HomeMy WebLinkAbout20200220_HO_Staff ReportCITY OF NEWPORT BEACH
HEARING OFFICER STAFF REPORT
February 20, 2020
Agenda Item No. 1
SUBJECT: Balboa Realty Abatement Period Extension (PA2019-186)
SITE LOCATION: 813 East Balboa Boulevard
APPLICANT: Balboa Realty
OWNERS: Alex Batley, Aaron Batley, and Arthur Dorr
PLANNER: Patrick Achis, Planning Technician
pachis@newportbeachca.gov, 949-644-3237
PROJECT SUMMARY
Request for extension of the required Abatement Period specified by Newport Beach
Municipal Code (NBMC) Section 20.38.100 (Abatement Periods). The property is located
in the Two-Unit Residential (R-2) Zoning District and is developed with an existing 2,613-
square-foot nonresidential building. The previously approved abatement extension
authorizes nonresidential uses to remain until November 30, 2021. The property owner
intends to remodel and reinvest in the existing building and requests to allow the existing
nonresidential use to continue to November 30, 2031, without abatement.
RECOMMENDATION
1)Conduct a public hearing;
2)Find this project exempt from the California Environmental Quality Act (CEQA)
pursuant to Section 15301 under Class 1 (Existing Facilities) of the CEQA Guidelines,
because it has no potential to have a significant effect on the environment; and
3)Adopt Resolution No. HO2020-001 for the property located at 813 East Balboa
Boulevard, approving the Abatement Period Extension for an additional ten years to
November 30, 2031(Attachment No. HO 1).
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VICINITY MAP
GENERAL PLAN ZONING
LOCATION GENERAL PLAN ZONING CURRENT USE
ON-SITE RT (Two-Unit Residential) R-2 (Two-Unit
Residential)Nonresidential
NORTH AND
WEST
MU-V (Mixed Use
Vertical)
MU-V (Mixed Use
Vertical)
Public Facility (OCSD A Street
Pump Station) and Restaurant
(Cruisers Pizza Bar Grill),
respectively
EAST AND
SOUTH RT R-2 Residential
Subject Site
813 E. Balboa Blvd
Cruisers Pizza Bar and Grill
Restaurants and Retail
Residential Buildings
Residential Buildings
OCSD A Street Pump Station
813 E. Balboa Blvd.
Balboa Realty Property
Existing Site of Balboa Realty
(709 E Balboa Blvd)
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INTRODUCTION
Project Setting
The subject property is located on the southerly side of East Balboa Boulevard, between
A Street and Main Street, on the Balboa Peninsula. Its size and orientation with alley
access is characteristic of nearby lots along this mixed-use corridor of Balboa Village.
Balboa Village embraces a robust mixture of residential and commercial uses as a
favored visitor destination. At present an existing 2,613-square-foot, single-story,
commercial building without off-street parking occupies the site.
Project Description
Whereas the property is located in the Two-Unit Residential (R-2) Zoning District, Balboa
Realty requests an abatement period extension for the nonconforming nonresidential use
in the existing commercial building. The previously approved abatement extension
authorizes nonresidential uses to remain until November 30, 2021. The property owner
intends to remodel and reinvest in the existing building and requests to allow the existing
nonresidential use to continue to November 30, 2031, without abatement.
Background
Available City archives and applicant-submitted materials date original construction of the
subject nonresidential building to late 1946. Over the years, the building has experienced
several tenant improvements and seismic upgrades. Most recent modifications were for
a day spa that ceased operation in 2011; the space has been mostly vacant since. The
current property owners purchased the property in July 2019, for the anticipated
relocation of their real estate office (Balboa Realty).
The following details the chronology of land use and zoning designations for the property:
On November 9, 1992, the City Council adopted Ordinance No. 92 -45, which made
zoning district changes citywide and transitioned the zoning of the subject property and
the adjacent properties from the C-1 (Commercial) District to the RSC-R (Retail and
Service Commercial-Residential, mixed-use) District.
On September 12, 1994, the City Council adopted Ordinance No. 94-44, which changed
the zoning of the subject property and the adjacent properties from the RSC-R (Retail
and Service Commercial-Residential) District to the SP-8 (RSC) (Retail and Service
Commercial) District. This ordinance created the Central Balboa Specific Plan Area and
included several properties within the Central Balboa vicinity. In the case of the subject
property, the change in designation allowed for commercial use of the property, and
eliminated the residential component and the ability to construct a mixed -use project.
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On August 12, 2003, the City Council adopted Ordinance No. 2003-14 that changed the
zoning designation of the subject property from the SP-8 (RSC) District to the SP-8 (R-2)
(Two-Unit Residential) District. This ordinance changed the land use designation from
commercial to residential and rendered the property nonconforming since the building
was occupied by a nonresidential use.
On July 25, 2006, the Newport Beach City Council adopted Resolution No, 2006 -76
approving a comprehensive update to the Newport Beach General Plan ("General Plan
Update").
On January 28, 2008, the City Council adopted Ordinance No, 2008 -05 that, in addition
to other Zoning Code changes, established the maximum time period for the abatement
and termination of nonconforming uses in residential districts. However, determinations
of nonconformity could not be made until the finalization of the City's Local Coastal Plan
(LCP), which occurred on July 14, 2009, and the subsequent Zoning Code Update which
was effective November 25, 2010.
On October 25, 2010, the City Council adopted a Comprehensive Update to the Zoning
Code (Newport Beach Municipal Code Title 20) bringing consistency between the Zoning
Code and the Land Use Element of the General Plan . The Zoning Code Update also
eliminated all of the Specific Plans Areas, with the exception of Santa Ana Heights (SP-
7). The subject property was re-designated from the SP-8 (R2) District to the equivalent
basic R-2 District. The result of that action rendered several properties nonconforming,
including existing commercial uses located within residential districts, which in
accordance with Ordinance No, 2008-05, became subject to abatement in accordance
with the following Section of NBMC Chapter 20.38 (Nonconforming Uses and Structures):
20.38.100 (Abatement Period).
