Community Development Department Planning Division 1600 First Street + P.O. Box 660 Napa, CA 94559-0660 (707) 257-9530 PLANNING COMMISSION STAFF REPORT SEPTEMBER 21, 2017 AGENDA ITEM 7.B: PL17-0123 HOTEL REVIEW REQUIREMENTS I. GENERAL INFORMATION PROJECT SUMMARY: LOCATION OF PROPERTY: APPLICANT: Municipal Code Amendment updating the City s regulations regarding hotel uses Citywide City of Napa STAFF PLANNER: Michael Walker, Senior Planner Phone: (707) 257-9530 II. PROJECT DESCRIPTION Amendments to multiple sections of the Napa Municipal Code (NMC) establishing updated criteria for review of hotel projects. III. BASIS FOR PROPOSED AMENDMENTS Both City Council and the community have identified the influx of hotel projects into the City as a potential concern. At the August 15, 2017 meeting, the Council received a report from City Staff regarding hotel activity and housing development. The report identified an increase in hotel activity that is reflective of current market conditions. Table 1 below shows the number of existing hotel rooms, number of rooms under construction, the number of rooms that have been entitled but not yet under construction, and the number of rooms that are currently under review or in preliminary review. Table 1 Existing Hotel Rooms Under Rooms Pending Under Review Rooms Construction 2,365 328 634 1,261 While favorable market conditions are leading to an increase in housing projects, the Council discussed that the increase in permits for new hotels warrants refreshing of current hotel policies and a review of regulations pertaining to hotel entitlements. 1
PL17-0123 Hotel Review Requirements 2 The Council expressed specific concern regarding time extensions of entitlements for hotels. The property at the northwest corner of First Street and Silverado Trail (originally planned as a Ritz Carlton hotel) was cited as just one example where automatic extensions of entitlements have not led to hotel development. While the City is generally supportive of extending permit entitlements to allow additional time for projects to move forward, projects that are granted extensions and then are not ultimately built may have a negative effect on market conditions by discouraging other more viable projects from moving forward. Amending the permit extension requirements will allow the City greater flexibility in preventing projects from becoming dormant. At their August 15, 2017 meeting, the City Council directed Staff to prepare necessary amendments to the NMC to: Require all hotel uses to receive final approval from the City Council following a recommendation from the Planning Commission; Limit permit validity for hotel uses to two years; and Eliminate automatic extension of hotel permits in conjunction with Tentative Map and Parcel Map extensions. The basis for the proposed amendments is part of a broader strategy that includes potential lodging market studies, a review of current lodging policies, and incorporation of new policies as part of the General Plan Update. The proposed amendments are an important first step to grant the City Council greater authority over the review and approval of a land use that is increasing in demand from the development community. Limiting extensions will also prevent projects from becoming dormant, thus increasing development and redevelopment potential for properties within the City. IV. PROPOSED AMENDMENTS The following is a summary of the changes being proposed as part of the Municipal Code Amendment updating the City s review criteria for hotel uses. Land Use Charts NMC Sections 17.10.020 and 17.14.020 identify the land use regulations for the City s Commercial and Downtown Districts (Section 17.10.020) and for the City s Industrial Districts (17.14.020). Currently, hotel uses with less than 40 rooms are permitted by right in the Tourist Commercial District (CT). A Use Permit is required for hotel uses of 40 rooms or more in the CT District and all hotel uses in the Downtown Commercial Core (DCC); Downtown Mixed Use (DMU); Oxbow Commercial (OBC), Industrial Park (IP, A and B); Tannery Bend Mixed Use (MU-T; 17.18.020); and Gateway Mixed Use (MU-G; 17.20.020) Districts. The proposed amendments would increase the review for hotel uses in the CT District to require a Use Permit regardless of size. The proposed amendments also include adding a note to the corresponding Land Use Charts indicating that City Council approval is required for all hotel Use Permit applications. The proposed changes to the Land Use Regulations charts are outlined below. 2
