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444aiiy aft STAFF REPORT
Development Services Department
DATE: June 19, 2012
TO: Honorable Mayor and City Council
FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director
By: Jim Kasama, Community Development Administrator
SUBJECT: A CONTINUED PUBLIC HEARING FOR A COUNCILMEMBER
CALL UP FOR REVIEW OF ARCADIA PLANNING COMMISSION
APPROVAL OF CONDITIONAL USE PERMIT APPLICATION NO.
CUP 12-02 TO REVISE THE OPERATIONAL CONDITIONS OF
APPROVAL OF CONDITIONAL USE PERMIT 97-002 THAT
APPROVED THE EXISTING EXTENDED STAY AMERICA HOTEL
AT 401 EAST SANTA CLARA STREET
Recommended Action: Overturn the Planning Commission's
decision and adopt the Amendment to CUP 97-002 with the
original Conditions of Approval
SUMMARY
Conditional Use Permit Application No. CUP 12-02 was filed to revise the
operational Conditions of Approval for the existing Extended Stay America hotel at
401 E. Santa Clara Street. The Planning Commission conditionally approved the
application at their April 24, 2012, meeting. That decision was called up for full
City Council consideration by Council Member John Wuo on April 30, 2012. At the
June 5, 2012, City Council meeting, a public hearing was opened for the City
Council to consider Conditional Use Permit Application No. CUP 12-02. Attached
are the June 5, 2012, staff report and the letter that the Applicant distributed to the
City Council. After discussion, the public hearing was continued to the City
Council's next meeting for the City Attorney to prepare additional language for the
condition of approval regarding indemnification.
It is recommended that the City Council overturn the Planning Commission's
decision and adopt the Amendment to CUP 97-002 with the original Conditions of
Approval as recommended by the City Attorney.
DISCUSSION
Conditional Use Permit Application No. CUP 12-02 was filed to primarily clarify the
applicability of the City's transient occupancy tax (TOT). In particular, to address a
Appeal—CUP 12-02—Continuance
Extended Stay America
401 E. Santa Clara Street
June 19, 2012—page 2
provision that requires hotel guests to re-register every 30 days if their length of
stay will exceed 30 consecutive days. Additionally, two (2) new conditions are
being added to, replace provisions of the Redevelopment Agency Disposition and
Development Agreement. These are Conditions No. 8 and 9 of the attached
Planning Commission Resolution No. 1851. Furthermore, a new Condition No. 10,
regarding indemnification is to be added. It is this condition that is under
discussion, and for which additional language was requested of the City Attorney.
Condition No. 10, as approved by the Planning Commission, reads as follows:
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
Attorney. A decision to undertake the defense of the matter shall be at
the sole and absolute discretion of the City of Arcadia.
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 City Council, at the June 5, 2012, public hearing, directed the City Attorney to
provide additional language that would preclude the Applicant from filing any
claims against the City, regardless of the result of the litigation. The City Attorney
has drafted the following to be added to Condition No. 10:
Furthermore, and notwithstanding any provision herein to the
contrary, neither the applicant nor any person or entity affiliated with the
applicant shall file any claim, cross-claim, complaint, or cross-complaint
(collectively, "Extended Stay Claims") against the City and/or its
officials, officers, employees or agents (collectively, "City Parties")
pertaining to any fact or issue involved in or which gave rise to said
litigation, and the applicant shall indemnify and defend the City Parties
for and against any such Extended Stay Claims.
Appeal—CUP 12-02—Continuance
Extended Stay America
401 E. Santa Clara Street
June 19, 2012—page 3
RECOMMENDATION
It is recommended that the City Council overturn the Planning Commission's
decision and adopt the Amendment to CUP 97-002 with the original Conditions of
Approval recommended by the City Attorney.
