ped land project. The area in purple, pink, is the additional land that we're at the city also requiring to be part of the conditions of approval to meet the inclusionary as far as the land dedication. This is the either additionally acquire and dedicate to the city, this additional 2,874 square feet or pay an enlou fee of 1.2. So it's the yellow and the purple together that makes up the land area that exceeds the 15% alternative means of complying with the inclusionary. So that's the overall area. I wanted to show you and just to show you the map and then go to the next area. This is the proposed adjacent project and I thought it would be good just to provide that context of what we've been working on with Metro for the proposed Pacific station. In this one you can see the city owned land that's shown in red on the preceding slide, I'm sorry, blue on the preceding slide is also blue on this slide and that's just a little over half an acre. What we'd like to do is exchange the area that's translucent and blue with the area that sort of cross hatched along Pacific Avenue. And so to create the city frontage which would be an affordable housing project over ground floor commercial retail a new sort of entryway for the Metro with housing on top. And then we'd like to add in the proposed land dedication from this project of approximately 10,000 additional square feet to the project as well which is the area to the right on yellow. Additionally, we would like to add the area behind that that goes to Front Street but we first want to secure these parcels before we move on to that next area. We've had some questions of well, if you dedicate or accept this land dedication how many units can you actually create on this project? So just looking at the hatched area along Pacific we did an initial analysis of how many units we could fit on that site. And for this site keeping under the existing construction type that's more affordably developed we could develop approximately 100 to 108 units on this site with a range of unit types. When we're looking at the density specifically of between the downtown base case just to have sort of a range that we made for the financial analysis as well as a proposed existing project which goes up to 130 units per acre. And look at this total land area which is approximately a quarter of an acre. That gives us an estimate that's very conservative and reasonable between 22 and 34 affordable or inclusionary units that we can actually create with this combined land dedication area. So I wanted to look at it from two different ways. One, by our ordinance it's just a 15% or less land dedication but I also wanted to look at well what can we reasonably develop within that 15% and obviously it's comparable to what would be the requirement if you were to include that 15% which would be about 31 units within the project. Obviously the density would be subject to a future council direction and that would be at some point in the future when we actually bring the design development forward to you for the city public project. And then I actually wanted to give you the opportunity to hear directly from Kathy Head if you wanted to go into the detail of how she got to the downtown scenario of a 6% base case inclusionary percentage as well as the 9% for the density bonus but I wanted to first see from you if you would like to hear her to go into that level of detail. It is relevant to the discussion today but it is quite detailed financial analysis. Well, let's just say we could see how the questions go and if we need to we're gonna have her supplement unless there's anyone who's looking for that information now. I'll just say there's a lot of information I'm looking for and I don't think we're gonna cover it all today so I won't do this right now. Well, I wanted to, I mean, I think that we purposefully scheduled this to get as much information as we can. So I would encourage you let's, we have the professional staff here, let's hear it. I mean, is there something I just wanted, you've suggested that Bonnie and so if there's something you'd like to bring forward please do so. Well, I'm just sort of going just scrolling through the slide so you can see the information that Kathy had our financial consultant who I believe is on Webex. She's muted right now on her phone but is willing to go through the detail of how she got to the six and the 9% and I know there have been some questions about that. Council Member Crabb, I would appreciate that. Great, thanks. Okay, let me make sure. Kathy, are you there? Oh, wow. Great. So this is Kathy Head with Kaiser Marston who is our financial consultant. As you can see, she's traveling between meetings. Kathy, I'm going to turn it over to you and let me know if you want me to go back to your slides. Thanks for being in the passenger seat. Yes, they are the same slides. A couple of years looking at it. I also, as you know, is an inclusionary study that you all heard of in the last few months. And so what I understand is the question that's come up is how a 15% requirement could be recommended feasible in the downtown, but this project is a significant amount in a length of 45.5%. And so with the slides you're going to look at now relate to the downtown study. And what I try to do with the next three or four slides is to show you how you can get from 5.5% to 15% in a perfectly rational basis. So what I want to share with you is this again, the first slide just comes straight from what the downtown inclusionary study was as the base-selting case that we analyzed. And so I'm finding if that slides out. So we're just looking at slides that was about 48,000 feet on the slide, which equated to 90 units per stretch. So lower, as Bonnie mentioned in her presentation, a lower density than what the participant plans is proposed to have. And the idea is that from the base-selting to a density bonus scenario is essentially how you get to it being supportable. So that, so then in the next slide, I have a market rate alternative person, how I got to a financially feasible inclusionary percentage for the downtown before consideration of density bonus, otherwise, you know, state density bonus. Yes, that's it. So in that scenario, what I did was I, the prototype project, I ran on a full form before it as well as a 100% market rate project. And the reason I ran that was to say, look, if a developer was in town and bought land, built land costs in downtown, and had no restrictions on internal affordability what return would be generated by that project? So this isn't an analysis of whether that project would then be feasible for the developer. Nobody's restricting you. You can get the market random whatever the market will bear and it costs what it costs to build. And so that's the last-hand column under market rate alternative. And so as you can see in that column, the market rate alternative has a cost of about $54 million. And then from there, what I did was I said, okay, and it's not only that this is her presentation, this notion of the state can impose a restriction that alters the financial return, that alters the financial characteristics of the return.  