PL17-0123 Hotel Review Requirements 3 Chapter 17.10.020 Land Use Regulations Zoning Districts CL CT CC Added Use Regulations 10. Visitor Accommodations Hotels, motels C* *Requires City Council approval C. Visitor Accommodations DCC DMU DN OBC Specific Standards Apply Hotel CS* CS* CS* CS* CS* CS* Chapter 17.14.020 Land Use Regulations *Requires City Council approval. For condo hotels see Municipal Code Section 17.52.095 Zoning Districts IL IP-A IP-B IP-C Added Use Regulations 10. Visitor accommodations Hotels, motels *Requires City Council approval C* C* Retail, restaurant, conference center and related uses permitted accessory to hotel uses Chapter 17.60 Use Permits NMC Chapter 17.60 identifies the requirements for review of Use Permit applications. Proposed amendments to this Chapter include identifying the City Council as the final review authority for hotel projects in Section 17.60.020. Other proposed amendments include updating sections to reflect the correct decision making authority for Conditions of Approval, Findings, Public Notice, and Appeals. Chapter 17.62 Design Review Permits NMC Chapter 17.62 identifies requirements for review of Design Review Permit applications. Specifically, Section 17.62.050(C) identifies physical improvements subject to review by the City Council. The proposed amendment to this Section includes adding hotel uses to the list of uses requiring City Council approval. Expiration and Extensions NMC Sections 16.20.090 and 16.28.080 identify expiration and extension requirements for Tentative Maps and Parcel Maps, respectively. Both Sections contain language that, should a Tentative or Parcel Map qualify for an automatic extension under the Subdivision Map Act that any discretionary land use entitlement (including Design Review Permits, Use Permits, etc.) approved in conjunction with the Tentative or Parcel Map would also be 3
PL17-0123 Hotel Review Requirements 4 automatically extended. Proposed amendments to these Sections would clarify that these automatic extensions would only apply to residential projects, and not to commercial projects. Council also directed staff to amend Section 17.68.170(A) to limit the ability to renew or extend permits for hotel uses. Based on advice from the City Attorney, staff believes it needs more direction and guidance from Council before it can implement this proposal. Specifically, should there be direction from Council to proceed with amendments to limit renewal or extension of hotel permits, additional review criteria providing a basis for renewals or extensions would need to be included. V. ENVIRONMENTAL REVIEW The proposed project is not subject to the California Environmental Quality Act (CEQA) pursuant to the general rule exemption stated in CEQA Guidelines Section 15061(b)(3), as it can be seen with certainty that the activity in question, a Municipal Code amendment to amend procedures for processing hotel projects, will not have any impact on the environment. VI. PUBLIC NOTICE Notice of the public hearing was published in the Napa Valley Register on September 8, 2017 and provided to interested parties who requested notification of meetings related to the City s Municipal Code Amendments on September 6, 2017. Legal notice included a general explanation of the matter to be considered, a description of the date, time and place of the public hearing, the identity of the hearing body, and a statement consistent with the Code of Civil Procedure regarding the time limit to commence any legal challenge and matters that may be raised by such challenge. The Napa Housing Coalition has also been advised of the item scheduled for Planning Commission consideration. VII. REQUIRED FINDINGS The following findings from Section 17.66.080 of the Zoning Ordinance shall be made in order to approve the Zoning Ordinance amendment: 1. The proposed amendment is consistent in principle with the General Plan. The proposed amendments are consistent with the General Plan in that the amendments merely strengthen processes which are already consistent with the General Plan. Specifically, the proposed amendments are consistent with Land Use Goal (LU-5) which seeks to encourage attractive, well-located commercial development to serve the needs of Napa residents, workers, and visitors, and Land Use Goal (LU-6.5) which seeks to provide for development of hotel and conference facilities in the downtown area. 2. The public health, safety and general welfare are served by the adoption of the proposed amendment. 4