Approved:
Dominic Lazza
City Manager
Attachments:
June 5, 2012 City Council Staff Report with the following attachments:
Aerial Photo with Zoning Information
Photos of Subject Property
Plans of Subject Property
Planning Commission Resolution No. 1545
March 27, 2012 Planning Commission Staff Report
March 27, 2012 Planning Commission Minutes Excerpt
April 24, 2012 Planning Commission Staff Report
April 24, 2012 Planning Commission Minutes Excerpt
March 27, 2012 Letter from Applicant
Planning Commission Resolution No. 1851
Notice of Exemption
June 5, 2012 Letter from Applicant
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Development Services Department
DATE: June 5, 2012
TO: Mayor and City Council
FROM: Jason Kruckeberg, Assistant City Manager/Development Services Directory=
By: Jim Kasama, Community Development Administrator
Prepared By: Tim Schwehr, Assistant Planner F
SUBJECT: A COUNCILMEMBER CALL UP FOR REVIEW OF ARCADIA
PLANNING COMMISSION APPROVAL OF CONDITIONAL USE
PERMIT APPLICATION NO. CUP 12-02 TO REVISE THE
OPERATIONAL CONDITIONS OF APPROVAL OF CONDITIONAL
USE PERMIT 97-002 THAT APPROVED THE EXISTING
EXTENDED STAY AMERICA HOTEL AT 401 EAST SANTA CLARA
STREET
Recommended Action: Overturn the Planning Commission's
decision and adopt the Amendment to CUP 97-002 with the
original Conditions of Approval
SUMMARY
Conditional Use Permit (CUP) 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.
Extended Stay America is currently involved in litigation relating to its collection of
the City's transient occupancy tax (TOT). In order to clarify the method of applying
the TOT, the Applicant submitted Conditional Use Permit Application No. CUP 12-
02 to revise the operational Conditions of Approval by which the existing hotel was
approved. Included in the new Conditions of Approval are provisions for
indemnification by the Applicant, to which the Applicant disagrees.
The Planning Commission, at their April 24, 2012, meeting approved Conditional
Use Permit Application No. CUP 12-02 with indemnification provisions that do not
provide as much protection for the City as was recommended by the City Attorney,
and on April 30, 2012, Council Member. John Wuo called up for review the
Planning Commission decision for purposes of full City Council consideration of
the matter.
Appeal — CUP 12-02
Extended Stay America
401 E. Santa Clara Street
June 5, 2012 — page 2
It is recommended that the City Council overturn the Planning Commission's
decision and adopt the Amendment to CUP 97-002 with the original Conditions of
Approval recommended by the City Attorney.
BACKGROUND,
The subject property, 401 East Santa Clara Street, 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 and the
Conditions of Approval were imposed by the adoption of the attached Planning
Commission Resolution No. 1545.
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
revised Conditions add protections for the City from claims and actions, reinforce
the original Conditions of Approval that this hotel will not provide permanent
housing, and that the property will be maintained to high standards and in
accordance with the City's property maintenance requirements.
The issue when Conditional Use Permit Application No. CUP 12-02 was filed was
primarily the clarification of the method by which the City's transient occupancy tax
(TOT) was applied. This was in response to an action by former customers
regarding their payment of the TOT, and the proposed revisions to the Conditions
of Approval are part of Extended Stay America's efforts to resolve the legal
dispute.
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 comply with the City's current TOT regulations, even if later
amended. On April 10, 2012, the voters approved an amendment to the City's
TOT regulations that extended the period of occupancy subject to the TOT from 30
days to 90 days. Extended Stay America will comply with this amended
regulation.
The Planning Commission considered Conditional Use Permit Application No.
CUP 12-02 at its March 27, 2012, meeting, and continued the hearing to its April
24, 2012, meeting to have staff revise a proposed Condition of Approval. The
March 27, 2012, and April 24, 2012, Planning Commission staff reports and
minutes are attached. The additional Condition at issue is for indemnity
provisions. The City Attorney recommended an indemnity provision that would be
applicable to all future and current claims and actions retroactive to the original
Conditional Use Permit approval in 1997. The applicant questioned the fairness of
the retroactive aspect of the indemnity requirement, and the Planning Commission
Appeal — CUP 12-02
Extended Stay America
401 E. Santa Clara Street
June 5, 2012 —page 3
requested that the condition be revised to be applicable to claims and actions
based on the amended Conditional Use Permit. That revised condition was
presented at the continuance of the public hearing on April 24, 2012, and the
Planning Commission approved Conditional Use Permit Application No. CUP 12-
02, and adopted the attached Planning Commission Resolution No. 1851. On
April 30, 2012, Council Member Wuo called up for review the Planning
Commission decision for purposes of full City Council consideration of the matter.
