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HomeMy WebLinkAboutZoning Text Amendment 04-03 - Public Hearing - Amending Hunt i 4WD PROOF OF PUBLICATION STATE OF CALIFORNIA) ) ss. COUNTY OF ORANGE ) CITY OF Sullivan,Hardy,Green, am a Citizen of the United States and a HUNTINGTON BEACH NOES:None LEGAL NOTICE ABSENT:None resident of the County aforesaid; I am ORDINANCE NO.3690 This ordinance is over the age of eighteen years, and not a Adopted by the Cityfollncil fective adoption.3o days after on DECEMBER 6,2004 CITY OF. _ party to or interested in the below entitled "AN ORDINANCE OF THE HUNTINGTON BEACH CITY OF HUNTINGTON 2000 MAIN STREET matter. I am a rinci al clerk of the BEACH AMENDING HUNTINGTON BEACH, P P CHAPTER 250 OF THE CA 92648 -5227 HUNTINGTON BEACH INDEPENDENT ZONING HUNTINGTON BEACH JOANL.6LYNN, � ZONING AND SUBDIVI- JOAN L.FLYNN, SION ORDINANCE RE- CITY CLERK a newspaper of general circulation, LATING TO GENERAL Published Huntington PROVISIONS - MAP Beach Independent D6- printed and published in the City of REQUIREMENTS." cemberl_6,2004123-285 SYNOPSIS: Huntington Beach County of Orange ZONING TEXT � � AMENDMENT N0:04-03 State of California and that attached AN AMENDMENT TO , T. HUNTINGTON BEACH ZONING AND Notice is a true and complete copy as SUBDIVISION ORDI- NANCE (HBZSO) TO was printed and published in the UPDATE THE CONDO- MINIUM CONVERSION Huntington Beach Issue of said PROCESS. THE AMEND- MENT CREATED A TEN- newspaper to wit the Issue(s) of. E X E M PARCEL MAP EXEMPTION FOR APARTMENTS AND STOCK COOPERATIVES PRIOR TO JUNE 1, 2004, WITH TWO TO FOUR UNITS ON A PARCEL THAT WERE SOLD AS DECEMBER 16 , 2004 CONDOMINIUM UNITS WITHOUT CITY AP- PROVAL. THE TEXT AMEND- MENT PROVIDES RELIEF TO RESIDENTS AT- TEMPTING TO LEGALIZE THE OWNERSHIP STA TUS OF THEIR UNITS. THE ORDINANCE CHANGES CONTINUE TO I declare under penalty of perjury that ENSURE PROTECTION OF , , EXISTING OWNERS BY the foregoing is true and correct. AND REQUIRING PLAT MAP FICATE OF COMPLIANCE TO BE APPROVED AND RE- CORDED AT.THE COUN- TY OF ORANGE. Executed on DECEMBER 16 , 2004 COPIES OF THIS ORDI- NANCE ARE AVAILABLE at Costa Mesa, California. OFFICE.THE CITY CLERK'S PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting held December 6,2004 by the following - Signature roll call vote: AYES:Hansen,Coerper, s �U �< /vJ c(,A q-- -171 �L2 �� ��� Council/Agency Meeting Held: Deferred/ ontinued too c\ Approve Conditionally Approved ❑ Denied lerk's"Slignature Council Meeting Date: November 15, 2004 Department ID Number: PL04-24 CITY OF HUNTINGTON BEACH REQUEST FOR ACTION SUBMITTED TO: HONORABLE MAYOR AN[) CITY CO EMBERS SUBMITTED BY: PENELOPE �ULBR H-GRAFT, City Ad inistrator c-' { - co -i� PREPARED BY: JENNIFER MCGRAT ity Attorney ] �- ,T 5 HOWARD ZELEFSKY, Director of Planning SUBJECT: APPROVE ZONING TEXT AMENDMENT NO. 04-03 (TENTATIVE PARCEL MAP EXEMPTION) AND AFFORDABLE HOUSING IN-LIEU FEE (CONDOMINIUM CONVERSIONS) C �ceLd. �6 'D Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: Transmitted for City Council review is Zoning Text Amendment No. 04-03 (ZTA 04-03) and Ordinance No.3 6 q0. ZTA 04-03 represents a request by the City of Huntington Beach to amend Chapter 250, Subdivisions General Provisions, of the Huntington Beach Zoning and Subdivision Ordinance eliminating tentative parcel map procedures for apartments and stock cooperatives that were converted and sold as condominiums prior to June 1, 2004 without City approval. Resolution No. O0 r establishes an affordable housing in-lieu fee for condominium conversions that are unable to comply with current on-site parking and landscaping requirements. Staff recommends the City Council approve the requests as submitted (Recommended Actions) and adopt the ordinance exempting some condominium conversions from tentative parcel map procedures and establishing an affordable housing in-lieu fee. Funding Source: Not applicable. REQUEST FOR ACTION MEETING DATE: November 15, 2004 DEPARTMENT ID NUMBER: PL04-24 Recommended Action: STAFF RECOMMENDATION: Motion to: 1. "Approve for introduction Ordinance No. 3,(o 'O and Zoning Text Amendment No. 04-03 with findings for approval (ATTACHMENT NO. 1 and NO. 2)." 2. "Adopt Resolution No. a resolution of the City Council of the City of Huntington Beach establishing the affordable housing in-lieu fee authorized by Zoning and Subdivision Ordinance Chapter 235 relating to residential condominium conversions (ATTACHMENT NO. 3)." Alternative Action(s): The City Council may make the following alternative motion(s): 1. "Deny Zoning Text Amendment No. 04-03 with findings." 2. "Deny Resolution No. 91 3. "Continue Zoning Text Amendment No. 04-03 and Resolution No. and direct staff accordingly." Analysis: A. PROJECT PROPOSAL: Applicant: City of Huntington Beach, 2000 Main Street, Huntington Beach, CA 92648 Location: Citywide Zoning Text Amendment No. 04-03 is an amendment to the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) to update the condominium conversion process. The recommended amendment creates a tentative parcel map exemption for apartments and stock cooperatives with two to four units on a parcel that were sold as condominium units without City approval prior to June 1, 2004. Additionally, Resolution No. g f`" establishes an affordable housing in-lieu fee option of $15.00 per square foot of building floor area for previously converted condominium units that are unable to meet current development standards for parking and landscaping. PL04-24 TPM Exemption -3- 11/2/2004 11:40 AM REQUEST FOR ACTION MEETING DATE: November 15, 2004 DEPARTMENT ID NUMBER: PL04-24 B. BACKGROUND On July 6, and July 19, 2004, the City Council updated the condominium conversion ordinance by creating processing exceptions for apartments and stock cooperatives that have been converted into condominiums without City approval. Additionally, the Council adopted updates for all future condo conversion projects. According to adopted code standards, each condo conversion project requires approval of a conditional use permit and tentative parcel map. Additionally, each property must demonstrate compliance with current parking and landscaping requirements of the HBZSO. Many older apartment complexes constructed from the 1960's through the early 1990's may find it difficult to meet current parking requirements, as the space for parking stalls and vehicular maneuvering is not available. One alternative to address deviations in parking and landscaping is to request approval of a variance. Variances, however, may only be approved if there is a land related hardship or special circumstances, such as size, shape, topography, location or surroundings, which renders compliance with the zoning code infeasible. Variances may not be a grant of special privilege, may not be materially detrimental to the general welfare or injurious to properties in the same zone classification, and may not adversely affect the General Plan. Furthermore, variances may only be approved if it is necessary to preserve the enjoyment of one or more substantial property rights. The Zoning Administrator, as the approving body for this special class of units, must positively affirm all of these findings for approval prior to rendering a decision on a variance request. It will likely be difficult to approve a variance in these cases because there may not be a land related hardship associated with the request. For instance, most triplexes and fourplexes were constructed on property that is the same size and shape as all other surrounding multi-family zoned properties. If the properties are regular in shape and size, there are no grounds to allow deviations from zoning code development standards. Additionally, approval of a variance for projects that were completed without proper City approval may be construed as granting a special privilege that is not afforded to other projects in the same zoning district. It should be noted, however, that any property owner may apply for a variance if they choose to do so, the request will be evaluated on its own merits, and deliberated in a public hearing forum before the Zoning Administrator. At the July 6, 2004 public hearing, the City Council directed staff to further streamline the permitting process and asked to explore alternatives deleting the tentative parcel map process for previously converted units. The Council also directed staff to investigate alternatives for projects unable to comply with current code provisions for parking and landscaping, while at the same time develop an affordable housing in-lieu fee to offset the loss of affordable rental housing. The recommendations of this Request for Council Action follow-up with Council's July 6, 2004 direction for further streamlining. PL04-24 TPM Exemption -4- 11/2/2004 11:40 AM REQUEST FOR ACTION MEETING DATE: November 15, 2004 DEPARTMENT ID NUMBER: PL04-24 C. STAFF ANALYSIS AND RECOMMENDATION: Tentative Parcel Map Exemption The proposed ordinance change allows an exemption to the parcel map process providing the following items are completed: a. Sale of condominium units is evidenced by recorded documents b. No dedications or improvements are required by the Zoning and Subdivision Ordinance c. Covenants, conditions, and restrictions (CC&Rs) are recorded at the County of Orange d. A plat map showing the condominium subdivision is prepared, approved by the City Engineer, and recorded at the County of Orange e. A conditional use permit is approved pursuant to Section 235.04 and a Certificate of Compliance is issued by the Director and recorded at the County of Orange A comparison of estimated costs between the current tentative parcel map (TPM) process and the proposed certificate of compliance process is indicated in the chart below. Estimated costs for preparation of documents and recordation at the County of Orange are also included. Please note, however, this chart does not include cost estimates of the conditional use permit process, which was previously reported to Council. ISSUE CURRENT TPM PROCESS TPM EXEMPTION PROCESS Tentative Parcel Map Filing Fee $3,994* None Dedication and Improvements Most Likely Not Required—TBD on Most Likely Not Required — TBD case by case basis on case by case basis as part of a CUP CC&R Review Fee $993* None — Should already be recorded at County Preparation of Tentative Parcel and $12,000 -$15,000 (Estimated None Final Parcel Map by Licensed Cost)** Engineer/Surveyor Final Map Processing Fees Planning Department: $1,073* None Public Works: $1,744* Plan Check and Recordation of Final $2,500 (Estimated Cost)** None Map at County of Orange Preparation of Plat Map by Licensed None $5,000 (Estimated Cost)** Engineer/Surveyor PL04-24 TPM Exemption -5- 11/2/2004 11:40 AM REQUEST FOR ACTION MEETING DATE: November 15, 2004 DEPARTMENT ID NUMBER: PL04-24 Certificate of Compliance Filing Fee None $504* Certificate of Compliance None $800 (Estimated Cost)** Recordation Fee at County TOTAL $25,304 $6,304 *Filing fee costs represent fees established by City Council resolution for processing permits. **Estimated fees are provided for additional costs, which may be incurred, to prepare engineering drawings and record items at the County of Orange. In staff's recommendation, a certificate of compliance, with a plat map prepared by an engineer, substitutes for the tentative and final parcel map procedure at a substantially reduced cost. Therefore, the subdivision of the property is still legally recognized and recorded at the County of Orange ensuring current and future owners protection with definitive lot lines, establishing ownership boundaries, and describing common areas. Staff recommends approval of Zoning Text Amendment No. 04-03 in order to reduce processing costs and permitting time for property owners of condominium units which qualify under the special provisions of Chapter 235. Additionally, the certificate of compliance procedure still offers protection of subdivision and ownership definitions to the property owners. Affordable Housing In-Lieu Fee Condo conversions are required to comply with on-site parking and landscaping development standards. Chapter 235 of the Huntington Beach Zoning and Subdivision Ordinance offers the special class of units two options to comply with these standards: 1. Retrofit the property to provide additional parking and landscaping in accordance with the code; or 2. Pay an affordable housing in-lieu fee for not providing additional parking and/or landscaping which will off-set the loss of affordable rental stock Keyser Marston Associates, Inc. (KMA) performed an Affordable Housing In-Lieu Fee Study (October 15, 2004) to determine the amount of the fee (Attachment No. 4) sufficient to fund the financial gap associated with developing units that are subject to long-term income and affordability requirements. According to KMA's study, the recommended Affordable Housing In-Lieu Fee per unit equates to $15.00 per square foot of living area. A detailed description of the study methodology, assumptions, and conclusions can be reviewed in the attached analysis (Attachment No. 4). If the current property owners agree to pay the fee then the City will waive the development standard requirements for parking and landscaping. The City will then use the fee revenues to provide assistance to residential developers elsewhere in the PL04-24 TPM Exemption -6- 11/2/2004 11:40 AM REQUEST FOR ACTION MEETING DATE: November 15, 2004 DEPARTMENT ID NUMBER: PL04-24 City that agree to construct or substantially rehabilitate rental housing and to impose long- term income and affordability covenants on the units. KMA also estimated the cost of retrofitting the property to meet current development standards and determined that adding additional parking spaces on site is not feasible. Therefore, the property owners would need to reduce the parking requirement by eliminating bedrooms to comply with current parking standards. KMA determined that a remodel and reduction of bedrooms would result in a decrease in property values. KMA also estimated the cost of compliance with landscaping requirements. In summary, a property owner's cost of complying with parking and landscaping standards equates to $30.00 per square foot of living area. Contrasted with the recommended $15.00 per square foot Affordable Housing In-Lieu Fee, most property owners would choose to opt out of retrofitting the property and would agree to pay the in-lieu fee. SUMMARY: Zoning Text Amendment No. 04-03 modifies the Huntington Beach Zoning and Subdivision Ordinance for the purpose of eliminating the tentative parcel map requirement for existing condominium conversions. The recommended text amendment provides relief to residents attempting to legalize the ownership status of their units. The recommended ordinance changes continue to ensure protection of existing owners by requiring a plat map and certificate of compliance to be approved and recorded at the County of Orange. Additionally, an affordable housing in-lieu fee of $15.00 per square foot allows the City to waive parking and landscaping development standards for those property owners that cannot retrofit their properties. Staff recommends approval of Zoning Text Amendment No. 04-03 and Resolution No. for the following reasons: ➢ Decreases processing time for applicants ➢ Reduces application costs for property owners ➢ Continues to provide for quality development ➢ Ensures protection of existing and future property owners ➢ Provides for payment of an affordable housing in-lieu fee in cases where current parking or landscaping codes cannot be met Environmental Status: Zoning Text Amendment No. 04-03 is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to City Council Resolution 4501, Section 6, Class 20, which supplements CEQA and exempts minor amendments to zoning ordinances. Resolution No. is not subject to the provisions of CEQA pursuant to Section 15061 b) 3), because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. PL04-24 TPM Exemption -7- 11/2/2004 11:40 AM REQUEST FOR ACTION MEETING DATE: November 15, 2004 DEPARTMENT ID NUMBER: PL04-24 Attachment(s): City Clerk's Page Number No. Description 1. Findings for Approval 2. Ordinance No.3APO Including Legislative Draft 3. Resolution No. 4. Affordable Housing In-Lieu Fee Study by Keyser Marston Associates, Inc. dated October 15, 2004 ,�x�%6��`'� " fe �fwh aao -9/ 5. 1 Power Point Slide Presentation RCA Author: Jane James/Scott Hess PL04-24 TPM Exemption -8- 11/2/2004 11:40 AM ATTACHMENT 1 ATTACHMENT NO. 1 SUGGESTED FINDINGS ZONING TEXT AMENDMENT NO. 04-03 SUGGESTED FINDINGS FOR APPROVAL —ZONING TEXT AMENDMENT NO. 04-03: 1. Zoning Text Amendment No. 04-03 to amend Chapter 250, Subdivisions General Provisions, of the Huntington Beach Zoning and Subdivision Ordinance and exempt a certain class of condominium conversions from tentative parcel map procedures is consistent with the objectives, policies, general land uses and programs specified in the General Plan and any applicable specific plan. The amendment streamlines entitlement processing, continues to protect existing and future property owners, and substitutes a certificate of compliance for tentative parcel map procedures for a certain class of units converted to condominiums without approval by the City. 2. A community need is demonstrated for the changes proposed. The City desires to adopt unique provisions for apartment and stock cooperative units converted to condominiums without approval by the City. 3. Its adoption will be in conformity with public convenience, general welfare and good zoning practice by decreasing processing time for applicants, reducing application costs for property owners, continuing to provide for quality development, and ensuring protection of existing and future property owners. A certificate of compliance will depict the proposed subdivisions with an engineer prepared plat map. 4. The City Council finds that the project will not have any significant effect on the environment and is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Class 20, City Council Resolution No. 4501, which supplements the California Environmental Quality Act ATTACHMENT 2 ORDINANCE NO. 3690 AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING CHAPTER 250 OF THE HUNTINGTON BEACH ZONING AND SUBDIVISION ORDINANCE RELATING TO GENERAL PROVISIONS —MAP REQUIREMENTS The City Council of the City of Huntington Beach does hereby ordain as follows: SECTION 1. That Chapter 250 of the Huntington Beach Zoning and Subdivision Ordinance entitled General Provisions is hereby amended by amending Section 250.14, said section to read as follows: 250.14 Map Requirements A. Tentative and Final Map. A tentative and final map shall be required for all subdivisions creating five or more parcels, five or more condominiums as defined in Section 783 of the Civic Code, a community apartment project containing five or more parcels, or for the conversion of a dwelling to a stock cooperative containing five or more dwelling units. Exceptions as stated in Section 66426 of the Subdivision Map Act shall comply with Subsection B. B. Tentative and Parcel Map. A tentative and parcel map shall be required for all divisions of land into four or fewer parcels and exceptions stated in Section 66426 of the Subdivision Map Act. However parcel maps shall not be required for: I. Subdivisions of a portion of the operating right-of-way of a railroad corporation, which are created by short-term leases terminable by either party on not more than 30 days' notice in writing. 2. Land conveyed to or from a governmental agency, public entity or public utility, or for land conveyed to a subsidiary of a public utility for conveyance to such public utility for rights-of-way, unless a showing is made by the Department in individual cases, upon substantial evidence, that public policy necessitates a parcel map. If a parcel map is not required,the dedication or offer must be indicated by a separate instrument. 3. Lot line adjustments, provided: a. No additional parcels or building sites are created; b. The resulting parcels conform to Titles 20-24 (Zoning) of this Code; C. The lot line adjustment shall not sever any existing structure on either of the two parcels. d. The lot line adjustment shall not allow a greater number of dwelling units than allowed prior to the adjustment. e. The lot line adjustment is approved by the Director or by the Planning Commission on appeal; and (3530-2/02) f. A plat map showing the lot line adjustment is prepared, approved, and filed in accord with the provisions of Section 253.24. ord/04zonineg/chap 250 11-04 1 4. Parcel maps waived by the Zoning Administrator as provided by Section 251.20. 5. Subdivision of property with two to four apartment or stock cooperative units that were converted to and sold as condominium units without approval of a conditional use permit and tentative parcel map prior to June 1, 2004, provided: a. Sale of condominium units is evidenced by recorded documents; b. No dedications or improvements are required by the Zoning and Subdivision Ordinance; c. Covenants, conditions, and restrictions (CC&Rs) are recorded at the County of Orange; d. A plat map showing the condominium subdivision is prepared, approved by the City Engineer, and recorded at the County of Orange; e. A conditional use permit is approved pursuant to Section 235.04 and a Certificate of Compliance is issued by the Director and recorded at the County of Orange. C. Designation of Remainder Parcel. When a subdivision includes a remainder parcel as provided in Section 66424.6 of the Subdivision Map Act, the remainder parcel shall be in conformance with Titles 20-24 and shall require a Certificate of Compliance as provided by Section 258.06. SECTION 2. This ordinance shall become effective 30 days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 6th day of December , 2004. ATTEST: APPJ�OVED AS TO FORM: City Clerk City Atto�ey I 1 1 REVIEWED AND APPROVED: INI TED AND APPROVED: ! City kdministrator Director of Planning ord/04zoning/chap 250 11-04 2 Ord. No. 3690 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, JOAN L. FLYNN, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing ordinance was read to said City Council at a regular meeting thereof held on the 29th day of November, 2004, and was again read to said City Council at a regular meeting thereof held on the 6th day of December, 2004, and was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council. AYES: Hansen, Coerper, Sullivan, Hardy, Green, Bohr, Cook NOES: None ABSENT: None ABSTAIN: None I,Joan L.Flynn,CITY CLERK of the City of Huntington Beach and ex-officio Clerk of the City Council,do hereby certify that a synopsis of this ordinance has been published in the Huntington Beach Fountain Valley Independent on December 16,2004. In accordance with the City Charter of said City 000,4) !��5/- j4g4j Joan L. Flynn, City Clerk CU Clerk and ex-officio Verk Deputy City Clerk of the City Council of the City of Huntington Beach, California ATTACHMENT 3 2004-91 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH ESTABLISHING THE AFFORDABLE HOUSING IN-LIEU FEE AUTHORIZED BY ZONING AND SUBDIVISION ORDINANCE CHAPTER 235 RELATING TO RESIDENTIAL CONDOMINIUM CONVERSIONS Whereas, Section 235.08 B of Chapter 235 of the City of Huntington Beach Zoning and Subdivision Ordinance (ZSO) requires all condominium conversion projects to comply with parking requirements of ZSO Chapter 231 and landscape improvements of ZSO Chapter 232. A reduction in these development standards is available to apartments and stock cooperatives with two to four units on a parcel that were sold prior to June 1, 2004, as condominium units without approval of a conditional use permit and tentative parcel map upon the payment of an affordable housing in-lieu fee in accordance with Chapter 235 (hereafter, "Affordable Housing In-Lieu Fee"); and The City Council desires to use the Affordable Housing In-Lieu Fee revenues to provide assistance to residential developers that agree to construct or substantially rehabilitate rental housing and to impose long-term income and affordability covenants on the units in order to off-set the loss of affordable rental housing stock resulting from the conversion of apartment units to condominiums that occurred prior to June 1, 2004; and The City Council has reviewed a report dated October 14, 2004, entitled "Affordable Housing In-Lieu Fee Study" prepared by Keyser Marston Associates Incorporated (hereafter, "In- Lieu Fee Study") that evaluates the costs of imposing affordable housing requirements on conversions of apartment units to condominiums that have occurred without the City's approval prior to June 1, 2004. The In-Lieu Fee Study includes an analysis of the estimated cost of meeting the development standards requirements and is attached hereto as Exhibit A and incorporated herein by this reference; and The In-Lieu Fee Study has been available for public inspection and review prior to consideration of this resolution by the City Council after a public hearing, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH DOES HEREBY FIND, RESOLVE AND DETERMINE AS FOLLOWS: 1. The report dated October 14, 2004, entitled "Affordable Housing In-Lieu Fee Study" prepared by Keyser Marston Associates Incorporated attached hereto as Exhibit A is hereby adopted and approved. 2. That the purpose of the Affordable Housing In-Lieu Fee authorized by ZSO Chapter 235 is to off-set the loss of affordable rental housing stock resulting from the conversion of apartment units to condominiums that occurred prior to June 1, 2004, without City approval. 3. The Affordable Housing In-Lieu Fee shall be $15.00 per square foot of living area of an apartment or stock cooperative of two to four units that was sold as a condominium units without approval of a conditional use permit and tentative parcel map prior to June 1, 2004. G:\RESOLUTN\2004\CondoInLieuFee.doc 4. The Affordable Housing In-Lieu Fee established by this Resolution is consistent with the findings and conclusions of the Affordable Housing In-Lieu Fee Study and this amount is reasonable, and necessary to offset the loss of affordable housing rental stock on apartment or stock cooperative units converted to condominiums without City approval prior to June 1, 2004, that are subject to the Affordable Housing In-Lieu Fee. 5. The Affordable Housing In-Lieu Fee as authorized by this Resolution is reasonably related to impacts to the affordable rental housing stock resulting from the conversion of apartment units to condominiums that occurred prior to June 1, 2004, without City approval. 6. The revenues from the Affordable Housing In-Lieu Fee shall be used to provide assistance to residential developers that agree to construct or substantially rehabilitate rental housing and to impose long-term income and affordability covenants on the units. 7. The adoption of this Resolution is exempt from the California Environmental Quality Act ("CEQA") under Section 15061(b)(3) of the California Code of Regulations, commonly known as the CEQA Guidelines. The City Council finds that this exemption applies because there is no reasonable possibility that the Affordable Housing In-Lieu Fee could negatively affect the physical environment. To the contrary, the Affordable Housing In-Lieu Fee will be collected to mitigate the environmental impacts on the City's affordable housing stock as a result of conversions of apartments and stock cooperatives to condominiums that occurred without City approval of a conditional use permit and tentative parcel map prior to June 1, 2004. Any environmental impacts associated with specific projects that may be undertaken with fee proceeds will be assessed as each project is formulated. The City Council also hereby finds that the adoption of this Resolution is exempt from CEQA pursuant to the Supplemental Environmental Categorical Exemptions adopted the City Council pursuant to Resolution No. 4501, which provides that minor amendments to zoning ordinances that do not change the development standards intensity or density are exempt as a Class XX exemption. 