C. Residential zoning districts involving a structure, In residential zoning districts
or in an area where residential uses are allowed in planned community
districts or specific plan districts, a nonconforming use of land involving a
structure shall be discontinued as follows:
1.Abatement period, A nonconforming use of land involving a structure in
residential zoning district shall be discontinued on the earliest date as
follows:
a.Within one year; or
b.Upon the expiration of the term of a lease on the property, Any
lease shall be the last lease entered into for the subject property
prior to December 7, 2007; or
c.Upon the expiration of a current operating license that is
required by State law.
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On November 30, 2011, the Hearing Officer a pproved an Abatement Period Extension
(PA2011-079) allowing the nonresidential use to continue without abatement until
November, 30, 2021. This approval amortized the investment of the improvements at the
time for subject property.
Balboa Realty acquired the site in July 2019, and now seeks to renovate the existing
nonresidential building and modify the exterior fa çade. Project implementation would
invest $250,000 to $300,000, including improvements for structural reinforcement,
accessibility compliance, upgrades to the heating, ventilation and air conditioning (HVAC)
and mechanical, electrical and plumbing (MEP) systems.
DISCUSSION
General Plan
The Land Use Element chapter of the General Plan provides a breadth of guidance
envisioning the city’s ultimate pattern of development at build-out. This chapter
designates the subject site under the Two-Unit Residential (RT) Land Use Category.
Continuation of legally established structures and uses is ordinarily permissible under the
General Plan. No language exists within the General Plan to see to abate nonconforming
uses. Instead, it is the Zoning Code that structures and implements procedures regulating
abatement of nonconforming uses.
General Plan Policy LU 6.13.3 promotes the re-use of isolated commercial properties on
Balboa Boulevard as identified in Area C of Figure LU20, on the subsequent page.
However, the subject site is not one of these three identified properties out of the Village
Core that the General Plan directly names to undergo residential transition.
Figure LU20 also illustrates the immediate border between subject property and the
Village Core. General Plan Policy LU 6.13.1 guides the Village Core to prioritize uses that
“encourage local- and visitor-serving retail commercial and mixed-use buildings that
integrate residential with ground-level retail or office uses on properties.” While the
subject site is not in the Village Core, its ground-level noncommercial proposal coheres
with the neighboring mixed-uses. In this way, the request of a nonresidential use is
conducive to the aspirations of LU 6.13.1 for this area.
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General Plan Policy LU 6.13.4 calls for “the completion of enhancements to Balboa
Village’s streetscapes to enhance the area’s visual quality and character as a pedestrian -
oriented environment.” Proposed design aesthetics of the project amplify the
streetscape’s attractiveness. New window walls crowned by a brick panel with wood
siding would update and refresh the existing outworn exterior façade. Replacement of the
existing unscreened HVAC systems on the rooftop would be newly invisible behind a
color-corresponding screen wall that reinforces overall building articulation.
The subject property is located within the coastal zone. Pursuant to NBMC Subsection
21.52.035(C)(2)(g), (Other Existing Structures), the subject tenant improvement is exempt
from a coastal development permit, as the interior remodel and exterior façade work do not
involve an actual or potential risk of substantial adverse environmental impact. The
proposed nonresidential use is of commensurate intensity with that existing and the
improvements do not change the intensity of use of the structure.
Subject Site
813 E. Balboa Blvd
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Zoning Code
The subject property is zoned Two-Unit Residential (R-2). Conforming the subject
property to the R-2 standards requires the abatement of the nonresidential use. However,
the Zoning Code provides a procedure to extend the abatement period if certain findings
can be made. The approval authority for the extension is the Hearing Officer in
accordance with the provisions of NBMC Subsection 20.38.100(C)(4)(b) (Hearing Officer
Hearing and Action). The Hearing Officer is also required to conduct a public hearing on
the request in compliance with NBMC Chapter 20.62 (Public Hearings).
Findings and Considerations
In accordance with the provisions of NBMC Chapter 20.38, the Hearing Officer, by
resolution, shall approve, conditionally approve, or deny the request for an extension to
the abatement period. The resolution shall include findings of fact; evidence presented of
economic hardship arising from the abatement proceedings; the nonconformity's impact
on the community; and other factors that may affect the length of the abatement period
required to avoid an unconstitutional taking.
In accordance with the provisions of Subsection 20.38.100(C)(4)(c), the Hearing Officer
in reviewing an application for an extension to the abatement period shall consider the
following:
1.Length of the abatement period in relation to the owner's investment in the
use;
2.Length of time the use was operating prior to the date of nonconformity;
3.Suitability of the structure for an alternative use;
4.Harm to the public if the use remains beyond the abatement period; and
5.Cost and feasibility of relocating the use to another site.
The applicant has submitted information in support of the request (Attachment No. HO
3). Staff has reviewed this information and, where applicable, has summarized it below
to address the findings and considerations that the Hearing Officer may use in making his
determination.
1.Length of the abatement period in relation to the owner's investment in the
use;
The current property owners purchased the building in July 2019, for $1.2 million to
relocate their real estate office and expects to invest $250,000 to $300,000 more for
needed improvements. Vacancy in the subject building has persisted in past years
despite active efforts of the previous owner to sell the property or find a viable tenant.
The next-door parking lot and restaurant bar to the site compromise the property’s
value and appeal to residential prospects. Undesirable for residential use, the site is
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fit to continue commercial activity as an office. The requested length of the abatement
period is to proportional to the amortization period of the available loan to Balboa
Realty, which is ten years (until November 30, 2031).
