HomeMy WebLinkAbout13 - Sober Living by the SeaCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 13
July 8, 2008
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Dave Kiff, Assistant City Manager
949 -644 -3002 or dk'df @city.newport- beach.ca.us
SUBJECT: Summary of Proposed Settlement Terms between Sober Living by the Sea
and the City of Newport Beach regarding Group Residential Uses
ISSUE:
What are the terms of the proposed settlement agreement between the City and Sober Living by
the Sea, Inc. and how do they relate to the City's Group Residential Use ordinance?
RECOMMENDED ACTION:
Receive and file.
BACKGROUND:
NOTE: For detailed background about the City's Group Residential Uses Ordinance (Ordinance 2008-
05), please see the staff report dated January 22, 2008 relating to the adoption of the Ordinance. For
more information about the proposed settlement between Sober Living by the Sea (SLSTS) and the City,
please see the City's website under "Group Residential Uses."
Following the adoption of Ordinance 2008 -05 on January 22, 2008, the City has changed the
way it regulates certain group residential uses, like boarding houses, fraternities/sororities,
residential recovery homes, and more. Key aspects of Ordinance 2008 -05 are as follows:
A. Reasonable Accommodation. The concept of reasonable accommodation is a process by
which a disabled person or a facility operator in need of housing can request a modification of
an existing local law to allow that disabled person to retain housing — this process is fully
described, allowed, and included as a new Chapter 20.98 within the Newport Beach Municipal
Code (NBMC).
B. Integral Facilities & Integral Uses. Ordinance 2008 -05 defines "Integral Facilities" and
"Integral Uses." In addition to defining the terms, the Ordinance states that the City can
consider treatment and recovery facilities that operate integrally to be uses subject to a Use
Permit and regulated similarly to small unlicensed facilities or general (7 and over") facilities.
We defined "Integral Facility' and "Integral Uses" as follows:
Integral Facility. Any combination of two or more Residential Care (Small Licensed, Small
Unlicensed, or General) facilities which may or may not be located on the same or contiguous
parcels of land, that are under the control and management of the same owner, operator,
management company, or licensee or any affiliate of any of them, and are integrated components
of one operation shall be referred to as Integral Facilities and shall be considered one facility for
Proposed Sober Living -City Settlement
July 8, 2008
Page 2
purposes of applying federal, state, and local laws to its operation. Examples of such Integral
Facilities include, but are not limited to, the provision of housing in one facility and recovery
programming, treatment, meals, or any other service or services to program participants in
another facility or facilities or by assigning staff or a consultant or consultants to provide services
to the same program participants in more than one licensed or unlicensed facility.
Integral Uses. Any two or more licensed or unlicensed residential care programs commonly
administered by the same owner, operator, management company, or licensee, or any affiliate of
any of them, in a manner in which participants of two or more care programs participate
simultaneously in any care or recovery activity or activities so commonly administered. Any such
Integral Use shall be considered one use for purposes of applying federal, state, and local laws to
its operation.
In early May, 2008, Judge James Selna of the US District Court enjoined (blocked) the
enforcement of the "integral facilities" definition within Ordinance 2008 -05. Special Counsel
James Markman of Richards, Watson, Gershon believes that the Judge's stay applies to the
City's "integral uses" concept, too.
C. Siting of New Facilities. Ordinance 2008 -05 allows various group residential uses in the
following zones as shown in Table 1:
Table i
Zoning for New Group
Facility Type R -1
Residential
R -1.5
Uses
R -2 MFR
ADP Licensed 6 and Under
ADP Licensed 6 and Under
.
• .
(operating integrally)
Unlicensed and Under ®
.
®®
.
(integral or not)
7 and Over
.
•
.
(Licensed or Unlicensed)
All Other ®
. . .
. . .
®
. . .
®®
. . .
Group Residential Uses
* This provision of the Ordinance was blocked via Judge Selna's actions of May 2008.
The prohibitions of certain group residential uses in the R -1, R -1.5, and R -2 zones apply to new
facilities. Many existing group residential facilities — indeed most if not all of the unlicensed
facilities — became "non- conforming" after February 20, 2008. All non - conforming group
residential uses then became subject to the Ordinance's Use Permit process and had to apply
for a Use Permit by May 22, 2008 to continue to operate. Table 2 compares estimated recovery
beds in mid -2007 with the amount of beds addressed by Use Permit applications:
D. Abatement. The Ordinance directs that any operator within one of the zones shown in
Table 1 where their operation is either prohibited or allowed with a Use Permit but who did not
apply for or obtain a Use Permit or secure Reasonable Accommodation in a timely manner must
cease this use no later than:
February 20, 2009; or
Proposed Sober Living -City Settlement
July 8, 2008
Page 3
The date an operator's lease expires to use the property. This is only applicable if the
lease was entered into prior to December 7, 2007; or
The date that an operator's State license expires (ADP licenses are good for up to 24
months if not revoked or if uses are unchanged).
