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HomeMy WebLinkAbout07/27/2004 - Regular MeetingCITY OF NEWPORT BEACH City Council Minutes Regular Meeting July 27, 2004 - 7:00 p.m. STUDY SESSION - 4:30 p.m. INDEX CLOSED SESSION - 6:00 p.m. A. RECESSED AND RECONVENED AT 7:00 P.M. FOR REGULAR MEETING B. ROLL CALL Present: Heffernan, Rosansky, Bromberg, Adams, Webb, Nichols, Mayor Ridgeway Absent: None C. CLOSED SESSION REPORT - None. D. PLEDGE OF ALLEGIANCE - Council Member Bromberg. E. INVOCATION - Reverend Dr. Dennis Short, Harbor Christian Church, President of Newport- Mesa - Irvine Interfaith Council F. PRESENTATIONS Newport Beach Conference & Visitors Bureau Annual Report. Marta Hayden, Executive Director, highlighted the annual report that was included in the agenda packet. She reported that the Bureau participates in over 26 trade shows and conducts eight client events, as well as familiarization tours. She believed that they have the potential to generate $13 million in room tax. She noted that about 20% of the Bureau's money is dedicated to promoting the City. She stated that the communication department's goal is to generate $1.2 million in ad equivalents. She reported that their department and their partners got over $3 million in positive impressions last year. Ms. Hayden stated that they will be working with a firm to do an advertising program to generate more room revenue, looking at luxury and emerging markets, and working with coastal hotels. She indicated that their biggest enhancement this year was their online reservation system. She reviewed the criteria for their base year measurement for 2003 -2004. Ms. Hayden noted that she serves on the Economic Development Committee. In response to Council Member Heffernan's question, Ms. Hayden reported that their allocation from the City will be $1.7 million which is a combination of money from room taxes and dues. Mayor Ridgeway noted that the Discovery Channel will be sending a package to them because they would like to have Newport Beach in a travel program. National Recreation & Parks Month. Recreation and Senior Services Director Knight announced that July is National Recreation & Parks Month. She Volume 56 - Page 1088 City of Newport Beach City Council Minutes July 27, 2004 stated that they have seen a 21% increase in program participation this summer and have brought in $250,000 more in revenue than last summer. She noted that the campers have made signs and reminded everyone that it is healthy to take a day to play. Lee Knight, 9 year old camper at the Balboa Beach Camp, stated that they celebrated parks and recreation everyday at camp by going to the beach, the bay, the park, and the library. She reported that they gave out surf necklaces tonight with shells they found at the beach. She stated that they also wrote poems about why they love the park and proceeded to read her poem. Mayor Ridgeway displayed his shell necklace and the poems that were written by the campers. He read the proclamation and presented it to Lee Knight. G. NOTICE TO THE PUBLIC H. CITY COUNCIL ANNOUNCEMENTS OR MATTERS WHICH COUNCIL MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION. ACTION OR REPORT (NON- DISCUSSION ITEM): Council Member Webb stated that he attended the Concert in the Park on Sunday night at Bob Henry Park in which Caravana performed. He reported that the next Concert in the Park will be held August 22. He noted that Shakespeare in the Park begins August 7, 2004. Council Member Heffernan indicated that people still don't understand the tree policy. He requested a report regarding people being able to pay to have their tree removed and also the ability to pay extra to have it planted someplace else. CONSENT CALENDAR READING OF MINUTESIORDINANCES AND RESOLUTIONS 1. Removed at the request of an audience member. 2. READING OF ORDINANCES AND RESOLUTIONS. Waive reading in full of all ordinances and resolutions under consideration, and direct City Clerk to read by title only. ORDINANCES FOR ADOPTION 3. MARINER'S MILE LANDSCAPE STANDARDS, MUNICIPAL CODE SECTION 20.42.050(M), CODE AMENDMENT NO. 2004 -006 (PA 2004 -104) — AMENDS THE STANDARDS TO REDUCE THE NUMBER OF PALM TREES REQUIRED AND PROVIDE FLEXIBILITY IN THE SPECIES OF HEDGES REQUIRED ACROSS THE FRONTAGE OF PROPERTIES ON COAST HIGHWAY BETWEEN NEWPORT BOULEVARD AND THE BACK BAY BRIDGE. Adopt Ordinance No. 2004 -15. 4. Removed at the request of Council Member Heffernan. Volume 56 - Page 1089 INDEX (100 -2004) City of Newport Beach City Council Minutes July 27, 2004 RESOLUTION FOR ADOPTION 5. DECLARATION OF SURPLUS ASSESSMENT DISTRICT FUNDS. 1) Adopt Resolution No. 2004 -61 to declare improvement fund surpluses in the following assessment districts: 60 (West Bay Avenue from 8th Street to 15th Street); 61 (Bay Avenue and East Bay Front); 62 (Hazel Drive south of PCH); 63 (Newport Island): 64 (Channel Road); 65 (West Coast Highway); 66 (Bay Avenue from 7th Street to 8th Street); and 72 (Balboa Coves); and 2) authorize the Administrative Services Director to choose an appropriate distribution method, to return remaining funds, with interest, consistent with the 1913 Act on a district by district basis. (Mayor Ridgeway recused himself from voting on this item) CONTRACTS AND AGREEMENTS 6. Removed at the request of Council Member Heffernan. MISCELLANEOUS ACTIONS 7. UPDATE ON CABLE TELEVISION FRANCHISE NEGOTIATIONS. Receive and file report. 8. Removed at the request of an audience member. 9. Removed at the request of an audience member. 10. 2004 -2005 CULTURAL ARTS GRANTS. Approve recommended recipients for FY 2004 -05 Cultural Arts Grants as selected by the City Arts Commission in accordance with City Policy I -12 - Reserve Fund for Culture and Arts. 11. TELECOMMUNICATIONS FACILITY PERMIT NO. 2003 -003 (PA2003 -255) (could. from 5/11/04, 6/8/04 & 7/13/04). Continue to August 24, 2004 to allow staff time to review the applicant's new proposal, as well as provide Council with an evaluation prepared by an independent consultant. Motion by Mavor Pro Tern Adams to approve the Consent Calendar, except for those items removed (1, 4, 6, 8 and 9), and noting the abstention on Item 1 by Mayor Pro Tern Adams and the recusal on Item 5 by Mayor Ridgeway. The motion carried by the following roll call vote Ayes: Heffernan, Rosansky, Bromberg, Adams, Webb, Nichols, Mayor Ridgeway Noes: None Absent: None Abstain: None City Attorney Burnham asked that Council consider taking Item 4 out of order since staff would like a continuance for two weeks to allow special counsel more time to look at certain provisions of the group homes ordinance. He explained that they are looking at possible legal issues related to the current ordinance and drafting language that might address those issues. He reported that he engaged Volume 56 - Page 1090 INDEX Assessment District Funds (89/100 -2004) Cable Franchise (42/100 -2004) (100 -2004) (100 -2004) City of Newport Beach City Council Minutes July 27, 2004 in email communications with Mr. Applegate who represents the recovery facility community who indicated that he supports the continuance. O. ITEMS REMOVED FROM THE CONSENT CALENDAR — taken out of order. 4. ZONING AMENDMENT/RECOVERY FACILITIES. Motion by Mayor Pro Tern Adams to continue this item to August 10, 2004. Jon Stearman, Narconon, submitted a letter from their attorney. Linda Orozco, Newport Beach, stated that she has attended meetings since September 2003 for this. She noted that she just returned from teaching in Thailand and is not sure where she will be in two weeks. She presented a handout, reporting that the certificate of occupancy for one of the Narconon facilities is for 27 persons, including staff; however, the State authorizes them to have beds for 27 clients. She noted that she has a letter from the State that indicates they have 29 full -time employees at that facility. She emphasized the importance of following the current zoning code and reported that a semi -truck was parked in three meter parking spaces for 1.5 hours to deliver food. Carolyn Martin, Newport Beach, reported that the residents of the 1800 block of West Ocean Front continue to support this proposal. Chris Boge stated that he will be going over Federal Acts when this item comes back. Donna Cambon stated that it is hard for her to be at her house which is three feet away from the facility with all the language, spitting, and cigarette butts, and watching the people come off of the drugs. She believed that this does not fit in their neighborhood. She stated that someone took a video of what happens in the alleyway. City Attorney Burnham indicated that there are Federal laws relative to the dissemination of this information and recommended that she consult an attorney prior to distributing the video. Council Member Heffernan explained that this process takes two hearings since there is an ordinance. He stated that, at the last meeting, he asked why there aren't more people supporting this if it's such a big problem. He indicated that he received emails and responded to them by telling them to attend the meeting. He noted that he didn't know it was going to be continued. The motion carried by the following roll call vote: Ayes: Heffernan, Rosansky, Bromberg, Adams, Webb, Nichols, Mayor Ridgeway Noes: None Absent: None Abstain: None Volume 56 - Page 1091 INDEX (100 -2004) City of Newport Beach City Council Minutes July 27, 2004 J. PUBLIC HEARINGS 12. PROPOSED ASSESSMENT DISTRICT NO. 68 (NEWPORT SHORES) FOR UNDERGROUNDING UTILITIES AND DESIGNATION AS AN UNDERGROUND UTILITY DISTRICT. Council Member Rosansky noted that, since he owns property in Assessment District No. 68 and it is within 500 feet of Assessment District No. 69 (Item 13), he recused himself from both public hearings. Without objection, Mayor Ridgeway limited testimony to three minutes. Mayor Ridgeway announced that the public hearing is required pursuant to the Municipal Improvement Act of 1913, Article XIIID, of the Constitution of the State of California and Chapter 15.32 of City Code. He stated that this is the time and place fixed for the public hearing on protests or objections to the Resolution of Intention, Assessment Engineer's Report, proposed assessment, and all other matters relating to Assessment District No. 68 (Newport Shores), and to designate the area as an underground utilities district. He noted that all written protests and ballots must be received by the City Clerk prior to the close of the public hearing. He stated that the notice of public hearing was given in the manner and form required by law. Scott Koppel, MuniFinancial, reported that he and Dan Hunt of Willdan Associates are the Assessment Engineers for this district. He stated that the engineer's report shows the district boundaries, the $6.6 million estimated cost for the proposed improvements, a detail of the improvements, the benefit each parcel receives, the assessment methodology, and the assessment amount which is about $11,600 for the average single - family residential property. He reported that they made one change that is on file with the City Clerk to reduce the assessment on one commercial property (Parcel No. 045114 -16 or Parcel ID No. 531) to take into account the additional parking area the parcel has. He noted that the report already lists seven parcels they've adjusted, but this is an additional one. Mayor Ridgeway opened the public hearing. Everette Phillips, Newport Shores, stated that he has a multi - family unit in the district and expressed his support for the assessment. He noted that it is a burden and a hardship, but a lot of people have been working very hard to make this improvement happen. He expressed hope that the City will also look at helping with the assessment on multi- family dwellings. He noted that the assessment is done based on rules from 1913 and stated that it would be nice if the City worked with Sacramento to update the regulations so future assessment districts would go more smoothly. Jim Hildreth stated that there is a 30 day period relative to asking for financial assistance and noted that this has not been addressed. He referenced page 2 and took issue with the Income Tax Component of Contribution (ITCC). He believed that, if poles are removed and no one gives an assessment for the pole, the location for that pole will be put in Volume 56 - Page 1092 INDEX Res 2004 -62 Res 2004 -63 Assessment District No. 68/ Newport Shores (89 /100 -2004) City of Newport Beach City Council Minutes July 27, 2004 INDEX the dark. He asked if the ITCC tax will be paid by the residents of that location or will everyone pay for it. He added that the covers make noise. Steve Foley, Newport Shores, stated that he owns a 12 -unit apartment building in the assessment district and that half of his tenants have very low rent. He indicated that, when the assessment first came out, he was being assessed the same amount as a single - family house for one apartment. He noted that he talked with the City and they reduced his assessment. He encouraged Council to approve the reduced assessment which he feels is fair. George Leslie, Newport Shores, stated that he heard that underground utilities are less safe than above - ground utilities. However, he asked how buying your house on an earthquake fault is less safe than putting utilities underground. He noted that, if utility lines are underground, utility poles don't have the chance to fall on his house. He believed that the streets are very narrow in Newport Shores and the existence of utility lines and poles are more visible there than in areas like Newport Heights. Barbara Murphy stated that her family owns an apartment complex in Newport Shores. She thanked the assessment office for correcting