DISCUSSION
Conditional Use Permit Application No. CUP 12-02 was filed to primarily clarify the
applicability of the City's transient occupancy tax (TOT). In particular, to address
the second sentence (underlined) of Condition No. 2 of CUP 97-002, which reads
as follows:
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 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 in an effort to resolve the legal
dispute, the Applicant proposed that this condition be amended to 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 discussions for resolving the legal dispute, the prospect
Appeal —CUP 12-02
Extended Stay America
401 E. Santa Clara Street
June 5, 2012— page 4
of the elimination of redevelopment arose, and because of that possibility, the
Applicant, in cooperation with the City Attorney, included two (2) new conditions to
replace the provisions of the DDA. These are Conditions No. 8 and 9 of the
attached Planning Commission Resolution No. 1851.
Furthermore, the Applicant included an indemnification provision. This was
included because indemnification is generally required for all Conditional Use
Permits, but it was not a requirement of CUP 97-002 when the subject hotel was
initially approved. The Applicant's indemnification proposal read as follows:
10. 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 bf 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.L.C. 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.
The City Attorney, in order to better protect the City from present and any future
claims and actions related to this hotel and Conditional Use Permit, recommended
the following indemnification provisions in place of the applicant's proposal:
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
Appeal — CUP 12-02
Extended Stay America
401 E. Santa Clara Street
June 5, 2012 —page 5
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
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.
At the regular meeting on March 27, 2012, the Planning Commission considered
Conditional Use Permit Application No. CUP 12-02 at a public hearing, and the
applicant presented the attached letter regarding the indemnification requirement.
After receiving additional testimony and discussion, the Planning Commission
continued the public hearing to its April 24, 2012, meeting and directed staff to
revise Condition No. 10 to remove the retroactive aspects of the indemnification
provisions.
In response to the Planning Commission's direction, the City Attorney and the
Applicant reviewed the language of the indemnification provisions, and the
following was submitted for the Planning Commission to consider at their April 24,
2012, meeting:
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
Appeal — CUP 12-02
Extended Stay America
401 E. Santa Clara Street
June 5, 2012—page 6
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.
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 City Attorney's recommendation, however, was that the indemnification
provisions should be those originally drafted by his office; that is, retroactively
applicable to the 1997 approval of the initial Conditional Use Permit.
Prerequisite Conditions
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.
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 the existing hotel. Any
Appeal —CUP 12-02
Extended Stay America
401 E. Santa Clara Street
June 5, 2012 — page 7
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.
Based on the foregoing, the existing hotel and the proposed operational revisions
satisfy each of the prerequisite findings.
PLANNING COMMISSION ACTION
Despite the City Attorney's recommendation that the indemnification provisions
should be those originally drafted by his office, the Planning Commission voted
unanimously on April 24, 2012, to approve Conditional Use Permit Application No.
CUP 12-02 and adopt the attached Planning Commission Resolution No. 1851 to
revise the operational Conditions of Approval of the hotel at 401 E. Santa Clara
Street as proposed by the Applicant, including the aforementioned, non-retroactive
indemnification provisions.
ENVIRONMENTAL ASSESSMENT
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.
FISCAL IMPACT
The fiscal impacts of whether the indemnification provisions are retroactive to
1997, or are to be applied from the approval of Conditional Use Permit No. CUP
12-02 are indeterminable. If the indemnification provisions are not retroactive, the
City will likely be liable for some part of the current litigation, but otherwise, it is not
possible to foretell if there will be any other claims or actions involving the subject
hotel and the City on issues arising from hotel operations prior to the approval of
CUP 12-02. With the indemnifications proposed by the City Attorney, the City
would be shielded from any and all claims, including the present case and any
future claims based on either past, current, or future activity.
