9.1. Public Hearing to consider introduction and First Reading of Ordinance No.16-24 approving a First Amendment to Development Agreement with Chapman Orange Holdings, LLC.
On behalf of UNITE HERE Local 11 (Local 11), we submitted a 4-page comment letter to the City Clerk regarding this proposed amendment to the Development Agreement (DA). Local 11 has several concerns with the proposed discretionary DA Amendment, including the following:
(1) Has the City considered the loss of TOT revenue? The Amendment would allow a reduction of rooms from 305 to the currently anticipated 240 rooms, which the property owner may further revise. The reduction of rooms will lead to a decrease in City revenues from TOTs, which amounts to a reduction in public benefits that was expected when the Original DA was approved. (See DA § 6.2)
(2) Has the owner satisfied its prior public benefit payment and reduction in City subsidy, and why is the city not considering more than a mere six parking spaces for this third extension? The DA Amendment would entirely remove DA Sections 6.2.1 and 6.3, which seems to refer to the City subsidy granted to the property owner in 2018 (i.e., 33.3% TOT forgiveness first 3 years), which was reduced to 25% in 2021 and accompanied by a $50,000 public benefit payment from the property owner in exchange for the 3-year extension. By eliminating Sections 6.2.1 and 6.3, the City should ask itself the following question left unanswered by the staff report: (i) has the property owner already paid the $50,000 public benefit payment; (ii) has the property owner revised its Participation Agreement to reduce the City subsidy by eight percentage points; (iii) if a 3-year extension was worth eight percentage points and $50,000 back in 2021, why is the City not considering a similar reduction in subsidy for the 2.5-year extension requested now; and (iv) are the six parking spaces offered now a sufficient deal?
(3) Has the CITY considered the value of utilizing some of the site for affordable housing? Under the City’s new Housing Element, the City has a RHNA obligation of approximately 4,000 units (about 60% at moderate-income levels or lower). A key City strategy to create 1,600+ low-income units is the redevelopment of UMU zones, like those UMU zones near the Project Site and UCI Medical Center. Given the high need for housing and reduced demand for hotels (evidenced by the property owner’s request to reduce hotel rooms), it seems that the City should reconsider the best and highest use of the Site—such as a mixed-use housing development would be better than a hotel alone.
(4) Has the City considered new mitigation measures to reduce potential environmental impacts? Since the Entitlements were initially approved in 2018, significant changes have been made to how developments are analyzed and mitigated, particularly as they relate to impacts on VMTs and GHGs, and there are numerous strategies and mitigation measures urged by public agencies like SCAQMD, SCAG, CAPCOA, OPR, and CARB. The City should consider new measures/strategies to ensure project impacts are minimized (e.g., LEED certification, CalGreen Tier 2 standards, robust TDM measures, max solar panels, native trees, etc.)
In conclusion, much has changed since the City initially approved the Entitlements in 2018 and it is time for the City to reconsider the full economic and environmental impacts of this Project. The City needs to ask itself whether granting another significant time extension is worth merely six parking spaces. Local 11 respectfully requests that the City reject the DA Amendment.
On behalf of UNITE HERE Local 11 (Local 11), we submitted a 4-page comment letter to the City Clerk regarding this proposed amendment to the Development Agreement (DA). Local 11 has several concerns with the proposed discretionary DA Amendment, including the following:
(1) Has the City considered the loss of TOT revenue? The Amendment would allow a reduction of rooms from 305 to the currently anticipated 240 rooms, which the property owner may further revise. The reduction of rooms will lead to a decrease in City revenues from TOTs, which amounts to a reduction in public benefits that was expected when the Original DA was approved. (See DA § 6.2)
(2) Has the owner satisfied its prior public benefit payment and reduction in City subsidy, and why is the city not considering more than a mere six parking spaces for this third extension? The DA Amendment would entirely remove DA Sections 6.2.1 and 6.3, which seems to refer to the City subsidy granted to the property owner in 2018 (i.e., 33.3% TOT forgiveness first 3 years), which was reduced to 25% in 2021 and accompanied by a $50,000 public benefit payment from the property owner in exchange for the 3-year extension. By eliminating Sections 6.2.1 and 6.3, the City should ask itself the following question left unanswered by the staff report: (i) has the property owner already paid the $50,000 public benefit payment; (ii) has the property owner revised its Participation Agreement to reduce the City subsidy by eight percentage points; (iii) if a 3-year extension was worth eight percentage points and $50,000 back in 2021, why is the City not considering a similar reduction in subsidy for the 2.5-year extension requested now; and (iv) are the six parking spaces offered now a sufficient deal?
(3) Has the CITY considered the value of utilizing some of the site for affordable housing? Under the City’s new Housing Element, the City has a RHNA obligation of approximately 4,000 units (about 60% at moderate-income levels or lower). A key City strategy to create 1,600+ low-income units is the redevelopment of UMU zones, like those UMU zones near the Project Site and UCI Medical Center. Given the high need for housing and reduced demand for hotels (evidenced by the property owner’s request to reduce hotel rooms), it seems that the City should reconsider the best and highest use of the Site—such as a mixed-use housing development would be better than a hotel alone.
(4) Has the City considered new mitigation measures to reduce potential environmental impacts? Since the Entitlements were initially approved in 2018, significant changes have been made to how developments are analyzed and mitigated, particularly as they relate to impacts on VMTs and GHGs, and there are numerous strategies and mitigation measures urged by public agencies like SCAQMD, SCAG, CAPCOA, OPR, and CARB. The City should consider new measures/strategies to ensure project impacts are minimized (e.g., LEED certification, CalGreen Tier 2 standards, robust TDM measures, max solar panels, native trees, etc.)
In conclusion, much has changed since the City initially approved the Entitlements in 2018 and it is time for the City to reconsider the full economic and environmental impacts of this Project. The City needs to ask itself whether granting another significant time extension is worth merely six parking spaces. Local 11 respectfully requests that the City reject the DA Amendment.
Sincerely,
Jordan Sisson, Attorney for Local 11