Loading...
HomeMy WebLinkAboutGPAC_2004_11_15111111111 lill 111111111111111111111111111111111 *NEW FILE* G PAC 2004 11 15 P 40 CITY OF NEWPORT BEACH GENERAL PLAN ADVISORY COMMITTEE AGENDA November 15, 2004 7:00-9:00 p.m. OASIS Senior Center 5t" and Marguerite 7:00 I. Call to Order 7:05 II. Approval of Minutes August 23, 2004 7:15 III. Topic/Discussion Paper — Hotels & Tourism Doug Svenssen, Applied Development Economics 8:45 IV. Discussion of Future Agenda Items 8:50 V. Public Comments DRAFT CITY OF NEWPORT BEACH GENERAL PLAN ADVISORY COMMITTEE Minutes of the General Plan Advisory Committee Meeting held on Monday, August 23, 2004, at the OASIS Senior Center. Members Present: Roger Alford Nancy Gardner Phillip Bettencourt Louise Greeley Carol Boice Bob Hendrickson Elizabeth Bonn Mike Ishikawa Gus Chabre Mike Johnson John Corrough Bill Kelly Lila Crespin Lucille Kuehn Laura Dietz Phillip Lugar Florence Felton Marie Marston Members Absent: Ronald Baers Tom Hyans (sick leave) Patrick Bartolic Kim Jansma Karlene Bradley Donald Krotee Grace Dove Barbara Lyon Staff Present: Sharon Wood, Assistant City Manager Debbie Lektorich, Executive Assistant Woodie Tescher, EIP Consultant Members of the Public Present: Phil Arst Patricia Barnes Alan Beek Robin Everett I. Call to Order Carol Hoffman Ken Johnson Jeffrey Lambert Merrilee Madrigal Nancy Gardner called the meeting to order. Catherine O'Hara Charles Remley John Saunders Hall Seely Jan Vandersloot Tom Webber Ron Yeo Raymond Zartler Carl Ossipoff Larry Root Mark Tabbert Sharon Wright II. Approval of Minutes The minutes for the July 12, July 26 and August 9 meetings were approved as submitted. III. Presentation of Land Use Alternatives Woodie Tescher reviewed the Land Use Alternatives submitted by the Geographic Subcommittees. During the presentation, committee members offered comments and corrections. Airport Business Area John Saunders pointed out that the committee thought residential could be added anywhere in the area, not just the three specific areas listed. Ms. Gardner stated she recalled the focus on the three areas however thought the language could be adjusted so residential would not be excluded from other areas. Hall Seely also recalled the subcommittee discussing residential uses in other areas within the airport business area. Carol Boice asked about the density in option 2. Mr. Tescher stated 60-80 units per acre would be mid -rise. • Phil Bettencourt stated Brookfield was in the process of preparing a General Plan Amendment and application for low-rise residential in the area of Spruce and Quail. Jan Vandersloot asked about the use of the word "intensify" because he did not recall the word being used in the subcommittee discussions. Ms. Gardner pointed out that regarding workforce housing the discussion was that the density would be higher in this area. Mr. Tescher stated that intensify means addition. Bob Hendrickson asked if the recommendation in Area B came from the Subcommittee or Planning staff. Ms. Gardner stated it was a combination of both. Mr. Saunders asked about the FAR in Area A, he thought it was .50 now instead of 1.0. Mr. Tescher stated that an FAR of 1.0 means 2 to 3 story buildings for a frame of reference. Balboa Peninsula — Lido Village Carol Hoffman asked why Area A did not include the waterfront area on the other side of Via Oporto. John Corrough thought that the uses Area A were consistent with what the Subcommittee had discussed for the waterfront area, • he pointed out there was an overlay used by the committee that would show what was intended for the entire area. 2 • Ron Yeo asked how the comments submitted by Ron Baers fit into the land use for the area. Mr. Vandersloot pointed out the word "intensify" was used in this area and he would like the word removed. Mr. Corrough stated the idea was net change, he stated the group did not assign an amount of change during the discussions. Ms. Gardner pointed out that the groups were only looking at small areas when the recommendations were determined and may be too much when looking at the plan as a whole. Laura Dietz added that intensify could mean by one. Ms. Wood pointed out that the land uses being presented tonight are not "recommendations", they are alternatives for study, we are not at the recommendation stage yet. The subcommittees were asked to provide the best and worse case scenarios for the areas and then after the analysis we will start working on what will be acceptable. Mr. Corrough stated another idea discussed for this area was to get people into parking garages and then turn them into pedestrians, or have them use trams, water taxies, etc. for travel down the peninsula. • Balboa Peninsula — Cannery Village — no comments. Balboa Peninsula — McFadden Square — no comments. Balboa Peninsula — Balboa Village Ms. Hoffman pointed out that under Option 2, two units per acre were listed and it should probably be two units per lot. Mr. Vandersloot pointed out the word "encourage" instead of "intensify" in this area. Gus Chabre pointed out that it is hard to put on a map the importance of the relationship between water and the land use; however it is a very important component in this area. Mr. Corrough agreed and indicated it was discussed at length. He also indicated water uses had a significant impact on parking in the area. Mr. Yeo suggested a map indicating the location of the tidelands would be helpful. Ms. Kuehn questioned the language indicating "the Balboa Theater is the lynch • pin of revitalization". 3 Banning Ranch 49 Mr. Vandersloot stated he thought the 50 foot buffer in the first paragraph of page 3 was going to be deleted. He also pointed out that Category 2 areas can also be found on the upper mesa. Mr. Bettencourt stated he hoped there would be some latitude in Option 4 to allow for more acreage to make the resort feasible in that area. Mr. Vandersloot also recalled that option including 50 units per acre for the 10 acres. Ms. Kuehn indicated she thought the idea of a senior center would not be feasible for this area. Corona del Mar — no comments. Fashion Island/Newport Center Mr. Vandersloot pointed out that Area D on the map is currently zoned open space and stated he felt the General Plan should not take away designated open space without replacing it somewhere else. Ms. O'Hara pointed out that Banning Ranch has a large portion recommended for open space. • Mr. Yeo suggested including the area east of Avocado in the Corona del Mar planning area. Ms. Wood explained that for General Plan purposes the area is included in the statistical area for Newport Center and Measure S requires the City to track by statistical area. Mr. Vandersloot pointed out that the Newport Center area should be considered for affordable housing. Carol Boice asked about the capacity for the 8,000 square foot conference center compared to the Long Beach Convention Center which has a capacity of approximately 12,000 people. Ms. Wood indicated she would check the report where the square footage came up to see if it indicated capacity. Charles Remley asked why the number of seats where not indicated for the theaters in Section F as they are in Section C. Mariner's Mile Mike Johnson pointed out that in a previous discussion about this area the need for safe bicycle traffic was an important issue. Mr. Yeo explained that in the second scenario Area C, the subcommittee was stressing water -oriented harbor uses when they came up with this concept. rd Mr. Vandersloot indicated the use of the word "intensify" in this area caught his • eye because the intersection of Riverside and Coast Highway is one of the worst in the City and to intensify use will increase traffic. He also thought the community associations should be consulted about Option 2, because he doesn't think they will go along with the plan to move the highway. Bill Kelly asked if the subcommittee had discussed elevating the highway. Mr. Corrough indicated they had not. Mr. Yeo added because of view corridors there was discussion of compressing it however then there are water problems, that is when the idea of moving the highway up against the bluff came up. old Newport Boulevard — no comments. West Newport Industrial Mr. Saunders suggested combining medical and residential which could include nursing homes and would keep traffic counts and parking needs more reasonable. Ms. Dietz asked if there were any restrictions prohibiting medical, and senior housing in the same building. Mr. Tescher indicated certain types of medical uses may have restrictions due to use of chemicals, etc.; however medical offices • may not have the same restrictions. Ms. Greeley asked if nursing homes were considered residential. Mr. Tescher indicated it depended on how the city defines the code. Mr. Remley pointed out that Area B on the map was incorrectly shown as a trailer park. West Newport Residential & Highway Corridor — no comments. IV. Guiding Principles for the General Plan Ms. Wood explained that the Guiding Principles with Planning Commission revisions were provided as information for GPAC. The Guiding Principles will be used when we start developing policies; they will not be adopted as a separate document. Ms. Boice asked why the Planning Commission deleted the exposure to noise hazards and intrusion of light sources from Guiding Principles on Environmental Conservation. Ms. Wood felt the Commission thought those issues would be analyzed as part of an EIR. She added the General Plan does have a noise element and light could be covered with policies in community character. 