CITY COUNCIL PUBLIC HEARING MARCH 20, 2017 SUBJECT:

CITY COUNCIL PUBLIC HEARING MARCH 20, 2017 SUBJECT: INITIATED BY: APPEAL OF THE PLANNING COMMISSION APPROVAL OF A REQUEST TO EXPAND AN EXISTING RESTAURANT WITHIN THE EXISTING LOBBY AND ROOFTOP AREA WITH ALCOHOLIC BEVERAGE SERVICE WITHIN AN EXISTING HOTEL (PALIHOUSE) LOCATED AT 8465 HOLLOWAY DRIVE IN WEST HOLLYWOOD. COMMUNITY DEVELOPMENT DEPARTMENT ~ (Stephanie DeWolfe, AICP, Deputy City Manager & Direct. (John Keho, Assistant Director) 5f (L. (David DeGrazia, Planning Manager, CHPP)\).)\.) (Rachel Dimond, AICP, Senior Planner) q,_\) STATEMENT ON THE SUBJECT: The City Council will consider an appeal of a Planning Commission decision to approve the expansion of a restaurant into a hotel lobby and rooftop with alcoholic beverage service at the Palihouse, located at 8465 Holloway Drive. RECOMMENDATIONS: Staff has found that the information brought forth in the appeal document does not provide new evidence or documentation of errors or identify unsupported findings that would justify overturning the Planning Commission action. Staff recommends that the City Council hold a public hearing, consider all pertinent testimony, deny the appeal, and affirm the Planning Commission's decision by adopting the following resolution: 1) Draft Resolution No. CC 17-XXXX: "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST HOLLYWOOD, DENYING AN APPEAL AND UPHOLDING THE PLANNING COMMISSION DECISION CONDITIONALLY APPROVING A CONDITIONAL USE PERMIT AMENDMENT, MINOR CONDITIONAL USE PERMIT AMENDMENT, DEVELOPMENT PERMIT, AND ADMINISTRATIVE PERMIT TO ALLOW THE EXPANSION OF AN EXISTING RESTAURANT WITH FULL ALCOHOL SERVICE INTO AN EXISTING LOBBY AND ROOFTOP, EXTENSION OF HOURS OF OPERATION, AND EXTENSION OF HOURS OF DJ OPERATION, AT A HOTEL LOCATED AT 8465 HOLLOWAY DRIVE, WEST HOLLYWOOD, CALIFORNIA (PALIHOUSE). (EXHIBIT A). BACKGROUND I ANALYSIS: Planning Commission Approval On September 15, 2016, the Planning Commission held a public hearing and approved the subject request for a conditional use permit amendment for hotel with alcohol service, minor conditional use permit amendment for change to DJ operations, and a development Page 1of10 AGENDA ITEM 3.A.

permit to facilitate the expansion of the existing restaurant into the lobby and rooftop area, with increased hours of operation, alcohol service, and DJ operation. The Planning Commission conditionally approved the request with a vote of 6-1-0 (Lightfoot opposed) and directed staff to return to the Planning Commission with a final resolution. On October 20, 2016, the Planning Commission adopted Resolution No. PC 16-1169 on consent, which included provisions for a 7 foot tall glass wall around the rooftop area on all sides except the south side facing Holloway Drive. Further, the Commission allowed ambient music to play on the roof, with additional noise testing parameters and review for 6 and 12 months after approval. Applicant's Request The applicant requests to expand an existing 3,235 SF ground floor restaurant into 2,022 SF of existing hotel lobby on the ground floor and 1, 770 SF of existing roof area for a total of 7,027 SF. The existing restaurant includes 1,210 SF of outdoor dining in an internal courtyard, 550 SF of indoor dining room, and a 1,475 SF kitchen on the ground floor. The existing approval for the hotel allows alcohol service in the lobby and roof area, with findings noting these areas would be for hotel guests and residents. The proposal would allow these areas to be converted to full service restaurant. Further, the applicant requests expanded hours of operation and alcohol service and expanded DJ hours in the indoor restaurant space. The expanded restaurant requires 14 additional parking spaces, which are provided with existing excess parking and new valet parking spaces on site within the existing garage. The request requires four permits. A Conditional Use Permit Amendment is required to amend the Conditional Use Permit for the hotel with alcohol service, which includes service to the existing restaurant. A Minor Conditional Use Permit Amendment is required to amend the interior DJ hours of operation. A Development Permit is required for change of use from lobby and rooftop common areas with no required parking to restaurant space, considered an intensification of use, which is defined (in part) as any change that increases parking requirements or operational characteristics with increased impacts. An Administrative Permit is required to approve the new outdoor dining on the roof. Staff Recommendation to the Planning Commission: The existing hotel restaurant has operated adjacent to the lobby without any impacts to the neighbors, as it is contained within the building and insulated courtyard. The expansion of the restaurant into the lobby with expanded hours for operation and a live DJ will not create any new impacts to the neighborhood. However, staff's main concern centers on the expansion of the restaurant onto the roof. As a result, staff included the Page 2of10

