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HomeMy WebLinkAboutItem 1MEMORANDUM DATE: TO: FROM: SUBJECT: Development Services Department April 24, 2012 Arcadia Planning Commission Jim Kasama, Community Development Administrator By: Tim Schwehr, Assistant Planner Continued Public Hearing for Conditional Use Permit Application No. CUP 12 -02 to amend CUP 97 -002 to revise the operational conditions of approval for the Extended Stay America hotel in the Commercial Planned Development (CPD -1) zone at 401 E. Santa Clara Street BACKGROUND At the regular meeting on March 27, 2012, the Planning Commission considered Conditional Use Permit Application No. CUP 12 -02 to amend the operational conditions of approval of Conditional Use Permit No. CUP 97 -002 for the Extended Stay America hotel at 401 E. Santa Clara Street. The March 27, 2012 staff report is attached. At the public hearing, the applicant presented the attached letter regarding the recommended new condition of approval regarding indemnification. After receiving additional testimony and discussion, the Planning Commission unanimously voted to continue the public hearing and directed staff to revise the proposed condition no. 10 regarding indemnification. DISCUSSION In response to the direction from the Planning Commission, the City Attorney has revised the recommended indemnification condition (no. 10) to read as follows: The applicant shall defend, indemnify, and hold harmless the City of Arcadia, its agents, officers or employees from any claim, action or proceeding against the City or its agents, officers or employees to attack, set aside, void or annul this approval and modification of the subject application whether such challenge is against the City, its legislative body, advisory agencies or administrative officers. The City will promptly notify the applicant of any such claim, action or proceeding against the City and the applicant will either undertake defense of the matter and pay the City's associated reasonable legal costs, or will advance funds to pay for defense of the matter by the City Attorney. A decision to undertake the defense of the matter shall be at the sole and absolute discretion of the City of Arcadia. ariSinS While this indemnification provision does not apply to any claim, or case filed prior to this application, INCLUDING THE SPENCER MATTER DESCRIBED BELOW, applicant further agrees that this provision shall not be construed as a limitation on the applicant and the City later entering into an indemnification, defense, or other mutual agreement relating to the matter of Alex Spencer, et al. v. HVM L.L.C. Management Co. d /b /a Extended Stay Hotels, et al., Los Angeles County Superior Court Case No. GC047629. The above revised Condition No. 10 has been incorporated into the attached Resolution No. 1851. RECOMMENDATION The Development Services Department recommends approval of Conditional Use Permit Application No. CUP 12 -02 to revise the conditions of approval of CUP 97 -002 and Resolution No. 1545. PLANNING COMMISSION ACTION Approval If the Planning Commission intends to approve this project, the Commission should move to approve Conditional Use Permit Application No. CUP 12 -02 and adopt the attached Resolution No. 1851, which states that the project satisfies the requirements for a Conditional Use Permit, and incorporates the Commission's decision, specific findings, and revised conditions of approval. Denial If the Planning Commission intends to deny this project, the Commission should move to deny Conditional Use Permit Application No. CUP 12 -02; state the finding(s) that the proposal does not satisfy with reasons based on the record, and direct staff to prepare a resolution incorporating the Commission's decision and specific findings for adoption at the next meeting. If any Planning Commissioner, or other interested party has any questions or comments regarding this matter prior to the April 24, 2012 public hearing, please contact Assistant Planner, Tim Schwehr by calling (626) 574 -5422, or by email at tschwehr©ci.arcadia.ca. us. Approved by: Jimasama Cfrmunity Development Administrator Attachments: March 27, 2012 Staff Report Letter from Applicant Resolution No. 1851 CUP 12 -02 (cont'd) 401 E. Santa Clara Street April 24, 2012 —page 2 STAFF REPORT Development Services Department March 27, 2012 TO: Arcadia Planning Commission FROM: Jim Kasama, Community Development Administrator By: Tim Schwehr, Assistant Planner SUBJECT: Conditional Use Permit Application No. CUP 12 -02 to amend CUP 97 -002 to revise the operational conditions of approval for the Extended Stay America hotel in the Commercial Planned Development (CPD -1) zone at 401 E. Santa Clara Street SUMMARY Conditional Use Permit Application No. CUP 12 -02 was filed by Mr. Timothy B. McOsker, an attorney with the firm, Mayer Brown, LLP. He is representing the hotel management company, HVM, LLC ( "Applicant "), which operates the Extended Stay America Hotel at 401 E. Santa Clara Street. An aerial photo of the site with zoning information is attached. In order to clarify the method of applying the City's transient occupancy tax, the Applicant is requesting to revise the operational conditions of approval of the original Conditional Use Permit (CUP 97 -002 / Resolution No. 1545 — attached) by which the existing hotel was approved. Specifically, CUP 