the original assessment and indicated that it is now a doable assessment. She encouraged Council to support this, believing that undergrounding is safer and would beautify the area. Prevan Chaprisa, Best Western Hotel, stated that his assessment is about $46,000. He noted that his hotel generates revenue for the City and believed that it is unfair for a merchant to be penalized with such a large amount. He stated that he supports the underground utilities but he cannot bear the burden. He requested the City look into it. Mayor Ridgeway requested that anyone having a ballot that has not been submitted to bring them forward. He asked staff to talk to the Best Western Hotel operator to see if an adjustment is warranted. Mr. Koppel noted that there are about 530 parcels and it would take about 45 minutes to count the ballots. Hearing no further testimony, Mayor Ridgeway closed the public hearing. City Clerk Harkless submitted the ballots to Junior Civil Engineer Arciniega for counting. Following the tabulation of the ballots, City Clerk Harkless announced that there were 387 parcels that cast ballots for an assessment amount of $4,662,261.37. She reported that 268 parcels submitted ballots in favor of the assessment for an assessment amount of $3,071896.22 which represents 65.89 %; and there were 119 parcels that submitted ballots in opposition to the assessment for an assessment amount of $1,590,365.15 which represents 34.11 ° %. Motion by Mayor Pro Tern Adams to adopt Resolution No. 2004 -62 approving contracts for utility improvements since there were more "yes" votes than "no" votes; adopt Resolution No. 2004 -63 declaring the results of the ballot tabulation, confirming the assessment, ordering the Volume 56 - Page 1093 City of Newport Beach City Council Minutes July 27, 2004 acquisition of improvement; approving the Assessment Engineer's Report, and designating the area an Underground Utilities District for Assessment District No. 68 Newport Shores; and approve a budget amendment (05BA -003) in anticipation of the formation and approval of Assessment District No. 68. The proposed budget amendment will increase revenue estimates by $5,978,077 and increase expenditure appropriations by $5,453,737. The difference of $524,340 will be utilized to establish a bond reserve of approximately $429,800 and $94,540 will be utilized to reimburse the City for past assessment engineering and design expenditures related to this district. The motion carried by the following roll call vote: Ayes: Heffernan, Bromberg, Adams, Webb, Nichols, Mayor Ridgeway Noes: None Absent: None Abstain: Rosansky 13. PROPOSED ASSESSMENT DISTRICT NO. 69 — WEST NEWPORT (AREA BETWEEN SEASHORE DRIVE AND W. OCEAN FRONT, FROM SUMMIT ST. TO 33RD STREET; BETWEEN RIVER AVENUE AND SEASHORE DRIVE FROM 56TH STREET TO 47TH STREET AND OCEAN FRONT ALLEY, FROM 33RD STREET TO ALLEY EAST OF 30TH STREET) FOR UNDERGROUNDING UTILITIES AND DESIGNATION AS AN UNDERGROUND UTILITIES DISTRICT. Mayor Ridgeway announced that this is the time and place fixed for the public hearing on protests or objections to the Resolution of Intention, Assessment Engineer's Report, proposed assessment, and all other matters relating to Assessment District No. 69 (West Newport), and to designate the area as an underground utilities district. He noted that all written protests and ballots must be received by the City Clerk prior to the close of the public hearing. He stated that the notice of public hearing was given in the manner and form required by law. Joan Cox, Harris & Associates, Assessment Engineer, reported that this district has 662 parcels and the total assessment amount is about $10,147,000. She stated that the assessment has been apportioned based on property zoning. She explained how the assessment is assigned to R- 1, R -2, and split R -2 lots. She stated that benefits were assigned to City properties, large properties, and homeowner association properties by using the average street width of the surrounding properties. She indicated that, since the preliminary engineer's report was approved by Council, eight R -2 properties were found to be split, so their designations were changed and their assessments were reduced accordingly. Ms. Cox reported that there is one change to the engineer's report and presented a revised report. She explained that an R -2 property (Parcel No. 42333507 and Assessment No. 580) had a deed restriction so it could only be used as an R -1 property. She stated that, with these changes, it is her opinion that the assessments are in proportion to the special benefits that each property receives. Volume 56 - Page 1094 INDEX Res 2004 -64 Res 2004 -65 Assessment District No. 69/ West Newport (89/100 -2004) City of Newport Beach City Council Minutes July 27, 2004 11011 � Mayor Ridgeway opened the public hearing on the formation of Assessment District No. 69. Ed McLaughlin stated that he lives on Seashore Drive and voted "no" on this issue two times before since he purchased his property in 1984. He asked why some houses are excluded that are off of Seashore Drive from 47th Street to 32nd Street, and why there is some gerrymandering until 31st Street. He believed that this is being done to get this to pass. He stated that the assessment does not include the cost of new electrical service or trenching, and believed that a new double service will cost him about $2,000, which will put his total assessment to about $20,000. He noted that the poles along Neptune, from 54th Street to 46th Street, were replaced five years ago by Edison, there are no problems with the poles, and he was not charged anything for this. He added that they have a high water table and asked what is going to happen 20 years from now. He indicated that the wires don't bother him and that the picture from 46th Street shows the largest concentration of wires on Seashore Drive. He requested that Council abandon the proceedings. Jim Hildreth indicated that the person who made the statement that overhead utilities was safer than underground utilities was a representative of Arizona Pipeline during the undergrounding of Balboa Island. He stated that the wires being used for the undergrounding are aluminum and could burn quicker and will be harder to repair. Further, this will cost more money to maintain. He noted that Edison can no longer clean its vaults and pump it into the harbor as they have in the past. He stated that he does not know who is going to maintain this expense. Victoria Rafa stated that she lives on 32 °6 Street between the alley and Balboa Boulevard, it is not covered by the area listed to be undergrounded, but she is being assessed in the alleyway behind her house. She indicated that she talked to a lot of repair people who said that undergrounded utilities are harder to maintain, they can't inspect them for problems ahead of time, and there will be a lot more problems because of the high water table. She stated that she does not see a benefit to undergrounding and the expense is excessive. Inga Hawkins stated that she voted against this because of affordability. She explained that her property has two small cottages that support them, in addition to social security. She stated that they were assessed for two parcels but the rent does not come close to retrieving that amount. She also is voting against it because it is being paid for by people who live there, but the area is run by beachgoers, surfers, and tourists. She stated that she currently lives in Rancho Mirage where they have tourists and are putting its utilities underground; however, the residents are not paying for it. She emphasized that there are ways of creating funds so that everyone who comes to the beach pays their share. Council Member Webb noted that page 3 of the staff report indicates that the City is being assessed $789,204 for park properties. City Manager Bludau reported that he votes on behalf of the City. Volume 56 - Page 1095 City of Newport Beach City Council Minutes July 27, 2004 Mayor Ridgeway emphasized that this is a self- imposed assessment. Jeff Rycell, Seashore Drive, stated that he cannot afford his assessment of 516,500, even though he feels this is a great idea. Mayor Ridgeway requested that anyone having a ballot for Assessment District No. 69 that has not been submitted to bring them forward. Hearing no further testimony, Mayor Ridgeway closed the public hearing. City Clerk Harkless submitted the ballots to Junior Civil Engineer Arciniega for counting. Following the tabulation of the ballots, City Clerk Harkless announced that the total assessment amount from ballots received was $6,901,510. She reported that the total assessment from ballots submitted in favor of the assessment was $5,105,668 which represents 74 %; and the total assessment from ballots submitted in opposition to the assessment was $1,795,841 which represents 26 %. Motion by Mayor Pro Tern Adams to adopt Resolution No. 2004 -64 approving contracts for utility improvements since there were more "yes' votes than "no" votes; and adopt Resolution No. 2004 -65 declaring the results of the ballot tabulation, confirming the assessment, ordering the acquisition of improvement; approving the Assessment Engineer's Report, and designating the area an Underground Utilities District for Assessment District No. 69 West Newport; and approve a budget amendment (05BA -004) in anticipation of the formation and approval of Assessment District No. 69. The proposed budget amendment will increase revenue estimates by $9,117,156 and increase expenditure appropriations by $8,390,811. The difference of $726,345 will be utilized to establish a bond reserve of approximately $638,000 and $88,345 will be utilized to reimburse the City for past assessment engineering and design expenditures related to this district. This budget amendment also appropriates $789,204 for the related assessment on City owned property. The motion carried by the following roll call vote: Ayes: Heffernan, Bromberg, Adams, Webb, Nichols, Mayor Ridgeway Noes: None Absent: None Abstain: Rosansky 14. VACATION OF SEWER EASEMENT AT 207 EVENING CANYON ROAD. Mayor Ridgeway opened the public hearing. Hearing no testimony, he closed the public hearing. Motion by Council Member Webb to adopt Resolution No. 2004 -66 ordering the vacation and abandonment of the 5 -foot wide sewer easement located on Lot 123, Tract 1116 as described in Exhibit "N' and depicted in Exhibit "B "; and direct the City Clerk to have the Resolution Volume 56 - Page 1096 INDEX Vacation 207 Evening Canyon Road (90/100 -2004) City of Newport Beach City Council Minutes July 27, 2004 recorded in the Office of the County Recorder. The motion carried by the following roll call vote Ayes: Heffernan, Rosansky, Bromberg, Adams, Webb, Nichols, Mayor Ridgeway Noes: None Absent: None Abstain: '_None 15. VACATION OF SEWER EASEMENT AT 2223 CLIFF DRIVE. Mayor Ridgeway opened the public hearing. Hearing no testimony, he closed the public hearing. Motion by Mayor Pro Tern Adams to adopt Resolution No. 2004 -67 ordering the vacation and abandonment of the 5 -foot wide sewer easement located on Lot A, Tract 919 as described in Exhibit `A" and depicted in Exhibit °B "; and direct the City Clerk to have the Resolution recorded in the Office of the County Recorder. The motion carried by the following roll call vote: Ayes: Heffernan, Rosansky, Bromberg, Adams, Webb, Nichols, Mayor Ridgeway Noes: None Absent: None Abstain: None 16. MARINAPARK RESORT & COMMUNITY PLAN [Applicant - Bayside Pacific LLC (formerly Sutherland Talla Hospitality - STH)]. (contd. from 7/13/04). City Attorney Burnham reported that the project is at Marinapark between the American Legion facility and 18Lh Street, and on the bay side of Balboa Boulevard. He stated that the proposal is for a luxury resort with a maximum of 110 guest units, of which, up to twelve units could be fractional ownership. Further, the resort would include a spa, lobby, small restaurant and cafe, and other amenities. He reported that the overall resort will not exceed 96,000 square feet on five acres. He noted that the five acres is currently the site of a 56 unit mobilehome park. He stated that the guest units are proposed to be one and two level structures with average roof heights of 14 feet for the one level structures and 24 feet for the two level structures, and the average roof height of the lobby will be 24 feet. Further, there would be 100 surface and 100 subterranean parking spaces proposed onsite. City Attorney Burnham stated that the project includes a long dock that would accommodate about six vessels depending on size, and the project contemplates the construction of a new and expanded community center that would accommodate Girl Scout activities and community events, as well as reconstruction of the existing recreational facilities onsite, including the tennis courts. He indicated that the half -court basketball court would be eliminated. Volume 56 - Page 1097 INDEX Vacation 2223 Cliff Drive (90/100 -2004) C -3389 Marinapark Resort & Community Plan (38/100 -2004) City of Newport Beach City Council Minutes July 27, 2004 INDEX City Attorney Burnham emphasized that the focus of tonight's meeting is the Environmental Impact Report (EIR) prepared for the project. He stated that the California Environmental Quality Act (CEQA) Guidelines indicate that a lead agency should certify an EIR if it represents a good faith effort at full disclosure of all of the potentially significant effects of the project, identifies possible ways to mitigate the impacts that have been identified, and describes reasonable alternatives to the project. He noted that CEQA does not require the analysis to be exhaustive and there is no such thing