And so over time, and we've done these analysis, we've come to use, as a surrogate, a 30% reduction of land value, which Bonnie mentioned in her presentation. And so what you can get to that then, what you can do from what I did, is I tested how many affordable cities affordability measure, which is taking 80% of the area we didn't income and using 30% of that to the allowable rent. And so the result of that analysis, and this was in the August analysis and the September analysis, was that it could, for the downtown, before any consideration of density bonus, a 6% requirement. And that's in the right-hand column. So now looking at Roman in Room 3 on that chart, you have the stabilized net operating income from a market-rate scenario, which is $2.7 million per year. And then with a 6% inclusionary requirement imposed, that income falls to $3.6 million a year. So it's $100,000 a year reduction in income generated by the project. And again, going back to the market rate now, no restrictions, et cetera, what would the developer return, if you'd like, return on full occupancy. And that would have to be 5%. Reduction in income does to the project economics you divide the $100,000 by 5%. And again, it involves a return for the market-rate scenario. And as you can see on the chart, that map has about a $2 million impact on what could be supported for the project. And we need to buy that. We need to buy that by the 6th imminent, because it's 3% of 100. And that's a cost-effective cost per inclusionary unit of $334,000. So I'm going to stop here for a second and ask if you have any questions. Well, yeah, I just wanted to make two points. One is thank you for the detail and thoroughness of the presentation, the analysis you did in regards to calculating these costs. Second, how often have you done this before in looking at other projects and how significant of a level of review and close to these outcomes have you seen in past analysis? So would you say this cost is highly reliable? Thanks. Council Member Cron. We met with the local developer who had enough to share numbers from their project. And the numbers you're looking at now were then done in August. So I'm going to take the June analysis to fold those numbers in. What you're looking at half the times were provided the direct cost numbers and our construction cost numbers were done having reviewed the numbers that the developer provided. Thank you, Ms. Head. One of the council members has a question. Council Member Cron. Hi, Kathy. My question is, and maybe I am not seeing this, is 15% of land of the total project, how is that equivalent to 15% of the affordable units? It seems like apples and oranges kind of comparison or is it what I'm not seeing? Okay, thanks. Are there any other questions while we have this kind of market analysis regarding the market rate versus inclusionary percentage while Kathy heads on the phone? Any questions? Right, but I'm just up to this point. You're giving a lot of good detail in regards to the project analysis, so I just want to make sure that we can kind of pace ourselves. Okay, I don't see any. So if you'd continue, please. So my analysis from August and June said, okay, if you don't count density bonus in, the supportable inclusionary percentage is 6%, reducing density bonus in downtown because it is primarily because of the downtown where they can take advantage of reduced parking standards and not harm marketability as much as when you're in the non-downtown area. So the next analysis, which you're looking at the slide, which is called incremental value analysis, 35% density bonus, it is an analysis to say, okay, if a developer loves the density bonus, are provided by the additional market rate unit that a developer would get. So using the density bonus on a hundred unit project, a developer could get up to 35 additional units. And in those 35 additional units, 20 of them in this case, because we're getting no 15% requirement, 20 of those units would be market rate units, low income units, and those very low income units are required by this density bonus. So that's a more stringent requirement than the city of the province. And so that becomes relevant to this analysis. And so you can also do low income as a state density bonus, but those rents are also lower than the rents provided in the inclusionary. And just automatically, financially, it's better to do for the project. It's better for the project economics to do the very low income standard. Okay, I'm done. And then the other three, to get up to 15 total local units, for low income units, using Santa Cruz inclusionary rents. Okay, so that's the 35 additional units that you get with a density bonus. Okay, I'm going to ask. Can I just want to make sure, are there any questions at this point? I mean, we're going over some of the detail. No, okay. I just want to make sure that we're, you know, we can cover any sort of questions people have as you're going through your presentation. 20 extra market rate units. And so in this project, if you do own this prototype project that you're developing, you would have incremental costs to build 20 additional market rate units. And so it's not all new values, but you do get to spread some of the other costs across these units. So what I do, I just look at the incremental cost of the 20 market rate units, and what that adds to the net value. And so if you're looking at road and numeral 2A, the income, the table and net operating income, which is the rent minus the operating expenses, is $484,500. Here's the 5% threshold return on investment again. That's from the market rate analysis of the base case. If you divide the 484,500 by 5%, you get $9.7 million of ad value. $8.7 million can build the looping. The $9.7 million, and effectively your net value created by the 20 additional market rate units is $3 million. Now, I just want to make one comment that is really probably way more detailed than you want. Another factor that played into the same life and operating income of those 20 market rate units was the fact that the very old income requirement being imposed on units that was strict for standards in your home and in your kitchen, I also factor out that differential income out of my state-of-the-art operating income. Again, that's probably way too much of a no-meat, but I wanted to end on that. But anyway, net value is $3 million, that extra $3 million. You will, in a comment about the new original three there, you'll see that some $2,998, or effectively $3 million, divided by the net cost per ski-hair unit, which was from the earlier table, $330,000, generates nine units, and the out-of-the-year base project, and you can only measure, again, the base project with 100 units. So I move on to the final slide or the questions on that. No, but while you were speaking, I made sure that we had copies of each of the analysis out so we have them on the desk so that if people do have questions, they can. Are there any questions up until this point regarding the presentation, regarding the analysis in the next slide? Anyone? Okay, I don't see any questions. Okay. Thank you. Any questions from the council regarding that analysis? I think you had a question in regards to it. So thank you for that thorough report. And I understand this was also presented, at least the analysis from the report to the Planning Commission. Is that correct? Not at this level of detail, but we did have the base case scenario. Great. So I'll go ahead, please. I just wanted to quickly finish up the report and give you