AGENDA CITY OF SALIDA PLANNING COMMISSION

Transcription

1 Page 1 of 91 AGENDA CITY OF SALIDA PLANNING COMMISSION MEETING DATE: Tuesday, April 10, 2018 MEETING TIME: 6:00 p.m. MEETING LOCATION: City Council Chambers, 448 East First Street, Salida, CO AGENDA SECTION: I. CALL TO ORDER BY CHAIRMAN 6:00 p.m. II. III. IV. ROLL CALL UNSCHEDULED CITIZENS AMENDMENT(S) TO AGENDA V. UPDATES VI. HEARINGS- 1. Tundermann Appeal - The applicant is requesting to appeal the decision of the Administrator regarding the revocation of the short-term rental license for the property at 102 River West Drive. A. Proof of Notice B. Staff Review of Appeal C. Appellant Presentation D. Entering Exhibits into record E. Commission Discussion and Action VII. VIII. COMMISSIONERS COMMENTS ADJOURN

2 Page 2 of 91 STAFF REPORT MEETING DATE: April 10, 2018 AGENDA ITEM TITLE: AGENDA SECTION: Appeal of Administrator s Decision Regarding Revocation of Short Term Rental License Public Hearing REQUEST: Jason Tundermann, (appellant) who owns a residence at 102 River West Drive, is appealing the decision of the Administrator to revoke his short term license for the property. The property is zoned R-2 with a Planned Development overlay. LOCATION: Jason Tundermann Property in River West Subdivision

3 Page 3 of 91 TIMELINE AND EXHIBITS: Below is a table that describes the various actions by the City regarding the appellant s license. Date Action Exhibit June 28, 2016 Jason Tundermann submitted an application for a short term rental A license for the subject property which was a vacant lot. July 3, 2016 The application was approved and license #303 was issued to be B valid from July 3, 2016 to May 31, Sept. 20, 2016 Ordinance No was approved by emergency putting a C moratorium in place on short term rental licenses, effective October 1, 2016, and sun setting in six months (April 1, 2017). October 25, 2016 Building Permit Application for 102 River West Drive was D submitted. March 7, 2017 Ordinance No was approved extending the moratorium to E July 1, March 21, 2017 Ordinance No received first reading by Council to put new F standards into Chapter 16, Land Use and Development of the Salida Municipal Code (SMC), now known as Section q. One of the new requirements was the allowance of only one short term rental license per block face. March 21, 2017 Ordinance No received first reading by Council to adopt G new licensing standards for short term rentals into Chapter 6 Business Licenses and Regulations of the SMC. April 18, 2017 Ordinance No was approved by Council and became F effective May 18, April 20, 2017 Administrator Guy Patterson sent letter to Mr. Tundermann stating H license #303 was revoked because it was issued to a vacant lot contrary to City ordinances. The letter suggested re-applying after certificate of occupancy is issued for home. May 16, 2017 Ordinance No was approved by City Council and became G effective on June 15, May 31, 2017 Short term residential license #0360 was renewed for 206 River Left I Lane. June 15, 2017 Short term residential license #0411 was issued for 108 River West J Drive. October 25, 2017 Certificate of Occupancy for 120 River West Drive issued. K Dec. 19, 2017 Application submitted for a substantial modification of the River L West Planned Development to allow short term rentals within all of the homes in River West. March 5, 2018 City Council discussed in work session applicant s request to amend the River West Planned Development. March 6, 2018 City Council denied at first reading Ordinance No to M amend the River West PD. Discussion included suggestions that applicant submit separate appeal for his individual situation. March 19, 2018 Appellant submitted appeal request. N March 26, 2018 Staff notified the applicant of hearing scheduled with the Planning Commission for April 10, O

4 Page 4 of 91 BACKGROUND: Between the times of the appellant s license being revoked, and he became eligible for a license after receiving a C of O, two licenses had been issued in his subdivision. Section q, subparagraph (2)c states there shall only be one short term rental permitted per street segment (Exhibit F). The two licenses meet that standard and may be renewed annually. Therefore, currently no more licenses will be allowed in River West. RIVER WEST SUBDIVISION Current Licenses issued at 108 River West Drive and 206 River Left Lane APPEAL HEARING (from Section (e): (1) Evidence. Formal rules of evidence shall not be followed during hearings. The chairman shall have the power to decide what evidence is material to the appeal. Written documents presented at the hearing shall be made part of the record, and public testimony shall be taken if the appeal required public notice. The burden of persuasion on appeal shall rest with the appellant. (2) Basis of a Decision. Review of the land use decision being appealed shall be limited to the record established before and relied upon by the designated decision making body. An appealing body shall not have the authority to override the provisions of this Land Use Code. Any decision shall include a basis for the decision and cite specific sections of this Code.