... whichever of the above three criteria is sooner. An operator can ask a Hearing Officer for an
extension of the abatement period, subject to certain findings. The Hearing Officer's extension
decision can be appealed to the City Council. All facilities shown in Table 2 that were required to
apply for a use permit, but did not, were issued abatement letters by the City on May 23, 2008,
beginning the abatement process.
Table 2
Beds by • .
•
ry
Operator Name
188
18 t
t8
238 2
Sober Living b the Sea
72 0
0
49 4
49
— Balboa Peninsula/West Newport
40
56 5
56
35 2
Lido Isle
12 C
Closed
16 0
0
Total Sober Living b the Sea
0
t5 0
0
17 C
Momin side Recovery
8 C
Closed
11 1
11
Narconon Southern California
6
0 1
12
12 1
Ocean Recovery & affiliates
60 0
0
679 4
419
Yellowstone Recovery
Newport Coast Recovery
The Shores Treatment/Recovery
Lynn House
Dana Road Sober Living
911 East Balboa
115 39th Street "The Beach House"
Seaview Sober Living
Balboa Horizons Recovery
Adelante Recovery
Miramar Recovery affected b stay)
Kramer Center
Pacific Shores Recovery
Estimated Totals
Recove Beds
Beds in Mid - p
Submded via UP
220 1
188
18 t
t8
238 2
204
72 0
0
49 4
49
66 4
40
56 5
56
35 2
29
12 C
Closed
16 0
0
6 0
0
t5 0
0
17 C
Closed
8 C
Closed
11 1
11
6 6
6
0 1
12
12 1
12
60 0
0
679 4
419
E. The Use Permit Process. As noted in Table 1, existing non- conforming uses and new uses
in the Multi- Family Residential ( "MFR') Zone had to apply for a Use Permit to remain in
operation or to start operation. The key provisions of this process follow:
— Timing. Any existing operator had to apply for a Use Permit by May 22, 2008.
of operating facilities consistent with any applicable laws, and
Proposed Sober Living -City Settlement
July 8, 2008
Page 4
that the applicant operating under a Use Permit will operate in a manner that minimizes
adverse impact on facility residents, neighbors, the community, or the character of the
neighborhood and that the use conforms with established industry standards for the well-
being of the facility residents. Each applicant had to describe:
• Facility users (staff, clients, visitors, more).
• Characteristics of the use (hours of operation and more).
• Transportation and parking, including routes used to transport clients.
• Similar uses nearby.
• Proposed operations and a management plan, including data about the applicant,
co- owners, partnership information, a medical waste disposal plan, and more.
• Occupancy levels.
• The applicant's license and permit history — including revocations or suspensions.
• Similar operations owned or operated by the applicant in California within the past
five years, as well as any violations of state or local law, revocations and
suspensions of licenses or permits associated with any of those locations, and
• A declaration that the applicant/operator has not violated any laws, regulations, or
ordinances at any of its locations, or if so, to specify such violations.
3 — Notice and Hearing. Per Council Policy F -26, the City has designated three hearing
officers (Charles Vose, Thomas Allen, and Judy Sherman) to approve, conditionally
approve, or disapprove group residential Use Permits at noticed public hearings. Decisions
of the hearing officers may be appealed to the City Council. While no hearings have yet
been set as of the date of this report (most applications are undergoing completeness
reviews), the City will mail or deliver notice of the public hearing for each Use Permit for a
group residential use in a residential district to owners and occupants of property within 300'
of the proposed use ten (10) business days prior to a public hearing on the use.
4 — Standards. Any Use Permit issued must adhere to these specific standards if
applicable to the use:
• No secondhand smoke can be detectable outside of the property.
• Operations must comply with state law, local law, the submitted management plan,
including any modifications to the plan required in the Use Permit.
• A contact name and number must be provided.
• No one can provide services that require a license if they don't have a license for
those services.
• There shall not be more than two persons per bedroom plus one additional resident.
If an applicant wants to put more than 2 persons in one or more bedrooms, the
applicant must request greater occupancy. The Hearing Officer may set different
occupancy limits based on structure characteristics, traffic and parking impacts, and
the health, safety, and welfare of the persons residing in the facility and
neighborhood.
• Where certification from a responsible entity other than ADP's licensing program is
available to an operator (like the Orange County Sheriffs sober living facilities
certification program or certification offered by the Orange County Sober Living
Network), applicants must get that certification.
• Every individual or entity involved in the facility's operation or ownership shall be
disclosed to the City.