a recommendation here. We have received public comments, both in opposition and support of the project, which you have received. You also received today a revised resolution. And that is because we added one find, finding related to off-site land dedication to meet the project's inclusionary housing requirements. So essentially that finding states that because the parcels will be dedicated to the city, the city can control the ultimate use of the property for affordable housing. And so the city's control of the land represents adequate security to ensure that the future construction of inclusionary housing units will be provided. The proposed development as conditioned is consistent with the goals and design and development criteria of the downtown plan. Therefore, it's recommended that the city council acknowledge the environmental determination and approve the permits that are before you today for the proposed project based on the findings and the conditions of approval. Thank you. Thank you. Does that conclude your presentation? Yes, it does. Thanks. Are there any questions from the council regarding the staff presentation? Anybody? Councillor Moeller Brown. Thank you for the presentation and all your work that's gone into bringing us this project and to the applicants. I just have, I have many comments which I'll reserve for later, but just if you could, when was the environmental checklist that came, we had a hard copy this morning when we arrived at City Hall, when was this made available to the council, the checklist that you referred to with respect to coverage of environmental review through the downtown plan and the staff's determination of items that fell outside the downtown, excuse me, the downtown recovery plan and the items that fell outside of that plan, when was that provided to council and made available to the general public? When was the checklist made available? The checklist was completed prior to the Planning Commission meeting. It was provided as an attachment to the Planning Commission staff report and it was recently provided to you. Am I correct that it was at 9.58 p.m. last night because that's the email I received, 9.58 p.m.? Yeah, I'm not, I'm sorry, I'm not familiar with the exact time that it was provided, but it was provided, yeah, it was provided as part of the Planning Commission staff report, but yes, it was provided. Another follow-up question. Are there questions regarding the information that was presented? Well, I haven't been able to read it because we received it at 9.58 p.m. last night and I actually didn't look at it until I walked in this morning. I would just say and add that there was not any additional information that from the environmental review that needed to amend what was studied in the Downtown Plan EIR that this council certified. So all of the analysis that we conducted concluded that the Downtown Plan EIR adequately covered all of the project impact. So while we did several studies and the Planning Commission staff report identified those including things like traffic counts were specifically called out in the Planning Commission staff report that was attached to the council's packet, that conclusion as identified in the Planning Commission staff report was that it all falls within the previously analyzed Downtown EIR. Second question. Was the council at any point asked to reacquaint itself with the Downtown Recovery Plan EIR and if not, which I believe the answer is no, when was the last time the council was directed to review the Downtown Recovery Plan environmental impact report? I can't recall that. The council reviewed the Downtown Plan EIR in roughly November of last year, so about a year ago and the staff report did call out that this project is relying on the Downtown Plan EIR. So that was specifically calling the council's attention to that issue. Thank you. Any other questions? Any other questions at this time? Council Member Cronin. I appreciate you leaving ample time for questions. That's why we got here at 8.30. That I don't know. Bonnie, could you talk about the exchange of the property again because I'm not sure I was clear on it. I'm understanding that there's the Tampico's building, which is either a Tampico's building or 1.2 million, do I have that right? And so is that like going to be assessed value at the time of this whole deal coming together and we'll figure that out? No, the Tampico, which is <IP_ADDRESS> are the two parcels outlined in yellow and the applicant, the developer, already owns those and is proposing to dedicate that to the city. Additionally, we are looking at them also either acquiring and dedicating the area outlined in purple, also commonly known as the pipeline site. That's 8.18 Pacific Avenue. So we're asking for all three. And alternatively, if they can't acquire since they don't own that site, in lieu of dedicating, acquiring, dedicating the purple parcel they would pay the city on top of the land dedication, an additional 1.2 million. Are there any other land exchanges that you talked about? For the purposes of this project and the conditions of approval, we're talking about the three parcels, the two in yellow and the additional one in purple. Do we have an idea of what these units are going to rent for? The yellow and the purple? No, the units in the Market Ray project. The applicant is here, and I'm sure he's done that analysis. Kathy Head independently has done an analysis of its market rate supportable rents for the Market Ray project, but they can specifically talk about that. Similar to 555 Pacific Avenue, those kinds of rents that are getting 32 to 3800. They're going to be presenting after this portion so we can have them address that or just mark it for reference. Another question about not wrap garage with commercial uses, why would we not want to do that again? You mentioned not wrapping the garage with commercial uses. The proposal from the applicant is to not wrap the garage with commercial uses and the downtown plan specifically encourages the addition of active uses along Front Street. Plus we see that Front Street is evolving to a more pedestrian friendly area and we'd like to activate that area. We are specifically not requesting shoulder-to-shoulder commercial as that might not be feasible for the applicant, but we would like to them to provide some additional active spaces. Okay, so that would be one of the requirements. That would be one of the requirements, yeah. Is this six stories or seven stories? It's six stories. Six stories. And how many heritage trees are going to be removed? There are 22 trees on the property and I believe two are heritage that would be removed. Yes, there are 22 trees on the property. What page is that? This is actually in the staff report to the Planning Commission, page 20. Thank you. There's eight heritage trees and then two non-heritage trees on the site too. Those will remain, you're saying? There are 22 existing trees on the property of the 22 trees. The report identifies eight heritage trees of which two are non-heritage tree trees. And those all would be coming down or leaving some of them? Yeah, so of those eight trees, two are coming. Two are within the project site and those would be removed as a part of the project. Okay, thank you for that clarification. And would this be the time to ask the Measure O