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HomeMy WebLinkAbout18 - Coastal Comm MOU 919 Bayside and Rhine WharfCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 18 June 12, 2007 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, Assistant City Manager 9491644 -3002 or dkiff @city.newport- beach.ca.us SUBJECT: Coastal Commission -City MOU Regarding 919 Bayside and the Rhine Wharf Guest Dock ISSUE: Should the City enter into a Memorandum of Understanding (MOU) with the Coastal Commission that would construct a proposed Guest Dock at the Rhine Wharf? RECOMMENDATION: Authorize the Mayor to execute a Memorandum of Understanding with the Coastal Commission regarding the 919 Bayside Project and the Rhine Wharf Guest Dock provided that the MOU is in substantially similar form to the attached. DISCUSSION: About 919 Bayside Drive. On January 10 and on February 14 2006, the City Council held public hearings on an application by UGS Development, Inc. to construct 17 single - family homes on a 3.92 -acre parcel on the south side of Bayside Drive, adjacent to Promontory Channel and Newport Bay. The Planning Commission recommendation to the City Council was to approve the project subject to a condition that public access to the waterfront be maintained across an existing six -foot wide, floating walkway. After the two meetings and with extensive deliberations, the Council required UGS to provide an 8' -wide walkway, partially on land and partially cantilevered over water, to maintain or improve public access. The 919 Bayside Project received a Coastal Development Permit (CDP) from the Coastal Commission on February 15, 2007. The Commission applied a Condition (Special Condition #8) written about below that required UGS to pay $240,000 to the City to allow the City to construct the Rhine Wharf Guest Dock. About the Rhine Wharf Guest Dock. As far back as 2002, the Harbor Commission, held several public hearings to gauge the need for and to seek public input regarding a proposed Guest Dock in Lower Newport Bay at the Rhine Channel. Following the hearings, the Commission unanimously supported the placement of a 100' by 8' Guest Dock (fully compliant with the Americans with Disabilities Act or ADA) at the northerly side of the Channel. The dock will allow up to four vessels of 26' or more to dock. Rhine Wharf Guest Dock June 12, 2007 Page 2 The Rhine Wharf area (shown below) is home to several hundred residences, a dozen restaurants (including the Bluewater Grille and the Cannery), and several marine - oriented commercial businesses (sportfishing charters and more). It contains many private slip areas, but no guest dock for boaters to access. Access from a guest dock could significantly enhance transient boaters' ability to enjoy the restaurants and use the marine- oriented businesses. The Coastal Commission generally agrees that a Guest Dock at the Rhine Wharf would be a significant visitor - serving improvement to Lower Newport Bay. As such, the Commission staff proposed that the 919 Bayside Drive Project — in addition to the 8'- wide walkway — fund the construction of the Rhine Wharf Guest Dock. Previous City attempts at securing a grant from the Department of Boating and Waterways (DBAW) Boating Infrastructure Grant (BIG) program had failed. The document that would accomplish the payment of the $240,000 anticipated to construct the Project is an MOU between the City and the Commission. This Agenda Item asks the Council to authorize the Mayor to approve the MOU. The MOU envisions (among other things): • That UGS pays the City $240,000 upon the MOU's execution. • That the City invests the funds in a protected account and that interest accrued to the funds go towards the Project. • That the City use the UGS funds for design, environmental approvals, testing, and construction of the Rhine Wharf Guest dock. • That the City prepare and submit a plan (called the "Final Plan" in the MOU) to the Commission that describes the construction, maintenance, and public operations of the Guest Dock. Rhine Wharf Guest Dock June 12, 2007 Page 3 • That once the Final Plan is approved by the Executive Director of the Commission, the City shall apply for a CDP for the Project. • That when the City submits an acceptable completed CDP application, the Commission shall declare the project either approved as a de minimus project or approved with a CDP. • City agrees to be liable for the Project. • City reports to the Commission as to the Project's implementation. • That the guest dock shall be a public dock. Side Letter Agreement, too. In addition to the MOU, the City and UGS have entered into a Side Letter Agreement (attached) that commits UGS to an additional $60,000.00. The City may use this revenue either to cover construction costs or, if the project comes in at less than $300,000, to manage and operate the dock. The Side Letter also notes that the Project will be completed if it is $350,000 or less (pending permits and environmental) — therefore, the City's financial contribution