PL17-0123 Hotel Review Requirements 5 The proposed amendments are beneficial to the public health, safety and general welfare because they strengthen the standards for hotel development. 3. If a rezoning to a district with a larger minimum lot size is proposed, effectively reducing the planned residential density, the City shall also find that the remaining sites in the Housing Element are adequate to accommodate the jurisdiction s share of the regional housing need pursuant to California Government Code section 65584; or if not, that it has identified sufficient additional, adequate and available sites with an equal or greater residential density in the jurisdiction so that there is no net loss of residential unit capacity. This finding is not applicable to this project because the project does not include any proposal to increase a minimum lot size nor does it eliminate any site designated in the Housing Element from future use as a housing site. VIII. STAFF RECOMMENDATION Staff recommends the Planning Commission forward a recommendation to the City Council to adopt the proposed Municipal Code Amendments based upon the above analysis and findings. IX. ALTERNATIVES TO RECOMMENDATION 1. Recommend denial of the proposed amendments. 2. Continue the hearing and direct Staff to revise the proposed amendments for further Planning Commission consideration. X. REQUIRED ACTIONS Final action by the Planning Commission: 1. Forward to the City Council a recommendation to adopt an ordinance amending sections of the Napa Municipal Code regarding review requirements for hotel projects. XI. ATTACHMENTS 1. Draft Ordinance 5
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ATTACHMENT 1 ORDINANCE O2017- ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NAPA, STATE OF CALIFORNIA, AMENDING NAPA MUNICIPAL CODE SECTION 16.20.090 TENTATIVE MAPS, SECTION 16.28.080 PARCEL MAPS, SECTION 17.10.020 COMMERCIAL DISTRICTS, SECTION 17.14.020 INDUSTRIAL DISTRICTS, SECTION 17.18.020 TANNERY BEND MIXED USE DISTRICT 17.20.020 GATEWAY MIXED USE DISTRICT, SECTION 17.60 USE PERMITS, AND SECTION 17.62 DESIGN REVIEW PERMITS, REGARDING PROCEDURES FOR PROCESSING HOTEL PROJECTS AND DETERMINING THAT THE ACTIONS AUTHORIZED BY THIS ORDINANCE ARE NOT SUBJECT TO CEQA WHEREAS, an influx of hotel applications has been identified as a potential community concern; and WHEREAS, on August 15, 2017, the City Council received a report from City staff regarding the status of hotel applications in the City and directed staff to prepare amendments to the Napa Municipal Code; and WHEREAS, the City Council has considered all information related to this matter, as presented at the public meeting of the City Council on, 2017, including any supporting reports by City Staff and recommendations by the Planning Commission, and any information provided during public meetings. NOW, THEREFORE, BE IT ORDAINED, by the City Council of the City of Napa as follows: SECTION 1: The City Council hereby determines that the actions authorized by this Ordinance are exempt from CEQA pursuant to general rule exemption stated in CEQA Guidelines Section 15061(b)(3), as it can be seen with certainty that the activity in question, a Municipal Code amendment to amend procedures for processing hotel projects, will not have any impact on the environment. SECTION 2: Findings. As required by Napa Municipal Code Section 17.66.080, the City Council hereby makes the following findings in support of the amendments to the zoning regulations set forth under this Ordinance: A. The proposed amendment is consistent in principle with the General Plan. The proposed amendments are consistent with the General Plan in that the amendments merely strengthen processes which are already consistent with the O2017- Page 1 of 6, 2017 7