5 Page 5 of 91 (3) Recording. Audio recordings of the hearing shall be necessary. A written summary of the audio recording shall be made in a timely fashion following the hearing. Whenever a written verbatim transcript of such recording is requested by the appellant or when a transcript is furnished by the City pursuant to court order, the cost of preparing the transcript shall be borne in full by the appellant. (4) Notice of Decision. The appropriate appealing body shall hear all relevant evidence, and within a reasonable time and in no event more than fifteen (15) days thereafter, shall render its decision. The appealing body may reverse, modify or confirm the order, decision or interpretation. All decisions on appeal shall be reduced to writing, contain a concise listing of facts and reasons supporting the same and shall be promptly mailed by regular mail to the appellant. DISCUSSION: The appellant s contention is he submitted a valid application as there was nothing to indicate the home had to be complete prior to issuance of the short term license, and this fact was highlighted in multiple ways both in our Application and verbally to city staff that the home was not complete at the time of Application (Exhibit N). Staff disagrees that the application highlighted the property was vacant. The Self-Inspection Worksheet was completed and indicated the inspection was done on June 24, 2016, four months before a building permit application was made. In addition, the appellant added a note to the bottom of the Checklist stating that all items will be double-checked before unit is made available for rental for the first time (Exhibit A). This would indicate that the items had been checked by the appellant a first time, which was impossible because the home did not exist. At the time the appellant applied for the license, Chapter 6 of the Salida Municipal Code defined a short-term rental unit as a privately owned residential dwelling, such as, but not limited to a single-family detached or multiple-family attached unit, duplex, condominium, townhome, apartment, or any portion of such dwellings, rented for occupancy for dwelling, lodging, or sleeping purposes for any period less than thirty (30) consecutive days. (Exhibit P) Therefore a short term license cannot be issued to a vacant lot. STAFF RECOMMENDATION: Staff recommends the appeal be denied and the Administrator s decision be upheld to revoke the short term rental license for 102 River West Drive. PROPOSED MOTION: The following are proposed motions for the Planning Commission to consider for the appeal: A. I move to confirm the decision of the Administrator to revoke the appellant s short term rental license because of the following facts and reasons: (1) The short term rental unit, as defined by the Salida Municipal Code at the time, did not exist at the time of issuance of the license; and (2) (Other facts and reasons established at the hearing). B. I move to reverse the decision of the Administrator to revoke the appellant s short term rental license because of the following facts and reasons: (1) (State facts and reasons established at hearing). C. I move to modify the decision of the Administrator to revoke the appellant s short term license in the following ways:

6 Page 6 of 91 (1) (State proposed modifications) The modification to the decision is based on the following facts and reasons established at the hearing: (1) (State facts and reasons established at hearing). D. I move to present the notice of decision at the April 23, 2018 Planning Commission meeting. EXHIBITS A Appellant s Application for Short Term Rental License B Short Term License #0303 C Ordinance No D Building Permit Application for 102 River West Drive E Ordinance No F Ordinance No G Ordinance No H Letter from Administrator Revoking License #0303 I Short Term Rental License #0360 J Short Term Rental License #0411 K Certificate of Occupancy for 102 River West Drive L Application for Substantial Modification of the River West Planned Development M Application to Appeal Administrator s Decision N Notice of Hearing P Excerpt from Section of Salida Municipal Code in Effect at Time of Approval of License #0303

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22 EXHIBIT E Planning Commission Packet Page 22 of 91

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24 4/3/2018 Ordinance No Code of Ordinances Salida, CO Municode Library Planning Commission Packet Page 24 of 91 EXHIBIT F 1/10

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37 EXHIBIT I Planning Commission Packet Page 37 of 91 City of Salida Short Term Rental Business License #0360 This is to Certify, that H2 Accretion of the State of Colorado, having applied for a License to operate a short term rental business at 206 River Left Lane in the City of Salida, Colorado for a period beginning on the 1st day of June, 2017, and ending on the 31st day of May, 2018, and having met all required conditions is hereby licensed. This License is issued subject to the Salida Municipal Code, under the provisions of Chapter 6, Article 5. Licensee has appointed Andrew Walker as the local contact person who can be reached at