0 . V. Discussion of Future Agenda Items A new meeting schedule was distributed and discussed. E 0 VI. Public Comments Robin Everette, Vice Chair of Banning Ranch Park Preserve Task Force and member of the Sierra Club, spoke in support of the open space option for Banning Ranch. Patricia Barnes, Sierra Club Outings Leader, also spoke in favor of leaving Banning Ranch open space and as natural as possible. Phillip Arst provided copies of documents from Newport Beach, Irvine and the League of Cities (documentation from visioning process, Table IV-5 Irvine General Plan Costs & Revenues per Acre and Orange County Cities Comparative Data). He asked the Committee to remember what the residents want during this planning process. Committee members responded that they are residents. a • 0 E TABLE 1 TRIP GENERATION COMPARISON FOR A 1 ACRE SITE LAND USE QUANTITY UNITS'll PEAK HOUR DAILY AM PM IN I OUT ITOTAL IN OUT TOTAL Office 21.78 TSF 49 7 56 18 86 104 413 Commercial 10.0 TSF 6 4 10 18 20 38 429 Sin le Family Residential 5 DU 1 3 4 3 2 5 48 Urban Residential 65 DU 5 15 20 14 9 23 273 Hotel 45 RM 15 10 25 14 12 26 368 Resort Hotel 45 RM 12 5 17 9 13 22 N/A U:\UcJobs\_01200\01232\Excel\[TripGenerationlacComparison.xls]TG SUMMARY TOURISM AND LODGING ISSUE PAPER NEWPORT BEACH GENERAL PLAN UPDATE November 9, 2004 Prepared for City of Newport Beach Prepared by Applied Development Economics 2029 University Avenue • Berkeley, California 94704 • (510) 548-5912 1029 J Street, Suite 310 • Sacramento, California 95814 • (916) 441-0323 www.adeusa.com In Association with EIP Associates Urban Crossroads 0 CONTENTS 1. Introduction.......................................................................... 1 2. Tourism Market.................................................................... 3 3. Newport Beach Lodging........................................................ 8 4. Tourism and Lodging Impacts ............................................. 23 5. Conclusion: Further Questions ............................................ 29 TABLES 1 Estimated Newport Beach Visitors 2003................................. 4 2 Purpose of Visit by Newport Beach Visitors ........................... 4 3 Attractions Visited by Newport Beach Visitors ....................... 5 4 Newport Beach Visitor Spending by Major Spending Category, 2003................................................... 6 5 Visitor Spending at Newport Beach Retail Stores 2003................................................................................... 7 • 6 Summary of Orange County Hotels and Motels, 2004.................................................................................10 7 Hotels and Motels in Newport Beach...................................11 8 Average Annual Occupancy Rate Newport Beach and Coastal/South Orange County Hotels and Motels 1998 To 2003.......................................................14 9 Average Monthly Occupancy Rate Newport Beach and Coastal/South Orange County Hotels and Motels, 2003 To 2004......................................................16 10 California Bed & Breakfast Inns Summary of Statistical Data.................................................................19 11 Travel Park Monthly and Annual Occupancy Trends California, 2003....................................................21 12 Summer Time ADT Comparison.......................................25 13 Peak Summer Time Daily Volume Variation ......................26 14 Trip Rates........................................................................... 27 0 1. INTRODUCTION • • Applied Development Economics With its attractive beaches and extensive harbor and marina facilities, Newport Beach has been a prime visitor destination for many years. The General Plan Update process recognized early on the need to address issues related to the costs and benefits of visitor trade, particularly related to the lodging industry. This paper presents a summary of information and public opinions generated to date regarding tourism and hotel development in the City, and provides a framework for further discussion of potential land use and circulation policies in the General Plan as well as economic development strategies for the City. In the Visioning Process, the City identified its vision for 2025 along several dimensions including community character, growth and development, healthy natural environment and others. The theme of balancing visitor -serving amenities and activities with local residents' desired character of the community is prevalent through much of the Vision Statement. The Community Character section states in part, "[t]he successful balancing of the needs of residents, businesses and visitors has been accomplished with the recognition that Newport Beach is primarily a residential community." Under the heading of Recreation Opportunities, the vision says, "Newport Beach attracts visitors with its harbor, beaches, restaurants and shopping. We are a residential and recreational seaside community willing and eager to share its natural resources with visitors without diminishing these irreplaceable assets in order to share them." The vision for Boating and Waterways acknowledges that, "[w]e are recognized as a premier recreational boating harbor," but emphasizes the low density, non -intrusive character of on -shore development in the lower bay and the unencumbered shoreline in the upper bay. • 0 The various public input opportunities during the Visioning Process elicited a variety of statements from the public about their interest in supporting tourism in Newport Beach and the desired characteristics of future lodging developments and other visitor attractions. Most participants in the process favored tourism, but were generally not receptive to extensive new hotel development. There was modest support for additional tourism amenities such as public restrooms, shuttle busses, and parking, although a majority of both residents and businesses opposed adding more retail shops and restaurants to serve visitors. If new hotels are to be built, residents of the City were more interested in small scale projects, while business participants favored larger hotels. Most people agreed that the Airport Area and Newport Center would be better locations for future new hotels, than would areas like Mariner's Mile, Lido Marina Village, or Newport Dunes. Finally, the City has established a set of Guiding Principles for the General Plan Update process, among which is the statement that, "ft]he General Plan shall support the careful expansion of visitor - serving businesses and facilities, including hotels and meeting facilities." 2. TOURISM MARKET U 0 Applied Development Economics Newport Beach is one of California's most popular visitor destinations, and the impact that visitors make on the local economy is significant. The city functions as both an overnight destination with its own amenities and visitor attractions, and as a daytrip destination, sometimes as part of an itinerary that includes other Southern California destinations, but mainly as a single -day outing for much of the Southern California population. VISITOR TRENDS According to a 2001 study done by CIC Research, Newport Beach has approximately 7.2 million visitors annually. Of these visits, about one million of them involved an overnight stay, while the remaining 6.2 million visitors were day visitors. The overall downturn in tourism and the impact of 9/11 was not accounted for in that CIC study. Using more recent lodging occupancy data as an indicator of overnight visits, it appears that the number of overnight visitors has declined to approximately 870,000. The day visitor market was not as severely impacted by 9/11 (and possibly temporarily increased), so our analysis does not assume any changes to those patterns. This reduces the current estimate of annual visitors to about 7.1 million (Table 1). As discussed later in this report, hotel occupancy trends have been steadily rising since 2001 and will likely be restored to pre- 9/11 levels in the next couple years. • 0 Applied Development Economics TABLE 1 Estimated Newport Beach Visitors 2003 2003 Totals Total Visitors 7,058,440 OvemightVisitors 869,440 Day Visitors 6,189,000 Source: ADL, data from CIC Research and Smith Travel Research PURPOSE OF VISITS In general, visitor trips to Newport Beach were for pleasure or vacationing (59%). Visits with friends and relatives accounted