Proposed Sober Living -City Settlement
July 8, 2008
Page 5
No owner or manager shall have any demonstrated pattern or practice of operating
similar facilities in violation of law whether in or outside of Newport Beach.
5 — Findings. In addition to the findings set forth in the provisions governing Use Permits
generally, Ordinance 2008 -05 provides that the Hearing Officer can approve a Use Permit
only if certain findings can be made:
• The project has adequate parking on -site.
• Traffic and transportation impacts have been mitigated to a level of insignificance.
• Structures are suitable for the use.
• The use will be compatible with the character of the neighborhood and will not create
an over - concentration of residential care uses nearby. To make or sustain these
findings, the Hearing Officer will consider as appropriate the following factors:
How close the proposed use is to schools, parks, other group homes, and
alcoholic beverage outlets (and more); and
Whether the existence of non - standard lots and other property characteristics
made such a use inappropriate; and
Whether the Hearing Officer should deem that the American Planning
Association's (APA's) standard of permitting one or two group uses per block
would be appropriate in this case OR whether a greater degree of separation is
appropriate. The Ordinance describes facts in Newport Beach relating to blocks,
which include:
• Blocks in some neighborhoods can be as short as 300'.
• Other blocks In town can be as long as 1,422'.
• The calculable average block length in an area characterized by standard
subdivisions is 711'.
• The calculable median block length in an area characterized by standard
subdivisions is 617'.
If the Hearing Officer applies the APA standard, he or she is directed to do so in
a manner that eliminates the differences in block lengths and guided by the
median block lengths in standard subdivision areas of the city. The Hearing
Officer retains the discretion to apply ANY degree of separation of uses which he
or she deems appropriate.
That vans, shuttles, or buses for transportation of clients will not generate more
traffic than normally generated by residential activities nearby.
That the operations do not have goods delivery, service deliveries or commercial
trash collection during hours that would cause an adverse affect to the peace and
quiet of neighboring properties.
6 — Revocation of the Use Permit. The Ordinance provides that that the Hearing Officer
can revoke a UP (similar to other uses subject to a UP) if these findings are made:
• The permit was issued under erroneous information or misrepresentation; or
• The applicant made a false or misleading statement of material fact, or omitted a
material fact; or
• The conditions of use or other regulations or laws have been violated; or
• There has been a discontinuance of use for 180 days or more.
Proposed Sober Living -City Settlement
July 8, 2008
Page 6
LEGAL ISSUES
Since adoption in February 2008, Ordinance 2008 -05 and the City's actions have been subject
to multiple legal activities, including:
• A lawsuit from a residents' group (the "Concerned Citizens of Newport Beach" or "CCNB ") arguing
that the City did not go far enough in enacting Ordinance 2008 -05. CCNB also sued multiple
operators and asked for $250 million in damages from the City.
• A filing with the US Department of Housing and Urban Development (HUD) alleging that the City's
ordinance and its practices have discriminated against persons entitled to fair housing — filed
separately by Pacific Shores Recovery and Sober Living by the Sea.
• A lawsuit from the City against Morningside Recovery and Pacific Shores Recovery that some of their
operations began illegally during a short-term temporary moratorium against the establishment of new
group residential uses.
• A "cross - complaint" by the City against Sober Living by the Sea and CCNB that consolidated their
lawsuits in US District Court.
In part to resolve the SLBTS and CCNB issues, the City asked each party to participate in a
supervised mediation in early June 2008. All three parties agreed to do so, and all three parties
participated in all or part of the mediation. The mediation resulted in a "Term Sheet" between
SLBTS and the City's representatives that SLBTS and the City agreed should be written into the
form of a "development agreement" between SLBTS and the City. Mediation discussions are
continuing with CCNB.
What does the Proposed Term Sheet Look Like? Here are the key provisions of the City -
SLBTS Term Sheet:
I — BED CAPS (limitations) — Citywide and Peninsula/West Newport/Lido Isle
• Overall IimitIcap for SLBTS citywide: Would initially go to 156 beds, down from up to 238 beds in
mid -2007 ( Citys estimate) and 204 beds by May 22, 2008 (204 were submitted by SLBTS within the
Use Permit process). This is a 34% reduction from mid -2007. SLBTS can go back up to a
permanent cap of 204, but the additional 48 beds must go in MFR and entirely off of the
Peninsula/West Newport/Newport Shores /Lido area. SLBTS can only add beds above the 156 count
when they have completed the "one building per block" dispersion below.
• The limits /caps apply to all beds, whether in licensed facilities (Large facilities or ADP - licensed "6
and Unders ") and all unlicensed SLBTS facilities.
• Peninsula/West Newport/Newport Shores permanent subcap: 144 beds for SLBTS (35% reduction).
• Lido permanent subcap: 12 beds for SLBTS (33% reduction).