question to our city attorney if we could get some clarification and I don't know about giving away legal strategies or anything, but we can receive the letter from what we're in parking on the Measure O and how the city is not implementing Measure O and the fact that we're only getting 5.5% inclusionary, aren't we violating the ordinance that exists? That was a vote, actually it was a vote of the people. It wasn't just a city council made ordinance. Right, yeah, I can address that. Measure O was a community supported ballot initiative that requires that 15% of new residential construction, be it for sale or rental property, be affordable or inclusionary. I think back in October when the council initially amended its inclusionary housing ordinance, this was covered in some depth by the planning director who pointed out that first of all, that has historically been interpreted to mean 15% of the total number of units constructed in the city, not 15% of each parcel that's developed. And I think the... And that's the manner in which the ordinance has been interpreted in the past, at least since 2007 and also provided the basis for modifying the inclusionary ordinance as you did back in October and again more recently. The argument that's made in the parking letter is that the 15% applies to all development projects in the city. That argument has not been tested in the court, but it's not the way the city's interpreted measure O in both crafting its inclusionary housing ordinance and in applying it. Do you have any other questions? Councilmember Rucro? Yeah, maybe just an analysis from Bonnie about why developers in general maybe not on this project, but don't want inclusionary units built within their projects. Yeah, I think it's largely just a matter of economics and looking at what is feasible for the project. And as they're calculating their return, they're looking at what the market can support and they're looking at the risk that they're taking as they're doing a development project. So I think that's largely based on what is financially supportable. So for example, the city came in and said, no, we'll build 20 units of market rate housing within your project. Would that kind of deal be accepted? You said market rate. Do you mean affordable? Affordable, excuse me. We'll put in 20 and just sprinkle them around, but the complex. I think often we have done that in the past. I mean, I think that was the role that we really played when we had redevelopment and redevelopment funding is that we often were able to fill that affordability, that feasibility gap for developers. So when we had requirements, we would come forward and provide that financial gap that made that feasible. So a number of our projects in the past have done that. If we had a viable source right now, and I know that there's some discussion of some legislation in the next session that may provide that, I think that's something that we can look at again. We didn't include today the chart that we've shown to you a couple of times in the past that shows the creation of affordable units since 1980. But the large spikes that you see and the majority, I mean 90 to 95% of the affordable units that were created, were created with redevelopment agency, city assistance financially. So I think the reality in our market is that it takes a subsidy to create the affordable units. Thank you. Thank you, Council Member Matthews and then Council Member Brown. Yeah, there's been some questions about the process to proceed with the dedication of the two yellow parcels there. What would be the process to move forward with the affordable housing? Would it be an RFP to non-profit housing providers? Is that how you would anticipate the meeting? Yeah, it would be similar to how we do other affordable housing projects is that we would finish assembling all the land that we wanted for the project. In this scenario where we have, you know, I understand there are a lot of possibilities. Right, we have sort of a plan A, which includes the activation on Pacific and the plan B, which is more of a rectangle that includes the Putney Perry Building facing Front Street. So we have sort of two different development scenarios. So our first goal would be to finish acquiring the land and assembling the land that we need and then we would put out an RFP for an affordable housing developer. Because we're effectively completely underwriting the value of the land, it becomes an extremely attractive project for an affordable housing developer. We're not only providing the land at no cost, we're actually providing a number of things that make it very compatible for state and federal funding and that it's a transit-oriented development project. We have two partners which I hadn't mentioned, Santa Cruz Community Health Center and Dientus Low Cost Dental Care. There are a number of grants out there in addition to being very competitive for 9% tax credits for an affordable housing project. We feel highly confident that we're going to be able to develop this project. Thank you. It's just a question that's come up. So I want the answer to be public. Thank you. Thanks, Council Member Brown. Yeah. So I do have some additional questions. And so far as the Pacific Station project is not specifically on the table here today, but it is related given the alternative with the land swap or land dedication, as you suggest. I do have some questions about that. But first, one quick question that occurred to me when Council Member Cron was speaking. The pipeline property, I've been told various things and I know you can't really speculate about a willing seller here, but how close are we to knowing whether or not that property will be for sale? What is the estimated value and is the 1.2 million an equivalent to the value of that property itself? We have done just from comps of some appraisals that we've done on the surrounding properties. We do believe that it's comparable to what we're estimating as the in-loofy. With that said, we haven't, as a city, pursued that property at this time. However, the applicant has been in discussions with the owner. Thank you for more questions coming. So it would be helpful because I'm still a little bit confused about the valuation of the land that is available to be dedicated to the Tampico site vis-a-vis the actual construction of units. So it would be helpful to get a better understanding of, because these formulas for the alternatives when it comes to in-loofies and alternative land dedication to facilitate affordable housing somewhere else if all the other variables can, all the other variables come into play and we can secure the financing, et cetera, et cetera. But is it really equivalent to that number of affordable units if they were actually built by the developer? How do we know this? It's something that confounds me every time we charge in in-loofies as well. Well, as we were talking just a few minutes ago, the actual development cost of creating affordable units is something that generally is heavily subsidized. And so if you're looking at the land dedication, because we already have the property on the slide in front of you in dark blue, we're able to leverage that into more units in a project. So the conservative estimate that we had was based on a density per acre, between 90 and 138, 138 being a very dense project that