for about 20 percent of Newport Beach trips. Shopping, business, conventions/ meetings, and special events were the other primary reasons for visiting Newport Beach (Table 2). TABLE 2 Purpose Of Visit By Newport Beach Visitors Percentage of Visitors Pleasure/Vacation 59.2% Visit fiends/relatives 19.7% Shopping 7.8% Business 6.2% Convention/Meeting 3.8% Special event 2.1% Personal reasons 0.8% Spouse/friend business 0.3% Other 0.2% Source: ADE, data from CIC Research The most popular attractions that visitors to Newport Beach visited at some point during their itinerary were the beaches, which over 64 percent of visitors visited during their trips (Table 3). Other popular attractions include restaurants, Fashion Island, Disneyland, Balboa Peninsula/Island, and other shopping areas in Newport Beach. Each of these attractions were visited by at least 30 percent of Newport Beach's C J 0 Applied Development Economics overnight and day trip visitors. Out of a total of about 7.1 million annual overnight and day trip visitors, this means that each of those attractions accounted for more than 2 million visits from Newport Beach visitors. TABLE 3 Attractions Visited By Newport Beach Visitors Attractions Visited orIntendtoVisit Percentage of Visitors Beaches 63.5% Dining in Newport Beach 42.7% Fashion Island 40.7% Disneyland 38.8% Balboa Pavilion/Island/Pier 39.0% Beach area strolling 29.6% Shopping in Newport Beach 24.4% South Coast Plaza 16.3% Universal Studios 15.5% Hollywood 12.6% Sunbathing at Newport Beach 11.4% Knott's Berry Farm 10.1% San Diego Zoo 9.7% Sea World 8.3% Harbor area sightseeing 7.8% The Block at Orange 6.6% Sufng at Newport Beach 6.5% Source: ADE, data from CIC Research SPENDING PATTERNS Overall, the direct spending by Newport Beach visitors totals approximately $852 million annually (Table 4). Overnight visitors account for $584 million in direct spending, while day visitors directly contribute about $268 million to the local economy. • 101 Applied Development Economics TABLE 4 Newport Beach Visitor Spending By Major Spending Category, 2003 Spending Category Overnight Daytrip Total Lodging $301,310,828 $0 $301,310,828 Meals $93,339,715 $83,268,863 $176,608,578 Shopping $111,337,245 $100,547,022 $211,884,267 Visitor Attractions $26,705,501 $32,545,906 $59,251,407 Transportation $30,413,584 $39,337,597 $69,751,181 Misc. And Convenience $20,777,186 $9,271,514 $30,048,700 Other Spending $143,485 $2,542,329 $2,685,814 Total $584,027,544 $267,513,231 $851,540,775 Source: ADZ, Data From CIC Research And Smith Travel Research About $301 million of the total visitor spending goes towards overnight accommodations, which include hotels and motels, as well as vacation rentals and other types of lodging. Another $419 million in visitor spending goes to Newport Beach retail stores. Given that Newport Beach's annual retail sales totals about $1.5 billion, the impact of the visitor market on the local economy is significant. The distribution of the retail spending shows that the largest magnets for visitor spending in Newport Beach are the local restaurants (Table 5). These eating establishments annually attract about $177 million. • TABLE 5 Visitor Spending At Newport Beach Retail Stores 2003 Retail Group Visitor Spending Total $418,541,546 Apparel Store Group $42,825,058 Women's Apparel $22,895,630 Men'sApparel $10,105,758 Family Clothing $6,530,089 Shoe Stores $3,293,581 General Merchandise Group $101,821,637 Department & Dry Goods $94,433,911 Drug & Proprietary Stores $7,326,565 Specialty Retail Group $74,625,298 Gifts & Novelties $9,352,943 Sporting Goods $10,533,707 Florists $2,286,283 Photographic Equipment $811,165 Records & Music $834,333 Books & Stationery $5,511,658 Jewelry $10,425,267 Misc. Specialty Retail $34,869,942 LJ 0 Applied Development Economics Food, Eating and Drinking Group $199,269,552 Grocery Stores $19,252,793 Specialty Food Stores $1,163,468 Liquor Stores $2,244,713 Eating Places $176,608,578 Source: ADE, data from State Board ofEqualization, CIC Research, and Smith Travel Research. Local department stores attract an additional $94 million in visitor spending. Other major sources of visitor spending include apparel stores and various specialty retail stores. Within Newport Beach, Fashion Island accounts for the largest proportion of visitor spending. Fashion Island accounts for $157 million of visitor spending. Given the high amount of visitor spending that goes to Newport Beach department stores, this pattern is not surprising. 3. NEWPORT BEACH LODGING u 0 Applied Development Economics Newport Beach has a diverse and far reaching lodging market that serves a variety of customers. The lodging market consists of all types of transient accommodations, including private residences. The lodging market for Newport Beach can be separated into four major groupings, hotel/motel establishments, bed and breakfast facilities, travel parks and vacation rentals. Hotel/motel establishments have a wide range of facilities, rooms, amenities, and price ranges. At the lower priced end of the market, economy hotels and motels simply provide a room with a private bathroom and basic amenities such as a TV, phone, and closet space. The middle market hotels typically have better appointed rooms with more amenities, while luxury resort hotels typically add conference facilities, restaurants, and resort amenities. As discussed further below, this market in Newport beach is further segmented into budget/economy hotels, middle market hotels, and luxury hotels and resorts. The Newport Beach market tends to cater much more heavily to the latter segment. ■ Bed and breakfast establishments are different from hotels and motels in that they often more closely resemble a private residence. This means that the rooms are not always private or separated from the rest of the facility like they typically are in a hotel or motel. Throughout California, the majority of B&B owners live on the premises with very little absentee ownership. Often, B&B rooms have shared restrooms and/or a common dining area. In addition, they typically accommodate no more than 20 rooms in a single facility. As noted below, B&B's can also occupy small scale commercial buildings, such as the Doryman's Inn in Newport Beach. This model may more • applicable to Newport Beach than residences converted to lodging, of which there are currently none in the City. ■ Travel parks primarily serve recreational vehicles, and mostly offer a space and utility hookups with no permanent structures used for overnight accommodations. Some travel parks provide recreational facilities, meeting rooms, and limited retail services. ■ Use of residential properties for seasonal rentals (summer weekly/winter monthly) is allowed in Newport Beach through the Short Term Lodging Permit procedures. These types of visitor accommodations are generally located within residential neighborhoods with a strong beach orientation. The highest concentration of seasonal rentals occurs on the Balboa Peninsula and in West Newport, although they can be found in all of the beach and bay residential areas. This • segment of the market is not analyzed extensively in this paper, but some observations about both beneficial and adverse impacts of vacation rentals are included in Section 4 below. HOTEL/MOTEL MARKET Hotels and motels constitute the largest segment of the lodging market. In general, these facilities offer rooms with a wide range of accompanying amenities and locational options. LOCAL SETTING Orange County constitutes one of the largest hotel lodging markets in the country, with a total of nearly 438 hotel and motel establishments, comprising over 53,600 guest rooms.' This works out to an average of 122 rooms per location. The largest portion of this lodging is located in Anaheim, which has 137 I Smith Taavel Research; does not include bed & breakfast inns. 0 Applied Development Economics • establishments and over 19,500 guest rooms, with an average of 142 rooms per establishment (Table 6). TABLE 6 Summary Of Orange County Hotels And Motels, 2004 City Hotels and Rooms Rooms Motels per Hotel Newport Beach, CA 15 2,787 186 Anaheim, CA 137 19,518 142 Santa Ana, CA 33 3,719 113 Costa Mesa, CA 29 3,643 126 Irvine, CA 13 3,258 251 Garden Grove, CA 19 3,00B 158 Buena Park, CA 26 2,649 102 Orange, CA 16 1,741 109 Dana Point, CA 30 1,716 172 Huntington Beach, CA 15 1,663 111 Fullerton, CA 11 1,280 - 116 Laguna Beach, CA 20 1,206 60 Other Orange County Cities 94 7,563 80 _ Source: ADE, data from Smith Travel Research Excluding timeshare resorts and bed & breakfast inns, • Newport Beach has a total of 15 hotels and motels with a total of nearly 2,800 guest rooms (Table 7)? In addition, there are approximately 625 residential units used as vacation rentals. In Newport Beach, the lodging facilities tend to be larger and have more rooms that do motels/hotels in other communities in the county except for Irvine. 