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Home My WebLink About05 - Amendment to Newport Place Planned Community Development Plan Related to the Minimum Percentage of Inclusionary For-Sale Housing within the Residential Overlay (PA2025-0196)Q �EwPpRT CITY OF s NEWPORT BEACH `q44:09 City Council Staff Report November 4, 2025 Agenda Item No. 5 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Jaime Murillo, Acting Community Development Director - 949-644- 3209, jmurillo@newportbeachca.gov PREPARED BY: Rosalinh Ung, Principal Planner— 949-644-3208, rung@newportbeachca.gov TITLE: Resolution No. 2025-77: Initiating an Amendment to Newport Place Planned Community Development Plan Related to the Minimum Percentage of Inclusionary For -Sale Housing within the Residential Overlay (PA2025-0196) For the City Council's consideration is the initiation of an amendment to revise the minimum percentage of inclusionary housing applicable to for -sale housing developments within the Residential Overlay of the Newport Place Planned Community Development Plan (PC-11). Should the City Council adopt the resolution, the changes will be considered by both the Planning Commission and the City Council at future public hearings. RECOMMENDATIONS: a) Determine this action exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15262 (Feasibility and Planning Studies) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3; and b) Adopt Resolution No. 2025-77, A Resolution of the City Council of the City of Newport Beach, California, Initiating an Amendment to Newport Place Planned Community Development Plan (PC-11) Related to the Minimum Percentage of Inclusionary For - Sale Housing Within the Residential Overlay (PA2025-0196). DISCUSSION: The Newport Place Planned Community (PC-11) is located in the Airport Area and was originally designed in the early 1970s with clusters of office parks and industrial uses. The 145-acre area has evolved over time, with light industrial uses being replaced with commercial support retail and office uses. Additionally, the introduction of the Mixed -Use Horizontal 2 (MU-H2) land use classification as part of the 2006 General Plan Land Use Element created an opportunity for residential uses. On July 24, 2012, the City Council adopted Ordinance No. 2012-14, amending PC-11 to create the Residential Overlay (Overlay). At the time, the Overlay was necessary to secure certification of the 4t" Cycle Housing Element since it had greater potential to 5-1 Resolution No. 2025-77: Initiating an Amendment to Newport Place Planned Community Development Plan Related to the Minimum Percentage of Inclusionary For - Sale Housing within the Residential Overlay (PA2025-0196) November 4, 2025 Page 2 accommodate the City's Regional Housing Needs Assessment (RHNA) for lower -income households. The amendment implemented the 2006-adopted MU-H2 General Plan Land Use category for parcels within PC-11. The Overlay included use and development standards for multi -unit residential projects, and it required 30% of the units in a development to be affordable to lower -income households for a minimum of 30 years. PC-11 is the only planned community in the Airport Area that requires inclusionary housing. On July 25, 2023, the City Council adopted Ordinance No. 2023-13, reducing the minimum inclusionary housing requirement of the Overlay from 30% to 15%. The amendment was necessary to implement the 6t" Cycle Housing Element by mitigating the governmental constraints of imposing a high inclusionary housing percentage that rendered projects financially infeasible and to facilitate construction of housing for all income groups. On April 9, 2024, the City Council approved the necessary land use entitlements for the development of a 67-unit condominium project (Residences at 1401 Quail Street) by Intracorp Homes. This project is located within the Overlay and includes 8 affordable units, satisfying the required 15% inclusionary requirement (15% of the 52 base units). As an incentive for providing affordable housing, the project also received a 27.5% density bonus (15 bonus units) in compliance with State Density Bonus Law. Representatives of Intracorp Homes are requesting that the City consider lowering the required inclusionary percentage applicable to for -sale housing, as the approved project is no longer financially viable to implement (Attachment B). If the amendment is initiated, staff will conduct further analysis and recommend an appropriate change to inclusionary housing percentage applicable to for -sale housing projects in PC-11. Future public hearings will be required by the Planning Commission and the City Council. a k*97 IIIIII I►Ti I iTO 6 There is no fiscal impact related to the initiation. ENVIRONMENTAL REVIEW: The initiation of an amendment to PC-11 is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15262 (Feasibility and Planning Studies) 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. No final action on the amendment will occur at this meeting and the initiation of the amendment does not have any legally binding effect upon future consideration of the amendment itself. The City will conduct an environmental review prior to the consideration of approval of the amendment. 