97 -002 included a condition requiring lodgers to re- register every 30 days in the event their stays exceeded 30 consecutive days. The revised conditions proposed by the Applicant will delete this language and simply provide that the hotel will have to comply with the City's existing transient occupancy tax regulations (TOT), even if later amended. As you may be aware, a revised version of the City's TOT regulations has been placed on the April 10, 2012 ballot. That ballot initiative would allow the City to extend the period of occupancy subject to the TOT from 30 days to 90 days. Thus, if that ballot initiative is approved and CUP 12 -02 is approved, the Applicant will have to comply with the new TOT regulations. The Development Services Department is recommending approval of this application. GENERAL INFORMATION APPLICANT: Mr. Timothy B. McOsker of Mayer Brown, LLP Representing the property manager, HVM LLC LOCATION: 401 E. Santa Clara Street — Extended Stay America Hotel REQUEST: To amend Conditional Use Permit No. CUP 97 -002 (Arcadia Planning Commission Resolution No. 1545) to revise the operational conditions of approval SITE AREA: 2.38 acres (103,673 square feet) FRONTAGE: Approximately 90 feet along E. Santa Clara Street EXISTING LAND USE & ZONING: The site is currently developed with a three -story, 122 studio -room hotel constructed in 1998. The property is zoned CPD -1, Commercial Planned Development. SURROUNDING LAND USES & ZONING: North: 210 /Foothill Freeway — unzoned South: Hotel & Medical Offices — zoned CPD -1 East: Two -story, R &D facility — zoned CPD -1 West: Santa Anita Wash, Three -story Office Building, & City Reservoir — zoned S -2 (Public Purpose), CPD -1, & S -2, respectively GENERAL PLAN DESIGNATION: Commercial (0.5 FAR) — The Commercial designation is intended to permit a wide range of commercial uses which serve both neighborhood and citywide markets. The designation allows a broad array of commercial enterprises, including restaurants, durable goods sales, food stores, lodging, professional offices, specialty shops, indoor and outdoor recreational facilities, and entertainment uses. PUBLIC HEARING NOTIFICATION Public hearing notices for CUP 12 -02 were mailed on March 16, 2012 to the owners and occupants of those properties that are located within 300 feet of the subject property — see the attached radius map. Because staff considers the proposed project exempt from the requirements of the California Environmental Quality Act (CEQA) the public hearing notice was not published in a local newspaper. BACKGROUND INFORMATION The site is developed with a three -story, 122 studio -room hotel constructed in 1998 (See the attached photos and plans). The hotel use was developed in cooperation with the Arcadia Redevelopment Agency and approved by Conditional Use Permit No. CUP 97 -002. The conditions of approval were formerly imposed by the adoption of Planning CUP 12 -02 Extended Stay America 401 E. Santa Clara Street March 27, 2012 — page 2 Commission Resolution No. 1545 (attached). At issue is the second sentence (underlined) of condition no. 2, which reads as follows: 2. CUP 97 -002 is specifically for a transient hotel use. Guest occupants shall re- reqister every 30 -days in the event that their length of stay will exceed 30 consecutive days. The applicant and property owner shall execute and record a legal instrument precluding conversion of the project into a residential use. This legal instrument shall be prepared by and approved by the City Attorney. Extended Stay America is currently involved in litigation relating to this condition (Alex Spencer et. al v. HVM LLC Management Co. dba Extended Stay Hotels, et al.) As a means of clarifying this condition and resolving the legal dispute, the Applicant is proposing this amendment. PROPOSAL AND ANALYSIS The applicant is proposing to revise condition no. 2 of Resolution No. 1545 (CUP 97- 002) to maintain the City's restriction that this use remain a hotel and not become permanent housing, and stipulate that the transient occupancy tax be collected as provided for by law. The revision will also necessitate that the legal instrument that was executed and recorded as called for by the original condition no. 2 be revised as well; and wording is included to effectuate that. The proposed new condition would read as follows: 2. CUP 97 -002 is specifically for a transient hotel use only. The hotel shall not be used for permanent housing. The Operator shall collect and remit the Transient Occupancy Tax to the fullest extent authorized by law, as may be amended from time to time. The applicant shall execute and record a legal instrument precluding conversion of the project into a residential use. Reasonable expenses and costs in connection with preparation of the legal instrument shall be paid for by the Applicant, and the legal instrument shall be prepared by and approved by the City Attorney. Additionally, because this hotel was developed in cooperation with the Arcadia Redevelopment Agency (Agency) a Disposition and Development Agreement (DDA) was executed between the Agency and the hotel developer. The DDA reiterated the restriction on converting the hotel to permanent housing, and also included provisions that clarified the applicability of the Conditional Use Permit to any subsequent hotels, and that the