2 The information in Appendix A includes a timeshare project, a bed and breakfast inn and a residential unit with two rooms that are not included in the figures in Table 7. 0 Applied Development Economics 70 • TABLE 7 Hotels and Motels in Newport Beach Hotel Facility opening aRooms Market Segment Balboa Inn 1929 34 Luxury/Resort Portofino Beach Hotel _Jun Jun 1930 15 Luxury/Resort Newport Channel Inn Apr1962 30 Economy Best Western Bay Shores Inn Jun 1963 25 Midmarket Hyatt Regency Newport Beach Jun 1963 403 Luxury/Resort Best Western Newport Beach Inn Jun 1970 49 Midmarket Radisson Newport Beach Jun 1974 335 Luxury/Resort Marriott Newport Bch Hotel &Tennis Gb Apr 1975 532 Luxury/Resort Little Inn By The Bay Jun 1976 30 Economy Sutton Place Hotel Jun 1983 435 Luxury/Resort Four Seasons Newport Beach Jun 1986 295 Luxury/Resort Marriott Newport Beach Suites Jun1988 254 Luxury/Resort Holiday Inn Express Hotel Newport Beach Jun 1990 54 Midmarket Balboa Bay Club j Jan 2003 132 Luxury/Resort Extended Stay America Mar 2001 164 Midmarket Oranoe County Airport Source: ADh, data from Smidi Travel Research, Newport Beach Conference & Vlsiton Bureau, and AAA. RECENT ORANGE COUNTY HOTEYMOTEL TRENDS Since 1990, Newport Beach has added three new hotels, comprising 350 guest rooms. Two of these were in the mid -market segment while one was in the luxury/resort class. This represents a 14 percent increase in the room inventory during that time. By comparison, Orange County as a whole added over 12,400 rooms during that period, an increase of 30 percent. HOTEYMOTEL MARKET SEGMENTS In general, the hotel market fits into one of three general classifications: budget/economy, midscale, and luxury. These classifications are typically defined based on room rates, level of service, amenities, and other on -site offerings. Budget/Economy Hotels The first market segment that is represented in the Newport Beach lodging market area is • Applied Development Economics II • Budget/Economy Hotels. These hotels are generally room -only hotels with little public space, no bars, and few amenities. These hotels generally serve budget tourists and highway travelers passing through a community on their way to another destination. Overhead costs are kept extremely low as the profit margin for these establishments is very narrow, it is typically a highly competitive market segment, and requires high turn over of rooms and cost savings. Average room rates for these hotels are generally under $75 per night in 2004. However, Newport Beach's low supply and high year-round lodging demand means that hotels and motels with limited amenities can seasonally charge $100 or more per night.' Newport Beach currently only has two lodging facilities that serve the budget market. Middle -Market Hotels Newport Beach also has a limited number of middle - market hotels. Middle -market hotels generally have more amenities than budget hotels, such as restaurants, spas/jacuzzis, meeting rooms, and business services. Four facilities comprising a total of nearly 300 guest rooms fit this description, two of which have been added since 1990. Luxury Hotels and Resorts Luxury hotels and resorts comprise the vast majority of the lodging market in Newport Beach. Newport Beach has clearly concentrated on the high end of the lodging market. Luxury hotels generally provide high quality service, extensive room and shared amenities, and are often destination places due to their unique and sophisticated character. Within this category, Newport Beach facilities range from small boutique hotels such as the Portofino and the Balboa Inn to large full service resorts such as the Four Seasons Hotel, which also cater heavily to the business travel market. 3 "Rack rate" information derived from price ranges listed in AAA Tourbook and hotel websites. 0 Applied Development Economics 12 • OCCUPANCY AND REVENUE As noted earlier, the supply of hotel rooms in Newport Beach has not grown much since 1990, while the rest of Orange County's lodging supply grew more than twice as fast. In recent years, Newport Beach's occupancy rates have mirrored those of the other coastal communities and south Orange County! Because of the relatively slow growth in the lodging supply, this indicates that Newport Beach's share of the overall lodging market in the region has decreased. Despite growth in the room supply elsewhere in the regional hotel market, Newport Beach has consistently captured significantly higher room rates than the rest of the County, although the trend recently has been closing the gap. In 1998, the occupancy rate in Newport Beach was 69 percent and grew to 75 percent by 2000 (Table 8)' However, the annual occupancy rate by 2002 had declined to 63 percent. This is due to a combination • of factors. First, the regional economy went through a sustained economic downturn beginning in 2000. This decreased both the amount of disposable income available to leisure travelers, and the travel budgets available to business travelers. This is important given that the Newport Beach hotel market depends on both overnight visitors and business travel. In addition, the national and international tourism markets went into sharp decline after the terrorist attacks of September 11, 2001 and the ensuing national travel reduction. This exacerbated the negative trends for overnight travel that had already begun earlier in the year. 4 The area encompassing the coastal communities and south Orange County includes all of the beach communities between Huntington Beach and San Clemente, and all of the cities along the I-5/405 corridor south of and including Costa Mesa, Santa Ana, and Irvine. 5 Data from Smith Travel Research; the occupancy rates are calculated from a sample of reporting hotels. In Newport Beach, this sample represents approximately 2,413 of the 2,787 total rooms in the city. For the Coastal/South Orange County area, the sample covers 14,126 of the 18,510 hotel rooms in the area. Some hotels did not report data for every month during the sample period between January 1998 and August 2004. 0 Applied Development Economics 13 • TABLE 8 Average Annual Occupancy Rate Newport Beach And Coastal/South Orange County Hotels And Motels 1998 To 2003 Occupancy Rate (%) Room Rate Year Newport Coastal/ South Newport Coastal/ South Beach Orange County Beach Orange County 1998 68.5 66.4 $137.13 $89.66 1999 70.8 69.0 $141.47 $91.22 2000 74.5 72.7 $148.18 $96.47 2001 62.6 66.6 $149.14 $99.45 2002 64.2 64.0 $134.45 $98.76 2003 66.0 67.4 $127.41 $102.33 2004 YTD (thru August) 70.5 72.8 $132.54 $108.06 Source: ADE, data from Smith Travel Research Notes: Daily room rates based on a sample of lodging establishments reporting data. The =a encompassing the coastal communities and south Orange County includes all of die bench communities between Huntington Beach and San Clemente, and all of the titles along the 1-5/405 corridor south of and including Costa Mesa and Irvine. In 2003, the occupancy rate in Newport Beach recovered to 66 percent and the year-to-date occupancy rate through August 2004 was 71 percent (although this is not comparable to the prior full years' data due to the seasonality of the tourism market). Similarly, the occupancy rates for Coastal/South Orange County increased from 66 percent to 73 percent between 1998 and 2000. Although this area did not decline nearly as severely in 2001 as Newport Beach did, by 2002 the Coastal/South Orange County occupancy rate of 64 percent was identical to the rate in Newport Beach. Despite the decline in occupancy rates, the average room rate consistently increased between 1998 and 2001, from $137 to $149 per night. However, during 2002 and 2003, Newport Beach's average room rates steadily decreased to $127. While still higher than the County average, it is showing an opposite trend. The year-to-date average room rate shows a slight recovery to about $133 through August 2004, although, again, this subject to the seasonality in the 0 Applied Development Economics 14 • market and is not strictly comparable to the annual averages for prior years. During this same period, the Coastal/South Orange County did not show any annual decline in the average room rate. Between 1998 and 2003, the room rate increased from $90 to $102, with only one minor year-to-year decrease in the average room rate. Very clearly, Newport Beach's overnight lodging market felt the post-9/11 travel impact more severely than the Coastal/South Orange County area chd, although occupancy rates appear to be recovering. It is also possible Newport Beach is experiencing more competition recently in the South Coast market. With the completion of the St. Regis, the Montage Resort and the Hyatt Regency in Huntington Beach in the past few years, older facilities in Newport Beach do not compare as well to these newer properties. On a seasonal basis, the occupancy in Newport Beach generally peaks in July and August, with the lowest • average occupancy in December (Table 9). The peak month in 2003 was July with an occupancy rate of nearly 81 percent. The low occupancy point was the 52 percent rate in December. By comparison, the occupancy for the Coastal/South Orange County area in 2003 ranged from a peak of 81 percent (August) to a low of 59 percent (December). 