8. This Resolution shall take effect sixty(60) days following its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 29th day of November 200 4 . Ail; 67�� M or REVIEWED AND APPROVED: APPROVED AS TO FORM: City Ad inistrator ( �`ty Atto ey �- ( ((0� INIT TED AND APPROVED: i ctor of Planriiaf G:\RESOLUTN\2004\CondoInLicuFee.doc 2 OCT. 15 2004 X#/46/T N4 ," 76 KEYSER M A R S T O N As SOCIATES INC . ADVISORS N: 500 SOUTH GRAND AVENUE,SUITE 1480 c9ty of Huntington Beach Los ANGELES,CALIFORNIA 90071 �+ �} A REAL ESTATE PHONE: 213/622-8095 OGT LOOT REDEVELOPMENT FAX:213/622-5204 AFFORDABLE HOUSING WWW.KEYSERMARSTON.COM ECONOMIC DEVELOPMENT LOS ANGELES Calvin E. Hollis,II Kathleen H.Head MEMORANDUM James A.Rabe Paul C.Anderson Gregory D.Soo-Hoo SAN DIEGO Gerald M.Trimble Paul C.Marra To: Jane James, Senior Planner City of Huntington Beach SAN Ncisco A.Jerzy Keyser Timothy C.Kelly From: Kathleen Head Kate Earle Funk Debbie M.Kern Julie Romey Robert J. Wetmore Date: October 14, 2004 Subject: Affordable Housing In-Lieu Fee Study The City of Huntington Beach (City) adopted modifications to the Condominium Conversions section of the City of Huntington Beach Zoning and Subdivision Ordinance (Conversion Ordinance) on August 2, 2004. The purpose of the following Keyser Marston Associates, Inc. (KMA) nexus analysis is to assist the City in setting an affordable housing in-lieu fee to be used in conjunction with the Conversion Ordinance. EXECUTIVE SUMMARY In recent years, several existing apartment projects have been converted to condominium projects without City approval. These conversions did not meet the City's development standards, and they have reduced the supply of affordable rental housing within the community. To mitigate this problem, the Conversion Ordinance provides two options for owners of condominium units converted without the City's approval prior to June 1, 2004. These options can be described as follows: 1. Retrofit the project to comply with the City's development standards on-site; or 2. Pay an affordable housing in-lieu fee, which will be used by the City to provide affordable housing in an off-site location. CELEBRATING 30 YEARS OF SERVICE TO OUR CLIENTS 0409048.HB:KHH:JR:gbd 14066.003.011 To: Jane James S`�_;ity of Huntington Beach October 14, 2004 Subject: Affordable Housing In-Lieu Fee Study Page 2 The following KMA analysis indicates that the assistance cost associated with providing affordable housing units at the Conversion Ordinance standards is $70,500 per affordable unit. When this cost is applied across the 122 units that were converted to condominiums with the City's approval, the cost per unit equates to $17,900 per unit, or$15 per square foot of living area. In contrast, the analysis concludes the cost to meet the current development standard requirements on-site equals $31,570 per unit, or$30 per square foot of living area. The levy of any City fee is subject to the nexus requirements imposed by Sections 66000-66008 of the Government Code. Based on these requirements, and the KMA financial analysis, the maximum supportable in-lieu fee is estimated at $17,900 per unit, or$15 per square foot of living area. As long as the City sets the in-lieu fee at or below this amount, the in-lieu fee will comply with the nexus requirements. BACKGROUND STATEMENT It is our understanding that recently, several property owners have converted existing small apartment projects into individually owned condominium units without applying for the appropriate City permits. At least 122 apartment units in 26 buildings throughout Huntington Beach were converted and sold as condominium units without the approval of the City. Most of these projects include between two and four units, and the units have already been sold to individual owners. Many of these projects do not meet the City's zoning and development standards, and the conversions have decreased the stock of affordable rental housing in the City. The City wishes to devise an equitable solution to this problem that protects the individual condominium owners' interests and that allows the City to attract affordable housing units to replace the lost rental units. The methodology that has been adopted by the City is to require the condominium owners to retrofit their projects to meet the development standards, or to waive the current development standard requirements if the condominium owners agree to pay an affordable housing in-lieu fee to the City. The City will then use the fee revenues to provide assistance to residential developers that agree to construct or substantially rehabilitate rental housing and to impose long-term income and affordability covenants on the units. It should be noted that the revised Conversion Ordinance does not provide an in-lieu fee option to future condominium conversions. CELEBRATING 30 YEARS OF SERVICE TO OUR CLIENTS 0409046.H B:KH H:J R:g bd 14066.003.011 To: Jane James, Uty of Huntington Beach October 14, 2004 Subject: Affordable Housing In-Lieu Fee Study Page 3 Conversion Ordinance The recently adopted Conversion Ordinance requires future condominium conversions to allocate 25% of the units in a project with three or more units as follows: 1. Eighty percent (80%) of the affordable units are to be allocated to moderate income households earning up to 100% of the Orange County median income (Median); and 2. Twenty percent (20%) of the affordable units are to be allocated to low income households earning up to 80% of the Median. The program guidelines allow the owners of condominiums that converted without the proper approvals prior to June 1, 2004, to be relieved of the affordable housing obligation and development standard requirements if they pay an established in-lieu fee to the City. As currently envisioned, the City will set the fee at an amount that will be sufficient to fund the financial gap associated with developing units that are subject to long-term income and affordability covenants (Affordability Gap Analysis). The purpose of the KMA nexus analysis is to quantify the affordability gap associated with providing low and moderate income rental units in the City. The results of the Affordability Gap Analysis will then be used to assist the City in establishing the in-lieu fee that will be imposed on conversion projects that have the option of receiving development standards relief. NEXUS ANALYSIS The ability of California cities to charge new development for its relative share of the costs of public facilities and services is regulated by the Mitigation Fee Act (Sections 66000-66008 of the Government Code), also known as AB 1600. In order to impose such fees on new development, the legislative body must make certain findings to establish the connections or "nexus between the development and the public facilities or services that will be funded by the fee, and also to establish the connection between the development and the amount of the fee that is being imposed on the development. The fees imposed on a development cannot be more than the cost of the relative burden on city facilities or services attributed to that development.' In order to support the required nexus findings, public agencies usually prepare nexus studies that establish the connection between different types of new development and the need for expanded or new city services or facilities. ' Development fees cannot be used to cure existing deficiencies in services or facilities. CELEBRATING 30 YEARS OF SERVICE TO OUR CLIENTS 0409048.H6 K HH:JR:gbd 14066.003.011 To: Jane James, .,ity of Huntington Beach October 14, 2004 Subject: Affordable Housing In-Lieu Fee Study Page 4 AFFORDABILITY GAP ANALYSIS (APPENDIX A) Methodology The methodology used in the KMA Affordability Gap Analysis can be described as follows: 1. KMA compiled rent data for two- and three-bedroom apartment units in the City. 2. KMA calculated the maximum affordable rents for moderate and low income households based on household income statistics distributed by the California Department of Housing and Community Development Department, and the affordability standards imposed by California Health and Safety Code Section 50053 (Section 50053). 3. KMA compared the value supported by 122 apartment units at market rents, to the value of 122 apartment units assuming 25% of the units are restricted at the affordability limits required by the Conversion Ordinance. This exercise identifies the financial gap that would be incurred by the City if they chose to purchase affordability covenants. The tables that detail the analysis are located in Appendix A, and are organized as follows: Appendix A Affordability Gap Analysis Table 1 Market Rent Comparables Table 2 Monthly Rent Assumptions Table 3 Scenario Assumptions Table 4A Cash Flow Analysis— 100% Market Rate Scenario Table 413 Cash Flow Analysis —25% Affordable Scenario Table 5 Affordability Gap Calculation Affordability Gap Calculation The following sections of the analysis summarize the KMA affordability gap calculations. Market Rate Rents As detailed in Table 1, rental comparables within Huntington Beach indicate that the current market rents are as follows: CELEBRATING 30 YEARS OF SERVICE TO OUR CLIENTS 0409048.H8:KHH:JR:gbd 14066.003.011 To: Jane James, .,ity of Huntington Beach October 14, 2004 Subject: Affordable Housing In-Lieu Fee Study Page 5 Median Median Weighted Monthly Unit Size Average Rent (Sfl $/SF Two-Bedroom Units $1,410 974 $1.34 Three-Bedroom Units $1,700 1,400 $1.32 KMA assumed that the size of the two- and three-bedroom units used in the Affordability Gap Analysis are the same as the median unit size of the units identified in the market survey. Maximum Affordable Rents The assumptions used to estimate the maximum affordable rents are summarized as follows: 1. In accordance with the Section 50053 requirements, the household incomes are based on three-person households for two-bedroom units and four-person households for three-bedroom units. 2. 30% of the defined household income is allocated to housing related expenses. 3. The maximum allowable rent must be adjusted to reflect the fact that the tenants will be required to pay for interior utilities costs. Based on the allowances provided by the Orange County Housing Authority, the utilities costs are estimated at $29 per month for two-bedroom units and $44 per month for three-bedroom units. As shown in Table 2, the maximum allowable rents under the income categories are: Moderate Low Income Income Two-Bedroom Units $1,672 $992 Three-Bedroom Units $1,846 $1,090 As a practical matter, tenants will not be willing to pay rent that exceeds the prevailing rate in the market area. As such, it is important to estimate the rents that could be generated by the units being evaluated if they were rented on the open market. The market survey performed by KMA indicates that the maximum affordable rents for moderate income restricted units exceeds the current market rents. Thus, the market rents would prevail for the moderate income restricted units. CELEBRATING 30 YEARS OF SERVICE TO OUR CLIENTS 0409048.HB:KHH:JR gbd 14066.003.011 To: Jane James, city of Huntington Beach October 14, 2004 Subject: Affordable Housing In-Lieu Fee Study Page 6 Affordability Gap Calculations To determine the affordability gap, KMA created two cash flow analyses that assume 61 two- bedroom units and 61 three-bedroom units. The scenarios are described in detail in Table 3, and summarized below: 1. 100% Market Rate Scenario— Estimates the value of 122 rental units that are not subject to any income or affordability requirements. 2. 25%Affordable Scenario— Estimates the value of 92 unrestricted units and 31 affordable units, of which; a. 25 units are restricted to moderate income households; and b. Six units are restricted to low income households. The cash flow analyses assume the following: 1. The market rate rents increase at 3% per year and the affordable rents increase at 2.5% per year. 2. Miscellaneous income is estimated at $10 per unit per year, increasing at 3% per year. 3. A 5% vacancy and collection allowance is provided. 4. The general operating expenses are estimated at $4,000 per year, increasing at 3.5% per year. 5. The property taxes are estimated based on a value estimated at an 8% capitalization rate, and 1.25% tax rate. 6. A $300 per unit per year contribution is provided for a reserve fund. The contributions increase by 3.5% per year. 7. The affordability restrictions terminate in Year 61. Thereafter, there is no difference in value between a market rate project and a project subject to income and affordability restrictions. Therefore, the reversionary value will not effect the affordability gap calculation, and is not included in either scenario being tested in this analysis. CELEBRATING 30 YEARS OF SERVICE TO OUR CLIENTS 0409048.H B:KH H:J R:9bd 14066.003.011 To: Jane James, city of Huntington Beach October 14, 2004 Subject: Affordable Housing In-Lieu Fee Study Page 7 The only differences between the annual net operating income (NOI) for each scenario are the achievable rental revenues and the annual property tax expenses. The NOI for the two scenarios is projected forward for 60 years, and then discounted to present value at a 7% rate. The following summarizes the estimated present value for each scenario: Project Value 100% Market Rate Scenario $35,280,000 25% Affordable Scenario 33,095,000 Affordability Gap $2,185,000 Per Affordable Unit (31 Units) $70,500 Per Total Unit 122 Units $17,900 The impact associated with imposing income and affordability restrictions on 25% of the units is estimated at $2.19 million. This means that the cost associated with acquiring long-term affordability covenants on 31 units is estimated at $70,500 per unit. When this cost is allocated across the 122 units being evaluated in this analysis, the supportable in-lieu fee amount equals $17,900 per unit. At an average unit size of 1,200 square feet, the in-lieu fee amount equates to $15 per square foot of living area. COST OF DEVELOPMENT REQUIREMENTS (APPENDIX B) The owners of the converted units have been given the option to pay an affordable housing in- lieu fee or to meet the City's current development standard requirements for parking and landscaping. A prototype project was utilized to estimate the on-site requirement costs, as follows: 1. Unit mix: # of Unit Size Units S 2 Two-bedroom Units 2 900 Three-bedroom Units 2 1,200 Total Units 4 1,050 2 These estimates are based on the average unit size of a small sample of condominium conversion projects, as provided by the City. CELEBRATING 30 YEARS of SERVICE TO OUR CLIENTS 0409048.H8:KHH:JR:gbd 14066.003.011 To: Jane James, < ty of Huntington Beach October 14, 2004 Subject: Affordable Housing In-Lieu Fee Study Page 8 2. Parking spaces: #of Spaces On-site Parking 9 Street Parking 2 Total Spaces 11 Appendix B presents the KMA analysis of the prototype project. The purpose of the analysis is to provide an order-of-magnitude estimate of the cost associated with complying with the City's development standards. Parking Requirement According to the City, most of the apartments that were recently converted to condominiums were built when the City's parking code for apartment development was as follows: 1. The code required one parking space per bedroom plus guest parking equal to 0.5 spaces per unit. 2. Each project was allowed to meet the parking requirement by providing two of the parking spaces on the street. The current parking standard for condominium development requires that all of the required parking spaces be provided on-site. Therefore, most of the converted projects are two parking spaces short of meeting the current parking standard. Given the size and configuration of most of the projects, it is not physically possible to provide two additional surface parking spaces on- site. To meet the current parking requirements, two bedrooms would have to be eliminated from the existing units within the project. The City estimates that most of the converted units are within four-plex buildings that have a mix of two- and three-bedroom units. If it is assumed that one bedroom is removed from two of the units, without changing the units'total square footage, the project could meet the City's parking code standards on-site. However, based on available sales data, KMA estimates that the elimination of a bedroom would diminish the units' value by +/-20%. KMA compiled sales price information from Dataquick for one-, two- and three-bedroom condominium units sold in the City from July 2003 through August 2004. This information is summarized in the following table: CELEBRATING M YEARS OF SERVICE TO OUR CLIENTS 0409048.H 8:KH H:J R:gbd 14066.003.011 To: Jane James, sty of Huntington Beach October 14, 2004 Subject: Affordable Housing In-Lieu Fee Study Page 9 Median Weighted Sales Average Prices $/SF One-Bedroom Units $295,000 $417 Two-Bedroom Units $369,000 $348 Three-Bedroom Units $408,000 $310 Assuming that the average two-bedroom unit in the converted condominiums is 900 square feet, the market sales price is estimated to be $313,200. If the market price is decreased by 20%, the estimated market price for a 900 square foot one-bedroom unit is $250,600. The resulting reduction in value for each unit that loses a bedroom is estimated at $62,600. Given that a bedroom must be eliminated in two units in a four-plex, the total value loss is estimated at $125,280. When this is allocated across the-four units, the impact to the individual condominium owner is approximately $31,320 per unit. Landscaping Requirement The City staff indicated that the conversion projects have not met the City's tree requirement. This requirement can be described as follows: 1. Multi-family residential lots shall have one 36 inch box tree for every 45 lineal feet of street frontage planted within the setback areas adjacent to a street; and 2. One 36 inch box tree planted within the common open space areas for each ground or first level unit. The City anticipates that the typical condominium conversion project will need to plant two trees to meet the current landscaping requirements. According to Marshall and Swift, the average cost of a 36 inch box tree, including soil preparation and planting, is approximately $500 per tree. Therefore, to meet the landscaping requirement, installing two trees on a typical site will cost a total of$1,000. This equates to $250 per unit in a four-plex project. CELEBRATING 30 YEARS OF SERVICE TO OUR CLIENTS 0409048_HB:KHH:JR:9bd 14066.003.011 To: Jane James, ty of Huntington Beach October 14, 2004 Subject: Affordable Housing In-Lieu Fee Study Page 10 Estimated Cost to Meet Development Requirements On Site The following summarizes the estimated cost to meet the City's development standards on-site: $/Sf Total Living Costs $/Unit Area Parking Requirement $125,280 $31,320 $29.83 Landscaping Requirement 1,000 250 .24 Total Cost of Requirements $126,280 $31,570 $30.07 As shown in the preceding table, the cost associated with meeting the City's development standards is estimated at $31,570 per unit, or approximately $30 per square foot of living area. As long as the in-lieu fee amount charged by the City is less than the cost of meeting the development standards requirements on-site, it is likely that the home owners will choose the _fee option rather than the on-site option. CONCLUSIONS The Affordability Gap Analysis concluded that the supportable in-lieu fee amount totals $17,900 per unit, or$15 per square foot of living area. Comparatively, the cost to comply with the City's development standards on-site is estimated at$31,570 per unit, or$30 per square cost of living area. To meet the nexus tests imposed by AB1600, it is the KMA conclusion that the fee should not exceed $17,900 per unit, or$15 per square foot of living area. If the owners of all 122 converted units elect to pay the recommended in-lieu fee, the revenues will total approximately $2.19 million. KMA estimates that, at an average assistance cost of $70,500 per unit, these in-lieu fee revenues will allow the City to create 31 units subject to long- term income and affordability restrictions. These units will fulfill the affordability goals that have been established for the 122 apartment units that were converted to condominiums without City approval. CELEBRA77NG 30 YEARS OF SERVICE TO OUR CLIENTS 0409048.H8:KHH:J R:gbd 14066.003.011 APPENDIX A 'ABLE 1 AARKET RATE RENT COMPARABLES-CITY OF i16NTINGTON BEACH' 1FFORDABILITY GAP ANALYSIS :ONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS WNTINGTON BEACH,CALIFORNIA Units in Year Unit Size Monthly Name Address Zip Project Built (Sq Ft) Rent $/Sf 2-bedrooms/1 Bathroom Units Avalon at Pacific Bay 6700 Warner Ave. 92647 304 1970 1,000 $1,410 $1.41 Huntington Highlander 16162 Sher Lane#13 92647 178 1969 960 $1,245 $1.30 Huntington Highlander 16162 Sher Lane#13 92647 178 1969 1,146 $1,395 $1.22 Ocean Breeze Villas 6401 Warner Ave. 92647 288 1975 800 $1,100 $1.38 Ocean Breeze Villas 6401 Warner Ave. 92647 288 1975 900 $1,250 $1.39 The Californian 6242 Warner Ave. 92647 232 1970 1,050 $1,400 $1.33 Windjammer 7701 Warner Ave. 92647 NA NA 950 $1,399 $1.47 Weighted Averages-2-Bedrooms/1-Bathroom Units 960 $1,395 $1.35 I. 2-bedrooms/1.5-Bathrooms Units Huntington Lakes 7562 Ellis Ave. 92648 NA NA 983 $1,485 $1.51 Huntington Villas 16761 Viewpoint Ln 92647 400 1972 1,056 $1,475 $1.40 Regency Palms 6762 Warner Ave. 92647 310 1969 820 $1,192 $1.45 Regency Palms 6762 Warner Ave. 92647 310 1969 1,020 $1,496 $1.47 Surfside Villas 7795 Neptune Drive 92648 NA NA 975 $1,500 $1.54 Weighted Averages-2-Bedrooms/1.5-Bathrooms Units 979 $1,485 $1.24 III. 2-Bedrooms/2-Bathrooms Units Avalon at Pacific Bay 6700 Warner Ave. 92647 304 1970 1,000 $1,460 $1.46 Casa del Sol 21661 Brookhurst St. 92646 NA NA 1,112 $1,430 $1.29 Huntington Breakers 21270 Beach Blvd. 92648 342 1985 950 $1,550 $1.63 Huntington Breakers 21270 Beach Blvd. 92648 342 1985 950 $1,585 $1.67 Huntington Breakers 21270 Beach Blvd. 92648 342 1985 950 $1,585 $1.67 Huntington Continental 17101 Springdale 92649 NA NA 1,025 $1,455 $1.42 Huntington Lakes 7562 Ellis Ave. 92648 NA NA 1,190 $1,575 $1.32 Huntington Villas 16761 Viewpoint Ln 92647 400 1972 820 $1,265 $1.54 Huntington Villas 16761 Viewpoint Ln 92647 400 1972 926 $1,355 $1.46 Huntington Vista 21551 Brookhurst St 92646 NA NA 1,025 $1,300 $1.27 Huntington Vista 21551 Brookhurst St 92646 NA NA 1,135 $1,530 $1.35 Ocean Breeze Villas 6401 Warner Ave. 92647 288 1975 1,100 $1,350 $1.23 San Miguel 16040 Springdale 92649 NA NA 850 $1,335 $1.57 San Miguel 16040 Springdale 92649 NA NA 930 $1,375 $1.48 The Californian 6242 Warner Ave. 92647 232 1970 1,050 $1,450 $1.38 Windjammer 7701 Warner Ave. 92647 NA NA 950 $1,495 $1.57 Yorktown Apartments 8082 Yorktown Ave. 92646 NA NA 1,025 $1,295 $1.26 Weighted Averages-2-Bedrooms/2-Bathrooms Units 975 $1,450 $1.36 1V. lWeighted Averages-All 2-Bedrooms Units 975 $1,410 $1.34 V. 3-bedrooms/1-Bathroom Units Huntington Highlander 16162 Sher Lane#13 92647 178 1969 1,466 $1,630 $1.11 VI. 3-bedrooms/1.5 Bathrooms Units Surfside Villas 7795 Neptune Drive 92648 NA NA 1,132 $1,800 $1.59 VII. 3-bedrooms/2 Bathrooms Units Huntington Villas 16761 Viewpoint Ln 92647 400 1972 1,028 $1,650 $1.61 Ocean Breeze Villas 6401 Warner Ave. 92647 288 1975 1,288 $1,650 $1.28 Ocean Breeze Villas 6401 Warner Ave. 92647 288 1975 1,440 $1,700 $1.18 Weighted Averages-3-Bedrooms/2-Bathrooms Units 1,288 $1,650 $1.33 Vill. 3-bedrooms/2.5 Bathroom Huntington Lakes 7562 Ellis Ave. 92648 NA NA 1,464 $1,875 $1.28 Huntington Vista 21551 Brookhurst St 92646 NA NA 1,400 $1,900 $1.36 Weighted Averages-3-Bedrooms/2.5-Bathroom Units 1,432 $1,888 $1.32 IX. lWeighted Averages-All 3-Bedroom Units 1,400 $1,700 $1.32 Sources include RentNet and Rent.com. 2 Remodeled in 1999. 3 Remodeled in 2000. Prepared by: Keyser Marston Associates, Inc. Filename: In-lieu fee 10 14 04.xls;Mkt Rents; 10/14/2004;jlr TABLE 2 MONTHLY RENT ASSUMPTIONS AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 1. 100%Market Rate Scenario' Two-Bedroom Units $1,300 $1,339 $1,379 $1,420 $1,463 $1,507 $1,552 $1,599 $1,647 $1,696 $1,747 $1,799 $1,853 Three-Bedroom Units $1,900 $1,957 $2,016 $2.076 $2,138 $2,202 $2,268 $2,336 $2,406 $2,478 $2,552 $2,629 $2,708 II. Moderate Income Rents A. Maximum Allowable Rents Two-Bedroom Units' $1,672 $1,714 $1,757 $1,801 $1,846 $1,892 $1,939 $1,987 $2,037 $2,088 $2,140 $2,194 $2,249 Three-Bedroom Units' $1,846 $1,892 $1,939 $1,987 $2,037 $2,088 $2,140 $2,194 $2,249 $2,305 $2,363 $2,422 $2,483 B. Maximum Achievable Rents° Two-Bedroom Units $1,300 $1,339 $1,379 $1,420 $1,463 $1,507 $1,552 $1,599 $1,647 $1,696 $1,747 $1,799 $1,853 Three-Bedroom Units $1,846 $1,892 $1,939 $1,987 $2,037 $2,088 $2,140 $2,194 $2,249 $2,305 $2,363 $2,422 $2,483 III. Low Income Rents' Two-Bedroom Units $992 $1,017 $1,042 $1,068 $1,095 $1,122 $1,150 $1,179 $1,208 $1,238 $1,269 $1,301 $1,334 Three-Bedroom Units' $1,090 $1,117 $1,145 $1,174 $1,203 $1,233 $1,264 $1,296 $1.328 $1,361 $1,395 $1,430 $1,466 ' Year 1 rents are based on TABLE 1. Assumes annual increases of 103.0%. 2 Based on 100%of the OC median,and Section 50053 of the California Health and Safety Code,per the Ordinance. Rents increase at 102.5%per year. 3 Assumes monthly utility allowances of$29/two-bedroom unit and $44/three-bedroom unit. Assumes that the maximum acheivable rent is the lesser of the maximum allowable rent and the market rate rent. e Based on 60%of the OC median,and Sections 50053 of the California Health and Safety Code,per the Ordinance. Rents increase at 102.5%per year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.x1s;Rent Assumptions;jlr; 10/14/2004 TABLE 2 MONTHLY RENT ASSUMPTIONS AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 1. 100%Market Rate Scenario Two-Bedroom Units $1,909 $1,966 $2,025 $2,086 $2,149 $2,213 $2,279 $2,347 $2,417 $2,490 $2,565 $2,642 $2,721 Three-Bedroom Units $2,789 $2,873 $2,959 $3,048 $3,139 $3,233 $3,330 $3,430 $3,533 $3,639 $3,748 $3,860 $3,976 II. Moderate Income Rents A. Maximum Allowable Rents Two-Bedroom Units 3 $2,305 $2,363 $2,422 $2,483 $2,545 $2,609 $2,674 $2,741 $2,810 $2,880 $2,952 $3,026 $3,102 Three-Bedroom Units $2,545 $2,609 $2,674 $2,741 $2,810 $2,880 $2,952 $3,026 $3,102 $3,180 $3,260 $3,342 $3,426 B. Maximum Achievable Rents 4 Two-Bedroom Units $1,909 $1,966 $2,025 $2,086 $2,149 $2,213 $2,279 $2,347 $2,417 $2,490 $2,565 $2,642 $2,721 Three-Bedroom Units $2,545 $2,609 $2,674 $2,741 $2,810 $2,880 $2,952 $3,026 $3,102 $3,180 $3,260 $3,342 $3,426 III. Low Income Rents' Two-Bedroom Units' $1,367 $1,401 $1,436 $1,472 $1,509 $1,547 $1,586 $1,626 $1,667 $1,709 $1,752 $1,796 $1,841 Three-Bedroom Units' $1,503 $1,541 $1,580 $1,620 $1,661 $1,703 $1,746 $1,790 $1,835 $1.881 $1,928 $1.976 $2,025 Year 1 rents are based on TABLE 1. Assumes annual increases of 103.0%. 2 Based on 100%of the OC median,and Section 50053 of the California Health and Safety Code,per the Ordinance. Rents increase at 102.5%per year. 3 Assumes monthly utility allowances of$29/two-bedroom unit and $44/three-bedroom unit. 4 Assumes that the maximum acheivable rent is the lesser of the maximum allowable rent and the market rate rent. 5 Based on 60%of the OC median,and Sections 50053 of the California Health and Safety Code,per the Ordinance. Rents increase at 102.5%per year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.xls;Rent Assumptions;jlr;10/14/2004 TABLE 2 MONTHLY RENT ASSUMPTIONS AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 27 Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Year 34 Year 35 Year 36 Year 37 Year 38 Year 39 I. 100%Market Rate Scenario Two-Bedroom Units $2,803 $2,887 $2,974 $3,063 $3.155 $3,250 $3.348 $3,448 $3,551 $3,658 $3,768 $3,881 $3,997 Three-Bedroom Units $4,095 $4,218 $4,345 $4,475 $4,609 $4,747 $4,889 $5,036 $5,187 $5,343 $5,503 $5,668 $5,838 II. Moderate Income Rents A. Maximum Allowable Rents Two-Bedroom Units' $3,180 $3,260 $3,342 $3,426 $3,512 $3,600 $3,690 $3,782 $3,877 $3,974 $4,073 $4,175 $4,279 Three-Bedroom Units $3,512 $3,600 $3,690 $3,782 $3,877 $3,974 $4,073 $4,175 $4,279 $4,386 $4,496 $4,608 $4,723 B. Maximum Achievable Rents° Two-Bedroom Units $2,803 $2,887 $2,974 $3,063 $3,155 $3.250 $3,348 $3,448 $3,551 $3,658 $3,768 $3,881 $3,997 Three-Bedroom Units $3,512 $3,600 $3,690 $3,782 $3,877 $3,974 $4,073 $4,175 $4,279 $4,386 $4,496 $4,608 $4,723 III. Low Income Rents' Two-Bedroom Units' $1,887 $1,934 $1,982 $2,032 $2,083 $2,135 $2,188 $2,243 $2,299 $2,356 $2,415 $2,475 $2,537 Three-Bedroom Units' $2,076 $2,128 $2,181 $2,236 $2,292 $2,349 $2,408 $2,468 $2,530 $2,593 $2,658 $2,724 $2,792 Year 1 rents are based on TABLE 1. Assumes annual increases of 103.0%. 