Agency be notified of any sale or transfer of any part of the ownership or improvements of the hotel. The DDA also included provisions regarding the quality of the hotel and the maintenance of the improvements. During the legal dispute and the discussions for its resolution, the prospect of the elimination of redevelopment arose, and in anticipation of any ramifications of that, the City Attorney is proposing the following two (2) new conditions to reiterate those provisions of the DDA: CUP 12 -02 Extended Stay America 401 E. Santa Clara Street March 27, 2012 — page 3 8. This Conditional Use permit applies to all subsequent hotel uses. The applicant may not assign or attempt to assign the authorized uses on the property, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Extended Stay America Hotel use or the improvements thereon, without notification to the Redevelopment Agency, or its successor entity, and without informing subsequent purchasers or operators of the requirements of this CUP. 9. The applicant covenants and agrees for itself, its successors, its assigns and all voluntary and involuntary successors in interest to the subject parcel, project, or any part thereof, that (i) such use shall be for a quality reputable extended stay hotel, including ancillary uses located within the hotel (ii) the subject property and exterior (including all landscaped areas) and interior portions of the Project shall be maintained in a first -class condition and in accordance with the standards of the City's municipal code; (iii) the project shall be marketed and advertised to the business community and shall provide weekly maid service; and (iv) neither the project nor subject parcel shall be used for permanent housing. Lastly, and in order to protect the City's interests in this matter the City proposes the addition of an indemnification clause that protects the City from the current litigation between the plaintiffs and Extended Stay. That condition would provide that the CUP amendment becomes applicable only if two (2) conditions are satisfied. The condition would read as follows: 10. This approval shall not be effective unless and until; A. The Applicant, or their successor in interest, executes an agreement with the City of Arcadia agreeing to indemnify and hold harmless the City, its officials, officers, agents and employees ( "City Parties ") from, any and all actions, suits, claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities, that have been asserted in the matter of Alex Spencer, et al. v. HVM L.L.C. Management Co. d /b /a Extended Stay Hotels, et al., Los Angeles Superior Court Case No. GC047629 or that may be asserted or claimed in the future by any person, firm or entity arising out of or in connection with an appeal of that matter or this CUP Amendment (hereinafter "Indemnified Claims and Liabilities "). At a minimum, such indemnity shall include the following: 1. Applicant shall defend and pay for any current and future action or actions filed in connection with any of said Indemnified Claims and Liabilities and will pay all costs and expenses, including legal costs and attorneys' fees incurred in connection therewith; 2. Applicant shall promptly pay any judgment rendered against the City and Applicant for any such Indemnified Claims and Liabilities; and Applicant shall save and hold the City and the City Parties harmless therefrom; and CUP 12 -02 Extended Stay America 401 E. Santa Clara Street March 27, 2012 — page 4 3. To the extent the City is or is made a party to any action or proceeding filed or prosecuted against the Applicant for such Indemnified Claims and Liabilities, Applicant shall pay to the City any and all costs and expenses incurred by the City in such action or proceeding, including but not limited to, legal costs and attorneys' fees; or B. There is final disposition in the matter of Alex Spencer, et al. v. HVM L.L.C. Management Co. d /b /a Extended Stay Hotels, et al., Los Angeles Superior Court Case No. GC047629 in the form of an executed settlement agreement among all of the parties to the case or judgment issued in favor of the plaintiffs. The existing hotel is compatible with the other uses in the area, and is consistent with the CPD -1 Zoning and the General Plan's Commercial designation of the property. The new conditions will not affect this compatibility or consistency. The proposed revised conditions have been reviewed by the City Attorney and have been found to be acceptable. Indeed the revised conditions will protect the City, reinforce the original conditions of approval that this hotel, while approved for extended stays, will not provide permanent housing, and that it will be maintained to the high standards called for by the DDA and the City's property maintenance requirements. CODE REQUIREMENTS All City requirements regarding disabled access and facilities, occupancy limits, building safety, emergency equipment, water supply, drainage, and waste and pollution control are being complied with to the satisfaction of the Building Official, City Engineer, Fire Marshal, and Public Works Services Director. CEQA Because no physical alterations to the property are proposed or necessary, this project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15301 of the CEQA Guidelines for the operations of an existing facility. A Notice of Exemption is