0 Applied Development Economics 15 • TABLE 9 Average Monthly Occupancy Rate Newport Beach And Coastal/South Orange County Hotels And Motels, 2003 To 2004 Average Monthly Occupancy Rate (%) Coastal/ Newport South Orange Month Beach County Jan 2003 62.7 60.7 Feb 2003 64.0 64.0 Mar2003 63.0 63.5 Apr2003 62.8 63.4 May 2003 62.0 66.1 Jun 2003 71.1 71.0 Ju12003 80.7 79.5 Aug 2003 80.1 80.9 Sep 2003 64.9 65.3 Oct 2003 68.7 68.7 Nov 2003 59.5 65.2 Dec 2003 52.0 59.5 Source: ADE, data from Smith Travel Research Notes: Daffy room rates based on a sample of lodging establishments reporting data. The area encompassing die coastal communities and • south Orange County includes all of the beach communities between Huntington Beach and San Clemente, and all of the odes along the I-5/405 corridor south of and including Costs Mesa and Irvine. SITE CHARACTERISTICS The site development requirements for a typical economy/budget or midmarket hotel are about 2.5 acres of land needed for a 60-room facility. The indoor space will be about 15,000 to 25,000 square feet. Development requirements for luxury resorts and higher end properties vary considerably depending on the types of on -site amenities provided. GENERAL POTENTIAL FOR NEW HOTEYMOTEL DEVELOPMENT Typical rules of thumb for new hotel development require an average annual occupancy of between 60 and 70 percent in order for a project to break even. Judging by these standards, Newport Beach is about 0 Applied Development Economics 76 n U where it should be in terms of its hotel room supply. This would also indicate at least some potential for new lodging, provided that the market continues to recover to pre-9/11 levels. The decline in room rates over the last two years indicates that the support for expanded lodging in Newport Beach might still need more time to recover. BED & BREAKFAST INN MARKET The bed & breakfast (B&B) lodging market generally serves a more upscale market than budget and midmarket hotel options. Rather than physical amenities such as recreation and conference facilities, B&Bs typically offer highly personalized service and location amenities such as a historic neighborhood, unique architecture, or a natural setting. LOCAL SETTING The California Association of Bed & Breakfast Inns (CABBI) identified a total of four lodging establishments in Orange County that are considered B&Bs � None of these facilities are located in Newport Beach. However, one establishment in Newport Beach, the 11-room Doryman's Inn, classifies itself as a bed & breakfast establishment. It is important to note that this is not a residential -type establishment; rather, it occupies a two-story commercial building. While some residential properties in Newport Beach may be suitable for B&B operations, previous discussions of this type of facility have snagged over the issue of parking requirements and the inability of residential neighborhoods in Newport Beach to absorb the parking needs of transient lodging facilities. The Doryman's, located in a commercial district near the waterfront, likely does not experience this constraint as much. 6 This total is separate from hotels and motels. 0 Applied Development Economics 17 • GENERAL CHARACTERISTICS The aspects that distinguish a B&B from a typical hotel or motel are the high level of involvement by the owners, and the small scale of typical B&B operations. In California, about 68 percent of B&B owners live on the premises, with an additional 12 percent that reside within one -mile.' Because of this high degree of involvement by ownership, B&Bs typically maintain a small employee staff with an average of less than four full-time equivalent employees.' On average, a California B&B inn generates about $232,300 of annual revenue. By contrast, an average Newport Beach hotel/motel generates about $6 million of annual room revenue.' It should be noted that B&B inns average eight guest rooms throughout California (Table 10). In contrast, Newport Beach hotels average 186 guest rooms. Clearly, a B&.B establishment represents a smaller scale operation • than even a budget/economy motel, and one that generates higher revenue per room on average. OCCUPANCY AND REVENUE The annual occupancy rate of California B&B establishments averages about 44 percent, which is well below the typical break even benchmark for hotel and motel developments. However, the average daily room rate for a B&B is about $164. In Orange County, the range of posted room rates averages between $120 and $450, while the Doryman's Inn advertises room rates that range between $150 and $250 for the fall season (and higher in the summer).10 This means that the room rates in Orange County and 7 Professional Association of Innkeepers International (PAII), Industry Study ofOpemtiatu, Marketing, and Finances— California Report; 2002 8 California average is 6.3 employees working 145 total hours per week. 9 Calculated from PAII and Smith Travel Research occupancy and room rate data. ro The room rate range reflects a weighted average of the low and high room rate range for all of the B&B facilities in Orange County. It does not reflect discount programs or the seasonality of the rate ranges. 0 Applied Development Economics 18 • Newport Beach are well within the normal room rates across the state. TABLE 10 California Bed & Breakfast Inns Summary Of Statistical Data OCCUPANCYTREND Occupancy (California) 44% Room Rate (California) 164 SITE CHARACTERISTICS Average Number of Rooms Per Facility 8 (California) Average B&B Lot Size (Acres) 6.5 Average B&B Floor Area (Sq.Ft.) 7,200 Inns Occupying Less than One Acre 58% Inns Originally Built as B&B Faclides 18% OWNERSHIP INVOLVEMENT Inn Owners Living On Premises 68% Inn Owners Living Within One Mile 12% Average Weekly Hours Worked by 78 Owners Source: ADE, data from Professional Association of Innkeepers International, Industry Study- 2002 Cahfomia Report • SITE CHARACTERISTICS In California, an average B&B is 6.5 acres with 7,200 square feet of total building space to accommodate eight guest rooms, common areas, and owner's residences." However, it should be noted that 58 percent of B&Bs sit on parcels of less than one acre, and only 18 percent of the B&B buildings were originally built as B&Bs. This illustrates the wide range of characteristics for B&Bs given that many of them are located on large rural estates, and most of them represent reuse of an existing building not originally constructed for guest lodging. GENERAL POTENTIAL FOR NEW BED & BREAKFAST INNS The B&B option is an especially attractive and appropriate option for Newport Beach because it is tr PAII. • Applied Development Economics 19 • currently a significantly underrepresented lodging segment. Newport Beach has focused its lodging market on large-scale resort developments, yet the B&B market represents a comparable high end lodging use that adds another option for upscale overnight visitors. In addition, because B&B inns typically do not require large scale development, they are more compatible that other types of lodging with sensitive coastal areas such as Balboa Village, Balboa Island, or Corona del Mar. Depending on the layout, existing residences can be potentially converted or renovated into B&B lodging. However, a more potent opportunity may be in small scale commercial -type buildings such as in Balboa Village, where the facility can be integrated with ground floor retail shops and other forms of mixed use buildings and developments. This could provide a very attractive visitor experience while maintaining a small scale, low profile envelope for the lodging facilities. TRAVELPARKS Travel parks are different from other types of lodging in that they generally cater to the recreational vehicle (IM traveler and campers, and as such, they do not typically offer rooms and related amenities. However, they often offer a wide range of outdoor recreation opportunities, and some travel parks provide meeting facilities, business services, and retail stores on the premises. GENERAL CHARACTERISTICS Travel parks differ from other forms of lodging in that they often provide long-term occupancies. These long-term occupancies range from seasonal travelers who follow the warm weather during winter months, to local residents who use travel parks in the same way as more permanent mobile home parks.12 Some 12It should be noted that the City does not receive TOT tax on stays that are longer than 30 days. 0 Applied Development Economics 20 • travel parks serve as destinations in their own right, with outdoor recreation and natural site amenities, while others are mainly stopovers for long-distance travelers. LOCAL SETTING Newport Beach has one travel park, the Newport Dunes Waterfront Resort.13 The park has 394 spaces with full utility hookups. The park is located on a 100- acre site with a private beach fronting the Back Bay. The site also has 12 cottages and has a full complement of recreational facilities, as well as meeting rooms, on -site concessions, and a restaurant. OCCUPANCY AND REVENUE Throughout California, the average occupancy rate for travel parks is 62 percent, with an average daily revenue of $32 (Table 11)." TABLE 11 Travel Park Monthly And Annual Occupancy Trends California, 2003 Occupancy January 57.2% February SSA% March 57.2% April 56.2% May 58.3% June 62.3% July 73.7% August 74.4e/a September 60.2% October 62.5% November 59.9% December 56.5% 2003 Average 61.5% Average Daily Rate $32 Source: ADE, data from California Tmvd Parks Association 13 Newport Beach Conference and Visitors Bureau. 