Appeal —CUP 12-02
Extended Stay America
401 E. Santa Clara Street
June 5, 2012 — page 8
RECOMMENDATION
It is recommended that the City Council overturn the Planning Commission's
decision and adopt the Amendment to CUP 97-002 with the original Conditions of
Approval recommended by the City Attorney.
Approved:
Dominic Lazzar
City Manager
Attachments: Aerial Photo with Zoning Information
Photos of Subject Property
Plans of Subject Property
Planning Commission Resolution No. 1545
March 27, 2012 Planning Commission Staff Report
March 27, 2012 Planning Commission Minutes Excerpt
April 24, 2012 Planning Commission Staff Report
April 24, 2012 Planning Commission Minutes Excerpt
March 27, 2012 Letter from Applicant
Planning Commission Resolution No. 1851
Notice of Exemption
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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 report'are 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 hi 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 the 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:
I. 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, findings.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
41101A-_ ..4_4161...
el . I an,Planning Commission
ity of Arcadia
ATTEST:
410r ....001""
Alt.„...4,2 - ..„..-.400111_, . --
Secretary,Planning Commission
City of Arcadia
APPROVED AS TO FORM:
??1.1 6;ziiff xg-e_____
Michael H. Miller,City Attorney
City of Arcadia
- 4- 1545
or ARC •
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il;J STAFF REPORT
,.icy.
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-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 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. at 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 staffs 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(c�ci.arcadia.ca.us.
Approved by:
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
\,
MINUTES
;',°'. - Excerpt -
-titt-t• ,. ARCADIA PLANNING COMMISSION
�yAly oR Tuesday, March 27, 2012, 7:00 P.M.
Arcadia City Council Chambers
PUBLIC HEARINGS
1. CONDITIONAL USE PERMIT NO. CUP 12-02
401 E. Santa Clara Street— Extended Stay America
Timothy B. McOsker of Mayer Brown, LLP — Representing HVM, LLC
The applicant is requesting an amendment to Conditional Use Permit No. CUP 97-002
(Arcadia Planning Commission Resolution No. 1545) to revise the operational conditions of
approval.
RESOLUTION NO. 1851
A Resolution of the Planning Commission of the City of Arcadia, California, approving
Conditional Use Permit No. CUP 12-02
RECOMMENDATION: Conditionally approve Conditional Use Permit No. CUP 12-02
Mr. Kasama presented the staff report.
Chairman Baerg asked how this Conditional Use Permit is related to the lawsuit. Mr.
Kasama explained that the lawsuit has to do with the applicability of the City's transient
occupancy tax and the condition requiring guests to re-register every thirty days. He said
that this Amendment is proposed as a means of clarifying the requirement and resolving the
lawsuit.
Chairman Baerg asked if anyone would like to speak in favor of this project.
Mr. Tim McOsker, of Mayer Brown, LLP, represented the applicant. He referred to his letter
dated March 27, 2012, wherein he outlined his client's situation and stated agreement with
most of the terms of the Amendment. He explained that the lawsuit filed against his client
and the City alleges that the 30-day re-registration requirement conflicts with Civil Code Sec.
1940.1 which is designed to protect tenancy rights after 30 days, but not to prevent
compliance with Transient Occupancy Tax regulations. At this point, Mr. McOsker
explained, no one knows if there will be any liability resulting from the lawsuit. However, his
client is opposed to the indemnification condition included in the draft Resolution. He noted
that when the original CUP was approved, approximately 15 years ago, indemnification was
not required and, therefore, not included in the original conditions. Mr. McOsker explained
that his client is agreeable to the application of an indemnification condition for the future,
but not on a retroactive basis.
Commissioner Chiao asked about the status of the litigation. Mr. McOsker explained that
the lawsuit is in a very early stage and little has been done to date. Commissioner Chiao
asked if Mr. McOsker expects that there will be additional plaintiffs, and Mr. McOsker said
yes, but he couldn't predict how many.
Mr. McOsker explained that the purpose of the proposed amendment is to modify the
controlling document, which is the original CUP and that by doing so; the CUP would more
closely conform to the Arcadia Municipal Code.
