any in-kind funding shall be limited to clearly measurable capital and/or operational contributions.
At the end of the Development Agreement Term, the total value of Providence’s annual community benefit program will be over $29,000,000, of which over $23,000,000 will have been provided by Providence as cash grants to other non-profit organizations. 2) Child Care Program
During the entire Development Agreement Term, Saint John’s will be required to continue its on-site Phase One Child Care Program obligation for providing a minimum 49 spaces for full-day childcare which includes a minimum 21 full-day infant/toddler 26 of 50
spaces and provide additional service capacity to address Phase Two childcare demand. Along with a series of programmatic requirements, tuition subsidies are also required as part of the Phase One obligation. The original Development Agreement requires Saint John’s to provide additional childcare spaces to address the childcare needs generated by the Phase Two development. A childcare needs assessment was conducted as part of the Phase Two process, subject to City approval. Based on that analysis Saint John’s is required to increase its service capacity for a minimum of 11 additional childcare spaces over the implementation of Phase Two development.
The requirement to provide its Child Care Program to address both Phase One and Phase Two requirements may occur in the planned new Child and Family Development Center Building (S1) on the South Campus adjacent to Broadway. This planned facility would have a total of five classrooms, outdoor activity space, and have operational capacity for up to 71 licensed childcare spaces. In the event that childcare for Phase One or Phase Two is not provided on the S1 Site and operations remain on the North Campus in the existing Child and Family Development Center Building, Saint John’s will be required to pay an Early Childhood Initiatives contribution to the City in the amount of $300,000.00. The City would utilize this contribution to support early childhood initiatives including but not limited to infant, toddler and pre-school tuition subsidies; family support and parent engagement strategies; home visitation programs; facility and playground improvements and kindergarten readiness models.
3) Monetary Contribution for Santa Monica Behavioral Health Initiatives Background on Negotiation
The City recognizes the need for greater capacity to address the unmet behavioral health needs of both housed and unhoused residents, especially on a 24/7 basis. The City is studying different models to address this gap, assessing resources and identifying partnerships both locally and in the region. The City’s Community Services Department has released a Request for Proposals to advance this evaluation in a concrete way. More specifically, the City is seeking a cross-discipline expert team to advise the City and support the development of a comprehensive behavioral health 27 of 50
strategy, to include a community engagement process, and to evaluate the feasibility and development of an operational plan and site assessment for a potential behavioral health center.
City and Providence Negotiation
In addition to the negotiation of Saint John’s annual Community Benefit Program providing cash grants and in-kind services to support homelessness services and services to other vulnerable populations, as outlined in #1 above, the City and Providence have been in substantive discussions regarding a new and significant investment from Providence in the form of a direct financial commitment of $10,000,000 to help expand access to services and to improve the continuum of care for individuals in the community who need access to behavioral health services.
The negotiated funds would be paid directly to the City and could be used for capital needs or operational funding for a behavioral health center – or for other City-sponsored behavioral health programs. The most effective way(s) to use these funds would be determined at the discretion of the City Council. It is staff’s hope that Council’s determination will be informed by the forthcoming inclusive community-based process to develop a comprehensive behavioral health strategy, including an operational plan for a 24/7 behavioral health center and feasibility studies of available City property. A Request for Proposals for experts to support the City’s development of a communitywide behavioral health strategy was released earlier this month. Staff anticipates returning to Council in Summer 2022 with recommendation of award of contract.
Community engagement would follow. Additionally, staff will return to Council in May with an interdepartmental update on homelessness that will highlight potential new investments through the FY 2022-23 budget process to expand access to behavioral healthcare.
In addition, in order to address the broader intent of Planning Commission’s recommendation #4 regarding how the City should use the funds, staff has included a requirement:
• Saint John’s shall support the City’s community engagement process for the development of Santa Monica Behavioral Health Initiatives by actively 28 of 50
participating in planning meetings and making good faith efforts to provide subject matter experts and leverage existing partnerships to help advance the City’s behavioral health goals and priorities.
The City and Providence both agree on the fundamental purpose and importance of this community benefit to make a meaningful and positive impact in supporting behavioral health services in Santa Monica; however, the City and Providence are not in full agreement on the schedule of payment and the inclusion of an annual adjustment to account for inflation, as detailed below.
Providence Proposal
Providence proposes that Saint John’s would be required to provide a total sum of Ten Million Dollars ($10,000,000) to the City based on the following schedule:
a) Within 180 days after the Third Amendment Effective Date, Saint John’s would be required to pay the sum of Five Million Dollars ($5,000,000) to the City; and
b) Within 100 days after the effective date of the final City approval of the Development Review Permit for the first Phase Two Building (excluding the Phase Two Multi-Family Housing building (S2)), Saint John’s would be required to pay an additional sum of Five Million Dollars ($5,000,000) to the City.
