CITY COUNCIL: Appeal of Planning Commission's Decision to Approve Carmel Sands Redevelopment Project & Adopt Mitigated Negative Declaration

Meeting Date: 14 September 2010
Prepared by: Sean Conroy, Plng & Bldg Services Manager

City Council
Agenda Item Summary

Name: Consideration of an appeal of the Planning Commission’s decision to approve the Carmel Sands Redevelopment Project and to adopt a Mitigated Negative Declaration. The Carmel Sands Lodge is located on the northeast corner of San Carlos Street and Fifth Avenue. The appellant is Barbara Livingston.

Description: The project consists of the demolition of the existing 42-room Carmel Sands Lodge and the construction of a new 42-room hotel that includes a 64-space underground garage, a restaurant, a day spa and two retail spaces. The appellant is requesting that the Council overturn the Planning Commission’s decision to approve the project and is requesting that an Environmental Impact Report be prepared for the project.

Staff Recommendation: Deny the appeal and uphold the Planning Commission’s decision.

Important Considerations: The California Environmental Quality Act (CEQA) requires that a lead agency prepare an Initial Study for all projects that are not categorically or statutorily exempt. An Initial Study is prepared to determine if a project may have a significant effect on the environment. The City prepared an Initial Study for this project and determined that all potentially significant environmental impacts could be mitigated. The Planning Commission, therefore, adopted a Mitigated Negative Declaration for the project.

Decision Record: The Planning Commission approved the project and adopted a Mitigated Negative Declaration on 14 July 2010. An appeal was filed on 27 July 2010.

Attachments:
• Staff Report dated 14 September 2010
• Initial Study/Mitigated Negative Declaration (submitted under separate cover)
• Appeal Information (Attachment “A”)
• Applicant’s Correspondence (Attachment “B”)
• Planning Commission Correspondence Review (Attachment “C”)
• Response to Comments (Attachment “D”)
• Planning Commission Findings and Conditions of Approval (Attachment “E”)
• Hotel Comparison Tables (Attachment “F”)
• Project Plans (Attachment “G”)

Reviewed by:

__________________________ _____________________
Rich Guillen, City Administrator Date

CITY OF CARMEL-BY-THE-SEA
DEPARTMENT OF COMMUNITY PLANNING AND BUILDING
STAFF REPORT
TO: MAYOR MCCLOUD & COUNCIL MEMBERS
FROM: SEAN CONROY, PLNG & BLDG SERVICES MANAGER
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
DATE: 14 SEPTEMBER 2010
SUBJECT: CONSIDERATION OF AN APPEAL OF THE PLANNING COMMISSION’S DECISION TO APPROVE THE CARMEL SANDS REDEVELOPMENT PROJECT AND TO ADOPT A
MITIGATED NEGATIVE DECLARATION. THE CARMEL SANDS LODGE IS LOCATED ON THE NORTHEAST CORNER OF SAN CARLOS STREET AND FIFTH AVENUE.

THE APPELLANT IS BARBARA LIVINGSTON.

INTRODUCTION & BACKGROUND
The Carmel Sands Lodge is located at the northwest corner of San Carlos Street and Fifth Avenue in the Service Commercial (SC) District. The lodge consists of 42 guest rooms and a 120-seat restaurant in three buildings. The site also includes a large surface parking lot and a swimming pool. The buildings on the site are not considered historically
significant. A Determination of Ineligibility for listing on the City’s Historic Inventory was issued on 1 September 2006.

An application was filed in 2008 for the demolition of the existing hotel and the construction of a new 57 room hotel. The Planning Commission (PC) reviewed this project on August 13th, November 12th and December 10th, 2008. The PC continued the project at its 10 December 2008 hearing. The City has a cap on the number of hotel rooms and the applicant had not yet identified where the additional 15 rooms would come from. The PC indicated that more information was needed regarding the addition 15 rooms.

The project was subsequently revised to eliminate the proposal to add 15 rooms. The revised project was then reviewed by the PC at four separate meetings. On 10 March 2010 the PC approved the Design Concept, and on 14 July 2010 the PC approved all development permits and adopted a Mitigated Negative Declaration.

An appeal was filed on 27 July 2010 by Carmel resident Barbara Livingston.