as a perfect EIR. He stated that the absence of even relative information in the EIR does not preclude certification unless the EIR lacks information that really prevents informed decision making and informed public participation. City Attorney Burnham reported that the Planning Commission, after exhaustive analysis of this document and extensive discussion, unanimously recommended that the City Council certify the EIR. He added that the staff report also includes an opinion from Chris Taylor of Shute, Mihaly & Weinberger LLP who is a CEQA expert and is familiar with this document since she read all of it and helped prepare some of the responses to comments. He reported that Ms. Taylor concluded that the EIR meets all CEQA requirements. City Attorney Burnham emphasized that certifying the EIR does not approve the project. He stated that the only thing achieved by certification is that Council has the ability to place the General Plan Amendment (GPA) on the ballot because certification of the EIR is a precondition to doing so, both legally and contractually. In response to Council Member Heffernan's questions, City Attorney Burnham reported that the contract between the City and Sutherland Talla Hospitality requires Council to submit the GPA necessary for this project to the voters if /when Council certifies the EIR. He indicated that the City is still dealing with Sutherland Talla and will be dealing with them until they request City consent to an assignment. He noted that the agreement requires Council consent to any assignment of their rights under the original or amended agreement. City Attorney Burnham reported that, if Council certifies the EIR, the contract between Sutherland Talla Hospitality and the City which was approved unanimously by this Council about 15 months ago, except for Council Member Rosansky, requires Council to submit the necessary GPA to the voters for approval. He stated that the current General Plan designation for the site is Recreation and Environmental Open Space. He indicated that, to allow the project to go forward, the General Plan would need to be amended to Recreation and Marine Commercial. He noted that a resolution is included with the staff report that would submit this measure to the voters. He added that there is also proposed ballot language which Council can modify tonight. He emphasized that, once the resolution is approved, this language cannot be changed and it will be submitted to the voters. City Attorney Burnham noted that one of the exhibits authorizes any member of Council to prepare and submit an argument for or against the measure. He stated that, if Council approves the resolution as it is currently written and multiple arguments are submitted, the City Clerk is required by law to give priority and preference to the arguments Volume 56 - Page 1098 City of Newport Beach City Council Minutes July 27, 2004 INDEX submitted by Council members. He expressed the opinion that the impact of approving the resolution is that an argument submitted by a member or members of Council, in support of or opposition to this measure, would be the one that the voters see. He confirmed that a Council member could enlist other individuals to sign the argument. He noted that the Elections Code requires the City Clerk to give "preference and priority to arguments submitted by any member or members of the legislative body that have been authorized to submit arguments ". He confirmed that only one argument in favor and one against is allowed to be published. He stated that, if two Council members submit an argument for the measure, the City Clerk would have to choose which Council member's argument would be published. He confirmed that two Council members can sign one argument. Mayor Pro Tern Adams asked if it would be a violation of the Brown Act if a majority of Council got together to prepare an argument for or against the measure if it was not during a public hearing. City Attorney Burnham stated that he is not sure if it is considered a decision of the legislative body, noting that the Brown Act deals with actions of the City Council that are either decisions or preliminary decisions. He indicated that he will research this. City Clerk Harkless reported that, in order to meet the County's deadlines for publication in the ballot, Council would need to do this at tonight's meeting. She explained that the direct arguments and the City Attorney's impartial analysis would be due on August 6 and the public review period for the candidate statements, the text of the measure, the impartial analysis, and the direct arguments would be between August 7 and August 17. She reported that the last day for rebuttal arguments is August 16, and the public review period for rebuttal arguments would be between August 17 and August 26. City Attorney Burnham indicated that, what is put before the voter, is a measure that summarizes the GPA that would be different than what is in place now. Council Member Heffernan noted that there are unresolved tideland issues and expressed concern about the tidelands boundary and whether timeshare fractional units can be put on the property. He asked if this is an appropriate decision to be made with the tidelands issue still up in the air. City Attorney Burnham stated that he and the State Lands Commission Senior Counsel believe it is, noting that he spoke to him last Friday. He added that both land uses would be consistent with tidelands trust limitations. He indicated that it would be difficult for him to provide an opinion when the State Lands Commission has not come to grips with whether fractional units are permitted on tidelands. He stated that they have agreed that the timeshares with one to two week intervals are visitor - serving commercial uses that would be permitted on tidelands. However, the question is what happens if the time period is longer. In response to Council Member Heffernan's questions, City Attorney Burnham stated that the ballot measure language in the resolution should be a summary of the actual text of the amendments to the General Plan which would accompany the ballot pamphlet. He indicated that the pamphlet would include an impartial analysis by him, a map, and the text of the two amendments. He noted that the impartial analysis would Volume 56 - Page 1099 City of Newport Beach City Council Minutes July 27, 2004 INDEX refer to the documents to aid the voters in understanding the full implications of a vote. Council Member Heffernan asked what happens if the use is changed and the use never gets built. City Attorney Burnham indicated that, if the voters approve a change in the land use designation from Recreation and Environmental Open Space to Recreation and Marine Commercial, it would permit the development of a resort hotel up to 110 units with a maximum square footage. He stated that, since the City is the administrator of the property, the City has the ability to determine what is appropriate, subject to the agreement with Sutherland Talla. He indicated that, if they were out of the picture and the project did not go forward, Council would then have the option to resume discussions about what would go on the property as long as the use was consistent with the Recreation and Marine Commercial designation. He indicated that the ballot language and the text of the General Plan would specifically state that this designation would allow this particular project to go forward, but not on an exclusive basis. City Attorney Burnham stated that, if this project does not go forward and there is no agreement with Sutherland Talla, the City has the full discretion to decide what is appropriate within the Recreation and Marine Commercial designation. Council Member Heffernan asked if the City is limited on the amount of rent it can charge. City Attorney Burnham indicated that the GPA does not deal with the fiscal return to the City. However, another aspect of the staff report is to get Council to confirm direction for Sutherland Talla relative to a lease or option to lease that should return revenue to the City over time, assuming that a number of other conditions are satisfied in the future. He confirmed that the lease detail is not going to be a part of the information voters will have. City Attorney Burnham indicated that this is something that prompted Council to appoint a negotiating committee and begin discussions with Sutherland Talla well in advance of the point where the agreement required lease negotiations to commence. He noted that the agreement states that the lease agreement negotiations would not commence until after the voters approved the GPA. He indicated that Council wanted to get as much information to the voters as possible about the terms and conditions of the lease so they knew what could happen if they voted "yes" on the GPA and all the conditions of the option to lease were satisfied. Council Member Nichols asked, if the GPA were changed and the hotel was not built, has the City foreclosed the present uses on the property. City Attorney Burnham stated that it is not fair to say it is foreclosed since the property has been designated Recreation and Environmental Open Space for more than 20 years and, during that time, the property has been developed as a 56 unit mobilehome park which is a use that is not permitted under the current General Plan designation. He reported that it would require an affirmative action of Council, assuming voters approve the amendment, to close the mobilehome park and proceed to redevelop the site within the context of the Recreation and Marine Commercial designation. He indicated that, to continue the mobilehome park use, Council would need to determine how it views the vote of the electorate. He asked if the Council would consider a change in the GPA to be a mandate to implement this project and what does the State Lands Commission wants to do about this property. He noted that it is clear that, to the extent that this property consists of State tidelands, the Volume 56 - Page 1100 City of Newport Beach City Council Minutes July 27, 2004 INDEX mobilehome park use is not permitted. He indicated that, at some point, the State Lands Commission may say that the Council, as the administrator of trust properties of Newport Beach, must take action to bring that property into conformance with trust limitations. Council Member Webb stated that he does not see where parks are allowed in the Recreation and Marine Commercial designation. He asked if this means that the City would be precluded from putting a park use on the entire site if the hotel weren't built. City Attorney Burnham indicated that he does not believe so. He stated that land use designations typically allow for improvements in a manner that is less intense. Council Member Webb proceeded to read the definition of Recreation and Marine Commercial. City Attorney Burnham noted that it does not state that the whole parcel needs to be used for one of the designated uses. He stated that he does not believe that Council would be prohibited from developing that property for park or open space purposes if the designation changed. In response to Council Member Nichols' question, City Attorney Burnham read the portion of the Charter relative to the strip of bayfront land above mean high tide which shall be reserved for public use. He stated that the negotiating committee wants to make sure the lease is consistent with the Charter, ordinances, rules, policies, and regulations which means there must be 85 feet reserved for public use between the mean high tide line and the line of private development. He believed that this provision of the Charter, depending on where the line is located, was designed to protect the sandy beach. He noted that the mobilehome park was in place at the time the Charter was approved and there is a line of private development bayward and there has been a sandy beach there the same amount of time the mobilehome park has been there. He stated that the lease would have to be consistent with the provisions of the Charter. Council Member Nichols indicated that an interpretation of this is that the mobilehome park could continue as long as the City wished to allow it. However, if it were to be discontinued, this would be the method. City Attorney Burnham clarified that he is not saying that the fact that the mobilehome park was there when the Charter was approved is definitive as to the intent of the people who wrote the Charter. He indicated that this project has a lot of steps to it and this is just one of them. He believed that the orderly approach is to look at the environmental document, determine if it is adequate under CEQA guidelines, put the matter to the electorate if it is, and then Council and the project proponent have a number of steps to follow before the project can be implemented if the electorate approves the change in designation. City Attorney Burnham indicated that the agenda leaves open the possibility for a broad range of testimony. However, he believed that the focus should be whether the EIR is legally adequate under CEQA; and, if so, is the proposed ballot language the best language to convey to the voters the significance of a "yes" vote. City Attorney Burnham reported that the staff report includes a fiscal impact analysis and a market analysis prepared by PKF Consulting, which is a well - recognized hotel industry marketing analysis firm. Further, the staff report references the thoughts of Mayor Ridgeway and Volume 56 - Page 1101 City of Newport Beach City Council Minutes July 27, 2004 INDEX uouncll 1v1ember ttetternan as to what objectives the City is trying to achieve assuming the voters approve this amendment and the City enters into an option