City Proposal
The City proposes that an outside time limit be established for submitting the second payment of $5,000,000 in order to ensure that the City has a clear timeline and the full ability to plan for the use of these funds to address a critical community priority. More specifically, timing is important because there are both City and other agency efforts underway to evaluate the feasibility and potential for implementing different behavioral health service models that could also include the future siting and operation of a community-based behavioral health center. Having a firm commitment regarding when resources would be available for such a project may allow the City to use such funds to leverage other resources and partnerships toward this effort. Accordingly, the City has 29 of 50
proposed the following counterpoint to Providence addressing the timing of the second payment and inclusion of a 1.5% annual adjustment to account for inflation:
(b) Saint John’s shall pay the additional sum of Five Million Dollars ($5,000,000) to the City upon the earlier of:
(i) One-hundred (100) days after the effective date of the final City approval of the Development Review Permit for the first Phase Two Building (excluding the Phase Two Multi-Family Housing building (S2)), or (ii) Eight (8) years after the Third Amendment Effective Date.
Notwithstanding the foregoing, if this additional sum is not paid within three (3) years after the Third Amendment Effective Date, this sum shall be adjusted commencing January 1, 2025 and annually thereafter by one and a half percent (1.5%).
In summary, Providence agrees with the timing for the first payment to the City – and agrees that the second payment of $ 5,000,000 is contingent on the approval of the first Development Review Permit for a Phase Two Building (excluding the Phase Two MultiFamily Housing building). However, Providence does not agree with setting an outside date of eight years for the second payment regardless of whether or not a Development Review Permit for a Phase Two Building has been approved.
If the outside payment date is not agreed to by Providence then this second contribution could be made to the City any time within the 17-year vesting period that starts after final approval of the Third Amendment, provided Providence proceeds with Phase Two development. As a result, if Providence never proceeds with Phase Two development then the second contribution would not be received by the City. Providence also does not agree with increasing the second payment by 1.5% annually as described in the City proposal.
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Providence has expressed their position that the community benefit proposal presented to the City is substantial and unprecedented for a non-profit organization in a land use entitlement context and that the timing for the second payment tied to the approval of the first Development Review Permit for a Phase Two Building is fair and appropriate.
Furthermore, Providence has indicated that the first $5,000,000 payment to the City within 180 days of final approval of the Third Amendment and Phase Two Master Plan is not contingent on construction of any Phase Two development and, as such, is demonstration of its commitment to helping address behavioral health in the community, and to its overall investment in the Phase Two Master Plan process. 4) Child & Family Development Center Youth and Family Program Beginning on July 1, 2023 through the Term of the Development Agreement, Saint John’s has agreed to continue its Child/Youth Development Project (or a substantially similar program) without City funding. Saint John’s has historically received City grants of approximately $315,000 annually to subsidize this program. The Child/Youth Development Project shall continue to provide direct services to children and families who have been impacted by community violence, familial discord, poverty, substance abuse, and/or trauma as further described in Section 3.2 of Exhibit R-1. 5) Community Access to Phase Two Community-Oriented Facilities The original Development Agreement established a requirement that as part of Phase Two development, Saint John’s would be obligated to allow a reasonable number of Santa Monica residents who are unable to afford fees and memberships to have access to Phase Two’s community-oriented facilities. R-1 Exhibit Section 3.3 outlines this proposed community benefit with more specificity following negotiation as part of the Third Amendment and with consideration of the applicable components of the Phase Two Master Plan. This requirement would be in effect during the full term of the Development Agreement and specifies the terms for use of Phase Two communityoriented facilities including by community groups and local non-profit organizations at the new Education & Conference Center on the South Campus. There is also a requirement for providing discounted admission pricing to Santa Monica residents for 31 of 50
future conference and events hosted by Saint John’s and open to the public at the Education & Conference Center.
6) Phase Two Open Space, including Publicly-Accessible Open Space and 24/7 Pedestrian Connections
The original Development Agreement established the requirement for a minimum of 35% open space provided on the South Campus as part of Phase Two. This site planning requirement has been incorporated into the Phase Two Master Plan and has served as benchmark guiding principle for the Plan’s evolution since the Development Agreement for the Health Center was originally approved in 1998. Accordingly, substantial open space, including Publicly-Accessible Open Space and 24/7 Pedestrian Connections, have been an area of focus for both the City and Saint John’s in terms of site planning for Phase Two. Publicly-accessible open space and 24/7 Pedestrian Connections are required in accordance with Section 2.11 of the Third Amendment and the Phase Two Master Plan Standards.
7) Phase Two Vehicle, Bicycle & Pedestrian Infrastructure Improvements and Enhanced Transportation Demand Management and the Transportation Impact Fee
Section 3.5.1 of Exhibit R-1 provide the cross-reference to the Phase Two Master Plan’s requirement for Saint John’s to make certain vehicle, pedestrian and bicycle infrastructure improvements as part of the Phase Two developments. The City and Providence has engaged in negotiations regarding payment of the Transportation Impact Fee for Phase Two Buildings as individual Development Review Permit applications are submitted as part of the phased buildout of Phase Two.
With respect to payment of the Transportation Impact Fee for Phase Two development, both parties have agreed that the fee in effect in 2022 will be valid for Phase Two development applications submitted and deemed complete during a period of ten years after the Third Amendment Effective Date. After that 10-year period, the Transportation Impact Fee then in effect would apply.