2.Length of time the use was operating prior to the date of nonconformity;
First constructed in 1946, the subject building has only engaged nonresidential uses.
Historically speaking, Balboa Village had a much larger footprint and had mostly
commercial zoning only. During the early 1990s, Balboa Village experienced several
zoning changes, yet the subject property always retained a form of nonresidential
use. In a 2003 City ordinance, the subject site transitioned to the residential R-2
designation and the nonresidential use was rendered nonconforming. Prior to
nonconformity, the site enjoyed uninterrupted commercial operation for 57 years. In
2011, a 10-year abatement extension was granted for the property to retain the
commercial use through 2021. From Adams to A Street, all southerly properties on
Balboa Boulevard are Mixed Use (MU-V), except 813 and neighboring 815 East
Balboa Boulevard.
3.Suitability of the structure for an alternative use;
The existing structure only affords minimal allowance for residential transition.
Converting the structure to residential uses would require an extensive remodel to
comply with zoning and building codes. Balboa Realty estimates remodeling costs to
be roughly $400,000 to $500,000, based on current remodel construction costs. More
sensible is a complete demolition and a ground-up redevelopment, but this is
estimated at $1.5 million. Both scenarios are not economically feasible based on the
current sales price for the existing structure/land and the future values of the new
construction. The existing single story building shows evidence of earthquake
retrofitting with over $600,000 of recent improvements for commercial use.
4.Harm to the public if the use remains beyond the abatement period; and
No public harm would occur as a result of the abatement period extension for Balboa
Realty. Balboa Realty operates a multipurpose real estate operation, inclusive of sale,
property management, and vacation rentals business. Since operation commenced
in 2007, Balboa Realty has provided a valuable service to local residents and the
public. The current location of Balboa Realty is one block east of the proposed site at
709 East Balboa Boulevard and has not been the subject of any concern.
5.Cost and feasibility of relocating the use to another site.
Balboa Peninsula lacks land availability for nonresidential uses, and a structure of
reasonable size to relocate the operation is difficult to find, particularly in Balboa
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Village. The subject site and structure is one of the few in the area meeting the
business’ needs, and practically the only site in Balboa Village. Balboa Realty would
suffer extreme monetary detriment and a loss of its brand if it relocated out of Balboa
Village. Acquiring 813 East Balboa for use as office space would fit the site usage
well as the area experiences very little walk-by pedestrian traffic for retail purposes,
expect in the summertime around Memorial Day to Labor Day. Commercial office
space makes the most sense for long-term viability at this location. The former tenant
who applied for the 2011 abatement and upgraded the building remained at this
location for less than one year. The structure has been mostly vacant ever since.
ALTERNATIVES
1. The Hearing Officer may deny the Abatement Extension request (Attachment
No. HO 2).
ENVIRONMENTAL REVIEW
This project is exempt from the California Environmental Quality Act (CEQA) pursuant to
Section 15301 under Class 1 (Existing Facilities) of the CEQA Guidelines, California Code
of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect
on the environment.
Class 1 exempts the operation, repair, maintenance, permitting, leasing, licensing, or
minor alteration of existing public or private structures, facilities, mechanical equipment,
or topographical features, involving negligible or no expansion of use beyond tha t existing
at the time of the lead agency's determination. In this case , extension of the abatement
period would allow the remodel of an existing single-story commercial structure to
accommodate an office use.
PUBLIC NOTICE
Notice of this hearing was published in the Daily Pilot, mailed to property owners within
300 feet of the property and posted at the site a minimum of 10 days in advance of this
hearing consistent with the Municipal Code. Additionally, the item appeared upon the
agenda for this meeting which was posted at City Hall and on the City website.
APPEAL PERIOD
An appeal or call for review may be filed to the Planning Commission within 14 days
following the date of action. For additional information on filing an appeal, contact the
Planning Division at 949-644-3200.
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Prepared by: Submitted by:
BMZ/pda
ATTACHMENTS
HO 1 Draft Resolution Approving the Abatement Extension Request
HO 2 Draft Resolution Denying the Abatement Extension Request
HO 3 Applicant’s Extension Application and Supporting Information
HO 4 Project Plans
01/12/18
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Attachment No. HO 1
Draft Resolution Approving the Abatement Extension Request
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RESOLUTION NO. HO2020-001
A RESOLUTION OF THE HEARING OFFICER OF THE CITY OF
NEWPORT BEACH, CALIFORNIA, APPROVING AN
ADDITIONAL TEN-YEAR ABATEMENT PERIOD EXTENSION
FOR THE PROPERTY LOCATED AT 813 EAST BALBOA
BOULEVARD (PA2019-186)
THE HEARING OFFICER OF THE CITY OF NEWPORT BEACH HEREBY FINDS AS
FOLLOWS:
SECTION 1. STATEMENT OF FACTS.
1.An application was filed by Balboa Realty (Applicant); on behalf of Alex Batley, Aaron
Batley, and Arthur Dorr (Owners); requesting approval of an abatement period extension
of 10 years in addition to a previous extension until November 30, 2031, with respect to
property located at 813 East Balboa Boulevard, and legally described as Lot 7, Block 12,
Balboa Tract (Property).
2.Newport Beach Municipal Code (NBMC) Section 20.38.100 (Abatement Periods) requires
nonconforming nonresidential uses in residential zoning districts to be abated and
terminated upon a specified period of time unless that period of time is extended by a
resolution from the Hearing Officer after a noticed public hearing to allow the property
owner to amortize the owner’s investment in the nonconforming property or to avoid an
unconstitutional taking of property.
3.The Applicant proposes an extension of the required abatement period specified by
NBMC Section 20.38.100 (Abatement Periods). Since 1946, the site has been improved
with a single-story nonresidential building and use. The Applicant intends to reinvest in
the existing building through interior and exterior modifications and improvements. The
Applicant requests to allow the existing nonresidential use to continue to November 30,
2031, without abatement.