1" California Travel Parks Association (CTPA). 0 Applied Development Economics 27 • The Newport Dunes, however, charges rates that are more than double this level, even during the winter season. This is somewhat lower than the average daily room revenue for hotels and motels, and the posted rack rates for B&B establishments. GENERAL POTENTIAL FOR TRAVEL PARKS Aside from providing utility hookups, the level of investment needed to maintain and operate a travel park is generally lower than with other forms of lodging. For example, a travel park might not require additional construction of permanent buildings. However, Newport Dunes serves the market well because it fronts along a public beach and offers a wide array of activities beyond just utility hookups and space for RVs. While; there may be some expansion potential for this facility, the amount of land required and the generally lower overnight rates for travel parks may make it difficult for such a development to be replicated elsewhere in the community. Applied Development Economics 22 4. TOURISM AND LODGING IMPACTS This section summarizes key economic and traffic issues associated with tourism and lodging. FISCAL IMPACT From an economic standpoint, visitors bring substantial income to Newport Beach, as described above. Retail and lodging spending alone generated about $4.8 million in sales taxes and $8.3 million in Transient Occupancy Tax (TOT) for the City budget in 2001, about 13 percent of total City revenues. Visitors generate other revenues as well, including indirect business license and property taxes, revenues from use of public property, and others. The Fiscal Impact Report prepared for the General Plan update analyzed the comprehensive revenues and cost impact on local government by visitors to • Newport Beach (ADE, Inc. Jan.2004). Overall visitors generate about $21.6 million per year in revenues against $16.7 million in service costs. The service costs include $4.9 million in police services, $2.7 million for beach lifeguards included in the fire department budget, as well as other emergency medical calls made by the fire department. The net positive fiscal impact of visitor business activity in Newport Beach, then, is about $4.9 million.per year, not counting the net fiscal benefit of the marine and boating industry. These are revenues that contribute toward City services provided to residents and businesses in the community. 0 Applied Development Economics 23 • TRAFFIC IMPACTS The effect of tourism on traffic conditions in the City of Newport Beach is evident in the seasonal variation of traffic. The peak traffic on key roadways that provide access to the primary visitor destination (the beaches) occurs during the peak season for tourism cited in subsequent sections of this paper. Peak season daily traffic volumes were collected for select locations (primarily in coastal areas) within the City of Newport Beach. Daily traffic volume counts were collected over a one week period in August of 2003 for each selected roadway segment. This time period historically reflects the peak of the (summer) peak. These volumes are therefore higher than the volumes experienced during the earlier or later parts of the summer season. For each roadway segment selected for summertime counts, the summertime typical weekday average (Tuesday through Thursday) volume was compared to the shoulder season count volume at the same location. Table 12 contains the results of this analysis. The only decrease in peak season volume from shoulder season conditions occurs on MacArthur Boulevard north of San Joaquin Hills Road. Shoulder season data for this location was collected in early November of 2001. All other segments increase for summer conditions by at least 1.3% and as much as 58.02%. The only locations with volume increases of more than 25 percent are on Newport Boulevard south of Coast Highway and Balboa Boulevard east of 20th Street on the Peninsula. The increases at these two locations both exceed 50%. Review of the data clearly indicates that Newport Boulevard is the most heavily impacted access route to the beach for summertime traffic. Jamboree Road and MacArthur Boulevard appear to be the least affected routes, with increases in traffic of between 5 and 10 percent. Newport Coast Drive experiences a higher percentage increase in summertime traffic, but 0 Applied Development Economics 24 • TABLE 12 Summer Time Average ADT Comparison Summertime Road Name Road Segment Traffic Change SuperiorAv. n/o Coast Hw. 21.49% Newport el. s/o Coast Hw. 54.34% 3amboreeRd. n/o Coast Hw. 1.30% MacArthur BI. n/o San Joaquin Hills Rd. -24.17% MacArthur BI. n/o Coast Hw. 6.63% Newport Coast Dr. n/o Coast Hw. 22.70% Balboa BI. s/o Coast Hw. 9.80% Coast Hw. e/o Dover Dr. 8.02% Coast Hw. e/o Newport Coast Dr 14.61% Coast Hw. e/o Santa Ana River 3.60% Balboa al. e/o 20th St. 58.02% TOTAL 10.50% n/o = north of, etc. the magnitude of the increase (approximately 3,400 • vehicles per day) is very similar to the increase on MacArthur Boulevard north of Coast Highway. The traffic increases along Coast Highway itself are also less than the increases on routes leading to the beach, suggesting that people are primarily oriented towards traveling to the beach/coast, rather than along it. For one special case (Newport Boulevard in front of City Hall), daily traffic volume data was collected every day for three weeks. Daily volumes range from approximately 35,000 to 50,000 vehicles per day with definite peaking trends on weekend days. Table 13 provides analysis of daily traffic volume patterns over the three weeks collected on Newport Boulevard in front of City Hall. The average summer mid -week weekday volume is approximately 40,600 vehicles per day (vpd). The Monday summer time volume is very near this same volume, but traffic is more evenly spread throughout the day. Saturday has the highest average volume with 48,144 vpd. The average Friday summer time 0 Applied Development Economics 25 • volume (45,732 vpd) is approximately 2,500 vpd greater than the average Sunday summer time volume (43,292 vpd). TABLE 13 Peak Summertime Daily Volume Variation Newport Boulevard at City Hall DAY AVERAGE Sunday 43,292 Monday 40,779 Tuesday 40,083 Wednesday 39,964 Thursday 41,775 Friday 45,732 Saturday 48,144 Average of Monday and Friday 43,256 Average Typical Weekday (Tu•Th) 40,461 Average Weekend Day 45,718 . Typical Shoulder Season Weekday 36,000 Table 13 also presents the typical shoulder season weekday volume (36,000 vpd). The volumes on summer time weekdays (40,600 to 43, 250 vpd) reflect approximately a 10 to 20% increase over typical shoulder season weekday traffic volumes (36,000 vehicles per day). For typical shoulder season weekday traffic, it is projected that fourteen study area intersection analysis locations will experience Level of Service " E" or worse the for Currently Adopted General Plan buildout conditions. At least seven of the fourteen locations can be considered coastal locations. With the summer time weekday coastal traffic increase over shoulder season typical weekday conditions, as described, an increase in traffic congestion can be expected. Tourism traffic tends to build from mid- morning to evening and compounds congestion primarily in the PM peak period. Of the seven coastal • Applied Development Economics 26 • locations, four intersections are projected to have Level of Service "E" or worse for the shoulder season, and can be expected to experience increased congestion. Another measure of the potential traffic related to encouraging tourism is the amount of traffic generated by tourist serving uses, particularly hotels. The trip generation rates for hotels are based on the type of hotel. Table 14 summarizes the trip rates for the various types of hotels and other uses for which data is available. As shown on Table 14, resort hotels tend to generate less traffic than any other type of hotel. TABLE 14 Trip Rates AM PM PEAK PEAK HOTEL TYPE UNITS HOUR HOUR DAILY • Hotel (General) Rooms 0.56 0.58 8.17 All Suites Hotel Occupied Rooms 0.48 0.55 6.24 Business Hotel Occupied Rooms 0.68 0.62 7.27 Motel Occupied Rooms 0.64 0.58 9.11 Resort Hotel Occupied Rooms 0.37 0.49 N/A Single Family Residential