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Through the negotiation, both parties have also agreed that in order to further support use of public transportation and single-occupancy vehicle trip reduction by a large employer in the community such as Saint John’s, Providence may request that up to $50,000 of the TIF for each Phase Two development may be used by Saint John’s (rather than being paid to the City) for transportation demand management measures beyond those required by the Phase Two Transportation Demand Management Plan (Exhibit R-2 to the Third Amendment). This Transportation Demand Management Plan was originally negotiated and required as part of the First Amendment to the Development Agreement and has been implemented since then and will be required through the end of the 17-year Phase Two Vesting Deadline. After the Phase Two Vesting Deadline, the City’s transportation demand requirements then in effect will apply.
8) Phase Two Local Hiring Programs
Section 3 of Exhibit R-1 confirms that during the Term of the Third Amendment, Saint John’s will be required to implement and monitor the Local Hiring Programs for Phase Two as provided in Exhibits R-5 and R-6 to the Third Amendment. These programs include local hiring provisions for construction-related and permanent employment. The Applicant and commercial tenants would be required to follow certain steps to ensure that the greatest opportunity for interviewing local residents and employees is provided.
All hiring decisions would continue to remain at the discretion of Providence and commercial tenants. The concept of Priority for Targeted Job Applicants provides an updated definition of “First Priority” as follows: “Any resident of a household with no greater than 80% Median Income that resides within the Low and Moderate Income Areas identified in Map 2-7 of the City of Santa Monica’s Adopted 6th Cycle 2021-2029 Housing Element or any resident who resides in Santa Monica’s 90404 zip code (Pico Neighborhood).”
9) Neighborhood Protection Measures
Except as otherwise stated in Section 4 of Exhibit R-1, during the Term of the Third Amendment, a series of Neighborhood Protection Measures will be required. These 33 of 50
requirements include having a community Ombudsperson, security escorts for staff, providing a discounted daily parking rate for visitors/patients with Disabled Person license plates or placards who are visiting Saint John’s, availability of special events parking, requirement for an annual community meeting to identify and address any issues associated with Saint John’s compliance under the Development Agreement, and the requirement to continue implementation of its noise reduction parking policy in Lot “H” adjacent to the 1440 23rd Street residential building is required. . 10) Phase Two South Campus Affordable Housing & Affordable Housing Commercial Linkage Fee
Subject to the terms provided in Section 5 of Exhibit R-1, Saint John’s is required to replace the existing 10 vacant residential units located at 1417 21st Street by building no less than ten (10) new deed-restricted residential rental dwelling units affordable to TCAC 80% AMI Households on the South Campus in the location identified in the Phase Two Master Plan adjacent to Broadway. All ten of these units will be subject to a recorded rental deed restriction of not less than 99-years. Saint John’s is not precluded from partnering with a housing provider to develop, finance and deliver these affordable units. Saint John’s may satisfy its housing obligations under the Third Amendment at any time, however, no other Phase Two Building on the South Campus may obtain its Certificate of Occupancy until these replacement units have been issued a Certificate of Occupancy by the City.
With respect to payment of the Affordable Housing Commercial Linkage Fee for applicable Phase Two development, both parties have agreed that the fee in effect in 2022 will be valid for Phase Two development applications submitted and deemed complete during a period of ten years after the Third Amendment Effective Date. After that 10-year period, the Affordable Housing Commercial Linkage then in effect would apply.
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11) Internship/Nurse Residency Program
As provided in Section 6 of Exhibit R-1, during the Term of the Third Amendment, Providence will be required to make available at least two (2) internships or nurse residencies during each school year (which for this purpose includes the following summer) to students who attend a high school in Santa Monica or Santa Monica College (or attended within three years prior to the relevant year) or are Santa Monica residents. Two (2) additional internships or nurse residencies shall also be made available no later than six months after the issuance of the Certificate of Occupancy for the first Phase Two Building, not including the Phase Two Multi-Family Housing building.
All four (4) of these internships shall be paid at the City’s minimum wage unless a student requests an unpaid internship in order to obtain school credit(s) (or more school credits) for such internship. Providence shall select interns in accordance with its normal practice of hiring the most qualified candidate and shall make a good faith effort to hire residents of the 90404 zip code (Pico Neighborhood) as the first priority and other Santa Monica residents as the second priority when most qualified or equally qualified as other applicants who are not residents of the 90404 zip code or Santa Monica residents, as applicable. Subject to the requirements specified Section 6 Exhibit R-1, Saint John’s retains full discretion to establish selection criteria for, and to select, the students for the internships.
Saint John’s will also be required to notify the City’s Director of Community Development, Santa Monica High School, Santa Monica College, Virginia Avenue Park Advisory Board, and Virginia Avenue Park Youth Employment Services of the availability of, and selection criteria for, such internships prior to the start of each school year.