4.The Property is designated Two-Unit Residential by the General Plan (RT) Land Use
Element and is located within the Two-Unit Residential Zoning District (R-2).
5.The Property is located within the coastal zone. Pursuant to NBMC Subsection
21.52.035(C)(2)(g), (Other Existing Structures), the subject tenant improvement is exempt
from a coastal development permit, as the interior remodel and exterior façade work do
not involve an actual or potential risk of substantial adverse environmental impact. The
proposed nonresidential use is of commensurate intensity with that existing and the
improvements do not change the intensity of use of the structure.
6.A properly noticed public hearing was held on February 20, 2020, in the Balboa
Conference Room (Bay 2B – Second Floor) located at 100 Civic Center Drive, Newport
Beach. Evidence, both written and oral, including a written staff report was presented
and considered at this hearing by the Hearing Officer, William B. Conners.
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SECTION 2. CALIFORNIA ENVIRONMENTAL QUALITY ACT DETERMINATION.
1.This project is exempt from the California Environmental Quality Act (CEQA) pursuant to
Section 15301 under Class 1 (Existing Facilities) of the CEQA Guidelines, California Code
of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect
on the environment.
2.Class 1 exempts the operation, repair, maintenance, permitting, leasing, licen sing, or
minor alteration of existing public or private structures, facilities, mechanical equipment,
or topographical features, involving negligible or no expansion of use beyond that
existing at the time of the lead agency's determination. In this case , extension of the
abatement period would allow the remodel of an existing single-story commercial structure
to accommodate an office use.
SECTION 3. REQUIRED FINDINGS.
In accordance with NBMC Subsection 20.38.100(C)(4)(c) (Findings and Considerations) the
following findings and facts in support of such findings are set forth:
Finding:
A.Is the length of the abatement period appropriate considering the owner's investment in the
use?
Fact in Support of Finding:
1.Yes. The structure is rather old and in need of visual refreshing. It was recently
purchased for $1.2 million and the Applicant proposes an additional investment of
approximately $300,000 to $500,000 million more to establish an office.
Improvements include structural reinforcement, accessibility compliance, upgrades
to the heating, ventilation and air conditioning (HVAC) and mechanical, electrical and
plumbing (MEP) systems. The amortization period of that requested is necessary to
financially support an investment of this level.
2.The existing abatement period of one year nine months is insufficient given the
condition of the existing building and proposed renovations, including improvements
for structural reinforcement, accessibility compliance, upgrades to the HVAC and
MEP systems. Granting the extension would leave eleven and a half years to make
use of the existing structure on the site without any potential required abatement of
the nonconforming use.
3.Based on the information submitted, an extension of an additional ten years for the
abatement of the current uses is necessary to avoid the resultant economic hardship.
4.The abatement extension of an additional ten years is appropriate in this case since
it will afford the property owner the ability to amortize the value of the pro posed
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building improvements and secure financing of the property that is likely to be
impossible if a potential abatement of current uses is imminent.
Finding:
B.Does the length of time the use was operating prior to the date of nonconformity justify the
extension of the abatement period beyond that specified by Code?
Fact in Support of Finding:
1.Yes. The property has been used as for nonresidential purposes since 1946. There
is no evidence of any negative impact to the surrounding areas and in the context of
surrounding uses, and integrates into the mixed-use neighborhood.
2.The property became nonconforming in 2003, 17 years ago, when the City Council
adopted Ordinance No. 2003-14. The existing structure and use conformed to the
Land Use Element of the General Plan for 57 years prior to this, and was not subject
to abatement until 2008. At all relevant times, the commercial use has been
compatible with the surrounding land uses and there is no evidence of any nuisance
arising from such use.
3.The substantial period of time of commercial use without noted problems
underscores a high probability of continued successful integration into the
surrounding environs, supporting the extension sought. Balboa Realty currently
operates one block east of the site and has not been the subject of any concern.
Finding:
C.Would the existing structure be suitable for an alternative use?
Fact in Support of Finding:
1.No. Transitioning the nonresidential structure for residential use is expected to
necessitate total demolition or unreasonably high costs of converting the existing
nonresidential building to residential dwelling units.
2.It is conceivable that the building could be modified to accommodate other
nonresidential uses, but not within reasonably justifiable parameters. The existing
building is currently vacant and was last occupied by a psychic business. Conversion
to a residential use would require demolishing and building new or major renovation
with significant structural and seismic alterations to provide adequate living areas
and residential garages.
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Finding:
D.Would remaining at this site beyond the abatement period result in any public harm?
Fact in Support of Finding:
1.No. There is no evidence that extending the nonconforming use has or will result in
any negative impact or harm to the public. There is no evidence that the continued
nonresidential use will result in any negative change whatsoever.
2.The property is in an area that includes a mix of mixed-use and residential uses,
including Cruisers Pizza Bar and Grill, retail, and the OCSD A Street Pump Station.
The continued commercial use of the subject property is compatible with the
surrounding uses and will not have any negative impact or pose harm on the
neighboring residential and nonresidential uses in the vicinity.
3.See Fact in Support of Finding B.2.
4.The existing nonresidential building has not posed a negative impact on the
neighboring uses and the proposed upgrades will enhance the site and surrounding
neighborhood.
Finding:
E.Would relocation of the facility to another site be overly costly and infeasible?
1.Yes. This building and underlying land cost almost $1.2 million to purchase. The
Applicant explained there is no evidence that there are other suitable properties for
sale within this specific area of Newport Beach, This would be especially difficult to
accomplish within the remaining existing abatement period.
2.The relocation of the proposed use is difficult since there are no commercial buildings
of comparable size in the Balboa Village area to accommodate the occupant’s
needs. Balboa Village is part of Balboa Realty’s brand identity, having operated in
this area for over ten years just one block east of the subject site.