Dwelling Units 0.75 1.01 9.S7 Commercial Thousand Square Feet 1.03 3.75 42.94 office (100 tsf rate) Thousand Square Feet 1.88 1.90 13.34 Source: Urban Crossroads. ISSUES TO CONSIDER RELATIVE TO SEASONAL RENTALS Vacation rentals generate substantial TOT revenues as well as property taxes and other revenues. In 2001, total City revenues from these units were estimated at about $1.7 million (ADE 2004). There are also costs for City services such as police and fire protection, among others. Higher concentrations of seasonal rentals generally occur in areas with lower owner 0 Applied Development Economics 27 • occupancy rates. While these rentals do provide an additional alternative for visitors to consider when visiting Newport Beach during the summer months, there are some implications the presence of seasonal rentals creates not common in other residential areas. One is the number of people occupying seasonal rentals can be quite high, resulting in parking problems. There can also be increased noise complaints coming from gatherings and parties, resulting in higher police and code enforcement actions in the area. There can also be issues related to property maintenance. These factors can result in a neighborhood being less desirable for owner occupancy, which is an established City goal in the beach -oriented residential areas. n LJ 0 Applied Development Economics 28 5. CONCLUSION: FURTHER QUESTIONS This paper is intended to provide background information to facilitate further discussion of appropriate policies related to tourism and hotel development in Newport Beach. The City may be expected to see continued market interest in new lodging developments as well as other visitor -serving amenities and business projects. Clearly, this sector provides fiscal and other economic benefits to the City, while also creating traffic and demands for City services. The following questions can serve as a discussion guide for the GPAC in their consideration of this issue. I. With the information presented here, would GPAC answer the survey questions differently than did those surveyed in 2002? 2. What is meant in the Guiding Principles by "careful' expansion of visitor -serving businesses and facilities? 3. Where, if anywhere, would new hotel development be acceptable? What kind and at what scale? 4. Should the City encourage hotel development in any area? 5. Is there a concern with vacation rentals in residential neighborhoods? 6. Should the City encourage more retail stores and restaurants to attract visitors? 7. Should the City provide more public amenities for visitors (e.g. restrooms, boating facilities)? 9 Applied Development Economics 29 n LJ n U 0 TABLE 1 TRIP GENERATION COMPARISON FOR A 1 ACRE SITE LAND USE QUANTITY UNITS PEAK HOUR DAILY AM PM IN OUT TOTAL IN OUT ITOTALI Office 21.78 —TSF-1 49 1 7 56 18 86 104 413 Cotmnercial 10.0 TSF 6 1 4 10 1 18 20 38 429 Single Family Residential 5 DU 1 3 4 3 2 5 48 Urban Residential 65 DU 5 15 20 14 9 23 273 Hotel 45 RM 15 10 25 14 12 26 368 Resort Hotel 45 RM 12 5 17 9 13 22 NIA U:\UcJobs\ 01200\U GENERAL PLAN ADVISORY COMMITTEE Monday, November 15, 2004 Roger Alford Ronald Baers Patrick Bartolic Phillip Bettencourt Carol Boice Elizabeth Bonn Gus Chabre John Corrough Lila Crespin Laura Dietz Grace Dove • Florence Felton Nancy Gardner Louise Greeley Bob Hendrickson Tom Hyans Mike Ishikawa Kim Jansma Mike Johnson Bill Kelly Donald Krotee Lucille Kuehn Philip Lugar Barbara Lyon Marie Marston Catherine O'Hara R eKlt- 1 :t Charles Remley �N✓'' • Larry Root John Saunders Hall Seely Jan Vandersloot Tom Webber Ron Yeo Raymond Zartler u r � • GENERAL PLAN AASORY COMMITTEE Monday, November 15, 2004 PUBLIC SIGN -IN NAME ADDRESS/PHONE � ] E-MAIL ADDRESS 1 - ' Ccr- VVe�S� 93 1 1)Ot 'rE « S�_ Cpp ^� _�_c r f�,, � wa (s k(2 V�4�+k (.c we i I g 3 Cape Gy-ctp C654-a ►ii &sa {iil(a b� (� ael,cav�, C1) FEE ,q vk 5 i:>i+ CZ7 ) STA M Sr> LF) q a 6a ilzv)NF, cer qt Wol— do z,+ Avrw IDA OR I ra � � 6 R ZCO&O Mi- , cum Flzvf N94�6E3 w�14 O@Qa��r � y GENERAL PLAN AASORY COMMITTEE Monday, November 15, 2004 PUBLIC SIGN -IN NAME ADDRESS/PHONE 0 E-MAIL ADDRESS CITY OF NEWPORT BEACH GENERAL PLAN ADVISORY COMMITTEE Minutes of the General Plan Advisory Committee Meeting held on Monday, November 15, 2004, at the OASIS Senior Center. Members Present: Roger Alford Ronald Baers Patrick Bartolic Phillip Bettencourt Carol Boice Elizabeth Bonn Gus Chabre John Corrough Lila Crespin Laura Dietz Grace Dove Florence Felton Nancy Gardner Bob Hendrickson Mike Ishikawa Kim Jansma Bill Kelly Donald Krotee Members Absent: Louise Greeley Phillip Lugar Tom Hyans (sick leave) Marie Marston Mike Johnson Catherine O'Hara Staff Present: Sharon Wood, Assistant City Manager Patricia Temple, Planning Director Tamara Campbell, Senior Planner Debbie Lektorich, Executive Assistant Woodie Tescher, EIP Consultant Doug Svennson, Applied Development Economics Members of the Public Present: Teresa Barnwell Scott Giffin Alan Beek Gordon Glass Cliff Chapman Gary Itano Laura Curran Carol Martin I. Call to Order Nancy Gardner called the meeting to order. Lucille Kuehn Barbara Lyon Charles Remley Hall Seely Jan Vandersloot Tom Webber Raymond Zartler Larry Root John Saunders Ron Yeo Dennis O'Neil Terry Welsh Sharon Wright • Ms. Gardner reported that she had attended the GPUC earlier in the evening and that they had reviewed the Land Use Alternatives and had the following comments: ♦ Cannery Village —add the Albertsons shopping center area to study mixed use, retail and residential for that area ♦ Mari napa rk—delete this study area until Council reviews options ♦ Lido Village —add another option of visitor -serving retail and residential Sharon Wood added that, GPUC was very complimentary about the work done by this committee on the land use alternatives. Lucille Kuehn asked where we are in the process. Ms. Gardner explained that the land use alternatives were reviewed by GPUC today and they will then go to the Planning Commission and City Council to make sure everyone agrees we're on the right track. After those reviews the modeling will start. Ms. Wood added that the results from the model runs will be brought back to the Committee for discussion and possibly another run before deciding on a preferred land use plan. Mr. Tescher added that a community workshop will also be scheduled to allow the public to comment on the plan. II. Approval of Minutes • Carol Boice pointed out a correction on page 4 under Fashion Island/Newport Center, the reference to the "8,000 square foot conference center" should actually be "58,000 square foot conference center." The minutes for the August 23, 2004 meeting were approved with the correction. III. Topic/Discussion Paper — Hotels & Tourism Doug Svensson, Applied Development Economics reviewed the Hotels & Tourism Paper, committee members offered comments during and after the presentation. Mr. Svensson also distributed a table called the Trip Generation Comparison for a One Acre Site. Charles Remley asked about the numbers on the table relating to hotels. Mr. Tescher and Mr. Svensson explained it was based on 45 rooms per acre and the trips listed are shown for the peak hour periods in the morning and evening. Ms. Boice asked if the numbers included employees of the hotel. Mr. Svensson indicated that it does. Tom Webber asked what time was the peak hour. Ms. Temple indicated it is the highest hour in the morning and evening. Mr. Svensson added that the commute hour between 5:00 p.m. and 6:00 p.m. is typically the timeframe in the evening. Mr. Remley pointed out the daily trips total 368. Mr. Svensson stated that the number . includes everyone in the room as well as employees and service providers. 