is the applicant's density, 90 being the base case scenario that our financial consultant did, and that's with the assumption of the 90 per acre that you would do density bonus, so it would become an even denser project. So that range that I gave you earlier between 22 and 34 units is conservatively within that area of looking at the three parcels, the two yellow and the purple, of minimally what we would be able to create fitting within that density, so between 22 and 38. I mean, if your question is, are we getting the same thing from the developer as if they were to provide that 15% as an in-loop fee, no. And I think that really goes back to Kathy Head's analysis of that's why it's a 5.5%, because if we imposed that as a monetary, as a dollar amount on the developer, that 15%, they would be underwater on the project. So basically, they would be giving the land away for free and then paying the city an additional couple million for the rights to develop that property. If we imposed a 15%, you build the inclusionary units within the project. Yes, we can do that, but we can't force the developer to build the project. So I think that's where it comes back to our independent financial analysis of saying what is it that's supportable on the developer so that the land value isn't reduced more than 30% because that's sort of the industry threshold. So essentially, what we're saying here is the calculation of 15% can be flexible and that is up to the... I mean, I believe that's a decision that's up to the council whether or not interpreting it to suggest that this is 15% is... I mean, that's a decision that the council ought to be making based upon the information we have, but one could say it's 5.5% if we look at it a different way versus 15%. Right. Included in the project, the dollar value is 5.5%. If you're looking at the dedication here of how we're able to leverage it with the adjacent property, it's between 15% and 17%. Given that we're talking here... I'm very much in favor of the Pacific Station project. I appreciate all the work that's gone in and in no way do I want to suggest that I'd like to disrupt that, but because this is kind of the cornerstone of getting some affordable units connected with the decisions we make here, I really want to understand this. I mean, I want to understand the feasibility of the Pacific Station project because right now all we're going to have is the land. We don't have redevelopment money. We don't have deep pockets to subsidize development of those affordable units, so it's really kind of hypothetical for the future. So it's a bit speculative and I'm all for finding those resources, but I'd like to know a little bit more about your sense of, and it sounds like you think that we are globally competitive, our ability to get affordable housing tax credits for this to move forward on construction. Will, sorry, will we... Can the city be competitive for getting access to low-income housing tax credits or the non-profit through RFP? Can an entity be competitive? Will we be competing with other potential affordable housing projects in the city for those tax credits? You know, I'd just like to know where that is that you're thinking is in the mix on that. Yeah, we are highly competitive because of the level of investment that we have in the city and we've completely underwritten the land value from it's extremely attractive to an affordable housing developer. I mean, this is the level of subsidy or even greater than any of the other projects that we've created over the year, this 1200 plus affordable housing units we've created as redevelopment. This is the level of subsidy comparable to those from the tannery to any variety of the projects from 1010 Pacific to Shaffer Road to any of those projects. So in discussions with probably three or four affordable housing developers, they are all anxiously awaiting for us to put an RFP out here out on the street for them to respond to because this fits right within projects that can be supported. So we don't have any doubt that we'll be able to move forward with the project once we finish assembling the parcels. Okay, what is the plan for the vacant lots in the interim before? So those properties will be, I believe we're talking about a demolition permit here. Yeah, as part of the condition of approval for the two in yellow is we are recommending that the applicant demo that within a certain number, I think six months of council approval, because they're vacant right now, they are a nuisance property and we could come back to council to determine how we want to use that in the interim during the period. So you can, but will we be looking at that or will the site be engaging? I don't know. Just curious. Yeah, your question is will we come back? We absolutely will come back. Okay. Well, I have major concerns. It's not really a question, but I mean, I have major concerns as I've suggested about our ability as a council to determine how we can use the downtown plan EIR. And I just don't think we have enough information, but I'll reserve that for comments later. Last question. I know you said that a historical review was conducted and there are no buildings of historical significance, which on the face of it seems reasonable to me, but I am interested to know a little bit more about that and in particular, if any of the buildings in that project area are over 50 years old. Yes, that's true. Some of the buildings are over 50 years old, which is what triggered the requirement for the historic report. And some of the buildings were, it could have been historically significant, however, because of the extent of the remodels that were done after the earthquake, the building no longer maintained the significance. So the historic consultant recommended that those would not be eligible for listening. Is it for now? Thanks. I'm going to just real quick because I wanted to follow up. First of all, I'd like to thank everyone in the public that's listening. I know that we're taking some time on this. It's a really important project. I want to make sure that we get every all the questions asked before we open it up for public comment, as well as having the applicant present their project. I just have one question on what you asked. What were the concerns about the EIR? Because I'm not clear and I would like to know that, you know, just so we have an understanding what the issue is that you're referring to, the downtown EIR. I mean, it's just a general concern. I have not had, part of my point is that I haven't had time to review, re-review the EIR up against this project. So I don't, I mean, there may be many, there may be none, but that has not been something that we've been asked to do, that we've had time to do in acting as a quasi-judicial body here to approve a project. I think that we should have that opportunity. And specifically with respect to measuring this against the EIR, but also with respect to what was not, the staff does not suggest was covered in the EIR. I mean, we're told it's insignificant. I received this information at 10 o'clock last night. Actually, when I looked at my email this morning, because I didn't look at it that late, and here in hard copy. So it's, I can't answer what questions I have, because I have not had time to review. Well, I just had a couple of questions before I asked Council