2 Based on 100%of the OC median,and Section 50053 of the California Health and Safety Code,per the Ordinance. Rents increase at 102.5%per year. 3 Assumes monthly utility allowances of$29/two-bedroom unit and $44/three-bedroom unit. 4 Assumes that the maximum acheivable rent is the lesser of the maximum allowable rent and the market rate rent. 5 Based on 60%of the OC median,and Sections 50053 of the California Health and Safety Code,per the Ordinance. Rents increase at 102.5%per year. Prepared by: Keyser Marston Associates, Inc. Filename: In-lieu fee 10 14 04.xls;Rent Assumptions;jlr;10/14/2004 TABLE 2 MONTHLY RENT ASSUMPTIONS AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 40 Year 41 Year 42 Year 43 Year 44 Year 45 Year 46 Year 47 Year 48 Year 49 Year 50 Year 51 Year 52 I. 100%Market Rate Scenario Two-Bedroom Units $4,117 $4,241 $4,368 $4,499 $4,634 $4,773 $4,916 $5.063 $5,215 $5,371 $5,532 $5,698 $5,869 Three-Bedroom Units $6,013 $6,193 $6,379 $6,570 $6,767 $6,970 $7,179 $7,394 $7,616 $7,844 $8,079 $8,321 $8,571 II. Moderate Income Rents A. Maximum Allowable Rents Two-Bedroom Units 4 $4,386 $4,496 $4,608 $4,723 $4,841 $4,962 $5,086 $5,213 $5,343 $5,477 $5,614 $5,754 $5,898 Three-Bedroom Units $4,841 $4,962 $5,086 $5,213 $5,343 $5,477 $5,614 $5,754 $5,898 $6,045 $6,196 $6,351 $6,510 B. Maximum Achievable Rents° Two-Bedroom Units $4,117 $4,241 $4,368 $4,499 $4,634 $4,773 $4,916 $5,063 $5,215 $5,371 $5,532 $5,698 $5,869 Three-Bedroom Units $4,841 $4,962 $5,086 $5,213 $5,343 $5,477 $5,614 $5,754 $5,898 $6,045 $6,196 $6,351 $6,510 Ill. Low Income Rents' Two-Bedroom Units' $2,600 $2,665 $2,732 $2,800 $2,870 $2,942 $3,016 $3,091 $3,168 $3,247 $3,328 $3,411 $3,496 Three-Bedroom Units' $2,862 $2,934 $3,007 $3,082 $3,159 $3,238 $3,319 $3,402 $3,487 $3,574 $3,663 $3,755 $3,849 Year 1 rents are based on TABLE 1. Assumes annual increases of 103.0%. 2 Based on 100%of the OC median,and Section 50053 of the California Health and Safety Code,per the Ordinance. Rents increase at 102.5%per year. 3 Assumes monthly utility allowances of$29/two-bedroom unit and $44/three-bedroom unit. ° Assumes that the maximum acheivable rent is the lesser of the maximum allowable rent and the market rate rent. s Based on 60%of the OC median,and Sections 50053 of the California Health and Safety Code,per the Ordinance. Rents increase at 102.5%per year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.xls;Rent Assumptions;Jlr;10/14/2004 TABLE 2 MONTHLY RENT ASSUMPTIONS AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 53 Year 54 Year 55 Year 56 Year 57 Year 58 Year 59 Year 60 I. 100%Market Rate Scenario' Two-Bedroom Units $6,045 $6,226 $6,413 $6,605 $6,803 $7,007 $7,217 $7,434 Three-Bedroom Units $8,828 $9,093 $9,366 $9,647 $9,936 $10,234 $10,541 $10,857 It. Moderate Income Rents A. Maximum Allowable Rents Two-Bedroom Units' $6,045 $6.196 $6,351 $6,510 $6,673 $6,840 $7,011 $7,186 Three-Bedroom Units $6,673 $6,840 $7,011 $7,186 $7,366 $7,550 $7,739 $7,932 B. Maximum Achievable Rents" Two-Bedroom Units $6,045 $6,196 $6,351 $6,510 $6,673 $6,840 $7,011 $7,186 Three-Bedroom Units $6,673 $6,840 $7,011 $7,186 $7,366 $7,550 $7,739 $7,932 Ill. Low Income Rents' Two-Bedroom Units' $3,583 $3,673 $3,765 $3,859 $3,955 $4,054 $4,155 $4,259 Three-Bedroom Units' $3,945 $4,044 $4,145 $4,249 $4,355 $4,464 $4,576 $4.690 ' Year 1 rents are based on TABLE 1. Assumes annual increases of 103.0%. 2 Based on 100%of the OC median,and Section 50053 of the California Health and Safety Code,per the Ordinance. Rents increase at 102.5%per year. 3 Assumes monthly utility allowances of$29/two-bedroom unit and $44/three-bedroom unit. ° Assumes that the maximum acheivable rent is the lesser of the maximum allowable rent and the market rate rent. a Based on 60%of the OC median,and Sections 50053 of the California Health and Safety Code,per the Ordinance. Rents increase at 102.5%per year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.xis;Rent Assumptions;jlr; 10/14/2004 TABLE 3 SCENARIO DESCRIPTIONS AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA 1. Unit Mix Assumptions Two-Bedroom Units 50% Total Units 61 Three-Bedroom Units 50% Total Units 61 Total Units 122 If. 100%Market Rate Scenario 2 A. Affordability Assumptions Market Rate Units 100% Total Units 122 Affordable Units 0% Total Units 0 Moderate Income Units 20% Affordable Units 0 Low Income Units 80% Affordable Units 0 Market Moderate Low Rate Income Income Total B. 100%Market Rate Scenario 3 Units Units Units Units Two-Bedroom Units 61 0 0 61 Three-Bedroom Units 61 0 0 61 Total Units 122 0 0 122 III. 25%Affordable Scenario A. Affordability Assumptions Market Rate Units 75% Total Units 91 Affordable Units 25% Total Units 31 Moderate Income Units 80% Affordable Units 25 Low Income Units 20% Affordable Units 6 Market Moderate Low Rate Income Income Total B. Affordability Mix Units Units Units Units Two-Bedroom Units 46 13 3 62 Three-Bedroom Units 45 12 3 60 Total Units 91 25 6 122 I Based on the City's estimate of the number of condominums converted without City approval. KMA based the unit mix assumption on a small sample of projects provided by the City. 2 Assumes that all of the units are rented on the open market. 3 Assumptions based on the adopted Condominium Conversion Ordinance. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.xis;Scenarios;jlr; 10/14/2004 TABLE 4A CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 I. Income Rental Revenue' Market Rate Units $2,342,400 $2,412,700 $2,485,100 $2,559,700 $2,636,500 $2,715,600 $2,797,100 $2,881,000 $2,967,400 Moderate Income Units Low Income Units Gross Rental Income $2,342,400 $2,412,700 $2,485,100 $2,559,700 $2,636,500 $2,715,600 $2,797,100 $2,881,000 $2,967,400 Miscellanous Income` 14,600 15,000 15,500 16,000 16,500 17,000 17,500 18,000 18,500 Gross Income $2,357,000 $2,427,700 $2,500,600 $2,575,700 $2,653,000 $2,732,600 $2,814,600 $2,899,000 $2,985,9G. (Less)Vacancy Allowance (117,900) _ (121,400) (125,000) (128,800) (132,7001 (136,600) (140,700) (145,000) (149,300) Effective Gross Income $2,239,100 $2,306,300 $2,375,600 $2,446,900 $2,520,300 $2,596,000 $2,673,900 $2,754,000 $2,836,600 Ii. Operatina Expenses General Operating Expenses" $488,000 $505,100 $522,800 $541,100 $560,000 $579,600 $599,900 $620,900 $642,600 Property Taxes 5 231,700 236,300 241,000 245,800 250,700 255,700 260,800 266,000 271.300 Reserves° 36,600 37,900 39,200 40,600 42,000 43,500 45,000 46,600 48,200 Total Operating Expenses $756,300 $779,300 $803,000 $827,500 $852,700 $878,800 $905,700 $933,500 $962,100 Ill. Net Operating income $1,482,800 $1,527,000 $1,572,600 $1,619,400 $1,667,600 $1,717,200 $1,768,200 $1,820,500 $1,874,500 IV. Present Value @ 7%, $35,280,000 Per Unit $289,200 1 Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month,increasing at 103.0%/year. 3 Assumes a 5.0%vacancy and collection allowance. Assumes annual operating expenses at$4,000/unit,increasing at 103.5%/year. 5 Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.00/6/year. e Assumes$3001unit/year,increasing at 103.5%/year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.x1s;Market Rate CF;jlr; 10/14/2004 TABLE 4A CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year10 Year 11 Year12 Year13 Year14 Year16 Year16 Year17 Year18 I. Income Rental Revenue' Market Rate Units $3.056,400 $3,148,100 $3,242,500 $3,339,800 $3,440,000 $3,543,200 $3,649,500 $3,759,000 $3,871,800 Moderate Income Units - - - - - - - - Low Income Units Gross Rental Income $3,056,400 $3,148,100 $3,242,500 $3,339,800 $3,440,000 $3,543,200 $3,649,500 $3,759,000 $3,871,800 MiscellanousIncome 19,100 19,700 20,300 20,900 21,500 22,100 22,800 23,500 24,200 Gross Income $3,075,500 $3,167,800 $3,262,800 $3,360,700 $3,461,500 $3,565,300 $3,672,300 $3,782,500 $3,896,000 (Less)Vacancy Allowance' (153,800) (158,400) (163,100) (168,000) (173,100) (178,300) (183,600) (189,100) (194,800) Effective Gross Income $2,921,700 $3,009,400 $3,099,700 $3,192,700 $3,288,400 $3,387,000 $3,488,700 $3,593,400 $3,701,200 II. Operating Expenses General Operating Expenses 4 $665,100 $688,400 $712,500 $737,400 $763,200 $789,900 $817,500 $846,100 $875,700 Property Taxes° 276,700 282,200 287,800 293,600 299,500 305,500 311,600 317,800 324,200 Reserves° 49,900 51,600 53,400 55,300 57,200 59,200 61,300 63,400 65,600 Total Operating Expenses $991,700 $1,022,200 $1,053,700 $1,086,300 $1,119.900 $1,154,600 $1.190,400 $1,227,300 $1,265,500 III. Net Operating Income $1,930,000 $1,987,200 $2,046,000 $2,106,400 $2,168,500 $2,232,400 $2,298,300 $2,366,100 $2,435,700 IV. Present Value @ 7% Per Unit Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month, increasing at 103.0%/year. 3 Assumes a 5.0%vacancy and collection allowance. Assumes annual operating expenses at$4,000/unit,increasing at 103.5%/year. 5 Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.0%/year. 6 Assumes$300/unit/year,increasing at 103.5%/year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.xis;Market Rate CF;jlr; 10/14/2004 TABLE 4A CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 26 Year 26 Year 27 1. Income Rental Revenue' Market Rate Units $3,988,000 $4,107,600 $4,230,800 $4.357,700 $4,488,400 $4,623,100 $4,761,800 $4,904,700 $5,051,800 Moderate Income Units Low Income Units Gross Rental Income $3,988,000 $4,107,600 $4,230,800 $4,357,700 $4,488,400 $4,623,100 $4,761,800 $4,904,700 $5,051,800 Miscellanous Income 24.900 25.600 26.400 27.200 28.000 28,800 29.700 30,600 31,500 Gross Income $4,012,900 $4,133,200 $4,257,200 $4,384,900 $4,516,400 $4,651,900 $4,791,500 $4,935,300 $5,083,300 (Less)Vacancy Allowance' (200,600) (206,700) (212,900) (219,200) (225,8001 (232,600) (239,600) (246,800) (254,200) Effective Gross Income $3,812,300 $3,926,500 $4,044,300 $4,165,700 $4,290,600 $4,419,300 $4,551,900 $4,688,500 $4,829,100 II. Operating Expenses General Operating Expenses° $906,300 $938,000 $970.800 $1,004,800 $1,040,000 $1,076,400 $1,114,100 $1,153,100 $1,193,500 Property Taxes° 330,700 337,300 344,000 350,900 357,900 365,100 372,400 379,800 387,400 Reserves" 67,900 70,300 72,800 75,300 77,900 80,600 83,400 86,300 89,300 Total Operating Expenses $1,304,900 $1,345,600 $1,387,600 $1,431,000 $1,476,800 $1,522,100 $1,569,900 $1,619,200 $1,670,200 III. Net Operating Income $2,507,400 $2,580,900 $2,656,700 $2,734,700 $2,814,800 $2,897,200 $2,982,000 $3,069,300 $3,158,900 IV. Present Value @ 7% Per Unit ' Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month,increasing at 103.0%/year. 3 Assumes a 5.0%vacancy and collection allowance. 4 Assumes annual operating expenses at$4,000/unit,increasing at 103.5%/year, 5 Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.0%/year. 6 Assumes$300/unit/year, increasing at 103.5%/year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.x1s;Market Rate CF;jlr; 10/14/2004 TABLE 4A CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Year 34 Year 35 Year 36 1. Income Rental Revenue' Market Rate Units $5,203,400 $5,359,500 $5,520,300 $5,685,900 $5,856,500 $6,032,200 $6,213,200 $6,399,600 $6,591,600 Moderate Income Units Low Income Units Gross Rental Income $5,203,400 $5,359,500 $5,520,300 $5,685,900 $5,856,500 $6,032,200 $6,213,200 $6,399,600 $6,591,600 Miscellanous Income` 32,400 33,400 34,400 35,400 36,500 37,600 38,700 39.900 41,100 Gross Income $5,235,800 $5,392,900 $5,554,700 $5,721,300 $5,893,000 $6,069,800 $6,251,900 $6,439,500 $6,632,700 (Less)Vacancy Allowance (261,800) (269,600) (277,700) (286,100) (294,700) (303,600) (312,600) (322,000) (331.600) Effective Gross Income $4,974,000 $5,123,300 $5,277,000 $5,435,200 $5,598,300 $5,766,300 $5,939,300 $6,117,500 $6,301,100 II. Operating Expenses General Operating Expenses" $1,235,300 $1,278,500 $1.323,200 $1,369,500 $1,417,400 $1,467,000 $1,518,300 $1,571,400 $1,626,400 Property Taxes° 395,100 403,000 411,100 419,300 427,700 436,300 445,000 453,900 463,000 Reserves° 92,400 95,600 98,900 102,400 106,000 109,700 113,500 117,500 121,600 Total Operating Expenses $1,722,800 $1,777,100 $1,833,200 $1,891,200 $1,951,100 $2,013,000 $2,076,800 $2,142,800 $2,211,000 Ill. Net Operating Income $3,251,200 $3,346,200 $3,443,800 $3,544,000 $3,647,200 $3,753,300 $3,862,500 $3,974,700 $4,090,100 IV. Present Value @ 7% Per Unit I Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month, increasing at 103.0%/year. ' 3 Assumes a 5.0%vacancy and collection allowance. 4 Assumes annual operating expenses at$4,000/unit,increasing at 103.5%/year. 5 Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.0%/year. B Assumes$300/unit/year,increasing at 103.5%/year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.xfs;Market Rate CF;jlr;10/14/2004 TABLE 4A CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year37 Year38 Year39 Year40 Year41 Year42 Year43 Year44 Year45 1. Income Rental Revenue' Market Rate Units $6,789,300 $6,993,000 $7,202,800 $7,418,900 $7,641,500 $7,870,700 $8,106,800 $8,350,000 $8,600,500 Moderate Income Units Low Income Units Gross Rental Income $6,789,300 $6,993,000 $7,202,800 $7,418,900 $7,641,500 $7,870,700 $8,106,800 $8,350,000 $8,600,500 Miscellanous Income` 42,300 43,600 44,900 46,200 47,600 49,000 50,500 52,000 53,600 Gross Income $6,831,600 $7,036,600 $7,247,700 $7,465,100 $7,689,100 $7,919,700 $8,157,300 $8,402,000 $8,654,100 (Less)Vacancy Allowance' (341,600) (351,800) (362,400) (373,300) (384,500) (396,000) (407,900) (420,100) (432,700) Effective Gross Income $6,490,000 $6,684,800 $6,885,300 $7,091,800 $7,304,600 $7,523,700 $7,749,400 $7,981,900 $8,221,400 11. Operating Expenses General Operating Expenses $1,683,300 $1,742,200 $1,803,200 $1,866,300 $1,931,600 $1,999,200 $2,069,200 $2,141,600 $2,216,600 Property Taxes° 472,300 481,700 491,300 501,100 511,100 521,300 531,700 542,300 553,100 Reserves° 125,900 130,300 134,900 139,600 144,500 149,600 154,800 160,200 165,800 Total Operating Expenses $2,281,500 $2,354,200 $2,429,400 $2,507,000 $2,587,200 $2,670,100 $2,755,700 $2,844,100 $2,936,500 III. Net Operating Income $4,208,500 $4,330,600 $4,455,900 $4,584,800 $4,717,400 $4,853,600 $4,993,700 $5,137,800 $5,285,900 IV. Present Value @ 7% Per Unit Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month,increasing at 103.0%/year. 3 Assumes a 5.0%vacancy and collection allowance. 4 Assumes annual operating expenses at$4,000/unit,increasing at 103.5%/year. s Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.0%/year. s Assumes$300/unit/year,increasing at 103.5%/year. Prepared by: Keyser Marston Associates, Inc. Filename: In-lieu fee 1014 04.xis;Market Rate CF;jlr; 10/14/2004 TABLE 4A CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 46 Year 47 Year 48 Year49 Year 50 Year 51 Year 52 Year 53 Year 54 I. Income Rental Revenue' Market Rate Units $8,858,500 $9,124,300 $9,398,000 $9,679,900 $9,970,300 $10,269.400 $10,577,500 $10,894,800 $11,221,600 Moderate Income Units - - - - - - - - - Low Income Units Gross Rental Income $8,858,500 $9,124,300 $9,398,000 $9,679,900 $9,970,300 $10,269,400 $10,577,500 $10,894,800 $11,221,600 Miscellanous Income` 55,200 56,900 58,600 60,400 62,200 64,100 66,000 68,000 70,000 Gross Income $8,913,700 $9,181,200 $9,456,600 $9,740,300 $10,032,500 $10,333,500 $10,643,500 $10,962,800 $11,291.600 (Less)Vacancy Allowance (445,700) (459,100) (472,800) (487,000) (501,600) (516,700) (532,200) (548,100) (564,600) Effective Gross Income $8,468,000 $8,722,100 $8,983,800 $9,253,300 $9,530,900 $9,816,800 $10,111,300 $10,414,700 $10,727,000 II. Operating Expenses General Operating Expenses' $2,294,200 $2,374,500 $2,457,600 $2,543,600 $2,632,600 $2,724,700 $2,820,100 $2,918,800 $3,021,000 Property Taxes° 564,200 575,500 587,000 598,700 610,700 622,900 635,400 648,100 661,100 Reserves° 171,600 177,600 183,800 190.200 196,900 203,800 210,900 218,300 225,900 Total Operating Expenses $3,030,000 $3,127,600 $3,228,400 $3,332,500 $3,440.200 $3,551,400 $3,666,400 $3,785,200 $3,908,000 Ill. Net Operating Income $5,438,000 $5,594,500 $5,755,400 $5,920,800 $6,090,700 $6,265,400 $6,444,900 $6,629,500 $6,819,000 IV. Present Value @ 7% Per Unit Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month,increasing at 103.0%/year. i 3 Assumes a 5.0%vacancy and collection allowance. 4 Assumes annual operating expenses at$4,000/unit,increasing at 103.5%/year. 5 Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.0%/year. 6 Assumes$300/unit/year,increasing at 103.5%/year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.x1s;Market Rate CF;jlr; 10/14/2004 TABLE 4A CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 55 Year 56 Year 57 Year 58 Year 59 Year 60 I. Income Rental Revenue' Market Rate Units $11,558,200 $11,904,900 $12,262,000 $12,629,900 $13,008,800 $13,399,100 Moderate Income Units - - - - - - Low Income Units Gross Rental Income $11,558,200 $11,904,900 $12,262,000 $12,629,900 $13,008,800 $13,399,100 Miscellanous Income` 72.100 74,300 76,500 78,800 81,200 83,600 Gross Income $11,630,300 $11,979,200 $12,338,500 $12,708,700 $13,090,000 $13,482,700 (Less)Vacancy Allowance' (581,500) (599,000) (616,900) (635,400) (654,500) (674,100) Effective Gross Income $11,048,800 $11,380,200 $11,721,600 $12,073,300 $12,435,500 $12,808,600 II. Operating Expenses General Operating Expenses" $3,126,700 $3,236,100 $3,349,400 $3,466,600 $3,587,900 $3,713,500 Property Taxes 674,300 687,800 701,600 715,600 729,900 744,500 Reserves' 233,800 242,000 250,500 259,300 268,400 277,800 Total Operating Expenses $4,034,800 $4,165,900 $4,301,500 $4,441,500 $4,586,200 $4,735,800 111, Net Operating Income $7,014,000 $7,214,300 $7,420,100 $7,631,800 $7,849,300 $8,072,800 IV. Present Value @ 7% Per Unit ' Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month,increasing at 103.0%/year. 3 Assumes a 5.0%vacancy and collection allowance. 4 Assumes annual operating expenses at$4,000/unit,increasing at 103.5%/year. 5 Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.0%/year. 6 Assumes$300/unit/year,increasing at 103.5%/year. Prepared by: Keyser Marston Associates,Inc. Filename: in-lieu fee 10 14 04.xls;Market Rate CF;jir; 10/14/2004 TABLE 413 CASH FLOW ANALYSIS-25%AFFORDABLE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 I. Income Rental Revenue' Market Rate Units $1,743,600 $1,795,900 $1,849,800 $1,905,300 $1,962,500 $2,021,400 $2,082,000 $2,144,500 $2,208,800 Moderate Income Units 468,600 480,300 492,300 504,600 517,200 530,100 543,400 557,000 570,900 Low Income Units 75,000 76,900 78,800 80,800 82,800 84,900 87,000 89,200 91.400 Gross Rental Income $2,287,200 $2,353,100 $2,420,900 $2,490,700 $2,562,500 $2,636,400 $2,712.400 $2,790,700 $2,871,100 Miscellanous Income` 14,600 15,000 15,500 16,000 16,500 17,000 17,500 18,000 18,500 Gross Income $2,301,800 $2,368,100 $2,436,400 $2,506,700 $2,579,000 $2,653,400 $2.729,900 $2,808,700 $2,889,600 (Less)Vacancy Allowance (115,100) (118,400) (121,800) _ (125,300) (129,000) (132,700) (136,500) (140,400) (144,500) Effective Gross Income $2,186,700 $2,249,700 $2,314,600 $2,381,400 $2.450,000 $2,520,700 $2,593,400 $2,668,300 $2,745,100 II. Operating Expenses General Operating Expenses" $488,000 $505,100 $522,800 $541,100 $560,000 $579,600 $599,900 $620,900 $642.600 Property Taxes' 224,600 229,100 233,700 238,400 243,200 248,100 253,100 258,200 263,400 Reserves" 36.600 37,900 39,200 40,600 42,000 43,500 45,000 46,600 48,200 Total Operating Expenses $749,200 $772,100 $795,700 $820,100 $845,200 $871,200 $898,000 $925,700 $954,200 111. Net Operating Income $1,437,500 $1,477,600 $1,518,900 $1,561,300 $1,604,800 $1,649,500 $1,695,400 $1,742,600 $1,790,900 IV. Present Value @ 7% $33,095,000 Per Unit $271,300 Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month,increasing at 103.00/o/year. 3 Assumes a 5.0%vacancy and collection allowance. Assumes annual operating expenses at$4,000/unit, increasing at 103.5%/year. 5 Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.0%/year. 6 Assumes$300/unit/year,increasing at 103.5%/year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.xis;25%Aff CF;jlr; 10/14/2004 TABLE 4B CASH FLOW ANALYSIS-25%AFFORDABLE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year10 Year11 Year12 Year13 Year14 Year15 Year16 Year17 Year18 1. Income Rental Revenue' Market Rate Units $2,275,100 $2,343,400 $2,413,700 $2,486,100 $2,560,700 $2,637,500 $2,716,600 $2,798,100 $2,882,000 Moderate Income Units 585,200 599,800 614,800 630,200 646,000 662,200 678,800 695,800 713,200 Low Income Units 93,700 95,000 _ 98,400 100,900 103,400 106,000 108,700 111,400 114,200 Gross Rental Income $2,954,000 $3,039,200 $3,126,900 $3.217,200 $3,310,100 $3,405,700 $3,504,100 $3,605,300 $3,709,400 Misceilanous Income` 19.100 19.700 20,300 20,900 21,500 22,100 22.800 23.500 24,200 Gross Income $2,973,100 $3,058,900 $3,147,200 $3,238,100 $3,331,600 $3,427,800 $3,526,900 $3,628,800 $3,733,600 (Less)Vacancy Allowance (148,700) (152,900) (157A00) (161,900) (166,600) (171,400) (176,300) (181,400) (186,700) Effective Gross Income $2,824,400 $2,906,000 $2,989,800 $3,076,200 $3,165,000 $3,256,400 $3,350,600 $3,447,400 $3,546,900 11. Operating Expenses General Operating Expenses" $665,100 $688,400 $712,500 $737,400 $763,200 $789,900 $817,500 $846,100 $875,700 Property Taxes' 268,700 274,100 279,600 285,200 290,900 296,700 302,600 308,700 314,900 Reserves° 49,900 51,600 53,400 55,300 57.200 59,200 61,300 63,400 65,600 Total Operating Expenses $983,700 $1,014,100 $1,045,500 $1,077,900 $1,111,300 $1,145,800 $1,181,400 $1,218,200 $1,256,200 III. Net Operating Income $1,840,700 $1,891,900 $1,944,300 $1,998,300 $2,053,700 $2,110,600 $2,169,200 $2,229,200 $2,290,700 IV. Present Value @ 7% Per Unit Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month,increasing at 103.00/o/year. 3 Assumes a 5.0%vacancy and collection allowance. 4 Assumes annual operating expenses at$4,000/unit, increasing at 103.5%/year. 6 Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.0%/year. 6 Assumes$300/unit/year,increasing at 103.5%/year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.xis;25%Aff CF;jlr; 10/14/2004 TABLE 413 CASH FLOW ANALYSIS-25%AFFORDABLE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year19 Year20 Year21 Year22 Year23 Year24 Year26 Year26 Year27 I. Income Rental Revenue' Market Rate Units $2,968,500 $3,057,600 $3,149,300 $3,243.800 $3,341,100 $3,441,300 $3,544,500 $3,650,800 $3,760,300 Moderate Income Units 731,000 749,300 768,000 787,200 806,900 827,100 847,800 869,000 890,700 Low Income Units 117.100 120,000 123,000 126,100 129,300 132,500 135,800 139,200 142,700 Gross Rental Income $3,816,600 $3,926,900 $4,040,300 $4,157,100 $4,277,300 $4,400,900 $4,528.100 $4,659,000 $4,793,700 Miscellanous Income` 24,900 25,600 26,400 27,200 28,000 28,800 29,700 30,600 31,500 Gross Income $3,841,500 $3,952,500 $4,066,700 $4,184,300 $4,305,300 $4,429,700 $4,557,800 $4,689,600 $4,825,200 (Less)Vacancy Allowance' (192,100) (197,600) (203,300) (209,200) (215,300) (221,5001 (227,900) (234,500) (241,300) Effective Gross Income $3,649,400 $3,754,900 $3,863,400 $3,975,100 $4,090,000 $4,208,200 $4,329,900 $4,455,100 $4,583,900 II. Operating Expenses General Operating Expenses" $906,300 $938,000 $970,800 $1,004,800 $1,040,000 $1,076.400 $1,114,100 $1,153,100 $1,193,500 Property Taxes° 321,200 327,600 334,200 340,900 347,700 354,700 361,800 369,000 376,400 Reserves' 67,900 70,300 72,800 75,300 77,900 80,600 83,400 86.300 89,300 Total Operating Expenses $1,295,400 $1,335,900 $1,377,800 $1,421,000 $1,465,600 $1,511,700 $1,559,300 $1,608,400 $1,659,200 III. Net Operating Income $2,354,000 $2,419,000 $2,485,600 $2,554,100 $2,624,400 $2,696,500 $2,770,600 $2,846,700 $2,924,700 IV. Present Value @ 7% Per Unit 1 Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month,increasing at 103.0%/year. 3 Assumes a 5.0%vacancy and collection allowance. 4 Assumes annual operating expenses at$4,000/unit, increasing at 103.5%/year. 5 Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.00/o/year. B Assumes$300/unit/year,increasing at 103.5%/year. Prepared by: Keyser Marston Associates, Inc. Filename: In-lieu fee 10 14 04.x1s;25%Aff CF;jlr; 10/14/2004 TABLE 4B CASH FLOW ANALYSIS-25%AFFORDABLE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year28 Year29 Year30 Year31 Year32 Year33 Year34 Year35 Year36 Year37 I. Income Rental Revenue' Market Rate Units $3,873,100 $3,989,300 $4,109,000 $4,232,300 $4,359,300 $4,490,100 $4,624,800 $4,763,500 $4,906,400 $5,053,600 Moderate Income Units 913,000 935,800 959,200 983,200 1,007,800 1,033,000 1,058,800 1,085,300 1,112,400 1,140,200 Low Income Units 146,300 150.000 153,800 157,600 161,500 165.500 169,600 173,800 178,100 182,600 Gross Rental Income $4,932,400 $5,076,100 $5,222,000 $5,373,100 $5,528,600 $5,688,600 $5,853,200 $6,022,600 $6,196,900 $6,376,400 Miscellanous Income` 32,400 33,400 34,400 35,400 36.500 37.600 38.700 39,900 41,100 42,300 Gross income $4,964,800 $5,108,500 $5,256,400 $5,408,500 $5,565,100 $5,726,200 $5,891,900 $6,062,500 $6,238,000 $61418'"� (Less)Vacancy Allowance' (248,200) (255,400) (262,800) (270,400) (278,300) (286,300) (294.600) (303.100) (311,900) (320"A Effective Gross Income $4,716,600 $4,853,100 $4,993,600 $5,138,100 $5,286,800 $5,439,900 $5,597,300 $5,759,400 $5,926,100 $6,097,800 II. Operating Expenses General Operating Expenses" $1,235,300 $1,278,500 $1,323,200 $1,369,500 $1,417,400 $1,467,000 $1,518,300 $1,571,400 $1,626,400 $1,683,300 Property Taxes° 383,900 391,600 399,400 407,400 415,500 423,800 432,300 440,900 449,700 458,700 Reserves" 92,400 95,600 98,900 102,400 106,000 109,700 113,500 117,500 121,600 125.900 Total Operating Expenses $1,711,600 $1,765,700 $1,821,500 $1,879,300 $1,938,900 $2,000,500 $2,064.100 $2,129,800 $2,197,700 $2,267,900 III. Net Operating Income $3,005,000 $3,087,400 $3,172,100 $3,258,800 $3,347,900 $3,439,400 $3,533,200 $3.629,600 $3,728,400 $3,829,900 IV. Present Value @ 7% Per Unit ' Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month,increasing at 103.0%/year. 3 Assumes a 5.0%vacancy and collection allowance. a Assumes annual operating expenses at$4,000/unit, increasing at 103.5%/year. 5 Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.0%/year. B Assumes$300/unit/year,increasing at 103.5%/year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.xls;25%Aff CF;jir; 10/14/2004 p TABLE 4B CASH FLOW ANALYSIS-26%AFFORDABLE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year38 Year39 Year40 Year41 Year42 Year43 Year44 Year45 Year46 Year47 1. Income Rental Revenue' Market Rate Units $5,205,200 $5,361,400 $5,522,200 $5,687,900 $5,858,500 $6,034,300 $6,215,300 $6,401,800 $6,593,900 $6,791,700 Moderate Income Units 1,168,700 1,197,900 1,227,800 1,258,500 1,290,000 1,322,300 1,355,400 1,389,300 1,424,000 1,459,600 Low Income Units 187,200 191,900 196,700 201.600 206,600 211,800 217,100 222,500 228,100 233,800 Gross Rental income $6,561,100 $6,751,200 $6,946,700 $7,148,000 $7,355,100 $7,568,400 $7,787,800 $8,013,600 $8,246,000 $8,485,100 Miscellanous Income` 43,600 44 900 46,200 47,600 49,000 50,500 52,000 53,600 55,200 56,900 Gross Income $6,604,700 $6,796,100 $6,992,900 $7,195,600 $7,404,100 $7,618,900 $7,839,800 $8,067,200 $8,301,200 $8,542,L (Less)Vacancy Allowance (330,200) (339,800) (349,600) (359,800) (370,200) (380,900) (392,000) _ (403,400) (415,100) (427,100) Effective Gross Income $6,274,500 $6,456,300 $6,643,300 $6,835,800 $7,033,900 $7,238,000 $7,447,800 $7,663,800 $7,886,100 $8,114,900 II. Operating Expenses General Operating Expenses" $1,742,200 $1,803,200 $1,866,300 $1,931,600 $1,999,200 $2,069,200 $2,141,600 $2,216,600 $2,294,200 $2,374,500 Property Taxes° 467,900 477,300 486,800 496,500 506,400 516,500 526,800 537,300 548,000 559,000 Reserves° 130,300 134,900 139,600 144,500 149,600 154,800 160,200 165.800 171,600 177,600 Total Operating Expenses $2,340,400 $2,415,400 $2,492,700 $2,572,600 $2,655,200 $2,740,500 $2,828,600 $2,919,700 $3,013,800 $3,111,100 III. Net Operating income $3,934,100 $4,040,900 $4,150,600 $4,263,200 $4,378,700 $4,497,500 $4,619,200 $4,744,100 $4,872,300 $5,003,800 IV. Present Value @ 7% Per Unit ' Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month,increasing at 103.0%/year. 3 Assumes a 5.0%vacancy and collection allowance. 