HomeMy WebLinkAboutITEM #4 SUPPLEMENTAL ITERA #4
CorrespondenceReceived from Procopio
Regarding 125 North "A" Streetj 395 West First street
Tiscareno, Vera
0m: Tiscareno, Vera
aivnt': Tuesday, December 12, 2017 9-154 AM
Subject: FW- Plirining Conifflission Agenda Item No. 7 - CUP 2017-10, Design Review 2017-011
and Lot t epee AdjUstment 2016-03
Aftachments: Letter t!,-.., Tustlii PC 12 11 2017.pdf
Good morning Commissioners,
We just received this email so 1,thought I would share with you now to allow you time to read. Copies will also be
provided at the dais.
Thank you,
Vera
From: Thomas, Joanne E. [rnaailto.-Joanne.Thomas@ rocopi com]
Sent: Tuesday, December 12, 2017 9:52 AM
To: Tiscareno, Vera
Cc: Yaghoubian, Sella; Nielsen, Justine K.; Thomas, Joanne E.
Subject: Planning Commission Agenda Item No. 7 - CUP 2017-10, Design Review 2017-011 and Lot Lire Adjustment
2016-03
car Chairperson Smith 'and Coninii_ �ioners.*
Ncl-A�'--c find fli,c ati�ichcd k:ttcr regardino Plk'-wniiio Ao k:ilda I mil t !P 17-10. Dcsl(111
,Berhour
0 16-0' on hk2li,�il -cant, Mr, f3t2i-d' K(2u%]lar L
R�2� ';2w 20174)1 1 am,l `
I-()i I -'nC A(1JL1St111Cfl'k
I loldinus LLC'.
Thank- \0U.
JOANNE E. THOMAS
LEGAL SECRETARY
P. 619.525.3855 1 joanne.t.homas@procopio.com
525 B STREET, SUTE 22r-)0. SAN D1,EG0, CA
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-111 s t'S M) C111all trom Prm:oplo, Cor\. I I-Lirurrcavc & Sa\ I ts:li 1,LF, Attornevs at Lav. This email and any
attachments hereto nia\- contain information that is cotif-I(iciinal .,in /or piqot�2cted by the attorney-client privilege
and attorney or PI-OdUct doctrine. I'his eni.,ii I is not intendcd for transmission to, or receipt by, any
unauthorized persons. Inadvertent disclosure of the contents of this email or its attachments to unintended
recipients is not intended to and does not constitute a waiver of attorney-client privilege or attorney work
.product protections. If you have received this.email in error, immediately notify the sender of the erroneous
receipt and destroy this email, any attachments, and all copies of same, either electronic or printed. Any
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PROCOP110
o c o t o 525 B Street
Suite 2200
San Diego,CA 92101
T.619.238.1900
F.619.235. 98
JUSTINIE K.NIELSEN
P.619-906.5787
i Usti n c". Ise r"').10 P0,ClIn M
AUS T I IN
DEL MAR HEI SHIs
PHOENIX
SA N rel E G,,3
SILICON VALLEY
December 11, 2017
VIA E-MAIL
Chalrpers,on R\,--der Smith and Mem5clrs of the Planning Comrl'lissiorl
City of Tustin
300 Centennial Way
Tustin, CA 92780
lie: Planning Commission Agenda Itern No. 7 - CUP 2017-10, Design Review 2017-01.1
and Lot Line Adjustment 2016-03
Dear Chauperson Smith and Commissioners:
We represent Mr. Berdj KeuyIjan/I3erg 0L1r Holdings LLC, applicant in the above-referenced
item and own-1-",%r of the property located at 125 North "A"' Street and 395 West First Stret-3it located in
the First Street Specific Plan area of the City of Tustin ("Property"). Mr. KC)Uylian is proposing to
amend the existing use perniit to allow for restoration of an existing historic house and Continued
use of the house as a residence.
