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HomeMy WebLinkAbout04/23/2013 - Study SessionCity Council Minutes Study Session April 23, 2013 — 3:00 p.m. I. ROLL CALIF - 3:00 p.m Present: Council Member Gardner, Council Member Petros, Mayor Pro Tern Hill, Mayor Curry, Council Member Selich, Council Member Henn, Council Member Daigle II, CURRENT BUSINESS 1. CLARIFICATION OF ITEMS ON THE CONSENT CALENDAR Council Member Henn reported that he will be recusing himself from Item SS3 (City Hall Reuse Proposals) due to a business relationship with a business in Via Lido Plaza, In response to Council Member Gardner's questions regarding Item 5 (Disestablishment of Balboa Village and Marine Avenue Business Improvement Districts), City Manager Kiff reported that the issue of providing ongoing funding will be presented to Council during budget deliberations. Regarding Item 6 (Central Parking System (CPS) Parking Meter Services Agreement), Council Member Gardner noted issues with the timeline and questioned why the City is paying more. City Manager Kiff indicated that the additional cost is to pay for higher CPS staff costs and pointed out that reductions in the City's staff costs are not seen in the agreement. Council Member Petros referenced Item 4 (Measure M2 Environmental Cleanup Grant Program) and noted that the report indicates that the Tier Il Grant Program could include funding to dredge the Semeniouk Slough, however, he expressed concern that waiting for grant funding does not compromise scheduling for the City's obligation to dredge the Slough. Public Works Director Webb reported that it will not compromise the ability to move the project forward and is included in the Capital Improvements Program (CIP). Council Member Petros announced that he will be recusing himself from Item 3 (City Hail Reuse Proposals) since he has previously had a business relationship with one of the proposers. 2. SOUTHERN CALIFORNIA EDISON DISCUSSION ABOUT CURRENT AND FUTURE ELECTRIC INFRASTRUCTURE Eddie Marquez, Southern California Edison, provided a PowerPoint presentation to discuss system outages, types of outages, power interruptions, planned and unplanned outages, capital improvement projects completed in 2012, capital improvement projects pending in 2013, and energy partnerships with the City. He noted that the City will be receiving a check for $261,000 as a savings incentive related to the new Civic Center facility. He also addressed their program which provides incentives to businesses for implementing energysaving equipment. Council Member Gardner acknowledged the great programs offered but noted that when the Volume 61 - Page 133 City of Newport Beach City Council Study Session April 23, 2613 City was considering the oil fields and converting methane into electricity, it was determined that the City would have to pay Edison a penalty because it wasn't using electricity and stated that there seems to be a disconnect. Bob Root, SCE Senior Manager, addressed the vault replacement process and reported that SCE plans on meeting with the City to coordinate the operation. He stated that the process takes about four months, including planning and construction. He reported that the intent is to minimize disruptions to customers during the construction process and reported that the vaults will be replaced in the same locations. Council Member Daigle expressed concerns over the size of the vaults, noting that rights -of -way are being crowded with equipment. In response to Council Member Selich's question, Mr. Marquez stated that load testing on alley light poles in Balboa Island is part of the regular inspections performed by SCE. Ernie Solazano of SCE explained the inspection process and schedule. Mayor Pro Tom Hill expressed concern regarding how rehabilitation work is prioritized for specific areas. He noted that the City has significant projects that will have large power requirements and questioned the availability of reliable power on the Peninsula. Council Member Henn reported that he lives on the Peninsula and that there are significant outages in the area three or four times a year. He stressed that the infrastructure on the Peninsula is dated, exists within one of the most corrosive areas in the City, and that there is no project addressing the reliability on the Peninsula. Andy Garcia of SCE discussed the engineering challenges when dealing with the Peninsula. He indicated that there is not much that can be done to increase the reliability of services on the Peninsula, but indicated that there are options that have been considered. Mayor Pro Tom Hill questioned whether it would be helpful to modernize the existing equipment on the Peninsula and commented that the equipment on Fashion Island is much newer and is included in the schedule; however, the Peninsula is not. Mr. Marquez reported that older equipment that needs repair is placed on the schedule for replacement and/or repair. Mr. Solazano