PROJECT DESCRIPTION
The applicant is proposing to demolish the existing buildings on-site and construct a new hotel (see project plans in Attachment “G”). The redevelopment will include the following features:
• 42 hotel rooms in four buildings
• Intra-block walkway and interior courtyard
• Two retail spaces
• Limited use restaurant
• 64-space underground garage
• Day spa facility
• A Porte Cochere vehicle entrance on San Carlos Street

PROJECT DATA FOR A 32,997 SQUARE FOOT SITE:
Site Considerations Allowed/Required Existing Proposed
Floor Area 44,546 sf (135%) 20,780 sf (63%) 39,077 sf (118%)
Building Coverage 31,347 sf (95%) 10,559 sf (34%) 25,052 sf (76%)
Building Height 30 ft. 26 ft. 30 ft.*
Parking 57 spaces 42 spaces 64 spaces
*Applicant is requesting height exceptions for tower elements per CMC 17.14.150.

APPEAL
The appellant is requesting that the City Council overturn the PC’s decision to approve the project and adopt a Mitigated Negative Declaration based on two points, 1) an EIR should have been prepared, and 2) the project has significant drawbacks (see attachment “A”). It is important to note that many of the letters, emails and the petition attached to the appellant’s submittal were addressing the previous proposal of a 57 unit motel, not the current proposal.

EVALUATION
The following section addresses comments raised in the appellant’s letter. The numbers below correspond to the numbers annotated on attachment “A” for reference purposes.

Staff summarizes the concerns raised by the appellant followed by a brief response.
1. The appellant argues that the applicant’s attorney stated in a letter that an EIR should be required for the project.

Response: This letter was in reference to the previous proposal that included 15 new hotel rooms and not to the current proposal, which does not increase the room count. The applicant’s attorney has submitted a letter to the Council indicating that the proposed Mitigated Negative Declaration is appropriate for the project (see Attachment “B”).

2. The primary basis of the appeal is that an EIR should be prepared for the project.
Response: The California Environmental Quality Act (CEQA) requires that a lead agency prepare an Initial Study (IS) for all projects that are not categorically or statutorily exempt. An IS is prepared to determine if a project may have a significant effect on the environment.

Based on the results of the IS, a lead agency may determine whether to prepare a Negative Declaration (ND), a Mitigated Negative Declaration (MND) or an Environmental Impact Report (EIR). A MND can only be adopted if there is no substantial evidence in light of the whole record that the project will have a significant effect on the environment that cannot be mitigated or avoided. CEQA Guidelines Section 15384 defines substantial evidence as:
“...enough relevant information and reasonable inferences from this information that a fair argument can be made to support a conclusion, even though other conclusions might be reached…Substantial evidence shall include facts, reasonable assumptions predicated upon facts, and expert opinion supported by facts.”

The City prepared an IS for this project and determined that a MND was appropriate as all potentially significant impacts could be mitigated. The IS/MND was then circulated for public comment. The City received 10 comments, most of which simply requested that an EIR be prepared (see Attachment “C”). Two comment letters raised questions as to whether sufficient information had been provided in the IS/MND. The City then prepared a Response to Comments that was subsequently reviewed by the PC (see Attachment “D”).

On 9 December 2009 and again on 10 February 2010 the PC determined that the MND was appropriate for the project. The PC determined that the comments had been responded to, and that no substantial evidence of significant environmental impacts had been presented. The PC then adopted the MND on 14 July 2010 (see Attachment “E”).

3. The appellant argues that the project could result in a canyon effect on San Carlos Street if the properties north of Fifth Avenue were built out to the sidewalk.
Response: The ‘canyon effect’ referred to by the appellant is actually a desirable attribute in the commercial district. The General Plan, Zoning Ordinance and Commercial Design Guidelines all encourage properties in the SC District to be built at, or close to the street to create a pedestrian wall (see O1-11, P1-64, & P1-68 of the General Plan, CMC 17.14.130, & Commercial Design Guideline pg. 8).

Even if the City did determine that a canyon effect at this location could be detrimental, the proposed project would not contribute any more to this effect than the existing twostory structure on San Carlos Street already does, which is built to the sidewalk and stretches from lot line to lot line.

4. The appellant argues that public comments were not responded to.
Response: The Planning Commission reviewed and considered all public comments, both oral and written. The Commission determined that all of the comments were appropriately addressed through the IS/MND, the Response to Comments (see Attachment “D”) and the deliberation of the Commission.

5. The appellant argues that the mass and scale of the project are inappropriate.
Response: The majority of commercial building sites in the City are between 2,500 and 8,000 square feet in size. Most of these small commercial sites were developed independently with a wide array of architectural styles. The architectural variety and small building sites contribute to the unique character of the City.