4 Assumes annual operating expenses at$4,000/unit, increasing at 103.5%/year. 5 Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.011a/year. s Assumes$300/unit/year,increasing at 103.5%/year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.xls;25%Aff CF;jlr; 10/14/2004 TABLE 4B CASH FLOW ANALYSIS-25%AFFORDABLE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 48 Year 49 Year 50 Year 51 Year 52 Year 53 Year 54 Year 55 Year 56 1. Income Rental Revenue' Market Rate Units $6,995,500 $7,205,400 $7,421,600 $7,644,200 $7.873,500 $8,109,700 $8,353,000 $8,603,600 $8,861,700 Moderate Income Units 1,496,100 1,533,500 1,571,800 1,611,100 1,651,400 1,692,700 1,735,000 1,778,400 1,822,900 Low Income Units 239,600 _ 245,600 251,700 258,000 264,500 271.100 _ 277,900 284,800 291,900 Gross Rental Income $8,731,200 $8,984,500 $9,246,100 $9,513,300 $9,789,400 $10,073,500 $10,365,900 $10,666,800 $10,976,500 Misceilanous Income` 58.600 60.400 62,200 64,100 66.000 68.000 70,000 72,100 74.300 Gross Income $8,789,800 $9,044,900 $9,307,300 $9,577,400 $9,855,400 $10,141,500 $10,435,900 $10,738,900 $11,050,800 (Less)Vacancy Allowance (439,500) (452,200) (465,400) (478,900) (492,800) (507,100) (521,800) (536,900) (552,500) Effective Gross Income $8,350,300 $8,592,700 $8,841,900 $9,098,500 $9,362,600 $9,634,400 $9,914,100 $10,202,000 $10,498,300 Il. Operating Expenses General Operating Expenses" $2,457,600 $2,543,600 $2,632,600 $2,724,700 $2,820,100 $2,918,800 $3.021,000 $3,126,700 $3,236,100 Property Taxes' 570,200 581,600 593,200 605,100 617,200 629,500 642,100 654,900 668,000 Reserves° 183,800 190,200 196,900 203,800 210,900 218,300 225,900 233,800 242,000 Total Operating Expenses $3,211,600 $3,315,400 $3,422,700 $3,533,600 $3,648,200 $3,766,600 $3,889,000 $4,015,400 $4,146,100 111. Net Operating Income $5,138,700 $5,277,300 $5,419,200 $5,564,900 $5,714,400 $5,867,800 $6,025,100 $6,186,600 $6,352,200 IV. Present Value @ 7% Per Unit ' Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month,increasing at 103.0%/year. 3 Assumes a 5.0%vacancy and collection allowance. 4 Assumes annual operating expenses at$4,000/unit, increasing at 103.5%/year. 5 Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.0%/year. 6 Assumes$300/unit/year, increasing at 103.5%/year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.xis;25%Aff CF;jlr; 10/14/2004 TABLE 413 CASH FLOW ANALYSIS-26%AFFORDABLE SCENARIO AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year 57 Year 58 Year 59 Year 60 . 1. Income Rental Revenue' Market Rate Units $9.127,600 $9,401,400 $9,683,400 $9,973,900 Moderate Income Units 1,868,500 1,915,200 1,963,100 2,012,200 Low Income Units 299,200 306,700 314.400 _ 322.300 Gross Rental Income $11,295,300 $11,623,300 $11,960,900 $12,308,400 Miscellanouslncome` 76,500 78,800 81,200 83,600 Gross Income $11,371,800 $11,702,100 $12,042,100 $12,392,000 - (Less)Vacancy Allowance° (568,6001 (685,100) (602,100) (619,600) Effective Gross Income $10,803,200 $11,117,000 $11,440,000 $11,772,400 It. Operating Expenses General Operating Expenses $3,349,400 $3,466,600 $3,587,900 $3,713,500 Property Taxes° 681,400 695,000 708,900 723,100 Reserves" 250,500 259,300 268,400 277,800 Total Operating Expenses $4,281,300 $4,420,900 $4,565,200 $4,714,400 III. Net Operating Income $6,521,900 $6,696,100 $6,874,800 $7,058,000 IV. Present Value @ 7% Per Unit ' Based on assumption in TABLE 3 and TABLE 2. 2 Assumes$10/unit/month, increasing at 103.0%a/year. 3 Assumes a 5.0%vacancy and collection allowance. ' " Assumes annual operating expenses at$4,000/unit, increasing at 103.5%/year. s Assumes property taxes at 1.25%of the value(8.0% capitalization rate),increasing at 102.0%/year. s Assumes$300/unit/year,increasing at 103.5%/year. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 1014 04.xls;25%Aff CF;jlr; 10/14/2004 TABLE 5 AFFORDABILITY GAP CALCULATION AFFORDABILITY GAP ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA 1. Value of 122 Rental Units Total Value 100% Market Rate Scenario $35,280,000 25%Affordable Scenario $33,095,000 II. Affordability Gap $2,185,000 Per Affordable Units $70,500 Per Total Units $17,900 Per Sf GBA of Converted Units $15 ' Assumes the weighted average unit size is 1,188 square feet. Prepared by: Keyser Marston Associates,Inc. Filename: In-lieu fee 10 14 04.x1s;Aff Gap;jlr; 10/14/2004 APPENDIX B TABLE 1 ESTIMATED COST TO MEET DEVELOPMENT REQUIREMENTS ON-SITE DEVELOPMENT REQUIREMENT ANALYSIS CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA I. Parkinq Requirements A. Parking Code Deficit Required On-site Parking Spaces 11 (Less)Existing On-site Parking Spaces (9) Parking Deficit 2 Required Required #of Unit Size Parking On-Site B. Revised Unit Mix Units (Sf) Ratios Parking One-Bedroom Units 2 900 1.50 3 Two-Bedroom Units - 900 2.50 Three-Bedroom Units 2 1,200 3.00 6 Totals 4 1,050 2.25 9 C. Reduction in Value/Converted Unit Two-Bedroom Unit Market Price $348 /Sf $313,200 Estimated%Reduction in Value 20% One-Bedroom Unit Market Price $278 /Sf $250,560 Reduction in Value/Converted Unit $62,640 D. Cost of Parking Requirement Number of Units Converted to One-Bedroom Units 2 Reduction in Value/Converted Unit $62,640 Total Cost of Parking Requirement $125,280 Per Unit(Total Project) $31,320 Per Sf GBA/Unit $29.83 Il. Landscaping Requirement Additional Trees 2 Cost of Planting Trees $500 Total Cost of Landscaping Requirment $1,000 Per Unit(Total Project) $250 Per Sf GBA/Unit $0.24 III. Cost to Meet Development Requirements On-Site Total Cost of Parking Requirement $125,280 Total Cost of Landscaping Requirment 1,000 IV. Total Cost to Meet Development Requirements On-Site $126,280 Per Unit(Total Project) $31,570 Per Sf GBA/Unit $30.07 Prepared by: Keyser Marston Associates, Inc. Filename: In-lieu fee 10 14 04.x1s;Dev Standards;jlr; 10/14/2004 Res. No. 2004-91 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, JOAN L.FLYNN, the duly appointed, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at an adjourned regular meeting thereof held on the 29th day of November 2004 by the following vote: AYES: Sullivan, Coerper Hardy, Cook, Winchell NOES: None ABSENT: Green, Boardman ABSTAIN: None --00e.-st) oll- dv� CiIUClerk and ex-officio lerk of the City Council of the City of Huntington Beach, California -PNT 4 , ATTAC�HMI� ,�esj . C)oo ATTACHMENT 5 CONDOMINIUM CONVERSIONS CITY COUNCIL MEETING NOVEMBER 1 5, 2004 ZONING TEXT AMENDMENT NO. 04-03 AND AFFORDABLE HOUSING IN-LIEU FEE RESOLUTION BACKGROUND • Cou cil directed staff to explore options to: 1) liminate tentative parcel map procedures 2) Provide affordable housing in-lieu fee when unable to comply with parking and landscaping re quirements ANALYSIS • Current ordinance requires: ■ Approval of CUP and TPM ■ Provision of current parking and landscaping re uirements on-site ANALYSIS • Pr soo ed _1_o i ications (2-4 units sold without City approval) ■ Substitute Certificate of Compliance procedure for TPM process ■ Allow $15/sq. ft. Affordable Housing In-Lieu Fee instead of compliance with current parking ar d landscaping requirements ANALYSIS • Certificate of Compliance ■ Plat Map by engineer ■ Recorded at County ■ R cognizes subdivision, establishes property lines, co nnion area ■ Pr)vides protection to current and future owners • Park ng and Landscaping Options ■ V riance—difficult to approve ■ A fordable Housing In-Lieu fee—$15/sq. ft. re,ommended fee vs. $3 0/sq. ft. to retrofit property ANALYSIS • Fee omparison ■ T M - $25,304 ■ C rtificate of Compliance - $6,304 Cost e timates only — additional costs for CU 5 etc. STAFF R E C O-M-M-E 1`I-D AX I-O N • Recommend approval of ZTA 04-03 and Resolution for Affordable Housing In-Lieu Fee: ✓DZeases processing time ✓Riduces application costs ✓Prpvides for quality development ✓Prlptects current and future owners ✓ProI-vides affordable housing in-lieu fee when parking anti landscaping cannot be met Endo Presentation RCA ROUTING SHEET INITIATING DEPARTMENT: Planning SUBJECT: ZONING TEXT AMENDMENT NO. 04-03 (SUBDIVISIONS) AND AFFORDABLE HOUSING IN-LIEU FEE (CONDO CONVERSIONS COUNCIL MEETING DATE: November 1 , 2004 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached Resolution (w/exhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) (Signed in full by the City Attorne ) Not Applicable Subleases, Third Party Agreements, etc. (Approved as to form by City Attorne ) Not Applicable Certificates of Insurance (Approved by the Cit Attorne ) Not Applicable Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report (If applicable) Attached Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Attached EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff Assistant City Administrator Initial City Administrator Initial City Clerk ( ) EXPLANATION FOR RETURN OF ITEM: Clerk's(Below Space For City Only) RCA Author: HZ:SH:MBB:JJ:rI NOTICEOFPUBLICHEARING � of the staff — - - BEFORE T,�JQi"=',14.1 1(1L gill be available OF THE interested parties at the City Clerk's Offi,, H U N T I N G T 0 N B E A C F-- CITY OFWJNTWTON BEACH, on Wednesday, Nove, NOTICE IS 'FIEREBY ber 10,2004. GIVEN that on Monday, ALL INTERESTED November 15, 2004, at PERSONS are invited to 7:00 p.m. in the City attend said hearing and DFPFNDENT Council Chambers, 2000 express opinions or Main Street, Huntington submit evidence for or Beach, the City Council against the application will hold a public hearing as outlined above-If you on the following Plan- challenge the City ning and zoning items: Council's action in court, 1. ZONING TEXT you may be limited to AMENDMENT NO. 04- raising only those issues 03 (TENTATIVE PARCEL you .or someone else MAP EXEMPTION FOR raised at the public CONDOMINIUM CON- hearing described in this VERSIONS) Applicant: notice, or in written City of Huntington Beach correspondence deli- A Client Reference # �n� Request: To amend ered to the City at, or l 0q-() Chapter 250, Subdivi- prior to, the public sions - General Provi- hearing.If there are any sions, of the Huntington further questions please on Beach Independent Reference Beach Zoning and Sub- call the Planning De- division Ordinance. The partment at 536-5271 proposed amendment is and refer to the above intended to provide an items. Direct your exemption to the ten- written communications tative parcel map pro- to the City Clerk. cess for apartments and Joan L.Flynn,City Clerk stock cooperatives City of Huntingto n Beach previously converted to :_20(X1-Main Street,2nd Floor condominiums without City approval. Location: Citywide Planner As- signed:Jane James 2. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUN- Ivertiser. TINGTON BEACH ES- TABLISHING THE AF- FORD HOUSING IN- LIEU F€E AUTHORIZED By ZONING AND SUBDIVISION ORDI- NANCE CHAPTER 235 °d is a cli inc, of our ad from the first publication, beginning on RELATING TO RESI- DENTIAL �/ Pp D y COCONDOMINI- UMERSIAp /-O Cr and expiring on ! -//-o CONVERSION Ap- plicant: City of Hun- tington Beach Request: To establish an afford- able housing in-lieu fee reed to make any changes or corrections, please call me at your for apartments and stock cooperatives convenience. previously converted to condominiums- without City approval. Location: Citywide Planner As- t signed:Jane James ; of this ad is $ NOTICE, IS HEREBY GIVEN that Items #1 is exempt from the provi- n Environmental Quality of the California for your cooperation and patronage. Envi Act (CEQA) pursuant to City Council Resolution 4501, Sectiod 6, Class 20, which supplements CEQA and exempts. minor-, amendments to y zoning ordinances. Ad- , dWO*Ally Item #2 is not � ject to the provisions ,of CEQA' pursuant to tion 15061 b) 3), bec use it can be seen with certa'pty that there is no possibility that the 1 Sletten activity in question may have a significant effect WvertisinQ on the environment. ON FILE:A copy of the Proposed requests is on file e the City Clerk's Office,,2000 Main Street, A Huntington Beach, Cali- . fornia 92648, for in- V� 5 spection by the gublic. 18682 Beach Blvd.,Ste.160,Huntington Beach,California 92646 (714)965-3030 •Fax(714)965-7174 r A Publication of Times Community News •A Division of the Cos,Angeles &.e5 NOTICE OF PUBLIC HEARING BEFORE THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH NOTICE IS HEREBY GIVEN that on Monday, November 15, 2004, at 7:00 p.m. in the City Council Chambers, 2000 Main Street, Huntington Beach, the City Council will hold a public hearing on the following Planning and zoning items: ZONING TEXT AMENDMENT NO. 04-03 (TENTATIVE PARCEL MAP EXEMPTION FOR CONDOMINIUM CONVERSIONS) Applicant: City of Huntington Beach Request: To amend Chapter 250, Subdivisions —General Provisions, of the Huntington Beach Zoning and Subdivision Ordinance. The proposed amendment is intended to provide an exemption to the tentative parcel map process for apartments and stock cooperatives previously converted to condominiums without City approval. Location: Citywide Planner Assigned: Jane James A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH ESTABLISHING THE AFFORDABLE HOUSING IN-LIEU FEE AUTHORIZED BY ZONING AND SUBDIVISION ORDINANCE CHAPTER 235 RELATING TO RESIDENTIAL CONDOMINIUM CONVERSIONS Applicant: City of Huntington Beach Request: To establish an affordable housing in-lieu fee for apartments and stock cooperatives previously converted to condominiums without City approval. Location: Citywide Planner Assigned: Jane James NOTICE IS HEREBY GIVEN that Items #1 is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to City Council Resolution 4501, Section 6, Class 20, which supplements CEQA and exempts minor amendments to zoning ordinances. Additionally Item #2 is not subject to the provisions of CEQA pursuant to Section 15061 b) 3), because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. ON FILE: A copy of the proposed requests is on file in the City Clerk's Office, 2000 Main Street, Huntington Beach, California 92648, for inspection by the public. A copy of the staff report will be available to interested parties at the City Clerk's Office on Wednesday, November 10, 2004. ALL INTERESTED PERSONS are invited to attend said hearing and express opinions or submit evidence for or against the application as outlined above. If you challenge the City Council's action in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City at, or prior to, the public hearing. If there are any further questions please call the Planning Department at 536-5271 and refer to the above items. Direct your written communications to the City Clerk. Joan L. Flynn, City Clerk City of Huntington Beach 2000 Main Street, 2nd Floor Huntington Beach, California 92648 (714) 536-5227 (g:legals:Council\041115) CITY COUNCIUREDEVELOPMENT AGENCY PUBLIC HEARING REQUEST SUBJECT: 7-YA t A - l Wl> lsO 90C �MP-UA6 tit" S11 IN-LIEU, DEPARTMENT: h t� MEETING DATE: 11.1 S •DA FFE CONTACT: 30.VIQ. 3a YY" PHONE:_ T�(o N/A YES NO ( ) 90 ( ) Is the notice attached? ( ) 0 ( ) Do the Heading and Closing of Notice reflect City Council(and/or Redevelopment Agency)hearing? ( ) ( ) Are the date, day and time of the public hearing correct? If an appeal,is the appeicant's name included in the notice? ( , ) ( ) If Coastal Development Permit,does the notice include appeal language? Is there an Environmental Status to be approved by Council? ( ) ( ) Is a map attached for publication? Is a larger ad required? Size Q ( ) ( ) Is the verification statement attached indicaWy" e source and accuracy of the mailing list? 0�itne�(C0. Ck �l m4 "W1 vw_ft KS Are the applicant's name and address part of the mailing labels? Are the appellant's name and address part of the mailing labels? fX) ( ) - ( ) If Coastal Development Permit,is the Coastal Commission part of the mailing labels? ( ) ( ) If Coastal Development Permit,are the resident labels attached? Is the Report 33433 attached? (Economic Development Dept. items only) Please complete the following: 1. Minimum days from publication to hearing date (� 2. Number of times to be published_ 3. Number of days between publications 21 V"0965 aasel pgej ssaippd ®A213AV Michael J. Chemey Steven F. Merrill Cara Marshall 1118 Park St 17650 Los Alamos St 2505 Delaware St 12 Huntington Beach CA 92648-2729 Fountain Valley CA 92708-5214 Huntington Beach CA 92648-2555 Rene A. Brookbank Elishia Olsen Debra Jean Campbell 816 1 lth St 205 13th St Apt C 205 13th St Unit 4 Huntington Beach CA 92648-3410 Huntington Beach CA 92648-4836 Huntington Beach CA 92648-4836 Pamela A. Campbell Beatriz P. Gotuzzo Romeo Tajanlangit 14 Village Circle Dr 205 13th St Apt A 209 13th St Apt A Lompoc CA 93436-5600 Huntington Beach CA 92648-4836 Huntington Beach CA 92648-4837 Nancy Ellen Boyd David N. & Simone Carillo Cathy Gillett 209 13th St Apt B 209 13th St Apt C 209 13th St Apt D Huntington Beach CA 92648-4837 Huntington Beach CA 92648-4837 Huntington Beach CA 92648-4837 Matson R C &J E 1994 Trust Aaron T. Frankel Sean Hong 413 14th St Apt A 413 14th St Apt C 413 14th St Apt D Huntington Beach CA 92648-4226 Huntington Beach CA 926484226 Huntington Beach CA 92648-4226 Michael R. Goodwin Gwendolynn Edwards David L. Loonier 413 14th St Apt B 202 15th St 204 15th St Huntington Beach CA 92648-4226 Huntington Beach CA 92648-4411 Huntington Beach CA 92648-4411 John D. &Teri K.Gillespie Robert B. &Kayla Holmes Patrick Bortmann 812 13th St 218 16th St Apt C 218 16th St Apt A Huntington Beach CA 92648-3435 Huntington Beach CA 92648-4439 Huntington Beach CA 92648-4439 Andreas Osman Jane Hiltz Hsu Yung-Hua 218 16th St Apt B 218 16th St Apt D 317 17th St Apt B Huntington Beach CA 92648-4439 Huntington Beach CA 92648-4439 Huntington Beach CA 92648-4283 Scott Schutzman Eric L. &Ruby L. Frazier Paul A. Tahmisian 317 17th St Apt C 317 17th St Apt A 1264 Sonoma Dr Huntington Beach CA 92648-4283 Huntington Beach CA 92648-4283 Altadena CA 91001-3152 Waltrau Mattern Caroline Cass Lisa-L.A. Perez 9188 Molt River Cir 103 Vista Del Mar Apt 3 322 19th St Apt A Fountain Valley CA 92708-4436 Redondo Beach CA 90277-5311 Huntington Beach CA 92648-3850 _AATL IAI °9CA W1096S aasel ;lagel ssalppV oAU3AV Q7/ •Michael R. &Julie E. Textor Joshua T. &Angela M. Lewis Greg O. &Robin M. Endsley 322 19th St Apt B 214 20th St Apt A P. O. Box 3865 Huntington Beach CA 92648-3850 Huntington Beach CA 92648-3941 Huntington Beach CA 92605-3865 Patricia Y. Conners Michael Lyons Daniel J.Torla 214 20th St Apt C 214 20th St Apt D 7247 Havenrock Dr Huntington Beach CA 92648-3941 Huntington Beach CA 92648-3941 Huntington Beach CA 92648-3005 David J. Makuch Gilbert A. & Suzanne J. Perea Matthew R. Busser 221 Meriden Rd. 21676 Canon Dr 409 20th St Apt A Middlefield CT 06455-1069 Topanga CA 90290-4327 Huntington Beach CA 92648-3857 Judith Hendler Mark Camp Michael Stone P. O. Box 779 7071 Warner Ave#F431 9612 Brynmar Dr Huntington Beach CA 92648-0779 Huntington Beach CA 92647-5495 Villa Park CA 92861-2655 Raoul E. Lybarger Carmen A. Wilcox Robert Lee Gambrel 1610 Riverview Cir 402 21 st St. Apt B 10062 Spar Cir Huntington Beach CA 92648-3707 Huntington Beach CA 92648-3324 Huntington Beach CA 92646-7401 Gregory F. &Cindy L. Gunn Michael J. &Erika H. Reardon David Lawrence O'Toole 426 22nd St Apt A 426 22nd St Apt B 426 22nd St Apt D Huntington Beach CA 92648-3335 Huntington Beach CA 92648-3335 Huntington Beach CA 92648-3335 Jane L. Stolba Jean Stolba Larry B. Zumbro 1703 Alabama St Apt A 1703 Alabama St Apt D 1703 Alabama St Apt B Huntington Beach CA 92648-3126 Huntington Beach CA 92648-3126 Huntington Beach CA 92648-3126 Alexandra Pedano Jeffrey D. Crandall First Security Exchange 618 E Utica Ave 7551 Amazon Dr#A 7551 Amazon Dr#B Huntington Beach CA 92648-3218 Huntington Beach CA 92647-8652 Huntington Beach CA 92647-8652 Ydalid Leon Wai Ming Cheung David K. Wilkings 7551 Amazon Dr#D 1325 S Fremont Ave 17031 Ash St Apt C Huntington Beach CA 92647-8652 Alhambra CA 91803-1903 Huntington Beach CA 92647-5833 Kyle M. Mc Donald Dwight A.Flenniken Albert W. Kim 17031 Ash St Apt D 17031 Ash St Apt B P. O. Box 454 Huntington Beach CA 92647-5833 Huntington Beach CA 92647-5833 Huntington Beach CA 92648-0454 rL,09L5 jo4 aieldwal asn l _--rz4 ( K fi� ....sIaauc naaj uloowc V„,096S aase-1 slage-1 ssaappd G)AU3AV Ismael B. Denenburg Cara & Keith Marshall Richard C. &Lori A. Lujan 357 E 57th St Apt 17C 2505 Delaware St Apt 2 2505 Delaware St# C New York NY 10022-2918 Huntington Beach CA 92648-6520 Huntington Beach CA 92648-2555 Michael Mc Donnell Garrison S. & Renee Tarnow Carolyn Kiefer 2402 Delaware St Apt 108 2505 Delaware St Unit D 7681 Fir Dr Apt C Huntington Beach CA 92648-5900 Huntington Beach CA 92648 Huntington Beach CA 92647-4769 Robert C. & Maria Del Carmen Nancy L. Golding Steven R. Worley Murphy 7681 Fir Dr Apt B 7681 Fir Dr Apt A 7681 Fir Dr Apt D Huntington Beach CA 92647-4769 Huntington Beach CA 92647-4769 Huntington Beach CA 92647-4769 Michael Carter Ron Esmilla Louis R. Craig 7342 Garfield Ave Apt D 7352 Garfield Ave Apt B 7342 Garfield Ave Apt A Huntington Beach CA 92648-2034 Huntington Beach CA 92648-2033 Huntington Beach CA 92648-2034 Terry L. Davis Rosemary&Lynn Short-Baker Chad W. & Christina M. Owens 7342 Garfield Ave Apt C 7342 Garfield Ave Apt B 7352 Garfield Ave Apt C Huntington Beach CA 92648-2034 Huntington Beach CA 92648-2034 Huntington Beach CA 92648-2033 Jennifer A. Caveness Jay Turner Timothy H. & Laurel L.Talbert 7352 Garfield Ave Apt D 7352 Garfield Ave Apt A 16741 Green St Apt B Huntington Beach CA 92648-2033 Huntington Beach CA 92648-2033 Huntington Beach CA 92649-3445 Benjamin C. &Jane Ann Evink Howard C. Richey Joseph M. Limauro 16741 Green St Apt D 6056 Shadowbrook Cir 16751 Green St Apt C Huntington Beach CA 92649-3445 Huntington Beach CA 92648-5567 Huntington Beach CA 92649-3446 Howard C. Richey Vincent G.Periolat Matthew T. & Teresa A. Gabbett 440 Panorama Dr 16821 Green St#A 16821 Green St#B Hemet CA 92543-5725 Huntington Beach CA 92649-3528 Huntington Beach CA 92649-3528 Theresa &Ron Ferber Michael J. &Heidi Orsini Catherine E. Callia 16821 Green St#D 16821 Green St. #C 16741 Green St Apt A Huntington Beach CA 92649-3528 Huntington Beach CA 92649-3528 Huntington Beach CA 92649-3445 Rodriguez W&N Trust Ab Nancy A. Sparks Lisa A. Schick 16751 Green St Apt B 6056 Shadowbrook Cir 16741 Green St Apt C Huntington Beach CA 92649-3446 Huntington Beach CA 92648-5567 Huntington Beach CA 92649-3445 n0915104 aleldwal as0 7— v ! P� ....siaauc naaa uioowc W1096S aasel ►1agel ssaippV (@A213AW Q� W. Jason Bonifay Robert C.Nelson Damon W. Hill 1412 Orange Ave 1416 Orange Ave 1418 Orange Ave#A Huntington Beach CA 92648-4214 Huntington Beach CA 92648-4214 Huntington Beach CA 92648-4214 Robert David Timothy& Grace E. Yuan Thomas Bagshaw 1414 Orange Ave P. O. Box 2060 5001 Ixworth PI Huntington Beach CA 92648-4214 C/O O C P M Westminster CA 92683 Huntington Beach CA 92647-0060 Kelly Alderman Ryan Hagen Michael J. Chemey 8161 Forelle,#4 6600 Warner Ave#216 20951 Brookhurst St Huntington Beach CA 92647 Huntington Beach CA 92647 Huntington Beach CA 92648 Chuck Sheid Albert&Ann Kim Marie Elena Molnar 8062 Ebbtide Cir 1412 Huntington St P.O. Box 73542 Huntington Beach CA 92646 Huntington Beach CA 92648 San Clemente CA 92873 Mike Adams Jason Austin Mike &Julie Textor P.O. Box 382 8161 Forelle Dr#1 1009 Pecan Ave - Huntington Beach CA 92648 Huntington Beach CA 92646 Huntington Beach CA 92648 Alan Cirson Nesip Tarcan J. Osborn 8241 Deauville Dr 411 1 Oth St 16152 Beach Blvd.#250 Huntington Beach CA 92646 Huntington Beach CA 92648 Huntington Beach CA 92647 Rash Syed Alan Cirson Pat Morris 17925 Elm St c/o Millennium Real Est. 3631 Windspun Dr Fountain Valley CA 92708 4041 MacArthur Blvd. #160 Huntington Beach CA 92649 Newport Beach CA 92660 David N. Carillo Barbara Arrigale Linda Smith 603 Termino Ave 20100 Brookhurst St 504 19th St Long Beach CA 90814 Huntington Beach CA 92646 Huntington Beach CA 92648 Rob Nelson Howard Richey Jason Bonifay 419 Main St#364 440 Panorama Dr 6 Snowberry Huntington Beach CA 92648 Hemet CA 92543 Irvine CA 92604 Ann Kim 1412 Huntington St#1 Victor Verzele Huntington Beach CA 92648 21662 Brookhurst,#D Huntington Beach CA 92648 n09tS aol aleidwal ash `Z / ) 0 GI `' 0 � ....smaauc naaj uinnuic Yfi TM G:Lab%==L\Public WE mo— President 1 Huntington rbor A 10 Sue Johnso 16 H.B.Chamber of Commerce P.O.B 91 19671 et Ba ane 19891 Beach Blvd.,Ste.140 Sun e ,CA 90742 H on ach,CA 92648 Huntington Beach,CA 92648 Dave Stefanides 2 William D.Holman I Edna Littlebury 17 Orange County Assoc.of Realtors PLC Gldn St.Mob.Hm.Owners Leag. 25552 La Paz Road 19 Corporate Plaza Drive 11021 Magnolia Blvd. Laguna Hills,CA 92653 Newport Beach CA 92660-7912 Garden Grove,CA 92642 President 3 Tom Zani 12 Pacific Coast chaeological 18 :165-311 os ols ca New est Society, . ols ca Street,Suite 312 520 100 P.O.B 109 n n Beach,CA-92649 Monica,CA 01 Co Mes 92627 A :J Gothold Sunset B:epo unity Assoc. 4 Pres.,H.B.Hist.Society 13 Director 19 Pat gent C/O Newland House Museum O.C.Pln . ev.Services Dept. P 5Keach,`CA 19820 Beach Blvd. P.O.B 404 Suns 90742-0215 Huntington Beach,CA 92648 S Ana A 92702-4048 President 5 Community Services Dept. 14 Vicky Wj 19 Huntington Beach Tomorrow Chairperson O.C. lic F ties&Res.Dept. PO Box 865 Historical Resources Bd. P. .Box 48 Huntington Beach,CA 92648 to a,CA 92702-4848 Julie Vandermost 6 Co�60/g l 15 Planniag D' cto 20 BIA-OC 17 ve. City of st esa 17744 Sky Park Cude,#170 Hugt Beach,CA 92648 P.O o. 00 Irvine CA 92614-4441 Costa esa,CA 92628-1200 Richard ' er 7 Jeff Metz 16 Planning D' ctor 21 SCA Sea City of unt ' Valley 81 es th,l2th Floor 193 S dy Harbor Circle 102 Slat ve. Los 'Angeles,CA 90017 Huntington Beach,CA 92648 F A un alley,CA 92708 E.T.I.Corral 100 8 JohnWSut� 16 Planniag D' or 22 Mary Bell Seac City ofVeach, ach 20292 Eastwood Cir. 19 2 �eUne P.O Huntington Beach,CA 92646 Huntington Beach,CA 92648 N o 92663-8915 Al Hendricker 9 L/gto 16 P uect 23 Environmental Board Chairman Se City Wes ster 8452 Grace Circle 19uff Circle 8 0 Wes ' ster Blvd. Huntington Beach,CA 92646 Hch CA 92648 es ster,CA 92683 2- d q - o 7 G�eels\Pub �TM PL-L :^g Director 24 James Jones 31 HB Hampton HO-k 38 City o Seal B Ocean V' E entary Progressiv omau:ity Nfgmt. 211 EizapK Scho Dis ct 27405 e eal =300 Seal 90740 17 0 P' ehurst Lane bfi on V' go,C.�92691 Hun " on Beach CA 92647 Califc-.;,Coastal Commission 25 Jon lL Ax ald 32 Saliy Gr 39 Theresa Henry WestxPk5ster ool District Mead ar4 -ea South Coast Area Office 141X Cc ood Avenue 51 Ge Q-H,e 200 Oc_e-angate,loth Floor Wes " ter CA 92683 1 untiQfon Beach,CA 92649 Long aeach,C-k 92802-4302 Califora Coastal Commission 25 Patricia K 33 Chetyle Br 39 South Coast Area Office HB U n chool Disrict I�feado ark ' a 200 Oc�ngate,loth Floor 102 Yo —Avenue 167 Ro velt Late Long Brach,CA 92802-4302 iZ� n Beach,CA 92646 tin on Beach,CA 92649 Rober"Toseph 26 CSA,Inc. 34 Hearthside Homes 40 Z333-e- ct 12 Marsh pp resident 6 Executive Circle,Suite 250 son Drive,Suite 380 204 ata Irvine,CA 92614 92612-1699 N art each,CA 92660 Director 27 Gold=w College 35 Balsa ChicaLZd Trust 41 Local Sa'' aste nf.Agy. Attn: ed Ow s 5200 W er Av ,Ste. 108 O.C. �lth C Agency 157 Gold west St. Hun " gtofC�92649 P. .Boa untiagt Beach CA 92647 Santar- C-k 92702 New Gro oar for 28 OC Co ors,Beach 36 Balsa Chi Trust 41 Hun ' B Post Office and P s D t. Evan my resident 677 am ve. P. ox 48 181 o iffia Place H ti=o Beach,CA 92647 Santa ,CA 92702-4048 N wpo Beach,CA 92660 Marc Ecker 29 Huntingto each Mall 37 Steve Ho ,erson 42 Foun a]lep em.School Dist. Attn:P oger aude SEH.B_ 1721 Sppiftet 77 ding ve.