reported that, through regular inspections, if it is determined that equipment does not need replacing; it will not be replaced unless it is corroded, damaged, or failing. In response to Mayor Pro Tem Hill's question whether incident reports throughout the City are standard and whether they show that the Peninsula has more incidents of surprise outages than other areas, Mr. Solazano reported on the existing circuits throughout the Peninsula and stated that there was no significant data that stood out relative to the Peninsula. Mr. Marquez stated that SCE will review the data for the last 12- months and "identify what specific outages were on the Peninsula. Council Member Daigle addressed the growth in Fashion Island and inquired whether the projected plans are capacity -based improvements. Mr. Root noted that the improvements are based on the system. Council Member Henn pointed out that, if an area is identified as having a higher frequency of problems, there should be a higher frequency of inspections and equipment replacement. He believed that efforts should be prioritized based on the experiences of the area. Mr. Marquez reported that SCE proactively looks to identify problem equipment and make necessary improvements. Mayor Pro Tern Hill stated that residents of the Peninsula deserve the same level of infrastructure and reliability that the rest of the City has and noted that areas on the Peninsula are going to be developed and will have additional power requirements. Mr. Marquez noted that SCE constantly monitors the entire system and does not focus on one area Volume 61 - Page 134 City of Newport Beach City Council Study Session April 23, 2013 over another Charles Griffin discussed his experience and background with electrical power. He recommended that Council look into hydrogen fusion as a new source of energy and explained the process. Jim Mosher addressed the Rule 20 undergrounding project at Marina Park, as well as an item to be considered under Closed Session tonight. He questioned whether the item applies to undergrounding. Denys Oberman reported that the Lido Peninsula has had no growth and noted that residents want the quality and type of economic growth that will revitalize the area. She indicated that the area deserves to be a significant economic area for the City. Council Member Henn stated that he is unsatisfied with the presentation given by SCE and that he would like to get a better view of the power failure statistics on the Peninsula, as well as how SCE plans to improve services. Mr. Marquez indicated that he will work with Public Works Director Webb to address Council's specific concerns and report back in the future. 3. FIRST LOOK AT CITY HALL REUSE PROPOSALS (PA2012 -176) - 3300 NEWPORT BOULEVARD AND 475 32ND STREET Council Members Henn and Petros recused themselves and left the dais. City Manager Kiff emphasized that no specific action will be taken at this time, but explained that the purpose for today's presentations is to learn about each proposer's vision for the site, ask questions, and offer comments. He stated that staff is impressed with the work that went into each of the proposals, expressed his appreciation to the proposers, and provided a tentative schedule of the process. R.D. Olson Development Bob Olson, R.D. Olson Development, presented a proposal for a hotel as a new gateway to Lido Village and Lido Peninsula. He provided an overview of the company, presented details of the concept which is comprised of a 130 -room boutique hotel called, "The Lido House Hotel". He highlighted the upscale restaurant, spa and fitness center, architectural style, bay/beach park, ballrooms and meeting rooms, rooftop lounge, and viewing deck, and introduced his design team from WATG. He listed the design firm's experience, projects, and track record. Greg Villegas, WATG Associate Vice President/Director of Construction, presented the team's goal for the project, the upscale architectural style, site analysis, main features considered, an aerial view of the proposed concept, as well as dispersed and stepped massing. He addressed the retail element, landscape linkage to other areas, and highlighted other features and amenities. He presented details of the ground floor layout and discussed elevations. Matt Walker, Executive Vice President of Destination Hotels and Resorts, and Michael Fosser, Management Director of their Del Mar property, noted the intent of the design is to create a unique hotel and unforgettable guest experiences. Bruce Baltin, Senior Vice President of PKF Consulting, addressed projections, market studies, fiscal and economic impact analysis, and economic benefits. Mr. Olson discussed community benefits due to the project and addressed project execution, Volume 61 - Page 135 City of Newport Beach City Council Study Session April 23, 2413 implementation and schedule. He listed the qualifications, expertise, and experience of the team as reasons for choosing