12) Equal Opportunity Subcontracting
Section 7 of Exhibit R-1 provides the requirements for inclusion in all construction contracts between Saint John’s and its contractors with respect to Phase Two Development Sites during the Term of the Third Amendment:
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“The Contractor shall not discriminate on the basis of race, gender, religion, national origin, ethnicity, sexual orientation, age, or disability in the solicitation, selection, hiring, or treatment of subcontractors, vendors, or suppliers. The Contractor shall provide equal opportunity for subcontractors to participate in subcontracting opportunities. The Contractor understands and agrees that violation of this clause shall be considered a material breach of the contract and may result in contract termination or other contract remedies.”
“At least 30 days before recruitment of subcontractors by any of Saint John’s construction contractors, Saint John’s shall submit documentation to the Community Development Director, evidencing its construction contractors’ outreach about bid opportunities to enhance participation by all classes of subcontractors, vendors, or suppliers, including, without limitation, women business enterprises, minority business enterprises, and local business enterprises. The scope of documentation shall be reasonably determined by the Community Development Director.” Proposed Vacation of a Portion of 21st Street
In order to implement the Phase Two Master Plan on the South Campus, Providence has requested vacation of a 250-foot portion of 21st Street between Broadway and Santa Monica Boulevard. This is shown in purple in the figure below. This proposed partial street vacation provides the opportunity for a pedestrian-oriented, publiclyaccessible plaza that opens onto Santa Monica Boulevard with public access for pedestrians and cyclists provided through to Broadway. The southern portion of 21st Street would remain a public street and continue to provide access to neighboring residential developments and connect to two new City streets on Saint John’s property. 36 of 50
Figure 7 – Map Showing Proposed Street Vacation and Proposed new City streets If approved, the proposed street vacation would be subject to the following conditions:
(a) dedication of Saint John’s property for two new City streets (referred to as 20th Place and Saint John’s Way), as depicted above in Figure 7, to provide alternative vehicular, pedestrian and bicycle access, and (b) dedication of pedestrian connections to provide pedestrian access through Saint John’s Campus, and c) dedication of necessary utility easements. The partial street vacation would not occur until all of these conditions have been met to the City’s satisfaction as part of future phased construction during the 17-year vesting period.
Attachment “M” to this staff report provides the Council’s Resolution of Intention declaring its intention to order vacation of portions of 21st Street’s public right-of-way and to set a public hearing on April 26, 2022. This resolution is the formal initiation of the process to approve the future street vacation that is required by the Streets and Highways Code. Public outreach and required notifications would be conducted prior to the April 26, 2022 meeting.
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General Plan Consistency Analysis
The proposed Phase Two Master Plan and Third Amendment to the Development Agreement is consistent with the objectives, policies, general land uses and programs specified in the general plan and any applicable specific plan, in that Saint John’s is a non-profit healthcare facility located in the Healthcare District Land Use Designation.
The vision for this land use designation is to create a cohesive environment that supports the continued vitality of the City’s hospitals, responds to the evolving needs of the health care community, and improves the way health care facilities relate to surrounding residential and commercial areas.
The Phase Two Master Plan and Third Amendment is consistent with Land Use and Circulation Element (LUCE) Goal D28: Allow for the continued improvement of the Healthcare District and the ongoing responsible expansion of the Saint John’s Health Center (St. John’s) and Santa Monica-UCLA Medical Center (SMUCLA). Specifically, the Phase Two Master Plan and Third Amendment to the Development Agreement present a comprehensive Master Plan that addresses all development on the north and south campuses for a 17-year period and provides for substantive review of individual buildings closer to the time of construction in order to create the cohesive environment that supports the vitality of the health care district and also protects adjacent residential neighborhoods.
The proposed Phase Two Master Plan and Third Amendment to the Development Agreement is also consistent with LUCE Goal LU7: Support the continued vitality of the City’s hospitals to meet the healthcare needs of the City and the larger region, and implement strategies to reduce vehicle trips. Specifically, development standards in the Master Plan and the procedural requirements set forth in the Third Amendment to the Development Agreement ensure that a mix of medical research and hospital health care uses are vested (permitted) for a period of 17 years to allow phased implementation of health care facilities that are responsive to changing health care needs in the community. Moreover, Saint John’s Health Center will be required to continue to implement a Transportation Demand Management (TDM) Program to reduce vehicle 38 of 50
trips in the area and associated parking demand and the Master Plan includes pedestrian and bicycle enhancements to promote alternative modes of travel and better connections to public transit.
Accordingly, the Phase Two Master Plan is therefore consistent with LUCE Circulation Policy T19.2 which seeks appropriate TDM requirements for new development.
Furthermore, the project is consistent with LUCE’s overall land use policies by providing community benefits for the area, including but not limited to, affordable housing, mobility improvements, visitor accommodations, publicly-accessible open spaces, and programs to address the needs of vulnerable populations in the community.