II — ONE BUILDING PER BLOCK & DISPERSION
• SLBTS agrees to move property leases upon expiration of these leases to one building per block
(block is an area bounded byfour streets, not alleys). Exception to this is limited to:
o 11240th Street and 3960 -3980 Seashore (longtime SLBTS properties).
• All locations where there are currently more than one building per block shall be relocated to an
address where there would be one per block and none across a bordering street after the move.
Exceptions to this are:
0 122 45th Street can stay near 4500 Seashore;
o 4800 Seashore can stay near 4711 Seashore; and
o 6110 Oceanfront can stay near 6111 Seashore.
• As a result, up to 10 separate units with up to 50 beds (about 1 /3rtl of SLBTS beds) will move.
• 4816 Seashore (alleged to have opened without first obtaining a use permit) must close.
Proposed Sober Living -City Settlement
July 8, 2008
Page 7
A duplex with clients in each unit counts as one building.
SLBTS facilities shall be located more than 1,000' away from elementary schools and known licensed
day care facilities as of the date of this Agreement.
SLBTS shall not have facilities on any street immediately adjacent to certain tot lots.
III - OPERATIONAL IMPROVEMENTS
• SLBTS shall abide by all operating standards in Ordinance 2008 -05, including:
• Continue operating policies which ensure compliance with City codes on trash receptacles and
enclosures.
• Management/containment of 2nd -hand smoke.
• Parking consistent with City's existing residential standards (i.e.: At least 2 off - street parking
spaces per building).
• Implement the same Route Plans as SLBTS has in the UP Applications for transport of staff and
clients to and from meetings, school, jobs, etc.
• Limit business deliveries to its residential facilities to weekday common business hours.
• Maintain curfew (Sun - Thurs 10:00 p.m. -7:00 a.m., Fri -Sat 11:00 p.m. -7:00 a.m.)
• Medical waste, if any, shall be disposed of in proper manner in accordance with NBMC.
• SLBTS shall accept no parolees.
• SLBTS will establish and maintain a 24 -hour hotline for residents' inquiries, concerns.
• SLBTS shall participate in a larger Stakeholders Group led by the City to address neighborhood
complaints and concerns.
IV - OTHER
• SLBTS would dismiss HUD complaint, send letter to HUD requesting no further action.
• Upon approval of Agreement and upon effective date of ordinance implementing Agreement, SLBTS
will dismiss lawsuit against Ordinance 2008 -05.
Why is this in the form of a Development Agreement? While a development agreement is most
often used in situations where substantial construction or development is involved, it is legally
appropriate to use it here. A development agreement is an often used mechanism to "vest" land
use rights for a period of time, establish a customized solution for specific land use issues with
unique characteristics, and provide public benefits to the City. It is a negotiated understanding
between the City and an applicant that is supported by a detailed, formal agreement. For
example, it may contain standards and restrictions that, if violated, provide for penalties and
sanctions. In Newport Beach, development agreements must be approved via a public process
through adoption of a formal Council ordinance. Prior to Council action, the Planning
Commission must hold a public hearing and make a recommendation. The City Council must
hold a public hearing for public review and comment. An important advantage of development
agreements is that they provide a means for the City to achieve greater regulation and benefits
than would otherwise be available through existing regulations. In this case, for example, the
City will be able to limit the number of licensed six and under facilities operated by Sober Living,
a major benefit not achievable under the use permit process or the City's group homes
ordinance.
How does this address what CCNB representatives asked for? At the City Council's meeting of
June 10, 2008, CCNB spokesperson Dan Welden said the following:
MR. WELDEN: ... We, the citizens, wanted to work towards both the City and the citizens compromising
and aligning themselves to reach the same goals. These goals were:
• To set guidelines to how many beds for the total City;
Proposed Sober Living -City Settlement
July 8, 2008
Page 8
City Response: As of the deadline to apply for a Use Permit under Ordinance 2008 -05, applications
for 404 beds citywide were received. Using CCNB's count of 1,000 beds citywide," this is a bed
reduction of 59.6 %. Using the City's verified count of 672 beds citywide as mid -2007, this is a
reduction of 40%.
The proposed settlement with SLBTS brings the bed count down even further citywide, to 356 beds,
again before any Use Permit applications have even been set for hearing. This is a 64.4% reduction
using CCNB's count and a 44% reduction using the City's count. Importantly. the proposed
• To spread out the beds so we do not have overconcentration as we have it today;
City response: City code enforcement, the proposed settlement and the Use Permit process could
lead to major improvements to reduce overconcentrated areas. For example, using mid- 2007's bed
count:
• The 401h Street - 39"' Street Area goes from 69 beds to 20 beds;
• The 43rd — 52nd Street — River — Seashore Area goes from 162 beds to 60 beds:
• Lido Isle goes from 18 beds to 12 beds (with a SLBTS cap of 12).