Apart from the Carmel Plaza, the majority of sites larger than 8,000 square feet are occupied by hotels. While most of the commercial buildings are modest in size and scale, many of the hotels are much larger in scale and generally consist of a single architectural style. Hotels such as the Pine Inn, La Playa, and the Cypress Inn, for example, are all developed on sites well over 8,000 square feet and are much larger in scale than surrounding development. However, these buildings add rich diversity and contribute significantly to the character of the City.

Tables A and B (see Attachment “F”) provide some additional context as to site size, number of rooms, density and height of many of the hotels in town, including most of the hotels surrounding the Carmel Sands project. While the Sands is the second largest hotel site in the City, the project height, number of rooms, and room density are very consistent with many of the hotels in town, including those in the immediate vicinity.

The total proposed floor area ratio for the project is 118% and the total building coverage is 76%. The floor area is 17% below the base allowed floor area for the site (135%) and 27% percent below the maximum allowed floor area with bonuses (145%). The building coverage is 19% below the maximum allowed coverage (95%).

6. Traffic congestion at San Carlos and Fifth and overall parking has not been adequately addressed.
Response: The analysis shows only slight changes to peak hour and daily trips to the site. The existing surface parking lot accommodates 42 vehicles for the forty two-room motel and the 120 seat restaurant. The site is currently nonconforming by approximately six parking spaces. The proposed project exceeds the on-site parking requirement by 7 spaces, a 13-space improvement based on the City’s required parking standards. The project also creates new on-street parking spaces by eliminating existing access points on Fifth Avenue and on Mission Street. The Porte de Cochere will also allow vehicles to pull off the street while checking in or out of the hotel, thus limiting congestion (see Attachment “D” for more information).

7. The appellant argues that it is unlikely an EIR would be required if this project is approved and later additional hotel units are proposed.
Response: This argument is purely speculative. If a proposal were submitted to add additional units to this site, an IS would be prepared. Based on the results of an IS, the City would then take the appropriate action. Adding rooms would raise potential concerns related to parking and traffic along with issues related to where the proposed new rooms were being transferred from. All of these issues would need to be addressed
in the environmental review.

8. The appellant argues that an EIR was required for the Plaza del Mar Project and should therefore be required for this project.
Response: There are several aspects to this project that make it very different from the Plaza del Mar Project (SE Cor. Dolores & 7th ). The Plaza del Mar project was located adjacent to an historic district, involved a potentially significant architectural structure, required the removal of significant trees, involved a significant intensification of use and was requesting exceptions to several General Plan and Zoning standards.

The Carmel Sands project is not adjacent to an historic district, does not involve historically or architecturally significant structures, does not include the removal of any significant trees, is not significantly intensifying the use on the site and is not requesting any variances or exceptions to General Plan or Zoning standards.

Planning Commission: On 14 July 2010, the Planning Commission approved the
project with a 4-1 vote. One of the primary topics of discussion was whether it was appropriate to have each building include variations in materials, colors and styles, as shown on the drawings. The concern expressed by the Commission was that having several variations in materials and styles may appear unauthentic and contrived. The Commission approved the project with a condition that all of the buildings be clad with stucco siding with only slight color variations. The applicant is required to return to the Commission for the final review of the exterior treatments prior to building permit issuance.

If the appeal is denied, the Council may want to discuss whether it prefers a unified appearance, as conditioned by the Planning Commission, or slight variations in materials and styles, as proposed by the applicant. The Council could then provide direction to the Planning Commission on this issue.

Fiscal Benefits: The applicant argues that the proposed project will result in a substantial financial benefit to the City. The applicant estimates that additional tax revenue resulting from this project could be as much as $360,000 a year. While staff has not performed a financial analysis, and the applicant did not provide information on how the $360,000 figure was obtained, it can be safely assumed that an upgraded hotel will result in an increase in tax revenue.

OPTIONS
The following are potential options for the Council to consider regarding this appeal:

Option 1: Deny the appeal
This option would uphold the Planning Commission’s decision to approve the project and adopt a MND.

Option 2: Grant the appeal
This option would void the Planning Commission’s approval of the project and would require the preparation of an EIR before taking further action on the project.

Option 3: Grant the appeal in part
If the Council determines that an EIR is not required, but would like to see changes in the project design and/or additional information in the MND prior to final approval, this option could be selected. The Council could remand the project back to the Planning Commission with directions.

Option 4: Continue Consideration of the Appeal to a Future Date
This option would allow the City Council to request additional information prior to making a final decision on the appeal.

RECOMMENDATION
Deny the appeal and uphold the Planning Commission’s decision to approve the Carmel Sand Redevelopment Project and to adopt a Mitigated Negative Declaration.