5-2 Resolution No. 2025-77: Initiating an Amendment to Newport Place Planned Community Development Plan Related to the Minimum Percentage of Inclusionary For - Sale Housing within the Residential Overlay (PA2025-0196) November 4, 2025 Page 3 NOTICING - The Municipal Code does not require notice for the initiation of amendments. Notice of this item appeared on the agenda for this meeting, which was posted at City Hall and on the City website. Should the City Council initiate the amendment, public notice will be provided for subsequent public hearings before the Planning Commission and the City Council, as required by the Municipal Code. ATTACHMENTS: Attachment A — Resolution No. 2025-77 Attachment B — Initiation Request Letter 5-3 Attachment A Resolution No. 2025-77 5-4 ATTACHMENT A RESOLUTION NO. 2025-77 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, INITIATING AN AMENDMENT TO THE NEWPORT PLACE PLANNED COMMUNITY DEVELOPMENT PLAN (PC-11) RELATED TO THE MINIMUM PERCENTAGE OF INCLUSIONARY FOR -SALE HOUSING WITHIN THE RESIDENTIAL OVERLAY (PA2025-0196) WHEREAS, Newport Beach Municipal Code ("NBMC") Section 20.66.020 (Initiation of Amendment) provides that the City Council ("City Council") of the City of Newport Beach ("City") may initiate an amendment to a Planned Community Development Plan with or without a recommendation from the Planning Commission; and WHEREAS, City Council desires to amend the Newport Place Planned Community Development Plan (PC-11) related to the minimum percentage of inclusionary for -sale housing within the Residential Overlay, in accordance with Section 20.56.050(B) (Development Plan) and Section 20.56.050(E) (Development Plan Amendments) of the NBMC. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows.. Section 1: The City Council hereby initiates an amendment to Newport Place Planned Community Development Plan (PC-11) to lower the minimum percentage of inclusionary for -sale housing within the Residential Overlay. Section 2: The recitals provided in this resolution are true and correct and are incorporated into the operative part of this resolution. Section 3: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. 5-5 Resolution No. 2025- Page 2 of 2 Section 4: The City Council finds the adoption of this resolution is exempt from environmental review under the California Environmental Quality Act ("CEQA"), pursuant to Section 15262 of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it involves feasibility or planning studies for possible future actions which the agency, board, or commission has not approved or adopted. Section 5: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 4th day of November, 2025. Joe Stapleton Mayor ATTEST: Lena Shumway City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE 4 o� C, = - Aaron C. Harp City Attorney 5-6 Attachment B Initiation Request Letter 5-7 INTRACORP September 3, 2025 Seimone Jurjis, PE, CBO City Manager / Community Development Director City of Newport Beach 100 Civic Center Drive, Bay 1B Newport Beach, California 92660 sjuriis cknewportbeachca.g_ov. RE: Request to Amend Affordability Housing Percentage of the Residential Overlay in Newport Place Planned Community (PC-11) from 15 percent to 8 percent Dear Mr. Jurjis: Intracorp SoCal — 1, LLC owns the property located at 1401 Quail Street, which is located in PC-11. We are formally requesting that the City Council of the City of Newport Beach initiate an amendment to PC - II related to the minimum affordability percentage of the PC -I I's Residential Overlay in accordance with Newport Beach Municipal Code Section 20.56.050(B) (Development Plan Amendments) and Section 20.56.050(E) (Development Plan). Specifically, we are requesting that the affordability percentage be reduced from 15 percent to 7.5 percent, which shall be accomplished by amending PC -I I's Part III, Section IV(A)(3) to read as follows 3. A minimum of 7.5 percent of the units within the residential development shall be affordable to lower -income households and subject to a 30-year affordability covenant. This requested amendment would be a step in the implementation of the 6th Cycle Housing Element by mitigating potential governmental constraints through the reduction of affordable housing percentage from 15% to 7.5%, facilitating construction of market -rate housing and affordable housing for all income groups. Thank you in advance for your consideration of this requested amendment to PC -I 1, we are available to meet with you and answer any questions you may have regarding this requested amendment. Sincerely yours, C C Y � � eJ Brad Perozzi President Intracorp Homes 1 895 Dove Street, Suite 400 1 Newport Beach CA 92660 1 5-8