Member Cron. This went through the Planning Commission, and I just want you to reiterate, what were some of the issues that they had, so I can kind of re-educate myself on what were their specific areas. I know it was a unanimous vote, wasn't it? Yes, it was. So were there specific concerns that they raised that we should be thinking about right now before we, as we go into the public comment and deliberation? They addressed their concerns through modifications in the conditions of approval. There was a recommendation for a design alteration to the large building at the corner of Pacific and Laurel Street that they eliminated. They felt that the design was appropriate for that corner, and actually the design, they felt, reduced the height and massing of the building. There was also quite a bit of discussion on the recommendation for adding active areas at the Front Street frontage, and like I said, during the staff report, the only modification they made to that condition of approval was to require that any spaces that were not converted to commercial were made easily convertible in the future by stubbing out utilities and that kind of thing. At the end of their deliberations, did they feel those issues had been sufficiently addressed? Yes, yes. And I just wanted to ask in terms of, I know, I believe I saw it in the report, but how many new units, residential units will this project produce downtown? 205. Okay. All right, Council Member Cron. The six stories, what was the total height on the six stories? It's 75 feet, and then there's a mezzanine level that we don't count as a story, and that mezzanine level would go up to 85 feet. Yeah. Sounds like seven stories. For the city attorney about Measure O again, on page four of Bill Parkin's letter, he says, because the applicant has no vested right to develop the project without imposition of inclusionary housing requirement, the city, through the city council, had no right to override the wishes of the voters in enacting Measure O. Has Measure O ever been challenged in court, or has the city ever been taken a task on this before? You mean has a similar project that the council approved with less than 15% affordability? Has it been challenged? And gone to court, yeah. Over the issue of Measure O, not being interpreted by the way the... Not to my knowledge. Okay, thank you. Any other questions? Okay, any other questions regarding the staff presentation? No. Okay, so then now it is the opportunity for the applicant to come forward. You have 15 minutes to speak. Whoever the designated staff applicant, you'll have 15 minutes to present. And then after that, we will go towards public comment. Greetings, everyone. Thank you, Mayor Tarasas and city council members. And first, thank you, staff. Very thorough. Well done. My name is Reuben Hellick. I'm one of the members of LHH Partners LLC. I'm here today with Owen Lawler, Jan Hochhauser, our attorney, Frank Pirelli, land use attorney. Of course, Owen's the L, and Chan's the H, the other two in LHH Partners. We're with our equity partner, DevCon Investments, LLC. We're really quite pleased to present for your approval this Pacific Front mixed use project. You know, by the way, also, Brett Sistine with DevCon Investments is also here today in the audience. We started working on the design of Pacific Front five years ago. And since then, we've been working closely with city staff to bring this vibrant new building to the front of you today for your approval. During the past several years, I've served on the Downtown Management Corporation, which is an advisory board to the city council. And I served there with city mayors, city council members, and along with local business owners and property owners. And all of us are working collaboratively towards improving the overall downtown experience for both our residents and our visitors of Santa Cruz. Now, I'd say it's a fair statement to make that this Pacific Front project is viewed by many as a terrific step in the right direction towards increasing the economic fatality of this community that you all love so much as do I. With 205 apartments, we're providing desperately needed housing for the citizens of Santa Cruz. Instead of a block of old dysfunctional buildings, we're bringing revitalization to our lower Pacific Avenue area. And that's going to greatly enhance our public health, safety, and our local economy. In short, this really is a renaissance moment. While I have not served in a governmental role such as you, I have served on many lawn profit boards, including the local Santa Cruz Habitat for Humanity. We build homes for those who really need affordable housing. And I understand how it works. Professionally, I work as a commercial real estate agent. I am responsible for bringing many of the tenants right here into your downtown. Over the past years, we've watched the housing deficiencies in this community continue to grow. Clearly, there's one thing I hope we can all agree on. At least most of us, Santa Cruz does need more housing. And the vertical solution provided in front makes great sense. To that end, both the City Council and the Coastal Commission approved the revised zoning ordinance for this area of Pacific Avenue. Earlier, we know that the Coastal Commission approved it unanimously. Then, last month your Planning Commission approved this particular project unanimously. One of the wonderful benefits of this project is the affordable housing element. As you learned firsthand from Bonnie and staff, we've put a lot of thought and a lot of expense into an innovative solution that secures affordable housing right next to the Transit Center. During the past five years, since we started this, we've seen construction costs literally skyrocket. I mean, the numbers are staggering, what it costs to build now. Interest rates are climbing. Lenders, who we need to build the project, are tightening their underwriting standards. Yet in the face of all these very serious headwinds, here we are today committed to moving forward with this project as submitted. I love this town. So do you. Why else would you serve? What's the point of serving on a City Council if you don't truly deeply care for the real quality of life in your very own community? Us guys, LHH partners, we look forward to providing Santa Cruz with a really beautiful new apartment building five years in the making. In just a few short years from now hundreds of your citizens are going to happenally refer to this place as their new home. I now turn over the day as to Owen Lawler and then after Owen Jan Hochelser they'll present the Pacific Front project. Thank you for your time and happy holidays. We plan to use ten minutes of our time and leave five minutes for questions and rebuttals later. Thank you, Reuben. My name is Owen Lawler and those who don't know me I've lived and worked in Santa Cruz for over 40 years, raising my daughter here. She attends Westlake in the fifth grade. As a member of this community, this project is more than just about housing. This project brings a greater sense of engagement to our downtown. This is about bringing vibrancy and positive energy south of Cathart Street. This project is about creating a more healthy community that we are excited and we are excited to be here today. I really want to thank Leigh Butler-Bonney and especially Samantha