Hospital Area Specific Plan Repeal and General Plan Amendment The Phase Two Master Plan and Third Amendment to the Development Agreement was assessed for consistency with the Land Use and Circulation Element (LUCE) of the General Plan, including various Citywide and Healthcare District goals, objectives and policies. The current HASP is based on 1984 General Plan policies and 1988 Zoning Ordinance designations and development standards for the entire Hospital Area Specific Plan study area, including UCLA-owned properties, commercial-zoned parcels, and residential-zoned parcels. The proposal to repeal the 1988 HASP and remove references to the HASP contained in the 2010 Land Use and Circulation Element would not change the current regulations that apply to the HASP area. More specifically, the 2015 Zoning Ordinance use regulations and development standards would continue to apply to parcels in the current HASP area and, if approved, the Phase Two Master Plan would govern the Saint John’s Health Center parcels until the end of the 17-year vesting period established by the amended Development Agreement. The proposed General Plan Amendment would only strike or modify references to a Hospital Area Specific Plan; the 2010 LUCE’s goals, objectives, and policies would continue to apply for the LUCE Healthcare District, applicable Boulevards (Wilshire, Santa Monica, and Broadway), and the Healthcare Mixed Use Land Use Designation. Proposed language associated with General Plan Amendment and the repeal of the HASP is provided in Attachment “H”.
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Environmental Analysis
In accordance with the California Environmental Quality Act (CEQA), an EIR was prepared to analyze the potential environmental effects of the Providence Saint John’s Project. As required by Section 15082 of the CEQA Guidelines, a Notice of Preparation (NOP) was published on commencing April 10, 2017 and ending May 11, 2017. The purpose of the NOP was to formally convey that the City was preparing a Draft EIR for the Project, and to solicit input regarding the scope and content of the environmental information to be included in the Draft EIR.
The public scoping meeting was held on April 24, 2017 from 6:00 P.M. to 7:30 P.M. at the McKinley Elementary School Auditorium, located at 2401 Santa Monica Boulevard, Santa Monica, California 90404. The meeting included a presentation of the Project and an overview of the CEQA process followed by an open house format which provided interested individuals, groups, and public agencies the opportunity to view materials, ask questions, and provide oral and written comments to the City regarding the scope and focus of the Draft EIR as described in the NOP.
On July 30, 2019, a Notice of Completion and Public Availability of the Draft EIR was published, commencing a 45-day public comment period for the Draft EIR that ended on September 13, 2019. In accordance with Section 15087(a) of the State CEQA Guidelines, a public notice indicating the Draft EIR was available for review was distributed to parties providing comment on the Notice of Preparation (“NOP”) and residents within a 1,000-foot radius of the Project Site. Additionally, the notice was published in the Santa Monica Daily Press and mailed to all neighborhood groups, relevant governmental agencies, and interested parties. The Draft EIR was made available for public review at local libraries, City Hall, and online on the City of Santa Monica’s Planning & Community Development Department website.
The environmental issues studied in detail in the Draft EIR include:
• Aesthetics (Visual Character, Views, Light and Glare, Shading) • Air Quality/Health Risk
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• Construction Effects
• Cultural Resources - Historical Resources
• Cultural Resources - Archaeology and Paleontology
• Energy
• Greenhouse Gas Emissions
• Geology and Soils
• Hazards and Hazardous Materials
• Hydrology and Water Quality
• Land Use/Planning
• Neighborhood Effects
• Noise and Vibration
• Population and Housing
• Police Protection
• Fire Protection
• Transportation
• Tribal Cultural Resources
• Water
• Wastewater
• Solid Waste
Other issue areas such as Agricultural/Forestry Resources, Biological Resources, Mineral Resources, and Recreation were determined to be less than significant in the Initial Study (Appendix A of the EIR).
The Final EIR, which was published in January 2022, contains all comments and responses to comments received during the comment period as well as minor changes to the Draft EIR.
Comments on the Draft EIR
The Draft EIR was available for a 90-day public review period, during which a total of 90 comment letters were received. During this period, a total of ten comment letters were 41 of 50
received. Comments were raised regarding traffic analysis, general support for the project, and concerns about construction air quality. Responses to all comments received are included in the Final EIR within Chapter 10, Responses to Comments.
Significant Impacts
As indicated in Chapter 4, Environmental Impact Analysis, of the Final EIR, the Project would result in significant unavoidable impacts in terms of air quality, construction effects (due to vibration), cultural resources - historical resources, neighborhood effects (due to transportation), noise and vibration (vibration), and transportation.
Air Quality
As indicated in Section 4.2, Air Quality, of the EIR, Project Interim Year (2031) operational nitrogen oxides (NOx) emissions would be reduced with implementation of the proposed mitigation measure (e.g., MM-AIR-1), but would still exceed South Coast Air Quality Management District (SCAQMD) regional operational thresholds. Therefore, operational NOx emissions would be significant and unavoidable. However, it should be noted that if the SCAQMD regional construction thresholds were applied, total Project construction and operational emissions would be below all thresholds.
Cultural Resources - Historical Resources
As indicated in Section 4.4, Cultural Resources - Historical Resources, of this EIR, the Project would result in a significant unavoidable impacts to historical resources due to demolition of the Santa Monica Cancer Institute Building (formerly John Wayne Cancer Institute) and Lt. Joseph P. Kennedy Jr. Memorial Child & Family Development Center (CFDC). The implementation of the proposed mitigation measures (e.g., MM-HIST-1 through -3) would address impacts, but would not reduce to less than significant levels as there is no feasible mitigation to reduce demolition of these historical resources to a less than significant level.