to lease with Sutherland Talla. He explained that the lease would generate revenue to the City which is consistent with the fiscal impact analysis projections, the Charter, all policies and resolutions, and project description. Further, the lease would contain terms that would protect the City's non - economic interest to ensure that the developer constructed the new and expanded community center and conducted public improvements. He added that the term of the lease would also need to maximize the City's control of the property in the event of a default and, before the City enters into the lease, that the City has done appropriate due diligence as to the persons who would have the right to exercise the option to lease so Council would be sure they had the financial ability to construct the project, had an operating agreement with an entity that was capable of operating a luxury resort, and that they had good reputations in the business community and engaged in community- sensitive development in the past. City Attorney Burnham stated that the project proponent's commitment to the American Legion would be a term and condition of the lease. He reported that the $250,000 to $500,000 would be used to renovate the American Legion facilities which are City -owned and leased to the Legion. He added that another component to this is that there would be public access connecting the walkway in front of the resort and 15th Street. Council Member Heffernan believed that any discussion about the ground lease is coming at a late hour. He asked if the revised fiscal analysis assumes that the City and developer agree on the terms of the two parcel/two ground lease situation. City Attorney Burnham stated that it is fair to say that the fiscal impact analysis that was transmitted to Council with the staff report assumes the Transient Occupancy Tax (TOT) amount and a $1.1 million base rent. He agreed that fractional interests are an integral part of the developer's plan. Assistant City Manager Wood reported that the fiscal impact analysis did not include the substitute TOT revenues from the fractional units or the City's sharing in the proceeds from the sale of the fractional units because those are issues that are still being discussed by Council and the proposed developer. She stated that, as the lease terms become firmer, they will be able to add those into the fiscal impact analysis. She clarified that they assumed the lease rent of $1.1 million would come from the hotel, noting that the base rent would still be $1.1 million even if it were split. City Attorney Burnham introduced Cal Hollis of Keyser Marston Associates who is the City's real estate and economic consultant. He stated that he currently represents the City of Beverly Hills in discussions with the Montage. Further, he would be able to explain how the concept of an option to lease would fully protect the City to the maximum extent possible from any failure on the part of the developer to proceed with the project. Cal Hollis, Keyser Marston Associates, stated that the Council committee wanted to make sure that, if there is a lease agreement with this developer, a set of conditions were met before the lease could be effectuated and the leasehold can be transferred over. He explained that the objective is to build the project if the lease becomes effective and Volume 56 - Page 1102 City of Newport Beach City Council Minutes July 27, 2004 WITOW:i ensure that the project is the one approved. He reported that the following items would have to be completed prior to the leaseholding being effective: all the land use and building approvals would have to be in place; the construction drawings would have to be completed; a construction contract with a qualified contractor needs to be in place; a construction loan needs to be ready to close with the only contingency being the closing of the ground lease itself; there is evidence of sufficient equity to complete the project; and the hotel management and /or franchise agreement is in place. Mr. Hollis confirmed for Council Member Heffernan that the site has to be cleared of all the existing tenants to be available for ground lease. Doug Svensson, Applied Development Economics (ADE), reported that there is a revised fiscal impact report. He explained that the fiscal impact model was developed to help them understand land use alternatives for the General Plan and is designed to model changes in City costs and revenues related to land use changes. He noted that the lease is subject to a different type of analysis; however, they insert numbers into the analysis and combine it with revenues. He indicated that the report two weeks ago failed to update the numbers properly. He stated that a couple of the tables reflected an earlier understanding they had. He noted that the change in the bottom line fiscal impact is due to a clerical error in the lease revenues. He stated that this is now corrected and essentially reflects the state of discussions. Further, they corrected a minor issue with the TOT in which the Visitors & Conference Bureau receives a portion of that and not the City. He reported that the net benefit to the City is lower than previously reported; however, the project as a whole is shown to have a positive fiscal impact for the City. Mr. Svensson stated that the staff report contains a table which is adjusted for inflation to give a sense of how the costs and revenues will balance out. He presented a memo tonight, indicating that tonight's memo takes inflation out in order to see the numbers in current dollars. In response to Council Member Webb's question regarding the table in the memo, Mr. Svensson indicated that the CIP amount of $1,080,000 is a City expense. Assistant City Manager Wood clarified that this is the estimate of what it would cost to close the mobilehome park. Assistant City Manager Wood indicated that the average room rate used was $367, which is in 2004 dollars, and the occupancy rate is 76 %. Mr. Hollis stated that he does not believe that the fiscal impact report assumed fractional unit sales. He clarified that the total rent was assumed. Council Member Heffernan added that it is also probably assumed and the reason it is not in the fiscal impact report is because, once the units are sold, the money goes to the developer and not the lessor, the City. Assistant City Manager Wood believed that there is some assumption about the fractional shares in terms of property tax to the City. Mr. Hollis confirmed that they have a value from a real property standpoint. Council Member Nichols asked if there was an in -lieu fee. City Attorney Burnham stated that there are two components to the fractional unit return to the City. He explained that the discussions so far have resulted in a conceptual agreement that the City would receive TOT as if those Volume 56 - Page 1103 City of Newport Beach City Council Minutes July 27, 2004 110117�A/ units functioned as hotel units. Regarding what additional revenues the fractional units generate over and above the base rent, he reported that there have been discussions about a percentage of the sale going to the City and an annual assessment or percentage of the annual maintenance assessment going to the City. He stated that those discussions are still in -flux. He confirmed that the fractional units will be paying TOT, not in lieu tax, as long as the stay is 30 days or less. He added that the City would get the same amount of money as if it were rented and this would come in the form of supplemental rent. Mr. Hollis added that the City will see revenues from the units in several ways. He stated that the rooms would generate tax if the stay was less than 30 days and if the units are put back into the hotel room pool by the owners and rented like the other hotel rooms. Further, they have reached conceptual agreement that, if an individual buys the fractional shares and it is never used as a hotel room but a vacation place, there would be in -lieu taxes. He stated that the intent is so the City would see the same TOT as it would've received if the units would not have been fractional units but normal hotel rooms. City Attorney Burnham introduced Kim Thompson of Rutan and Tucker. He stated that Mr. Thompson has 20 years experience in negotiating ground leases and he is part of the team that has been involved in discussions with the project proponent. Mr. Hollis reported that it is becoming increasingly common for luxury hotels to make a portion of their product available on a for sale basis as fractional or condominium units. He indicated that the project he is working on in Beverly Hills will have 26 condominium units for sale. He stated that it is becoming more common because the cost of luxury hotels has gotten so expensive on a per room basis compared with the room revenues that they cannot fund all the land and development costs out of hotel revenues. He indicated that hotel owners sell a piece of the project in the form of fractional units or condominium units to pay the excess cost of creating the hotel project to a point that it is a financially feasible project. He stated that this also assists them in obtaining a market rate return that allows the project to attract debt and equity funds. Council Member Heffernan indicated that people who own the fractional units don't want to be subject to a big ground lease payment that supports the hotel. He stated that this is why there will be two parcels and, therefore, two ground lease payments. Mr. Hollis indicated that this will be a 50 year lease and a lot of things happen over a long period of time. He stated that the City, as landlord, wants to preserve all its rights, options, and protections over a long period of time. He indicated that, because there are two different types of uses on the property, they felt it was important to preserve the City's assets by having two different ground leases. He noted that the owners of the fractional units will not be responsible for the operation of the hotel and the hotel owners are not responsible for the individuals who own the fractional units. He pointed out that the City has the right to go after either one of the parties in the event there is a problem. He emphasized that the lease has not been negotiated, but major provisions have been talked about on a conceptual basis. He reported that both parties understand and agree to protecting the City in the event there is a default by any lessee. He stated that they Volume 56 - Page 1104 City of Newport Beach City Council Minutes July 27, 2004 INDEX are working hard to limit the rights of the fractional unit owners on the hotel parcel. He indicated that the fractional unit owners may have limitations relative to hotel amenities, but these are terms to be negotiated if it is approved by the voters. He stated that they are now talking about how far the discussions can go so Council and the public has an idea about what the agreement might look like. City Attorney Burnham pointed out that this is a ground lease and not a conveyance of the fee for this property. He stated that all rights would be limited to a 50 year ground lease. Arthur Spalding, attorney with Cox Castle and Nicholson, stated that there is no distinction between timeshares and fractional units. He indicated that "timeshare" is a defined legal term under California State law and is regulated by the Department of Real Estate as a subdivision under State law. He reported that a fractional interest is the same as a timeshare but is larger (i.e. a poodle versus a Saint Bernard). He stated that fractional units have 1/4 to 1/17 ownership interest versus a timeshare which has 1/50 use (one week). He indicated that a 1/4 share is 13 weeks of use and 1/8 is typically 6 weeks of use. He reported that the proponents are contemplating 1/8 use. He noted that the fewer fractional units there are, the less it costs to sell them, however, they are typically more expensive. He indicated that the advantages are that there are fewer people to make happy, they stay longer, and they tend to act like residents rather than hotel guests. Mayor Ridgeway opened the public hearing. JT Tarwater, Newport Beach, stated that he is the past commander of the American Legion Post. He expressed his support for the project, believing that the Peninsula needs a resort hotel. He stated that he also likes that the tennis courts, Girl Scout House, community center, Veteran's Park, and the American Legion building will be redone. He noted that there will be public beach access and visibility from the boulevard to the beach. Maria O'Hora, Newport Beach, stated that the EIR does not deal with the no project /no development alternative or the marine recreational alternative, believing that the report is prejudiced on behalf of the developer's project. She added that the data is incomplete and expects Council to reject the EIR. She questioned who the applicant is in the EIR, since none of the listed entities are recorded with the Secretary of State as a California corporation, and none have a City business license as of January 20. She noted that the residents opposed the project in a previous survey. She added that the EIR is incomplete relative to tideland boundaries, believing that timeshare units would be considered residences. She took issue that the sailing programs will be moved to the beachfront adjoining the project site and that the driveway on 15th Street will only be used for egress and ingress of deliveries, trash trucks, and employees. Dolores Otting, Newport Beach, provided Council with a packet. She questioned who Sutherland Talla Hospitality LLP and Marinapark LLC, are, believing they are non - existent entities. She indicated that the