As more and more developers are negotiating Development Agreements (DA) with the City of Santa Monica, instances have come to light of previous agreements where developers have failed to keep their end of the bargain.
A DA is agreed to by the City when the developer offers the city public benefits in exchange for being permitted to develop their project with parameters that are outside of the of the City’s zoning standards. For example, the City might allow a new building to have more floors built if the building provides more than the minimum amount of low-income housing.
The City Planning Division presented an information item on DA compliance to the City Council on February 23. The report noted that there are eleven DAs in effect and that monitoring of compliance occurs at various stages during the life of a project. This year, City staff has requested annual compliance reports from all DA projects.
At least two properties with DAs (the Dorchester House and the Arboretum) have been found to not be complying with their DAs when it comes to providing affordable housing units.
The City has filed suit against the owners of the Plaza at the Arboretum in February and the city attorney’s office is investigating the issues at the Dorchester House.
The Mirror spoke with City Council member Gleam Davis about the compliance problem. She stated that City staff is “reviewing the procedures in order to create effective and efficient building strategies for future compliance.” She said developers should agree to fund compliance efforts to ensure the necessary monitoring is done.
Planning Commissioner Gwynne Pugh echoed Davis when he told the Mirror the Planning Commission is always dealing with competing and conflicting interests. One of the important tools the City uses “are the benefits written into DAs, such as including affordable housing. The whole system breaks down if these DAs are not enforced.”
In his view, the “monitoring needs to be paid for by the developer” and should be an “automatic annual fee that would be non-discretionary” like a business license. As for who should do the monitoring, it could be either the City or an independent agency, he said.
In an e-mail to the Mirror, Planning Commissioner Ted Winterer took a different position when he stated, “I believe fervently there should be a public hearing at either the Planning Commission or the City Council to review the problems with annual review of DA compliance, and to implement new procedures to assure DAs are audited yearly, including a possible reassignment of the responsibility within City departments for doing so. I think we have a duty to the public to explain what went wrong and how it will be fixed before entering into any new DAs.”
One method to monitor compliance is an Estoppel request in which an owner or buyer makes this request when the property undergoes a real estate transaction. It can trigger the City to find out whether a project is in compliance with its DA.
Another mechanism is the City’s Plan Check process, which causes a project to be reviewed for compliance and consistency with DA conditions and fee requirements. A Certificate of Occupancy is another tool to check compliance, although the City does not issue it unless the provisions of a DA have been met and the project is in compliance.
Lastly, the City can request Zoning Conformance applications from lenders and appraisers on DA properties and indicates in their request any outstanding compliance issues.
Planning Commission Chair Hank Koning explained that the Commission has recommended to the City Council that budget priorities be given “to look at better enforcement” of DAs. He supports an annual or bi-annual review requirement, penalties for misinformation, and spot-checking by city officials to ensure compliance.
Mirror Contributing Writerhannah@smmirror.com