will be at most $50,000.00 to construct this Project. If the Project's bids come in at more than $350,000, then the City can deem the Project infeasible per the Side Letter. As envisioned today, if the MOU is approved, the City's Public Works Department will put out a bid to design -build the Guest Dock Project. Harbor Resources will assist, in part by applying for all required permits. Environmental Review: The City Council's approval of this Agenda Item does not require environmental review, but the Project itself will require a CEQA analysis. Public Notice: This agenda item may be noticed according to the Brown Act (72 hours in advance of the public meeting at which the City Council considers the item). Funding Availability: Funding for the Guest Dock Project — depending on how the bids come in — is expected to be as follows: $240,000 from UGS via the MOU; $60,000 from UGS (for construction costs or, if project is less than $300,000.00, for future operations and maintenance) via the Side Letter Agreement; and Up to $50,000 from the City General Fund (already budgeted in FY 2006 -07 CIP Item #7231- C0310684 and C5100865). Submitted by: �� Dave Kiff Assistant City Manager Attachments: Draft MOU Side Letter Agreement MEMORANDUM OF UNDERSTANDING BETWEEN THE CALIFORNIA COASTAL COMMISSION AND CITY OF NEWPORT BEACH This Memorandum of Understanding ( "MOU ") is entered into by and between the California Coastal Commission ( "Commission "), a public agency, created and existing under the authority of Section 30300 of the California Public Resources Code, and the City of Newport Beach ( "City "), a municipal corporation, through its duly elected, appointed, qualified or acting representatives. RECITALS A. WHEREAS, on April 12, 2004, pursuant to Section 30600(a) of the California Public Resources Code and Chapter 20.94 of the Newport Beach Municipal Code, UGS Development Inc. ( "Applicant ") applied to the City of Newport Beach for a zoning code amendment and for the adoption of the Bayside Residential Planned Community District Development Regulations for the property located at 919 Bayside Drive, which application was assigned the number PA 2004 -072 ( "Applicant's Project "); B. WHEREAS, on March 14, 2006, the Newport Beach City Council adopted Ordinance No. 2006 -6 approving Code Amendment No. 2004 -003 amending Zoning District Map No. 15 and adopting the Bayside Residential Planned Community District Development Regulations for the property located at 919 Bayside Drive; C. Whereas, on February 15, 2007 the California Coastal Commission approved Coastal Development Permit ( "CDP ") No. 05 -06 -145, subject to Special Conditions; D. WHEREAS, Special Condition 8 of CDP 05 -06 -145 required UGS Development Inc. to pay a mitigation fee to the City of Newport Beach in an amount not less than $240,000.00, which shall be increased and /or supplemented as necessary by the applicant or its successor(s) in interest as described below in an amount to be sufficient for the City to design, permit, and construct a public dock, with not less than 100 -feet of wharfage area, for the short term /transient docking of boats in Newport Harbor at the Rhine Channel Wharf, Newport Beach, California (the "Project "); E. WHEREAS, Special Condition 8 of CDP 05 -06 -145 requires that, if the construction of the public dock becomes infeasible, the applicant shall submit an application to amend the CDP; F. WHEREAS, the Project is not feasible without the City's cooperation and Special Condition 8 of CDP 05 -06 -145 requires the Executive Director to determine if the Project is infeasible and if so, to make a determination identifying a different feasible project appropriate for the use of this in -lieu fee; and H: \My Documents \Harbor Resources -- 2007\07 -06 -06 CCC -City MOU clean.doc G. WHEREAS, the parties are entering into this MOU pursuant to Special Condition 8 of CDP 05 -06 -145 in order to specify the terms and conditions for the use of the mitigation fee in accordance with Special Condition 8 of CDP 05 -06 -145. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. Upon execution of this MOU by both parties and acknowledgement by the Applicant, and as a condition to issuance of the Coastal Development Permit for the development of Applicant's Project, the Applicant shall pay a mitigation fee to the City of Newport Beach (the "City ") in accordance with the provisions of this MOU, in an amount not less than Two Hundred and Forty Thousand Dollars and No Cents ($240,000.00), which shall be increased and/or supplemented as necessary to be sufficient for the City to carry out the Project. If the City determines that the Two Hundred and Forty Thousand Dollars and No Cents ($240,000.00) transferred to the City pursuant to this MOU is insufficient to complete the Project as described in paragraph 2 below, the City shall request that the Executive Director demand such additional /supplementary funding from Applicant or its successor(s) in interest as the City shall have determined to be reasonably sufficient to complete the Project. The City shall provide the Executive Director with all necessary information to justify the need for additional funding. The Executive Director is further authorized to develop a methodology to resolve disputes regarding the need for additional funding, should dispute resolution be required. 