Ocean Avenue Project
Development Agreement
City Council
July 14, 2022
Ocean Avenue Project
Staff Presentation
High-level overview – project and community benefits, community input, guiding principles Staff Recommendation
Affirm Project is exempt from CEQA.
Certify Final Environmental Impact Report (EIR) prepared for project. Adopt Statement of Overriding Considerations & Mitigation Monitoring and Reporting Program. Adopt resolution amending 1992 Local Coastal Program Land Use Plan (1992 LUP). Introduce for first reading ordinance approving Ocean Avenue Project Development Agreement.
Ocean Avenue Project
Project Location & Land Use
Information –
• 2010 LUCE Downtown District
• 2017 Downtown Community Plan
- Ocean Transition
• - Bayside Conservation
- Established Large Site Overlay
• Located in Coastal Zone
Ocean Avenue Project
Neighborhood Context
• Ocean Avenue – mix of building
heights – low scale one-story to
60’ and substantially taller
buildings 90’ to 180’
• Historic character – Landmark
Palisades Park + Landmark
buildings from different eras
along 1300-1400 Block of Ocean
Avenue
• 2nd Street & Santa Monica Blvd –
range of commercial/mixed-use
building and heights
Ocean Avenue Project
Project Site Information –
• ~82,500 SF / 11 Parcels
• Parcels separated by 1st Court
• Three commercial buildings
• 1327 Ocean Avenue (1951)
• 1333 Ocean Avenue (1906)
• 1337 Ocean Avenue (1926)
• Commercial / 19-unit
residential building
• 101 Santa Monica Blvd (1925)
• Two surface parking lots
Ocean Avenue Project
1333 Ocean Avenue
Designated City Landmark
Queen Anne Victorian style architecture (1906)
Represents early turn-of-the-century residential
development on Ocean Avenue
1337 Ocean Avenue
Designated City Landmark
Spanish Colonial Revival style architecture (1926)
Early and excellent example of a mixed-use building &
expansion of commercial development to Ocean
Avenue in the 1920s
Ocean Avenue Project
Development Agreement
Project Timeline
• February 2013
Development
Agreement Application
filed
• March 2013
Community Meeting
• August 2013
ARB prelim. concept
meeting
2015-2017 2018 2019-2020 2021-2022
.
• Project review on hold
pending adoption of the
Downtown Community
Plan
• July 2017
Downtown Community
Plan adopted
• December 2017
Applicant submitted
revised project design
• January 2019
Notice of Preparation
and public EIR
Scoping Meeting
• May-August 2020
90-day Draft EIR
public review period
• Review of project and
Development
Agreement
community benefits
negotiations
• Review of project and
Development Agreement
community benefits
negotiations
• May 18, 2022
Planning Commission
recommendation hearing
• Unanimous
recommendation to
approve project
• July 14, 2022
City Council hearing for project
and Development Agreement
2013
• January 2018
Community Meeting
• February 2018
ARB prelim. concept
meeting
• March 2018
Landmarks Commission
prelim. concept meeting
• May 2018
Planning Commission
prelim. concept meeting
• June 2018
City Council meeting
• Unanimous
direction to staff to
start negotiations
Ocean Avenue Project
2017 Downtown Community Plan &
Established Large Site Overlay
• Foundation for City review and negotiations
• Broad community participation: vision and development standards for Downtown
• Framework for three Established Large Sites
• Sites that can provide significant community benefits • Rigorous process, development agreement
Project Site Standards:
130’ / 4.0 FAR / open space min.