3.The property owner’s investment with the purchase of the property would result in a
substantial loss of revenue to the property owner if the existing building could not
continue to be used for nonresidential purposes. As noted above, it would be
extremely costly to convert this existing structure to residential use, probably
requiring demolition and reconstruction. This would be an unreasonable expenditure
to expect the owner to shoulder.
4.If the owner were to be required to abate the property to residential use, a taking of
the premises without payment of adequate compensation may result. The lack of
suitable site alternatives and extremely high costs of converting the existing facility
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to residential would prove unfair for the Applicant to bear in the remaining extension
time; and
SECTION 4. DECISION.
NOW, THEREFORE, BE IT RESOLVED:
1.The Hearing Officer of the City of Newport Beach hereby finds this project is exempt from the
California Environmental Quality Act (CEQA) pursuant to Section 15301 under Class 1
(Existing Facilities) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter
3, because it has no potential to have a significant effect on the environment.
2.The Hearing Officer of the City of Newport Beach hereby conditionally grants and approves
the requested Abatement Period Extension (PA2019-186) for the subject property located
at 813 East Balboa Boulevard, Newport Beach, CA, subject to the findings and
considerations set forth above and the condition set forth in Exhibit “A,” which is attached
hereto and incorporated by reference.
3.This action shall become final and effective 14 days following the date this Resolution was
adopted unless within such time the decision is appealed or called for review to the Planning
Commission in accordance with the provisions of Title 20 Planning and Zoning.
4.This Resolution is intended to apply at the conclusion of the extension previously granted
by Hearing Officer Resolution No. HO2020-001 (PA2019-186), and is additive to that
determination, and does not in any way nullify or void that decision.
PASSED, APPROVED, AND ADOPTED THIS 20TH DAY OF FEBRUARY, 2020.
BY: ________________________________
William B. Conners, Municipal Law Consultant
Hearing Officer for the City of Newport Beach
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EXHIBIT “A”
CONDITION OF APPROVAL
1.The development shall be in substantial conformance with the approved site plan, floor
plans and building elevations stamped and dated with the date of this approval. (Except as
modified by applicable conditions of approval).
2.The abatement extension granted herein shall be conditional upon the Applicant
demonstrating an actual intent to construct the improvements to the internal and external
portions of the structure by securing appropriate permits and commencing such
construction within 12 months of the date of this Resolution, with completion to occur within
24 months after construction commences. It is the intent of this condition that applicant
actively commence and continue construction of the improvements to ensure that the
extension remains justified based on economic conditions related to such improvements.
Should the Applicant fail to comply with this condition of approval, the grant of extension is
automatically withdrawn and denied, subject to further review of the matter by a hearing
officer at that time.
3.The Applicant shall comply with all federal, state, and local laws. Material violation of
any of those laws in connection with the use may be cause for revocation of this Use
Permit.
4.A copy of the Resolution, including conditions of approval set forth in this Exhibit “A”,
shall be incorporated into the Building Division and field sets of plans p rior to issuance
of the building permits.
5.To the fullest extent permitted by law, applicant shall indemnify, defend and hold harmless
City, its City Council, its boards and commissions, officials, officers, employees, and agents
from and against any and all claims, demands, obligations, damages, actions, causes of
action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including
without limitation, attorney’s fees, disbursements and court costs) of every kind and nature
whatsoever which may arise from or in any manner relate (directly or indirectly) to City’s
approval of Balboa Realty Abatement Extension including, but not limited to, Abatement
Extension No. PA2019-186. This indemnification shall include, but not be limited to,
damages awarded against the City, if any, costs of suit, attorneys' fees, and other
expenses incurred in connection with such claim, action, causes of action, suit or
proceeding whether incurred by applicant, City, and/or the parties initiating or bringing such
proceeding. The applicant shall indemnify the City for all of City's costs, attorneys' fees,
and damages which City incurs in enforcing the indemnification provisions set forth in this
condition. The applicant shall pay to the City upon demand any amount owed to the City
pursuant to the indemnification requirements prescribed in this condition.
17
Attachment No. HO 2
Draft Resolution Denying the
Abatement Extension Request
18
RESOLUTION NO. HO2020-001
A RESOLUTION OF THE HEARING OFFICER OF THE CITY OF
NEWPORT BEACH, CALIFORNIA, DENYING AN ADDITIONAL
TEN-YEAR ABATEMENT PERIOD EXTENSION FOR THE
PROPERTY LOCATED AT 813 EAST BALBOA BOULEVARD
(PA2019-186)
THE HEARING OFFICER OF THE CITY OF NEWPORT BEACH HEREBY FINDS AS
FOLLOWS:
SECTION 1. STATEMENT OF FACTS.
1.An application was filed by Balboa Realty (Applicant); on behalf of Alex Batley, Aaron
Batley, and Arthur Dorr (Owners); requesting approval of an abatement period extension
of 10 years in addition to a previous extension until November 30, 2031, with respect to
property located at 813 East Balboa Boulevard, and legally described as Lot 7, Block 12,
Balboa Tract (Property).
2.Newport Beach Municipal Code (NBMC) Section 20.38.100 (Abatement Periods) requires
nonconforming nonresidential uses in residential zoning districts to be abated and
terminated upon a specified period of time unless that period of time is extended by a
resolution from the Hearing Officer after a noticed public hearing to allow the property
owner to amortize the owner’s investment in the nonconforming property or to avoid an
unconstitutional taking of property.
3.The Applicant proposes an extension of the required abatement period specified by
NBMC Section 20.38.100 (Abatement Periods). Since 1946, the site has been improved
with a single-story nonresidential building and use. The Applicant intends to reinvest in
the existing building through interior and exterior modifications and improvements. The
Applicant requests to allow the existing nonresidential use to continue to November 30,
2031, without abatement.