ATTACHMENT 1 General Plan. Specifically, the proposed amendments are consistent with Land Use Goal LU-5, which seeks to encourage attractive, well-located commercial development to serve the needs of Napa residents, workers, and visitors and Land Use Goal LU-6.5, which seeks to provide for development of hotel and conference facilities in the downtown area. B. The public health, safety and general welfare are served by the adoption of the proposed amendment. The proposed amendments are beneficial to the public health, safety and general welfare as they strengthen standards for hotel development. C. If a rezoning to a district with a larger minimum lot size is proposed, effectively reducing the planned residential density, the City shall also find that the remaining sites in the Housing Element are adequate to accommodate the jurisdiction s share of the regional housing need pursuant to California Government Code section 65584; or if not, that it has identified sufficient additional, adequate and available sites with an equal or greater residential density in the jurisdiction so that there is no net loss of residential unit capacity. This finding is not applicable to this project because the project does not include any proposal to increase a minimum lot size nor does it eliminate any site designated in the Housing Element from future use as a housing site. SECTION 3: Amendment. Napa Municipal Code Section 16.20.090.E is hereby 16.20.090 Expiration. E. Notwithstanding the provisions of Section 17.68.170 of this code to the contrary, if an approved or conditionally approved tentative map is subject to an automatic extension of the expiration date pursuant to California Government Code Section 66452.21, 66452.22, 66452.23 or 66452.24, and if the tentative map was approved or conditionally approved in conjunction with a separate residential discretionary land use entitlement (including design review permits, use permits, variances, or other residential discretionary land use entitlements), then the initial expiration date of the separate residential discretionary land use entitlement shall automatically be extended to be equal to the expiration date of the approved or conditionally approved tentative map. SECTION 4: Amendment. Napa Municipal Code Section 16.28.080.E is hereby O2017- Page 2 of 6, 2017 8
ATTACHMENT 1 16.28.080 Expiration. E. Notwithstanding the provisions of Section 17.68.170 of this code to the contrary, if an approved or conditionally approved tentative parcel map is subject to an automatic extension of the expiration date pursuant to California Government Code Section 66452.21, 66452.22, 66452.23 or 66452.24, and if the tentative parcel map was approved or conditionally approved in conjunction with a separate residential discretionary land use entitlement (including design review permits, use permits, variances, or other residential discretionary land use entitlements), then the initial expiration date of the separate residential discretionary land use entitlement shall automatically be extended to be equal to the expiration date of the approved or conditionally approved tentative map. SECTION 5: Amendment. The Land Use Regulations table, Table A Commercial Districts, set forth in Subsection 17.10.020.A.10 Visitor Accommodations in the row labeled Hotels, motels is hereby amended to replace permitted or P* with conditionally permitted or C* under the column labeled CT and replace *C if >40 rooms with *Requires City Council approval under the column labeled Added Use Regulations. SECTION 6: Amendment. The Land Use Regulations table, Table B Downtown Specific Plan Area set forth in Subsection 17.10.020.C Visitor Accommodations in the row labeled Hotel is hereby amended to add an asterisk to the conditionally permitted with applicable standards or CS* under the columns labeled DCC, DMU, and OBC and add *Requires City Council approval under the column labeled Specific Standards Apply. SECTION 7: Amendment. The Land Use Regulations table set forth in Subsection 17.14.020.B.10 Visitor Accommodations in the row labeled Hotels, motels is hereby amended to add *Requires City Council Approval under the column labeled Added Use Regulations. SECTION 8: Amendment. The Land Use Regulations table set forth in Subsection 17.18.020.B.5 Visitor Accommodations in the row labeled Hotels, motels; small scale per guidelines is hereby amended to add an asterisk to the conditionally permitted or C* under the columns labeled Area A, Area B, Area C, and Area D and add *Requires City Council approval under the column labeled Added Use Regulations. SECTION 9: Amendment. The Land Use Regulations table set forth in Subsection 17.20.020.A.9 Visitor Accommodations in the row labeled Hotels, motels is hereby amended to add an asterisk to the conditionally permitted or C* under the columns labeled North of 6 th Street and South of 6 th Street and add *Requires City Council approval under the column labeled Added Use Regulations. O2017- Page 3 of 6, 2017 9
