HomeMy WebLinkAboutSS2 - Re-use of Current City Hall Site - PowerPointAgenda Item No. SS2
a September 11, 2012
Existing City Hall Complex Reuse
U P DATF
33oo Newport Boulevard and 475 32nd Street
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City Council
Study Session
September 11, 2012
eduction
What is the appropriate future use of the City
Hall site?
In April 2012, Council authorized the initiation of amendments to the General Plan,
Coastal Land Use Plan, and Zoning Map to allow "Mixed Use Development" on the
4.26 -acre site.
What are the proposed elements of the Mixed
Use designation?
Maximum of gg residential units plus a maximum of 15,000 square feet of
commercial; OR
Maximum of 78 -room Hotel
Community Development Department September 10, 2012 z
Site Size
4.26 acres gross
3.96 acres net
(approximately)
Buildina Area
54,000 sq. ft.
(includes
fire station #2)
Designated
"Public Facilities"
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Community Development Department September 10, 2012
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Background
In addition to the various land use amendments, Staff
is concurrently preparing a Request for Qualifications
package
In June 2012, Council requested a Hotel
Feasibility /Market Analysis
F Staff contracted with PKF Consulting
Combined that work with an analysis by Keyser- Marston
Community Development Department September io, zoiz L
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The market is capable of supporting 2 Hotels in Lido Village
The City Hall site is well- suited for the development of an Upscale
Boutique Hotel
The site's existing lot configuration is acceptable given the site's
extensive frontage on Newport Blvd and 32nd Street
The location of Fire Station #2 is not a negative consideration in
redeveloping the site as a Hotel
3 Hotel Sizes were studied:
■ 78 rooms
■ Zoo rooms
■ 15o rooms
Community Development Department September io, zoiz
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Hotel Type
Hotel rooms
Stabilized
Occupancy
Average Daily
Rate (2012 $)
C,
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Upscale Boutique Upscale Boutique Upscale Boutique
i Lee
76%
$220
W9161
75%
$210
Community Development Department September 10, 2012
150
72%
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0
All three options are viable (78, loo, or 150
rooms)
However, PKF's recommended Upscale
Boutique Hotel size is 12o rooms.
This size has enough critical mass to be
economically justified while keeping in character
with the site and surrounding neighborhood
Community Development Department September 10, 2012
Analyzed 4 Land Use Alternatives:
■ 78- Room Hotel
■ 120 -Room Hotel
■ 92M a rket- Rate Rental Units + 6,00o SF of Retai
■ gg Market -Rate Rental Units
Assumed several Public Benefits (Land value
offsets):
Main Public Plaza and Promenade on site
■ Pedestrian Promenades on 32nd Street, Via Malaga, Via Oporto
Fire Station reconstruction onsite (50% of Cost)
Community Development Department September 10, 2012 8
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amparison Chart
Comparison of Scenarios
PKF Consulting
Scenario
78 -room Hotel
120 -room Hotel
Development Cost
$18,500,000
$29,800,000
Public Improvements
Low High
Low High
Pubic Improvements cost
$5,569,519 $8,950,105
$5,569,519 $8,950,105
Land Value Upon Completion
$27,500,000
$40,900,000
Residual going -in Cap Rate
n/a n/a
n/a n/a
Residual Terminal Cap Rate
8.5% 8.5%
8.5% 8.5%
Residual Discount Rate
11.0% 11.0%
11.0% 11.0%
Residual Land Value (After Public
F
F
Improvements)
$3,430,481 $49,895
$5,530,481 $2,149,895
Representative Year Economic Impact
$20,600,000
$29,400,000
10 Year ( 2015 -2024)
$254,249,861
$362,006,807
Community Development Department September io, 2012
Community Development Department September io, 2012
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Comparison
Chart
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Comparison of Scenarios
Keyser Marston
Scenario
92 -unit Apartment; 6,OOOSFretail
99 -unit Apartment
Development Cost
$34,062,000
$34,919,000
Public Improvements
Low
High
Low
High
Pubic Improvements cost
$5,569,519
$8,950,105
$5,569,519
$8,950,105
Land Value Upon Completion
$52,236,000
$54,075,000
Residual going -in Cap Rate
6.1%
6.1%
6.0%
6.0%
Residual Terminal Cap Rate
n/a
n/a
n/a
n/a
Residual Discount Rate
n/a
n/a
n/a
n/a
Residual Land Value (After Public
Improvements)
$12,604,481
$9,223,895
$13,586,481
$10,205,895
Representative Year Economic Impact
$2,069,000
$2,227,000
10 Year (2015 -2024)
$25,918,136
$27,897,385
Community Development Department September io, 2012
Apartment scenarios have a higher development cost
compared to either Boutique Hotel scenario
■ Apartment scenarios also have a higher land value upon
completion
Therefore, the potential annual ground rent will be higher for
Apartment scenarios
■ However, the Boutique Hotel's direct and indirect annual
economic impact on the local community is nearly zo times
more a year ($20.6 Million v. $2.07 Million) than Apartment
scenarios
■ The annual transient occupancy tax (TOT) of the Boutique
Hotel Scenarios ranges from $476,00o to $680,700 per year
Community Development Department September io, zoiz
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The City Hall site is well- suited for an Upscale
Boutique Hotel or Market Rate Apartment
Community
Both land uses are economically viable and
will have a positive impact on the community
78 -room versus 120-room hotel option
suggests a Measure S review (for the 120
rooms) and possible election
Community Development Department September io, 2012
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,,,.�xt Steps
Staff will proceed with Mixed Use Land Use Amendments;
City Council (evening) meeting on September 25, 2012—
Final market and economic studies will be made available in advance;
Council direction sought regarding consideration of a 120 -room Upscale
Boutique Hotel in the Land Use Amendments
Should Request for Qualifications be issued for both options?
78/120- Room Hotel
Maximum 99-unit market rate rental residential development with
ancillary retail
Both RFQs will include the public benefit components
Community Development Department September 10, 2012
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For more information contact:
Kim Brandt, Community Development Director
949-644 -3228
kbrandt@newportbeachca.gov
www.newportbeachca.gov