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HomeMy WebLinkAboutPH 3 VARIANCE 81-8 12-19-83DATE: December 19, 1983 PUBLIC HEARINGS 12-19-83 Inter-Corn Honorable Mayor & City Council Members FROM: Community Development Department SUBJECT: Termination of Variance 81-8 Californian Apartments 14882-14942 Newport Avenue J Discussion A public hearing was advertised for the November 28, 1983 Planning Commission meeting to consider revocation of Variance 81-8, a permit allowing conversion of the Californian Apartments into condominiums. Over the past several months, inaction on the part of the property owner to make necessary repairs and proceed with apartment conversion, prompted the City Council to initiate Planning Commission review of this subject. On the day of the scheduled, public hearing, the property owner, Eugene Vollucci, president of Cai-State Associates, Inc., submitted a letter voluntarily terminating his rights under Variance 81-8. That letter, attached hereto, outlines the financial difficulties associated with the apartment project which led to his decision. Mr. Vollucci also indicated to staff that the project might be marketed to a new owner who might again proceed with a request to convert. Since a public hearing had previously been scheduled, the Commission conducted said hearing following which it accepted the relinquishment and by Minute Order recommended to City Council, termination of Variance 81-8. Recommndatton That the City Council, by Minut~ Order, accept the Planning Commission recommendation and approve termination of Variance 81-8. Director of Community Development DDL:jh Attachments: Letter from Cai-State Associates, Inc. Planning Commission Staff Report - 11-28-83 Report to Council - 10-5-83 Report to the Planning Commission PUBLIC HEARING NO. 1 SUBdECT: OMIER: LOCATION: ZONING: NOVEMBER 28, 1983 Consideration of Revoking Variance No. 8I-8 The Californian Apartments Eugene ¥ollucci, President, Cai-State Associates, Inc. 14882-14942 Newport Avenue R-3 (1750) - Multiple-Family Residential ENVIROMME#T~L STATUS: Exempt from Requirements of the California Environmental Quality Act REQUEST: BACKGROUND A City-initiated request to consider revoking approval to convert the Californian Apartments into Condominiums The Californian Apartment complex, located at 14482-14942 Newport Avenue, Tustin, was constructed in 1970 and purchased by Cai-State Associates in 1980. The complex consists of 296 apartment units; 167 one-bedroom and 129 two-bedroom units. Cai-State Associates was granted permission on January 18, 1982 to convert the apartments to condominiums subject to specific conditions such as recordation of a single lot trac~ map and execution of a tenant relocation agreement. Rather than granting a use permit, a variance was granted since relief was necessary from strict application of the condominium open space requirement. However, a use permit is technically included within the approval of the subject variance. A subdivision map was subsequently submitted and. approved for the conversion on June 7, 1982. The applicant Cai-State Associates is attempting to now record the final map prior to the tentative map expiration on December 7, 1983. Prior to and since conversion approval~ the property has been plagued with significant plumbing .defects which have resulted in hot and cold water distribution failures, in addition to heating system ruptures. To further complicate matters, the building roof design is a flat surface composition membrane which is subject to leakage. The flat surface tends to allow water ponding which eventually penetrates the roof membrane into habitable apartment areas. Serious water damage has resulted in units throughout the apartment complex. A high vacancy rate due to water damage, excessive repair costs and partial conversion construction have resulted in periodic hazadrous living conditions, and continual disruption of tenant livelihood. Community Development Department Consideration of Revoking Variance 81-8 November 28, 1-983 Page 2 AII/~YSIS A substantial volume of complaints and communications .have been received in the past few months primarily concerning tenant living conditions. Numerous letters detail lack of hot or cold running water, holes in ceilings due to plumbing or roof leakage .and pestilence annoyance. Several tenants have appeared before the Council seeking 'assiStance in correcting the various problems. xResulting from complaints presented to Council in September, Council directed staff to inspect the Californian and notify the property owner of code violations and needed corrections. Following~receipt of notices from the City and County agencies, Cai-State Associates commenced