R.D. Olson Development and explained why this is the best hotel site in Lido Village, Council Member Gardner indicated that she likes that the plan saves the existing ficus trees, that it is set back on the property, and that it has a green area surrounding it. She asked about the proposed parking plan and the rooftop deck. In response to Council questions, Mr. Olson stated that his team believes it is a great hotel site since it is a bridge between the bay and the beach. He further highlighted where the parking will be located and Mr. Walker commented on the rooftop deck. Mr. Bolton discussed the economic differences in magnitude between hotels versus apartments. He stated that residents would shop in a wide range of areas versus hotel guests spending 100% of their money in or around the hotel during their stay. He added that shopping is the #1 tourist activity and noted that Transient Occupancy Tax (TOT) is an important producer of tax revenue to a city. He projected that there would be an average of $17 million generated over a 10 year period ($1.7 million per year) in annual direct revenue to the City as a result of the proposed concept. Mayor Pro Tem Hill commented positively on the plan, specifically as it relates to the rooftop deck, the iconic corner, and the site usage and massing; however, pointed out that the pictures versus the floor plans did not match and asked Mr. Olson to expand on the four new hotels that his company recently completed. Mr. Olson listed the hotels, noting they are all Marriott - branded hotels and are each reflective of the communities in which they are located. He addressed financing, equity, investments, and target markets, and reported that the goal is to attract a balance of leisure and business customers. In response to Council Member Daigle's question, Mr. Olson reported that everything they own is ground -up construction and indicated that their preference is to own the land. Council Member Selich commended the design, stated that the area along 32nd Street appears to have sufficient parking, and suggested continuing the same treatment along Newport Boulevard and along 32nd Street. He asked whether there is a plan to move parking onto the 82nd Street side or construct a partial underground parking. Mr. Olson stated that there is an opportunity to park along 32nd Street and believed that public parking is an important part of the plan. He indicated a willingness to work with Council and staff to generate a solution that works for everyone. In response to Council Member Selich's questions, Community Development Director Brandt reported that the requirement for a Greenlight vote (Charter Section 423) relates to limitation on square footage and would not apply to the project as currently proposed. Regarding construction type and framing, Mr. Olson stated that the hotel would have wood -frame construction with integrated steel and some concrete, and there would he wood, brick, and tile roofing on the exterior. He added that the elevation treatment will be the same throughout the building. Mayor Pro Tern Hill questioned if the fire station were to be moved whether that would improve the value of the property and help with site planning. Mr. Olson reported that it would likely provide for additional guest rooms; however, the more rooms that are built would begin to saturate the market and at some point the hotel would begin competing with itself. Sonnenblick Development Robert Sonnenblick, Sonnenblick Development, presented background on his company and the team assembled for this project, including Auberge Properties. He addressed differences in Volume 61- Page 136 City of Newport Beach City Council Study Session April 23, 2013 public benefits between his project and the Olson project, and reported that they project that their project would generate about $682 million of direct and indirect benefits over a 10 -year period. David Rose, Sonnenblick Development, presented a video that featured Auberge Resorts and Spas. He addressed average daily rates and average guest expenditures, as well as features and amenities of their various properties. He presented various perspectives of the proposed concept, including a proposal for iconic art at the corner of 32nd Street and Newport Boulevard, with another piece placed at Finley Avenue. He addressed concept plan elements which include guest villas, restaurants, bars and lounges, spas, water features, enhanced landscaping and bardscaping, event and pre - function spaces, enhanced entry paving, hotel meeting space, townhouse villas, a pool deck, retail fronting, relocation of the Ficus trees and existing trees, and the new landscape median on Newport Boulevard; and presented details of the general public benefits of the project. He addressed parking and new landscaping in and around the fire station and compliance with the Lido Village Design Guidelines. Mr. Rose addressed tower elements, coastal architecture, existing