50% parcel area: 25% groundlevel + 25% unregulated
Project Site
Priority Community Benefits:
Affordable Housing, Cultural
Institutions, Historic Preservation
Ocean Avenue Project
2017 DCP Standards for
Established Large Sites
2017 DCP Standard Proposed Project
Maximum Building Height 130’ New building heights range from 53’ to a maximum 130’
(12 stories)
~60’ Museum Building
130’ Hotel Building
~58” Corner Building
~53’/97’/106’ 2nd Street Building
~62’ Santa Monica Blvd Building
Maximum Floor Area Ratio
(FAR) for the Project Site
4.0 2.95
~25% less proposed floor area
compared to DCP maximum
(~ 86,625 SF less)
Minimum Open Space 50% of parcel area (comprised of
25% at ground level & 25%
unrestricted)
~66% of parcel area
(comprised of 27.5% at ground level
& 38% above ground level)
Ocean Avenue Project
Guiding Principles for City Review & Negotiations
Community Priorities and Land Use Objectives
Prioritizing placemaking, sustainability, outstanding architecture Preserving and showcasing City’s historic buildings
Constructing housing for all
Expanding access to art, culture, and community gathering places Enhancing the pedestrian environment
Requiring safe/efficient all-mode mobility
Promoting job creation
Increasing economic investment/revenue generation to support community services Local economy remains in initial stage of recovery from effects of Covid-19 pandemic Ocean Avenue Project
Project Design
• Site planning & open spaces
• Massing strategy
• Architectural design
• Treatment of Landmarks
Technical Review
• Circulation/parking
• Sustainability
• Vehicle trip reduction measures
• Utilities
• Resource recovery/recycling
• Public works/right-of-way
City Review
Ocean Avenue Project
• 120 room full-service hotel with spa, meeting and banquet space (~122,400 SF) • 100 residential rental units, including 19 replacement units (~117,700 SF) o 25 deed-restricted affordable units (25% of total units) o Ranging from 30% to Moderate income levels
o 19 rent-controlled units
o 64 market-rate units
• Ground-floor restaurant/retail/commercial space (~36,110 SF) • Cultural Uses Campus (~35,500 SF)
• New museum building
• Preservation, adaptive reuse of two City Landmark Buildings • Publicly accessible open space along Ocean Avenue
Project Components
Ocean Avenue Project
Publicly accessible rooftop observation deck (~5,000 SF) Ground-level pedestrian paseos throughout site (~12,000 SF) Proposed Pedestrian Mall on a portion of First Court, subject to separate Council action New vehicle route from First Court exiting on Second Street 285 subterranean parking spaces, including with EV chargers, EV ready spaces 231 bicycle parking spaces (short and long-term)
Project Components (cont’d)
Ocean Avenue Project
Site Planning and Design
Site plan and massing strategy studied and
redesigned for DCP compliance
• Reduction in height, elimination of
condominiums.
• Range of building heights 53’ to 130’ with
ample ground level & upper level open space.
• Redesigned to create more articulated
building forms.
• Further study to respond to feedback: define
corner building; imaginative integration of
Landmark buildings for Cultural Uses Campus.
Ocean Avenue Project
Treatment of Historic Buildings
• Creates historic and contemporary presence
along Ocean Avenue.
• Project complies with Sec. of Interior’s Standards.
• Preservation professionals will develop project’s
preservation plan.
• On-site relocation and protection of two
Landmarks, adaptive reuse, restoration of key
exterior building features.
• Cert. of Appropriateness review and approval
required by Landmarks Commission – plus design
review by Architectural Review Board.
Ocean Avenue Project
• Open space plan creates variety of places to gather.
• Podium-level and other upper-level areas for
different uses.
• Publicly accessible rooftop viewing deck.
• Proposed Pedestrian Mall on a north/south
section of First Court from Santa Monica Blvd
~160’ in length (shown in yellow).
• Provides connection to paseo leading to
Ocean Avenue.
• Separate Council action required.
• September 27th public hearing scheduled.
Open Space Plan
Ground Level
Open Space
Diagram (right)
Ocean Avenue Project
Level 2 Seating & Landscape Plan +
Publicly Accessible Rooftop Deck
Upper-Level Open
Space Diagram &
View from Rooftop
Deck (right)
Ocean Avenue Project
Mobility and Parking
• Create uninterrupted pedestrian environment by
removing driveways on Ocean Ave frontage (~350’) &
on Santa Monica Blvd frontage (~320’).
• Valet operation on Ocean Avenue for hotel guest firstarrivals; other visitors, residents use subterranean garage.
• Access to subterranean levels from First Court; re-routed alley on private property exits on 2nd Street. Signage & parking info will be formulated.
• North/south bicycle facility options on Ocean Avenue
will be studied through City’s community process.
• 285 vehicle parking spaces, new code applies for EV
charger/EV-ready spaces/Raceway-conduit.
• 231 bicycle parking spaces, short and long-term.
First Court
2nd Street
Ocean Avenue
Santa Monica Blvd
Ocean Avenue Project
Negotiated Community Benefits
Community benefits negotiated based on community process, Council priorities, LUCE/DCP policies
Monetary contributions/fees: $6,065,000
Conservatively estimate of the following community benefits: $47.2 million - Construction of the Cultural Uses Campus + Historic Preservation - Construction of publicly accessible rooftop viewing deck Conservative estimate of monetary value of these community benefits: $53.3 million Important to consider value of project as a whole, including community benefits without an assigned dollar value (e.g., affordable housing, commitment to operate cultural facility, educational programming, sustainability features, internship program) Ocean Avenue Project – Community Benefits
(#1) Cultural Uses Campus
• Construct, operate, and maintain a Cultural Uses Campus for Life of the Project. • Designed to attract and exhibit works of significant local, international, established and emerging artists, including architects.