City accepted two checks from Bayside Pacific LLC which D. Michael Talla is Volume 56 - Page 1105 City of Newport Beach City Council Minutes July 27, 2004 INDEX named and noted they have a licensed LLC with the State. However, she reported that the attorneys have stock in the Las Vegas topless clubs Sapphire and the Olympic Garden. She added that Mr. Talla owns 50% of the Sapphire and is in litigation with his partner that he owns sport clubs with. She indicated that Pacific Coast Capital Partners has a California LLC but has a Delaware jurisdiction. She clarified that Harvey Brookstein's company is actually RBZ, LLP. Robert Walchli stated that Mr. Sutherland is doing this under his own free will but was told by Council that he probably doesn't have a chance. He indicated that the hotel is probably better for the City than the mobilehomes that are currently using public land. However, he believed future generations will be better off if the land is developed into a public bayfront beach, marine activity facility, or other publicly chosen use, instead of an exclusive retreat. He took issue with the hotel having timeshares and pointed out that the City has no public ramps or sailboat crane launching facilities. He stated that the issue with Marinapark is the use of public land. He indicated that he is not against development, but is against the conversion of public property to private control. He believed that the EIR does not give enough options and urged people to vote to keep this a public recreation facility. City Attorney Burnham clarified that the EIR does evaluate continued mobilehome use. Christine Eiger, Newport Beach, stated that she and her husband support certifying the EIR to let the voters decide on this. She indicated that other supporters for revitalizing the area and voting in November include Lisa Goodsell, owner of the Aubergine, and former Assemblywoman Marilyn Brewer who submitted a letter. She stated that no one on their team will be looking for reasons to mudsling, but they want to be sure that people get to hear about the project. She believed that there will be reduced traffic than the current use, and noted that there will be community benefits. She emphasized that the applicant bid on this, has been abiding by the rules, has come to every hearing, and has hired consultants to try to accommodate the issues raised. Matt Webb, Newport Beach, stated that he is a traffic engineer and asked that Council not certify the EIR because he feels it is inadequate with regard to noise, traffic, General Plan consistency, tideland boundary issues, and lack of alternative analysis. He believed that the process is being rushed to meet the election timeframe. He asked that Council recirculate the EIR. Joel O'Hora, Newport Beach, believed that many of the conclusions in the financial analysis are unreliable, PKF's methodology and database are suspect, and PKF's future revenue and occupancy rate projections are optimistic. He noted that there is a $1.3 million change in the projected revenue and believed that this should cast enough doubt in the integrity of the entire analysis. He took issue that the report attempts to extrapolate its results from dissimilar hotels. He stated that the financial impact analysis relies on a flawed EIR and the developer's own PKF study. He believed that the City backed itself into a corner. Volume 56 - Page 1106 City of Newport Beach City Council Minutes July 27, 2004 INDEX Louise Fundenberg, President of the Central Newport Beach Community Association, urged Council to not adopt Exhibits A and C. However, if they are adopted, they request Council to defer the election until the next general election. She asked that staff have corrections and reanalysis performed on the PKF and ADE financial studies, revise the recommendations for the negotiating committee, and terminate the agreement with Sutherland Talla Hospitality based on the default of Section 10.E of the amended agreement. Christine Shingleton stated that she is speaking as an individual who works in planning /redevelopment for another city, but is a lifetime member of the Girl Scouts of the USA and the former president of the Girl Scout Council of Orange County. She indicated that she has been monitoring this project since 1999. She noted that, during her presidency, the Girl Scout Council of Orange County adopted a comprehensive property plan which prioritized maintaining the Newport Beach presence in the current facility that has been operational since 1946. She expressed the opinion that the proposed project is an exceptional opportunity to meet this need and to provide community recreational opportunities. She believed that it provides a balanced approach to putting public land to benefit and responding to the fiscal constraints that are challenging all cities in the State. She stated that the project has been thoroughly reviewed and the developer has always been responsive to the Girl Scout's concerns. She stated that the EIR is a sound document and urged Council to support the staff recommendations and put the project to a public vote. Suzanne Esher, President of the Board of the Girl Scout Council of Orange County, stated that other members of the Board are in attendance. She urged Council to adopt the resolutions. She stated that the City and Sutherland Talla have been responsive to the inclusion of a facility that will meet the needs of Girl Scouts not only in the City but for the other 27,000 girl members and 12,000 adult members. She urged Council to be committed to this project and ensure that the Girl Scouts have a continued permanent and safe facility in the community. Linda Orozco, Newport Beach, stated that she lives across the street from the property. She indicated that she cannot believe the EIR because she sees the impacts from the rehabilitation center. She indicated that this project has changed over the years from the original proposal and asked if there is a need for it. She stated that this is an issue of public land versus development. She indicated that she has no faith in the City's ability to enforce its own zoning code. She urged Council to reject the proposal. Christopher Gabbs expressed concern with the democratic process. He believed that the City has performed due diligence on the proposed project. He stated that those opposed have not presented factual evidence that the EIR is flawed. He urged Council to certify the EIR and let the citizens vote on the project. Mayor Ridgeway recessed the meeting at 10:00 p.m. and reconvened the meeting at 10:08 p.m. with all members of Council present. Volume 56 - Page 1107 City of Newport Beach City Council Minutes July 27, 2004 INDEX Allan Beek, Newport Beach, stated that normally the EIR and the project are considered simultaneously. He believed that considering the project after November is healthy because, in the meantime, the City is not just restricted to the hotel idea. He asked if Council is committed to this project if the GPA is approved by the voters. He believed that the EIR is not adequate and should not be certified since there are three technical flaws. He stated that City Code Section 20.84 says that any timeshare project has to have at least 100 timeshare units in it. Further, he believed that the EIR ignored the effects on marine recreation and the environmental effects of demolishing and rebuilding the American Legion building. He further believed that the EIR does not compare this project with reasonable alternatives and does not consider using the land as a park. He suggested getting approval to use the land for housing so the City gets income. He also suggested using the property as an aquatic center. City Attorney Burnham reported that the City entered into an agreement with Sutherland Talla Hospitality four years ago, in which Council committed to negotiate a lease of the property for resort development if the voters approved the GPA. Following this, the City has a good faith obligation to negotiate the terms and conditions of a lease. He indicated that it is Council's desire to define the lease before the matter is submitted to a vote. He clarified that, if the project does not proceed after the City in good faith satisfied its contractual obligations, the City- could then be free to consider other plans. He emphasized that this cannot be done if the voters approve the project and the parties reach an agreement relative to the terms and conditions of a lease or option to lease, and the option to lease conditions are satisfied. Council Member Heffernan asked if the use issue is resolved by Council's decision four years ago when it gave Sutherland Talla the exclusive right to negotiate for a hotel development on this property and, therefore, the EIR did not have to address this issue. City Attorney Burnham indicated that the EIR has to address the issue, noting that it has a public recreation alternative, evaluates continued mobilehome park use, and evaluates a reduced intensity alternative. He stated that, in March 2003, Council approved a project description for purposes of CEQA and a concept that Council would pursue in terms of a lease once all of the approvals necessary were given. Council Member Heffernan received confirmation that this is not an EIR issue and that it broadcasted all its uses in its analysis. Craig Batley, Newport Beach, believed that the 400 page EIR meets the requirements necessary, noting that there hasn't been an FIR produced in the last ten years that hasn't had a lot of people think it is inadequate. He urged Council to approve the EIR and submit it to the voters. He pointed out that the Girl Scouts and the Legion support the project. Bob Koop, Newport Beach, urged Council to certify the EIR and supported redeveloping the American Legion and the Girl Scout House. He expressed his hope that the residents will be involved in the future of the property. Be believed that this issue should go to a vote. Volume 56 - Page 1108 City of Newport Beach City Council Minutes July 27, 2004 INDEX Iryne Black, Newport Beach, stated that even if the EIR is barely adequate to certify, she asked how the voters are supposed to understand it if Council can't understand it. She asked why the City didn't decide the tidelands issue first. She believed that the EIR should be more definitive about what the City plans to do before the voters can intelligently vote on this or any alternative. She believed that Council is short - sighted by putting this to the voters. Jan Vandersloot, Newport Beach, believed that the EIR fails to address the alternative of making the area a park, noting that it has had the Recreation and Environmental Open Space designation for 20 years. He stated that the Marine and Recreation alternative only provides 1.6 acres of park out of the S acres. He stated that there needs to be a project description, an analysis of what is happening with the American Legion, and determine what is best for everyone. He asked why the City wants to give away open space. Stewart Berkshire, Newport Beach, stated that he lives in Marinapark and is an emeritus professor of business and economics. He noted that the Daily Pilot stated that the hotel will not produce the revenue originally promised. He added that this revenue will steal revenue from other hotels and doubted that the revenue will happen in the fourth year. He stated that they submitted a proposal to restore the mobilehome park to its full potential without any cost to the City and immediately increase its return. He compared his proposal to the hotel's proposed revenue, believing that the hotel would surpass the mobilehome park's revenue during its 16th year of operation. Mayor Ridgeway clarified that Council isn't voting on the approval of the hotel, but for the certification of the EIR. He stated that the voters of the City will be voting on the project. Tom Naughton, Newport Beach, stated that he supports this project. He suggested that Council certify the EIR and submit it to the voters in November. Dick Freeman, Newport Beach, recommended that Council certify the EIR. He stated that Mr. Sutherland is an outstanding individual and a good friend of his. Elaine Linhoff, Newport Beach, stated that the City has been spending thousands of dollars to create a new General Plan, but believed that Council is ready to ignore or amend it at the first hint of revenue. She referenced the harbor element and stated that the hotel is not a water - dependent or water - related use, but it tries to make the case that it is a water- enhanced use. She believed that the EIR should not be certified and the responses to comments are inadequate. Further, the project should be killed tonight by not certifying the EIR so Mr. Sutherland does not waste anymore money trying to promote the project. Brent Cooper, Newport Beach, stated that he is representing Stop Polluting Our Neighborhoods (SPON) who believe that the EIR is not adequate. However, he indicated that he attended the last meeting where staff said that the EIR was legally adequate. He stated that the Volume 56 - Page 1109 City of Newport Beach City Council Minutes July 27, 2004 INDEX element of discretion and policy have been missing from the discussions. He indicated that individual Council members should be able to vote with their conscience. He believed that Council shouldn't let the voters decide on this and shouldn't certify the EIR if they have problems with it. City Attorney Burnham clarified that the EIR needs to be judged in terms of its adequacy as an informational document and not a policy document, and not whether it comes to conclusions that are favored by one person or another. Further, Council has to look at the EIR not in terms of whether it comes