LOS ANGELES DESPERATELY NEEDS MORE AFFORDABLE HOUSING AS WELL AS MORE PARK AND RECREATIONAL AREAS: A NEW ORDINANCE SEEKS TO ADDRESS THESE TWO POTENTIALLY COMPETING NEEDS BY RAISING DEVELOPMENT FEES

The City of Los Angeles has for many years been faced with a planning dilemma, lagging far behind all other major U.S. cities in green space and affordable housing.  The local development boom has not substantially alleviated the problem and may have even added to it.  In response, the City has recently passed legislation, Ordinance No. 184505 (the “Parks Dedication and Fee Ordinance”), which tries to strike a new balance between housing and open space considerations.  It sets out a revised version of the City’s park or “Quimby” fee requirements.  Its provisions extend to apartment projects as well as condominium developments.  The amount and scope of those fees will be increased on the premise that those funds will help pay for steps to mitigate the impacts which ongoing residential development will have on parks and other recreational areas, even as the City continues to encourage additional multi-family construction.

A colleague of Joe Cobert, Craig Lawson, a highly regarded and knowledgeable land use consultant in Los Angeles (and a reader of The Joe Cobert Report), has written a terrific summary of the terms of the new ordinance, both its coverage and its exemptions.  With his permission, we have sent a copy to the readers of The Joe Cobert Reort.

Note that the ordinance is not scheduled to be fully operative until February of 2017, 120 days after the currently prescribed “effective date” of October 20, 2016.  The October date is very important right now because the exemption is tied to the effective date.  The exemption reads as follows:

“Any project that would otherwise be subject to a park fee but has acquired vested rights under Section 12.26 A.3 of this Code prior to the effective date of this Ordinance, and/or has an approved vesting tentative tract map per Section 17.15, the application for which has been deemed complete prior to the effective date of this Ordinance, shall not be subject to a park fee.”

Clearly, absent modification of the Ordinance in the next few weeks, anyone who has a project “in the pipeline” in the City of Los Angeles needs to do everything possible to move the project to an exempt status in the next 30 days (by October 19).

The Joe Cobert Report will keep you informed about the Ordinance and the various issues raised thereby.

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ARE SOME CITIES GOING TO BE ABLE TO KEEP OUT CHAIN RETAILERS?

The retail sector of the real estate market was devastated during the years of the Great Recession. Fortunately, in many locations, retail has rebounded. In some of those locations, the amount of retail space is relatively small and competition for same is intense. This is especially so in municipalities which have a unique character. This has exacerbated a situation which has become increasingly prevalent in recent years, pitting chain stores against “Mom & Pop” types of establishments.

Some new battlegrounds and additional “players” have been emerging. In a small but growing number of California municipalities seeking to hold onto their distinctive look and feel, resistance to chain stores has actively increased. Indeed, San Francisco, Malibu, Coronado, Carmel and Calistoga, among other cities in the state, have passed or are contemplating ordinances banning or limiting the addition of new “formula retail” stores or at least requiring them to obtain special permits on a case-by-case basis. “Formula retail” would include large chains in many categories — food, clothing, pharmacy and more. (For example, think Starbucks, the Gap and CVS.)

The proposed Malibu ordinance, to be considered this month by that municipality’s city council, would limit to 2,500 square feet the size of any new store and restrict formula retail to 40% of the available retail commercial space in that city. Even that is not stringent enough for some Malibu residents. As a result, the city council of that jurisdiction will also evaluate a measure proposed by actor/director Rob Reiner and his wife, both long-time Malibu residents. It would restrict formula retail to 30% of retail commercial space plus it would require a citywide vote as to any proposedretail development project of more than 20,000 square feet.

It is no surprise that many formula retailers are opposed to these restrictions, asserting that these types of ordinances are unreasonable, discriminatory and unconstitutional. The litigation on the subject has not thus far been definitive. For instance, the first lawsuit to get to the Court of Appeal (a 2003 decision involving the City of Coronado) upheld that city’s restrictions but did so on very narrow grounds in a non-published 2003 opinion.

The land use community is divided on how this will ultimately play out. Undoubtedly, there will be some upcoming legal challenges in other municipalities. One thing you can count on: we at The Joe Cobert Report will monitor this and keep you informed.