2. The City shall utilize all funds transferred to the City pursuant to this MOU, including any later accrued interest, to design, provide construction management, obtain permits, complete necessary mitigation measures, complete environmental analysis for and construct the Project in accordance with this MOU. Funds transferred to the City pursuant to this MOU may only be utilized to pay fees, costs and expenses associated with the Project. 3. The City shall: (1) obtain approval of a final plan as described in this paragraph and (2) obtain a Coastal Development Permit to implement the approved activities. The City shall submit to the Executive Director of the Commission a final plan within twenty -four (24) months of the date on which the funds are transferred to the City. The final plan shall provide for construction and opening of the public dock within 36 months of approval of the final plan by the Executive Director. The Executive Director shall approve or reject the final plan within 60 days of receipt, provided, however, that the Executive Director may extend this period if necessary for adequate review by notifying the City in writing. The Executive Director shall reject the final plan if it does not demonstrate that the City will comply with the terms of this MOU. The final plan shall be deemed approved if notification is not provided by the Executive Director within the sixty (60) day period. Upon approval of the plan, the City shall seek a Coastal Development Permit as set forth in the approved plan to carry out the Project. If the Executive Director determines that construction of the Project is infeasible, the applicant shall submit an application to amend the CDP and the Executive Director shall identify a different feasible project appropriate for the use of the mitigation fee specified in paragraph 1. I-My Documents \Hubor Resources -- 2007 \07 -06 -06 CCC -City MOU cfean.doc 4. The City shall apply for a CDP for implementation of the Project. The CDP application shall be submitted to the Executive Director within one (1) year after the date on which the Executive Director approves the final plan described in paragraph 3. However, the City may submit the CDP application before the final plan's submittal or approval. When the City submits an approved final plan and a complete CDP application, the Commission shall deem the Project approved, either by declaring that the Project is a de minimus project or by issuing a CDP and finding that the Project does not require further review by the Commission. 5. The City shall acquire a CDP and all other Regulatory Agency permits necessary prior to implementing the Project for which the funds transferred pursuant to this MOU are to be used. 6. Notwithstanding the City's use of funds derived from in lieu fees collected by the Coastal Commission, and the review of plans and /or programs by the Commission or its Executive Director pursuant to this MOU prior to the City's use of those funds, the City hereby agrees to assume responsibility for and liability arising out of any actions, activities, construction and/or development that the City undertakes with the assistance of the funds granted under this MOU. 7. During any period that funds transferred pursuant to this MOU are held by the City, the funds shall be deposited in a separate and independent interest bearing account created solely to manage the funds. Investment earnings shall be apportioned to these funds at least annually. All of the transferred monies, along with accrued interest, and interest which may accrue while the City hold the funds, shall be utilized solely for the purposes set forth in this MOU. Any reference to the funds or monies to be utilized pursuant to this MOU shall include such interest. 8. The terms of this MOU shall become effective upon execution by both parties and shall continue thereafter until the satisfactory completion of the obligations of the parties as described herein and exhaustion of the funds to be utilized pursuant to this MOU, unless altered by written and signed amendment of this MOU. The MOU may be altered, changed, or amended by mutual consent of the parties. Any changes or amendments must be in writing and signed by the parties before such change or amendment shall take effect. In addition, Applicant is an intended beneficiary of this MOU and no change affecting Applicant's rights or obligations shall be made without Applicant's prior written consent. 9. Approval of the final plan described in paragraph 3 by the Executive Director, whether deemed or otherwise, is not a substitute for any coastal development permit or other approval needed by the City or any other person or entity to undertake the Project. 