Noise and Vibration/Construction Effects
As indicated in Section 4.13, Noise and Vibration, of the EIR, Project construction activities would result in significant vibration effects. Participation in Mitigation Measure 42 of 50
MM-NOISE-2 would prevent vibration impacts to vibration sensitive medical equipment at Medical Office Buildings not owned/controlled by Saint John’s. Participation in MMNOISE-2 includes location inventory, simulation testing, equipment relocation, and equipment isolation. MM-NOISE-2 also requires that no construction be conducted during active use of equipment, or alternative construction methods. Thus, potentially significant construction vibration impacts at participating Medical Office Buildings not owned/controlled by Saint John’s would be reduced to a less than significant level.
However, for any Medical Office Buildings not owned/controlled by Saint John’s that do not participate in MM-NOISE-2, Project construction vibration could result impacts to vibration sensitive medical equipment. Therefore, the impact would be significant and unavoidable.
Transportation/Neighborhood Effects
As indicated in Section 4.17, Transportation, of the EIR, Project intersection and street segment operations impacts would be significant and unavoidable at fourteen study intersections and six segments under Interim Year (2031) and/or Future Year (2042) conditions. The impacts at these intersections would be significant and unavoidable as feasible mitigation is not available to reduce the impacts at these intersections to less than significant levels due to lack of additional adequate right-of-way area, inconsistency with adopted City policies, and/or because they would result substantial secondary impacts. It should be noted that after publication of the Draft EIR, on June 9th, 2020 the City adopted vehicle miles traveled (VMT) as the metric for analyzing the transportation impacts of projects that are subject to CEQA, to align with the requirements of Senate Bill (SB 743). VMT measures the cumulative distance of automobile travel, taking into account the origin and destination of a particular trip.
Typically, development located at a greater distance from other land uses and in areas without transit generates more VMT than development near other land uses with more robust transportation options. Since the Project’s Notice of Preparation and Draft EIR predate the adoption of the VMT thresholds, the Project’s analysis of transportation effects are utilized using the former level of service (LOS) standards. Nonetheless, Section 4.17, Transportation, of the EIR does provide analysis and disclosure of the Project’s VMT effects.
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Alternatives Studied
The selection of alternatives studied in the EIR are based on CEQA requirements as well as consideration of public comments received during the NOP comment period for the Draft EIR. The EIR studied five alternatives to the project, which are intended to reduce the environmental impacts of the projects:
• Alternative 1 – No Project/No Build: Per CEQA Guidelines Section 15126.6(e)(2), the No Project/No Build Alternative analysis discusses the existing conditions at the time the Notice of Preparation (NOP) was published (April 7, 2017) and compares impacts of the No Project/No Build Alternative to the Project. Under the No Project/No Build Alternative, the Project would not be developed. Rather, the existing on-site uses (e.g., medical, medical office, laboratory, day care, and vacant residential totaling 110,055 square feet of floor area, along with the existing entry plaza and surface parking) would remain unchanged. • Alternative 2 – Tier 1 Only: Alternative 2 assumes development of the Phase Two Development Sites with healthcare and related uses at the Tier 1 densities and heights with associated parking (e.g., not at the Tier 2 densities and heights permitted by the SSMC with the provision of specified community benefits). In addition, the existing street network would remain as is. There would be no new streets such as 20th Place and Saint John’s Way and, the northern portion of 21st Street would not be vacated. Instead, site access would be directly from the streets adjacent to the Phase Two sites. Furthermore, the below-grade tunnels connecting parking garages and above-grade pedestrian connections over Santa Monica Boulevard would not be constructed.
• The total floor area available for Phase Two uses would be reduced by about 110,000 square feet as a result of the Tier 1 height and density limitations. In addition to reducing the total floor area available for healthcare uses, Alternative 2 would not include an Education and Conference Center, Visitor Housing, Saint 44 of 50
John’s Café or Mullin Plaza Café. The on-site open space would also be significantly reduced due to the Tier 1 height limit.
• Alternative 3 – Reduced Healthcare Uses with Tier 2 Housing on South Campus:
This alternative represents a reduction in the healthcare uses compared with the proposed Project and a reduction in open space, with an overall increase in the total floor area to accommodate residential development on the South Campus in response to public comments received during the preliminary hearings and NOP scoping meeting to explore adding housing as part of the Phase Two Master Plan. Total development on the North Campus would be consistent with the Master Plan, with variations in the proposed uses to accommodate replacement of the Child and Family Development Center, including its Daycare uses, on Development Site 2I (rather than moving the Child and Family Development Center to a new building on the South Campus along Broadway). The northern portion of the South Campus (along Santa Monica Boulevard) would be developed with healthcare uses in buildings with similar setbacks, densities and heights as the Phase Two Master Plan. On the southern portion of the South Campus, development would be primarily multi-family housing (247 multi-family units, including 10 replacement units) at Tier 2 densities and heights with a reduction of open space on the South Campus.