to conclusions that an individual Council member or the public would like, but whether it adequately describes the impacts, alternatives, and mitigation measures. He stated that, in terms of the legal standards, the last speaker was not accurate. Tom Hyans, Newport Beach, stated that he is the past president of the Central Newport Beach Community Association. He believed that Marinapark is a beautiful park, is open to the public, and is accessible. Regarding the ballot issue, he expressed the opinion that the language does not describe the hotel/timeshare project. He indicated that the EIR does not show side elevations and expressed concern that the issues regarding Mr. Talla and other individuals were discovered by his group and not by City staff. He asked if due diligence was performed. He stated that the citizens of the City are investing $100 million of beachfront property into this project and indicated that he is not sure what the City is getting in return. Mayor Ridgeway indicated that the terms of the lease and the ownership entity information will be available. Further, if they wanted to change the use, it would need to go through the permitting process. Steve Bernard, Newport Beach, stated that the Parks, Beaches & Recreation Commission was initially asked to review an aquatic center. He indicated that this was presented to the City but was excluded from the EIR as an alternative. He utilized a PowerPoint presentation to describe the proposed project, show their proposed community- serving aquatic park, and current views from the property. He believed that this should've been shown as an alternative in the EIR and that the hurried pace to qualify this for the November ballot is transparent. Craig Morissette, Newport Beach, read his statement that he presented to Council and stated that the FIR writes off any analysis of the impacts to current marine uses. He noted that the beach is used by kids and adults. He indicated that he took pictures of people using the beach and counted 59 sailboats and 11 small motorboats at the same time on a Monday. He asked how an EIR that doesn't acknowledge 300 feet of dock serve the public interest. He believed that Marinapark is the only large bayside beach that hasn't been consumed by roped off areas for swimming and beach moorings. He noted that the EIR states that the project will replace all recreational facilities except the basketball half court, so no significant recreation impacts will occur. He asked how anyone knows since the impacts were never analyzed. Jerry McClellan, Newport Beach, stated that he came to tonight's meeting because of the 40% mathematical error that was mentioned in the Daily Pilot. He indicated that he appreciates the City trying to find Volume 56 - Page 1110 City of Newport Beach City Council Minutes July 27, 2004 INDEX sources of revenue, but believed that it could be done in a way that isn't going to inflame the citizenry. He asked what is wrong with improving the mobilehome park and increasing the rent to be fair market value to have a predictable source of income. He stated that developer's will promise all kinds of things that financial situations can't support. Patricia Frostholm, Newport Beach, asked that Council respond to the citizens that want to keep this area as a park and an open place for future generations and asked if this Council wants to be known as the ones who sold the last park site for profit. She believed that the EIR needs to be recirculated. Dennis Baker read Response to Comments D -97. He believed that the EIR did not explore a range of reasonable alternatives. He noted that it explored having a marine center with 240 parking spaces, but it did not explore keeping it as a park. He believed that the economic viability is driving this as a good source of income to the City. He asked if the City really wants to sell its park. Joe Reebis, Newport Beach, stated that the citizens own the land that is at Marinapark and the Balboa Bay Club. He asked, as landlords, why they would want to create a property that will compete with another tenant. He believed that choice reduces rates and room occupancy, and the City won't be making more money. He believed that, except for a couple of people, supporters of the project have been attorneys, accountants, and real estate brokers. However, everyone opposed is a resident of the City. He noted that Marinapark has offered a guaranteed $1.5 million a year, adding that there has never been an eviction there. He stated that he wants a $100 million performance bond on the project. Pete Carolyn, Newport Beach, stated that he trained as a lifeguard for the City in 1964 on the beach where this development will be taking place. He indicated that this development will hinder this type of training to continue, noting that the lifeguard station at 19th Street will still be manned by a City lifeguard. He urged Council to certify the EIR to allow the voters the opportunity to vote on this. He believed that this is a great opportunity to redevelop the Girl Scout Base, as well as the American Legion. Larry Porter indicated that the EIR states that the project will require more water than the other uses that were considered. He asked if it is irresponsible to grant increased water use to a private individual for a hotel that is not an existing use. He reported that people are saying that the Colorado River will experience a 500 year drought and that Lake Powell will be dry in two years. He requested that Council not certify the EIR tonight. Laura Dietz stated that she has served on EQAC for seven years, but has not had any direct input into the comments from EQAC. She noted that the EIR has been criticized for not having enough open space. However, she reported that 36% of the City is open space, but only 10% is commercial. She noted that there was only one project that came before Council that qualified and pointed out that tonight is to discuss the EIR that Mr. Sutherland put forward in good faith. She stated that the flaw Volume 56 - Page 1111 City of Newport Beach City Council Minutes July 27, 2004 INDEX in the financial statement was not done by the City or the developer, but commended the consultant for explaining the error to everyone tonight. She indicated that she was not thrilled with the project initially because of the issue with the American Legion; however, that has been resolved. She stated that the benefits from this project are significant in its totality that she strongly recommends that Council certify the EIR and take this to the voters. Madelene Arakelian stated that the EIR is inadequate relative to traffic and alternatives. She noted that voters need to realize that they're going to vote for a change in the land use and to give away the beach. She took issue with the aesthetics of the hotel. She hoped that Council does not vote for the EIR. Tom Billings, Newport Beach, stated that he is speaking on behalf of Protect Our Parks. He believed that they call themselves Protect Our Parks because they feel that all parks in the City are threatened by Council actions. He indicated that Protect Our Parks oppose the EIR because the ownership and financial stability of the project applicant has been suspect, there is no written lease agreement, developing public tidelands for a private timeshare hotel is against the standards set by the California Coastal Commission and the State Lands Commission, the EIR has major deficiencies, and the EIR is biased. He stated that now is the time to give the applicant the opportunity to withdraw from the project. He urged Council not to give away Marinapark, to vote "no" on the EIR, and to recirculate it for further review. Mayor Ridgeway asked Mr. Billings if he saw that the check was from Mr. Talla. Mr. Billings indicated that Ms. Otting provided him with a copy of the check. City Attorney Burnham reported that the check was signed by Mr. Rosenfeld, Everett Delano, attorney from Escondido, indicated that he provided a letter earlier today. He agreed that CEQA does not require perfection, but it requires information that allows for a reasonably informed decision. He noted that the EIR is supposed to be roadmap and should present the environmental price tag for what is going to come. He indicated that, if Council votes to certify the EIR, Council is saying to the residents /voters that they have the roadmap and all the information needed to make a decision. He believed that Council does not have this picture before them right now. He expressed the opinion that Council can't certify the EIR tonight. He noted that the California Department of Fish and Game, the California Coastal Commission staff, the Newport Beach Harbor Commission, and the State Lands Commission have criticized various aspects of the EIR. Peggy Fort, Newport Beach, stated that she is the owner of a local marketing firm that specializes in tourism, hospitality, and economic development. She expressed her support of the project because it will beautify the neighborhood and benefit the City in the future. She urged residents to visit www.marinaparkresort.com to get more informed about the plan. She stated that it is sad to see an individual's character or a consulting firm be unfairly scrutinized. She urged Council to support the recommendations to certify the EIR if they feel it is the appropriate thing Volume 56 - Page 1112 City of Newport Beach City Council Minutes July 27, 2004 INDEX to do and give all the residents the opportunity to vote on this issue. John Buttolph, Newport Beach, stated that he is not on anyone's team and is not interested financially in the outcome of the project; however, he is interested in the democratic process. He believed that the ill- advised agreement has really hamstrung the process. He noted that a specific exception was carved out in the Greenlight law for this project because Council entered into an agreement with this developer. He indicated that, if Council certifies the EIR, it will tell the voters that Council looked real hard at this project, its alleged deficiencies, and comments from proponents and opponents, and at the end of the day Council exercised its discretion in favor of the EIR and the project. He pointed out that the agreement states that the City retains full discretion to certify the EIR, emphasizing that it does not create an obligation on the part of Council to approve or give special consideration to the project. He believed that the process has been rushed due to the agreement and to get it on the November ballot. He added that the EIR does not adequately consider the alternative of leaving it a public park which it is supposed to be. He pointed out that Balboa Bay Club was supposed to be preserved for public use. Jim Hildreth, Newport Beach, believed that none of the Council members or any City employee should be allowed to submit arguments on this. He stated that, since this is public land, the people who are for and against the proposal should present the arguments and rebuttals. Irene Dunlap, Newport Beach, asked whether all City -owned parkland will be vulnerable to the same kind of development in the future if the voters change the designation. City Attorney Burnham expressed the opinion that this is will not happen since this would be a vote about a particular parcel and GPA. Ms. Dunlap believed that this land shouldn't be considered leverage for commercial development and profit. Richard Luehrs, President of the Newport Beach Chamber of Commerce and resident, reported that, following hearing presentations on the EIR and the project, the Board of Directors voted to request that Council certify the EIR and present the project to the voters. He believed that building this project will not remove the public from this parcel. Steve Sutherland, applicant, stated that he is present to answer any questions Council may have. In response to Council Member Heffernan's question, Mr. Sutherland stated that Mr. Talla was not involved in today's payment. Hearing no further testimony, Mayor Ridgeway closed the public hearing. Assistant City Manager Wood indicated that a couple of the speakers talked about the EIR failing to analyze the impacts on marine recreation. She reported that issue was scoped out of the EIR during the initial study process. She stated that the study indicated that the City is going to continue its sailing program on the beach and, therefore, this is why they did not think there was an impact and did not require a full discussion in the EIR. Volume 56 - Page 1113 City of Newport Beach City Council Minutes July 27, 2004 INDEX Assistant City Manager Wood stated that there were comments about not discussing the effects of demolishing and rebuilding the American Legion. She reported that the American Legion is not part of the project, it had been at one point, but not when they started the EIR. She stated that it was her understanding that the improvements to the American Legion will be made with some contribution from the hotel developer and would be for remodeling. She indicated that she has not heard that the building was going to be demolished and remodeled; however, if this was the proposal, it would need to receive its own environmental review. Assistant City Manager Wood believed that a couple of the speakers confused the market study done by PKF with the fiscal impact analysis done for the City. She explained that the market study looked at the economics from the developer's point of view. She stated that all of these conclusions become assumptions in the fiscal impact analysis which looks only at the consequences to the City in terms of revenues and expenditures. She noted that one of the speakers said that the error in the fiscal impact analysis