Commissioner Beranek asked what is at the root of this suit, and Mr. McOsker explained
that there is a collection of people who object to the requirement to pay the Transient
Occupancy Tax after thirty days.
Chairman Baerg asked if anyone would like to speak in opposition to this project.
There were none.
MOTION
It was moved by Commissioner Baderian, seconded by Commissioner Parrille to close the
Public Hearing. Without objection the motion was approved.
Mr. Martinez explained that the applicant accepted the conditions and benefits of the original
Conditional Use Permit and that it is fair for the City to impose retroactive indemnification.
He said there is also a clause stating that the City would be willing to consider another
approach if a settlement is reached. However, at this point, the City Attorney's office
recommends including the indemnification clause as drafted.
Chairman Baerg asked if approval of the Amendment with all recommendations, particularly
No. 10, would unilaterally impose the indemnification clause on the applicant. Mr. Martinez
said that is correct, but that the applicant would have the option to appeal the decision to the
City Council.
Commissioner Chiao said that he also finds the retroactive indemnity clause to be a little
strong, but that in looking forward, a standard indemnification clause would benefit the City.
Chairman Baerg agreed, stating that he is not in favor of retroactive indemnification for the
existing lawsuit but, would support a standard indemnification clause. Commissioner
Beranek agreed.
Commissioner Baderian suggested asking the City Attorney for a revision of Condition 10 of
the Amendment regarding indemnification. He suggested reviewing the proposed revision
at the April 24 Planning Commission meeting.
MOTION
It was moved by Commissioner Baderian, seconded by Commissioner Chiao to reopen the
public meeting and continue Conditional Use Permit No. CUP 12-02 to April 24, 2012.
ROLL CALL
AYES: Commissioners Baderian, Beranek, Chiao, Parrille and Baerg
NOES: None
Arcadia Planning Commission— Minutes Excerpt—March 27, 2012 Page 2 of 2
of ARC
nj
�cr
op.
C.4 o>t9��3�
IucurpuruluJ �
Au„oe[5,IMl
rn4nlrp of MEMORANDUM
Development Services Department
DATE: April 24, 2012
TO: Arcadia Planning Commission
FROM: Jim Kasama, Community Development Administrator
By: Tim Schwehr, Assistant Planner
SUBJECT: 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.
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(a ci.arcadia.ca.us.
Approved by:
Jima, asama
C,( munity 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
MINUTES
Excerpt
,-
¢Ija, ARCADIA PLANNING COMMISSION
ma°°��, Tuesday, April 24, 2012, 7:00 P.M.
Arcadia City Council Chambers
PUBLIC HEARINGS
1. CONDITIONAL USE PERMIT NO. CUP 12-02
401 E. Santa Clara Street— Extended Stay America
Timothy B. McOsker of Mayer Brown, LLP — Representing HVM, LLC
Continued from March 27, 2012
The applicant is requesting an amendment to Conditional Use Permit No. CUP 97-002
(Arcadia Planning Commission Resolution No. 1545) to revise the operational conditions of
approval.
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.
RECOMMENDATION: Conditionally approve Conditional Use Permit No. CUP 12-02 and
adopt Resolution No. 1851
Mr. Kasama presented the staff report.
Chairman Baerg asked if anyone would like to speak in favor of this project.
Mr. Tim McOsker of Mayer Brown represented the applicant. Mr. McOsker said that the
applicant is satisfied with the changes made to the conditions of approval providing
indemnity to the City going forward except for the Spencer case which is ongoing.
Chairman Baerg asked if anyone would like to speak in opposition to this project.
There were none.
MOTION
It was moved by Commissioner Parrille, seconded by Commissioner Beranek to close the
Public Hearing. Without objection the motion was approved.
Commissioner Beranek asked Mr. Deitsch if he would like to add a comment.
•
Mr. Deitsch explained that he continues to recommend the original language of condition 10
as presented at the March 27 meeting but that the Commission has the option to amend it
and approve the revised version.