On November 14, 2017, we submitted a letter outlining thr.2 reasons we object to the
Community Development Department's ("CI D") Impo'-sition of an affordable housing restriction in
connectionwllt-h approval of the conditional use permit �.-November 14 Letter"). A copy of the
November 14 Letter is attached as Exhlbft 1. In response to the November 14 Letter, the item was
continued from t ii e N oven-i b e r 14, 1017 ni e eti n g to Dec,.�-�,n-i.ger 12. 2017. on Dece n-i be r 8, 201 7, we
received an updated Agenda Report wherein CDD ddresses the concerns we raised in the
November 14 Letter. We standby the objections raisc,-7ad in the November 14 Letter and Continue to
object to proposed condition 2.3 because it is unnecessary, unreasonably burdensome, and unlikely
to result in any additional public or private benefits.
THE AFFORDABLE HOUSING RESTRICTION IS UNNECESSARY BECAUSE THE HOUSE ALREADY
PROVIDES A BELOW-MARKET HOUSING OPMON
The Agenda Report argues thaL the condition is necessary to ensure the applicant will not
increase rents to market rate in the future. However, this argument igriores troth the historical and
practical economic realities of the home. As the Agenda Report notes, It1he house has historically
provided housing to low/moderate income renters" not because it was required to do so by an
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onerous regulatory condition, butl _ bc;caUSC the Tustin housing market does not support higher rents
for a home of this size and in Lhis location. The home is only 900 square feet, has a single bathroom,
and it located adjacent to a busy gas station. Simply [-Dut, the nia6,-let does not support charging
$2,200 per month for the house. In order to increase rc_,nts, Mr. Kouylian would have to make
significant improvements to the house to increase its size or add bathrooms. Due to the home's
historic status and use permit restrictions, this could not be done without approval of an amendment
to the use permit, which the Plan,ning Commission would have the discretion to approve or deny.
THE AFFORDABLE HOUSING RESTRICTION IS UNREASONABLY BURDENSOME
The Agenda Report argues that the condition is not unreasonably burdensome because the
ho(,.ase is already rented at helow market rents. The Agenda Report states that "[flhere has been no
,�Llstification offered for why the continuation of a condition that has existed since at least 1977
vvould cause an undue burden to the applicant." This argument misses the point and ignores the
fact that the 1977 Use Permit did not contain a requirement to record an affordable housing
agreement and Implement a formal affordable housIng program. The burden t o M r, K e u y 11 a n is not
the below-market rent. The hDme has always been rented and will continue to be rented at below-
market rates. The burden of this condition is the recordation of a 55-year encumbrance on the title
to the property, which will impact his ability finance or refinance the property. Additionally. the
burden is the cost of it and maintaining regulatory compliance with the provisions of a
formal affordable housing requirement including compliance with specific tenant application
standards and income verification requirements. Unlike traditional developers, the burdens and
costs of compliance with these requirements cannot be offset k)'-}c ause� Mr. Keuylian is not
redeveloping the property.
THE AFFORDABLE HOUSING RESTRICTION WOU LD N OT RESU LT I N ANY AD DITIONAL PUI BUC OR
PRIVATE BENEFrM
Finally, because the home is already offc.)red to torlcalnts at rates and will remain
below-market while it is used as a residence, the Affordal.-fle Housing Restriction will not result in any
additional public benefits. The Agc.)nda Report states that the condition has an obvious benefit in
that it will result in i(maintall'111,19 n sidcntlal housing stock for low/moderate income renters for at
least 55 years." But, as the Agenda Report also notes, the house has been rented to low/moderate
income renters for the past 40 years and will continue to be rented as such due to its size and
location. The-,'efore, there will be no add1tional public benefits as a result of imposition of this
condition, only [Dur yens to Mr. Keuylian.
Moreover, the condition will not result in any private benefits to Mr. Keuyllan. Pursuant to the
City's Zoning Ordinance, a number of incentives are available to deve1cpers who elect to incorporate
affordable housing restrictions into a portion of their project. For example. if a developer agrees to
restrict 10 percent of the units in a housing development as affordable, it can receive a density
bonus to allow it to construct additional units and spread thc costs of the affordable units over the
entire project. The Zoning Ordinance also provides incentives and concessions in exchange for
affordable housing restrictions. These incentives and concessions can include deviations to
development regulations including parking i'oductions and increased building height as well as
approval of mixed use zoning. Mr. Keuylian will not benefit from any of these incentives because he
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DOCS 125930-000001/3143037.1
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is not proposing to redevelop the existing house or gas station. His "project" merely corisists of an
amendi"nent to the existing Use permit to allow for tht,.:- continued residential use of the house and
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minor improvements to thc,, existing gas station.