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42 Summary of Proposed Modification Attachment A: Application Text River West Planned Development Application for Substantial Modification With the approval of its Owners and its Executive Board, the River West Owner s Association ( Association ) hereby submits a proposed Substantial Modification to the River West Planned Development ( PD ) to allow short-term rentals (STRs) within the River West subdivision ( Subdivision ). Along with any other Council requirements, all relevant STR provisions in the Salida Municipal Code (eg, self-certification; visible notices, etc) would be incorporated by reference within the Modified PD to ensure safety and consistency with other STRs in the City. The Association respectfully urges City Council to approve this requested Modification for the following reasons: i. It is consistent with the goals established by the City s Short-Term Rental Policy established on April 18, 2017 ( Salida STR Ordinance ), including: ii. iii. iv. a. Allowing STRs would not change the character of any existing community. The Subdivision is a newly-created neighborhood that is physically isolated from existing communities and is entirely surrounded by either parks or parcels where STRs are already available by right. b. Allowing STRs would not reduce workforce housing supply. All construction at River West has added new units to the Salida housing stock no units have been converted from potential workforce housing to STRs. Furthermore, as a riverfront PD it is highly unlikely that any units at River West would have ever provided affordable workforce housing; It is fully supported by the owners and Executive Board of the Subdivision, and is consistent with all guiding documents of the Subdivision, including the approved Bylaws and Covenants, Conditions & Restrictions (CC&Rs); It is a fair resolution for Subdivision owners who purchased lots and initiated construction when STRs were explicitly allowed; in many cases STRs were a critical component of those owners financing plans; It is consistent with recent precedent established by Council in its approval of STRs within the Two Rivers PD. Indeed, had the Salida STR Ordinance been contemplated at the time of the original River West PD application, the Developer would have requested STR licensing, and current owners would have had the flexibility to make different investment decisions; v. It would generate significant economic activity and tax revenue for the community at large, as compared to a community of largely unoccupied vacation homes. Statutory Authority Section [d] of the Salida Municipal Code establishes that a Planned Development may seek a Substantial Modification upon a finding by the City Council, so long as the modification is: i. Consistent with the efficient development and preservation of the entire PD; ii. Planning Commission Packet Page 42 of 91 Does not affect in a substantially adverse manner either the enjoyment of land abutting upon or across the street from the PD or the public interest; and

43 Page 43 of 91 iii. Is not granted solely for a special benefit upon any person. The Modification proposed herein meets all the above requirements. Background River West is a mixed-use subdivision currently under development just inside the City s western limits (Exhibit A, below, shows the Subdivision location). It is bordered by the Arkansas River to the north, Marvin Park to the east, and Highway 291 to the south. The Subdivision was developed by Natural Habitats of Salida ( Developer ). On April 23, 2014, the Salida Planning Department and the Salida City Council each approved the River West Planned Development. Phase 2 of the PD is the residential component, which permitted 14 units, including 10 detached units and four townhome units. At this time, four of the 10 detached units and all of the townhome units have been constructed; a fifth detached unit is under construction with expected completion in Spring The Planning Department and City Council also concurrently approved a PD for Phase 1, which is a C-1 commercial development that sits between the Phase 2 residential component and Highway 291. At the time the PD was approved in 2014, there was no discussion of STRs and no indication that a moratorium or STR Ordinance might be adopted. As a result, the Developer did not include any requests related to STRs in its original PD application. Indeed, as Phase 2 lots were sold between 2014 and 2016, many current owners purchased lots with the explicit understanding that STRs were allowed, which in many cases was a fundamental component of those owners financing plans. In some cases, owners received guidance from City staff and published documentation that reinforced this understanding. On April 18, 2017, the City Council adopted new regulations for STRs, which caught multiple River West owners by surprise and in some cases, mid-construction. These regulations limited the number of STR licenses that can be issued in R-zoned districts (ie, R-1, R2, R3 & R4) to 3.5% of the total Salida housing stock that is eligible for STR licensing in effect creating a permanent moratorium on the issuance of net new licenses in R-zoned districts. The new regulations imposed additional constraints in R-zoned districts, including the limitation that only one STR license can be issued within any single street segment. There are only 2 street segments within River West Phase 2, meaning that under current regulations only 2 units can be permitted as STRs despite Owner preferences and both of those STR licenses have already been issued. Importantly, the Ordinance does not specifically address PDs. Justification of Proposed Modification For the reasons outlined below, allowing STRs within the Subdivision will avoid negative community impacts, provide a fair resolution for Subdivision owners, and expand local jobs & tax revenue. A. Allowing STRs Would Not Affect Existing Communities The Phase 2 Subdivision is completely isolated from existing communities. The Arkansas River and Marvin Park create large, permanent buffers on the north and east sides, respectively. To the west, the

44 Page 44 of 91 Subdivision is bordered by a former motel ( All Time Inn ) currently being operated as an apartment complex. To the west is Highway 291 and the River West commercial component, where the Salida Inn & Hostel operates a dedicated short-term lodging enterprise. The City s zoning map shows that all adjacent occupied land uses are either zoned C-1 or are outside City limits (Exhibit A). As a result, River West is effectively a PD island surrounded entirely by properties where STRs are available by right (Exhibit B). This further highlights that allowing STRs at River West would not affect any existing communities, would be completely compatible with the fabric of adjacent land use, and would represent fair & equitable treatment for River West owners. B. Allowing STRs Would Not Affect Workforce Housing Supply Every unit constructed at River West has added new housing stock within the City; affordable housing would therefore not be converted to STRs. Furthermore, given location and amenities, new riverfront developments like River West are not realistic sources of affordable housing supply. The first round of detached lot sales in 2014 ranged from $77,000 to $220,000 representing per-acre pricing from approximately $700,000 to over $1.5 million. Recent lot sales have increased significantly as have the prices of transacted homes for example, one home in the Subdivision recently sold for $785,000, and a riverfront lot is currently listed for $310,000. Finally, full City tap fees and ongoing HOA fees further erode the ability to provide affordable housing within the Subdivision. C. River West Owners Support STR Licensing Within the Subdivision The Subdivision s owners actively support STR licensing within this new community. Two owners already operate licensed STRs from their homes, and at least several additional owners had planned to operate STRs prior to purchasing their lots and upon commencing construction. The topic of STRs was discussed at length at the annual River West HOA meeting on May 13, After discussion, a vote was called to determine whether the Association s Executive Board should facilitate allowing STRs throughout the subdivision the motion passed without objection. The Executive Board has confirmed that such STR approval requested by the owners would be consistent with the Subdivision Bylaws and CC&Rs. It is also worth noting that the owner of the Salida Inn & Hostel sits on the River West Executive Board and supports the STR license. D. Materials & Precedent Suggest PDs Can & Should be Treated Differently Than R-Zoning The River West subdivision is zoned as a Planned Development (PD). While this PD is technically a zoning classification overlay on top of an R-2 zoning district, it is also fundamentally different than pure R-2 zoning. For example, as shown in Exhibit A, the City s zoning maps label River West as a PD and not as R- zoning. The closest R-zoned parcel to River West Phase 2 is over 380 away, across Highway 291. The River West PD s table of dimensional standards explicitly differs from R-2 zoning. Finally, while the City s STR Ordinance addresses R-zoned parcels, it does not explicitly address PDs. In addition, City Council has recently granted STR licenses within the new Two Rivers PD, which shares many of the same characteristics as River West it is a PD overlay on R-2; it is a new development on the edge of the City limits; and it is physically separated from existing communities. Had the Salida STR Ordinance existed when the River West PD was approved, the Developer would have certainly pursued this same permitting approach. And unlike Two Rivers, which came before Council well after the STR Ordinance had been adopted, River West was approved (and its owners purchased lots) well before the

45 Page 45 of 91 Ordinance was even contemplated. To maintain consistency, it would seem only fair to honor this recent precedent and allow STR flexibility within the River West PD. E. Allowing STRs Would Increase Salida Tax Base & Economic Activity Preventing STRs in River West would very likely force some current owners who had intended to use their homes part time and rent as STRs occasionally to sell to more affluent, most likely non-resident, buyers who could afford to leave the homes vacant much of the year. This would deprive the City & County not only of lodging tax revenue, but also the associated local spending and sales tax generation that more frequent use of the homes would support. In this context, allowing STRs in the Subdivision can turn a potential Lose-Lose into a Win-Win for both the owners and the City. As an example, Figure 1 presents an estimate of potential increases in local spending and tax revenues from a unit used only as an occasional vacation home (assuming 1.5 weekends-per-month) vs the same unit that is also used as a STR (assuming 30% occupancy). Using relatively conservative spending assumptions, the unit with STR flexibility would generate 4-times the amount of local retail spending, and 10-times the amount of tax revenue versus the vacation-only unit. Fourteen units could generate over $815,000 of incremental local spending and over $75,000 in additional tax revenue. Figure 1. Estimated Spending & Tax Revenue from Vacation Home vs Vacation Home with STR Vacation Home Only Vacation Home + STR Multiplier Assumptions Occupancy (%) Vacation Home 10% 10% 1.5 weekends/mo Rental 0% 30% Total 10% 40% Annual Lodging nights Annual Spending Retail $7,200 $29, $200/unit/day Lodging $0 $36,375 $250/night Total $7,200 $65, Annual Tax Revenue Sales tax $605 $2, % rate Lodging tax $0 $3, % combined rate Total $605 $6,

46 Page 46 of 91 EXHIBIT A: Salida Zoning Map River West Residential

47 Page 47 of 91 EXHIBIT B: River West Residential vs Parcels Where STRs Are Available By-Right RW

48 Page 48 of 91 Attachment B: Legal Description A copy of the River West Salida Subdivision Phase 2 subdivision plat is provided in this Attachment B. This includes the following legal description of the Subdivision Phase 2 boundaries, with the parcel described below having been platted & subdivided as indicated on the Phase 2 plat, and illustrated in Figure 1 below:

49 Page 49 of 91 Figure 1: Boundary of Proposed Substantial Modification to River West Subdivision Phase 2 Planned Development

50 EXHIBIT M Planning Commission Packet Page 50 of 91 ITEM: Approval of Ordinance approving the amendment to the River West Planned Development Overlay on first reading. REQUEST: The request is to amend the River West Planned Development, located on the north side of West 1st Street, adjacent to Marvin Park and west of the intersection with 2nd Street, to amend the allowed uses to include short term rentals. APPLICANT: The applicants are the River West Owner s Association as represented by Jason Tundermann. OVERVIEW OF REGULATIONS AND APPROVALS: Development of the River West subdivision included several steps including annexation, zoning, planned development overlay and subdivision approvals. Phase 1 and 2 of the subdivision and planned development overlay were approved by resolution on July 16, The annexation agreement was also approved on July 16, The underlying zoning of the residential portion of the PD is R-2. There were no regulations for short term rentals (STR) in 2013, so staff determined that the subdivision must meet the STR requirements of Section (q) for an R-2 district. These standards put a cap on the total

51 Page 51 of 91 amount of STR s allowed in the R-1, R-2, R-3 and R-4 districts of 3.5%; and a maximum of one STR per street segment. Two licenses have been issued in River West in accordance with these standards. Above is a map that shows where licenses have been issued within different zoning districts. Currently there are only two licenses available in the R-1, R-2, R-3 and R-4 districts. Section of the Salida Municipal Code states the criteria and process for modifying a planned development. A substantial modification includes: (1) A change in land use or development concept. (2) An increase in residential density levels or building coverage of nonresidential uses. (3) An increase in the permitted height.

52 Page 52 of 91 (4) A realignment of major circulation patterns or a change in functional classification of the street network. (5) A reduction in approved open space or common amenities. (6) Other significant changes which involve policy questions or issues of overriding importance to the community. With the modification, the City Council may require new conditions per Section : (d) During the review of any proposed substantial modification to the PD, the City Council may require such new conditions of approval as are necessary to ensure that the development will be compatible with the current community standards and regulations. This shall include, but not be limited to, applying the portions of the PD which have not obtained building permits, or are subject to the proposed amendment, any new community policies or regulations which have been implemented since the PD was originally approved. One of the provisions of the annexation agreement is to devote two lots to affordable housing: e. Owner shall, upon recordation of the proposed Phase II plat offer for sale two lots (Lots 11 and 12) to buyers who qualify at one hundred percent (100%) or less of the Area Median Income for Salida. The owner may also construct the units and offer them for sale provided the units are offered at one hundred percent (100%) or less of the Area Median Income for Salida. Sales price shall be set to meet the one hundred percent (100%) or less Area Median Income buyer. The lots or units shall be resident occupied. If the lots have not sold within two (2) years of the acceptance by the City of Phase II infrastructure, this requirement may terminate. REQUEST: The applicant is requesting that all 14 of the homes in River West be granted a Short Term Rental license. Their reasons include: 1. River West is an enclave that will not impact other neighborhoods. 2. Allowing STRs would not reduce workforce housing supply. All construction at River West has added new units to the Salida housing stock no units have been converted from potential workforce housing to STRs. Furthermore, as a riverfront PD it is highly unlikely that any units at River West would have ever provided affordable workforce housing. 3. Many residents started construction on their homes prior to the new regulations going into effect. 4. It is supported by all of the homeowners within the subdivision. 5. Additional short term rentals were allowed in the Two Rivers planned development, effectively setting a precedent for STR s in PD s. 6. It would generate significant economic activity and tax revenue for the community. STAFF RECOMMENDATION: From a land use standpoint, staff agrees that the additional STR licenses within the River West subdivision will not impact existing neighborhoods. However the request does pose policy questions or issues of overriding importance to the community, namely :

53 Page 53 of 91 Should Salida include neighborhoods that are dominated by visitors; and Does the allowance of a STR help or hinder affordability? Some of the options Council has with this request include: Approval of all, or a portion of the requested 14 STR licenses. Denial of the request, thereby continuing to enforce the current STR regulations in the neighborhood. Remand case to the Planning Commission for a land use recommendation. Staff believes a larger concern is the potential loss of two full-time resident housing units that were required through the annexation and planned development approvals. It appears the original developer correctly implemented the condition on the initial sale, but there was no requirement to ensure the continued affordability of these units through a deed restriction. If Council does approve the additional STR licenses, staff recommends Lots 11 and 12 be excluded to help ensure The lots or units shall be resident occupied. RECOMMENDED FINDINGS: City Council shall review requests for substantial modifications and may approve them if it is consistent with the findings that the modification is: (i) (ii) (iii) Consistent with the efficient development and preservation of the entire PD; Does not affect in a substantially adverse manner either the enjoyment of land abutting upon or across the street from the PD or the public interest; and Is not granted solely for a special benefit upon any person. SUGGESTED MOTIONS: A Council person should make the motion to Approve Ordinance approving the substantial amendment to the River West Planned Development on first reading; and setting a public hearing and second reading of the proposed ordinance for March 20, Attachments Ordinance Applicant Submittal

54 Page 54 of 91 ORDINANCE NO. 09 (Series 2018) AN ORDINANCE OF THE CITY COUNCIL FOR THE CITY OF SALIDA, COLORADO APPROVING A SUBSTANTIAL AMENDMENT TO THE RIVER WEST PLANNED DEVELOPMENT OVERLAY CONSISTING OF 2.65 ACRES KNOWN AS THE RIVER WEST SALIDA SUBDIVISION PHASE 2 WITH THE UNDERLYING ZONING OF R-2, MEDIUM DENSITY RESIDENTIAL WHEREAS, on July 16, 2013 the Salida City Council approved Resolution approving the River West Salida Subdivision Phase 2 (hereinafter Property ) and Planned Development Overlay (hereinafter PD Overlay ) which was recorded at Chaffee County Recorder Reception No ; and WHEREAS, a condition of the approval of the Planned Development Overlay of the underlying R-2 zoning was compliance with the annexation agreement for the property which was approved by the Salida City Council on July 16, 2013 by Resolution No and recorded at Chaffee County Recorder Reception No ; and WHEREAS, paragraph 5.e of said annexation agreement requires the sale of two lots or units, Lots 11 and 12, to buyers who qualify at 100% or less of the Average Median Income for the City of Salida for residents; and WHEREAS, because of the concern of the impact of short term rentals on residential neighborhoods in the City of Salida, the City Council adopted Ordinance which put in place regulations on the number on the total short term rentals to be allowed in the R-1, R-2, R-3 and R-4 residential districts (3.5%), and limited one short term rental per street segment; and WHEREAS, representatives of the River West Owner s Association (hereinafter Owners ) have made an application (hereinafter Application ) to the City of Salida for a substantial modification to the PD Overlay on the Property in accordance with Section Modifications of the Salida Municipal Code; and WHEREAS, the Owner s Application requested the allowed uses in the PD Overlay allow short term rental licenses for every lot within the Property; and WHEREAS, after a duly noticed public hearing held on March 20, 2018, the City Council determined that approving the Application for Lots 1-10 and of the Property was consistent with the efficient development and preservation of the entire PD; does not affect in a substantially adverse manner either the enjoyment of land abutting upon or across the street from the PD or the public interest; and is not grated solely for the benefit of any one person; and WHEREAS, at said public hearing the City Council also determined that granting short term rental licenses for Lots 11 and 12, which were intended by the PD Overlay to be resident occupied, was not in the public interest.

55 Page 55 of 91 NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL FOR THE CITY OF SALIDA, COLORADO AS FOLLOWS: Section One That the PD Overlay be modified for Lots 1-10 and of the Property to allow the issuance of short term licenses without the restrictions of Section (q) (2) a. and c. of the Salida Municipal Code regarding the total number of licenses allowed in residential districts and the number allowed per street segment. Lots 11 and 12 shall remain for resident occupancy. Section Two Upon approval by the City Council the applicant shall have one hundred eighty (180) days to submit a final Mylar of the amended River West Salida Subdivision Phase 2 stating the amendment to the PD Overlay for the Mayor s signature and recordation. Section Three The City Clerk is hereby directed to undertake the following actions upon the adoption of this Ordinance: 1. Publish this Ordinance in a newspaper of general circulation in the City of Salida. Section Four This Ordinance shall not have any effect on existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of any ordinance repealed or amended as herein provided, and the same shall be construed and concluded under such prior ordinances. Section Five The provisions of this Ordinance are severable and the invalidity of any section, phrase, clause or portion of the Ordinance as determined by a court of competent jurisdiction shall not affect the validity or effectiveness of the remainder of the Ordinance. INTRODUCED ON FIRST READING, ADOPTED and ORDERED PUBLISHED IN FULL in a newspaper of general circulation in the City of Salida by the City Council on March 6, 2018 and set for second reading and public hearing on the 20th day of March, INTRODUCED ON SECOND READING, FINALLY ADOPTED and ORDERED PUBLISHED BY TITLE ONLY, by the City Council on the 20th day of March, CITY OF SALIDA

56 Page 56 of 91 By: Mayor P.T. Wood ATTEST: City Clerk (SEAL) PUBLISHED IN FULL in the Mountain Mail after First Reading on the, 2018 and BY TITLE ONLY, after Final Adoption on the, By: City Clerk

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59 Summary of Proposed Modification Attachment A: Application Text River West Planned Development Application for Substantial Modification With the approval of its Owners and its Executive Board, the River West Owner s Association ( Association ) hereby submits a proposed Substantial Modification to the River West Planned Development ( PD ) to allow short-term rentals (STRs) within the River West subdivision ( Subdivision ). Along with any other Council requirements, all relevant STR provisions in the Salida Municipal Code (eg, self-certification; visible notices, etc) would be incorporated by reference within the Modified PD to ensure safety and consistency with other STRs in the City. The Association respectfully urges City Council to approve this requested Modification for the following reasons: i. It is consistent with the goals established by the City s Short-Term Rental Policy established on April 18, 2017 ( Salida STR Ordinance ), including: ii. iii. iv. a. Allowing STRs would not change the character of any existing community. The Subdivision is a newly-created neighborhood that is physically isolated from existing communities and is entirely surrounded by either parks or parcels where STRs are already available by right. b. Allowing STRs would not reduce workforce housing supply. All construction at River West has added new units to the Salida housing stock no units have been converted from potential workforce housing to STRs. Furthermore, as a riverfront PD it is highly unlikely that any units at River West would have ever provided affordable workforce housing; It is fully supported by the owners and Executive Board of the Subdivision, and is consistent with all guiding documents of the Subdivision, including the approved Bylaws and Covenants, Conditions & Restrictions (CC&Rs); It is a fair resolution for Subdivision owners who purchased lots and initiated construction when STRs were explicitly allowed; in many cases STRs were a critical component of those owners financing plans; It is consistent with recent precedent established by Council in its approval of STRs within the Two Rivers PD. Indeed, had the Salida STR Ordinance been contemplated at the time of the original River West PD application, the Developer would have requested STR licensing, and current owners would have had the flexibility to make different investment decisions; v. It would generate significant economic activity and tax revenue for the community at large, as compared to a community of largely unoccupied vacation homes. Statutory Authority Section [d] of the Salida Municipal Code establishes that a Planned Development may seek a Substantial Modification upon a finding by the City Council, so long as the modification is: i. Consistent with the efficient development and preservation of the entire PD; ii. Planning Commission Packet Page 59 of 91 Does not affect in a substantially adverse manner either the enjoyment of land abutting upon or across the street from the PD or the public interest; and

60 Page 60 of 91 iii. Is not granted solely for a special benefit upon any person. The Modification proposed herein meets all the above requirements. Background River West is a mixed-use subdivision currently under development just inside the City s western limits (Exhibit A, below, shows the Subdivision location). It is bordered by the Arkansas River to the north, Marvin Park to the east, and Highway 291 to the south. The Subdivision was developed by Natural Habitats of Salida ( Developer ). On April 23, 2014, the Salida Planning Department and the Salida City Council each approved the River West Planned Development. Phase 2 of the PD is the residential component, which permitted 14 units, including 10 detached units and four townhome units. At this time, four of the 10 detached units and all of the townhome units have been constructed; a fifth detached unit is under construction with expected completion in Spring The Planning Department and City Council also concurrently approved a PD for Phase 1, which is a C-1 commercial development that sits between the Phase 2 residential component and Highway 291. At the time the PD was approved in 2014, there was no discussion of STRs and no indication that a moratorium or STR Ordinance might be adopted. As a result, the Developer did not include any requests related to STRs in its original PD application. Indeed, as Phase 2 lots were sold between 2014 and 2016, many current owners purchased lots with the explicit understanding that STRs were allowed, which in many cases was a fundamental component of those owners financing plans. In some cases, owners received guidance from City staff and published documentation that reinforced this understanding. On April 18, 2017, the City Council adopted new regulations for STRs, which caught multiple River West owners by surprise and in some cases, mid-construction. These regulations limited the number of STR licenses that can be issued in R-zoned districts (ie, R-1, R2, R3 & R4) to 3.5% of the total Salida housing stock that is eligible for STR licensing in effect creating a permanent moratorium on the issuance of net new licenses in R-zoned districts. The new regulations imposed additional constraints in R-zoned districts, including the limitation that only one STR license can be issued within any single street segment. There are only 2 street segments within River West Phase 2, meaning that under current regulations only 2 units can be permitted as STRs despite Owner preferences and both of those STR licenses have already been issued. Importantly, the Ordinance does not specifically address PDs. Justification of Proposed Modification For the reasons outlined below, allowing STRs within the Subdivision will avoid negative community impacts, provide a fair resolution for Subdivision owners, and expand local jobs & tax revenue. A. Allowing STRs Would Not Affect Existing Communities The Phase 2 Subdivision is completely isolated from existing communities. The Arkansas River and Marvin Park create large, permanent buffers on the north and east sides, respectively. To the west, the

61 Page 61 of 91 Subdivision is bordered by a former motel ( All Time Inn ) currently being operated as an apartment complex. To the west is Highway 291 and the River West commercial component, where the Salida Inn & Hostel operates a dedicated short-term lodging enterprise. The City s zoning map shows that all adjacent occupied land uses are either zoned C-1 or are outside City limits (Exhibit A). As a result, River West is effectively a PD island surrounded entirely by properties where STRs are available by right (Exhibit B). This further highlights that allowing STRs at River West would not affect any existing communities, would be completely compatible with the fabric of adjacent land use, and would represent fair & equitable treatment for River West owners. B. Allowing STRs Would Not Affect Workforce Housing Supply Every unit constructed at River West has added new housing stock within the City; affordable housing would therefore not be converted to STRs. Furthermore, given location and amenities, new riverfront developments like River West are not realistic sources of affordable housing supply. The first round of detached lot sales in 2014 ranged from $77,000 to $220,000 representing per-acre pricing from approximately $700,000 to over $1.5 million. Recent lot sales have increased significantly as have the prices of transacted homes for example, one home in the Subdivision recently sold for $785,000, and a riverfront lot is currently listed for $310,000. Finally, full City tap fees and ongoing HOA fees further erode the ability to provide affordable housing within the Subdivision. C. River West Owners Support STR Licensing Within the Subdivision The Subdivision s owners actively support STR licensing within this new community. Two owners already operate licensed STRs from their homes, and at least several additional owners had planned to operate STRs prior to purchasing their lots and upon commencing construction. The topic of STRs was discussed at length at the annual River West HOA meeting on May 13, After discussion, a vote was called to determine whether the Association s Executive Board should facilitate allowing STRs throughout the subdivision the motion passed without objection. The Executive Board has confirmed that such STR approval requested by the owners would be consistent with the Subdivision Bylaws and CC&Rs. It is also worth noting that the owner of the Salida Inn & Hostel sits on the River West Executive Board and supports the STR license. D. Materials & Precedent Suggest PDs Can & Should be Treated Differently Than R-Zoning The River West subdivision is zoned as a Planned Development (PD). While this PD is technically a zoning classification overlay on top of an R-2 zoning district, it is also fundamentally different than pure R-2 zoning. For example, as shown in Exhibit A, the City s zoning maps label River West as a PD and not as R- zoning. The closest R-zoned parcel to River West Phase 2 is over 380 away, across Highway 291. The River West PD s table of dimensional standards explicitly differs from R-2 zoning. Finally, while the City s STR Ordinance addresses R-zoned parcels, it does not explicitly address PDs. In addition, City Council has recently granted STR licenses within the new Two Rivers PD, which shares many of the same characteristics as River West it is a PD overlay on R-2; it is a new development on the edge of the City limits; and it is physically separated from existing communities. Had the Salida STR Ordinance existed when the River West PD was approved, the Developer would have certainly pursued this same permitting approach. And unlike Two Rivers, which came before Council well after the STR Ordinance had been adopted, River West was approved (and its owners purchased lots) well before the

62 Page 62 of 91 Ordinance was even contemplated. To maintain consistency, it would seem only fair to honor this recent precedent and allow STR flexibility within the River West PD. E. Allowing STRs Would Increase Salida Tax Base & Economic Activity Preventing STRs in River West would very likely force some current owners who had intended to use their homes part time and rent as STRs occasionally to sell to more affluent, most likely non-resident, buyers who could afford to leave the homes vacant much of the year. This would deprive the City & County not only of lodging tax revenue, but also the associated local spending and sales tax generation that more frequent use of the homes would support. In this context, allowing STRs in the Subdivision can turn a potential Lose-Lose into a Win-Win for both the owners and the City. As an example, Figure 1 presents an estimate of potential increases in local spending and tax revenues from a unit used only as an occasional vacation home (assuming 1.5 weekends-per-month) vs the same unit that is also used as a STR (assuming 30% occupancy). Using relatively conservative spending assumptions, the unit with STR flexibility would generate 4-times the amount of local retail spending, and 10-times the amount of tax revenue versus the vacation-only unit. Fourteen units could generate over $815,000 of incremental local spending and over $75,000 in additional tax revenue. Figure 1. Estimated Spending & Tax Revenue from Vacation Home vs Vacation Home with STR Vacation Home Only Vacation Home + STR Multiplier Assumptions Occupancy (%) Vacation Home 10% 10% 1.5 weekends/mo Rental 0% 30% Total 10% 40% Annual Lodging nights Annual Spending Retail $7,200 $29, $200/unit/day Lodging $0 $36,375 $250/night Total $7,200 $65, Annual Tax Revenue Sales tax $605 $2, % rate Lodging tax $0 $3, % combined rate Total $605 $6,

63 Page 63 of 91 EXHIBIT A: Salida Zoning Map River West Residential

64 Page 64 of 91 EXHIBIT B: River West Residential vs Parcels Where STRs Are Available By-Right RW

65 Page 65 of 91 Attachment B: Legal Description A copy of the River West Salida Subdivision Phase 2 subdivision plat is provided in this Attachment B. This includes the following legal description of the Subdivision Phase 2 boundaries, with the parcel described below having been platted & subdivided as indicated on the Phase 2 plat, and illustrated in Figure 1 below:

66 Page 66 of 91 Figure 1: Boundary of Proposed Substantial Modification to River West Subdivision Phase 2 Planned Development

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90 EXHIBIT O Planning Commission Packet Page 90 of 91