following recommended conditions to the Planning Commission to ensure noise would not become an issue on the roof: Require a 7 ft. solid glass barrier around the roof deck, as measured from the finish floor of the Roof Terrace Level. Prohibit all amplified sound on the roof level at any time, even with a special event permit. Allow live music without any amplification to be permitted on the rooftop with a special event permit. Require a 6 and 12 month review of the permits, with additional conditions placed with a modification hearing as necessary. Limit rooftop hours of operation to 1 Opm daily. Limit tables to restaurant-style low tables only with standard chairs to avoid lounge or bar seating. Planning Commission Approved Project: As previously stated, the Planning Commission approved the request, and amended Staff's recommended conditions as follows: Require a 7 ft. solid glass barrier around the roof deck, except the south side facing Holloway Drive. Permit ambient amplified sound on the roof level Require a 6 month review by staff with neighborhood meeting, and a 12 month review by the Planning Commission. Removed staff's recommended limiting of tables to restaurant-style low tables, thus allowing high top tables on the roof. Palihouse along Holloway Drive Page 3 of 10

Hours of Operation The following table outlines the existing hours of operation, the proposed hours, and hours as recommended by staff and approved by the Planning Commission: Existing Hours / Proposed by Applicant - - I Approved by Planning Commission Restaurant Dining ~ 6 a.m.-12 a.m. 6 a.m.-1 a.m. 16 a.m. to 1 a.m. Permitted Hours Sunday-Thursday Sunday- Thursday Sunday - Thursday 6 a.m.-1 a.m. 6 a.m.-2 a.m. / 6 a.m. to 2 a.m. Friday, Friday- Saturday Friday, Saturday, Saturday, and observed Holidays City Holidays I Consumption of 6 a.m.-12 a.m. 8:30 a.m.-1 a.m. 8:30 a.m. to 1 a.m. Alcohol on 1st floor Sunday-Thursday I Sunday- Thursday Sunday - Thursday >---- - 6 a.m.-1 a.m. 6 a.m.-2 a.m. I 6 a.m. to 2 a.m. Friday, Friday- Saturday I Friday, Saturday, Saturday, and observed Holidays City Holidays Sa/es and Servi~6 a.m.-12 a.m. t 8:368.m.-1 a.m. is":3o a.m. to 12:30 am.-1 of Alcohol on 1st Sunday-Thursday Sunday- Thursday Sunday- Thursday floor 6 a.m.-1 a.m. Friday- Saturday 6 a.m.-2 a.m. Friday, Saturday, Holidays I 6 a.m. to 1 :30 a.m. Friday, Saturday, and observed City Holidays DJ operation hours 6 a.m.-12 a.m. within 1st floor only Sunday-Thursday 6 a.m.-1 a.m. Friday- Saturday 10 a.m.-1 a.m. Sunday- Thursday 10 a.m.-2 a.m. Friday, Saturday, Holidays 10 a.m. to 1 a.m. Sunday - Thursday 1 O a.m. to 2 a.m. Friday, Saturday, and observed City Holidays Rooftop Dining Permitted Hours & Sa/es, Service and Consumption of ~Alcohol I _J_ NI A -- -------- 12 p.m.-10 p.m. Sunday- Thursday 12 p.m.-11 p.m. Friday, Saturday, Holidays 12 p.m. to 10 p.m.d1 I J Page 4of 10

