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HomeMy WebLinkAbout3/4/2025 Item 6a, Tway and Amini - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum City of San Luis Obispo Council Agenda Correspondence DATE: March 4, 2025 TO: Mayor and Council FROM: Timmi Tway, Community Development Director Prepared By: David Amini, Housing Coordinator VIA: Whitney McDonald, City Manager SUBJECT: ITEM 6A - APPEAL OF PLANNING COMMISSION DECISION ON 466 DANA STREET - WATERMAN VILLAGE PROJECT Staff received the following questions regarding the Waterman Village project and appeal to Council. The questions are below with staff’s response shown in italics: 1) Is Council’s decision restricted to the issues within the Appeal? Is Council making the final decision regarding the project? Under the SLO Municipal Code, this project falls into the Moderate development review category, which requires a hearing before the Architectural Review Commission with a recommendation to the Community Development Director for final review authority. Due to the unique characteristics of the project (City owned land, Master List Historic property, required review by multiple Advisory Bodies, Exclusive Negotiating Agreement and community interest) the Community Development Director elevated the project to the Planning Commission for a final decision. Planning Commission decisions of this kind are final, unless appealed to the City Council. SLOMC 17.126.030 states that “The appeal shall concern a specific action and shall state the grounds for appeal.” But “Action on appeals shall be “de novo” review and shall be considered at the same type of hearing and after the same notice that is required for the original decision.” (SLOMC 17.126.050.) Accordingly, the Council could review and revise the underlying project approval without deference to the Planning Commission action and could modify or amend the conditions of approval as it deems necessary to address the issues raised in the appeal. Therefore, Council is making the final decision regarding entitlement approval of the project through its action on the appeal. If the project appeal is denied and the project’s land use and development entitlements are approved, Smart Share would then be required to enter into real property negotiations with the City, where lease terms, demonstration of project financing, and all factors required by the Exclusive Negotiating Agreement would be considered. Staff would then bring the final lease agreement to the City Council for decision, which if approved, would allow Smart Share to construct the project. Until such time as the Item 6a. Appeal of 466 Dana Street - Waterman Village Project Page 2 Council approves a final Lease agreement, the City retains ultimate control of the property and the Applicant can proceed only with actions expressly permitted by the City. 2) Is the nonprofit financially capable of completing the project, including adobe restoration? The Exclusive Negotiating Agreement requires Smart Share to demonstrate, prior to commencement of the lease, that it has at least 50 percent of the funds necessary to construct the project, and an approved fundraising plan for raising the remaining portion of the funds. Smart Share is required to submit annual financials to the City to demonstrate the results of fundraising. The Agreement further requires that before starting construction, Smart Share must demonstrate, to the City Finance Director’s satisfaction, that they have all of the funds necessary to design and construct, at a minimum, the adobe rehabilitation, tiny home installation, site infrastructure and public park feature construction, as well as operate for at least two (2) years after completion of construction, plus a 15% contingency, available in cash or approved financing. 3) What would be the financial exposure of the City regarding provision of water, sewer, utilities, insurance, maintenance, etc? The City’s financial exposure to the operational expenses of the project will be decided during the real property negotiations phase, prior to execution of the lease agreement with Smart Share. The Council will be asked to direct staff on the specific terms they wish staff to negotiate as to these requirements. The Exclusive Negotiating Agreement, however, makes clear that Smart Share is required to shoulder all expenses associated with operating the property and it would be expected that these terms would carry over to a prospective lease. 4) What criteria would be applied for choosing occupants of the units and would the City be required to oversee the legality of the process and the nonprofit’s operation of the project? The City’s Below Market Rate Standards would apply to this project. A restrictive agreement would be recorded on the property and would require that the City’s Below Market Rate Administrator oversee and implement the tenant selection plan, ensuring that tenants meet the income requirement thresholds, and the agreement will expressly require compliance with federal and state law. Under City Municipal Code, private selection of tenants by project developers is expressly prohibited. A prospective lease with Smart Share would require that they remain at all times in compliance with any and all applicable laws and regulations.