• Exhibitions will be open to the public minimum of six days per week. • Cultural Uses Campus will showcase exclusive pieces from the archives of Frank Gehry for minimum of 15 years.
• Implement Education and Community Programming Plan.
• Youth education, higher education student research, programs to engage broader community. • Estimate annual cost to operate/maintain: $1.85 million.
Ocean Avenue Project – Community Benefits
(#1) Cultural Uses Campus
• Discount for students/youth and all Santa Monica residents; one day per month when admission fee is waived for Santa Monica residents.
• Free annual field trip, plus transportation, for Santa Monica public schools and youth-serving non-profit organizations.
• Commitment to construct and operate a world-class Cultural Uses Campus is an extraordinary community benefit.
• Expands Santa Monica’s art and cultural offerings in a meaningful way; • Makes a significant contribution to support the City’s economic vitality for many years to come; • Responds to a significant community interest that the City cannot fund at this time.
Ocean Avenue Project – Community Benefits
(#2) Deed-Restricted Affordable Housing
• Five (5) deed-restricted affordable units for Moderate Income Households negotiated as a community benefit, in addition to 20-unit base requirement. • 25% of project’s 100 residential units will be deed-restricted affordable units. (#3) Historic Preservation
• Preservation Plan: preserve, rehabilitate, reposition Landmark Buildings (#4) Publicly Accessible Open Space & Rooftop Observation Deck ~17,000 SF of Publicly-Accessible Open Space provided. Rooftop observation deck owned, operated, and maintained by Applicant $1.00 entry fee + CPI: 100% of net income donated to Santa Monica Ed Foundation (#5) Gehry Partners as Lead Architect
Gehry Partners will continue to serve as design architect through issuance of the Project’s Certificate of Occupancy.
Gehry Partners has expertise and extensive experience with designing world-renowned museums.
This knowledge and depth of experience will be invaluable to achieving the highest-quality project design and construction.
Ocean Avenue Project – Community Benefits
(#6) Sustainable Design and Features
Features that comply with code + exceed City’s codes (community benefits) achieve a high level of sustainability.
• Minimum LEED® Platinum (v4) certification for project. • On-site capture and reuse of rainwater.
• Recycled water Infrastructure.
• Pay cost of connection to City’s existing recycled water line. • Non-potable water for all County-approved uses (e.g., cooling tower, landscaping). • Contract with Clean Power Alliance for electrical service under 100% Green Power tier (sourced entirely from wind, solar and geothermal sources).
Other Code-required solar infrastructure; EV infrastructure & commitment to increase with demand; use 15% less energy than required by 2019 California Energy Code.
Ocean Avenue Project – Community Benefits
Ocean Avenue Project – Community Benefits
(#7) Local Hiring
• Local hiring provisions for construction-related and permanent employment. • Steps to ensure the greatest opportunity for interviewing local residents. • Priority for Targeted Job Applicants includes definition of “First Priority” as follows:
• “Any resident of a household with no greater than 80% Median Income that resides within the Lowand Moderate-Income Areas identified in Map 2-7 of the City of Santa Monica’s 2021-2029 Housing Element or any resident who resides in Santa Monica’s 90404 zip code (Pico Neighborhood).” Ocean Avenue Project – Community Benefits
(#8) Internship Program
• Annual Internship Program – Minimum two (2) paid hotel internships for students who attend a high school in Santa Monica or Santa Monica College. • Outreach and notification to City, Virginia Avenue Park Advisory Board, Virginia Avenue Park Youth Employment Services
• Applicant must make a good faith effort to hire residents of 90404 zip code as the first priority (Pico Neighborhood) and other Santa Monica residents as the second priority.
Ocean Avenue Project – Community Benefits
(#9) Impact Fees and Monetary Contributions
Impact fees escalated by 8.5%
• Affordable Housing Commercial Linkage Fee Contribution $400,000 • Transportation Infrastructure Contribution $2.25M
• Early Childhood Initiatives Contribution $1M
• Parks and Recreation Fee Contribution $2.16M
$250,000 Economic Equity/Opportunity Fund Contribution
• To support City economic equity and opportunity initiatives, seed funding to support local entrepreneurs from disadvantaged communities, community partnerships and non-profit organizations.
Total Impact Fees/Contributions: $6,065,000
Ocean Avenue Project
Fiscal & Economic Impact Analysis
Economic Analyses provide a picture of the project's economic value to the City – and its fiscal impacts to the City.