for all their hard work to get this project before you here today. And I want to thank your council for your consideration. Community engagement included over 30 community meetings on both the downtown plan and this project. The project aligns perfectly with the downtown plan. Unanimously supported as Reuben mentioned by the coastal commission and the planning commission. We're gratified by the large cross-section of community members that have turned out here today to support this project. And as you can see from the package there is a large coalition of community support. We know intimately how critical the rental and affordable housing shortage is in this community. As we all know, lack of housing hurts this community to its core. From the inception of this project we've been looking for ways to maximize both the rental housing and permanently affordable units in our downtown. With staffs as well as council's guidance we've crafted a project that will facilitate the creation of over 100 units of rental housing in our downtown core. In closing this project brings sorely needed workforce rental and affordable housing adjacent to transit to our downtown. This is the environmentally and socially least impactful location and consistent with community values of environmental stewardship and minimizing greenhouse gas emissions and encouraging a walkable inviting family friendly downtown. Community has stated clearly that downtown is where the housing should be located. Thank you for your consideration. And Jan will continue the discussion. Good afternoon, council. Mayor Terazis and members of the council, my name is Jan Hochhouser. I have been working as an architect in Santa Cruz for almost 10 years. Santa Cruz is indeed a wonderful place and I do really appreciate the opportunity and experience to have worked with the city and community stakeholders in the pursuit of a quality housing and architectural project. I think it's timely and in that regard I'm very pleased to inform this council that the all affordable 100% affordable project at 350 Ocean Street has finally and just recently received tax credit allocations from the state. That's a 63 unit all affordable project that's contributing to the crisis, the housing crisis in town. There are no market rates units sprinkled amongst that project. It's 100% 63 affordable units. So I'm really pleased to report that that's now moving forward. Perhaps reiterating what my associates presented about the rigorous and comprehensive process that has been undertaken to bring the Pacific Front project before you today, I can emphasize enough how this project is conceived not as an affordable entity, but a critical piece of the downtown plan. It interfaces with future development straddling the Maple Street alley, as Bonnie presented and the adjacent transit hub. In cities all over the world this is like a textbook solution for housing and commercial adjacent transit in the heart of downtowns. The proposed design is crafted in a way to be consistent with the goals and objectives of the city and bring the best of downtown to lower Pacific. Our team, DevCon, Joanie Janaki, and city staff work very hard to resolve design issues so that every frontage, Pacific, Laurel, Front of this project is both functional and beautiful. Enhancing the experience of pedestrians and bicyclists was paramount in this process. This new development proposal goes beyond the literal requirements of sculpting the architecture with an array of courtyards, terraces, and patios. The community experiences inviting spatial diversity up close and from afar. The project employs three distinctive architectural styles that deliver a richness and sensitivity to the fabric of the city. In contrast with the monolithic design of the county building on Ocean Street, for example, Pacific Front is premised on a playful macro and an intimate scale. We generally all agree that entering Pacific Avenue at Water Street is a positive community experience. We believe the Pacific Front project will be a positive community attribute from so many different standpoints and contribute to the betterment of Santa Cruz now and well into the future. I'd like to say that words are sometimes not adequate, but we are indeed honored and proud to present the city such a finely crafted and considered project. Naturally, I am here to answer any questions you may have, and I would be delighted to share more about the specifics of the project if you so desire. Thank you for your time. Thank you. Can we give pause time, please? How much time is left? Okay, so you're reserving that time for questions and rebuttal. I'd like to ask the council at this time if there's any other questions they have of the applicant presentation at this time? Council Member Cron. I was wondering about the notion of workforce rental and could you go into that a little bit and talk about what that means, what is workforce rental, how is that defined and what are the rents that will be charged and will folks who are present from building trades be able to live in these units? First of all, it's the project for successful won't be available for at least two to two and a half years. So I can't tell you exactly what the rents will be. I can tell you. Go on, please. You could just pause for a second. We have a really long day ahead of us and now everybody has different viewpoints on different matters. If we can just be respectful of everyone's point of view, it'll make this process a lot more manageable. Okay, please go ahead and complete your response. I do know that there's a number of competing projects coming online. We're taking the risk that whatever the rent is, this project will still work and that's what I can tell you. So we don't have, I mean, folks who are present here, we're talking 3,500 for a two bedroom, maybe by that time 4,500 and maybe the market goes south. If we continue to go up as we've seen in the last four years, you know, rents rising 40 plus percent, the rents could be as high as 4,500 for a one bedroom. So no, I don't think that's possible. And I also say that people now are paying $1,500 a month for one room in a 100 year old house on the west side of Santa Cruz. And many of those people could pay less and live in this project with a roommate. So I don't think that's possible for people living in units that are built for one, you know, one bedroom. Let me just say just for the purposes of our discussion, this is an opportunity for questions. And so I mean, I'll just, I know it's more rhetorical, but I think that one of the things is we do have, you know, housing crisis is add more units and so having more supply, I think that the answer will be provides more information. Thank you. Mr. Helig, a real estate question. You said you're responsible for bringing in many tenants and what I hear from folks who approach me and say when they're driving over to San Jose, they hear units advertised in Santa Cruz over there. I'm just wondering how much is this going to solve the housing crisis that exists for Santa Cruzans right now and not like Google or Apple or anything like that. When housing is built, people rent it and those rental applications come from a variety of areas. Who will be renting this project? My personal opinion is it will be lateral moves for people like Owen mentioned. We all know a lot of