attached. FINDINGS Section 9275.1.2 of the Arcadia Municipal Code requires that for a Conditional Use Permit to be granted, it must be found that all of the following prerequisite conditions can be satisfied: 1. That the granting of such Conditional Use Permit will not be detrimental to the public health or welfare or injurious to the property or improvements in such zone or vicinity. The proposed revisions to the operational conditions of approval are consistent with the intended and existing commercial use of the property and will not have any adverse impacts to the neighboring businesses or properties. CUP 12 -02 Extended Stay America 401 E. Santa Clara Street March 27, 2012 — page 5 2. That the use applied for at the location indicated is properly one for which a Conditional Use Permit is authorized. Per Sections 9260.1.12.7 and 9275.1.50 of the Arcadia Municipal Code, hotels are allowed in the CPD -1 zone subject to the approval of a Conditional Use Permit. The existing hotel was approved by Conditional Use Permit No. CUP 97 -002 (Resolution No. 1545). 3. That the site for the proposed use is adequate in size and shape to accommodate said use, and all yards, spaces, walls, fences, parking, loading, landscaping, and other features required to adjust said use with the land and uses in the neighborhood. The site is adequate for existing hotel. Any necessary adjustments to the existing facility since its development have been readily accommodated. 4. That the site abuts streets and highways adequate in width and pavement type to carry the kind of traffic generated by the proposed use. The site is accessed via East Santa Clara Street, which is a collector street with two, undivided traffic lanes; one in each direction, and is adequate for the traffic demand of the existing use. 5. That the granting of such Conditional Use Permit will not adversely affect the comprehensive General Plan. The existing hotel is a commercial use that is consistent with the General Plan Land Use Designation of the site. It is staff's opinion that the existing hotel and the proposed operational revisions satisfy each of the above prerequisite findings. RECOMMENDATION The Development Services Department recommends approval of Conditional Use Permit Application No. CUP 12 -02 to revise the conditions of approval of CUP 97 -002 and Resolution No. 1545. PLANNING COMMISSION ACTION Approval If the Planning Commission intends to approve this project, the Commission should move to approve Conditional Use Permit Application No. CUP 12 -02 and adopt the attached Resolution No. 1851, which states that the project satisfies the requirements for a Conditional Use Permit, and incorporates the Commission's decision, specific findings, and revised conditions of approval. Denial If the Planning Commission intends to deny this project, the Commission should move to deny Conditional Use Permit Application No. CUP 12 -02; state the finding(s) that the proposal does not satisfy with reasons based on the record, and direct staff to prepare a resolution incorporating the Commission's decision and specific findings for adoption at the next meeting. CUP 12 -02 Extended Stay America 401 E. Santa Clara Street March 27, 2012 — page 6 If any Planning Commissioner, or other interested party has any questions or comments regarding this matter prior to the March 27, 2012 public hearing, please contact Assistant Planner, Tim Schwehr at (626) 574 -5422, or at tschwehr @ci.arcadia.ca.us. Approved by: 7 Ji asama ommunity Development Administrator Attachments: Aerial Photo and Vicinity Map with Zoning Information Resolution No. 1545 (CUP 97 -002) 300 -foot Radius Map Photos of Subject Property Plans of Existing Facility Notice of Exemption Resolution No. 1851 CUP 12 -02 Extended Stay America 401 E. Santa Clara Street March 27, 2012 — page 7 .......... ..........._...........,....... 0 "Free*a' RESOLUTION NO. 1545 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF ARCADIA, CALIFORNIA, GRANTING CONDITIONAL USE PERMIT NO. CUP 97 -002 FOR A THREE- STORY, 122 STUDIO - ROOM HOTEL AT 401 EAST SANTA CLARA STREET. WHEREAS, on February 12, 1997, an application was filed by Mr. Sig Raulinaitis of Extended Stay America, Inc. for a three- story, 122 studio -room hotel, Development Services Department Case No. CUP 97 -002, to be located on a site on the north side of East Santa Clara Street bounded on the west side by the Santa Anita Wash, on the north side by the Foothill Freeway, and on the east side by a one -acre vacant remainder parcel, which property is commonly known as 401 East Santa Clara Street, and more particularly described in Exhibit "A ". WHEREAS, a public hearing was held on March 25, 1997, at which time all interested persons were given full opportunity to be heard and to present evidence; NOW, THEREFORE, THE PLANNING COMMISSION OF THE CITY OF ARCADIA HEREBY RESOLVES AS FOLLOWS: SECTION 1.. That the factual data submitted by the Development Services Department in the attached staff reportare true and correct. SECTION 2. This Commission finds: A. That the evaluation of the environmental impacts as set forth in the initial study are appropriate and that the project will have no significant effect upon the environment within the meaning of the California Environmental Quality Act of 1970, and, when considering the project as a whole, there