This is a classic example C)f Llnnecessar,,' governnient regulations that will only result in
�)Lirdens and increased costs to pi"N"--ite citizens �vhlle rcsulWig in no additional beriefits the puhlic.
We urge you to approve the CUP. Design vies v and Lot Line Adjustment without the Affordable
Housing Restriction is unnecessary. is unreasonably bUrdensorae, and is unrelated to any add-!tional
public or private bencJIts.
'Very truly yours,
Ju tine K. Nielsen
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DOCS 125930-000001/314303-1.1
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A PROCOPIO
17 1
oco B Street
Suite 2200
KlIffAffl= San Diego,CA 92101
T.619.238.1900
F.619.235.0398
JUSTINE K NIELSEN
P.61-9.906.5787
jusline.nielsen@procopio.com
AUSTIN
DEL MAR HEIGHTS
PHOENIX
SAN DIEGO
SILICON VALLEY
November 14, 2017
VIA E4M L
Chairperson Ryder Smith and Members of the Planning Commission
City of Tustin
300 Centennial Way
Tustin, CA 92780
Re: Planning Commission Agenda Item No. 7 - CUP 2017-10, Design Review 2017-011
and Lot Line Adjustment 2016-03
Dear Chairperson Smith and Commissioners:
We represent Mr. Berdj Keuylian/Berhour Holdings LLC, applicant in the above-referenced
item and owner of the property located at 125 North OA" Street and 395 West First Street located in
the First Street Specific Plan area of the City of Tustin ("Property"). Mr. Keuylian is proposing to
amend the existing use permit to allow for restoration of an existing historic house and continued
use of the house as a residence. For the reasons discussed below, we urge you to approve the CUP,
Design Review and Lot Line Adjustment without Condition 2.3, which requires the house to be
occupied by a low-moderate income family for 55 years.
Background
The Property consists of two legal lots with a historic residential house and a gas
,station/convenience store, as shown below. The house was built in the 1920s along with the
development of the rest of the single-family residential block along North "A" Street. The house is
integrated into the existing single-family neighborhood because it is physically separated from the
gas station by a brick wall.The gas station is located on the corner of West First Street and North "A"
Street and was originally constructed in 1977 pursuant to Use Permit 76-27. The Use Permit
contained a requirement that the house be converted from residential to commercial use upon
termination of the existing tenancy. For almost 35 years, this requirement was never enforced by the
City of Tustin.
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125 W,
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In 2003, the City of Tustin listed the house as a historic resource in the 2003 Tustin
Historical Resources survey Update as a good example of Spanish Colonial Revival architectural
style.
When Mr. l euylian pui iii e the Property in an auction -) ce,-7,d1- g in 2010, he was
unaware of the restrictions contained in the 1977 Use Permit or f -'[h-Grhistoric nature of the
residence. shortly after he Purchased the Property, Mr. Keuylian ubi-nutted pernilt applications to the
City of Tustin for improvements to the existing gas station. Duhrg this process. he was made avre
of the 1977 Use Permit requirement to convert the house from residential to commercial use. In
early 2011, Mr. leu lian asked for and received a five year extension of the Use Permit requirement
pursuant to ars executed and recorded rded Covenant and Agreement. Notably, Mr. I euylian was net
notified at that time that the house was listed as, a historic: resource.