ATTACHMENT 1 SECTION 10: Amendment. Napa Municipal Code Section 17.60.020 is hereby 17.60.020 Authority. The Planning Commission shall approve, conditionally approve or deny applications for use permits; except that, upon recommendation from the Planning Commission, the City Council shall approve, conditionally approve, or deny use permit applications for hotels. Except for hotel uses, the Community Development Director shall approve, conditionally approve, or deny applications for extensions through the administrative permit process if the application is made prior to expiration. SECTION 11: Amendment. Napa Municipal Code Section 17.60.060 is hereby 17.60.060 Conditions of approval. In approving a use permit the decision-making body may apply reasonable conditions of approval. SECTION 12: Amendment. Napa Municipal Code Section 17.60.070 is hereby 17.60.070 Findings. The decision-making body may issue a use permit if the following findings can be made. A. The proposed use is in accord with the General Plan, applicable specific plans, the objectives of the zoning ordinance and the purposes of the district and overlay district in which the site is located. (This finding is not required for nonconforming uses, which were legally established prior to the adoption of the General Plan and implementing zoning.) B. The proposed use, together with the conditions applicable thereto, will not be detrimental to the public health, safety, or welfare, or materially injurious to properties or improvements in the vicinity, or to the general welfare of the city. C. The proposed use complies with each of the applicable provisions of the zoning ordinance. D. Any other applicable findings required under other chapters of this title for the specific use. O2017- Page 4 of 6, 2017 10
ATTACHMENT 1 SECTION 13: Amendment. Napa Municipal Code Section 17.60.080 is hereby 17.60.080 Notice and hearing provisions. The decision-making body shall hold a public hearing on an application for a use permit. Notice shall be provided in accordance with Chapter 17.68. The decisionmaking body shall prepare a written decision that shall contain the findings of fact upon which such decision is based and conditions of approval, if any. The decision shall be mailed to the applicant. SECTION 14: Amendment. Napa Municipal Code Section 17.60.090 is hereby 17.60.090 Appeals. Appeals of decisions by the Community Development Director or Planning Commission on use permits shall be filed within 10 calendar days of the approval of the permit, or if the 10th day is a weekend or city holiday, the deadline is extended to the next working day. Appeals shall be filed and processed in accordance with Chapter 17.70 (Appeals). SECTION 15: Amendment. Napa Municipal Code Section 17.62.050.C is hereby 17.62.050 Improvements subject to review. C. Physical Improvements Subject to Review by the City Council. 1. Subdivisions of five or more lots. Home designs shall be submitted with the application for design review of the subdivision, except that :HS Hillside lots may continue to use a two-step review process described in Chapter 17.40. 2. Multifamily and mixed use projects with 31 or more units. 3. All Hotels. 4. Any project in subsections A or B above that also requires a hearing by the City Council. SECTION 16: Severability. If any section, sub-section, subdivision, paragraph, clause or phrase in this Ordinance, or any part thereof, is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining sections or portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, sub-section, subdivision, paragraph, sentence, clause or phrase of this Ordinance, irrespective O2017- Page 5 of 6, 2017 11
ATTACHMENT 1 of the fact that any one or more sections, sub-sections, subdivisions, paragraphs, sentences, clauses or phrases may be declared invalid or unconstitutional. SECTION 17: Effective Date. This Ordinance shall become effective thirty (30) days following adoption. City of Napa, a municipal corporation MAYOR: ATTEST: CITY CLERK OF THE CITY OF NAPA STATE OF CALIFORNIA COUNTY OF NAPA CITY OF NAPA SS: I, Dorothy Roberts, City Clerk of the City of Napa, do hereby certify that the foregoing Ordinance had its first reading and was introduced during the public meeting of the City Council on the day of, 2017, and had its second reading and was adopted and passed during the public meeting of the City Council on the day of, 2017, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Approved as to Form: Michael W. Barrett City Attorney ATTEST: Dorothy Roberts City Clerk O2017- Page 6 of 6, 2017 12