egress and ingress, balconies and terraces, and pedestrian connections. He noted that the parking is underground and addressed the number of spaces proposed. Dan Wilburn, Gettys Group, presented concepts of the proposed interior space and noted that it becomes the connection to the community and is about coastal luxury. He addressed, dining, decor, specialty restaurants, the rooftop bar, the pool deck, ballroom and meeting rooms, the event lawn, fitness center and wellness rooms, guest rooms and suites, elevations, townhouse villas, and guest villas. He displayed a video which highlighted what the hotel will look like. Mr. Sonnenblick provided background and details of the company's capabilities and hotel experience. He highlighted hotel projects which they have been involved in, addressed public - private partnership experiences, and presented examples of government buildings built and owned by the company in partnership with municipalities. He also addressed financing and ground lease financing. He discussed differences between his company's concept and the R.D. Olson Development concept, including parking, and noted that his company's proposal includes below -grade parking in addition to street parking. Mr. Rose presented details about the development team, key amenities, benefits, and key statistics. In response to Council Member Gardner's questions, Mr. Rose indicated that they were advised that they could eliminate the existing public parking. lie also addressed the average daily rates proposed for the hotel. Regarding the Coastal Commission's acceptance of the concepts, Community Development Director Brandt reported that staff has been monitoring Coastal Commission approvals of high -end hotels and there have been recent requirements to include mitigation fees because they are not low -cost visitor - serving. Further, there may be a one -time cost associated with the City pursuing this type of a development. She indicated that this matter would be factored into the overall analysis of the projects. In response to Council Member Selich's questions, Mr. Rose reported that they are viewing the project as a partnership and met with various entities to obtain input to determine the final materials. Chris B. Shay, G.W. Driver, reported that the construction materials will include wood frame construction and steel. Mr. Sonnenblick stated that they only do design -build and that the rooms, materials, and wall coverings will be pre- designed. He noted that the project will come in on time and on budget. Mr. Rose added that design -build is very important to them and addressed a timeline with large community outreach throughout the design process. Council Member Selich commented on compliance with the Lido Village Design Guidelines and believed that there is not enough open space around 32nd Street and Newport Boulevard. Mr. Volume 61- Page 137 City of Newport Beach City Council Study Session April 23, 2013 Sonnenblick discussed their entry configuration. Mr. Rose addressed the location of the iconic restaurant near the intersection and the proposal to place the villas in the middle of the project. He noted that the RFP called indicated a desire to not maintain the access from Via Lido Plaza to 32nd Street. Mr. Sonnenblick explained what attracted him to Newport Beach to make the proposal. He agreed that this is a great site for a hotel, noted the plan to maximize water views and provide local use of the hotel, and added that they encourage use of the hotel's internal spaces by the general public. He noted that Hoag Hospital is a huge generator of people and stated their intent to work with them to encourage use of the amenities. He reported that his company has secured financing for most of their projects and addressed equity. Mr. Rose added that the walking areas are intended for residents and the public; adding that it is envisioned that public events will be held at the site. He reported the potential of building additional residential and retail on Lido Oporto and viewing the project as a catalyst for redevelopment of the entire area. Mayor Curry expressed appreciation for their efforts to have public art. The Shopoff Group Bill Shopoff, The Shopoff Group, presented details of their proposal and addressed compliance with the General Plan and Zoning Code. He discussed who is on the development team, addressed funding for the site development and construction, and commented on the history of the site and surrounding properties. He addressed accessibility, use and visual appeal, and presented an overview of the proposal which includes residential units, retail, restaurants, a town square, open space, and a community meeting room, and discussed the size of the apartments, target market, and potential unit mixes. Peter Wolff, The Wolff Company, presented background about his company, reported that the project is the gateway to Balboa Peninsula, and noted the importance of treating the scale