2 Ms. Kuehn thought a pie chart indicating the relationship between revenue and costs in • the City's budget regarding hotels would be helpful. Mr. Svensson pointed out that a diagram is in the fiscal report that shows the impact of all land uses and a separate table that focuses on impacts of visitor -serving uses. Laura Dietz asked if the trip generation table was based on a model. Ms. Temple stated the table came from the Institute of Traffic Engineers Manual; it is a nationwide standard. Gus Chabre asked how summer rentals were classified in this table. Mr. Svensson indicated the traffic information is based on the type of dwelling that is used as a summer rental. Although short term rentals do generate more traffic and demand for parking, it is hard to specifically capture the numbers; it is a unique land use and the data isn't available. Mike Ishikawa stated that impacts from rental areas is a historic problem and is a situation the City has to recognize and deal with. Ms. Wood pointed out that question #5 dealt with vacation rentals and how we should set policy to deal with them. Mr. Remley pointed out that the impact of vacation rental houses on the peninsula is on parking because renters usually come with 3 to 4 cars. He thought requiring adequate parking before issuing vacation rental permits would help with impacts. Ms. Temple asked what would be considered adequate. Mr. Remley suggested the same requirement as a single family residence would help. • Mr. Webber pointed out that the problem goes beyond vacation rentals because people who live in the beach environment get a lot of visitors and the model doesn't appear to account for that. He also asked how the visitors coming for the day at the beach were accounted for. Ms. Wood said those numbers are included in the traffic model. Kim Jansma asked about the designation of a small hotel versus a regular hotel or bed and breakfast. Mr. Svensson indicated 20 rooms would be the upper end of a B&B and 20 to 40 rooms would be a boutique hotel. Don Krotee asked about the revenue from vacation rentals. Mr. Svensson indicated 8- 9% of the TOT comes from vacation rentals. Ms. Wood pointed out that in addition to the fiscal impacts, vacation rentals also provide a source of affordable lodging in the coastal zone, which is required by the Coastal Commission. Mr. Ishikawa pointed out the impacts of summer rentals on the police department. Mr. Svensson indicated that even accounting for the added costs for public safety, the visitor activity more than pays for the costs. Ron Baers asked what triggers the permit. Ms. Temple explained the Short Term Lodging Permit is required for those who rent units seasonally with occupancies less than 30 days and is renewed annually. Ms. Kuehn thought there were three important issues: 1) would you like a rental unit • next to you and if they are allowed on the peninsula can we say we don't want rentals in Irvine Terrace? 2) the issue of property rights, do you have a right to rent? 3) the cost benefits. 3 Ms. Dietz thought it might be helpful to find out where the renters are coming from. . Ms. Temple indicated they come from everywhere, within the state and all over the country. Bob Hendrickson asked if it was possible to limit rental units to 2 cars when we don't have the same restriction for residents. Lila Crespin indicated there was an area in Los Angeles where permits are required of anyone parking in the community. Ms. Wood pointed out the Coastal Commission would not allow us to do that here. Grace Dove stated that vacation rentals are a historic use and when you buy property on the peninsula problems with parking and traffic are expected. She also pointed out that most rentals are owned by local people. John Corrough agreed with Ms. Dove, the problems have been around for years and will continue due to the nature of the public beach community. Mr. Ishikawa disagreed to the point because each neighborhood has its own characteristics and we're meeting to try to control growth, rather than leave the status quo. Ms. Dietz stated the airport subcommittee discussed some hotel development there to serve airport travelers and they could still visit the tourist areas at the beach. Mr. Krotee asked if the tax structure could be changed to increase revenue to the City. • Mr. Svensson pointed out that any change to the TOT would require a vote and most cities are similar in what they charge. Ms. Wood added that Anaheim's TOT rate is higher than Newport Beach. She added that our Conference and Visitors Bureau would not be in favor of raising rates because it would make it more difficult to market to groups. Ms. Boice asked if adding hotels focused on business travelers in the Newport Center area would increase flights to John Wayne Airport and require expansion. Mr. Svensson indicated business travelers are attracted to the area for the businesses, lodging availability doesn't attract them. Ms. Wood thought the residential development to the south is a bigger factor when talking about airport growth. Ms. Dove asked if the timeshares in Newport Coast and Dunes entitlement for a hotel had been factored into this information. Mr. Svensson stated it was, however he didn't know the status of the entitlement. Ms. Wood added that she didn't know if the 275 room family inn at the Dunes would ever be developed. And added that Orange County had just approved the Pelican Hill Resort which includes 120 rooms. Patrick Bartolic asked if the committee was supposed to be coming up with a recommendation of areas that could have additional lodging or if the recommendation is to suggest if there should be additional lodging. Mr. Svensson indicated that during the visioning process the message came through that there were only a couple areas • appropriate for hotel development. Mr Tescher added that the subcommittees had identified additional areas for consideration. Ms. Gardner reminded the group that the options we are discussing are not `recommendations," the options will require more rd study and discussions prior to determining our recommendations. Ms. Wood added that we are in the beginning of the policy discussions, the issue papers will provide a summary of information from the visioning process as well as a summary of all the information the committee has been provided since that process. Mr. Tescher asked the group to try to define the term "careful expansion" which will help determine the policies. Ms. Jansma suggested boutique hotels would fit the charm of Newport better than the large hotels. Phillip Bettencourt pointed out it may be hard to get a consensus from the group with the open ended questions we're discussing tonight. Ms. Boice asked if the traffic modeling shows unacceptable service levels for some of the options, who will be responsible for scaling them back? Mr. Tescher responded by saying the results of the modeling will come back to GPAC for discussions before going out to the public and then after getting the public response recommendations will be formed. Jan Vandersloot suggested that we should not deviate from the results that came out of the visioning process because the main concern was traffic and it continues to be a concern of this group. Mr. Bartolic agreed that traffic is the main issue and we should be looking at getting an effective shuttle service to help with the parking and traffic issues that exist now. • Mr. Corrough disagreed with the idea of staying with the visioning process results because this committee has been provided with additional information and has spent a lot of time in discussions regarding the information that was not available to the participants during the visioning process. Ms. Gardner added that comments at the GPUC meeting indicated that the background information would have been helpful during their review of the land use alternatives. Mr. Bartolic asked if we had any idea how many parcels in the City could accommodate a small scale hotel now. 'Ms. Temple indicated that a developer could redevelop any area zoned commercial, so it is difficult to determine the number of locations. Mr. Baers stated he had reread the results of the visioning process and felt they lacked clarity and thought we shouldn't rule out any options at this point. Ms. Dietz thought that having flexibility in our general plan is important because what we think is a good idea today may not work 20-25 years from now. Ms. Gardner summarized the two positions that came out in the discussions. One is that we take the visioning process as a starting point and utilize the materials we've received to guide us in our decisions. The other is we don't deviate from the results of the visioning process. Ms. Wood added that she thought the City Council intended for GPAC to keep studying because they had authorized the money for the traffic/fiscal impact models, consultants and staff time for the process. • Mr. Krotee thought we should wait to see the results of the modeling before addressing the questions about hotels. 5 IV. Discussion of Future Agenda Items The next meeting is scheduled for December 13t' and the agenda will include a paper on Community Character. V. Public Comments Ms. Gardner apologized for missing a member of the public at the last meeting who wanted to speak and was overlooked. She asked members of the public to stand if they would like to speak so it wouldn't happen again. Gordon Glass pointed out that the 3rd -alternative for Lido Village was supposed to include marine -oriented retail. He also commented on the vacation rentals, hoping that they wouldn't be squeezed out by over regulation. He suggested redevelopment for the oceanfront at the Newport Pier that could accommodate small scale hotels. Laura Curran commented in favor of the vacation rentals stating it brought revenue to the City. She also thought more detail would be needed before making decisions on the hotels and to get information from other communities with the same type issues. She asked the group to consider making Mariners Mile safer for bicycles. Terry Welsh, Chris Manka, Clifford Chapman, Teresa Barnwell, and Sharon Wright spoke in favor of keeping Banning Ranch open space. Lila Crespin provided copies of a Cultural Arts Guide prepared by the Newport Beach Arts Foundation. C.1