was no evidence before the City that the proposed project would have any potentially adverse effect on wildlife resources or the habitat upon which wildlife depends, and therefore, the Negative Declaration was approved. B. That the .granting of the Conditional Use Permit will not be detrimental to the public health or welfare, nor injurious to the property or improvements in such zone or vicinity in which the property is located. C. That the use applied for at the location indicated is properly one for which a Conditional Use Permit is authorized. D. That the site for the proposed use is adequate in size and shape to accommodate said use, and all yards, .spaces, walls, fences, parking, loading, landscaping, and other features required to adjust said use with the land and uses in the neighborhood. E. That the site abuts streets and highways adequate in width and pavement type to carry the kind of traffic generated by the proposed use. F. That the granting of Conditional Use Permit will not adversely affect the comprehensive general plan. SECTION 3. That for the foregoing reasons this Commission grants a Conditional Use Permit for a three- story, 122 studio -room hotel upon the following conditions: 1. The hotel, accessory improvements, and the site shall be maintained and operated in a manner that is consistent with the proposal and plans submitted and approved for CUP 97 -002, and shall include, but not be limited to, the following provisions: a. 24 -hour, on -site management shall be .provided; b. Fencing and other enclosures on the property shall be wrought iron or masonry with a decorative finish, except for the fencing along the freeway right -of -way. c. A detailed landscaping and irrigation plan shall be prepared for both the project site and the remainder parcel by a licensed landscape architect and shall be subject to approval by the Development Services. Department. 2. CUP 97 -002 is specifically for a transient hotel use. Guest occupants shall re- register every 30 -days in the event that their length of stay will exceed 30 consecutive days. The applicant and property owner shall execute and record a legal instrument - 2 - 1545 precluding conversion of the project into a residential use. This legal instrument shall be prepared by and approved by the City Attorney. 3. The items listed in the August 28, 1996 memorandum from the Acting City Engineer are to be complied with to the satisfaction of the Engineering Division including . the revisions indicated on the response dated February 25, 1997. 4. All local code requirements regarding accessibility, fire protection, occupancy, and safety shall be complied with to the satisfaction of Building Services and the Fire Department. 5. Water services, as listed in the February 27, 1997 memorandum from the Maintenance Services Division shall be complied with to the satisfaction of the Arcadia Water Division. 6. Approval of CUP 97 -002 shall not take effect until the property owner and applicant have executed and filed the Acceptance Form from the Development Services Department to indicate acceptance of the conditions of approval. 7. All conditions of' approval shall be complied with prior to completion and occupancy of the hotel. Noncompliance with the plans and conditions of CUP 97 -002 shall constitute grounds for suspension and/or revocation of any approvals in accordance with Section 9275.2.15 of the Arcadia Municipal Code, which could result in a temporary and/or permanent closing of the hotel. SECTION 4. The decision, fmdings.and conditions of approval contained in this Resolution reflect the Planning Commission's action of March 25, 1997 by the following vote: AYES: .Commissioners Bell, Bruckner, Huang, Kalemkiarian, Murphy and Sleeter NOES: None ABSENT: None ABSTAIN: None 3 " 1545 SECTION 5. The Secretary shall certify to the adoption of this Resolution and shall cause a copy to be forwarded to the City Council of the City of Arcadia. I HEREBY CERTIFY that the foregoing Resolution No. 1545 was adopted at a regular meeting of the Planning Commission held on the 8th day of April, 1997 by the following vote: AYES: Commissioners Huang, Kalemkiarian,.Murphy and Sleeter NOES: None ABSENT: Commissioners Bell and Bruckner ABSTAIN: None ATTEST: Secretary, Planning Commission City of Arcadia APPROVED AS TO FORM: Michael H. Milfer, City Attorney City of Arcadia irman, Planning Commission ity of Arcadia - 4 - 1545 TITLE: OWNERSHIP MAP F. ; Ii J !( \/� \ / ■&� lil )k \ 2 § § § �,` §:§a -� 4,« &lmga §» 0 Ul \K 0 DATE: JANUARY ! S& k a I; §k 22 SCALE: 1" = 200' k § \ k \ 0 RECEIVED BY 300-foot Radius Map Subject Property —401 E. Santa Clara Street CC LL J F■ 0 0 LL W w tz 0c CC 0 ULL a CC aV LL 0 0 0 SUMMARY c OMEN., al•MIM amMIMI .1.1010 PIO z 0 SOUTHWEST NORTHWEST ELEVATION LL J 0 V. S r 4 ccc E Ei cc u,2 d0a u.a a«0 UQ ul u. O 3 agtv Rai W ca W 4 = W I— u (I)a NORTHEAST ELEVATION SOUTHEAST ELEVATION 4:. 11.4.C. %SLUM ------- • C..) • 0-( f".4 -NC U a.) cL CI) , = U >- 0 LL. uJ cc ti a cc L• Y, < cc — < 5 o 0 F.) D 0 CITY OF ARCADIA 240 W. HUNTINGTON DRIVE ARCADIA, CA 91007 NOTICE OF EXEMPTION TO: Clerk of the Board of Supervisors or County Clerk County of: Los Angeles FROM: City of Arcadia 240 W. Huntington Drive Arcadia, CA 91007 1. Project Title: Conditional Use Permit No. CUP 12 -02 2. Project Location — Identify street address and 1 401 E. Santa Clara Street - Extended Stay America cross streets or attach a map showing project site ! between N. Second Avenue and N. Fifth Avenue (preferably a USGS 15' or 7 1/2' topographical map identified by quadrangle name): 3. (a) Project Location — City: I Arcadia (b) Project Location — County: 1 Los Angeles 4. Description of nature, purpose, and beneficiaries ' Amendment to an existing Conditional Use Permit (CUP of Project: ! 