Earlier this year, Mr. l euylian discovered the hol...a e was listed as a historic resource and
request;gid the City allow him to maintain the residential ise, consistent with the First strut Specific
Plan Lanni Use Regulations which encourage preservation and use of historic homes for reside Lial
uses. In excCiange, Mr. l euylian grced to invest igr�ificant resources to restore the residence to its
original historic appearance and to clean UP the underlying lot lines pursuant to a Lot. Line
Adjustment. However, the Community Development Department ent ("CC C") has requested that in
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addition to restoring the existing residence to its original historic appearance, Mr. Keuylian agree to
encumber the Property with an affordable housing requirement that it be occupied by a low-
moderate income family for the next 55 years (the "Affordable Housing Restriction"). Specifically, the
CDC has recommended the following condition be included:
2,3 The single-farnity home shall be occupied by a Low-Moderate income
family and shall be maintained as such for a peri
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THE AFFORDABLE HOUSING RESTRICTION IS UNNECESSARY BECAUSE THE HOUSE ALREADY
PROVIDES A BELOW-MARKET HOUSING OPTION
We understand CDC is recommending the Affordable Housing Restriction because it wants to
en-SUre the home remains affordable to future tenants. However, this Affordable Housing Restriction
is unne,,cessary [_�ecausc) the! house is already offered at a below-market rental rate. Since Mr.
Kc,uylian purch.---ithe property in 2010, he has rented the two bedroom home for approxin-iately
$1,700 per month. The average rent for a 2-bedroom unit in the City of Tustin is approximately
$2,200 Per manth.," The below-market rate for the existing residencle is due to several factors
including the home's small size of approximately 900 square feet, its single bathroom, and its
adjacency to a busy gas station,. FUrther, in light of the home's historic status and use permit
restrictions, significant modifications to 0-io honic, to increase its size or add bathrooms are
infeasible and would not be allo%.,��-ed v-ithout the City's approval of an amendment of existinig use
permit. Therefore. the home is goirig to ren-iain a bcdov�;-rnarket, lower hOUsing option for tenants
notwithstand.�ng the inclusion of the Affordable Housing Restriction.
THE AFFORDABLE HOUSING RESTRICTION WOULD NOT RESULT IN ANY ADDMONAL PUBLIC OR
PRIVATE BEN EFFTS
Because the home is already offs-,redl to tenants at below-market rates and will remain below-
market while it is used as a residence, the Affordable Housing Restriction will not result in any
additional public benefits. More--over, Mr. Keuylic= n will not benefil from any of the traditional
incentives associated with Irnlen)entinaffo rd a I
p - ,9 -)Ic housing restricti-ons.. Pursuant to the City's
I ,
Zoning Ordinance, a number of incentives are C-ivailable to developers who elect to incorporate
affordable housing restrictions into a I)ortion of their proj. For exan-i[)1,e. if a developer agrees to
restrict 10 percent of the units in a hOLISirig developn,icrit as affordable, it can receiv-.) a density
bonus to allow it to construct additional W-1111ts and spread the costs of the affordablP. Units over the
entire project. The Zoning Ordinance also provides incentives and concessions in exchange for
affordable housing restrictions. These incentives and concessions can include deviations to
development regulations including parking reductions and increased building height as well as
approval of mixed use zoning. Mr. Keuylian will not benefit froryi any of these incentives because he
is not proposing to redevelop the existing house or ,as station. His "`project" merely consists of an
amendment to the existing use pn-dt to allow for the contrnued residential use of the house and
minor improvements to the existing gas station.
THE AFFORDABLE HOUSING RESTRICTION IS UNREASONABLY BURDENSOME
The Affordable Housing Restriction is unreasonably burdeiso pie on Mr. Keuylian. As
discussed above, Nlr. Keuylian is not redeveloping the Property so he cannot he cannot offset the
costs of implementing and maintaining the Affordahle, Housing Restriction (e.g., compliance with
specific tenant application standards and income verification requirernents'). Additionally, the
Affordable Housing Restriction �%Jll be an encumbram,'-3c on Mr. KC-Uylian's title and may impact his
ability to finance or refinance, the Pro[Derty for the ne:lxt 55 years.
Rent Trend Data in Tustin, CA, https://www.rentjungle.carii/average-rent-iii-t;l,,stit)-rent-trends/
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For the reasons discussed above, we urge you to approve the CUP, Design Review and Lot
Line AdjustmiDnt without the Affordable Housing Restriction because �s riot requi'red. by law and lacks
a n e-xus to the inipacts of the proposed development, is LJI'MOCOSSary, is unrelated to any additional
public or private 13e-nefits, and is unreasonably burdensome.
Ve ry tru ly yo urs,
ustine K. Nielsen
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