MOTION
It was moved by Commissioner Baderian, seconded by Commissioner Parrille to approve
Conditional Use Permit No. CUP 12-02 subject to the conditions in tonight's staff report and
to adopt Resolution 1851.
ROLL CALL
AYES: Commissioners Baderian, Beranek, Chiao, Parrille and Baerg
NOES: None
•
Arcadia Planning Commission — Minutes Excerpt—April 24, 2012 Page 2 of 2
•
MAYER ' BROWN
Mayer Brown LLP
350 South Grand Avenue
25th Floor
�m`,.
p ��� ."\ s ,X Los ngeles,California 90071-1503
_G._ €�.;
Main Tel+1 213 229 9500
March 27, 2012 Main Fax+1 213 625 0248
www.mayerbrown corn
BY HAND DELIVERY MAR 2 7 2012
Timothy B.NicOsker
Direct Tel+1 213 229 5102
Members of the Et 1 ` Services Direct Fax+1 213 576 8130
. City of Arcadia Planning Commission tmcosker @mayerbrown.com
240 W. Huntington Drive 6 City r`ity of Arcadia
Arcadia, CA 91066
Re: CUP 12-02 (Amendment to CUP 97-002 for
Extended Stay America hotel at 401 E. Santa Clara
Street)
Honorable Members of the Planning Commission:
This office represents HVM L.L.C. in connection with Conditional Use Permit
Application No. CUP 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").' 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
I 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.L.C. 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.
, :je
(rely,
jA,
Timothy B.1.•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, and a continued public hearing was held by the Planning
Commission on April 24, 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 reports dated March 27, 2012 and April 24,
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.
While this indemnification provision does not apply to any claim arising 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 24th day of April, 2012.
Chairman, Planning Commission
ATTEST:
SecrP,t y, Planning Commission
APPROVED AS TO FORM:
CljTift&.,
�.
Stephen P. Deitsch, City Attorney
- 6 - 1851
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:
CITY OF ARCADIA )
I, Jim Kasama, Secretary of the Planning Commission of the City of Arcadia, hereby
certify that the foregoing Resolution No. 1851 was passed and adopted by the Planning
Commission of the City of Arcadia, signed by the Chairperson and attested to by the
Secretary at a regular meeting of said Planning Commission held on the 24th day of April,
2012 and that said Resolution was adopted by the following vote, to wit:
AYES: Commissioners Baderian, Beranek, Chiao, Parrille and Baerg
NOES: None
Se tary of the Planning Commission
�t
U
4 r CITY OF ARCADIA
h. 240 W. HUNTINGTON DRIVE
0Ilitk. '40 ARCADIA, CA 91007
o��ij•• NOTICE OF EXEMPTION
o��,otH
TO: ❑ Clerk of the Board of Supervisors FROM: City of Arcadia
or 240 W. Huntington Drive
® County Clerk Arcadia, CA 91007
County of: Los Angeles
1. Project Title: Conditional Use Permit No. CUP 12-02
2. Project Location—Identify street address and 401 E. Santa Clara Street- Extended Stay America
cross streets or attach a map showing project site
g P J ! 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: Arcadia
Los Angeles
(b) Project Location—County:
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) ❑ Categorical Exemption.
State type and class number: Operations of an existing facility -Class 1 (Section 15301)
—I
(e) ❑ Declared Emergency.
(f) ❑ Statutory Exemption.