Site History On February 22, 2005, the City Council approved the construction of a 42,814 SF mixed use development with a 3,997 SF restaurant, 20 hotel rooms, a commercial parking garage for hotel and restaurant patrons, and 16 condominium units with a separate residential parking structure, now called Palihouse. The project also contained a rooftop area and lobby, with both areas permitted to serve drinks to hotel guests and residents only. The approval resolution noted that the roof would not be used for outdoor dining. This approval allowed the restaurant to operate from 6:00 a.m.-12:00 a.m. Sunday through Thursday and 6:00 a.m.-1 :00 a.m. Friday and Saturday, with alcohol service between 8:30 a.m.-12:00 a.m. Sunday through Thursday and 6:00 a.m.-1 :00 a.m. Friday and Saturday. Alcohol service for room service was permitted between 6:00 a.m.-12:00 a.m. Sunday through Thursday and 6:00 a.m.-1 :00 a.m. Friday and Saturday. On February 7, 2007, the Director approved an amendment to the restaurant that relocated it to what was previously the hotel lobby. This amendment reduced the size of the restaurant from 3,997 SF to 3,325 SF. Because the restaurant was reduced in size, no additional parking was required for the amendment. On April 8, 2008, the Director approved a minor conditional use permit to allow an accessory live DJ use in the lobby and restaurant area. This approval was conditioned to allow a DJ to perform within the lobby and restaurant between the hours of 10 a.m.-12 a.m. Sunday through Thursday and 10 a.m.-1 a.m. Friday and Saturday. Site and Area Conditions The subject property is located on the north side of Holloway Drive, between Hacienda Place and La Cienega Boulevard. The four story 20 room hotel building includes a restaurant and 16 residential units on the north side of the project. The restaurant space is located on the lobby level and includes both indoor and outdoor dining in an interior courtyard. The roof deck is above the fourth floor, and is only a portion of the total rooftop area. The subject property is not located within 500 feet of any church facility or school. Palihouse Neighborhood Context Page 5 of 10

Appeal and Staff Response On October 31, 2016, a timely appeal was filed with the City Clerk by the appellant, Susana Lagudis. The following is a summary of the appeal arguments followed by staff response: 1. Compliance with General Plan and Vision 2020: Granting of the subject CUP and the associated noise and disruption to neighbors are contrary to General Plan and Vision 2020. Specifically, the approval violates the City's General Plan principal "Quality of Life- Maintain the high quality of life enjoyed by West Hollywood residents." The approval is also contrary to General Plan goal LU-8 to "Maintain and enhance residential neighborhoods" with the intent "to encourage stable, livable neighborhoods and to maintain and enhance their character." Granting of the subject CUP violates the City's Vision 2020 goal of "Maintaining the City's Unique Urban Balance with Emphasis on Residence Neighborhood Livability and Fiscal Sustainability" Staff Response: While staff did not cite the above aspects of the General Plan and Vision 2020 in the findings related to General Plan compatibility, staff believes the conditions of approval placed on the project are specifically geared towards maintaining that compatibility. The project does not need to consistent with every single policy outlined in the General Plan, but should be evaluated as to whether it impedes the City's ability to meet the goals and vision outlined for the city in the General Plan. The Planning Commission placed conditions on the project requiring a 7 foot solid glass sound wall around three sides of the roof. Further, the roof area is allowed ambient music only, with testing to be conducted three times within the first year of operation. This testing would be evaluated by staff and then the Planning Commission at 12 months after approval. The conditions also require the roof to close at 1 Opm daily. The location of the commercial activity on the roof is located on the south side of the roof, buffered to the residential neighborhood by the residential portion of the Palihouse. Staff contends that these conditions do not violate the tenets of the General Plan, in that the noise mitigation measures will not diminish quality of life. Further, the subject property, while adjacent to residential neighborhoods, is not within one, and thus, is not subject to regulations applicable to residential zone districts. There is a unique urban balance in West Hollywood, as this project is adjacent to residential neighborhoods. Staff believes the conditions of approval will ensure maintenance of that balance, allowing a commercial entity to thrive while providing additional barriers from sound to neighboring residential projects. Palihouse itself provides a buffer from the residential neighborhood by placing their residential component on the north side of th e project, providing a buffer from the rooftop activity. 2. Noise: Noise will negatively affect quality of life of nearby residents. Sound study does not address restaurant noises, but rather only addresses ambient music. Study does not address sound carrying to neighboring properties. Study does not confirm compliance with noise ordinance. Expanded DJ hours of operation and open courtyard design will lead to intensified noise on the roof due to people talking louder to hear over music. Hotel will hold private events in addition to special events, which are louder than regular restaurant operations. Page 6of10