with some repair work but has yet to meet all Fire Department corrections or proceed with conversion. Council further instructed staff to work with the property owner to resolve code violations and formulate a property owner commitment to complete conversion or relinquish the subject variance. In addition to weekly meetings of the Director of Community Development and Cai-State Associates representative Steve Price; two meetings were attended by Cai-State president, Eugene Vollucci; Steve Price; City Manager, Bill Huston; City Attorney, James Rourke; and Director of Community Development, Don Lamm. These meetings were conducted in an attempt to convey-the seriousness of the situation.and request a specific schedule for completion of the project. For whatever economic reasons, Cai-State Associates claims they are unable to proceed with the conversion unless relief is granted from payment of relocation benefits'and prohibition of raising pre-conversion frozen rental rates. The City cannot continue to indefinitely condone inaction by the property owner. Several carports are filled with construction materials, excess earth is mounded against a rear perimeter wall, dirt covers a circulation driveway, buildings remain partially vacant with damaged units and some carports are partially converted. Until recently, up to fifty or more units of the ~96 were vacant with many open to vandalism. While these units are presently locked or boarded closed, unless rented, they can again.become the subject of vandalism. Vandalism in a vacant unit adjoining an occupied unit could result in a life threatening situation. It is City staff's position that the conversion process should have been voluntarily terminated and all apartments brought into conformance with building and safety code regulations. Such action would have allowed requested relief from payment of future relocation benefits and the ability to raise pre-conversion frozen rents. The owner could then generate needed working capital to make necessary property repairs yet re-apply for conversion at future date when able to proceed. The property owner rejected staff's recommendation since he felt it would reduce property marketability. Mr. Vollucci has recently indicated his efforts to obtain financial assistance to proceed. However, to date a specific program has not been presented. In staff's opinion, there remain few alternatives but to revoke Variance No. 81-8j Com munity Development Department, Consideration of Revoking Variance 81-8 'November 28, t983 Page 3 Adoption of Resolution No 2125 recommending that the Ci~ Council revoke Variance No. 81-8. Director of Comuni~ Develop~nt DDL:jh Attach~nts: Staff report ~d October 5, 1983 Resolution No. 2125 Community Development Department DATE FROg: SUBJECT: October 5, [983 Inter-Coat Honorable Hayor and City Couflcil Members Community Development Deparl:~ent Californian/Windsor Gardens AparUsents Condominium Conversion Status . . _ j 8AC[GROUnD The City Council previously ~ecetved communications f~om Cai-St:ate Associates, Inc., owner of 1~o apartment projects in the City approved for conversion to condomlntums. Spectftca]ly, Cai-State requests that the relocation agreements be amended removing requirements to pay relocation benefits for voluntary ~enant move-outs and to pemit rent increases for those units with pre-conversion frozen rents. Cal-$ta~e has exper!enced substantial financial setbacks which have jeopardized both pmjects. The Californian at [4882 Newport Avenue has had severe water damage from plumbing failure and rain damage. The Windsor Gardens at [65[ Mitchell was also impacted by severe ~eather conditions and contractor disputes. When presented with Cal-$ta~e's ~equests, Council dt~ected s~aff ~o analyze.both projects in light of ~enan~ concerns. The ~a~ort~y'of problems at both projects surround: a) partially completed construction being an inconvenience for ~enants; b) safety and other code violations; and c) non-payment of relocation assistance according to agreements. City and County staff inspected both pmjects and provided the p~operty owner with thirty (30) days to ~ake necessary corrections. Staff also recommended that the o~ner's request for rent Increase and relocation relief not be considered until ~ini~um code violations were corrected. ~otices ~ere sent tm Cai-State Associa(es by certified ~all on August 19, 1983 concerning corrections at the. Ca]ifornian apartments. Again, following inspections of the gtndsor Gardens apartments, notice was sent to Cai-State on August ZS, [983 outllntng necessary corrections. AIIALY$IS OF CORRECTIOgS The following generally describes corrections necessary at both projects and the status of said corrections