10. The City shall use the transferred funds exclusively for costs and expenses associated with the Project as approved by the Executive Director pursuant to the City's final plan described in paragraph 3. Administrative costs in implementing this MOU, computed in accordance with applicable State Administrative Manual sections, shall not exceed five percent (5 1/o) of the total funds transferred to the City under this MOU. The City shall maintain WMy Ducumentt\Harbor Resources -- 2007107 -06 -06 CCC -City MOU cfean.doc accurate accounts of its expenditures in accordance with generally accepted accounting principles. 11. The City shall submit a report to the Commission's Executive Director within (1) twenty -four months of the transfer of funds or (2) twelve months of approval of the final plan, whichever is later, as to the status of the use of the funds. If the approved Project has not been fully completed within that time and the transferred funds have not all been spent, the City shall submit another status report to the Executive Director every twelve months, until such time as all of the funds are expended or five years from the date of transfer, whichever occurs first. If the Project is not complete and /or all of the transferred funds have not been used by the City within five years of the date of transfer, the City shall submit a report to the Executive Director detailing the reasons therefor. The Commission's Executive Director may, at his or her discretion, grant to the City an extension of time of up to five additional years for use of the transferred funds upon a showing of good cause and with a continuing requirement for status reports every twelve months. The Executive Director shall review all submitted status reports to insure compliance with the terms of the special condition imposed by the Commission in granting the permit referred to in Recital C and with this MOU. If less than all of the transferred funds are used by the City for costs and expenses associated with the Project within the time frames provided above, the balance of the funds shall be returned by the City to the Commission or a Commission - approved alternate entity within 60 days of notification to City by the Executive Director. 12. The public dock constructed pursuant to this MOU shall continue to be operated as a public dock in accordance with the terms of this MOU, whether the City of Newport Beach or another entity owns or operates the public dock 13. Either party to this MOU may for good cause terminate this MOU by providing written notification 30 days prior to termination. In the event of termination, any and all funds then held by City (phis interest earned thereon) shall be transferred by the City to the Commission or a Commission - approved alternate entity within 60 days of termination. Good cause shall include a determination by the Executive Director that City is not proceeding reasonably and expeditiously to complete any component of the Project proposed as part of the final plan and approved pursuant to this MOU, or is not complying with the plan and budget approved pursuant to this MOU. In the event that the MOU is terminated, the City agrees to take all reasonable measures to prevent further use of the funds. 14. The parties shall retain their contracting records for the entire period during which the funds are being utilized by the City under this MOU and for a period of three (3) years thereafter for potential examination and audit by the Auditor General. 15. The MOU is executed in counterparts, each of which shall be considered a duplicate original. 16. Notices: Any demand upon or notice required or permitted to be given by one party to the other shall be in writing, shall be made in the following manner, and shall be effective (a) upon receipt if given by personal delivery, (b) on the date indicated on the receipt H:1My DocumertMubor Resources -- 2007 \07 -06 -06 CCC -City MOU clom.doc if given by certified or registered mail, return receipt requested, or (c) on the succeeding business day after mailing or deposit if given by Express Mail or by deposit with a private delivery service of general use (e.g. Federal Express), postage or fee paid, as appropriate, addressed to the parties in paragraph 17. Notice of a change of address shall be given by written notice in the manner set forth in this section. 17. For the purposes of this MOU, all information, requests, or other business including any demand upon a party or notice pursuant hereto shall be coordinated through the following agency representatives: City of Newport Beach Homer Bludau, City Manager 3300 Newport Blvd. Newport Beach, CA 92658 -8915 California Coastal Commission Peter Douglas, Executive Director 45 Fremont Street, Suite 2000 San Francisco, CA 94105-2219 with copy to: California Coastal Commission South Coast District Office P.O. Box 1450 200 Oceangate, I Orh Floor Long Beach, CA 90802 -4325 18. This MOU shall be binding upon and shall inure to the benefit of the successors and assigns of the parties. 