Economic Impact Analysis
Approximately 2,211 construction jobs over three-year construction period Approximately 615 net-new jobs associated with operations Approximately $59.8M in net annual economic output
Fiscal Impact Analysis
First year of stabilized operations: $6.2M ($3.44M net new) positive impact to the City’s General Fund Ocean Avenue Project
Financial Feasibility Analysis
HR&A Peer Review of Applicant’s Financial Feasibility Analysis Information tool for negotiations and decision-making HR&A analysis presents an additional scenario for informational purposes (Scenario 2):
Ongoing operation of Cultural Uses Campus with a neutral effect on net operating income.
Applicant secures source of funding for annual operating costs - instead of providing a full subsidy of this cost offset by other revenue derived from the project uses (e.g., hotel and commercial).
This would result in higher profit margins compared to the full/ongoing subsidy scenario. However, investment return would still remain below the industry-accepted profit margin threshold of 13% to 15% for a development of this type.
Ocean Avenue Project
California Environmental Quality Act (CEQA) Review
Project is consistent with DCP and located near transit, and therefore, is exempt from CEQA analysis pursuant to Section 15182 of CEQA Guidelines. To promote informed decision making, an Environmental Impact Report (EIR) was prepared in compliance with CEQA Guidelines.
Notice of Preparation (NOP) released in December 2018. Public scoping meeting held on January 10, 2019.
Extended 90-day Draft EIR comment period provided: May 18, 2020 to August 17, 2020. EIR analyzed a range of environmental issue areas.
California Environmental Quality Act (CEQA) – Final EIR Final EIR Summary
EIR identified significant and unavoidable impacts for:
Construction-related groundborne vibration could affect the adjacent off-site Gussie Moran House if its property owner does not allow for mitigations to be implemented. Neighborhood traffic effects and transportation, based on the City’s prior thresholds for intersection levels of service (LOS).
• EIR analyzed five alternatives; reduced height/floor area alternative would reduce but not eliminate significant and unavoidable impacts.
• Final EIR published May 2022, including responses to seven comment letters and the project’s mitigation monitoring and reporting program.
General Plan / DCP Consistency
Staff report provides detailed analysis of how the project is consistent with 2010 LUCE and 2017 DCP vision, goals, and policies
(downtown development pattern, complete neighborhoods, circulation, sustainability, housing, community enrichment).
1992 Local Coastal Program Land Use Plan Amendment
Staff report outlines Applicant’s proposed text amendment to partially-certified 1992 LUP for consistency with 2010 General Plan and 2017 DCP parameters. Amendment applies only if project site is developed with a Development Agreement up to 130’ building height and 2.95 FAR.
Ocean Avenue Project
Ocean Avenue Project – Community Comments
Questions and Concerns
Traffic, construction, and noise.
What is anticipated timing of construction?
Blocking neighboring and nearby buildings’
views of the ocean and mountains. Hotel is too
tall and should be shifted to the east.
Has City conducted geotechnical analysis
pertaining to bluff stability/landslides?
Tourists who do not have a stake in the
community should not have access to upper
floors with best views.
Concern about loss of surface parking lot used
by patrons.
Concern about glare from new buildings and
conflicting architectural styles.
Support
Access to arts and culture in Santa Monica is important; new Cultural Uses Campus is a community benefit.
Project involves youth; generates financial support for local public schools/SM Ed Foundation.
This is an innovative and community-focused project.
Creative and high-quality project design in Santa Monica is important.
Frank Gehry-designed museum in Santa Monica will
provide educational opportunities for public school and higher education students - and create access to
important works from his archives/collection.
Project will generate much-needed revenue for the City to provide critical services.
Historic preservation has been carefully studied;
integration with museum campus will make an important
contribution to the City.
Ocean Avenue Project
Staff Recommendation
1. Affirm Project is exempt from CEQA.
2. Certify the Final Environmental Impact Report (EIR) prepared for the project.
3. Adopt Statement of Overriding Considerations & Mitigation Monitoring and Reporting Program.
4. Adopt resolution amending the 1992 Local Coastal Program Land Use Plan.
5. Introduce for first reading Ordinance adopting the Ocean Avenue Project Development Agreement.
Ocean Avenue Project
Development Agreement
City Council
July 14, 2022
Ocean Avenue Project
Ocean Avenue Project
Subterranean Levels
Ocean Avenue Project
Section – Ocean Avenue
Ocean Avenue Project
Section – East of Corner Building
Ocean Avenue Project
Section – Santa Monica Blvd