No Visitor Housing would be developed. In addition, the existing street network would remain as is. There would be no new streets such as 20th Place and Saint John’s Way and, the northern portion of 21st Street would not be vacated.
Furthermore, the above-grade pedestrian connections over Santa Monica Boulevard and the tunnels beneath Santa Monica Boulevard would not be constructed.
• Alternative 4 – Reduced Master Plan: Alternative 4 represents a reduction in the Phase Two Master Plan, with a reduction in height such that all new buildings would be no greater than 70 feet consistent with the Zoning Ordinance’s HMU 45 of 50
Tier 2 maximum height. Under Alternative 4, total development on the Saint John’s Campus would be reduced due to the decreased height as compared to the Master Plan, with the assumption that building footprints and open space would be provided similar to the project. In addition, Alternative 4 assumes the same proposed street network as the Master Plan, including new streets such as 20th Place and Saint John’s Way and, the northern portion of 21st Street would be vacated. Furthermore, the tunnel connections and above-grade pedestrian connections over Santa Monica Boulevard would be constructed. • Alternative 5 – Partial Master Plan: This alternative represents a reduction in the Phase Two Master Plan, with the assumption that only some phases of the Master Plan would be implemented. Under Alternative 5, total development on the Saint John’s Campus would be reduced as compared to the Master Plan.
Specifically, no development for 2D/E, S4, or S5 would occur (e.g., no Education and Conference Center, East Ambulatory Care and Research Building, visitor housing, or East Ambulatory & Acute Care Building), and existing uses (e.g., PSJHC Foundation Building, Santa Monica Cancer Institute, and surface parking) would remain as they are on these sites.
• Under Alternative 5, Development Sites 2I, 2C, S1, S3, and S2 would be redeveloped with the same programming as the Master Plan. The building location, uses, and building setbacks are assumed to be generally the same as the project. In addition, Alternative 5 assumes the same proposed street network as the Master Plan, including new streets such as 20th Place and Saint John’s Way and the vacation of the northern portion of 21st Street. Furthermore, similar to the Project, the west tunnel connection and the above-grade pedestrian connection over Santa Monica Boulevard would be constructed.
Environmentally Superior Alternative
In general, the environmentally superior alternative as defined by CEQA should minimize adverse impacts to the project site and its surrounding environment. Of the 46 of 50
alternatives analyzed in the EIR, Alternative 1 (the No Project/No Build Alternative) is considered the environmentally superior alternative because it is the only Alternative that would avoid the Project’s significant impacts. In addition, Alternative 1, which reflects existing conditions with no change to the environment, would result in less impacts across most of the environmental topics analyzed. Notwithstanding, without redevelopment of the Project Site, Alternative 1 would not contribute to City efforts to implement the goals and objectives of the HSP nor meet the Project’s objectives.
CEQA Guidelines section 15126.6 states that if the environmentally superior alternative is the No Project/No Build Alternative, the EIR shall also identify an environmentally superior alternative from among the other alternatives. The remaining alternatives were reviewed in accordance with the State CEQA Guidelines requirement to identify an environmentally superior Alternative other than the No Project/No Build Alternative.
According to Section 15126.6(a) of the State CEQA Guidelines, the purpose of an Alternatives analyses is to identify alternative developments that would feasibly attain most of the basic objectives of the project but that would avoid or substantially lessen any of the significant effects of the project. Other than Alternative 1, none of the remaining alternatives to the Project would avoid all of the Project’s potentially significant and unavoidable impacts.
The EIR identifies that other than Alternative 1, Alternative 5 is the least impactful and is the environmentally superior alternative. Alternative 5 would include less development than Alternative 4, such that the level of most of the impacts would be less under Alternative 5. In addition, Alternative 5 would avoid the significant unavoidable historical resources impacts to the Santa Monica Cancer Institute building that would occur under the proposed Project and Alternatives 2 and 3, and 5, and would result in significant unavoidable operational level of service impacts to fewer intersections and street segments than these other alternatives.
Therefore, Alternative 5 (Partial Master Plan) is identified as the environmentally superior alternative. However, it is noted that Alternative 5 (and indeed Alternatives 2 and 4) would not meet all the Project objectives. In particular, Alternative 5 would not:
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(1) provide the range and/or extent of medical services to be provided under the Project due to its reduced amount of floor area (Objective 1); (2) provide replacement housing (Objective 2); (3) accommodate all the Phase Two development vested by the DA or provide 35 percent of the Project Site as open space (Objective 3); (4) provide a comprehensive circulation plan on the entirety of the Phase Two Development Sites (Objective 4); or (5) reduce VMT to the same extent of the Project due to lower-density development than the Project in close proximity to transit (Objective 5). It would also not be as effective as the Project in meeting the balance of the Project objectives.