#300 P.O. g 6 F t`V4ey CA 92708 Huntingt%eBeach CA 92647 Huxidngt6n Beach,G4 92615 Dr.Cra r Ru rford,Super. 30 Couatrp V Estat s HOA 38 OC Saaita ' ct 42 HB Cit- em School Dist. Came omas 10844 s ue 2045 ane 664 ratter rive Fo V ey CA 92708 H tir`- On each,CA 92648 H tin each CA 92648 Y01 30 Country/Beach es HOA 38 Ed Blaekf PrP---' ' e=t 42 lem tart'School Dist. Gerald AES tingt Beach LLC ^ Lane G74 2173 aN�egd Street oa Beach,CA 92648 HuatingtA 92648 H tiach G�42G46 �� mom UVAM 040mom 0 T �v 77- IN MEETING DATE: November 15, 2004 DEPARTMENT RECEIVED SUBJECT: REQUESTING: DATE Eco Dev 10-14-04 Redevelopment Five Year Implementation Plan & J� -&"Atz, rn to-/,/-o 1( 10 year Housing Compliance Plan Eco Dev 10/26/04 The Strand CFD Resolution of Formation (cont. from 9/20) Planning 10/27104 Zoning Text Amendment #04-03 - Modification to parcel maps/subdivision Public Works 10/26/04 Fats, Oil and Grease (FOG) Control Fee co .0 TODAY'S DATE October 27, 2004 VERIFIED BY ADMININSTRATION: APPROVED BY: Penelope Culbreth-Graft City Administrator 10/27/2004 3:12 PM PROOF OF PUBLICATION STATE OF CALIFORNIA) ) ss. COUNTY OF ORANGE ) NOTICE OF PUBLIC HEARING NOTICE'is HEREBY] I am a Citizen of the United States and a GIVEN that Items #1 is BEFORE THE CITY COUNCIL exempt from the provi- resident of the County aforesaid; I am OF THE sions of the California f Environmental Quality CITY OFHUNTINGTONBEACH iAct (CEQA) pursuant to over the age of eighteen years, and not a NOTICE IS HEREBY City Council Resolution party to or interested in the below entitled _ _ GIVEN that on.Monday, 4501, Section s, Class 'Novemberl5,--2004;-at �20; which-supplements. 7:00 p.m. in the City �CEQA and exempts( matter. I am a principal clerk of the Council Chambers, 2000 `minor amendments to HUNTINGTON BEACH INDEPENDENT Main Street, Huntington zoning ordinances. Ad- Beach,.ta City Council !subject t Item ro isoons , will hold a public hearing (subject to the provisions a newspaper of general circulation the following Plan- of CEQA pursuant t, , ni ning and zoning items: I Section 15061 b) 3) printed and published in the City of 1. G TEXT because i can be seen, .AMENNDMENTDMENT NO. 04-j'.with certainty that there' 03 (TENTATIVE PARCEL !is no possibility that the Huntington Beach, County of Orange, (MAP EXEMPTION FORljactivity in question may CONDOMINIUM CON- I have a significant effect State of California, and that attached VERSIONS) Applicant:lion the environment. City of Huntington Beach ii ON FILE:A copy of the Notice is a true.. and complete copy as Request: , amend.'proposed requests is 's Chapter 250 Subdivi- file in the City Clerk's - sions - General Provi- Office,2000 Main Street, was printed and published' in the sions, of the Huntington Huntington Beach, Cali- Huntington "' . Beach issue of said Beach Zoning and Sub-I t 92648, for in- division Ordinance. The spec spection by the public. proposed amendment is A copy of the staff newspaper to wit the Issue(s) of: intended to provide an report will be available exemption to the 'ten- to interested parties at tative parcel map pro- the City Clerk's Office cess for apartments and on Wednesday, Novem- stock cooperatives ber10,2004. previously converted to ALL INTERESTED condominiums without, PERSONS are invited to City approval. Location:, attend said hearing and Citywide Planner As- express opinions or NOVEMBER 4 r 11, 2004 signed:Jane James submit evidence for or 2. A RESOLUTION OFi against the application THE CITY COUNCIL.OF as outlined above.If you THE CITY OF HUN- challenge the City TINGTON BEACH ES-1 Counci6 action in court, TABLISHING THE AF- you may be limited to FORDABLE HOUSING IN- raising only those issues - - LIEU FEE AUTHORIZED you or someone else BY ZONING AND' raised at the public SUBDIVISION ORDI- hearing described in this declare, under penalty of perjury, that RELATI CHAPTER 235 notice, n in written RELATING TO REST- correspondence deliv- DENTIAL CONDOMINI- ered to the City at, or the foregoing is true and correct. IUM CONVERSION Ap- prior to, the public iplicant: City of Hun- hearing. If there are any tington Beach Request: further,questions please To establish an afford- call the Planning De- able housing in-lieu,fee partment at. 536-5271 Executed on NOVEMBER 11 , 2004 for apartments and] and refer to the above at Costa Mesa, California. stock cooperatives; items. Direct your �previously,converted to written communications condominiums without to the City Clerk. City approval. Location:: Joan L.Flynn,City Clerk Citywide Planner As-C City of Huntington Beach signed:Jane James_ 2000 Main Street,2nd Floor Huntington Beach, California 92648 (714)536-5227 Signature^ Published Huntington Beach Independent No- vember 4,11,2004, y 111-160 r r.3 �zfh `� /2_� 0 PROOF OF PUBLICATION STATE OF CALIFORNIA) ) ss. COUNTY OF ORANGE ) NOTICE OF PUBLIC HEARING NOTICE IS HEREBY I am a Citizen of the United States and a GIVEN that Items is BEFORETNECRYCOUNCIL exempt from the provi- OFTHE sions of the California resident of the County aforesaid; I am CITY OF HUNTINGTON BEACH Environmental Quality _- NOTICE IS HEREBY Act (CEQA) pursuant to over the age of eighteen years, and not a City Council Resolution GIVEN that on Monday, 4501, Section 6, Class party to or interested in the below entitled November 15, 2004, at 20, which- supplements 7:00 p.m. in the City CEQA and exempts Council Chambers, 2000 minor amendments to matter. I am a principal clerk of the Main street, Huntington zoning 'ordinances. Ad- Beach, the-City Council subject Item ro is not 'will hold a public hearing subject to the provisions on the following Plan- of CEQA pursuant to a newspaper of general circulation, ningandzoningitems: Section 15061 b) 3), 1. ZONING TEXT because it can be seen printed and published In the CI of 1AMENDMENT No. 04- with certainty that there `J 103 (TENTATIVE PARCEL is no possibility that the MAP Huntington Beach County of Orange CONDOMINIUM EXEMPTION activity in question may > > j have a significant effect VERSIONS) Applicant: on the environment. State of California, and that attached City of Huntington Beach Re uest: To amend ON FILE:A copy of the q proposed requests is on Notice Is a true and complete copy as Chapter 250, Subdivi- file in the City Clerk'si sions - General Pro v1- Office,2000 Main Street,' was printed and published in the �sions, of the Huntington I Huntington Beach, Cali Beach Zoning and Sub- fornia 92648, for in Huntington Beach issue of said division Ordinance. t is 'A copy o the public. proposed amendment is� A copy of the staff intended to provide an report will be available newspaper to wit the Issue(s) of: exemption to the ten-I to interested parties atl tative parcel map pro the City Clerk's Office cess for apartments and on Wednesday, Novem stock cooperatives ber10,2004. previously converted to ALL INTERESTED, condominiums without PERSONS are invited to City approval. Location: attend said hearing and Citywide Planner As-' express opinions or NOVEMBER 4 11 2004 signed: RESOLUTION OF submit.evidence for or' � � ' against the application' THE CITY COUNCIL OF as outlined above.If you THE CITY OF HUN- challenge the City TINGTON BEACH ES- Council's action in court,i TABLISHING THE AF- you may be limited to FORDABLE HOUSING IN- raising only those issues LIEU FEE AUTHORIZED you or someone else BY ZONING AND raised at the public SUBDIVISION ORDI- hearing described in this NANCE CHAPTER 235 notice, or in written I declare, under penalty of perjury, that RELATING TO REST- correspondence deliv- DENTIAL CONDOMINI- ered to the City at, or UM CONVERSION Ap- prior to, the public the foregoing is true and correct. plicant: City of Hun- hearing. If there are any tington Beach Request: further questions please To establish an afford- call the Planning De- 'able housing in-lieu fee partment at 536-5271 2004 for apartments and and refer to the above Executed on NOVEMBER 11 stock cooperatives items. Direct your previously converted to written communications at Costa Mesa, California. condominiums without to the City Clerk. City, approval. Location: loan L.Flynn,City Clerk Citywide Planner As-' City of Huntington Beach sianed;Jane James____ 20M Main Street,2nd Floor Huntington Beach, California 92648 (714)536-5227 Published Signature Beach Indep nden�tgton No- vember 4,11,2004 111-160 PROOF OF PUBLICATION STATE OF CALIFORNIA) ) ss. COUNTY OF ORANGE ) I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the City of Huntington Beach, County of Orange, State of California, and that attached Notice is a true and complete copy as was printed and published in the Huntington Beach issue of said newspaper to wit the Issue(s) of: SEPTEMBER 07, 2006 1 declare, under penalty of perjury, that the foregoing is true and correct. Executed on SEPTEMBER 0 7, 2 0 0 6 at Costa Mesa, California. Signature NOV-24-2004 WED 03:00 PM,AOG LLP AAI FAX N0.�310 670 1231 P. 01/01, ARIAS, OZZEL,EO & GIGNAC, LL,P ATTORNEYS&COUNSELORS AT LAW T TOWARD HUGY IES CENTER 6701 CENTER DRIVE WE, SUITE 1400 LOS ANGELES,CALIFORNIA 90045 TELEPHONE(310) 670-1600 FAX(310)670-1131 e-mail: aoglaw0aogll.p.com CONFIDENTIAL N C fax cover sheet c -- Jennifer McGrath, Esq. 714,374.1590 `-- - to: Joan L. Flynn, Esq. 714.374.1557 -- --. - David G. Boss, Esq. 619.235.6749 - - -J r from: Mikael H. Stable, Esq. fax: See numbers listed above date: November 24, 2004 (3:05pm) PST re: Conditional Use Permit#04-03 pages: o,pages(including cover sheet) message: Correspondence of November 24, 2004 This facsimile contains PRIVILEGED AND CONFIDENTIAL INFORMATION intended only for use of the Addressee(s) named above. if you are not the intended recipient, you are hereby notified that any dissemination of this communication is strictly prohibited. If you have,received this facsimile in error,Please immediately notify us by telephone and return the original facsimile to us at the above address via the U.S. Postal Service. We will reimburse for all expenses incurred. Thank you. NOU-24-2004 WED 03:00 PM AEG LLP AAI FAX N0. �10 670 1231 P, 02/02 ARIAS, OZZELLO & GIGINAG, LLP MIKE ARIAS* ATTORNEYS&COUNSELORS AT LAW SANTA BARBARA OFFICE MARK A.027ELLO — J,PAULCiIGNAC HOWARD I1UGHES CENTER 1231 STATE STREET,SUITE 206 ROBERT A.DYE 67C11 CENTER DRIVE WEST SAN'FA MARBARA,CALIFORNIA 93101 ARNOLD C.WANG SUITF 1430 'ALEPI-IONE(805)a92-5560 MIKAEL h.STAHLE LOS ANGELES,CALIFORNIA 900g5-1558 FAX(9051 564-aaas MICHAEL R,FERRONE ERIK 1•EKSLAD TFLEPHONE(3101 G70.1600 or czm FAX(310)670-1231 NEW ASSOCIATEYORK OFFICE KATHRYN M.SCHWERTFEGER E-MAIL aeglawal6gllp,com DAVID JAROSLAWICZ GABRIEL M.REED• 1S0 WILLIAM STREET,19"`FLOOR NEW YORK,NEW YORK 10038 .MCMRM ch MY.NI•PC W.R: TELEPHONE(212)227.273D •V&IWP cA,gYLPtwx FAX(2121 732-6746 .AQAWRTXMA0MY UaLN ."I..T413. November 24, 2004 CHIP OUVER MILTON C.FRIEDMAN SENDER'S E-MAIL: REGINA M.MACLEOD MARICELACASTILLO In'iDf FFCTFXIENSfO SENDER'S DIRECT EXT6N51ON.10a vwrtiMr., CHRIS ELLI-SON STEVIE BELL 5AUNDERS Via fax no. (714)374-1590 Jennifer McGrath, Esq. Huntington Beach City Attorney P.O.Box 190 2000 Main Street Huntington Beach, CA 92648 Re: Conditional Use Permit#04-03 (Condo Conversions) Dear Ms.McGrath: This office represents condominium owner Scott Schutzman in connection with the above- referenced matter. We have also been contacted regarding this matter by several of the other owners of the remaining 64 units. We have learned that the owners of the units have been given until 3:00 p.m.today to accept or.reject a proposed settlement with the City of Huntington Beach. We believe that this time frame is too short to give the owners sufficient time to review the proposal and to seek the advice of counsel concerning their. rights. We therefore ask that you continue the deadline, as well as the hearing on the matter before the City Council, until the next regularly scheduled City Council meeting after November 29, 2004. Thank you for your cooperation in this matter. Should you have any questions or concerns regarding the foregoing,please do not hesitate to contact the undersigned at any time. Very truly yours, APA OZnSTAHLE LLP MIT�AEL H. cc: Joan L. Flynn,Esq.-City Clerk(Via fax no- (714) 374-1557) David G. Boss,Esq. (Via fax no: (619) 235-6749) NOV-29-2004 MON 02: 12 PM AOG LLP AA1 FAX NO. 310 670 1231 P. 01102 ARIAS., OZZELLO & GIGNAC, LLP ATTORNEYS&COUNSELORS AT LAW HOWA-RD HUGHES CENTER 6701 CENTER DRTVE WEST,SUITE 1400 LOS ANGELES,CALIFORNIA 90045 TELEPHONE(310) 670-1600 FAX(310)670-1231 e-mail; aog1aw@aog11p.com CONFIDE.NTIAL fax cover sheet CD Jennifer McGrath, Esq. 714.374.1590 to; Joan L. Flynn, Esq. 714.374.1557 T! David G. Boss,Esq. 619.235.6749 from: Mikael H. St-ahle, Esq. lax: See numbers listed above date: November 29, 2004 (2:03prn) PST re: Conditional Use Permit #04-03 pages: 2 pages(including cover sheet) message: Correspondence of November 29, 2004 cl- This facsimile contains PRMLEGED AND CONFIDENTIAL INFORMATION intended only for use of the Addressee(s) named above. If you are not the intended recipient, you are hereby notified that any dissemination of this communication is strictly prohibited. If you have received this facsimile in error,please immediately notify us by telephone and return the original facsimile to us at the above address via the U.S. Postal Service. We will reimburse for all expenses incurred. Thank you. NOV-29-2004 MON 02: 13 PM PnG LLP AAI FAX NO. �jO 670 1231 P. 02/02 ARIAS, OZZELLO & GIG(NAC, LLP MIKE ARIAS= ATTORNEYS&COUNSELORS AT LAW SANTA BARBARA OFFICE MARK A.OZZELLO 1,PAUL GIGNAC HOWARD HUGHES CENTER 1231 STAYS STREET.SUITE 205 ROBERT A.DYE 6701 CENTER DR VE WEST SAN'TA aARSARA.CALIFORNIA 93101 ARNOLD C,WANC SUITE 14G0 TELEPHONE(805)a92-55W MIKAEL H,STAHLE LOS ANGELES,CALIFORNIA 90045-1558 FAX(805)564-0tlas MICHAEL R.FERRONE _ ERIK)-EKBLAD TELEPHONE(31 01 670-1 600 FAX(310)67C-1231 NEW YORK gSSpCIATE OFFICE KAYI-IRYN M.SCHWERTFEGER E-MAIL aoglawo3oglip com DAVID 1AROSLAWi¢ GABRIK M.REED 150 WI STREET,1 K FLOOR YORK NEW vORK,NEW PORK 10038 •M4NLt�CI.NV,NI L DC DA0.1 TEL6Pi-IONS(212)227-27BO AKLf6tR G.NY L KINII• FAR(212)732-6746 a MCMRII In INN..NlY twl November 29, 2004 CHIP OLIVER MILTON C.FRIEDMAN SENDER'S E-MAIL: REGINA M.MACLEOD MARICELA CASTILLO mstahIRECT EXTE SIO SENpER'S DIRECT EXTENSIUN,16fl (.W ClLRn CHRIS ELLISON STEVIE BELL SAUNDCRS Via fax no. (7141374-1590 Jennifer McGrath,Esq. Huntington Beach City Attorney P.O. Box 190 2000 Main Street Huntington Beach, CA 92648 Re: Conditional Use Permit##04-03 (Condo Conversions) Dear Ms. McGrath: This confirms your voicernail to me of November 24, 2004 in whichyouu stated that unit owners will not forfeit any rights or opportunities to participate in the City's proposed settlement by declining to participate at this time. While you indicated that the item will not be taken off the City Council's November 29,2004 agenda,you assured me that the City Council will provide additional dates for public hearing should there be unit owners who wish to further review the proposed settlement beyond November 29, Thank you for your prompt attention to this matter. If the foregoing does not comport with your understanding of your message,please contact me immediately. Very truly yours, ARIAS, OZZELLO&GIGNAC,LLP Dictated but not read to expedite delivery MIKAEL H. STAHLE cc, Jean L.Flynn, Esq. -City Clerk (Via fax no: (714) 374-1557) David G. Boss, Esq. (Via fax no: (619) 235-6749) TAN , ?�I�,, 611 ANTON BOULEVARD, FOURTEENTH FLOOR ORANGE COUNTY COSTA MESA, CALIFORNIA 92626-1931 DIRECT ALL MAIL TO:CKER COSTA MESA,CALIFORNIA IAT9262F8-1950 1950 SILICON VALLEY l W. TELEPHONE 714-641-6100 FACSIMILE 714-546-9035 (408)289-8777 A T T O R N E Y $ A T L A W INTERNET ADDRESS www.rutan.com A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS Jeffrey M.Oderman Direct Dial:(714)641-3441 E-mail:joderman@rutan.com November 12, 2004 ZZ t —1 Mayor Kathy Green and Members of the - City Council - rq City of Huntington Beach ' 2000 Main Street, Second Floor Huntington Beach, CA 92648 Re: November 15, 2004, Public Hearing to Consider Adoption of Affordable Housing In-Lieu Fee for Pre-June 1, 2004, "Non-Permitted"Condominium Conversions Dear Mayor Green and Members of the City Council: The law firm of Rutan & Tucker, LLP, represents several title insurance companies and their insureds with respect to the above-referenced matter. As recently reported in the newspapers, the City and the title companies have reached a tentative "global" settlement regarding issues arising out of the non-permitted condominium conversions. We support that settlement and commend the City Council and City Attorney's office for taking an action that furthers both the public interest and the interests of the affected individuals. As of the time this letter is being prepared, however, a final settlement agreement has not been drafted, approved, or signed. Accordingly, Attorney David Boss, who has acted as lead counsel representing the same title insurance companies and insureds represented by my office, has requested that the City Council hearing on the affordable housing in-lieu fee be postponed for a short time until the settlement agreement can be finalized. As far as I know, that request has not been granted and we are therefore in the position of facing the possible imposition of a very substantial affordable housing in-lieu fee without having a settlement agreement in hand. Therefore, while my clients again support the City's efforts to resolve this entire mess on satisfactory terms, we feel we have no choice except to briefly state on the record our objections to the proposed fee. I therefore respectfully request that a copy of this letter be included in the public record for your November 15 hearing. 112/023959-0001 557554.01 all/12/04 TAN CKER A T TOR H E Y S AT LAW Mayor Kathy Green and Members of the City Council November 12, 2004 Page 2 My clients' objections to the in-lieu affordable housing fee are summarized below: 1. The In-Lieu Fee Does Not Satisfy the "Nexus"Requirement that it be Reasonably Related to the Public Need or Burden that Justifies Imposition of the Fee in the First Place. There is no general requirement in the City's condominium conversion ordinance for payment of an affordable housing in-lieu fee. Instead, the City, through a recently adopted amendment to Section 235.083 of the Municipal Code (Ordinance No. 3657), has proposed the affordable housing in-lieu fee as an offset for the narrow class of "apartments and stock cooperatives with two to four units on a parcel that were sold as condominium units without approval of a conditional use permit and tentative parcel map prior to June 1, 2004,"to the extent that those units do not comply with entirely unrelated City off-street parking and landscaping requirements. Creating an affordable housing in-lieu fee as an offset for allegedly deficient parking and landscaping fails the "nexus test" outlined by the United States Supreme Court in Nollan v. California Coastal Commission (1987) 107 S.Ct. 3141. In Nollan, the Supreme Court considered the validity of a lateral public easement for beach use (i.e. an easement running laterally or "horizontally" along the beach) that was imposed as a condition of approval to rebuild a beachfront dwelling and determined that, under the circumstances, the condition was an unconstitutional "taking without compensation." While readily acknowledging that there is a strong public interest in obtaining public access along the coastline, the court also found that the requirement for the Nollans to dedicate a lateral public beach easement was not reasonably related to any burdens that the rebuilding of their beachfront dwelling imposed on the public (an alleged impairment of view access from the public street through the property to the beach and ocean) that supposedly justified the exaction in the first place. The disconnect between the legitimate governmental purpose and the unrelated condition imposed by the Coastal Commission caused the Supreme Court to harshly denounce the exaction as an"out-and-out plan of extortion." The same can be said here with respect to the City's affordable housing in-lieu fee, which is being imposed on a narrow class of units' to supposedly compensate for the entirely unrelated failure of those units to satisfy current City parking and landscaping requirements. There is no more nexus between the affordable housing in-lieu fee and parking/landscaping requirements in I According to the KMA report commissioned by the City that is discussed below, only 36 (former) triplexes and fourplexes in the entire City of Huntington Beach would be subject to the fee. 112/023959-0001 557554.01 all/12/04 TAN CKER ATTORNEYS AT LAW Mayor Kathy Green and Members of the City Council November 12, 2004 Page 3 this case than there was between the lateral beach easement and the alleged concern with view impairment in Nollan. In addition, my clients respectfully submit that there is no nexus between the City's parking and landscaping requirements and a change in the form of ownership or the status of the occupants of the units. How does changing an apartment to a condominium create any additional burden on the City or exacerbate any existing deficiencies with respect to private onsite landscaping? How does the form of ownership create a need for more offstreet parking spaces? To our knowledge, the City has not even attempted to substantiate such a nexus. The only change is a change in ownership status and, possibly, occupancy.2 (See, in this regard, Coalition Advocating Legal Housing Options v. City of Santa Monica (2001) 88 Ca1.App.4th 451, Tom v. City and County of San Francisco (2004) 120 Cal.App.4th 674, and College Area Renters & Landlord Association v. City of San Diego (1996) 43 Cal.App.4th 677, all of which cases invalidated local ordinances that discriminated on the basis of the identity of the occupants of residential units.) 2. The City's Affordable Housing In-Lieu Fee Fails the Requirement that the Fee Be "Roughly Proportional" on a Unit-by-Unit Basis to the Burden Each Converted Condominium Unit Imposes on the Public Due to the Supposed Loss of Affordable Housing. Even overlooking the fact that the City's proposed affordable housing in-lieu fee is unrelated to its purported justification (the City authority to enforce parking and landscaping requirements), the fee additionally fails because it is not "roughly proportional" to the burden each of the affected units has imposed upon the City's supposed loss of affordable housing stock. When imposing ad hoc fees or exactions on a single project or a small class of projects, the City is required to demonstrate on a property-by-property basis that there is a "rough proportionality" between the exaction and the problem caused by the project that the exaction purports to address. Dolan v. City of Tigard (1994) 114 S.Ct. 2309; Ehrlich v. City of Culver City (1996) 12 CalAth 854. As the U.S. Supreme Court explained in Dolan, the City must make "some sort of individualized determination" that the exaction, in this case the proposed affordable housing in-lieu fee, is related both in nature and extent to the impact. The City has not even attempted to make that sort of "individualized determination" here and there is no question it simply cannot be made. 2 It is noteworthy, however, that the conversion of an apartment unit to a condominium does not necessarily result in displacement of the (former) tenant; nor does the maintenance of the unit as an apartment unit guarantee that the tenant will not be required to move. 112/023959-0001 557554.01 all/12/04 TAN CKERI ATTORNEYS AT LAW Mayor Kathy Green and Members of the City Council November 12, 2004 Page 4 In the first place, it must be emphasized that the fee requirement applies to an extremely narrow class of properties — 35-40 triplexes and fourplexes — a class that by definition cannot increase in the future. (Compare San Remo Hotel, L.P. v. City and County of San Francisco (2002) 27 Cal.4t1i 643.) I would refer the City Council generally to the report that is being submitted under separate cover by Pulse Marketing, which critiques the "nexus study" prepared for the City by Keyser Marston Associates, Inc. (KMA). Among the many defects in the KMA nexus study are the following: (1) KMA makes no attempt to analyze whether low-moderate income house- holds were actually "displaced" by the conversion of units in the 35-40 triplexes and fourplexes affected by the new fee. (2) KMA did not analyze whether low-moderate income households may actually have purchased some of the affected units. In fact, Pulse Marketing determined based on a large sampling that almost 30% of the units in question were purchased by low-moderate income buyers. (3) Significantly, KMA failed to compare housing costs for the affected units assuming they had remained as rental units versus housing costs incurred by the new purchasers. Pulse Marketing has demonstrated that the effect of the condominium conversions actually has been to lower housing costs for the affected units by an average of 55%. Thus, the unsubstantiated notion that conversion of rental units to ownership units has adversely impacted the units' affordability is absolutely false. (4) KMA has analyzed the supposed affordability "gap" in the City using 2004 numbers. The affected units, however, were converted over a period of 13 years, dating back as far as 1991. If the impact on supposedly displaced tenants is the justification for an exaction, the amount of the fee would have to be adjusted (downward) to account for the lower housing costs (and, presumably, much lower affordability "gap") when the non- permitted conversions actually occurred. (5) The KMA report does not demonstrate that the affordable housing in-lieu fee is necessary to address any existing affordability problem to which the 35-40 triplexes and fourplexes contributed. Indeed, as Pulse Marketing points out, the affected units represented only 0.18% of the City's rental housing inventory, the City maintains one of the highest percentages of 112/023959-0001 557554.01 all/12/04 TAN CKERI ATTORNEYS AT LAW Mayor Kathy Green and Members of the City Council November 12, 2004 Page 5 rental housing of any city in the County of Orange, the ratio between rental and ownership housing in the City has remained essentially unchanged for many years, and the City has more than met its own targets for affordable housing production except for very low income households (who were highly unlikely to have been occupying any of the affected units when they were apartment units anyway). Comparing Huntington Beach's proposed fee to the fees adopted by other jurisdictions in the State, Huntington Beach's fee turns out to be the highest of all according to Pulse Marketing's survey. The fee clearly is not "roughly proportional" on a unit-by-unit basis to any supposed affordability burden that the conversion of the units has imposed on the City, the former tenants, or the public. 3. Even if the Affordable Housing In-Lieu Fee is Analyzed Using the More Deferential Standard of Review Usually Accorded to Broad-Based Legislative Fees, the Fee is Excessive and Unreasonable. Once again, I would refer the City Council to the Pulse Marketing critique of the KMA report. There are numerous flaws with the KMA report that purports to justify a fee of$15 per square foot (over$17,000 per unit for the average-sized unit affected). Just one obvious example is the irrationally high discount rate used by KMA which, if it is adjusted to a more reasonable market-supported rate, would alone compel dropping the KMA-recommended fee to approxi- mately $1,500 per unit. Other defects in the KMA report (arbitrary assumptions regarding the assumed bedroom mix of the affected units [an excessive number of 3 bedroom units], expense growth [which KMA pegs at a rate higher than inflation], and mistakes regarding the actual rental data) demonstrate that based on rational and reasonable assumptions there actually is no affordability gap at all between the (former) rental units and the same units after they were converted to condominiums. 