19. This MOU shall be governed by, and construed and enforced in accordance with, the laws of the State of California. H: \Nfy Documents\Hnbor Resources -- 2007 \07 -06 -06 CCC -City MOU clean.doc APPROVED AS TO FORM: C Aaron C. Harp, Assistant City Attorney ATTEST: LaVonne Harkless, City Clerk ACKNOWLEDGEMENT: UGS DEVELOPMENT, INC., a California corporation By: Its: Date: CITY OF NEWPORT BEACH, a Municipal Corporation IC Homer Bludau, City Manager STATE OF CALIFORNIA CALIFORNIA COASTAL COMMISSION IC HAMy DocumentsT arbor Resources -- ?007107 -06 -06 CCC -City MOO elean.doc Peter Douglas, Executive Director r. tU r� �a x� o� 0 b I 0 leaf, t� b a ll4op 1 n 2 ro b Mw IN eb x I cr CD � � ti • JCS (�-+. � •' ��,- �`,... •:. tip, ��^^t -:..��y �t ' � �� • _ . � ,' 1, ! �. !. -- _m m .y n C a a 1 c. tD �C V O r� K �r �. o Of x� N� yr� V Mr W sv 0 C C e� IMW MR Mot evil, b 1, r, 7 w ro On o a . Z � r r Q �t rt J� Q' l.i N;�,+ ��x CITY OF NEWPORT BEACH May 31, 2007 Mr. Thomas L. Utman, President UGS Development, Inc. 537 Newport Center Drive # 380 Newport Beach, CA 92660 Re: Rhine Wharf Guest Dock, MOU, and Coastal Commission Dear Mr. Utman: The City has reviewed the Notice of Intent to Issue Permit for the above matter, and in particular Special Condition #8, in connection with our review and approval of a Memorandum of Understanding (MOU) between the City and the California Coastal Commission. Under the MOU, consistent with the language of Special Condition #8, UGS Development, Inc. ( "UGS ") is required to pay $240,000 to the City following execution of the MOU and the City agrees to ask the Commission to require more funding from UGS in the event the cost of the project required by Special Condition No. 8 exceeds $240,000. The MOU is attached and incorporated by this reference. As of the date of this letter, it has not yet been approved by the City Council nor the Coastal Commission and is in draft form. In consideration of UGS's agreement to pay the City an additional $60,000 concurrently with its delivery of the $240,000 deposit (all of which shall be refunded to UGS if the Commission fails to issue the CDP), which $60,000 may be used by the City for any purpose associated with the Project including, but not limited to, ongoing maintenance and repair costs after completion of the Project, the City hereby agrees, notwithstanding the MOU, that the City (a) will complete the Project in accordance with the MOU unless the Commission or another agency (other than the City) denies one or more of the required permits and approvals, the Project is deemed infeasible or the total projected or actual cost of the project exceeds $350,000, (b) will not request the Commission to require a total of more than $300,000 from UGS to complete the Project, unless the total projected costs exceeds $350,000 and an alternative project is not approved by the Commission or the actual costs exceed $350,000, and (c) the City will not deem the Project "infeasible" solely for cost considerations unless the costs are likely to exceed $350,000. In the event the total projected cost of the Project is expected to exceed $350,000, or the Project is otherwise deemed infeasible, the City shall actively cooperate with UGS to design an alternative project acceptable to the Commission which may be completed at no additional cost to UGS. UGS and City agree that the laws of the State of California shall govern this letter agreement and all matters relating to it and any action brought relating to this letter agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. This agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument. The terms and provisions of this agreement shall be binding upon and inure to the benefit of the parties hereto and their respective representatives, heirs, successors, and assigns. This agreement 3300 Newport Boulevard, Newport Beach, California 92663 Letter re: Rhine Wharf Guest Dock May 31, 2007 Page 2 (together with the MOU) constitutes the entire agreement between the parties pertaining to the subject matter of this letter agreement and supersedes all prior or contemporaneous agreements, representations and understandings of the parties with respect thereto. No supplement, modification or amendment shall be binding unless in writing, unless signed by the parties hereto. No waiver of any provision of this agreement shall be deemed a continuing waiver of such provision or a waiver of any other term or provision of this agreement. The terms of this agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the agreement or any other rule of construction which might otherwise apply. Capitalized terms not otherwise defined herein have the meanings given to them in the MOU. Sincerely, Homer Bludau City Manager cc: Mayor Steven Rosansky and Members of the City Council Steve Badum, Director of Public Works APPROVED AS TO FORM BY: CITY ATTORNEY By:_ Name: ATTEST: CITY CLERK By:_ Name: ACKNOWLEDGED AND AGREED: UGS DEVELOPMENT, INC., a California corporation By:_ Name: