Jesse Arreguín City Councilmember, District 4 ACTION CALENDAR July 8, 2014 To: From: Subject: Honorable Mayor and Members of the City Council Councilmember Jesse Arreguín Referral to Planning Commission: Amendment to B.M.C. Section 23B.44.030 - Variance from Setback Requirements for Downtown Hotel Projects RECOMMENDATION Refer to the Planning Commission the proposed amendment to Berkeley Municipal Code (B.M.C.) Section 23B.44.030 ( Findings for Issuance or Denial [of Variances] ) to amend required findings for the issuance of a Variance to establish an exception from set back requirements for hotel projects exceeding 75 feet in height in the Commercial Downtown Mixed Use District (C-DMU). FISCAL IMPACTS OF RECOMMENDATION The referral of the proposed amendment to the Planning Commission will require staff resources to analyze the proposal and to develop a staff report and zoning amendment text for Planning Commission consideration. Staff will also need to post a notice of public hearing if the Commission decides to initiate a public hearing on the zoning amendment. However there are significant economic benefits from a new hotel in the Downtown, which can be achieved in providing greater flexibility in existing zoning requirements. By amending the Zoning Ordinance to provide flexibility on setbacks and the maximum building width requirements, it will make a major hotel project economically feasible and a new hotel will not only revitalize the Downtown and attract new investment, but will also bring substantial sales tax and Transient Occupancy Tax revenue to the City. BACKGROUND Hotel projects are a significant economic stimulus, bringing visitors into Berkeley who patronize local restaurants and businesses, generating sales tax revenue, and bringing in Transient Occupancy Tax revenue to the City. Hotels also attract new investment of residential and commercial project into our community. Presently the limited number of hotels, particularly near the UC Berkeley campus, has resulted in visitors to the campus and the City patronizing hotels in other jurisdictions, which results in lost tax revenue to the City of Berkeley. The lack of available conference facilities also has resulted conferences and events being held in nearby cities. 2180 Milvia Street, Berkeley, CA 94704 Tel: (510) 981-7140 TDD: (510) 981-6903 Fax: (510) 981-7144 E-Mail: JArreguin@CityofBerkeley.info Website: www.jessearreguin.com
Referral to Planning Commission: Amendment to B.M.C. Section 23B.44.030 ACTION CALENDAR Variance from Setback requirements for Downtown Hotel Projects July 8, 2014 Throughout the Downtown Area Plan process, there was strong interest in the Berkeley community for a new hotel and conference facility in the Downtown because of the significant economic benefits it provides. The 2012 Downtown Area Plan (DAP) specially encourages new hotels in the Downtown, and Berkeley Municipal Code Section 23E.68.070 allows a new hotel project with conference facilities to exceed the maximum height limit of 75 feet in the Core Area of the Commercial Downtown Mixed Use (C-DMU) District. DAP Policy ED-1.11 talks about the importance of recruiting a major hotel in the heart of the Downtown DAP Policy LU-1.1 states: Encourage hotels in the Core Area through incentives and height exceptions. DAP Policy ED-1.11 also encourages a major hotel and states: a) Allow greater building height for major hotels than is generally allowed, if the hotel project delivers significant additional public benefits. b) Consider other incentives for major hotel projects, commensurate with the unique public benefits that hotels are likely to deliver. When the City developed the Downtown Area Plan it proposed a width restriction for upper floors above 120 feet above grade. The intent of this policy, which is codified in B.M.C. Section 23E.68.070.C.1, was to reduce the bulk and mass of high-rise projects to reduce shading and view impacts. However this policy was developed with an understanding that a hotel project with condominiums at upper stories would be a viable development scenario. Since the width restrictions were established, hotel-condominium projects have been shown to not be economically viable and the economics of hotel development have shown that the 120-foot width limit imposed by zoning will not be accepted by a worldclass hotelier that will operate the hotel, since modern hotel floors need 25 rooms for standard operations. The maximum building width requirements in B.M.C. Section 23E.68.070.C.1. make most major hotel projects economically infeasible. Given the City s strong interest in attracting a new hotel to the Downtown it is important to provide hotel projects flexibility in set back requirements. The 2012 Downtown Area Plan provides clear rationale for amending the Zoning Ordinance to allow for a variance for flexibility regarding building width on upper floors for a hotel project in the C-DMU Core Area. This item requests that the City Council refer to the Planning Commission a modification to the required findings for the issuance of a variance for high-rise hotel projects in the Page 2
Referral to Planning Commission: Amendment to B.M.C. Section 23B.44.030 ACTION CALENDAR Variance from Setback requirements for Downtown Hotel Projects July 8, 2014 C-DMU District. A hotel project would most likely be able to make three of the four required variance findings (B.M.C. Section 23B.44.030). However the second finding The granting of the application is necessary for the preservation and enjoyment of substantial property rights of the subject property s owner; is extremely hard to make. The proposed zoning text amendment would modify Variance finding # 2 to state that hotel projects above 75 feet in height in the C-DMU District shall be granted a variance if the Zoning Adjustments Board finds that the strict application of the set back and maximum building width requirements in B.M.C. Section 23E.68.070.C would make the hotel project economically infeasible, and provided that the Board can make the other required variance findings. This will enable the Zoning Board to issue a variance for set back and the maximum building width requirements for Downtown hotel projects. The new language also states: For the purposes of this subsection, the granting of the variance is necessary for the preservation and enjoyment of substantial property rights since the strict application of set back and building width requirements could make a high-rise hotel project economically infeasible. ENVIRONMENTAL SUSTAINABILITY The proposed Zoning Ordinance amendment would permit the Zoning Adjustments Board to grant a variance from the strict application of set back and maximum building width requirements for high-rise hotel projects in the Downtown. This would make Downtown hotel projects economically feasible and would encourage transit oriented development directly across the street from a major BART station and along a transit corridor. The new hotel project would also have to meet LEED Gold building requirements, pay into the Streets and Open Space Improvement Plan fund for new public open space, and must provide substantial community benefits to achieve greater height, which could include increased green building and environmental features. CONTACT PERSON Jesse Arreguin, Councilmember, District 4, 981-7140 Attachments: 1: Ordinance Page 3
ORDINANCE NO. -N.S. AMENDING BERKELEY MUNICIPAL CODE SECTION 23B.44.030 TO AMEND REQUIRED VARIANCE FINDINGS TO ESTABLISH AN EXCEPTION FROM SET BACK REQUIREMENTS FOR HOTEL PROJECTS EXCEEDING 75 FEET IN HEIGHT IN THE COMMERCIAL DOWNTOWN MIXED USE DISTRICT BE IT ORDAINED by the Council of the City of Berkeley as follows: Section 1. Findings and Purposes A. Hotel projects are a significant economic stimulus, bringing visitors into Berkeley who patronize local restaurants and businesses, generating sales tax revenue, and bringing in Transient Occupancy Tax revenue to the City. Hotels also attract new investment of residential and commercial projects into our community. B. Presently the limited number of hotels, particularly near the UC Berkeley campus, has resulted in visitors to the campus and the City patronizing hotels in other jurisdictions, which results in lost tax revenue to the City of Berkeley. C. The lack of available conference facilities has also resulted conferences and events being held in nearby cities. D. Throughout the Downtown Area Plan process, there was strong interest in the Berkeley community for a new hotel and conference facility in the Downtown because of the significant economic benefit it provides. E. The 2012 Downtown Area Plan (DAP) specially encourages new hotels in the Downtown, and Berkeley Municipal Code Section 23E.68.070 allows a new hotel project with conference facilities to exceed the maximum height limit of 75 feet in the Core Area of the Commercial Downtown Mixed Use (C-DMU) District. F. DAP Policy LU-1.1 states: Encourage hotels in the Core Area through incentives and height exceptions. G. DAP Policy ED-1.11 also encourages a major hotel and states: a) Allow greater building height for major hotels than is generally allowed, if the hotel project delivers significant additional public benefits. b) Consider other incentives for major hotel projects, commensurate with the unique public benefits that hotels are likely to deliver. H. When the City developed the Downtown Area Plan it proposed a width restriction for upper floors above 120 feet above grade. The intent of this policy, which is codified in B.M.C. Section 23E.68.070.C.1, was to reduce the bulk and mass of high-rise projects to reduce shading and view impacts. However this policy was
developed with an understanding that a hotel project with condominiums at upper stories would be a viable development scenario. I. Since the width restrictions were established, hotel-condominium projects have been shown to not be economically viable, and the economics of hotel development have shown that the 120-foot width limit imposed by current zoning will not be accepted by hotel operator, since modern hotel floors need 25 rooms for standard operations. J. The maximum building width requirements in B.M.C. Section 23E.68.070.C.1. make most major hotel projects economically infeasible. Given the City s strong interest in attracting a new hotel to the Downtown, it is important to provide hotel projects flexibility in setback requirements. K. The 2012 Downtown Area Plan provides clear rationale for amending the Zoning Ordinance to allow for a variance for flexibility regarding building width on upper floors for a hotel project in the C-DMU Core Area. Section 2. That Berkeley Municipal Code Section 23B.44.030 is amended to read as follows: 23B.44.030 Findings for Issuance and Denial A. After the Board has conducted a public hearing, it shall act on the application. The Board may approve a Variance application, either as submitted or modified, only if it makes all of the following findings: 1. There are exceptional or extraordinary circumstances or conditions applying to the land, building or use referred to in the application, which circumstances or conditions do not apply generally to land, buildings and/or uses in the same District; 2. The granting of the application is necessary for the preservation and enjoyment of substantial property rights of the subject property s owner. a. For hotel projects that exceed 75 feet in height in the Commercial Downtown Mixed Use (C-DMU) District, the Board shall grant a variance of the strict application of the set back requirements in Section 23E.68.070.C and maximum building width requirements in 23E.68.070.C.1., if the Board finds that the application of the set back requirements would make the project economically infeasible, and provided that the Board can make the other findings required in this Section. For the purposes of this subsection, the granting of the variance is necessary for the preservation and enjoyment of substantial property rights since the strict application of set back and building width requirements could make a high-rise hotel project economically infeasible; 3. The establishment, maintenance or operation of the use or the construction of a building, structure or addition thereof, to be approved will not, under the Page 2
circumstances of the particular case, materially affect adversely the health or safety of persons residing or working in the neighborhood of the property of the applicant and will not, under the circumstances of the particular case, be materially detrimental to the public welfare or injurious to property or improvements in said neighborhood; and that the granting of the Variance will promote the municipal health, welfare and safety and benefit the City as a whole; 4. Any other variance findings required by the Section of the Ordinance applicable to that particular Variance. B. The Board shall deny an application for a Variance if it determines that it is unable to make any of the required findings, in which case it shall state the reasons for that determination. Section 3. Copies of this Ordinance shall be posted for two days prior to adoption in the display case located near the walkway in front of Council Chambers, 2134 Martin Luther King Jr. Way. Within 15 days of adoption, copies of this Ordinance shall be filed at each branch of the Berkeley Public Library and the title shall be published in a newspaper of general circulation. Page 3