properly. He addressed massing, open space, circulation, connections around the site, public spaces, town square, water features, landscaping, interior plaza, and community room, communication with private areas, parking, entrances, focus on public and private open spaces, and architectural design and materials. He added that the community room is within the public space and addressed the size of the room. Mr. Shopoff indicated that the key attributes of the proposal include pedestrian ways, public open space, landscaping, water features, relocation of the existing Ficus trees, scale, vehicular access, public and resident parking, scheduling, and availability of capital. He addressed average rental rates, retail tenancy, and overall economic values to the City, He reported that residential lease revenues are not as sensitive to seasonality and economic flux, and noted that long -term residents will contribute to the long -term fabric of the community. Mr. Shopoff noted the importance of accessibility to onsite parking and the long -term nature of ownership attributes to the success of retail businesses. In response to Council Member Gardner's questions, Community Development Director Brandt reported that staff has not seen any type of mitigation fee associated with residential projects, but that concerns regarding visitor - serving amenities will have to be addressed with the Coastal Commission. She reported that the Coastal Commission sees the addition of retail to the area as a benefit, along with having residential. Mr. Shopoff added that the proposed public space can also be used to the concept's advantage with the Coastal Commission. Council Member Selich commented positively on the proposal, but expressed concern about the lack of vertical articulation. He stated that the Coastal Commission considers residential as a Volume 61 - Page 138 City of Newport Beach City Council Study Session April 23, 2013 lower priority than visitor- serving and believed that pointing out the concepts of mixed -use and open space are positive points to highlight to the Coastal Commission. In response to Council Member Daigle`s questions, Mr. Shopoff addressed the community outreach process, agreed on its importance, and emphasized the need to engage the neighbors. He reported that the team will implement community outreach efforts. Mayor Pro Tom Hill commented positively on the proposal, specifically on the use of public space. He believed that the architecture need, to be worked on, but liked the outside decking, the two schemes that hide the parking, and the flexibility of all- equity financing. Regarding the relocation of the fire station, Mr. Shopoff believed that it would add intrinsic value to his. project, but noted that they are at a cap with 99 units. He addressed scale, livability, and approachability of the site, and stated that this will be the best rental building in the entire Orange County area. Mayor Curry opened the Public Comments portion of the meeting and invited those interested to address Council at this time. Hugh Helm, Lido Isle Community Association, agreed with the need to revitalize Lido Village, reported that their resident poll shows that they strongly support a hotel on the site, and believed that it will likely act as a stimulus for revitalization. He urged Council to listen to the citizens of Lido Isle. Brian Hoyle believed that a hotel is the best option for the community. He reported that the Sonnenblick Development group has reached out to the community. Bettina Deminger believed that a small hotel will bring energy back into Lido Village, but that having residential units may not be the optimal use for the property. Tim O'Neil spoke in favor of a hotel project on the site. He addressed plans for Balboa Peninsula and noted that many of the projects depend on tourists and that a hotel will accommodate the added tourist activities. Willis Longyear expressed concerns regarding sub - letting on Lido Isle and spoke in support of a hotel on the site, He believed that the economics do not support having residential units on the site. Nancy Helm believed that, of the two hotel projects, the Olson project is more inviting and warm, and the residential units would become summer rentals with many absentee leases. Roberta Feeler supported having a hotel and believed that either hotel proposal would be an improvement to the community and generate economic development. She discussed the economic vitality in downtown Los Angeles near the Staples Center and stated that Council has the same opportunity in this area. Warren Wymer expressed support for having a hotel on the site. Noting the recusal of Council Member Henn on this issue, he expressed concerns with him not being present to support the concept and that the remaining Council Members will only make decisions based on financial reasons. Mayor Curry expressed the opinion that all three proposals are good and noted the need to