4. Conclusion. In summary, we believe the affordable housing in-lieu fee concept is flawed and unsupportable. It fails basic constitutional "nexus" requirements and thereby constitutes an unconstitutional taking. It is discriminatory against a very small group of people who have already been victimized once. To the extent that the fee on a particular unit exceeds the public burden that the unit has imposed on the City's affordable housing "gap," the fee also constitutes an unlawful special tax (since it is not being approved by the City's voters) and a violation of various provisions of the Mitigation Fee Act(Government Code § 66000 et seq.). 112/023959-0001 557554.01 all/12/04 TAN CKER ATTORNEYS AT LAW Mayor Kathy Green and Members of the City Council November 12, 2004 Page 6 We respectfully request that the City Council table further discussion regarding creation of an affordable housing in-lieu fee to address the small group of non-permitted condominium conversions, particularly since the fee will end up being superseded by a settlement agreement that has been agreed to by both sides. Very truly yours, RUTAN& TUCKER, LLP W�� 44t'�� J f y M. Oderman JMO:jh cc: City Attorney Jennifer McGrath Director of Planning Howard Zelefsky David G. Boss, Esq. 112/023959-0001 557554.01 all/12/04 P U L S E C?i CLERK October3l 2004 CITY C)F 1945 Maverick Lane HUN T INGTON BEAN, CA "E Santa Ana, CA 92705 voice: 714-505-3316 fax: 714-505-3317 David G. Boss, Esq. 1004 NOV 15 ' P 3: 2 8www.pulsemarket.net 550 B Street SUite340 MARKETING San Diego, CA 92101 Dear Mr. Boss: Pulse Marketing is pleased to provide you with this letter report which summarizes the findings of our research related to the affordable housing in-lieu fee being planned for implementation by the City of Huntington Beach and our analysis of a report prepared for the City by Keyser Marston Associates Inc- in support of the fee. As we understand it, the fee is being established as a contingent obligation, providing a mechanism that would allow the conversion of various housing units from rental to condominium, which otherwise would not meet the City's design development criteria for subdivision. At this point the subject units have already been transferred from the converter to individual buyers, who in some cases have resold the units to a second generation of buyers and the fee represents a significant economic hardship to these individuals. Under existing City ordinances, housing developers have no option of paying an in-lieu. fee and must either provide required affordable units as part of their project or make arrangements to satisfy their affordable requirement by purchasing units in other projects off-site, which are then committed to the City's affordable inventory. By _allowing subdivision approval for the subject units in return for payment of a fee and not allowing them to mitigate their requirement with the purchase of off-site units, the City implicitly recognizes that the subject units have unique circumstances and are a "special class" of units, which the City has identified for individualized treatment. The KMA Study Our research is focused on whether the need for the fee being promulgated by the City for this special class of units is substantiated by the KMA report, under the provisions of California's Mitigation Fee Act, which requires in part, that local agencies"imposing any fee as a condition of approval" demonstrate that: • There is a reasonable relationship between the fee and the purpose for which the fee is being charged. • There is a reasonable relationship between the amount of the fee and the impact attributable to the subject units. In this particular case the basic tests are whether conversion of the subject units have had any significant impact on the either rental housing market or the affordable housing market and whether the amount of the fee the subject units are being required to pay represents their"fair share". Market Research and, Strategic Planning COS� ; -7 In general, while the KMA report hasp several refer&ices"to being a nexus study, our opinion is that KMA's report is not a legitimate nexus study and does not satisfy the requirements for nexus analyses as set forth in the State's Mitigation.Fee Act • The report does not establish that there is an affordable housing problem in the City our analysis shows that the City's renter occupied housing stock is stable, that the City has more renter occupied housing as a percentage of total units;.than most cities either regionally or nationally and that City has in fact has met its affordable housing targets; • The report does not demonstrate how the conversion of the subject units impacts the City's affordable housing inventory -- our analysis shows that the subject units represent only .18 percent of the City's rental housing inventory, that conversion unit buyers will pay considerably less in housing costs, compared to renters and that many of the conversion buyers were affordable buyers at the time of purchase, under accepted governmental guidelines; • The report does not present/offer any strategy on how the City intends to fix its purported affordable housing problem; • The report provides no estimate of the total cost or the time-frame involved to remedy the problem, and; Y • The report-does nothing to substantiate that the fee being imposed on the subject units is their fair share of solving the problem. The Subiect Converted Units While there are more than 120 units that are involved in the conversion issue, our analysis is mainly focused on 55 subject units, of which 51 are owned by individuals and 4 are developer owned. About 75 percent of the non-developer owned units were purchased between 2001 and 2004. An additional 15 percent of the units were purchased between 1997 and 2000.,The remaining 10 percent of the subject units were purchased prior to 1995, (see Table 1). City's Rental Housing Inventory is Stable Renter occupied housing units as a percentage of total housing units in Huntington Beach have basically remained stable over the 14-year period between 1990 and 2004 at about 40.0 percent and are projected to remain stable through 2009, (see Table 2). Among 33 Orange County cities Huntington Beach ranks 13t` in the percentage of total housing units that are renter occupied. Huntington Beach has a higher percentage of housing units that are renter occupied than either Orange County or the United States in -general, (see Table 3). Among the 8 Orange County beach cities Huntington Beach ranks 2nd in the percentage of total housing units that are renter occupied, (Table 4). Conversions Had Basically No Impact on Rental Inventory The subject units represent .19 percent of the city's rental inventory as calculated based on the 2000 available.rental stock and .18 percent of the rental inventory as calculated based on the 2004 stock, (see Table 5). In either case the converted units represent less than .25 percent of the City's rental stock and the impact of the converted units on any deviation in the City's rental inventory is virtually negligible. The City Has Meet Its Affordable Housing Goals Between 1998 and 2005 the City's target for affordable housing production.as set by the Southern California Area Council of Governments ("SCAG") is 2015 units. About 388 units of these units are to be targeted at the very low-income category (up to 50 percent of the County median household income, while 255 are to be targeted at low-income households (up to 80 percent of the County.median household income). Another 400 units are targeted at moderate-income households (up to 100 percent of the County median) and 972 units are targeted at above moderate-income households (up to 120 percent of the County median). Based on information provided by the City's Redevelopment Agency, Huntington Beach has 'niet nearly 125 percent of its affordable housing targets for the period considering all income categories, (see Table 6). Market rate units with no restrictive covenants sold to .buyers meeting the various affordable guidelines based on their-household .income are not considered in the units produced and so the number of affordable units produced in the City during this period is no doubt significantly higher. In addition, the KMA report stipulates that the market rent for 2 and 3-bedroom apartment units in the City is lower than the allowable affordable rent for moderate rate units. This means that there are literally thousands of households in the City who are living in "affordable rental housing" that is not in some way connected. to any government program. Lower Income Households Have Not Been Displaced Over the last 15 years, the differential between the median household income in the City of Huntington Beach and median household income for Orange County has remained basically constant. Median household income in Huntington Beach grew from about $51,000 in 1990 to about $65,000 in 2000. The median household income for Orange County was about $46,000 in 1990, which increased to about $59,000 in 2000. In 2004, median household income in the City is estimated at just over $11,000 compared to the County's median household income-estimated at about $65,000, (Table 7). Basically the data shows that even with the City's major redevelopment efforts over the last 10 years, households with lower incomes have not been displaced to any significant degree. Conversion Buyers Were Affordable Buyers The 55 subject units are located in 20 separate projects, which in total have 78 units. To provide a more detailed understanding of the purchase transactions and buyer characteristics associated with these units and the household characteristics of the buyers, a telephone survey was undertaken and 30 interviews were completed, (see Table 8). Purchased units range in size from 676 square feet to 1700 square feet, with the average square footage of units surveyed estimated at about 1140 square feet. The purchase prices of those units surveyed range from about $160,000 to about $430,000, with an average unit purchase price of just under $254,000. Based on accepted affordability guidelines and actual household incomes in the year.of .purchase provided as part of the survey, 8 out of the 30 unit owners surveyed were in fact "affordable" buyers. While 5 of these purchasers had moderate incomes at the time of purchase, two were low-income purchasers and one was a very low-income purchaser, who was able to become:a homeowner only with the assistance of a family subsidy, (see Table 9). Statistically, the size of the sample allows us to estimate at a significantly high confidence level, that affordable buyers purchased 27 percent or about 15 of the 55 subject units. Owners Will Have Lower Housing Costs Than Renters A survey of rental apartments in Huntington Beach was undertaken to establish the cost of renting a two-bedroom/one bath apartment in the City, during the five year period from 2004 through 2009. The current minimum rent for two-bedroom/one bath unit ranges from about $1192 to about.$1500, with the average being about $1370. Over the five year period from 2004 to 2009 the average rental cost for a two-bedroom/one bath apartment in the City would be about $87,000 based on an inflation rate of 3 percent, (see Table 10). Using the base of subject units and information derived from the survey, we are able to estimate housing ownership costs for a two-bedroom/one bath condominium unit in the City during the same period, (see Table 11). The six units for which information is provided were purchased between April 2001 and June 2003 and range in price from $162,000 to $300,000. Four out of the six units were purchased with no money down. For purposes of understanding the five year cost of unit ownership, the analysis amortizes the down payments on the two remaining units over the 30 year loan term. Annual mortgage principal in the analysis is estimated at approximately 10 percent of the-total reported annual payment, which is basically the normal amortization pattern for newer loans. Mortgage interest, taxes and other ownership costs are as reported by the unit owners themselves. Other ownership costs include the costs of homeowners insurance and condominium fees. The estimated tax savings shown in the analysis has been estimated based on discussions with accounting professionals and household income information provided by the unit owners. Annual appreciation is estimated at 3.0 percent and has been averaged for the period, which corresponds to the rate utilized for rental inflation. For purposes of estimating unit appreciation during the five-year period, pre-2004 purchase prices have been adjusted to 2004 levels. The estimate of annual housing costs represents a unit owner's total expenditure for mortgage principal, mortgage interest, taxes and other ownership costs minus tax savings and appreciation. In total, ownership costs for the units surveyed range from about $36,250 to about$59,330 and average $47,525. With the average cost of renting a two-bedroom/one bath apartment in the City during the five-year period between 2004 and 2009 estimated at about $87,216 and the average cost of owning a two-bedroom/one bath subject unit during the same period estimated at $47,525, owners will experience a considerable savings over renters. In total, owning the average two-bedroom/one bath subject unit will cost about 55 percent less than renting a similar apartment in the City and save nearly $40,000 in housing costs over the five-year period. Huntington Beach Fee is High by Comparison According to the Northern California Housing Coalition and primary market research completed, approximately 108 California cities and counties have adopted some form of inclusionary housing policy. Out of those cities/counties who have inclusionary housing policies 40 of them require projects with 4 units or less to meet some type of affordable housing requirement, while 68 exempt projects of this size from meeting any affordable housing requirements. In 35 of the 40 cities/counties, developers of projects that have 4 or less units may satisfy their affordable housing requirement by paying an housing in- lieu fee. Based on a telephone survey of 13 of the 35 jurisdictions, the $17,900 fee per unit proposed by Huntington Beach is the highest among those surveyed, (see Table 12). Basic Assumptions in KMA Financial Model Are Flawed The financial model prepared by KMA is comprised of a market rate apartment cash flow and a cash flow for an apartment project with 25 percent affordable units, which are correlated to produce a hypothetical gap in affordability. The model has several significant assumptions which are questionable and difficult to support with reasonable and available market data. Probably the most significant assumption that does not appear to be market supportable is their conclusion with respect to the discount rate applied to annual cash flows. The KMA analysis assumes an 8.0 percent capitalization rate for purposes of estimating property taxes and then assumes a 7.0 percent rate for-purposes of discounting annual cash flows. In simplistic terms, the discount rate commonly applied to annual cash flows in real estate valuation is equal to the capitalization rate plus inflation, which based on KMA's capitalization rate of 8.0 percent, would yield a supportable -discount rate of 11.5, assuming the model's annual inflation rate of 3.5 percent. In cases where there is significant market competition for available properties and/or the cash flow being generated is considered to have below average volatility, appraisers/investors sometimes make downward adjustments. Any downward adjustment of more than 100 basis points less than inflation however, would be considered very aggressive. In no event have we ever seen a discount rate applied, which is lower than an assumed capitalization rate. Basically this means that assuming that KMA's capitalization rate of 8.0 percent is correct, any discount rate applied to the annual cash flows of less than about 10.5 percent is very difficult to support. KMA uses no regional or national investment report data to corroborate either their capitalization or discount rate assumptions, which is the standard in similar analyses. In theory, if KMA had utilized a "market derived" discount rate instead of a contrived discount rate, the net present value of the 60 years worth of cash flows would be roughly equal to the their first year of net operating income at the assumed 8.0 percent . capitalization rate. The analysis however, is not even close. The net present value of the market rate cash flows yields a total project value of$35,280,000 or $289,180 per unit, while the first year net operating income of $1,482,800 at an 8.0 percent rate yields a total project value $18,535,000 or $151,926 per unit. Using basic real estate-valuation theory/practices, any sensible reconciliation of these methods is virtually impossible. Based on recently published investment data for apartments and the market, we believe KMA's conclusion with respect to a project capitalization rate is a bit high and that their discount rate conclusion is extremely low. In the Korpacz Real Estate Investor Survey for Second Quarter 2004, produced by Price Waterhouse, apartment capitalization rates for projects nationally range from 5.25 to 9.25 and average 7.13. Discount rates range from 7.50 to 12.50 and average 9.77. Other nationally respected investment reports such as realtyrates.com makes similar conclusions to the Korpacz report. Using.the published data cited.as our basis, our conclusion is that a reasonable capitalization rate for an apartment project in Huntington Beach, generally assuming the quality of the subject units, is about 7.25 percent and that a reasonable discount rate is about 10.25 percent. Apartment projects with a substantial composition of affordable units have less potential cash flow volatility then market rate projects, because the affordable units will basically have very little, if any, rent loss from vacancy. This provides legitimate reasoning to apply a smaller vacancy/collection loss and lower discount rates, when valuing the cash flow from these projects. Based on market factors, we believe that a vacancy rate of 4.0 percent for an affordable project, verses 5.0 percent for a market rate project is justified. Likewise, we believe that discount rates for affordable projects (especially those with a 25 percent set aside) could reasonably be as much as 25 to 50 basis points.lower,than for market rate projects. To test the impact of various assumption changes to the KMA model, 10 separate models were constructed, (see Table 13). If you accept virtually all of KMA's-financial assumptions except their discount rate, which is not market supportable based on the data presented and make only a 1.0 percent adjustment to the vacancy/collection loss in the affordable model to reflect a somewhat smaller loss, the $17,900 per unit affordability gap estimated in the KMA model virtually disappears. For instance, when a 10.25 discount rate is applied to the KMA's market rate analysis and a 10-.00 discount rate is applied to the affordable analysis together with a reduction of 1.0 percent in vacancy, the affordability gap per unit becomes $1,500, (see Table 14). When a 10.25 percent discount rate is applied to the market rate analysis and a 9.75 percent discount rate is applied to the affordable analysis together with a 1.0 percent reduction in vacancy the affordability gap per unit drifts negative to($4017), (see Table 15). Aside from issues related to the discount rate utilized, there are also other significant assumptions that are employed in the KMA model that are fairly questionable. One example is the assumption regarding unit mix. KMA assumes for purposes of the model, that the project has 50 percent 2-bedroom units and 50 percent- 3-bedroom units. No developer in Southern California or for that matter in any major market nationally would ever construct a 122 unit project with this unit mix. Three bedroom units are typically more difficult to rent in down markets and are generally not in heavy demand during good markets. It is not usual even in good markets for owners to take discounts on 3- bedroom units,just to keep these types of units rented. Our experience suggests that even a unit mix with 25 percent 3-bedroom.units is aggressive, but for purposes of evaluating the impact we have assumed this mix, together with the discount.rate and vacancy assumptions discussed previously. When the KMA model is adjusted to_.75 percent 2- bedroom-units and 25 percent 3-bedroom-units, the per unit gap with a 10.00 percent discount rate on the affordable model is $587, while the per unit gap with a 9.75 percent discount rate on the affordable model is ($4170), (see Tables 16 and17). In the current market most industry analysts are utilizing a 3.0 percent growth factor in their financial models, which is applied to both income and expense. For no explained reason, KMA uses an expense growth assumption in their model of 3.5 percent for operating expenses/reserves, in combination with a rent growth assumption of 3.0 percent for market rate units and a-rent growth assumption of 2.5 percent for affordable units. Tactically, we believe that KMA employs the disproportionate growth assumption simply to keep the operating ratio in the model from dropping in the later years of the proforma, to well below the industry standard for apartments, which is about 35 percent. Since the expense growth factor affects both the market and the affordable sides of the model equally, dropping the rate would increase the cash equally in both cases and the gap per unit would stay the same. Given our contention however, that the discount rates applied to the market side of the model and the affordable side of the model should be different, an expense growth factor that is equal to the rent growth factor for market rents has a substantial impact on the narrowing the affordability gap. For example, with a 3.0 percent growth factor applied to both market rents and expenses and 3-bedroom units reduced to 25 percent of the inventory, the affordability gap drops to $327, using a 10.25 percent k discount rate on the market rate side of the model and 10.00 on the affordable side of the model, (see Table 18). With a 9.75 percent discount rate on the affordable side of the model, the gap per unit drops to ($4,713), (see Table 19). As part of their report KMA has conducted a market survey of rental rates, in order to reach a conclusion of market rent. The conclusion in Table 1 of the-report, which is reiterated on page 6, is that the market rent for a 2-bedroom unit is $1410, while the market rent for a 3-bedroom unit is $1700. KMA goes on to say that these actual market rents are in fact below the allowable affordable moderate rents of 1672 for a 2-bedroom unit and $1846 for a 3-bedroom unit. As logic goes the market rent would prevail and become the moderate rent for financial modeling purposes. In constructing its model however, KMA seems to ignore its market/moderate rental rate conclusions and utilizes a first year rent of $1300 for 2-bedroom market/moderate -units, $1900 for 3-bedroom market rate units and $1846 for moderate rate 3-bedroom units. If the first year rental rate assumptions used in the financial model are intentional, there is no bridge logic get there from the market findings. If the market findings in the report are the final conclusion, then the first year rental rate assumptions utilized in the financial model are not correct. Using the supported market survey rental rate conclusions as opposed to the unsupported rates in the KMA model has a major impact on the affordability gap per unit. For example, with 25 percent 3-bedroom units,_a 3.0 percent growth factor applied to market rents/operating expenses and market/moderate rents of $1400 for 2-bedroom unit and $1700 for a 3-bedroom unit, the affordability gap per unit is ($84) using a 10.00 percent discount rate on the affordable side of the model and ($5,263) using a 9.75 percent discount rate on the affordable side of the model, (see Tables 20 and 21). . While the City is requiring a 25 percent affordability requirement as part of the conversion ordinance, developers of for-sale condominium inventory have a 10 percent requirement affordability requirement as do developers in other California cities who have affordability requirements for projects of 4 units or less. If the affordability requirement was changed to 10 percent for purposes of determining the affordability gap, the affordability gaps drifts substantially negative using either a 10.00 discount rate on the affordable side of the model or a 9.75 rate on the affordable side of the model. With 25 percent 3-bedroom units, a 3.0 percent growth factor on market rents/expense and the concluded market rents of$1400/$1700, the affordability gap is estimated at ($5,123) at a 10.00 discount and (410,525) at a 9.75 discount rate, (see Tables 22 and 23). Even though KMA's assumptions on unit mix, growth factors and rental rates serve to exaggerate the situation, the poorly supported and unrealistic assumption on discount rates is the factor that has the greatest impact on the affordability gap per unit. The principal reason why the affordability gap basically disappears when reasonable discounting methodology is applied is because as KMA points out in its report -- "The market survey preformed by KMA indicates that the maximum affordable rents for moderate income restricted units, exceeds current the market rents." In effect, both the KMA analysis and our own analysis clearly shows that the market is working and the need for the City to artificially produce further affordable housing units is not warranted. ----------------- We appreciate the opportunity to be of service to you in this matter. k RKETING Siucker Table 1 Subject Units by Purchase Date and Transaction Type Huntington Beach, California Purchase Original Resale Total Percent Date Purchaser Purchaser Unknown Units Total 1991 1 0 0 1 2.0% 1992 1 0 0 1 2.0% 1993 2 0 0 2 3.9% 1994 1 0 .0 1 2.0% 1995 0 0 0 0 0.0% 1996 0 0 0 0 0.0% 1997 0 0 1 1 2.0% 1998 1 0 1 2 3.9% . 