97 -002) to revise the operational conditions of approval - benefits the hotel at this location and the City of Arcadia 5. Name of Public Agency approving project: Arcadia Planning Commission 6. Name of Person or Agency carrying out project: HVM, LLC - Property Owner 7. Exempt status: (check one) (a) ❑ Ministerial project. (b) ❑ Not a project. (c) ❑ Emergency Project. (d) I1 Categorical Exemption. State type and class number: % Operations of an existing facility - Class 1 (Section 1530] ) (e) ❑ Declared Emergency. (f) ❑ Statutory Exemption. State Code section number: (g) ❑ Other. Explanation: 8. Reason why project was exempt: Involves the operations of an existing facility - Class 1 Categorical Exemption 9. : Jim Kasama, Community Development Administrator Contact Person: Telephone: (626) 574 -5423 n errarh pretiminary Exemption Assessment (Form "A ") before filing. Date Received for Filing: (Clerk Stamp Here) Sig re (Lc�'a gency Representative) g,imuniiy Pnrclloop1v1014- 4,10;vt 51-1- Notice of Exemption \2011 FORM "B" March 27, 2012 BY HAND DELIVERY Members of the City of Arcadia Planning Commission 240 W. Huntington Drive Arcadia, CA 91066 MAYER.BROWN MAR 7, 7 2012 Pfennlnc Services r City of Arcadia Re: CUP 12 -02 (Amendment to CUP 97 -002 for Extended Stay America hotel at 401 E. Santa Clara Street) Mayer Brown LLP " 350 South Grand Avenue 25th Floor Losngeles, California 90071 -1503 Main Tel +1 213 229 9500 Main Fax +1 213 625 0248 www.mayerbrown.com Timothy B. McOsker Direct Tel +1 213 229 5102 Direct Fax +1 213 576 8130 trncosker @mayerbrown.com Honorable Members of the Planning Commission: This office represents HVM L.L.C. in connection with Conditional Use Permit Application No. CLJP 12 -02 for property located at 401 E. Santa Clara Street. We seek to amend and revise some of the operational conditions in existing CUP 97 -002 for the Extended Stay America -hotel at that address ( "Extended Stay "). Approving the amendments will facilitate Extended Stay's continued operations in Arcadia, while allowing both the hotel and the City to comply with applicable state and local law. Extended Stay has been in business in Arcadia for nearly fifteen years, and hopes to continue doing so for many years to come. We appreciate the work of your staff and the recommendation that CUP Application 12- 02 be approved. Indeed, for the past several months, Extended Stay, the City Attorney's office and City staff have collaborated over these proposed amendments. Extended Stay and the City are, therefore, already in agreement on virtually all of the revisions to the CUP conditions before you today. The most significant of these is Condition No. 2, addressing the hotel's compliance with the City's current transient occupancy tax regulations ( "TOT ").1 This amendment permits Extended Stay to accommodate its longer -term guests without engaging in unnecessary re- registration of these guests every 30 days, while preserving the provisions which guarantee that the hotel may not be used for residential purposes. Under this revised condition, Extended Stay will still collect and pay the TOT to the City, in accordance with the law, as may be amended by the City. Extended Stay is also in agreement with the City as to the conditions defining the use of the hotel after sale or transfer of the property. However, Extended Stay recommends a different approach to the indemnification issue in proposed Condition No.10. While the more recent policy of the City is to always require an indemnification in a CUP, the current CUP 97 -002 for this site includes no indemnification. We As you are aware, the relevant TOT regulations are set for a public vote by ballot on April 10, 2012. Mayer Brown LLP operates in combination with other Mayer Brown entities with offices in Europe and Asia and is associated with Tauil & Chequer Advogados a Brazilian law partnership. 701415807.1 11177822 Mayer Brown LLP City of Arcadia Planning Commission March 27, 2012 Page 2 understand and agree with the new policy, but we think it is unfair to ask Extended Stay to indemnify the City for litigation which was already filed prior to our request for an amendment. Rather, Extended Stay would agree to indemnify the City for any and all claims arising after the date that CUP 12 -02 is approved. However, as both Extended Stay and the City are (and have been) vigorously defending themselves in the pending lawsuit of Alex Spencer, et al. v. HVM L.L.C. Management Co. d/b /a Extended Stay Hotels, et al., Extended Stay does not believe it necessary or proper to indemnify the City in this ongoing litigation. Additionally, the agreed - upon amendment to Condition No. 2 addresses the central issue in the Spencer suit. This amendment is mutually beneficial to Extended Stay and the City, and limits both parties' potential exposure in the litigation, if there is any exposure. Accordingly, Extended Stay requests that proposed Condition