following the 30-day compliance period: CALIFORNIAll ~PARTMEgTS 1. Correct code violations which include: removal of combustible debris from vacant units; disconnect utilities in vacant units; secure all vacant units; replace all missing fire extinguishers throughout the complex; provide all weather access around rear of complex and replace missing building addresses. Condominium Conversion Status October 5, 1983 Page 2 Correction s~atu$: ~st units secured; however, two at-random Inspections after thirty-day period ~eveale~ at least four units un-locked, doo~s open, combustible me~erlal tn so~e as well as gas and electrlctty on in others. Fire extinguishers have been mplaced throughout co.lex yet the Fire Department is not accepting dl~c access ~oad to the ~ear of the project. 2. Removal of ali construction debris and abandoned vehicles in ca~ports. Correction status: The majority of all construction debris has been properly stored and removed from public view. Property has been cleaned and appearance is tm~mved. Inspection did reveal at least two abandoned cars mmatntng in ca~po~ts. 3. Provide hot and cold running water and space heating in all units. Correction status: Without physically knocking on doors, staff has not been able to.determine coepliance. A boiler unit ~ay have broken during the last thirty days wbtch caused a temporary loss of hot water, but not' permanent. On the contrary, some tenants previously ~eported having only hot water; no cold. ~Repatr all damage~ roof surfaces. Co~ect~oe status: Coincidentaliy, it rained in the 'last thirty days. A tenant called to report water leaking through an ~ectrtcal ceiling fixture. Also, a vacant unit inspected by staff indicated extensive water damage to walls and electrical fixtures. Roofs otherwise appear sound. 5. Proceed with construction of conversion. Correction status: Construction was terminated months ago, and owner indicates it will not commence without economic relief from the City. 1. Correct all code violations as detailed by City and County inspectors including an unobstructed access to ~re hydrants, removal of debris, and installation of security fencing to isolate construction area. Correction status: One violation has been corrected while others have not. Generally, no further action is being taken by property owner. Condominium Conversion S%atus October 5, 1983 Page 3 2. Renew butldlng pemtt foe project conversion. Correction status: Permit has not been renewed to date. 4. Proceed wtth conversion construction. Correction status: No evidence of recent construction actlvtty. Security guard previously hired to patrol site was not found during either of Staff'S L%~O follow-up inspections. While Cai-State has made some attempts to comply with the Clty's requests, the Californian has not been adequately corrected to satisfy staff. On every fnspectton occasion, staff found unlocked, If not wide open, apartment un, ts, some of which st~11 have gas and electricity turned on. A child tn the complex.could eastly be ~n~ured in one of these un,ts tf not cause a ma~or accident. Cai-State belleves a tenant may have a master key and is opening the units. Regardless, these units must be secured or the Building Oepartment wtll ~ake the Initiative to have them secured and posted appropriately. Concerning Cai-State's request for amendment of the ~elocatlon agreements, staff agrees that voluntary move~out, not ~elated to the' need for a particular unit for conversion, should not be grounds for payment of relocation assistance benefits. If the tenant-chooses to leave for reasons unrelated to conversion, that is thetr choice. However, tn these two projects, tt ts dffftcult to detemtne which are voluntary mOve-outs unrelated to the conversion since Inconvenience has surely played a pa~t tn several departures. At the Windsor Gardens, the existence of anexcavatton area consuming most available parking, noise, and dust surely affects tenants. The ideal situation would have been for the ortglnal relocation agreement to etther freeze rents for tenants accepting the inconvenience of construction or receive normally scheduled ~ent Increases and receive relocation assistance upon eviction. Regardless of the economtc pltght of the property owner, the City is obligated to ensure safe 11vtng conditions at both apartment .projects. Staff wtl~ conttnue to puruse the corrections dictated by the appropriate C~ty and County ~nspectors. REC01PENDATX Ol~ · tltndsor Gardens In staff's optn~on, the Wtndsor Gardens could be substantially completed and marketed as condominiums wtthtn a short per~od of ttme. The subdivision map has been recorded and substantial construction has occurred. The City should encourage