4.The Property is designated Two-Unit Residential by the General Plan (RT) Land Use
Element and is located within the Two-Unit Residential Zoning District (R-2).
5.The Property is located within the coastal zone. Pursuant to NBMC Subsection
21.52.035(C)(2)(g), (Other Existing Structures), the subject tenant improvement is exempt
from a coastal development permit, as the interior remodel and exterior façade work do
not involve an actual or potential risk of substantial adverse environmental impact. The
proposed nonresidential use is of commensurate intensity with that existing and the
improvements do not change the intensity of use of the structure.
6.A properly noticed public hearing was held on February 20, 2020, in the Balboa
Conference Room (Bay 2B – Second Floor) located at 100 Civic Center Drive, Newport
Beach. Evidence, both written and oral, including a written staff report was presented
and considered at this hearing by the Hearing Officer, William B. Conners.
19
Hearing Officer Resolution No. HO2020-001
Page 2 of 2
01-25-19
SECTION 2. CALIFORNIA ENVIRONMENTAL QUALITY ACT DETERMINATION.
1.Pursuant to Section 15270 of the California Environmental Quality Act (CEQA)
Guidelines, projects which a public agency rejects or disapproves are not subject to
CEQA review.
SECTION 3. REQUIRED FINDINGS.
In accordance with NBMC Subsection 20.38.100(C)(4)(c) (Findings and Considerations),
required findings must be made in order to approve the Abatement Extension. In this case,
the Hearing Officer was unable to make the required findings based upon the following:
NOW, THEREFORE, BE IT RESOLVED:
1.The Hearing Officer of the City of Newport Beach hereby denies Abatement
Extension No. PA2019-186, subject to the conditions set forth in Exhibit A, which is
attached hereto and incorporated by reference.
2.This action shall become final and effective fourteen days following the date this
Resolution was adopted unless within such time the decision is appealed or called for
review to the Planning Commission in accordance with the provisions of NBMC Title 20
Planning and Zoning.
PASSED, APPROVED, AND ADOPTED THIS 20th DAY OF FEBRUAY, 2020.
___________________________________
Hearing Officer, William B. Conners
20
Attachment No. HO 3
Applicant’s Extension Application and Supporting Information
21
Extension of Abatement Period
Property Address: 813 E. Balboa Blvd., Newport Beach, CA
Please find below an answer to the questions posed on the Newport Beach City Extension of
Abatement Period Information Sheet.
1 . What is the length of the requested extension of the abatement period?
We are seeking an additional extension of 1 O years (previously granted 10 years
from 2011-2021) and keeping in conjunction with the historical use of the property as
well as the future plans of the Balboa village. Despite the rezoning over the years, the
current improvements were built for and continue to be used as a commercial property.
2. What is the length of the abatement period in relation to the owner's investment in the
use?
The structure was built in 1946 for commercial use, with over $600,0000 from the
last renovation, the building was just purchased for $1,120,000 and will need further
improvements currently estimated around $250,000 -$300,000. The building has sat
vacant due both to an ongoing effort to sell the building, and extreme difficulty in finding
a viable tenant. With the property currently located inside the Balboa Village commercial
"Village Zone" (west of A street) and being immediately adjacent to a parking lot and bar,
the value of the property is severely impacted for prospective future residential usage.
This makes the continuation of commercial usage for this space ideal for the site for the
foreseeable future. We are planning on moving our company, Balboa Realty to this
space due to space constraints in our current location. The requested length of the
abatement period is to match the amoritization period of the available loan to the
applicants and potential purchasers of the property, Balboa Realty.
3. How long was the use operating prior to the date of nonconformity?
Built in 1946 after the end of World War 11, 813 E Balboa was built for commercial
use as the Balboa Village had a much larger footprint and had mostly commercial zoning
only. In the early 1990's it went through several zoning changes, always retaining some
form of commercial zoning. In 2003, the property was rezoned to R-2 residential. That is
57 years of commercial operation prior to the date of nonconformity (1946-2003). The
building continued to be used for commercial purposes after being rezoned, and with
the granting of a 10 year commercial abatement in 2011, the property continues to be
operated commercially through 2021. From Adams to A street, all property along
Balboa boulevard is commercial non-conforming or Mixed Use (MU-V) except 813 and
815 E Balboa. See attached Zoning Map.
4. What is the suitability of the structure for an alternative use?
PA2019-186
22
The existing structure is a single story building showing evidence of earthquake
retrofitting with over $600,000 of recent improvements for commercial usage. To convert
to residential would require extensive remodeling costs to comply with building codes
and suitability for occupancy. We estimate based on current remodel construction costs
that to convert the existing structure for alternative use would cost roughly $400 -
500,000. At that cost it would maybe make more sense to do a complete demolition and
a ground-up rebuild but we estimate this cost at roughly $1.5M. Both scenarios are not
economically feasible based on the current sales price for the existing structure/land and
the future values of the riew construction.
5. Will there be any harm to the public if the use remains beyond the abatement period?
No. There would not be any harm to the public for the intended use by Balboa
Realty. Balboa Realty operates a sales, property management, and vacation rentals
business office providing a valuable service to both local residents and the general
public. Balboa Realty does take occasional commercial supply deliveries in the rear
alley of its current location at 709 E Balboa and would continue to do so at 813 E
Balboa. (one block over)
6. What is the cost and feasibility of relocating the use to another site?
Due to the parking and other building restrictions for new commercial
development in the City of Newport Beach coupled with the lack of available land on the
Balboa Peninsula, commercial space of any reasonable size is virtually non-existent and
the Balboa Village is no exception. 813 E Balboa has one of the last structures
remaining built for what the Village was originally intended, a Village to serve the public
through commercial services. For Balboa Realty to move out of the Balboa Village, it
would be extremely monetarily detrimental to its brands. Acquiring 813 East Balboa for
use as office space would fit the site usage very well. The main reason for this is that
since the City has continuously shrunk the Village Area in the City Master Plan during
the last 30 years, 813 E Balboa gets very little walk-by pedestrian traffic for retail
purposes. Commercial office space makes the most sense for long term viability at this
location. The last tenant who applied for the current abatement and spent all the money
on upgrades did not last much longer than a year. The property has been vacant ever
since.