Staff Response: When considering any outdoor use, noise is also a factor for consideration. In this case, the Planning Commission required that a glass perimeter wall be installed on the east, west, and north sides of the rooftop walls to ensure sound is directed away from the residential neighborhood to the north. The Planning Commission also conditioned the project to include a sound test one month after the rooftop area is operational, and a 6 and 12 month review to ensure any issues can be addressed. The proposed project includes expanded DJ hours of operation. However, the DJ will be located within the expanded restaurant in what is now the lobby, which is inside the building. The restaurant does have outdoor dining within the courtyard in the center of the building, with the residential portion of the project blocking the courtyard from neighboring residential properties to the north. The music on the roof will be required to be played at ambient levels, enough to create light sound to keep a lively restaurant environment. Ambient music does not require people to talk louder to hear over the music, as ambient is defined as "pertaining to or noting sounds that create a peaceful and relaxed atmosphere." By definition, ambient levels of music would not cause people to scream to hear over one another. Further, the restaurant seating arrangement on the roof would not create a bar like atmosphere where patrons are standing around and yelling. Conditions of approval require music on the roof to be at ambient levels, with testing conducted as such levels as determined by hotel staff. The noise study conducted by Menlo Scientific Acoustics, Inc. tests the impact of ambient music being played on the roof. The study concludes this level of music noise will not violate the Noise Ordinance. The study did not test noise from patrons, as there was no regular use of this space as a restaurant at the time. Further, the Noise Ordinance specifically limits neighbor disturbance from businesses adjacent to residential properties between the hours of 1 Opm and Barn. The roof will be closed at 1 Opm, thus eliminating concerns of this violation. While special events may take place that allow extended hours, these are limited to 12 events per year, and may be exempt from the noise ordinance. With or without the subject approval, the hotel is permitted to hold up to 12 special events, including use of the roof as part of those events. 3. Intensification of Use on Rooftop: Original approval did not allow commercial activity on the roof and included such in findings and conditions Staff Response: The original project approval did not include commercial activity on the rooftop, and the findings did include mention of such. However, amendments to approved projects are permitted in concert with amendment approvals subject to public hearings as occurred for the subject project. Such amendments allow projects to evolve over time, and to change operations as requested with evaluation and approval by reviewing bodies. In this case, the Planning Commission approved amendments to the project permits to allow for the rooftop commercial activity, and made the same findings as the original approvals, but with amended justifications. The Planning Commission determined the conditions placed on the approval would allow the findings to be made. Page 7 of 10