• To make sure they are not close to schools, day care, etc.;
City response: The proposed settlement directs that no SLBTS facility — licensed or unlicensed, small
or large — can be within 1,000' of an elementary school or of known licensed day care facilities. The
proposed settlement directs that SLBTS homes can not be on streets adjacent to certain tot lots.
• To reduce the concentration we have on the Peninsula, the impacted zone; to vastly reduce the
number of beds in the same impacted zone relative to its population;
City response: Even before a Use Permit hearing has occurred, there appears to have been a
significant bed count reduction in the "Impacted Zone," which CCNB generally refers to as the
Peninsula, West Newport, Newport Shores, and Lido Isle. Using the Citys verified count of 535 beds
in this Zone as of mid -2007, operators managing 349 beds submitted Use Permit applications (a
reduction of 35 %).
The proposed settlement with SLBTS brings the bed count down even further in the Zone, to 301
beds, again before any Use Permit applications have even been set for hearing. This is a 44%
reduction from Zone beds in mid -2007 using the City's count.
CCNB also had asked for a 100 bed cap in the Zone. This is unrealistic to achieve via any settlement
With SLBTS. Just counting ADP - licensed beds alone, there are up to 173 beds with non -SLBTS
operators within the Zone.
to make sure that this never happens to the City again.
City response: The proposed City -SLBTS settlement is groundbreaking — it applies a bed cap and
dispersal to all SLBTS facilities, including small ADP - licensed facilities which our Ordinance alone
cannot do. With a suspension of the SLBTS lawsuit, the City can progress forward in enforcing its
Ordinance with other operators — meeting CCNB's goal, and the City's goal, of reducing
overconcentration now and into the future.
What's Next? Tonight's item is a "receive and file" item, allowing public discussion about the
proposed settlement with Sober Living by the Sea. Staff, including special legal counsel, is now
preparing the draft Development Agreement. The Agreement is subject to three public
meetings — one before the Newport Beach Planning Commission, and two before the Newport
Proposed Sober Living -City Settlement
July 8, 2008
Page 9
Beach City Council. The city hopes to have these public meetings on Thursday, July 17, 2008
and Tuesday, July 22, 2008 respectively. A second City Council meeting on August 12, 2008
will take place to finally adopt the ordinance approving the Development Agreement.
Prepared and Submitted by:
Dave Kiff, Assistant City Manager
Attachment: Media Release dated June 27, 2008
Proposed Sober Living -City Settlement
July 8, 2008
O`�arPOgr Page 10
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u s ATTACHMENT:
�� /kOAd�P Media Release dated June 27, 2008
FOR IMMEDIATE RELEASE Contact: Tara Finnigan
June 27, 2008 Public Information Manager
949 - 644 -3035
Newport Beach Reaches Tentative Settlement with Group Home Operator
NEWPORT BEACH, Ca. — Representatives of the City of Newport Beach and Sober Living by
the Sea (Sober Living), a subsidiary of CRC Health Group, reached a tentative settlement
regarding the group home operator's recovery facilities in Newport Beach that will significantly
reduce over - concentration of recovery facilities on the Balboa Peninsula and citywide, and place
a "bed cap" on Sober Living's facilities. The settlement will be subject to the negotiation of a
definitive agreement documented in the form of a publicly disclosed "development agreement,"
and will not be final until reviewed and approved by the Planning Commission and the City
Council in publicly noticed proceedings.
"Thanks to the cooperation of Sober Living, this agreement will result in a dramatic and
permanent reduction in the over - concentration of recovery facilities. In conjunction with the
reduced number of facilities eligible to apply for use permits under the City's recently enacted
group homes ordinance, the settlement is expected to result in bed count reductions of 47
percent citywide and 44 percent on the Balboa Peninsula, the area of our city with the highest
over - concentration of recovery facilities," said Mayor Edward Selich.
Sober Living is the largest operator of recovery facilities (both licensed treatment and
unlicensed "sober living ") in Newport Beach, with roughly 35 separate facilities and, at one time,
approximately 238 beds.
"Sober Living is by far the largest and financially most capable operator of recovery homes in
Newport Beach, and is a leader nationally in the recovery community, so its willingness to agree
to less concentration is a major step forward for us all," said Council Member Mike Henn. "This
agreement, if approved as anticipated, will also save the City potentially hundreds of thousands
dollars in legal fees and limit the risk of additional damage awards or adverse changes in the
ordinance, if the litigation over the group homes ordinance were to continue."