7. Is there any other evidence relevant to the determination of whether an extension of the
abatement period is required to avoid an unconstitutional taking of property?
We have mentioned several points in the answers to the 6 questions above, but
since the City Master Plan has the Village limits from A street to Adams, this building is
within those limits and should remain commercial due to both the historical and ongoing
usage of the property. Frankly, it fits. Balboa Realty has been located in the Balboa
Village since 2007 and the business owners have all been born and raised in Newport
Beach and lived and worked here for over 40 years. We not only want to find a
permanent home where we don't have to pay rent, we would like to fix up 813 East
PA2019-186
23
Balboa and USE IT as it has been derelict, ugly and unoccupied property for virtually 20
years now. We have a great desire to help the ongoing effort of revitalization of the
Balboa Village come to fruition. We truly believe that 813 E Balboa remaining as a
commercial business is in the best interest of the public, the Balboa Village, and the City
of Newport Beach and below are a few more supporting facts to bolster this position.
1. 500 E. Balboa and 503 and 505 E. Balboa (recently sold) are slated for
redevelopment as mixed use projects that will enhance the look and feel
of the village and bring new and better business to the village. The old
Casino building at the corner of E Balboa and Main is being refurbished
and will be beautiful and bring great business to the village. The structure
at 813 E Balboa is best suited for commercial use and Balboa Realty will
succeed in this location, continuing to provide quality service to the public
for decades to come. This fits in with the City and the Balboa Merchant's
vision and desire to revitalize Balboa.
2. A residential development of 813 E Balboa not only does nothing to aid in
revitalizing the Balboa Village with potential absentee second-home
owners as the likely future buyers of a residential use building, it also
removes a commercially zoned and operated property of almost 75 years
running.
3. Any residential development would be directly adjacent to the neighboring
bar, Cruisers, and their parking lot. Cruisers and its parking lot not only
has patrons exiting the bar in the early hours of the morning, but is host to
live music, daytime festivals, sports games and their boisterous fans,
contest nights, special events, etc. This proximity hurts the current
owners and any future owner's investment in the property as a residence.
Th is is further evidenced by the years of the property going on and off the
market for sale without a purchase and the inability to find a tenant that
can succeed at the location without failing within one season.
4. Residential Property sold at "land value" on the Balboa Peninsula ranges
anywhere from $650 to $950 per square foot depending on location.
However, property in the Balboa Village struggles to sell at $400 per
square foot. In the case of 813 E. Balboa, the successful rezoning of 813
E Balboa to R-2 did not raise the value of the "land value" to match the
$650 to $950 garnered everywhere on the peninsula. This is due to the
reasons stated above. Residential values are almost entirely based on
location and with the adjacent property being a bar and parking lot, 813
does not command residential prices, but aligns more closely with
commercial values.
IN CLOSING, Balboa Realty has paid a higher price to the current seller than the most recently
recorded commercial sq/ft prices in order to maintain its presence in the Village and provide a
necessary and desirable service to the public and the City. Balboa Realty has been in the
Village for 12 years and is one of the only commercial uses that can succeed in the Balboa
PA2019-186
24
Village (in its current state) as we dent need to rely on walk-by traffic to survive. However, we
do provide real estate services to local property owners as well as vacation guests. In fact,
Newport Beach Vacation Properties (the vacation brand of Balboa Realty) collects and pays the
City over $200,000 in TOT tax every year.
Currently there are 3 business licenses located at 709 East Balboa which would move to the
813 E Balboa location. These are: Bungalow Basics (a vacation services company), Balboa
Realty and Newport Beach Vacation Properties. Balboa Realty is requesting an extension of the
Abatement period for 1 O more years through 2031, in order to protect its substantial investment
in the purchase of 813 E Balboa.