1999 1 0 1 2 3.9% 2000 2 0 1 3 5.9% 2001 4 0 2 6 11.8% 2002 13 6 1_ 20 39.2% 2003 9 2 0 11 21.6% 2004 0 1 0 1 2.0% Unit Total 35 9 7 51 100.0% Developer 4 Source:Law Offices of David G.Boss Table 2 Trends in Renter Occupied Households Huntington Beach, California 1990-2009 Owner Percent Renter Percent Total Date Occupied Total Occupied Total Units 1990 40284 58.5% 28595 41.5% 68879 2000 44658 60.6% 28999 39.4% 73657 2004 45739 59.8% 30757 40.2% 76496 2009 47017 58.9% 32856 41.1% 79873 Source:US Department of the Census and Claritas Table 3 Orange County Cities Ranked by Percent of Renter Occupied Units 2004 Total Renter Percent Rank City Units Occupied Renter 1 Costa Mesa 39383 23651 60.1% 2 Los Alamitos 4362 2501 57.3% 3 Stanton 11038 5686 51.5% 4 Santa Ana 73862 37899 51.3% 5 Anaheim 97490 49427 50.7% 6 Tustin 24573 12318 50.1% 7 Fullerton 44541 20940 47.0% 8 Newport Beach 34604 15384 44.5% 9 Buena Park 23342 10190 43.7% 10 La Habra 19167 8367 43.7% 11 Garden Grove 45577 18790 41.2% 12 Westminster 26703 10757 40.3% 13 Huntington Beach 76496 30757 40.2% 14 Laguna Beach 11817 4751 40.2% 15 Irvine 61825 24703 40.0% 16 Dana Point 14819 5706 38.5% 17 Orange 42043 15723 37.4% 18 San Clemente 22902 8554 37.4% 19 Brea 13833 5077 36.7% 20 Placentia 15755 5034 32.0% 21 Cypress 15911 4861 30.6% 22 Lake Forest 20198 5766 28.5% 23 Laguna Niguel 23648 6286 26.6% 24 Fountain Valley 18401 4803 26.1% 25 La Palma 5079 1296 25.5% 26 Laguna Hills 10706 2674 25.0% 27 Seal Beach 13546 3299 24.4% 28 Rancho Santa Margarita 17172 3792 22.1% 29 San Juan Capistrano 11547 2251 19.5% 30 Mission Viejo 33888 6368 18.8% 31 Yorba Linda 20621 3279 15.9% 32 Laguna Woods 11962 1853 15.5% 33 Villa Park 2018 57 2.8% Orange County 975588 378609 38.8% California United States 109949228 36869410 33.5% Source:US Department of the Census and Claritas Table 4 Orange County Beach Cities Ranked by Percent of Renter Occupied Units 2004 Total Renter Percent Rank City Units Occupied Renter 1 Newport Beach 34604 15384 44.5% 2 Huntington Beach 76496 30757 40.2% 3 Laguna Beach 11817 4751 40.2% 4 Dana Point 14819 5706 38.5% 5 San Clemente 22902 8554 37.4% 6 Laguna Niguel 23648 6286 26.6% 7 Seal Beach 13546 3299 24.4% 8 San Juan Capistrano 11547 2251 19.5% Source:US Department of the Census and Claritas Table 5 Subject Unit Conversion --Impact on Rental Inventory Huntington Beach, California Renter Converted Conversion Date -Occupied Units Impact 2000 28999 55 0.19% 2004 30757 55 0.18% Source:US Department of the Census,Claritas and Pulse Marketing Table 6 City of Huntington Beach Regional Housing Need by Income Group Aug-04 1998- Percent Income Category 2005 Units Target -Targets Produced .--Achieved Very Low(Up to 50 percent of MHI) 388 "278 71.6% Low Income (up to 80% of MHI) 255 211 82.7% Moderate Income (up to 100% of MHI) 400 276 69.0% Above Moderate(up to 120% of MHI) 972 1747 179.7% Total 2015 2512 124.7% Source:City of Huntington Beach General Plan and City of Huntington Beach Redevelopment-Agency Table 7 Trends in Median Household Income Huntington Beach and Orange County California 1990-2009 Huntington Orange 80 Percent 50 Percent Date Beach County of OC Med: of OC Med. 1990 $50,692 $45,925 $36,740 $22,963 1991 $52,146 $47,239 $37,791 $23,620 1992 $53,600 $48,553 $38,842 $24,277 1993 $55,054 $49,867 $39,894 $24,934 1994 $56,508 $51,181 $40,945 $25,591 1995 $57,962 $52,495 $41,996 $26,248 1996 $59,416 $53,809 $43,047 $26,905 1997 $60,870 $55,123 $44,098 $27,562 1998 $62,324 $56,437 $45,150 $28,219 1999 $63,778 $57,751 $46,201 $28,876 2000 $65,235 $59,063 $47,250 $29,532 2001 $66,689 $60,527 $48,422 $30,264 2002 $68,143 $61,991 $49,593 $30,996 2003 $69,597 $63,455 $50,764 $31,728 2004 $71,054 $64,919 $51,935 $32,460 2009 $79,543 $72,863 $58,290 $36,432 Source:US Department of the Census and Ciaritas Table 8 Subject Unit Survey Analysis Sep-04 Total Total Subject Subject Project Subject Units Units Not ID Project Units Units Surveyed Surveyed A 2505 Delaware 4 4 2 2 B 16741 Green Street 4 3 3 0 C 16751 Green Street 4 4 1 3 D 7342 Garfield 4 4 2 2 E 7352 Garfield 4 3 1 2 F 16821 Green Street 4 4 3 1 G 17031 Ash Street 4 3 3 0 H 317 17th Street 3 2 2 0 1 1418 Orange Avenue 4 3 1 2 J 322 19th Street 4 2 1 1 K 8161 Forelle 4 4 4 0 -L 413 14th Street 4 2 2 0 M 205 13th Street 4 2 1 1 N 402 21 st Street 4 3 2 1 O 816 11th Street 3 1 1 0 P 214 20th Street 4 2 1 1 Q 7551 Amazon Drive 4 3 0 3 R 1412 Huntington Street 4 4 0 4 S 218 16th Street 4 1 0 1 T 7681 Fir Drive 4 1 0 1 Totals 78 55 30 25 Average Unit Sq. Ft. Source:Pulse Marketing Table 9 Subject Unit Affordability Analysis Huntington Beach,CA. Year Square Purchase Household County Above/ Income ID Project Purchased Feet Price Income Median Below Category A 2505 Delaware 2000 1400 $157,500 $60,000 $59,063 Above 2003 1700 $321,500 $12,000 $63,455 Below Very Low B 16741 Green Street 2002 850 $260,000 $90,000 $61,991 Above 2003 1176 $293,000 $229,000 $63,455 Above 2002 1157 $300,000 $84,990 $61,991 Above C 16751 Green Street 2002 1180 $300,000 $70,000 $61,991 Above D 7342 Garfield 2002 1550 $242,500 $51,000 $61,991 Below Moderate 2002 1100 $219,000 $70,000 $61,991 Above E 7352 Garfield 2001 1000 $211,500 $45,000 $60,527 Below Low F 16821 Green Street 2002 1346 $250,000 $64,000 $61.991 Above 2002 1550 $305,000 $94,000 $61,991 Above 2002 1550 $290,000 $75,000 $61,991 Above G 17031 Ash Street 2003 952 $242,000 $60,000 $63,455 Below Moderate 2001 900 $163,000 $48,000 $60,527 Below Low 2001 900 $162,000 $64,000 $60,527 Above H 317 17th Street 1993 1150 $175,000 $60,000 $49,667 Above 1993 1200 $190,000 $87,000 $49,867 Above 1 1418 Orange Avenue 2000 676 $184,900 $50,000 $59,063 Below Moderate J 322 19th Street 1998 1050 $185,000 $65,000 $56,437 Above K 8161 Forelle 2003 1450 $380,000 $85,000 $63,455 Above 2003 1050 $267,500 $64,000 $63,455 Above 2003 1250 $306,000 $80,000 $63,455 Above 2003 800 $247,500 $53,000 $63,455 Below Moderate L 413 14th Street 2002 1000 $270,000 $93,000 $61,991 Above 2002 900 $285,000 $60,000 $61,991 Below Moderate M 205 13th Street 2002 1050 $290,000 $90,000 $61,991 Above N 402 21 st Street 1997 1648 $210,000 $394,000 $55,123 Above 2001 850 $275,000 $85,000 $60,527 Above O 816 11th Street 2002 840 $429,900 $380,000 $61,991 Above P 214 20th Street 1999 940 $197,500 $120,000 $57,751 Above Averages 1139 $263,677 Source:Pulse Marketing Table 10 Housing Costs to Rent a 2 Bedroom/1 Bathroom Apartment Huntington Beach, CA. 2004—2009 Minimum Project Address Rent Califomia Apartment Homes 6242 Warner Avenue $1,400 Huntington Villas 16761 Viewpoint Lane $1,475 Windjammer 7701 Warner Avenue $1,399 Huntington Highlander 16162 Sher Lane $1,245 Surfside Villas 7795 Neptune $1,500 Regency Palms 6762 Wamer Avenue $1,192 Monthly Average $1,369 First Year Cost $16,428 Five Year Cost @ 3% Inflation $87,216 Table 11 Housing Costs to Own a 2 Bedroom/1Bath Condominium Huntington Beach, CA. 2004-2009 Annual Annual Real Other Annual Annual Annual Five Purchase Purchase Down Mortgage Mortgage Estate Annual Tax Save Apprec. Housing Year Date Price Payment Principal Interest Taxes Costs 32.0% 3.0% Cost Cost Oct-02 $260,000 $0 $2,280 $20,520 $2,600 $2,650 $7,398 $8,786 $11,866 $59,328 Nov-02 $300,000 $52,000 $1,644 $14,756 $3,200 $1,800 $5,746 $10,138 $7,249 $36,247 Sep-02 $242,000 $0 $2,232 $20,088 $2,500 $2,100 $7,228 $7,940 $11,752 $58,759 Apr-01 $162,000 $0 $1,326 $11,934 $1,800 $1,800 $4,395 $5,639 $6,826 $34,131 Dec-00 $189,900 $3,000 $1,680 $15,120 $2,200 $1,440 $5,542 $6,610 $8,388 $41,938 Jun-03 $267,500 $0 $2,220 $19,980 $3,000 $1,880 $7,354 $8,777 $10,949 $54,747 Average $47,525 Table 12 Inclusionary Housing In Lieu Fees For-Sale Condominium Projects with Four Units or Less Oct-04 Inclusionary In Lieu Fee for Residential City Requirement Projects with 4 Units or Less Carlsbad 15% $4515 per unit East Palo Alto 20% $10.60 per gross sq.ft. of project area, or$10,600 per unit for a project with a 1000 sq.ft. average unit size Healdsburg 10-15% $1500 per project unit Irvine 15% $6694 per project unit Mill Valley 15% Estimated at about$1500 per unit Mountain View 10% 3%of each units sales price, average multi-family sales price of$420,000 in City would produce a$12,600 fee Oceanside 10% $10275 per project unit Pleasanton 15-20% $2144 per project unit Poway 15% $500 per project unit and$1.00 per sq.ft. for units over 1000 square feet San Diego 10% .875 cents per gross sq.ft. of project area or$875 per unit for a project with a 1000 sq.ft. average unit size Solana Beach 10% $14,000 per project unit Walnut Creek 20% Based on gross sq.ft. of project area or$4,000 per unit for a project with a 1000 sq.ft. average unit size West Hollywood 20% $8.60 per gross sq.ft. of project area or$8600 per unit for a project with a 1000 sq.ft. average unit size Source:Non-Profit Housing Association of Northern California and Pulse Marketing l' Table 13 Gap Per Unit Assumption and Result Matrix Market Affordable Market Affordable Estimated Affordability Discount Discount Vacancy/ Vacancy/ Bedroom Expense Market Moderate Gap Model Percentage Rate Rate Collection Collection Mix Growth Rent Rent Per Unit KMA 25 7.00 7.00 5.0 5.0 50/50 3.5 1300/1900 1300/1846 $17,902 Pulse 1 25 10.25 10.00 5.0 4.0 50/50 3.5 1300/1900 1300/1846 $1,500 Pulse 2 25 10.25 9.75 5.0 4.0 50/50 3.5 1300/1900 1300/1846 ($4,017) Pulse 3 25 10.25 10.00 5.0 4.0 75/25 3.5 1300/1900 1300/1846 587 Pulse 4 25 10.25 9.75 5.0 4.0 75/25 3.5 1300/1900 1300/1846 ($4,170) Pulse 5 25 10.25 10.00 5.0 4.0 75/25 3.0 1300/1900 1300/1846 $327 Pulse 6 25 10.25 9.75 5.0 4.0 75/25 3.0 1300/1900 1300/1846 ($4,713) Pulse 7 25 10.25 10.00 5.0 4.0 75/25 3.0 1400/1700 1400/1700 ($84) Pulse 8 25 10.25 9.75 5.0 4.0 75/25 3.0 1400/1700 1400/1700 ($5,263) Pulse 9 10 10.25 10.00 5.0 4.0 75/25 3.0 1400/1700 1400/1700 ($5,123) Pulse 10 10 10.25 9.75 5.0 4.0 75/25 3.0 1400/1700 1400/1700 ($10,525) Table 14 KMA Analysis Compared to Pulse @ 10.25 Market Rate&10.00 Affordable Rate Financial Assumption KMA Pulse Market Rate Mix 243edroom Units 61 61 343edroom Units 61 61 Affordable Mix 2-Bedroom Market Rate Units 46 46 2-Bedroom Moderate Rate Units 13 13 2-Bedroom Low Rate Units 3 3 62 62 3-Bedroom Market Rate Units 45 45 3-Bedroom Moderate Rate Units 12 12 3-Bedroom Low Rate Units 3 3 60 60 Total Project Units 122 122 Affordable Units 31 31 Percent Affordable 25.4% 25.4% Year Rents 2-Bedroom Market Rent 1300 1300 3-Bedroom Market Rent 1900 1900 2-Bedroom Moderate Rent 1300 1300 3-Bedroom Moderate Rent 1846 1846 2-Bedroom Low Rent 992 992 3-Bedroom Low Rent 1090 1090 Rent Growth Market Rate Units 1.030 1.030 Affordable Units 1.025 1.025 Miscellaneous Income Revenue Per Unit 10 10 Vacancy&Collection Loss Market Rate Model 0.05 0.05 Affordable Model 0.05 0.04 Year 1 Expenses Operating Expense 4000 4000 Property Taxes--Market Rate Model 231700 231700 Property taxes—Affordable Model 224600 224600 Reserves 300 300 Expense Growth Operating Expense 1.035 1.035 Property Taxes 1.020 1.020 Reserves 1.035 1.035 Discount Rate Market Rate Model 7.00% 10.25% Affordable Model 7.00% 10.00% Net Present Value Market Rate Model 35280000 22033889 Affordable Model 33096000 21850912 GAP 2184000 182977 GAP per Unit 17902 1500 Table 15 KMA Analysis Compared to Pulse @ 10.25 Market Rate&9.75 Affordable Rate Financial Assumption KMA Pulse Market Rate Mix 2-Bedroom Units 61 61 3-Bedroom Units 61 61 Affordable Mix 2-Bedroom Market Rate Units 46 46 2-Bedroom Moderate Rate Units 13 13 2-Bedroom Low Rate Units 3 3 62 62 3-Bedroom Market Rate Units 45 45 3-Bedroom Moderate Rate Units 12 12 3-Bedroom Low Rate Units 3 3 60 60 Total Project Units 122 122 Affordable Units 31 31 Percent Affordable 25.4% 25.4% Year 1 Rents 2-Bedroom Market Rent 1300 1300 3-Bedroom Market Rent 1900 1900 2-Bedroom Moderate Rent 1300 1300 3-Bedroom Moderate Rent 1846 1846 2-Bedroom Low Rent 992 992 3-Bedroom Low Rent 1090 1090 Rent Growth Market Rate Units 1.030 1.030 Affordable Units 1.025 1.025 Miscellaneous Income Revenue Per Unit 10 10 Vacancy&Collection Loss Market Rate Model 0.05 0.05 Affordable Model 0.05 0.04 Year 1 Expenses Operating Expense 4000 4000 Property Taxes—Market Rate Model 231700 231700 Property Taxes—Affordable Model 2246W 2246M Reserves 300 300 Expense Growth Operating Expense 1.035 1.035 Property Taxes 1.020 1.020 Reserves 1.035 1.035 Discount Rate Market Rate Model 7.00% 10.25% Affordable Model 7.00% 9.75% Net Present Value Market Rate Model 35280000 22033889 Affordable Model 33096000 22523986 GAP 2184000 490097 GAP per Unit 17902 -4017 Table 16 KMA Analysis Compared to Pulse @ 10.25 Market Rate,10.00 Affordable Rate, and 25 Percent 3-Bedroom Units Financial Assumption lam Pulse Market Rate Mix 2-Bedroom Units 61 91 3-Bedroom Units 61 31 Affordable Mix 2-Bedroom Market Rate Units 46 68 2-Bedroom Moderate Rate Units 13 18 2-Bedroom Low Rate Units 3 5 62 91 3-Bedroom Market Rate Units 45 23 3-Bedroom Moderate Rate Units 12 6 3-Bedroom Low Rate Units 3 2 60 31 Total Project Units 122 122 Affordable Units 31 31 Percent Affordable 25.4% 25.4% Year 1 Rents 243edroom Market Rent 1300 1300 3-Bedroom Market Rent 1900 1900 2-Bedroom Moderate Rent 1300 1300 3-Bedroom Moderate Rent 1846 1846 2-Bedroom Low Rent 992 992 3-Bedroom Low Rent 1090 109D Rent Growth Market Rate Units 1.030 1.030 Affordable Units 1.025 1.025 Miscellaneous Income Revenue Per Unit 10 10 Vacancy&Collection Loss Market Rate Model 0.05 0.05 Affordable Model 0.05 0.04 Year1 Expenses Operating Expense 4000 4000 Property Taxes—Market Rate Model 231700 231700 Property Taxes—Affordable Model 224600 2246M Reserves 300 300 Expense Growth Operating Expense 1.035 1.035 Property Taxes 1.020 1,020 Reserves 1.035 1.035 Discount Rate Market Rate Model 7.00% 10.25% Affordable Model 7.00% 10.00% Net Present Value Market Rate Model 35280000 18966125 Affordable Model 33096000 18894451 GAP 2184000 71673 GAP per Unit 17902 587 Table 17 I(MA Analysis Compared to Pulse @ 10.25 Market Rate,9.75 Affordable Rate and 25 Percent 3-Bedroom Units Financial Assumption I(MA Pulse Market Rate Mix 2-Bedroom Units 61 91 3-Bedroom Units 61 31 Affordable Mix 2-Bedroom Market Rate Units 46 68 2-Bedroom Moderate Rate Units 13 1s 2-Bedroom Low Rate Units 3 5 62 91 3-Bedroom Market Rate Units 45 23 3-Bedroom Moderate Rate Units 12 6 3-Bedroom Low Rate Units 3 2 60 31 Total Project Units 122 122 Affordable Units 31 31 Percent Affordable 25A% '25.4% Year 1 Rents 2-Bedroom Market Rent 1300 1300 3-Bedroom Market Rent 1900 1900 243edroom Moderate Rent 1300 1300 3-Bedroom Moderate Rent 1846 1846 2-Bedroom Low Rent 992 992 3-Bedroom Low Rent 1090 1090 Rent Growth Market Rate Units 1.030 1.030 Affordable Units 1.025 1.025 Miscellaneous Income Revenue Per Unit 10 10 Vacancy&Collection Loss Market Rate Model 0.05 0.05 Affordable Model 0.05 0.04 Year 1 Expenses Operating Expense 4000 4000 Property Taxes--Market Rate Model 231700 231700 Property Taxes—Affordable Model 224600 224600 Reserves 300 300 Expense Growth Operating Expense 1.035 1.035 Property Taxes 1.020 1.020 Reserves 1.035 1.035 Discount Rate Market Rate Model 7.00% 10.25% Affordable Model 7.00% 9.75% Net Present Value Market Rate Model 35280000 18966125 Affordable Model 33096000 19474912 GAP 2184000 -508787 GAP per Unit 17902 4170 Table 18 I(MA Analysis Compared to Pulse @ 10.25 Market Rate,10.00 Affordable Rate, 25 Percent 3-Bedroom Units&3.0 Percent Expense Growth Financial Assumption IWIA Pulse Market Rate Mix 2-Bedroom Units 61 91 3-Bedroom Units 61 31 Affordable Mix 2-Bedroom Market Rate Units 46 68 2-Bedroom Moderate Rate Units 13 18 2-Bedroom Low Rate Units 3 5 62 91 3-Bedroom Market Rate Units 45 23 3-Bedroom Moderate Rate Units 12 6 3-Bedroom Low Rate Units 3 2 60 31 Total Project Units 122 122 Affordable Units 31 31 -Percent Affordable 25A% 25.4% Year 1 Rents 2-Bedroom Market Rent 1300 1300 3-Bedroom Market Rent 1900 1900 2-Bedroom Moderate Rent 1300 1300 3-Bedroom Moderate Rent 1846 1846 2-Bedroom Low Rent 992 .992 3-Bedroom Low Rent 1090 1090 Rent Growth Market Rate Units 1.030 1.030 Affordable Units 1.025 1.025 Miscellaneous Income Revenue Per Unit 10 10 Vacancy&Collection Loss Market Rate Model 0.05 0.05 Affordable Model 0.05 0.04 Year 1 Expenses Operating Expense 4000 4000 Property Taxes—Market Rate Model 231700 231700 Property Taxes—Affordable Model 224600 224600 Reserves 300 300 Expense Growth Operating Expense 1.035 1.030 Property Taxes 1.020 1.020 Reserves 1.035 1.030 Discount Rate Market Rate Model 7.00% 10.25% Affordable Model 7.00% 10.00% Net Present Value Market Rate Model 35280000 19498292 Affordable Model 33096000 19458393 GAP 21 B40W 39899 GAP per Unit 17902 327 Table i9 KMA Analysis Compared to Pulse Q 10.25 Market Rate,9.75 Affordable Rate, 25 Percent 3-Bedroom Units and 3.0 Percent Expense Growth Financial Assumption KMA Pulse Market Rate Mix 2-Bedroom Units 61 91 3-Bedroom Units 61 31 Affordable Mix 2-Bedroom Market Rate Units 46 68 2-Bedroom Moderate Rate Units 13 is 2-Bedroom Low Rate Units 3 5 62 91 3-Bedroom Market Rate Units 45 23 343edroom Moderate Rate Units 12 6 343edroom Low Rate Units 3 2 60 31 Total Project Units 122 122 Affordable Units 31 31 Percent Affordable 25.4% 25.4% Year 1 Rents 2-Bedroom Market Rent 1300 1300 3-Bedroom Market Rent 1900 1900 2-Bedroom Moderate Rent 1300 1300 3-Bedroom Moderate Rent 1846 1846 2-Bedroom Low Rent 992 992 3-Bedroom Low Rent 1090 1090 Rent Growth Market Rate Units 1.030 1.030 Affordable Units 1.025 1.025 Miscellaneous Income Revenue Per Unit 10 10 Vacancy&Collection loss Market Rate Model 0.05 0.05 Affordable Model 0.05 0.04 Year Expenses Operating Expense 4000 4000 Property Taxes—Market Rate Model 231700 23170D Property Taxes—Affordable Model 224600 224600 Reserves 300 300 Expense Growth Operating Expense 1.036 1.030 Property Taxes 1.020 1.020 Reserves 1.035 1.030 Discount Rate Market Rate Model 7.00% 10.25% Affordable Model 7.00% 9.75% Net Present Value Market Rate Model 35280000 19498292 Affordable Model 33096000 20073254 GAP 2184000 -674962 GAP per Unit 17902 -4713 Table 20 IONA Analysis Compared to Pulse @ 10.25 Market Rate,10.00 Affordable Rate, 25 Percent 3-Bedroom Units,3.0 Percent Expense Growth&New Market Rent Financial Assumption IOUA Pulse Market Rate Mix 2-Bedroom Units 61 91 3-Bedroom Units 61 31 Affordable Mix 2-Bedroom Market Rate Units 46 68 2-Bedroom Moderate Rate Units 13 18 2-Bedroom Low Rate Units 3 5 62 91 3-Bedroom Market Rate Units 45 23 3-Bedroom Moderate Rate Units 12 6 3-Bedroom Low Rate Units 3 2 60 31 Total Project Units 122 122 Affordable Units 31 31 Percent Affordable 25.4% 25.4% Year 1 Rents 2-Bedroom Market Rent 1300 1400 3-Bedroom Market Rent 1900 1700 2-Bedroom Moderate Rent 1300 1400 3-Bedroom Moderate Rent 1846 1700 2-Bedroom Low Rent 992 992 3-Bedroom Low Rent 1090 1090 Rent Growth Market Rate Units 1.030 1.030 Affordable Units 1.025 1.025 Miscellaneous Income Revenue Per Unit 10 10 Vacancy&Collection Loss Market Rate Model 0.05 0.05 Affordable Model 0.05 0.04 Year Expenses Operating Expense 4000 4000 Property Taxes—Market Rate Model 231700 231700 Property Taxes—Affordable Model 224600 224600 Reserves 300 300 Expense Growth Operating Expense 1.035 1.030 Property Taxes 1.020 1.020 Reserves 1.035 1.030 Discount Rate Market Rate Model 7.00% 10.25% Affordable Model 7.00% 10.00% Net Present Value Market Rate Model 35280000 19992542 Affordable Model 33096000 20002812 GAP 2184000 -10270 GAP per Unit 17902 -84 Table 21 10MA Analysis Compared to Pulse @ 10.25 Market Rate,10.00 Affordable Rate, 25 Percent 343edroom Units,3.0 Percent Expense Growth&New Market Rent Financial Assumption KMA Pulse Market Rate Mix 2-Bedroom Units 61 91 3-Bedroom Units 61 31 Affordable Mix 2-Bedroom Market Rate Units 46 68 2-Bedroom Moderate Rate Units 13 18 2-Bedroom Low Rate Units 3 5 62 91 3-Bedroom Market Rate Units 45 23 3-Bedroom Moderate Rate Units 12 6 3-Bedroom Low Rate Units 3 2 60 31 Total Project Units 122 122 Affordable Units 31 31 Percent Affordable 25.4% 25.4% Year 1 Rents 2-Bedroom Market Rent 1300 1400 3-Bedroom Market Rent 1900 1700 2-Bedroom Moderate Rent 1300 1400 3-Bedroom Moderate Rent 1846 1700 2-Bedroom Low Rent 992 992 3-Bedroom Low Rent 1090 1090 Rent Growth Market Rate Units 1.030 1.030 Affordable Units 1.025 1.025 Miscellaneous Income Revenue Per Unit 10 10 Vacancy&Collection Loss Market Rate Model 0.05 0.05 Affordable Model 0.05 0.04 Year1 Expenses Operating Expense 4000 4000 Property Taxes—Market Rate Model 231700 231700 Property Taxes—Affordable Model 224600 224600 Reserves 300 300 Expense Growth Operating Expense 1.035 1.030 Property Taxes 1.020 1.020 Reserves 1.035 1.030 Discount Rate Market Rate Model 7.00% 10.25% Affordable Model 7.00% 9.75% Net Present Value Market Rate Model 35280000 19992542 Affordable Model 330960M 20634655 GAP 2184OW -642113 GAP per Unit 17902 -5263 Table 22 QvIA Analysis Compared to Pulse 42 10%Affordability,10.25 Market Rate,10.00 Affordable Rah 25 Percent 343edroom Units,3.0 Percent Expense Grov th&New Market Rent Financial Assumption lam Pulse Market Rate Mix 2-Bedroom Units 61 91 343edroom Units 61 31 Affordable Mix 2-8edroom Market Rate Units 46 82 2-Bedroom Moderate Rate Units 13 7 2-Bedroom Low Rate Units 3 2 62 91 3-Bedroom Market Rate Units 45 28 3-Bedroom Moderate Rate Units 12 2 3-8edroom Low Rate Units 3 1 60 31 Total Project Units 122 122 Affordable Units 31 12 Percent Affordable 25.4% 9.8% Year 1 Rents 2-Bedroom Market Rent 1300 1400 3-Bedroom Market Rent 1900 1700 2-Bedroom Moderate Rent 1300 1400 3-Bedroom Moderate Rent 1846 1700 2-Bedroom Low Rent 992 992 3-Bedroom Low Rent 1090 1090 Rent Growth Market Rate Units 1.030 1.030 Affordable Units 1.025 1.026 Miscellaneous income Revenue Per Unit 10 10 Vacancy&Collection Loss Market Rate Model 0.05 0.05 Affordable Model 0.05 0.04 Year1 Expenses Operating Expense 4000 4000 Property Taxes--Market Rate Model 231700 231700 Property Taxes—Affordable Model 224600 224600 Reserves 300 300 Expense Growth Operating Expense 1.035 1.030 Property Taxes 1.020 1.020 Reserves 1.035 1.030 Discount Rate Market Rate Model 7.0D% 10.25% Affordable Model 7.00% 10.00% Net Present Value Market Rate Model 35280000 19992542 Affordable Model 33096000 20617510 GAP 2184000 -624968 GAP per Unit 179M -5123 Table 23 <MA Analysis Compared to Pulse @ 10%Affordability,10.25 Market Rate,10.00 Affordable Rate 25 Percent 3-Bedroom Units,3.0 Percent Expense Growth 8 New Market Rent Financial Assumption KMA Pulse Market Rate Mix 2-Bedroom Units 61 91 3-Bedroom Units 61 31 Affordable Mix 243edroom Market Rate Units 46 82 2-Bedroom Moderate Rate Units 13 7 2-Bedroom Low Rate Units 3 2 62 91 3-Bedroom Market Rate Units 45 28 3-Bedroom Moderate Rate Units 12 2 3-Bedroom Low Rate Units 3 1 60 31 Total Project Units 122 122 Affordable Units 31 12 Percent Affordable 25.4% 9.8% Year 1 Rents 2-Bedroom Market Rent 1300 1400 3-Bedroom Market Rent 1900 1700 2-Bedroom Moderate Rent 1300 1400 3-Bedroom Moderate Rent 1846 1700 2-Bedroom Low Rent 992 992 3-Bedroom Low Rent 1090 1090 Rent Growth Market Rate Units 1.030 1.030 Affordable Units 1.025 1.025 Miscellaneous Income Revenue Per Unit 10 10 Vacancy&Collection Loss Market Rate Model 0.05 0.05 Affordable Model 0.05 0.04 Year1 Expenses Operating Expense 4000 4000 Property Taxes—Market Rate Model 231700 231700 Property Taxes—Affordable Model 224600 224600 Reserves 300 300 Expense Growth Operating Expense 1.035 1.030 Property Taxes 1.020 1.020 Reserves 1.035 1.030 Discount Rate Market Rate Model 7.00% 10.25% Affordable Model 7.00% 9.75% Net Present Value Market Rate Model 35280000 19992542 Affordable Model 33096000 21276602 GAP 2184000 -1284060 GAP per Unit 17902 -10525 H. B. INDEPENDENT PUBLISH DATE: 12/16/04 CITY OF HUNTINGTON BEACH LEGAL NOTICE ORDINANCE NO. 3690 Adopted by the City Council on DECEMBER 6, 2004 "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING CHAPTER 250 OF THE HUNTINGTON BEACH ZONING AND SUBDIVISION ORDINANCE RELATING TO GENERAL PROVISIONS — MAP REQUIREMENTS." SYNOPSIS: ZONING TEXT AMENDMENT NO. 04-03 IS AN AMENDMENT TO THE HUNTINGTON BEACH ZONING AND SUBDIVISION ORDINANCE (HBZSO) TO UPDATE THE CONDOMINIUM CONVERSION PROCESS. THE AMENDMENT CREATED A TENTATIVE PARCEL MAP EXEMPTION FOR APARTMENTS AND STOCK COOPERATIVES WITH TWO TO FOUR UNITS ON A PARCEL THAT WERE SOLD AS CONDOMINIUM UNITS WITHOUT CITY APPROVAL PRIOR TO JUNE 1, 2004. THE TEXT AMENDMENT PROVIDES RELIEF TO RESIDENTS ATTEMPTING TO LEGALIZE THE OWNERSHIP STATUS OF THEIR UNITS. THE ORDINANCE CHANGES CONTINUE TO ENSURE PROTECTION OF EXISTING OWNERS BY REQUIRING A PLAT MAP AND CERTIFICATE OF COMPLIANCE TO BE APPROVED AND RECORDED AT THE COUNTY OF ORANGE. COPIES OF THIS ORDINANCE ARE AVAILABLE IN THE CITY CLERK'S OFFICE. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting held December 6, 2004 by the following roll call vote: AYES: Hansen, Coerper, Sullivan, Hardy, Green, Bohr, Cook NOES: None ABSENT: None This ordinance is effective 30 days after adoption. CITY OF HUNTINGTON BEACH 2000 MAIN STREET HUNTINGTON BEACH, CA 92648 714-536-5227 JOAN L. FLYNN, CITY CLERK ORDINANCE NO. LEGISLATIVE DRAFT Chapter 250 General Provisions (3334-6/97, 3530-2/02) Sections: 250.02 Citation and Authority 250.04 Consistency 250.06 Applicability 250.08 Exceptions 250.10 Definitions 250.12 Responsibilities 250.14 Map Requirements 250.16 Fees and Deposits 250.02 Citation and Authority This Title is adopted pursuant to Chapter XI, Section 7 of the California Constitution and to supplement and implement the Subdivision Map Act, Section 66410 et seq. of the Government Code. This title may be cited as the Subdivision Ordinance of the City of Huntington Beach. 