I 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. Contact Person: i Jim Kasama,Community Development Administrator
I Telephone: ! (626)574-5423
10. Attach Preliminary Exemption Assessment(Form "A")before filing. I
Date Received for Filing: o _
Sig re(L d gency Representative)
(Clerk Stamp Here) ( low uhiiy PfYrdo},0.4-AAlire/s
Notice of Exemption\2011 FORM"B"
•
•
MA_YERt BROWN
Mayer Brown LLP
350 South Grand Avenue
25th Floor
Los Angeles,California 90071-1503
Main Tel+1 213 229 9500
June 5, 2012 Main Fax+1 213 625 0248
www.mayerbrown.com
BY HAND DELIVERY 1d if 4z• a7 "eel-7744
U Timothy B. McOsker
Direct Tel+1 213 229 5102
Mayor and Members of the Direct Fax+1 213 576 8130
Arcadia City Council tmcosker @mayerbrown.com
240 W. Huntington Drive
Arcadia, CA 91066
Re: CUP 12-02 (Amendment to CUP 97-002 for
Extended Stay America hotel at 401 E. Santa Clara
Street)/Item # 1(a) on June 5, 2012
Honorable Mayor and City Council:
This office represents HVM L.L.C. in connection with Conditional Use Permit
Application No. CUP 12-02 for property located at 401 E. Santa Clara Street. We filed the
application to amend and revise key operational conditions in existing CUP 97-002 for the
Extended Stay America hotel at that address ("Extended Stay"). The Planning Commission
unanimously approved the amendments, which facilitate Extended Stay's continued operations
in Arcadia, while allowing both the hotel and the City to comply with applicable state and local
law.
We appreciate both the work of your staff and the approval of this application by the
Planning Commission. We ask that you leave the Planning Commission's decision in place, for
the benefit of both the City of Arcadia and the Applicant.
Extended Stay and the City family have been 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"). 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 would collect and pay the TOT to the City, in accordance
with the law, which was just amended by the municipal electorate.
It is important to note, and to clarify the description set forth in the staff report, that both
the City of Arcadia and the Applicant are co-defendants in pending litigation on this TOT issue.
It is the City's condition, imposed by the current CUP, that is alleged to be illegal in the lawsuit
of Alex Spencer, et al. v. HVM L.L.0 Management Co. d/b/a Extended Stay Hotels, et al. It
appears the City agrees with the Applicant that the proper method to modify the language and
therefore address any potential liability is through this amendment.
In fact, the only difference between Extended Stay and the City, at least initially, was on
the indemnity provision. While the City's more recent policy is to always require an
indemnification in a CUP, the current CUP 97-002 never included an indemnification. We
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,
702236938.1 11177822
Mayer Brown LLP
Honorable Mayor and Arcadia City
Council
June 5, 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 has agreed to indemnify the City for any and all claims arising
after the date that CUP 12-02 is approved. As both Extended Stay and the City are (and have
been) vigorously defending themselves in the Spencer case, Extended Stay does not believe it
necessary or proper to indemnify the City in this ongoing litigation. Additionally, the agreed-
upon amendments to the CUP address the central issue in the Spencer suit. As Extended Stay
has previously expressed to the Planning Commission, these amendments will be mutually
beneficial to Extended Stay and the City, limiting both parties' potential exposure in the
litigation, and decreasing risk and liability, if any.
Accordingly, Extended Stay requested from the Planning Commission fair and equitable
treatment on the indemnity issue, and the Commission agreed. On March 27, 2012, the
Commission directed that the City Attorney draft language with a prospective indemnification,
but where the parties to the Spencer suit bear their own costs, fees and liability, if any. On April
24, 2012 the City Attorney returned with that language, which the Planning Commission
unanimously adopted.
We urge the City Council to uphold the Planning Commission's decision to approve CUP
12-02, containing the provision indemnifying the City for any and all claims arising and cases
filed after the date that CUP 12-02 is approved.
Extended Stay cannot accept CUP 12-02 without removal of the retroactive portion of the
indemnification provision. While Extended Stay remains ready and willing to indemnify the
City for future claims, it is inequitable to require Extended Stay to indemnify the City for claims
arising prior to our application for this amendment. It is important to note that Extended Stay is
not required by law to accept the proposed CUP amendments with a punitive indemnification
provision. If the City Council adopts the current version of the amendments and Extended Stay
chooses not to accept them, the original CUP language will remain operative. This would not be
beneficial to the City, as the original CUP imposed by the City requires Extended Stay — under
the threat of revocation—to engage in actions alleged to be illegal by the Spencer plaintiffs.
We therefore recommend that the City Council uphold the decision made by the Planning
Commission, including the indemnity language prepared for Resolution No. 1851.
Thank you for your attention to this matter.
Sincerely,
Timothy B. McOsker 4�
cc: Stephen Deitsch, City Attorney
702236938.1 11177822