In the tentative settlement, Sober Living agreed to the following conditions:
Proposed Sober Living -City Settlement
July 8, 2008
Page 11
• Reduce the number of use permit applications for facilities in Newport Beach such that
its initial city -wide bed count will be reduced to a total of 156, from its peak of about 238
beds in mid -2007.
• Limit permanently its citywide bed count to a maximum of 204 beds, with no increases
above the initial 156 limit allowed until such time as the block by block de- concentration
of facilities on Balboa Peninsula described below is completed.
• Limit permanently the number of beds on the Balboa Peninsula to 144 and on Lido Isle
to 12.
• De- concentrate its facilities on the Balboa Peninsula and relocate up to five existing
facilities away from facilities on the same block to attain (with a few specified exceptions)
the "one facility per block" guideline in the City's recent ordinance.
• The conditionally allowable increase of 48 beds that would take Sober Living up to its
permanent citywide cap of 204 requires that any newly added beds over and above the
initial limit of 156 must be placed in Multi - Family Residential (MFR) districts in areas
other than on the Balboa Peninsula, Lido Isle, Newport Shores and West Newport.
• Limit over - concentration for A types of recovery facilities, including state - licensed
treatment homes with six or fewer residents. This is the first time that Sober Living, or
any operator in Newport Beach, has agreed to such a condition. The City's recent
ordinance could not go that far, because state law does not allow the City to otherwise
regulate or control the number and location of licensed six - and -under facilities through
anything but a voluntary and cooperative agreement like the one proposed.
• Maintain a 1,000 -foot separation from elementary schools and licensed day care
facilities. In addition, Sober Living agreed that facilities cannot be on streets adjacent to
certain tot lots.
• Ensure that properties adhere to strict operating standards, often the standards that
Sober Living already applies to its clients and facilities, which limit the impact of each
location on its neighbors.
Proposed Sober living -City Settlement
July 8, 2008
Page 12
• Drop its lawsuit against the City's ordinance and drop the pursuit of other legal claims
associated with the City's actions and ordinance.
"This settlement is a significant milestone, but there is more activity to be completed. Over the
next few months, another dozen or so facilities with approximately 173 beds will be subject to
public hearing as part of our use permit process," explained Henn.
"When we started to tackle this issue almost two years ago, Newport Beach willingly entered
into un- charted territory knowing that just about every group home operator and many California
cities were watching and waiting to see how we would fare. This settlement is proof — we hope —
that we've set a course of cooperation others can follow that benefits both residential
neighborhoods and persons in recovery," said Jim Markman, special counsel to the City with
Richards Watson Gershon.
On Saturday, June 14, City representatives met with Concerned Citizens of Newport Beach
(CCNB) in a continuation of the City- initiated mediation under the direction of retired Judge Gary
Taylor. The third party in the mediation was Sober Living. The City presented CCNB with the
proposed settlement terms described above, along with a monetary settlement in favor of
CCNB. Although CCNB settlement discussions are continuing, the City believes that the
settlement terms with Sober Living are consistent with the publicly stated goals of CCNB, which
include:
• De- concentration of the existing over - concentration on Balboa Peninsula
• Bed caps applicable to the City and the Peninsula
• 1,000 -foot distancing from elementary schools, licensed day care and certain tot
lots.
• Strong operating standards consistent with the City's recently- adopted ordinance.
"We believe that the settlement terms substantially met all of the publicly stated goals of CCNB.
We hope CCNB decides to participate in the settlement, as we believe that this settlement is in
the best interests of the residents of our city," said Council Member Nancy Gardner.
-30-
James L. Markman
Richards Watson & Gershon
P O Box 1059
Brea, CA 92 822 -1 05 9
Dear Mr. Markman:
C. EDWARD DILKES
ATTORNEY AT LAW
2443 PARK OAK DRIVE
HOLLYWOOD, CALIFORNIA 90068
TELEPHONE (323) 466 -1147
July 7, 2008
"RECEIVED AFTER AGENDA
PRINTED:" 1F5 '1•,;V09
TELECOPIER: (323) 466 -8360
EMAIL: EDILKES@ EARTH LINK. NET
Delivered by Email and First Class Mail
Re: Response to Statement By Michael Tidus
When we spoke, earlier this week, you indicated that Michael Tidus, claimed that someone
representing Sober Living By The Sea, Inc. had told him, in the Fall of 2007, that SLBTS
would reduce the number of program participants in Newport Beach to some figure roughly
equivalent to the number discussed in the Term Sheet, dated June 13, 2008. Since he has a
habit of grandstanding such comments, I thought it appropriate to send this letter.
I have spoken to all of those who work at SLBTS or represent that entity, and who might have
spoken to Mr. Tidus or members of his client group. None of us ever told him that SLBTS
was _proared to close any facilities or reduce the number of program participants in Newport
Beach.