250.04 Consistency No land shall be subdivided and developed for any purpose that is inconsistent with the Huntington Beach General Plan, the Local Coastal Program for development within the coastal zone, or any applicable specific plan of the City or that is not permitted by Titles 20- 24, Zoning, or other applicable provisions of this Code. (3334-6/97) The type and intensity of land use as shown on the General Plan, and Local Coastal Program for land within the coastal zone, and any applicable specific plan shall determine, together with the requirements of the Subdivision Map Act and this Title, the type of streets, roads, highways, utilities, and other public services that the subdivider shall provide. (3334-6/97) 250.06 Applicability The provisions set forth in this Title shall apply to all or parts of subdivisions within the City and to the preparation of subdivision maps and to other maps provided for by the Subdivision Map Act and this Title after the effective date of this Title. All subdivisions and any part thereof lying within the City shall be made and all subdivision maps shall be prepared and presented for approval as provided for in this chapter. All subdivisions and lot line adjustments located within the coastal zone that meet the definition of development as defined in Section 245.04(J) shall require approval of a coastal development permit. (3334-6/97) legisdraft/04zoning/Chp 250 LD 11-1 rev l 250.08 Exceptions This chapter shall not apply to the items listed in Sections 66412, 66412.1, 66412.2 and 66412.5 of the Subdivision Map Act. However subject to the provisions of Section 66412(d) of the Subdivision Map Act, a lot line adjustment between two or more existing adjacent parcels, where the land taken from one parcel is added to an adjacent parcel, and where a greater number of parcels than originally existed is not thereby created,provided that, the lot line adjustment is approved pursuant to Section 250.16B. 250.10 Definitions For the purposes of this Title, unless otherwise apparent from the context, certain words and phrases used in this Title are defined in this section as set forth below. All definitions provided in Chapters 1.04, 245.04, and 203 of the Municipal Code and all definitions provided in the Subdivision Map Act shall also be applicable to this Title and said definitions are hereby incorporated by this reference as though fully set forth herein. Access Rights. The right of abutting landowners or occupants to obtain access to an abutting public way. Acreage. Any parcel of land which is not a lot, as defined in this chapter, and those areas where a legal subdivision has not been made previously, or where a legal subdivision has declared such parcel as acreage. Block. The area of land within a subdivision, which area is entirely bounded by streets, highways or ways, except alleys, or the exterior boundary or boundaries of the subdivision. Certificate of Compliance. A valid authorization, issued by the City, stating that the subdivision of creation complies with City subdivision laws applicable at the time of creation or stating that the subdivision complies with the Subdivision Map Act and this Title. City En ig neer. The City Engineer of the City of Huntington Beach. Collector Street. A street, intermediate in importance between a local street and an arterial highway, which has the purpose of collecting local traffic and carrying it to an arterial highway. Conversion. The creation of separate ownership of existing real property together with a separate interest in space of residential, industrial or commercial buildings. Cul-de-Sac. A local street, one end of which is closed and consisting of a circular turnaround. Day. A calendar day unless otherwise specified. Department. The Community Development Department of the City of Huntington Beach. Department of Public Works. The Department of Public Works of the City of Huntington Beach. Director. The Director of the Community Development Department of the City of Huntington Beach. legisdraft/04zoning/Chp 250 LD I I-1 rev 2 Easement. A grant of one or more property rights by the owner to the City, a public entity, public utility, or private party. Final Map. A map showing a subdivision of five or more parcels, prepared in accordance with the provisions of the Subdivision Map Act and this Title and designed to be placed on record in the office of the Orange County Recorder. Lot Line Adjustment. A minor shift or rotation of an existing lot line where a greater or lesser number of parcels than originally existed is not created. Mer$zer. The joining of two or more contiguous parcels of land under one ownership into one parcel. Parcel. A unit or portion of a unit of improved or unimproved land. Parcel Map. A map showing a subdivision of four or fewer parcels or a subdivision pursuant to the exceptions stated in Section 66426 of the Subdivision Map Act prepared in accordance with the provisions of the Subdivision Map Act and this Title and designed to be placed on record in the office of the Orange County Recorder. Parkway. That area between the curb face and abutting property line. Person. Any individual, firm, co-partnership,joint venture, organization, corporation, estate, trust, receiver, syndicate, this City, and any other public agency. Private Street. Any street or accessway which is privately held, maintained and utilized as access to a development. Remainder. That portion of an existing parcel which is not divided for the purpose of sale, lease, or financing nor part of the subdivision. Scenic Easement. An easement dedicated to the City that protects a view from a specific location or locations to a specific visual resource by prohibiting or limiting development. Service Road. A street adjacent to and providing access to an arterial highway. Standard Plans. Plans and engineering drawings for public improvements as adopted by the Department of Public Works. Standard Engineering Specifications. Specifications for public improvements adopted by the Department of Public Works. Subdivision Committee. The Subdivision Committee of the City of Huntington Beach. Subdivision Map Act. The provisions of Division 2, Subdivisions of the California Government Code, relating to subdivisions of land and real property commencing with Section 66410. Tentative map. A map made for the purpose of showing the design and improvements of a proposed subdivision and the existing conditions in and around it precedent to the approval of a final map. Tentative map shall include a tentative parcel map, prepared pursuant to the provisions of this Title. Huntington Beach Zoning and Subdivision Ordinance Chapter 250 250-3 6/97 legisdraft/04zoning/Chp 250 LD 11-1 rev 3 Usable Parcel Area. That portion of a parcel which does not exceed a slope of 10 percent. Any portion of the parcel exceeding 10 percent shall, for the purpose of this Title, be considered slope and not usable parcel area. Vesting Tentative Map. A tentative map for a residential subdivision that has,printed conspicuously on its face, the words "vesting tentative map" at the time it is filed with the City, and is processed in accordance with the provisions of Chapter 252 of this Title. (3334- 6/97) 250.12 Responsibilities A. City Attorney. The City Attorney's responsibilities shall include approving as to form all subdivision improvement agreements; covenants, codes, and restrictions; security, liability agreements and insurance; and all governing documents for a community apartment project, condominium, stock cooperative, or conversion. B. City Council. The City Council shall have final jurisdiction in the approval of final maps and improvement agreements and the acceptance by the City of land and/or improvements as may be proposed for dedication to the City for subdivisions of five or more parcels. The City Council shall act as the appeal board for hearing appeals of all subdivision maps acted upon by the Planning Commission. C. Planning Commission. The Planning Commission's responsibilities shall include approving, conditionally approving, or denying the application for tentative map approval of subdivisions of ten or more parcels. The Planning Commission shall act as the appeal board for hearing appeals of tentative parcel maps and tentative maps for subdivisions of 9 or fewer parcels. D. Zoning Administrator. The Zoning Administrator's responsibilities shall include the processing and approval, conditional approval or denial of tentative map approval of subdivisions of nine or less parcels, tentative parcel maps and waivers of parcel map requirements, lot line adjustments, mergers and certificates of compliance. E. City Engineer. The City Engineer's responsibilities shall include: 1. Establishing design and construction details, standards and specifications. 2. Determining if proposed subdivision improvements comply with the provisions of the Subdivision Map Act and this Title. 3. The processing and certification of final maps, reversion to acreage maps, and amended maps and the processing and approval of subdivision improvement plans. 4. Examining and certifying that final maps are in substantial compliance with the approved tentative map. 5. Final jurisdiction in the approval of parcel maps and certification of lot line adjustments. Huntington Beach Zoning and Subdivision Ordinance Chapter 250 250-4 6/97 legisdraft/04zoning/Chp 250 LD 11-1 rev 4 6. The inspection and approval of subdivision public improvements. 7. The acceptance of dedications and public improvements for subdivisions by parcel map, and off-site dedications lying outside a subdivision boundary which require a separate grant deed. 8. Collection of all required fees and deposits associated with final maps and parcel maps except park and recreation fees. F. Director. The Director's responsibilities shall include the processing of tentative maps and lot line adjustments. 1. Determinations of violations of the provisions of the Subdivision Map Act or this Title. 2. The management of the Planning Division in carrying out the responsibilities imposed upon it by this Title. When necessary to carry out the Director's responsibilities hereunder, the Director may designate and authorize a representative to act on his or her behalf. 3. Collection of park and recreation fees and fees associated with tentative maps. G. Subdivision Committee. The Subdivision Committee's responsibilities shall include examining and determining that tentative and vesting tentative maps comply with the provisions of the Subdivision Map Act, this Title, the Local Coastal Program for maps located within the coastal zone, and the City's General Plan, and recommending approval, disapproval, or conditional approval of tentative or vesting tentative maps to the Planning Commission or Zoning Administrator. The Subdivision Committee shall consist of the following members or their authorized representatives: 1. The Director who shall serve as chairperson and secretary; 2. The City Engineer; 3. The Fire Chief; and 4. Three members of the Planning Commission. Representatives from other departments shall attend meetings when requested to do so by the Subdivision Committee. H. Coastal Commission. The Coastal Commission shall have appeal jurisdiction over coastal development permits approved for all subdivisions and lot line adjustments located within the appealable area of the coastal zone that constitute development as defined in Section 245.O4(J). (3334-6/97) Huntington Beach Zoning and Subdivision Ordinance Chapter 250 250-5 6/97 legisdrafr/04zoning/Chp 250 LD 11-1 rev 5 250.14 Map Requirements A. Tentative and Final Map. A tentative and final map shall be required for all subdivisions creating five or more parcels, five or more condominiums as defined in Section 783 of the Civic Code, a community apartment project containing five or more parcels, or for the conversion of a dwelling to a stock cooperative containing five or more dwelling units. Exceptions as stated in Section 66426 of the Subdivision Map Act shall comply with Subsection B. B. Tentative and Parcel Map. A tentative and parcel map shall be required for all divisions of land into four or fewer parcels and exceptions stated in Section 66426 of the Subdivision Map Act. However parcel maps shall not be required for: 1. Subdivisions of a portion of the operating right-of-way of a railroad corporation, which are created by short-term leases terminable by either party on not more than 30 days' notice in writing. 2. Land conveyed to or from a governmental agency,public entity or public utility, or for land conveyed to a subsidiary of a public utility for conveyance to such public utility for rights-of-way, unless a showing is made by the Department in individual cases, upon substantial evidence, that public policy necessitates a parcel map. If a parcel map is not required, the dedication or offer must be indicated by a separate instrument. 3. Lot line adjustments, provided: a. No additional parcels or building sites are created; b. The resulting parcels conform to Titles 20-24 (Zoning) of this Code; C. The lot line adjustment shall not sever any existing structure on either of the two parcels. d. The lot line adjustment shall not allow a greater number of dwelling units than allowed prior to the adjustment. e. The lot line adjustment is approved by the Director or by the Planning Commission on appeal; and (3530-2/02) f. A plat map showing the lot line adjustment is prepared, approved, and filed in accord with the provisions of Section 253.24. 4. Parcel maps waived by the Zoning Administrator as provided by Section 251.20. 5. Subdivision of property with two to four apartment or stock cooperative units that were converted to and sold as condominium units without approval of a conditional use permit and tentative parcel map prior to June 1, 2004, provided: Huntington Beach Zoning and Subdivision Ordinance Chapter 250 250-6 2/02 legisdraft/04zoning/Chp 250 LD I 1-1 rev 6 a. Sale of condominium units is evidenced by recorded documents; b. No dedications or improvements are required by the Zoning and Subdivision Ordinance; c. Covenants, conditions, and restrictions (CC&Rs) are recorded at the County of Orange; d. A plat map showing the condominium subdivision is prepared, approved by the City Engineer, and recorded at the County of Orange; e. A conditional use permit is approved pursuant to Section 235.04 and a Certificate of Compliance is issued by the Director and recorded at the County of Orange. C. Designation of Remainder Parcel. When a subdivision includes a remainder parcel as provided in Section 66424.6 of the Subdivision Map Act, the remainder parcel shall be in conformance with Titles 20-24 and shall require a Certificate of Compliance as provided by Section 258.06. 250.16 Fees and Deposits All persons submitting maps as required by this chapter shall pay all fees and/or deposits as provided by this Title and by the City Council resolution establishing applicable fees and charges. Huntington Beach Zoning and Subdivision Ordinance Chapter 250 250-7 6/97 legisdraf/04zoning/Chp 250 LD i l-1 rev 7 H. B. INDEPENDENT PUBLISH DATE: 12/16/04 CITY OF HUNTINGTON BEACH LEGAL NOTICE ORDINANCE NO. 3690 Adopted by the City Council on DECEMBER 6, 2004 "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING CHAPTER 250 OF THE HUNTINGTON BEACH ZONING AND SUBDIVISION ORDINANCE RELATING TO GENERAL PROVISIONS — MAP REQUIREMENTS." SYNOPSIS: ZONING TEXT AMENDMENT NO. 04-03 IS AN AMENDMENT TO THE HUNTINGTON BEACH ZONING AND SUBDIVISION ORDINANCE (HBZSO)TO UPDATE THE CONDOMINIUM CONVERSION PROCESS. THE AMENDMENT CREATED A TENTATIVE PARCEL MAP EXEMPTION FOR APARTMENTS AND STOCK COOPERATIVES PRIOR TO JUNE 1, 2004,WITH TWO TO FOUR UNITS ON A PARCEL THAT WERE SOLD AS CONDOMINIUM UNITS WITHOUT CITY APPROVAL. THE TEXT AMENDMENT PROVIDES RELIEF TO RESIDENTS ATTEMPTING TO LEGALIZE THE OWNERSHIP STATUS OF THEIR UNITS. THE ORDINANCE CHANGES CONTINUE TO ENSURE PROTECTION OF EXISTING OWNERS BY REQUIRING A PLAT MAP AND CERTIFICATE OF COMPLIANCE TO BE APPROVED AND RECORDED AT THE COUNTY OF ORANGE. COPIES OF THIS ORDINANCE ARE AVAILABLE IN THE CITY CLERK'S OFFICE. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting held December 6, 2004 by the following roll call vote: AYES: Hansen, Coerper, Sullivan, Hardy, Green, Bohr, Cook NOES: None ABSENT: None This ordinance is effective 30 days after adoption. CITY OF HUNTINGTON BEACH 2000 MAIN STREET HUNTINGTON BEACH, CA 92648 714-536-5227 JOAN L. FLYNN, CITY CLERK November 2,2004 Chapter 248 Notices, Hearings, Findings, Decisions and Appeals Sections: 248.02 Director's Duty to Give Notice 248.04 Notice Requirements 248.06 Rules Governing Conduct of Hearing, Opportunity to be Heard and Burden of Proof 248.08 Requirement that Findings be Made Upon Grant of Application 248.10 Time and Manner of Decision 248.12 Time Limit on Reapplication for Same Matter 248.14 Denial Without Prejudice 248.16 Finality of Decision and Time for Appeal 248.18 Designation of Hearing Body on Appeal 248.20 Appeal of Decision 248.22 Appeal of a Failure to Act 248.24 Appeal of Decision Not Otherwise Provided For 248.26 Fee for Appeal 248.28 Appeal by City Council Members or Planning Commissioner 248.30 Effective Date of Decision 248.02 Director's Duty to Give Notice Within sixty(60) days after final environmental evaluation the Director shall give the notice of public hearing required by law. The form of the notice shall contain: A. The date, time and place of the hearing; B. A general explanation of the matter to be considered, including a general description of the area affected; C. Other information which is required by statute or specific provision of this code or which the Director considers necessary or desirable. (Rest of page not used) Huntington Beach Zoning and Subdivision Ordinance Chapter 248 248-1 5/97 November 2,2004 248.04 Notice Requirements Type of Action Notice Requirement* Reference to Notice Requirement A. General Plan Adoption or Amendment 65090, 65091 65353 B. Zoning Ordinance Planning Commission(Gen.) 65090 65853--65857 Planning Commission(Uses) 65090, 65091 65853--65957 City Council 65090 65853--65857 C. Variance, eenditional tise pefmit, 65091 65905 development agreement, special sign permit, revocation, modification, or appeal D Conditional Use Permits 65091 with 500 65905 foot notification radius O Subdivision 65090, 65091 66451.3(a) E 1- Home occupation revocation 65091 65905 F *References are to the Government Code These notice requirements are declaratory of existing law. If state law prescribes a different notice requirement, notice shall be given in that manner. A reviewing body designated to hear a matter may direct that notice be given in a manner that exceeds the notice requirement prescribed by state law. Public notice requirements for coastal development permits shall be as described in Section 245.20 or 245.22. (3334) 248.06 Rules Governing Conduct of Hearing: Opportunity to be Heard and Burden of Proof Public hearings shall comply with minimum procedural standards prescribed by Government Code section 65804. Each person interested in a matter that is the subject of a public hearing shall be given an opportunity to be heard. In each case,the applicant has the burden of proof at the public hearing on the application and at the public hearing on the appeal. 248.08 Requirement that Findings be Made Upon Grant of Application Huntington Beach Zoning and Subdivision Ordinance Chapter 248 248-2 5/97 November 2,2004 A. In each case where a reviewing body is designated to make a decision of an adjudicatory nature as the result of a proceeding in which a hearing is required by state law or this ordinance code to be given, the body shall make findings to support its decision. B. Subsection A applies only to a determination made in the reviewing body's adjudicatory capacity. It does not apply to an action of a legislative nature such as a recommendation for an adoption of a zoning or subdivision provision. The existence or non-existence of a determination in connection with a legislative action does not affect the validity of that action unless otherwise directed by state law. 248.10 Time and Manner of Decision A. Form. After hearing the evidence and considering the application, the reviewing body, i.e., Zoning Administrator, Planning Commission, or City Council, shall make its decision. The decision shall be in the form of a written statement, minute order or resolution and shall be accompanied by reasons sufficient to inform as to the basis for the decision. B. Time. The reviewing body shall formulate its written findings within 5 calendar days after the decision. C. Notice of Decision. The Director shall have notice of the decision mailed to the applicant at the address given in the application and to each person who requests in writing notice of the proceedings within 5 working days of the decision, excluding weekends and holidays. The Director shall also have notice of the decision posted and distributed to the Planning Commission and City Council within 48 hours of such decision. D. Acceptance is Applicant's Agreement. The applicant's acceptance of the decision is an agreement to comply with the decision and its terms and conditions. 248.12 Time Limit on Reapplication for Same Matter If an application is denied and the decision is final, no person may file a new application for substantially the same request for a period of one year from the date the action of the city is final except as provided in section 248.14 for denial "without prejudice." 248.14 Denial Without Prejudice If the application is denied "without prejudice," the applicant may reapply for substantially the same request without complying with the time limit prescribed in section 248.12. 248.16 Finality of Decision and Time for Appeal A decision on a discretionary approval is not final until the time for appeal expires. The time for appeal from a decision by the Zoning Administrator, the Environmental Assessment Committee, Subdivision Committee, Design Review Board, or the Planning Commission shall be filed within ten calendar days after the date of the decision. Appeals may not be processed on actions which must be heard by and receive final action by the City Council, except that coastal development permits for Huntington Beach Zoning and Subdivision Ordinance Chapter 248 248-3 5/97 November 2,2004 development located in the appealable area of the coastal zone may be appealed to the Coastal Commission as described in Section 245.32. (3334) 248.18 Designation of Hearing Body on Appeal The Planning Commission shall hear an appeal from the decision of the Director,Zoning Administrator, Design Review Board, Environmental Assessment Committee, and Subdivision Committee. The City Council shall hear an appeal from the decision of the Planning Commission. The decision of the City Council is final, except that coastal development permits for development located in the appealable area of the coastal zone may be appealed to the Coastal Commission. (3334) 248.20 Appeal of Decision A. Notice of Appeal. A person desiring to appeal a decision shall file a written notice of appeal with the Director within the time required by section 248.16 except an appeal to the Planning Commission's decision shall be filed with the City Clerk. This section shall not apply to any action which must be heard by the City Council whether or not an appeal from the Planning Commission is filed. B. Form of Notice on Appeal. The notice of appeal shall contain the name and address of the person appealing the action, the decision appealed from and the grounds for the appeal. The Director may provide the form of the notice of appeal. A defect in the form of the notice does not affect the validity or right to an appeal. C. Action on Appeal. The Director or City Clerk shall set the matter for hearing before the reviewing body and shall give notice of the hearing on the appeal in the time and manner set forth in Sections 248.02 and 248.04. D. De Novo Hearing. The reviewing body shall hear the appeal as a new matter. The original applicant has the burden of proof. The reviewing body may act upon the application, either granting it, conditionally granting it or denying it, irrespective of the precise grounds or scope of the appeal. In addition to considering the testimony and evidence presented at the hearing on the appeal, the reviewing body shall consider all pertinent information from the file as a result of the previous hearings from which the appeal is taken. E. Decision on Appeal. The reviewing body may reverse or affirm in whole or in part, or may modify the order, requirement, decision, or determination that is being appealed. 248.22 Appeal of Failure to Act An applicant may appeal the failure of the Zoning Administrator, Design Review Board, Environmental Assessment Committee, Subdivision Committee or Planning Commission to act on an application if the failure to act continues beyond a reasonable time and the time to act is not otherwise fixed by law. The appeal body shall consider all of the circumstances surrounding the application in determining what is a reasonable time. Huntington Beach Zoning and Subdivision Ordinance Chapter 248 248-4 5/97 November 2,2004 248.24 Appeal of Decision Not Otherwise Provided For A. Any person may appeal a decision, requirement or determination made by the Director in the administration of the zoning and subdivision ordinances not otherwise provided for in the individual titles of this code. The Planning Commission shall hear the appeal in the first instance. The appeal shall be in writing, filed with the Director and shall specifically set forth the decision appealed from and the grounds for the appeal. The notice of appeal shall be filed within ten calendar days of the date of the action appealed. B. The notice of appeal shall be in the form provided by Section 248.20 A and B. The Director shall schedule the appeal for consideration by the Planning Commission within 30 calendar days and shall give the appellant ten calendar days notice of the time and place of the hearing. The decision of the Planning Commission may be appealed to the City Council. 248.26 Fee for Appeal The notice of appeal shall be accompanied by the fee fixed by resolution of the City Council. 248.28 Appeal by City Council Member or Planning Commissioner A. A City Council member or a Planning Commissioner may appeal a decision of the Director, Design Review Board, Environmental Assessment Committee, Subdivision Committee, Planning Commission or Zoning Administrator. The appeal shall be processed in the same manner as an appeal by any other person but need not be accompanied by the fee prescribed for an appeal. B. The City Council member or Planning Commissioner appealing the decision is not disqualified by that action from participating in the appeal hearing and the deliberations nor from voting as a member of the reviewing body. 248.30 Effective Date of Decision A decision on a discretionary approval becomes effective at the end of the appeal period. The decision of the City Council is final on the date of its decision, except that decisions on coastal development permits for development located in the appealable area of the coastal zone, the effective date is the day after the Coastal Commission appeal period expires and no appeals were filed or the date upon which final action on the appeal occurs. (3334) Huntington Beach Zoning and Subdivision Ordinance Chapter 248 248-5 5/97 H. B. INC,�r'ENDENT PUBLISH DATE: 12/16/04 CITY OF HUNTINGTON BEACH LEGAL NOTICE ORDINANCE NO. 3691 Adopted by the City Council on DECEMBER 6, 2004 "AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH AMENDING CHAPTER 248 OF THE HUNTINGTON BEACH ZONING AND SUBDIVISION ORDINANCE ENTITLED NOTICES, HEARINGS, FINDINGS, DECISIONS AND APPEALS." SYNOPSIS: ORDINANCE NUMBER 3691 AMENDS CHAPTER 248 OF THE HUNTINGTON BEACH ZONING AND SUBDIVISION ORDINANCE REQUIRING A 500-FOOT RADIUS NOTIFICATION FOR CONDITIONAL USE PERMITS THE AMENDMENT PROVIDES RELIEF TO THE BUSINESS COMMUNITY AND RESIDENTS WHILE ENSURING THAT ISSUES OF NEIGHBORHOOD COMPATIBILITY,AESTHETICS, ETC.STILL RECEIVE ADEQUATE CONSIDERATION. ADDITIONAL ORDINANCES IN THE PERMIT STREAMLINING PHASE 2 THAT INCLUDE CHANGES TO `PROVISIONAL DEVELOPMENT CRITERIA' HAVE BEEN DEFERRED TO THE FEBRUARY 7, 2005 CITY COUNCIL MEETING. COPIES OF THIS ORDINANCE ARE AVAILABLE IN THE CITY CLERK'S OFFICE. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting held December 6, 2004 by the following roll call vote: AYES: Hansen, Coerper, Sullivan, Hardy, Green, Bohr, Cook NOES: None ABSENT: None This ordinance is effective 30 days after adoption. CITY OF HUNTINGTON BEACH 2000 MAIN STREET HUNTINGTON BEACH, CA 92648 714-536-5227 JOAN L. FLYNN, CITY CLERK City of Huntington Beach Office of the City Clerk P.O. Box 190 Huntington Beach, CA 92648 PAW, Pamela A. Campbell 1 ` —" 14 Village Circle Dr Lompoc CA 93436-5600 ING X 930 NI 1 903 C 21 FORWARD TIME EXP RTN TO SENK CAMPBELLPPAMELA A IS TIERNANS LN DODDS raRmv NY 10522-2100 �ouNTY LEGAL NOTICE- PW§&WRINGg..,,4-..,, RETURN TO SENDER 92640%0190 City of Huntington Beach Office of the City Clerk P.O.Box 190 Huntington Beach,CA 92648 ,� ( Michael Lyons 214 20th St Apt D Huntington Beach C 92648-3941 INGTpy to �cUUNTY LEGAL NOTICE- P� �eR(NG?2646 I: ,: }1m3tlti�: ,.II� II�iS�jfl. =�Ifftttl City of Huntington Beach Off ice of the City Clerk P.O. Box 190 Huntington Beach, CA 92648 ro Marie e San ING 14)pil LEGAL NOTICE- _. '______-_ � � � City of Huntington Beach Office of the City Clerk P.O. Box 190 Huntington Beach, CA 92648 0 .,,�, / �� © W. Jason Bonifay 1412 Orange Ave �pNTINGTpr Huntington Beach CA 92648-4214 BON141a 9a64810a6 1805 57 11/11 FORWARD TIME EXP RTN TO SEND BONIFAY 6 SNOWBERRY IRVINE CA 9a604-2843 NTY ca LEGAL NOTICE - P Sp ffiW RING City of Huntington Beach V 0 Office of the City Clerk P.O. Box 190 Huntington Beach, CA 92648 ate �7 Michael R. &Julie E.Textor 322 1 9th St Apt B Huntington Beach CA 92648-3850 ��NTINGTpy TEXT3aa --7Q646301a :L703 13 11/1( Cm FORWARD TIME EXP RTN TO SEND W TEXTOR le 1009 PECAN AVE HUNTINGTON BEACH CA 92648-4516 LEGAL NOTICE - P=GW RING., -5r' City of Huntington Beach k fix` Office of the City Clerk P.O. Box 190 Huntington Beach, CA 92648 H ME Mike&Julie Textor 1009 pecan Ave I ING Huntington Beach CA 92648 4A IEGALAOTICE- P W. GNRJNG 92641 �s tk 1111ill I J111:14i fil I It City of Huntington Beach =<7 3�"' 'to Office of the City Clerk P.O. Box 190 Huntington Beach, CA 92648 Chad W. & Christi A Owens 7352 Garfield A Apt C l (� D Huntington Be h CA 92648-2033 ING C.2 OWEN352 926483045 IA03 44 11/0 FORWARD TIME EXP RTN TO SEND OWENS 1225 VALPARAISO DR N PLACENTIA CA 92870-3932 Py LEGAL NOTICE kfiUVRING 1( i ; £ :;1,}f ::i�:= �tl:=#►�.#i� I:.: � � �=s � � : 3 City of Huntington Beach Office of the City Clerk P.O. Box 190 Huntington Beach, CA 92648 David N. & Simone Carillo 1 _,,,, �� 0 � 209 13th St Apt C iN l Huntington Beach CA 92648-4837 ao���M'� 6Tp,�, F9 R E T U R N ETU 0 SE TO V LEGAL NOTICE - P RING J4' A P4 , OR,, ER EXPIRED S�t92 44 11 fit.ftlfl4{ItFF'IEF Itlltl tlttFli 7ilaftfti City of Huntington Beach T 0 A'l Office of the City Clerk < J# P.O. Box 190 Huntington Beach, CA 92648 Ira: Michael Mc Donnell 2402 Delaware St Apt 108 ���NtINGTpy Huntington Beach CA 92648-59 Cm NP LEGAL NOTICE- Pft 111 1 i l Ir114til111111111011HatfAil IfliffillII !, City of Huntington Beach Office of the City Clerk P.O. Box 190 ggg Huntington Beach, CA 92648 vi L. L 0 15 1 t�St �d t ING M tington Beach CA 92648-4411 -4 T R TICE- P WW ORDER: I _g�PRINGS264i