would mean that the room rates would be much lower than $376. She indicated that this is not the case, reporting that the error in the analysis occurred when converting the amount of rent that the project would pay from 2010 dollars to 2004 dollars. She stated that the only impact would be to the City's net revenue, which has nothing to do with what the hotel would be able to generate and whether the hotel would be feasible or not. Assistant City Manager Wood indicated that Mr. Berkshire assumed that the relocation cost to the City would be $4 million; however, the preliminary cost is $1 million. She added that Mr. Berkshire stated that the hotel is not projected to make money for the City until the fourth year. She clarified that the fiscal impact analysis shows that, in the first year of operation, the City would already be receiving $1.8 million in net revenue. She stated that the fourth year was the year used to compare against the existing uses on the site. She explained that the fourth year was used because this is when the occupancy and the room rates would be more stabilized. Assistant City Manager Wood indicated that Mr. Buttolph stated that, if Council certifies the EIR, it will send a strong message to the voters that this is a project that should be approved. She noted that she started her planning career in New Jersey in which there is no environmental law at the time. She stated that, even though she feels that CEQA has done some good things and improved the planning process, she indicated that the planning process in California has been frustrating because too much weight has been placed on EIRs. She indicated that people assume that, if you can mitigate all the impacts, it must be a good project. She stated that this is not necessarily the case since the EIR only gives environmental information, but there is still a policy decision to be made. In this case, it will be made by the voters rather than Council. She stated that the question ultimately is what should be the future use of this property be. City Attorney Burnham added that questions were raised about what the EIR evaluated in terms of alternatives. He reported that the EIR evaluated continued mobilehome use and found that this is the Volume 56 - Page 1114 City of Newport Beach City Council Minutes July 27, 2004 INDEX environmentally superior alternative. He added that the EIR also evaluated marine and recreation alternatives. He reported that the aquatic center use encompasses 1.64 acres of parkland, 1.92 acres for a Girl Scout Community Center, 1.2 acres of tennis/basketball courts, 2.77 acres of beach slip parking area, and .5 acres of meter parking. Further, it has 20 boat slips and a public boat launch facility. He reported that it has all the components of the plan without the 110,000 square feet of development or the restaurant which would generate substantial additional traffic when compared to this project. He noted that the Newport Aquatic Center (NAC) does generate substantial traffic. He reported that the 4,500 square foot restaurant in the third alternative generated almost as many trips as the 80 room resort that was evaluated in that alternative. He stated that he, Chris Taylor, the Planning Commission, and the EIR evaluated a reasonable range of alternatives. Mayor Ridgeway stated that an EIR, under CEQA law, does not need to consider every conceivable alternative to a project. He indicated that this FIR evaluated reasonable alternatives. City Attorney Burnham added that Mr. Buttolph was correct in stating that the agreement with Sutherland Talla does reserve to Council the full discretion to decide whether this EIR is adequate or not. Council Member Bromberg stated that, a year ago, Council promised that before this issue goes to a vote it would be sure there was an FIR, a fiscal analysis, and lease terms but not a lease agreement. He indicated that a number of speakers believe that the project, the EIR, and the hearing have been rushed through. He reported that he sits on EQAC who reviewed the EIR and submitted 23 pages of comments. Further, this was reviewed by the Harbor Commission and the Planning Commission. He noted that this was also reviewed at two City Council study sessions, Parks, Beaches & Recreation Commission meetings, and two City Council public hearings. He pointed out that this had eight total reviews. He stated that EIRs are one of the easiest documents to find something wrong because they are hundreds of pages long. He indicated that this is why CEQA has so much latitude. He believed that the bottom line is that, if the people of the City don't want the parcel to be a hotel, they should tell Council. He noted that, in 2000, the mantra was to let the people vote on this. Council Member Nichols stated that he sits on EQAC and Council Member Bromberg was not present the night this was brought up. He agreed that there were 22 pages of comments, but EQAC recommended that this go out and come back to them for review but there was no time. He stated that it was rewritten by Assistant City Manager Wood to be reviewed by the Planning Commission. Assistant City Manager Wood clarified that she never rewrites EQAC comments on EIRs where the City is the lead agency. She added that responses to comments are never brought back to EQAC, but go directly to the Planning Commission. Council Member Nichols indicated that they felt on EQAC that, after 22 pages of comments, it was inadequate. He noted that recreational use and the continued use of the property were scoped out. He believed that the recreation element needs to be looked at and that the current use would produce more money than the proposed hotel use. He noted that it would take three years to see revenue since the first year would be used Volume 56 - Page 1115 City of Newport Beach City Council Minutes July 27, 2004 INDEX to take the mobilehomes out and two years to build the hotel. Council Member Nichols stated that he was sorry about how the contract was set up, believing that the City does not do due diligence on the people it is dealing with until after the vote. Further, he was sorry that the right to negotiate is with a sole person. He indicated that he is not sure if this is in the best interest of the City. Mayor Ridgeway clarified that, under the trust agreement and the State Lands Commission, residential use is not an appropriate use on that property. Council Member Webb stated that, for as long as he has commented on this project, he has had some problems with it. He noted that he asked that something be considered that was a pure park use. He pointed out that the recreation and open space element said that this area has little vacant land for development. Further, park needs could be satisfied via renovation and upgrading facilities such as those at Marinapark. He added that active park facilities are desirable, along with support facilities. He asked, if the hotel was developed and takes up the space, where on the Peninsula is the City going to replace it. He noted that either Las Arenas Park or the public beach would be lost to the public. Council Member Webb stated that the report indicates that no open space would be lost because it is currently occupied by the mobilehome park. However, if the mobilehome park was not there, the City would have open space to lose. He continued by stating that the open space element does not indicate specific facilities that should be provided onsite so, therefore, the project includes an amendment to the recreation and open space element that would remove the reference to future opportunities at this project site. He stated that, rather than discuss the impacts of how the City is going to get the same amount of recreational use on the Peninsula, the way it handled it was to remove reference to it in the open space element. He indicated that this is not appropriate. Council Member Webb stated that the EIR has worked hard to answer everyone's question; however, he still feels that there should be an opportunity to discuss what the real impacts will be relative to the loss of recreational uses on the Peninsula. Council Member Rosansky stated that he is a little ambivalent about what is the best use on this property. He indicated that he was not on Council when many of the agreements were entered into. He agreed that Council needs to focus on what they are really voting on tonight and believed that they need the input from the voters. He stated that he is not normally in favor of taking projects to a vote; however, this is City owned property and it is important. Further, it is important to take the next step. He expressed the opinion that the EIR process has been extensive and there were a number of meetings and a lot of input. He believed that Council is ready to take the next step. Mayor Pro Tem Adams indicated that he will make the motion but suspects that there will be discussion about the ballot language. Motion by Mayor Pro Tem Adams to 1) adopt Resolution No. 2004 -68 (Exhibit A) certifying that the final Environmental Impact Report (EIR) for the Project fully complies with the California Environmental Quality Volume 56 - Page 1116 City of Newport Beach City Council Minutes July 27, 2004 INDEX Act (CEQA) and the UEQA (iurdehnes, making the tmdmgs required by CEQA and the CEQA Guidelines and adopting the Mitigation Monitoring Plan for the Project; 2) adopt Resolution No. 2004 -69 (Exhibit B), pursuant to Section 423 of the City Charter, the Measure S Guidelines and the agreement between the City and STH dated March 11, 2003, submitting to the electorate at the regular municipal election on November 2, 2004 proposed amendments to the Land Use Element and the Recreation and Open Space Element of the General Plan pertaining to the Project and Marinapark (Property); 3) adopt Resolution Nos. 2004- 70 and 2004 -71 (Exhibits C and D) authorizing any member or members of the City Council to file arguments in favor of, or against, the proposed amendments, directing the City Attorney to prepare an impartial analysis and authorize rebuttals; 4) receive and filed the Fiscal Impact Report prepared by Applied Development Economics and the Market Analysis prepared by PKF Consulting; and 5) receive the report of the Marinapark Negotiating Committee (Ridgeway and Heffernan) regarding the status of discussions with the Project proponent (Bayside), regarding a lease of the Property and approve the recommendations of the Committee regarding appropriate lease terms and conditions. Council Member Heffernan indicated that he will be voting against the motion because he thought this has been backwards from the beginning. He stated that, when voters passed Greenlight, they expected the project to be reviewed thoroughly. He noted that there is not one rendering of the project and no layout tonight. He stated that the EIR is a slick way of getting the voters to vote on this issue. He noted that the composition of the parties involved have changed in the last month and believed that the City is nowhere near the terms of a ground lease for this project. He added that the Planning Commission has not even dealt with the details of this project or weighed in on it. He indicated that EQAC even stated that the EIR was not adequate. He believed that this was flawed from the beginning when the Council before him gave the exclusive right to negotiate. He stated that he does not think the voters are going to know what they are voting on. He indicated that, if this is the end result of certifying the EIR, he cannot do it. Mayor Ridgeway stated that he is not approving the project, but is just seeing if the EIR is adequate. He indicated that this will be going to a vote. He reminded everyone that they demanded a vote through its approval of Greenlight, Council wants to put this to a vote, and now people oppose doing this. Mayor Ridgeway asked that Council omit or amend Recommendation No. 3 which authorizes Council to file arguments in favor or against the measure. He stated that, if this is approved, Greenlight will not have the ability to write a response because one of the Council members has already indicated that he wanted to write an argument against the measure. Mayor Pro Tem Adams asked what will happen if this is deleted. City Attorney Burnham indicated that he is not sure if a Council member will have the legal authority to file an argument if Council does not authorize a Council member or members to do so. He believed that Council can authorize an argument in the affirmative in order to allow the opposition to be dealt with in the normal manner for ballot measures. Volume 56 - Page 1117 City of Newport Beach City Council Minutes July 27, 2004 INDEX Mayor Pro Tem Adams amended his motion to authorize any member(s) of Council to file an argument in support. City Clerk Harkless indicated that the direct argument can be signed by one to five Council members. Mayor Pro Tem Adams expressed concern about violating the Brown Act. City Attorney Burnham noted that Council can have a special meeting to prepare arguments, one to three Council members can prepare the argument, or one Council member can prepare the argument individually or in conjunction with other individuals. Mayor Pro Tem Adams asked if the motion tonight can identify a member of Council to author the argument. City Attorney Burnham stated that authorizing no more than three Council members to sign the argument resolves the Brown Act issue. Mayor Pro Tem Adams received confirmation from Mayor Ridgeway that he could be responsible for that. Mayor Pro Tem Adams amended his amended motion to authorize the Mayor to prepare the argument in support of the proposed amendment on behalf of the City Council: and that Council remain