PA2019-186
25
Attachment No. HO 3
Project Plans
26
A-0TITLE SHEET & MISC. INFORMATIONA - 2.1 EXISTING FLOOR PLANNEWPORT BEACH CA 92661709 E BALBOA BLVDBALBOA REALTYO W N E R:PROJECT DATAARCHITECTURALA - 1 SITE, EGRESS, OCCUPANT, NOTES & GENERAL NOTESSHEET INDEXV I C I N I T Y M A PACDBAS Y M B O L S APPLICABLE CODESBUILDING ANALYSISNUMBER OFBUILDINGCONSTRUCTIONTYPEOCCUPANCYTYPEBUILDING AREAFLOORSSCOPE OF WORK:A - 5 ENLARGED RESTROOMSZONINGSTRUCTURALABBREVIATIONSA - 4.1 2ND FLOOR REFLECTED CLG PLAN & DETAILSS - N GENERAL NOTESS - 1 FOUNDATION & ROOF FRAMING PLANSD-1 FOUNDATION DETAILSOCCUPANT LOAD TABLESEXIST. FRONT SIDE ELEVATION ORANGE COUNTYNEWPORT BEACH, CA 92661813 E BALBOA BLVDPROJECT ADDRESS:BALBOA REALTY1101ABCDCONSULTANTSENGINEER/DESIGNERTOTAL ENGINEERING SOLUTIONS INC.PARKING ANALYSIS:A - 0 TITLE SHEET & MISC. INFORMATION A - 4 1ST FLOOR REFLECTED CLG PLAN & DETAILSMECHANICALM - 1 GENERAL NOTES & SCHEDULESM - 2 1ST FLOOR HVAC MECHANICAL PLANELECTRICALE - 1 GENERAL NOTES & SCHEDULESE - 2 POWER ELECTRICAL PLANT-24 ELEC. COMPLIANCE FORMSA - 5 ENLARGED RESTROOMSA - 3 ELEVATIONS, ROOF PLAN, & SECTIONA - 4 REFLECTED CLG PLAN & DETAILS M - 3 MECH. ROOF PLANE - 3 LIGHTING ELECTRICAL PLANA - 2 PROPOSED FLOOR PLANA - 6 INTERIOR ELEVATIONS & DETAILSTENANT IMPROVEMENT FOR:BALBOA REALTY813 E BALBOA BLVDNEWPORT BEACH, CA 9266112SANTA ANA, CA 92701TEL. NO. (714) 714-04291651 EAST FOURTH ST, SUITE 228FAX NO. (949) 606-8122EMAIL: YSalem TDS-AE.comTOTAL ENGINEERING SOLUTIONS, INC. CIVIL STRUCTURAL DESIGN@BUILDING NUMBERST-24 MECH. COMPLIANCE FORMS11813 E BALBOA AVE2591-2019SD-2 ROOF FRAMING DETAILS1A - 7 GREEN BUILDING NOTES1ABATEMENT PERIOD EXTENSION127
KEYED SITE PLANSPROPOSED SITE PLANSNEAST BALBOA BLVDEAST OCEANFRONT(E) ADJACENT BUILDINGEXITEXITEXIT ROUTE PLANEAST OCEANFRONTEAST BALBOA BLVDSTART POINTSTART POINTPATH OF TRAVEL PLANENTRANCEEAST OCEANFRONTEAST BALBOA BLVDA - 1SITE PLAN, GEN. NOTES, & EGRESSENTRANCES AND EXITSSANITARY FACILITESACCESSIBILITY NOTESOCFA ARCHITECTURAL NOTES INSPECTIONS GENERAL REQUIREMENTS PROJECT-SPECIFIC REQUIREMENTS ASSEMBLY OCCUPANCIEEXTINGUISHING SYSTEMSTENANT IMPROVEMENT FOR:BALBOA REALTY813 E BALBOA BLVDNEWPORT BEACH, CA 926611SANTA ANA, CA 92701TEL. NO. (714) 714-04291651 EAST FOURTH ST, SUITE 228FAX NO. (949) 606-8122EMAIL: YSalem TDS-AE.comTOTAL ENGINEERING SOLUTIONS, INC. CIVIL STRUCTURAL DESIGN@GENERAL NOTESFIRE AUTHORITY NOTES28
KEYED NOTESCLG.FIN.DCCLG.HGT.REMARKSBABASEFLOORROOM NAMERM. NO.WALLSCEILING FINISHINTERIOR PAINTSFLOOR FINISHCONCRETEFLOORING TILESUBSTRATEWALL FINISHCOVE BASE100101102103104105 106107108109 110111113112 114 115 116PROPOSED FLOOR PLANWALL LEGEND100ABCD101ABCD(E) KITCHEN102ABCD(E) RESTROOM 1104ABCD(E) RESTROOM 2107ABCD(N) OFFICE NO.1103ABCD(N) OFFICE NO.2106ABCD(N) MAIN. CLOSET108ABCD(N) OFFICE NO.3109ABCD(N) CONFERENCE ROOM111ABCD(E) HALLWAY 2105ABCD(E) HALLWAY 1112ABCD(N) RECEPTION113ABCD(N) FRONT OFFICES110ABCD114ABCDTRASH ROOMS115ABCD117118119FEDCBA123123FEDCBADOOR SCHEDULEDOOR LEGENDFIBER REINFORCED PANEL(N) HOME STAGINGSTORAGE ROOM 1(N) HOME STAGINGSTORAGE ROOM 2(N) OFFICE SUPPLIESSTORAGE ROOM 3A - 2PROPOPSED & EXISTING FLOOR PLAN21TENANT IMPROVEMENT FOR:BALBOA REALTY813 E BALBOA BLVDNEWPORT BEACH, CA 9266112SANTA ANA, CA 92701TEL. NO. (714) 714-04291651 EAST FOURTH ST, SUITE 228FAX NO. (949) 606-8122EMAIL: YSalem TDS-AE.comTOTAL ENGINEERING SOLUTIONS, INC. CIVIL STRUCTURAL DESIGN@111121111222222222222229
KEYED NOTESWALL LEGENDEXISTING FLOOR PLANTENANT IMPROVEMENT FOR:BALBOA REALTY813 E BALBOA BLVDNEWPORT BEACH, CA 926611SANTA ANA, CA 92701TEL. NO. (714) 714-04291651 EAST FOURTH ST, SUITE 228FAX NO. (949) 606-8122EMAIL: YSalem TDS-AE.comTOTAL ENGINEERING SOLUTIONS, INC. CIVIL STRUCTURAL DESIGN@A - 2.1EXISTING FIRST FLOOR PLAN1130
RIGHT SIDE ELEVATION K E Y E D N O T E SFRONT ELEVATION REAR ELEVATION TENANT IMPROVEMENT FOR:BALBOA REALTY813 E BALBOA BLVDNEWPORT BEACH, CA 9266112SANTA ANA, CA 92701TEL. NO. (714) 714-04291651 EAST FOURTH ST, SUITE 228FAX NO. (949) 606-8122EMAIL: YSalem TDS-AE.comTOTAL ENGINEERING SOLUTIONS, INC. CIVIL STRUCTURAL DESIGN@A - 3PROPOSED ELEVATIONS, SECTION & ROOF PLAN1111111111111222231