No.10 be revised as follows: "Except in the matter of Alex Spencer, et al. v. HVM L.L.C. Management Co. d/b /a Extended Stay Hotels, et al., Los Angeles County Superior Court Case No. GC047629, the applicant shall defend, indemnify, and hold harmless the City of Arcadia, its agents, officers or employees from any claim, action or proceeding against the City or its agents, officers or employees to attack, set aside, void or annul an approval or modification of the subject application by the City, its legislative body, advisory agencies or administrative officers. The City will promptly notify the applicant of any such claim, action or proceeding against the City and the applicant will either undertake defense of the matter and pay the City's associated reasonable legal costs, or will advance funds to pay for defense of the matter by the City Attorney. A decision to undertake the defense of the matter shall be at the sole and absolute discretion of the City of Arcadia. Notwithstanding anything to the contrary, in the matter of Alex Spencer, et al. v. HVM L. LC. Management Co. d /b /a Extended Stay Hotels, et al., Los Angeles County Superior Court Case No. GC047629, there is no indemnification or defense condition upon the applicant; the parties shall bear their own costs and fees in defense in that matter; and each party shall be responsible for its own costs and fees resulting from settlement, adjudication, or other resolution of the case." Again, we note that even with this revision to the indemnification condition, Extended Stay would provide indemnification and defense for future matters that the City now typically requires in its CUPs. 701383982.1 11177822 701415807.1 11177822 Mayer Brown LLP City of Arcadia Planning Commission March 27, 2012 Page 3 Thank you for your attention to this issue. ely. (>i/t Timothy B. IVt cOsker cc: Marco Martinez, Best, Best & Krieger LLP 701383982.1 11177822 701415807.1 11177822 RESOLUTION NO. 1851 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF ARCADIA, CALIFORNIA, APPROVING CONDITIONAL USE PERMIT NO. CUP 12 -02 TO REVISE THE OPERATIONAL CONDITIONS OF APPROVAL OF THE CONDITIONAL. USE PERMIT (CUP 97 -002/ RESOLUTION NO. 1545) THAT APPROVED THE EXISTING HOTEL AT 401 EAST SANTA CLARA STREET. WHEREAS, on February 17, 2012, an application was filed by Timothy B. McOsker of Mayer Brown LLP as representative for the applicant, HVM L.L.C. to revise the operational conditions of approval of Conditional Use Permit No. 97- 002 (Planning Commission Resolution No. 1545) that approved the existing, three -story, 122 studio -room hotel that was constructed in 1998 at 401 East Santa Clara Street, Development Services Department Case No. CUP 12 -02; and WHEREAS, a public hearing was held by the Planning Commission on March 27, 2012, at which time all interested persons were given full opportunity to be heard and to present evidence. NOW, THEREFORE, THE PLANNING COMMISSION OF THE CITY OF ARCADIA RESOLVES AS FOLLOWS: SECTION 1. That the factual data submitted by the Development Services Department in the staff report dated March 27, 2012 are true and correct. SECTION 2. This Commission finds: 1. That the granting of such Conditional Use Permit will not • be detrimental to the public health or welfare or injurious to the property or improvements in such zone or vicinity. The proposed revisions to the operational conditions of approval are consistent with the intended and existing commercial use of the property and will not have any adverse impacts to the neighboring businesses or properties. 2. That the use applied for at the location indicated is properly one for which a Conditional Use Permit is authorized. Per Sections 9260.1.12.7 and 9275.1.50 of the Arcadia Municipal Code, hotels are allowed in the CPD -1 zone subject to the approval of a Conditional Use Permit. The existing hotel was approved by Conditional Use Permit No. CUP 97 -002 (Planning Commission Resolution No. 1545). 3. That the site for the proposed use is adequate in size and shape to accommodate said use, and all yards, spaces, walls, fences, parking, loading, landscaping, and other features required to adjust said use with the land and uses in the neighborhood. The site is adequate for the existing hotel. Any necessary adjustments to the existing facility since its development have been readily accommodated. 4. That the site abuts streets and highways adequate in width and pavement type to carry the kind of traffic generated by the proposed use. The site is accessed via East Santa Clara Street, which is a collector street with two, undivided traffic lanes; one in each direction, and is adequate for the traffic demand of the existing use. 5. That the granting of such Conditional Use Permit will not adversely affect the comprehensive General Plan. The existing hotel is a commercial use that is consistent with the General Plan Land Use Designation of the site. - 2 - 1851 SECTION 3. That for the foregoing reasons this Commission grants Conditional Use Permit No. CUP 12 -02 to revise the operational conditions of approval of Conditional Use Permit No. 97 -002 (Planning Commission Resolution No. 1545) for the existing, three -story, 122 studio -room hotel at 401 East Santa Clara Street; such that the conditions are now as follows: 1. The hotel, accessory improvements, and the site shall be maintained and operated in a manner that is consistent with the proposal and plans submitted and approved for CUP 97 -002, and shall include, but not be limited to, the following provisions: a. 24 -hour, on -site management shall be provided; b. Fencing and other enclosures on the property shall be wrought iron or masonry with a decorative finish, except for the fencing along the freeway right- of-way; c. A detailed landscaping and irrigation plan shall be prepared for both the project site and the remainder parcel by a licensed landscape architect and shall be subject to approval by the Development Services Department. (This condition has been satisfied.) 