thts project to be swiftly completed. Council may wish to give consideration to rent adjustments and mudtf~catlon of the relocation assistance agreement. Condomlnium Conversion Status October 5, 1983 Page 4 The Californian has been plagued with structural design problems Including roof leaks and hot water plumbing leaks In ceilings. Stnce conversion construction has not substantially contsenced and the subdivision map has not be recorded, 'the property owner should concentrate on property maintenance expenses and resolve structure1 design problems. This property should not continue ~3 exist fna disrupted condltfon with a high vacancy rate of damaged units. Therefore, the conversion process should be terminated ~hrough either voluntar~ relinquishment of conversion ~fghts or revocation of the project variance. Rellnqutshment or revocation of Variance No. 8[-8 would terminate Cal-Stete'$ obligation ~o pay any future relocation assistance and also ~emove rent controls on apartments rented prior to variance approval on January [8, [98Z. At such time Cai-State Associates is ffnancially prepared ~ proceed, the City could again consider their applfcatton for conversion approval. Director of CommunttyDevelopment DOL:Jh INCOME PROPERTY- .u To.O PROPERTY MANAGEMENT - TAX SHELTERS CAL STATE ASSOCIATES, INC. 23639 HAWTHORNE BOULEVARD, TORRANCE, CA90505 SUITE 102 532-9100 November il, i983 Honorable Mayor Hoesterey and City Council City of Tustin Re: Californian Apartments Condominium Conversion Honorable Mayor Hoesterey & Members of the City Council: At the meeting of the City Council on October 5, 1983, the council 'passed a motion which, among other things, called upon Cal State Associates voluntarily to withdraw from the conversion of the Californian Apartments to condominiums and directed staff to commence revocation of the permit to convert if Cal State Associates would not voluntarily withdraw. _ The council is aware of the substantial efforts which have been made and the substantial expense~ which have been incurred (i.e., more than $2,000,000) by Cal State Associates in connection with the conversion. Unfortunately, many problems, many of which could not have been anticipated by Cal State Associates, have combined to hinder and obstruct the present economic viability of the project. The council also recognized at the meeting that there was and is no easy solution to the present situation. Cal State Associates believes, and expressed at the council meeting its belief, that actiQn by the council (1) suspending the obligation to pay relocation assistance to those tenants who move from the Californian voluntarily and (2) allowing Cal State Associates to raise the rents to fair market value would be most helpful in solving the problems. In addition, it is clear that an infusion of substantial new capital into the project would be beneficial, but the likelihood of such capital being loaned or invested by a new, outside person or entity and the amount which might be forthcoming both will be affected adversely if there is not an existing permit to convert the Californian. Cal State Associates' voluntary withdrawal or the city's revocation of the permit to convert undoubtedly will impact adversely any possible infusion of new capital into the project. Honorable Mayor Hoesterey City Council November 11, I98S Page two Nonetheless, after discussing all of the foregoing, the council voted as it did to seek voluntary withdrawal of the project by Cal State Associates or to pursue revocation of the permit to convert. Although Cal State Associates disagrees with the decision of the council and sincerely regrets many of the consequences of that decision, Cal State Associates acknowledges the difficulty of the issues involved. Cal State Associates, too, wants to demonstrate its good faith and, therefore, accepts effective as of October 5, 198S, the offer of the council to allow it voluntarily to withdraw from the Californian project. In so withdrawing, Cal State Associates is relying upon the good £aith of the City Council and anticipating that when the project comes back before the council for a re-approval sometime in the future, the council will take into consideration the facts that Cal State Associates already has paid well over $60,000.00 in relocation assistance payments to tenants and more than $2,000,000.0~ on the project to date. We look forward to working with your staf£ to improve the Californian for the benefit of the tenants, the city, and Cal State Associates~ and we will look forward to pursuing the conversion to condominiums as soon as the project once again becomes economically feasible. Respectfully, CAL STATE ASSOCIATES, INC. Eugene E. Vollucci President