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Council will consider restarting negotiations to develop the city-owned property at 4th and Arizona following a delay caused by questions over the land’s status.

Staff are asking the council to provide direction on the property at their June 23 meeting. Their options include restarting negotiations as they were earlier this year, abandoning current plans for the site or restarting talks with an altered set of priorities.

According to the staff report, the current project is up to 11 stories (129 feet in height) with up to 240 hotel rooms, no more than 106,800 square feet (SF) of creative workspace, 42,000 SF of ground-floor retail space, and 820 parking spaces within a three-level subterranean garage.

Of the approximately 2.6 acre site, nearly an acre of publicly accessible open space is planned alongside a 12,000 SF of cultural amenity space and 48 on-site affordable apartments that could potentially be provided off-site.

Prior to February of this year, the project had a draft EIR and was anticipated to have hearings at the Planning Commission and City Council. However, state officials ruled the land was subject to California’s Surplus Land Act and if that ruling held, the project would not be legal. Negotiations were halted while pending clarification from the state on its rules.

In March, the California Department of Housing and Community Development exempted the site from the state rules clearing the way for the process to restart. However, in the meantime, there have been huge changes to the world at large and Santa Monica in specific.

“While the potential applicability of the Surplus Land Act recently stalled negotiations, COVID-19 has also affected market trends and local conditions,” said the staff report. “The pandemic has also had severe impacts on the City’s revenue streams, forcing reduction or elimination of various programs and services that community members value and rely upon. Other external factors include a declared housing crisis in the State of California which has resulted in State and Regional directives regarding housing production. Recognizing the pandemic’s effect on Santa Monica, as well as the significant passage of time since the initiation of the Project approximately seven years ago, staff seeks direction regarding resuming negotiations and if desired, modifications to the project scope and public objective priorities.”

Staff said if changes are requested, the council could consider the amount of open space in the project, how much affordable housing to require, the financial impacts of proposed rent given dire financial predictions, the uncertainty of a cultural programming in the future and the amount of parking that could be needed.

Council could also consider a wholesale different project from the alternatives already proposed in the documents including a project that would build a new 391,820 SF mixed-use building with 330 residential units including 83 affordable residential units, 605 parking spaces, 28,000 SF of public open space, 90,600 SF of retail uses, a 1,700 SF bike center, and 5,700 SF of equipment/service uses. According to the documents, this project would have a greater floor area than the proposed project, is 60 feet in height with a FAR of 3.5 and includes 86 percent residential uses and 14 percent commercial uses.

Council could also abandon all plans for the site and try to sell the site. Under state rules priority would have to be given to affordable housing projects before a competitive open bidding process could occur for the site.