2. CUP 97 -002 is specifically for a transient hotel use only. The hotel shall not be used for permanent housing. The operator shall collect and remit the Transient Occupancy Tax to the fullest extent authorized by law, as may be amended from time to time. The applicant shall execute and record a legal instrument precluding conversion of the project into a residential use. Reasonable expenses and costs in connection with the preparation of the legal 3 - 1851 instrument shall be paid for by the Applicant, and the legal instrument shall be prepared by and approved by the City Attorney. 3. The items listed in the August 28, 1996 memorandum from the Acting City Engineer are to be complied with to the satisfaction of the Engineering Division, including the revisions indicated on the response dated February 25, 1997. (This condition has been satisfied.) 4. All local code requirements regarding accessibility, fire protection, occupancy, and safety shall be complied with to the satisfaction of Building Services and the Fire Department. 5. Water services, as listed in the February 27, 1997 memorandum from the Maintenance Services Division shall be complied with to the satisfaction of the Arcadia Water Division. (This condition has been satisfied.) 6. Approval of the amendments to CUP 97 -002 shall not take effect until the property owner and applicant have executed and filed the Acceptance Form from the Development Services Department to indicate acceptance of the conditions of approval. 7. All conditions of approval shall be complied with and maintained at all times. Noncompliance with the plans and conditions of CUP 12 -02 shall constitute grounds for suspension and /or revocation of any approvals in accordance with Section 9275.2.15 of the Arcadia Municipal Code, which could result in a temporary and /or permanent closing of the hotel. 8. This Conditional Use Permit applies to all subsequent hotel uses. The applicant may not assign or attempt to assign the authorized uses on the property, nor make any total or partial sale, transfer, conveyance or assignment - 4 - 1851 of the whole or any part of the Extended Stay America Hotel use or the improvements thereon, without notification to the Arcadia Redevelopment Agency, or its successor entity, and without informing subsequent purchasers or operators of the requirements of this Conditional Use Permit. 9. The applicant covenants and agrees for itself, its successors, its assigns and all voluntary and involuntary successors in interest to the subject parcel, project, or any part thereof, that (i) such use shall be for a quality reputable extended stay hotel, including ancillary uses located within the hotel; (ii) the subject property and exterior (including all landscaped areas) and interior portions of the project shall be maintained in a first -class condition and in accordance with the standards of the City's municipal code; (iii) the project shall be marketed and advertised to the business community and shall provide weekly maid service; and (iv) neither the project nor subject parcel shall be used for permanent housing. 10. The applicant shall defend, indemnify, and hold harmless the City of Arcadia, its agents, officers or employees from any claim, action or proceeding against the City or its agents, officers or employees to attack, set aside, void or annul this approval and modification of the subject application whether such challenge is against the City, its legislative body, advisory agencies or administrative officers. The City will promptly notify the applicant of any such claim, action or proceeding against the City and the applicant will either undertake defense of the matter and pay the City's associated reasonable legal costs, or will advance funds to pay for defense of the matter by the City 5 - 1851 Attorney. A decision to undertake the defense of the matter shall be at the sole and absolute discretion of the City of Arcadia. G7riSivi3 While this indemnification provision does not apply to any claim or case filed prior to this application, INCLUDING THE SPENCER MATTER DESCRIBED BELOW, applicant further agrees that this provision shall not be construed as a limitation on the applicant and the City later entering into an indemnification, defense, or other mutual agreement relating to the matter of Alex Spencer, et al. v. HVM L.L.C. Management Co. d /b /a Extended Stay Hotels, et al., Los Angeles County Superior Court Case No. GC047629. SECTION 4. The Secretary shall certify to the adoption of this Resolution. Passed, approved and adopted this day of , 2012. ATTEST: Chairman, Planning Commission Secretary, Planning Commission APPROVED AS TO FORM: Stephen P. Deitsch, City Attorney 6 _ 1851