review them in depth and detail, He emphasized that the City Council will make an informed decision based on evidence. Volume 61 - Page 139 City of Newport Beach City Council Study Session April 28, 2418 Charles Griffin expressed support for the hotel concept due to concerns with rising ocean water levels. Lucinda Boswell requested that Council ensure there is adequate parking in the area for whichever concept is decided on. She expressed hope that there will be a way to get the hotel . visitors into the area to also generate revenue locally, not just in the hotel. Fred Barnes, President of the Lido Isle Board of Directors, indicated that the Board is in favor of having a hotel in the area. He noted that his association has been approached by the two hotel developers, but not the mixed-use developer. Claudia Morehead expressed support for the hotel concept and believed that, between the two hotel concepts, the Sonnenblick concept does not reflect the lifestyle of the area, is not the right location for an Auberge Hotel, and having an underground panting structure may pose security issues. She expressed the opinion that Mr. Olson has ties to the community, has a positive track record, understands how to deal with the Coastal Commission, and presented a beautiful concept. Linda Klein expressed support for the hotel concept, noted how much revenue can be generated from having a hotel, expressed concern about how much parking will be impacted by having residents in the area, and emphasized the positive social and cultural impacts that will be created from having a hotel. Kevin Healy believed that the old City Hall site is an extension of Newport Heights. He expressed support for having a hotel on the site and believed that Mr. Olson's proposal depicts the area and its lifestyle. Drew Weatherbolt expressed support for the hotel concept and concern for the amount of rent The Shopoff Group wants to charge for the apartments. He pointed out that the area needs revitalization. Brian Park expressed support for the hotel concept. He expressed concerns about the economics associated with the apartment project, particularly since the online version was marked as confidential. He indicated that no parking accommodations were discussed for the surrounding areas, regardless of what concept is chosen. Dennis Borowsky, Balboa Peninsula Point Association Board Member, indicated that his area favors having a hotel on the site, noted that Olson Development reached out to his group and explained their project to them, expressed support for the Olson Development project due to its aesthetics and price point. He noted that Balboa Village is going through revitalization and believed that a hotel could help with that effort. Judy Rosener tools issue that the presentations were difficult to see in the Council Chambers. She expressed concern that two of the Council Members needed to recuse themselves from this discussion, that financial information was not accessible, and that the apartments could be rented to rehabilitation facilities. She emphasized that all information should be available, especially if the area's Council representative cannot participate on this topic and represent them. John Van Aker expressed the need for the Peninsula to be revitalized. In response to Denys Oberman's question, Mayor Curry indicated that the City Council is not privy to the proposers' financial information. Ms. Oberman requested to receive the financial Volume 61 - Page 140 City of Newport Beach City Council Study Session April 23, 2013 information as soon as available, took issue that some Council Members are indicating that the apartment concept has less risk than the hotel concept, expressed support for the hotel concept, and believed that a good traffic plan can be created for the entire Lido Village area. Cindy Koller believed that West Newport, Newport Shores, Newport Heights, Peninsula residents, and businesses support the hotel concept, especially due to the potential for revitalization in the area. In response to Ms. Koller's question, Council Member Gardner indicated that the Coastal Commission would probably favor a residential use if it had mixed use. Ms. Koller indicated that she prefers the Olson Development project because it is a good fit for the area, is set back from the street, preserves the two Ficus trees, and welcomes people into the City. Mayor Curry thanked everyone for attending and providing input. City Manager Kiff reported that staff believes that an independent entity should review the financial information and the information will be brought back to a City Council meeting before any decision is made. III. PUBLIC COMMENTS -None IV. ADJOURNMENT -Adjourned at 8:18 p.m. to Closed Session The agenda for the Study Session was posted on April 18, 2013, at 4:18 p.m, on the City Hall Bulletin Board located in the entrance of the City Council Chambers at 100 Civic Center Drive. City Clerk Volume 61 , - Page 141