During the Fall of 2007, I tried to figure out how to get a list of issues from his clients and to
open discussions. Mr. Tidus responded that all discussions should be postponed until after a
lawsuit was filed. For example, he called me on November 19, 2007, from his car. I proposed
we discuss how to head off the cost and disorder attendant with the litigation that loomed in
the future. No terms were discussed. He said, "I don't think so. You and others will go to
court to protect your interests,. . . We will deal with the players, then." I told him, that I
thought it would be harder to resolve the dispute, after both sides were locked in to litigation
strategies. He said, "My clients do not necessarily see litigation as a bad thing, and would
prefer to work out any settlements in that context." The conversation concluded, because his
battery ran out.
We have told Mr. Tidus that his clients have until July 23, 2008 to dismiss their suit, under
the terms that were proposed nearly a month ago. After that date, all offers in regard to their
claims are automatically withdrawn, and SLBTS will proceed to seek dismissal of their suit.
July 7, 2008
page 2
We believe that the City has worked, in good faith, and we will continue to work with you to
produce an agreement that benefits all parties. As to Mr. Tidus and his clients, we have made
every effort to prevent the current stalemate, but progress is frustrated by the fact that they
seem more interested in public posturing than serious discussion.
If there is any further information that you require, please feel free to call on me.
Very truly yours,
/signed CED/
C. Edward Dilkes
CED /ss
Cc: Edward D. Selich, Mayor
and Members of the City Council
of the City of Newport Beach
SLBTS -City Settlement
As Proposed
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Newport Beach City Council
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Tuesday, July 8t ", 2008
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What We'll Cover
• Actions since City's Group Residential
Ordinance's adoption (January 2008)
• Administrative
• Legal
• SLBTS -City Proposed Settlement
• Key concepts
• How it affects specific neighborhoods
• What's Next
• Where to find out more information
Actions since January 2008
• Ordinance 2008 -05 took effect Feb 2008.
• Administrative Actions:
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• Operators had 90 days (to May 22, 2008) to apply for Use
Permits. Those that did (41 addresses /401 beds) are:
• Sober Living by the Sea (30 addresses /204 beds)
• Yellowstone Recovery (4/56)
• Narconon Southern California (1/49 occupants)
• Ocean Recovery (2/40 beds)
• Newport Coast Recovery (1/29)
• Kramer Center (2/12)
• Balboa Horizons Recovery (1/11)
Actions since January 2008
. Administrative Actions (cont'd):
• Those that did not apply include about 18
buildings with about 220 beds:
• Pacific Shores Recovery (3 buildings /60 beds)
• Morningside Recovery (5 -6 buildings /60 -72 beds)
• The Shores Treatment (closed)
• Lynn House (1 home /16 beds)
• About 7 -8 other facilities (up to 79 beds)
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• Notices of Abatement sent May 23, 2008 to each.
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Actions since January 2008
• Legal Actions:
• Pacific Shores Recovery and SLBTS filed suit under Federal and
State Fair Housing laws to block Ordinance from taking effect
and claiming damages.
• Pacific Shores Recovery and SLBTS filed federal housing
discrimination complaints against the City's actions.
• Concerned Citizens of Newport Beach (CCNB) sued City for
$250 million and sued operators.
• City filed cross - complaint against operators to consolidate
lawsuits in US District Court.
• SLBTS filed motion to enjoin City from enforcing our ordinance.
Judge James Selna blocked only the portion of the ordinance
dealing with ADP - licensed "6 and Unders" operating integrally
with each other.
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Actions since January 2008
• Legal Actions (cont'd):
• City asked SLBTS and CCNB to enter into
mediation (held June 5 -6, 2008).
• SLBTS and City met for two days and developed
Term Sheet.
• Term sheet to become a Development Agreement.
DA subject to public hearings before the:
• Planning Commission (once); and
• City Council hearings (twice).
• City -CCNB negotiations continue.
About the Proposed
SLBTS -City Settlement
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Proposed Settlement Terms
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— Caps on Beds — Citywide and Peninsula/West Newport/Lido Isle
Overall bed cap for SLBTS citywide:
• SLBTS would initially go to 156 beds, down from up to 238 beds in
mid -2007 (City's estimate) and down from 204 beds submitted by
SLBTS within the Use Permit process in May 2008).
• SLBTS can go back up to a permanent cap of 204, but:
• The additional 48 beds must go in MFR and entirely off of the
Peninsula /West Newport/Newport Shores /Lido area.
• Additional 48 beds subject to 1 building /1 block.
• SLBTS can only add the additional 48 beds when they have completed I
building /1 block dispersion.
The limits /caps apply to all beds, whether in ADP - licensed facilities
(including "6 and Unders ") and all unlicensed SLBTS facilities.