silent about filing the argument in opposition. Council Member Rosansky believed that this should be all or nothing. He stated that Council should be afforded the ability to talk on either side or not to talk about it. City Attorney Burnham stated that his interpretation of the Elections Code is that, if Council does not authorize a member to file an argument either for or against the measure, then the member does not have the legal authority to file an argument. Council Member Rosansky asked if it would then be open to the public to submit their own arguments. City Attorney Burnham indicated that there is a general pecking order established in the Elections Code. Council Member Rosansky made a substitute motion to not allow Council to designate anyone to write an argument in favor of or against the ballot measure. Council Member Bromberg asked whether Council is precluded from adding their name(s) to the argument if no one is designated from Council to write an argument in opposition. City Attorney Burnham indicated that he has not checked case law, but it has happened before and has happened in this City. He clarified that Council has to authorize a Council member or members if they are going to file the argument on behalf of or against the measure. However, in the past a member of Council has signed an argument without Council authority. City Clerk Harkless emphasized that adoption of this resolution gives Council the priority to submit arguments, but Council does not have to exercise this. City Attorney Burnham stated that, if Council does not authorize any Council member to file an argument, the Council member does not have the authority to file the argument. However, if a Council member does not file an argument, the Elections Code then defaults to the next entity, which is a bona fide citizens group. He believed that the Elections Code squarely addresses the issue of allowing a Council member to sign with a bona fide citizens group. Volume 56 - Page 1118 City of Newport Beach City Council Minutes July 27, 2004 INDEX Council Member Nichols asked what would happen if both he and Council Member Webb wanted to file separate arguments. City Clerk Harkless reported that Section 9287 of the Elections Code states that, in selecting the argument, the City's election official shall give preference and priority in the order named to the arguments of the following: a) the legislative body or member(s) of the legislative body authorized by that body; b) the individual voter or bona fide association of citizens or combination of voters and associations who are the bona fide sponsors or proponents of the measure; c) bona fide associations of citizens; and d) individual voters who are eligible to vote on the measure. Mayor Pro Tern Adams stated that, if Council doesn't authorize anyone, they aren't given priority. City Attorney Burnham agreed that a Council member would not have priority over a group if they are not authorized. Council Member Heffernan stated that this is backwards again if there is no City Council input. He indicated that the voters want to know how the legislative body felt about this project with the project details. He noted that there is no project detail and now there is going to be no input about how Council feels about this when the voters are supposed to work through all the details and make an informed decision. City Attorney Burnham reported that the contract with Sutherland Talla that was approved in March 2003 established this process and reiterated that it was approved by every member sitting at the dais except for Council Member Rosansky. He stated that it was based on a recommendation by a subcommittee because they had not drafted the GPA language. He noted that, if the City entitled the resort the way it typically did, it would not require a vote. However, if you put the resort in terms of rooms and floor area which the current Measure S guidelines now require, it would've required a vote. He emphasized that Council decided that this is an important project and it should be put before the electorate and it should be done in a way that maximizes the information. He stated that the City has adhered to this process since the agreement was approved. Council Member Heffernan stated that City Attorney Burnham represented that night that, if Council went along with the contract that was proposed, the voters would have as much information if it had gone through the Planning Commission and Council. He indicated that he does not see this. City Attorney Burnham believed that the EIR is a very thorough document that has elevations and more details about the project than would typically be in a GPA. Council Member Heffernan stated that the Planning Commission and Council never specifically focused on the details. City Attorney Burnham reported that Section 423 of the Charter only requires voter approval of a GPA. He stated that there typically is an EIR for a significant project, but not all the approvals are always included. Further, there would be no fiscal impact analysis, market analysis, or the level of review that occurred with this project. Council Member Rosansky stated that he does not feel that it is a good idea to leave the opposition argument to be written by Greentight because it gives the impression that Council is supporting the project and not giving the other Council members the chance to write an argument. He indicated that the intent of his substitute motion is to either authorize Council to write both the argument in favor or against, or not be able to write either argument. He stated that he is willing to change his motion Volume 56 - Page 1119 City of Newport Beach City Council Minutes July 27, 2004 INDEX to say that Council will reserve the write to draft the arguments in favor or against the measure, and designate Council members. Mayor Pro Tem Adams agreed, adding that Council members who want to participate in writing the argument in opposition can volunteer to do so, and those wanting to participate in writing the argument in favor can volunteer to do so. Further, they can solicit feedback from the community to craft the language. City Attorney Burnham added that, if Council authorizes a Council member to file an argument, they are not precluded from combining with citizens who are like- minded in signing the ballot argument. Mayor Pro Tem Adams suggested asking the Mayor to solicit volunteers on both sides so they could be designated. City. Attorney Burnham believed that adopting the resolution that authorizes any member of Council to sign an argument for or against the measure addresses the issue. He stated that staff will research the Brown Act question. Mayor Pro Tem Adams indicated that the motion is now back to the original motion. Regarding the ballot measure language, Council Member Webb asked if "110 guest units" will be interpreted in the future as being 110 fractional units. City Attorney Burnham stated that there has not been a determination that there will be fractional units. He reported that there is nothing in the General Plan that calls out timeshares or fractional units as a specific land use. He explained that this is part of a resort or hotel, and is a more general terminology in the land use element than a specific use. He added that this is the same reason they did not include a lobby, spa, cafe, or restaurant since they are typically associated with a resort. He stated that fractional units can be included, but noted that there is a 75 word limit. Mayor Ridgeway suggested including, "and up to 12 timeshare ". Mayor Pro Tem Adams suggested "and not more than 12 timeshares ". City Attorney Burnham stated that he could include "including up to 12 timeshare units" in parentheses after "110 guest units ". Council Member Webb suggested changing "bayside property" to "bayfront property ", and taking out "guest' in "guest units ". City Attorney Burnham indicated that he does not want people to think they could have dwelling units. City Clerk Harkless read the amended ballot measure language and reported that it is 75 words long. City Attorney Burnham agreed with Mayor Ridgeway's suggestion to amend the language to read, "inclusive of 12 timeshare units" so it does not sound like they can add 12 more units. In response to Council Member Rosansky's questions, City Attorney Burnham reported that the American Legion is on a separate parcel of land according to the legal description in the 25 -year lease. He indicated that the City has not violated the Subdivision Map Act because it can divide property without complying with the Subdivision Map Act. He noted that the American Legion was allocated 7,000 square feet in the land use element to keep it separate. Council Member Rosansky asked if the change in the land use designation will not include the American Volume 56 - Page 1120 City of Newport Beach City Council Minutes July 27, 2004 Legion Post so it will remain recreation and environmental open space. City Attorney Burnham confirmed, adding that the American Legion is a private club but is a permitted use in the recreation and environmental open space designation. Council Member Heffernan asked if there is anything in the ballot measure that ties it to the EIR's detailed description. He suggested changing the ballot measure to state "as referenced in..." City Attorney Burnham noted that the ballot measure is limited to 75 words and this is the purpose of the impartial analysis which is 500 words. He indicated that this will give him a chance to try to explain what has happened in the EIR, what the City has committed in terms of the project development standards, and the process that would follow. He added that the City also has the ability to put all of the information in the EIR on its webpage and explain what the City has done so far, what the project would look like, and what it intends to do if the voters approve the GPA. City Attorney Burnham stated that you can't guarantee that the voters will see the EIR, but you can provide them every opportunity to see it. Following discussion, it was the consensus of Council to amend the language in parentheses to read, "including 12 timeshare units ". The original motion carried by the following roll call vote: Ayes: Rosansky, Bromberg, Adams, Mayor Ridgeway Noes: Heffernan, Webb, Nichols Absent: None Abstain: None Without objection, Mayor Pro Tem Adams moved to continue the remainder of the agenda except Item 19. N. CURRENT BUSINESS — taken out of order. 19. COMMENTS ON THE DRAFT ENVIRONMENTAL IMPACT REPORT (EIR) FOR THE REPLACEMENT OF THE ROCKY POINT PUMP STATION. Mayor Ridgeway stated that Assistant City Manager Wood provided a redrafted letter. Council Member Webb asked if he could work with staff to make some additional modifications. He believed that the environmental document has not discussed issues like control of methane gas and traffic control. Motion by Council Member Webb to approve and authorize the Mayor to send a letter after he works with staff on amendments to the letter. Council Member Nichols asked if it would be possible to have someone from EQAC review the comments after the rewrite. Mayor Ridgeway stated that this could be done in the future. 'The motion carried by the following roll call vote: Volume 56 - Page 1121 INDEX (100 -2004) City of Newport Beach City Council Minutes July 27, 2004 K. L. M. N. W rh Ayes: Heffernan, Rosansky, Bromberg, Adams, Webb, Nichols, Mayor Ridgeway Noes: None Absent: None Abstain: None PUBLIC COMMENTS Jim Hildreth, Newport Beach, referenced paragraph 6 of the key points in the City's webpage regarding him. He stated that there are no piers in the Grand Canal, but access structures called platforms and steps. He believed that the date was wrong and the City did not say they were putting in a ladder, but a public access structure. He took issue that the access structure was also called a dock. He believed that the ladder was installed in March 2000. Further, the City's willingness to have access in that location is well documented. ORAL REPORTS FROM CITY COUNCIL ON COMMITTEE ACTIVITIES - None. PLANNING COMMISSION AGENDA AND ORAL STATUS REPORT 17. PLANNING COMMISSION AGENDA FOR JULY 22, 2004. Continued to August 10, 2004. CURRENT BUSINESS 18. NEWPORT BAY WATERSHED EXECUTIVE COMMITTEE AND APPOINTMENTS THERETO. Continued to August 10, 2004. ITEMS REMOVED FROM THE CONSENT CALENDAR 1. MINUTES OF THE ADJOURNED REGULAR AND REGULAR MEETING OF JULY 13, 2004 AND ADJOURNED REGULAR MEETING OF JULY 19, 2004. Continued to August 10, 2004 (Mayor Pro Tem Adams abstained from voting on this item). 6. PROFESSIONAL SERVICES AGREEMENT WITH JENNIFER BRANIN FOR NEWPORT COAST ASSESSMENT DISTRICT REVIEW. Continued to August 10, 2004. 8. REQUEST FOR FUNDING FOR PROPOSED UNDERGROUND ASSESSMENT DISTRICT NO. 94 (PACIFIC DRIVE). Continued to August 10, 2004. 9. REQUEST FOR FUNDING FOR PROPOSED UNDERGROUND ASSESSMENT DISTRICT NO. 95 (AREA BOUNDED BY L STREET, BALBOA BOULEVARD, CHANNEL ROAD AND OCEAN BOULEVARD). Continued to August 10, 2004. MOTION FOR RECONSIDERATION - None. Volume 56 - Page 1122 INDEX 1(100 -2004) 1 (100 -2004) C -3720 Assessment District Review (38/100 -2004) Assessment District No. 94 /Pacific Drive (89/100 -2004) Assessment District No. 95 (89/100 -2004) City of Newport Beach City Council Minutes July 27, 2004 Q. ADJOURNMENT - at 1:15 a.m. on Wednesday, July 28, 2004, in honor of enlisted men and officers who are coming back from Iraq for rest and will be returning to Iraq. The agenda for the Regular Meeting was posted on July 21, 2004, at 2:15 p.m. on the City Hall Bulletin Board located outside of the City of Newport Beach Administration Building. City Clerk Recording Secretary Mayor Volume 56 - Page 1123 INDEX