CITY HALL — For years, City Hall has failed to hold required annual reviews of development agreements intended to ensure developers were living up to their obligations, city officials admitted.

City code 9.48.190 states that the council at least every 12 months must review the agreements, which typically allow a developer to exceed zoning restrictions (for example by adding an additional story to an office building) in exchange for providing benefits like extra affordable housing units or paying City Hall additional fees. Under the code, if a developer is out of compliance the council can take steps to enforce the agreement or vote to terminate the deal.

“As far as I know, there have not been annual hearings about compliance with development agreement requirements,” City Attorney Marsha Moutrie told the Daily Press this week. No one at City Hall or on the City Council, it appears, was aware of the annual review requirement.

Moutrie said she was concerned the reviews had not been taking place but added, “I’m not concerned about financial liability arising under this code section.”

City officials said they are taking steps to begin conducting the City Council reviews.

There are concerns about City Hall’s ability to hold developers accountable, especially because development agreements figure prominently in the draft Land Use and Circulation Element (LUCE), the long-range planning document that will guide development and is expected to be adopted this summer.

City Hall is currently negotiating 10 development agreements.

Over the years, Santa Monica officials have entered into 11 development agreements, many of them dating back to the 1980s. Projects like the Yahoo Center, the RAND facility, the Watergarden office building and the Sheraton Delfina hotel were all built under development agreements. Together the projects have provided millions of dollars in fees for programs like homeless services, parks and recreation and child care.

In the past year, Planning Director Eileen Fogarty said her staff has compiled a report on the status of City Hall’s existing development agreements. The planning department review, she said, is a precursor to placing the agreements before the City Council for public review.

“Even though, historically, this had not been done for many, many years … it was important and we committed the resources to it,” Fogarty, who joined City Hall in 2006, said of the staff review.

Fogarty denied that the lack of a City Council review process has meant developers have been able to short-change City Hall by reneging on promises to provide community benefits.

The planning department’s review, released publicly this week, shows five of the developers who entered into agreements with City Hall have been certified as being in compliance. Three of the development agreements are still being reviewed and three have not complied with requirements, according to the planning department’s report.

The projects deemed to be out of compliance are: both phases of the Lantana entertainment complex and the Arboretum apartment complex on Colorado Avenue, which City Hall is suing for allegedly failing to comply with its affordable housing obligation.

The owners of the Lantana property were required to submit a compliance report in January but failed to do so.

Barry Rosenbaum, City Hall’s lead land use attorney, acknowledged that Lantana’s owners have not submitted the required report but said City Hall staff recently reviewed Lantana’s development agreement as part of the property’s sale in December. He said he was confident the owners, who are expected to submit compliance reports on both phases within 30 days, have fulfilled their obligations.

St. John’s Hospital, which has drawn criticism surrounding its obligation to build a parking structure as part of its development agreement, has asked for an amendment to its deal with City Hall. Its compliance is still under review. Agreements with the Macguire Thomas office building on Ocean Avenue and the Sheraton Delfina hotel on Pico Boulevard also are still being reviewed.

City Councilman Kevin McKeown portrayed City Hall’s recent steps as positive moves toward making the development agreement review process open and transparent.

Assigning blame for officials’ past failure to properly review the agreements, he said, is difficult.

“That practice [of not holding City Council reviews] pre-dated the current council and the current staff, so there’s no one left” to explain why the reviews never became standard operating procedure, he said.

He said the review process should be encoded into the LUCE.

“I certainly feel better knowing that we are checking on compliance,” he said. “It’s a big step forward, now, to be doing the right thing.”

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