• Peninsula/West Newport/Newport Shores permanent subcap: 144
beds for SLBTS (35% reduction).
• Lido permanent subcap: 12 beds for SLBTS (33% reduction).
gTS Bed Caps/buDcaF
Proposed Settlement Terms
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II —DISPERSION (1 BUILDING /1 BLOCK)
• SLBTS agrees to move property leases upon expiration of these leases
to 1 building per block (block is an area bounded by four streets, not
alleys). Exception to this is limited to:
• 112 40th Street and 3960 -3980 Seashore (longtime SLBTS properties).
• On blocks in which there are currently more than 1 building per block,
SLBTS shall relocate to an address where there would be 1 per block
with none across a bordering street after the move. Exceptions:
• 122 45th Street can stay near 4500 Seashore;
• 4800 Seashore can stay near 4711 Seashore; and
• 6110 Oceanfront can stay near 6111 Seashore.
• As a result, up to 10 separate units with up to 50 beds (about 1 /3rd of
SLBTS beds) will move.
• 4816 Seashore (alleged to have opened without first obtaining a use
permit) must close.
• A duplex with clients in each unit counts as one building.
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Proposed Settlement Terms
II — DISPERSION (DISTANCES & ADJACENCIES)
• SLBTS facilities shall be located at least 1,000' away from
elementary schools and known licensed day care facilities as of
the date of this Agreement.
• SLBTS shall not have facilities on any street immediately
adjacent to certain tot lots.
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Proposed Settlement Terms
III —OPERATIONAL IMPROVEMENTS
• SLBTS shall accept no parolees.
• SLBTS shall abide by operating standards in Ordinance 2008 -05, including:
• Continue operating policies which ensure compliance with City codes on trash
receptacles and enclosures.
• Management/containment of 2nd -hand smoke.
• Parking consistent with City's existing residential standards (i.e.: at least 2 off - street
parking spaces per building).
• Implement the same Route Plans as SLBTS has in the UP Applications for transport of
staff and clients to and from meetings, school, jobs, etc.
• Limit business deliveries at residential facilities to weekday common business hours.
• Maintain curfew (Sun - Thurs 10:00 p.m. -7:00 a.m., Fri -Sat 11:00 p.m. -7:00 a.m.)
• Medical waste, if any, shall be disposed of in accordance with NBMC.
• SLBTS will establish and maintain a 24 -hour hotline for residents' inquiries,
concerns.
• SLBTS shall participate in a larger Stakeholders Group led by the City to
address neighborhood complaints and concerns.
Proposed Settlement Terms
IV — OTHER
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SLBTS would dismiss HUD complaint, send letter to HUD
requesting no further action.
Upon approval of Development Agreement and upon effective
date of ordinance implementing Agreement, SLBTS will dismiss
lawsuit against Ordinance 2008 -05.
Proposed Settlement Terms
What's Important:
• Control over ADP - Licensed 6 and Unders. State law doesn't grant any city
in California this ability.
• Our "integral facilities" language was blocked by US District Court — the
settlement results in the same control the Ordinance would have allowed.
• Ordinance can go forward. One legal challenge to it ends.
• 1 Building /1 Block. Ordinance would have allowed a hearing officer to
consider placement of "one or two" per block.
• 1,000' from elementary schools, licensed day care. Ordinance could not
impose any distance from these uses.
• No parolees.
• Mirror operational standards (curfew, trash control, medical waste, more) in
Ordinance, plus:
• 24 -hour hotline
• SLBTS leads stakeholders group to address concerns in the future
How this Affects Certain
Neighborhoods
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39th Street Area
ILLUSTRATION OF BLOCK DE-CONCENTRATION
391h Street Area
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Recovery Beds by Operator
Significant Assumptions:
• SLBTS successfully disperses.
• Non-SLBTS operators that applied
for use permits get full amount of
beds.
• Operators that did not apply for UPs
but needed them are all abated.
• Development Agreement
• RWG to draft DA, followed by review by City Attorney and City
Council.
• Heard before Planning Commission in public setting.
• Heard before City Council twice in public setting, adopted as an
Ordinance.
• Use Permit hearings for other operators.
• City has finished completeness reviews, responded back to
applicants asking for additional information.
• Hearings pending in 60 -90 days.
• Abatement proceedings continue for those that chose not to
apply for permits.
• Have until Feb 2009 or end of lease, whichever is sooner.
• City sent out abatement letters representing about 220 beds on
May 23, 2008.
For More Information
• City's website:
• Materials regarding settlement, use permits,
media information on City's website at
www. cif. newport- beach, ca. us then "Group
Residential Uses"
• Send us an e-mail if you're interested in
being notified of Use Permit hearings.
• dkiff @city.newport- beach.ca.us
• Call us at 949 - 644 -3002
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