Further, while Alternative 5 would result in direct reductions in impacts to the environment, it would have greater impacts than the Project and Alternatives 2, 3 and 4 in terms of a lack of support for applicable City goals and policies that are intended to support the continued operation of PSJHC, accommodate future growth, and promote sustainable development patterns to reduce VMT. The Project, as proposed, would better achieve these City goals and policies, and would provide a higher level of community benefits.
Public Notification
In addition to the various outreach meetings for the Phase Two Master Plan summarized in the Background section of this report, hearing notices for the March 22, 2022 City Council meeting were mailed 14 days prior to the hearing date to all residents and property owners within 1,000 feet of the subject property and also mailed to community members who have previously attended meetings or requested to be placed on the project mailing list. A notice for the March 22, 2022 City Council public hearing for the Phase Two Master Plan, Third Amendment and associate applications, was published in the Santa Monica Daily Press on March 7, 2022.
Financial Impact and Budget Action
Providence would provide a monetary contribution to the City of Santa Monica in the amount of $5,000,000 to support Santa Monica Behavioral Health Initiatives within 180 days of final approval of the Development Agreement. Based on the staff recommendation, Providence would also provide a second monetary contribution of 48 of 50
$5,000,000 within 100 days of the first Development Review Permit application approval for a Phase Two building, excluding the Multi-Family Housing, but in no case later than eight years after final approval of the Development Agreement. As discussed earlier in this report, Providence has agreed to make this second $5,000,000 contribution within 100 days of the first Development Review Permit application approval but does not agree with an outside payment date of eight years after final approval of the Third Amendment. Therefore, if the outside payment date is not agreed to by Providence then this second contribution could be made to the City any time within the 17-year vesting period that starts after final approval of the Third Amendment, provided Providence proceeds with Phase Two development. These two contributions would result in a total of $10,000,000 to be paid to the City specifically to support Santa Monica Behavioral Health Initiatives. These funds would be held and expended in special revenue source accounts to be created following execution of the Third Amendment to the Development Agreement.
Prior to issuance of a building permit for Phase Two Buildings, Providence would be required to pay two Development Impact Fees set forth in Article 9 of the Santa Monica Municipal Code pursuant to the proposed Third Amendment: the Affordable Housing Commercial Linkage Fee and Transportation Impact Fee. Final fee amounts will be calculated based on the Development Review Permit applications and plan check submittals for each Phase Two Building submitted in accordance with the Phase Two Master Plan:
• Affordable Housing Commercial Linkage Fee is vested in the Fiscal Year 2021- 2022 fee schedule, and subject to periodic adjustment pursuant to SMMC Section 9.68.080, for a period of ten (10) years after the Third Amendment Effective Date. Affordable Housing Commercial Linkage Fees shall be deposited in revenue account 10400001.415660. After this ten-year period, the impact fee rate then in effect shall apply to Phase Two Buildings development pursuant to the Phase Two Master Plan.
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• Transportation Impact Fee is vested in the Fiscal Year 2021-2022 fee schedule, and subject to period adjustment pursuant to SMMC Section 9.66.080, for a period of ten years after the Third Amendment Effective Date. Transportation Impact Fees shall be deposited in revenue account 10600001.415180. After this ten-year period, the impact fee rate then in effect shall apply to Phase Two Buildings development pursuant to the Phase Two Master Plan.
If Providence elects to pay the Private Developer Cultural Art fee in lieu of providing onsite public art, the fee would be vested in the Fiscal Year 2021-2022 fee schedule for the Phase Two Vesting Deadline and deposited in revenue account 10400003.408970.
After this 17-year period, the in-lieu fee rate then in effect shall apply to Phase Two Buildings pursuant to the Phase Two Master Plan. The Childcare Linkage Fee and Parks and Recreation Development Impact Fee will be satisfied through the provision of Providence’s on-site childcare program and the provision of on-site open space.
Prepared By: Roxanne Tanemori, Principal Planner
Approved Forwarded to Council
Attachments:
A. Attachment A Summary of Providence Phase Two Master Plan B. Attachment B History of Saint John's Health Center Development Agreement C. Attachment C Public Comments and Public Hearing Notice D. Attachment D Providence Phase Two Master Plan (Council March 2022) E. Attachment E Appendices Providence Phase Two Master Plan (Council March 2022)
F. Attachment F Ordinance Providence Third Amendment to the Development Agreement.docx
G. Attachment G Exhibit Q to Providence Third Amendment (Phase II Master Plan Standards March 2022)
H. Attachment H Resolution Repealing the 1988 HASP and Amending General Plan 50 of 50
I. Attachment I Resolution EIR Certifcation Findings PSJ Master Plan DA J. Attachment J Resolution Adopting EIR SOC and MMRP
K. Attachment K Resolution Adopting PSJ Phase Two Master Plan L. Attachment L Tentative Subdivision Map Statement of Official Action M. Attachment M Resolution of Intention Partial Vacation of 21st Street N. Attachment N Draft Findings
O. Attachment O Providence Tentative Tract Map 82302
P. Attachment P Link to Providence Saint John's Health Center Phase Two Master Plan EIR
Q. Written Comments
R. PowerPoint Presentation
S. Applicant Presentation