A map of the 16 sites that could accommodate Tier 3 projects. (City of Santa Monica)

Development agreements for housing projects in downtown Santa Monica could soon be a thing of the past.

The Planning Commission voted 5-2 Wednesday to recommend that City Council to eliminate development agreements for downtown housing projects larger than 90,000 square feet and process such projects through a simpler development review permit. 

Principal planner Steve Mizokami said development agreements inflate the cost of large housing developments because developers have to negotiate projects with the city over a prolonged period of time. 

Making downtown Tier 3 housing projects larger than 90,000 square feet subject to the same approval process as smaller projects would incentivize more housing development, Mizokami said. 

City Council already voted in March to streamline the approval process for many housing projects as a first step toward meeting a state mandate that will require Santa Monica to accommodate 9,000 new housing units by 2029. 

The procedural changes the Planning Commission voted to recommend to City Council would apply to 16 sites near the Metro E Line terminus and the 10 Freeway. Zoning and building standards for the sites would remain unchanged.

Five sites contain apartment buildings or hotels completed in the last 20 years. Housing projects are planned or under construction on four sites.

Santa Monica Place, the downtown E Line station, the Big Blue Bus Yards, the Wyndham Hotel, the Ken Edwards Center, the Salvation Army and a post office occupy the remaining sites. 

Planning Commission Chair Leslie Lambert said development agreements are only appropriate for large commercial projects that have the money and space to provide the required community benefits, such as affordable housing or public amenities.

Development review permits already require developers to make 25% of the apartments in a project affordable, pay impact fees related to transportation and open space, and reduce traffic generated by building residents.

On average, it takes the city more than two years to approve development agreements — more than twice the amount of time it takes to process development review permits, Lambert said.

“There are incredible time savings with DRPs,” she said. “That means cost savings, which means more housing.”

Large housing projects would still go through public planning and design review hearings, Lambert added. Although the future of the Architectural Review Board is up in the air because of the city’s budget crisis, the Planning Commission will recommend that City Council maintain a public design review process for major projects. 

Commissioner Elisa Paster said eliminating development agreements for downtown housing projects will make building standards more predictable for developers and residents.

“DAs are ripe for abuse, they’re ripe for political negotiation,” Paster said. “Santa Monica is one of the most expensive places to develop … (in part) because of the process and things like DAs. Why not, in this period, try to encourage more housing when we can?”

Commissioner Nina Fresco, who voted against the proposal, said she still believes that larger projects with more impact on the city need special review and should provide additional community benefits. 

Fresco and Commissioner Mario Fonda-Bonardi, who also voted no, said they were concerned about another provision of the proposal that changes Santa Monica’s definition of a housing project to align with state law. 

The proposal, which the commission approved 5-2, would increase the maximum amount of nonresidential space included in a housing project from 25% to 33% of the project’s total square footage. In alignment with state law, the nonresidential space would no longer have to be used only for “neighborhood commercial” purposes.

“I’m very uncomfortable with increasing something in an area that’s going to be weakened,” Fonda-Bonardi said. “Demand for retail and office space is going to be way way down for the next five years, so we’re opening something up we don’t need to open up because we’re trying to get housing.”

Community support for the proposal was split along slow-growth and pro-housing lines, with neighborhood organizations in opposition and the Santa Monica Chamber of Commerce and Downtown Santa Monica, Inc. in support.

“Applying the DRP process to Tier 3 projects will simplify and improve the predictability of our community’s onerous entitlement process. It will also significantly reduce the resources required of both the applicant and the city,” DTSM CEO Kathleen Rawson wrote in a letter to the commission. “As it is currently structured, the DRP process provides ample public process and opportunity for organizations like DTSM and other community stakeholders to provide feedback on a project’s merits.”


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