4. Code Compliance Issues: Appellant contends residential units were utilized as hotel rooms. Because the project was originally granted with a mixed use bonus, the illegal short term rental of residential units invalidates the mixed use bonus. Staff Response: After the subject application was filed, staff was made aware of the use of residential units as short term rentals. Staff worked with the applicant and the code compliance division to eliminate the code violations. Since June 2016, Palihouse has been in compliance with all requirements to maintain residential units as approved. Those units are rented for 30 days or more, in compliance with the West Hollywood Municipal Code. While the original approval granted a mixed use bonus because the project included residential units, the code compliance violation does not invalidate that bonus. Further, compliance has been maintained over the past six months. 5. CEQA: The applicant contends CEQA requires evaluation of noise on the site. Staff Response: The proposed project has been determined not to have a significant effect on the environment and is categorically exempt from the provisions of CEQA pursuant to Section 15301 (Existing Facilities) of the CEQA Guidelines, which exempt the operation of an existing structure involving negligible or no expansion of the use beyond existing conditions. While the restaurant is expanding, it is incorporating space already being used as hotel common area with alcohol service. The first floor expansion would utilize space currently being used for a hotel lobby, which is commercial in nature. The rooftop area proposed to convert to a restaurant is currently available for use by hotel guests, and has a permit to allow for yoga classes on the roof. A condition of approval would require a glass perimeter wall on the roof, which is extremely minor in nature and would not visually impact the neighborhood. Therefore, no substantive changes to the physical environment are taking place. As a result, the project is not subject to further requirements of CEQA that would require additional study take place. Summary Regarding the appeal put forth by Ms. Lagudis, staff finds that no new information was provided that was not considered at the time of the Planning Commission's approval, nor was any substantial evidence produced to support the claims made regarding compliance with local and state laws. Staff finds that the proposed use will not have significant impacts to adjacent businesses or residents. The project is conditioned to minimize the impact to nearby residents. The restaurant will complement similar uses along Holloway Drive and Santa Monica Boulevard that include a number of other neighborhood- and visitor-serving commercial uses and enhance the economic development of the area. Staff recommends denial of the appeal and conditional approval of the subject request for expansion of the restaurant at Palihouse. Page 8 of 10

CONFORMANCE WITH VISION 2020 AND THE GOALS OF THE WEST HOLLYWOOD GENERAL PLAN: This item is consistent with the Primary Strategic Goal(s) (PSG) and/or Ongoing Strategic Program(s) (OSP) of: PSG-1: Maintain the City's Unique Urban Balance with Emphasis on Residential Neighborhood Livability. OSP-8: Enhance the Cultural and Creative Life of the Community. In addition, this item is compliant with the following goal(s) of the West Hollywood General Plan: LU-1: Maintain an urban form and land use pattern that enhances quality of life and meets the community's vision for its future. ED-7: Enhance the City as a regional, national and international destination for the entertainment, nightlife, dining and retail industries that are key to West Hollywood's fiscal health. EVALUATION PROCESSES: The Planning Commission included a condition in their approval of the subject request requiring monitoring and evaluation as follows: 5.31) This approval shall be reviewed administratively by the Director of Community Development 6 months after this approval date, with a neighborhood meeting held in advance of said review. The Planning Commission shall review this approval at a publicly noticed meeting 12 months after this approval date with an information item provided by staff. The review shall include results of a recent rooftop sound demonstration by the applicant and any additional information provided by the public or requested of the applicant by the City. Notice of the reviews shall be provided to all properties within 500 feet and any other person requesting such notice. If the results of such sound demonstration reasonably warrant additional mitigation measures, this permit may be modified in accordance with WHMC Section 19.80.060. ENVIRONMENTAL SUSTAINABILITY AND HEAL TH: The proposed project has been determined not to have a significant effect on the environment and is categorically exempt from the provisions of CEQA pursuant to Section 15301 (Existing Facilities) of the CEQA Guidelines, which exempt the operation of an existing structure involving negligible or no expansion of the use beyond existing conditions. While the restaurant is expanding, it is incorporating space already being used as hotel common area with alcohol service. Therefore, no changes to the physical environment are taking place. Page 9of10

COMMUNITY ENGAGEMENT: Neighbors in a 500-foot radius were legally noticed for the September 20, 2016 Planning Commission hearing and also for the subject City Council meeting. OFFICE OF PRIMARY RESPONSIBILITY: COMMUNITY DEVELOPMENT DEPARTMENT I CURRENT & HISTORIC PRESERVATION PLANNING DIVISION FISCAL IMPACT: None. ATTACHMENTS: Attachment A: Draft Resolution No. CC 17-XXXX Attachment B: Appeal documents Attachment C: Resolution No. PC 16-1169 Attachment D: September 15, 2016 Planning Commission Report and Supplemental Report and Attachments (draft resolution and plans omitted) Attachment E: October 20, 2016 Planning Commission Report and Supplemental (draft resolution omitted) Attachment F: September 15, 2016 Planning Commission hearing minutes Attachment G: October 20, 2016 Planning Commission hearing minutes Attachment H: Letters from the appellant Attachment I: Project Plans Page 10 of 10