people in town here that are just aching to have a decent place to live but can't find it. We'll have it for them. By the way, now that we brought all of our property partners out in Milpitas and when we drive to DevCon construction, main headquarters, we go down Montague Expressway. When we started, there was no housing on Montague Expressway when we got off at 680, excuse me, 880 to head out to their office. Yesterday, I took a visit past about 5,000 units and a giant BART station. My point, people have places to live here. They have places to live there. The population continues to grow. The U.S. Census Bureau says the United States of America will have over 440 million citizens by 2060. Your question is esoteric and frankly we hope to find a really great mix in our property of young professionals, students, retirees of our age who have been able to come and live in Santa Cruz and enjoy this great lifestyle. Yes, perhaps we'll have some tech workers. At least 40,000 feet to Amazon downtown at the Cooper House and I've heard that they have a hard time finding proper hires and part of that problem is housing. You all know very well how hard it is to hire people. Housing is an issue even for your own city staff. So let's talk about housing. It's 205 units with thousands of bedrooms short. What's the point? We're going to build housing. It's very simple. You don't deny that you do participate in advertising units here in Santa Cruz over the hill for people to come and live here. Those units are leasing up very quickly and I would ask you to talk directly with the property manager as to what the mix is about. Do you have a definition of workforce housing? The definition of workforce housing I'll defer to staff who understands all of the technical issues revolving around workforce housing, income ratios, etc. Is workforce housing equivalent to affordable housing? What's the difference between those two terms? And then there's affordable by workforce housing. Workforce housing doesn't have one dedication as does affordable housing. Affordable housing can be many different percentages. It means it's affordable to a certain income group. Generally speaking, if you're talking about workforce housing the general thought is it ranges from 80% of area meeting income to 120% of area meeting income. Again, there's no set definition both of those ends could stretch. If you're talking about affordable housing it depends on the types of housing you're talking about. Our inclusionary ordinance for example sets everything at 80% of area meeting income. So we're on kind of that edge of workforce housing for our inclusionary units. Just to be clear, the housing and affordable housing is right so we live within those guidelines. HUD sets the guidelines for their programs at being 80% or below and that's just for like the home program but there are other guidelines and that's just for rental housing. If you're talking about ownership housing it increases up to 120% but since this is a referring to rental. My point also is workforce housing that term is not defined like natural environment. It has no formal definition that anybody is holding anybody to standards as far as housing between $1,200 to $2,000 a unit or 50% of the median income to 30% of the median. There's no restrictions there. We check up on affordable units. I understand when people have signed those kind of covenants with the city that they're going to keep units affordable workforce housing units has that rises and falls with the market. Workforce housing units per se aren't necessarily rent restricted. We do a program for workforce housing where you rent restricted them but in this instance workforce housing is not rent restricted but if you're thinking about the definition of it you have to be reasonable. In other words you're not saying oh I'm building workforce housing and saying I'm building for those people that are at 200 or 300%. We can't say that but there's nobody enforcing that. What about affordable by design? Affordable by design is again another term that is used to talk about units that usually rent at a lower rate. Affordable by design usually refers to the size of the building. We can't say that but we can't say that. We can't say that. We can't say that. We can't say that to the size of the unit and the amenities in the unit and that kind of thing that just makes it a little less expensive. The bare cost of building the unit or the whole complex is less since a luxury complex would be. The units are then considered affordable by design because it's not affordable by design. We can't say that. As much as I would love to debate the state of urban land markets and the laws of supply and demand, I don't believe this is really the venue to do that. But I do have a follow-up question related to prospective rents because I think at the end of the day what we know is we live in a financial hardship. I think that the applicant is asking us to make a determination of financial hardship for reduced inclusionary housing percentage. I have to think that some thought has gone into what anticipated rents might be. I would like to hear more about that aside from whatever the market will bear. I hear that. I would like to add one thing to that that I should have mentioned earlier related to that before the applicant addresses the question. One of the opportunities through the land dedication for the city is that we for the Pacific Station, our proposed affordable housing project is that our recommendation to council will be for us to develop the affordable units at affordability levels that are available to us. We're going to be able to do something that typically even some affordable housing developers wouldn't be able to do and that we're going to look at what our needs are for the remaining five years of arena allocation and create those extremely low, very low units in a project. We're going to be able to subsidize that. We're going to be able to subsidize that. We're going to be able to subsidize that. Because this is a city supported project, we'll be able to more accurately meet the needs of the community on deeper affordability levels than most even affordable housing developers will be able to do. Does that answer your question? I'm going to turn it over to councilmember Narroyan who had a question. No, I'll pass. Kate Roberts who contacted me in advance for modern economic partnerships but before you speak, I wanted to ask the planning director there was a question about the downtown EIR and if you could just kind of again you mentioned that that came before council November 2017 is there anything else you want to provide in response to councilmember Brown's comments? I can just sort of generally provide some information to address those either myself or with the team. So a few things the CEQA analysis relied primarily on the downtown plan EIR. It also tiered from the general plan EIR the downtown plan EIR was also looking at the overall general plan EIR so those two work together and there is a public resources code section 083.3 and that essentially says that if a project has been analyzed under either a general plan EIR or a specific plan EIR then as long as there aren't any site specific analyses that would warrant additional study then that prior certified environmental impact report or negative declaration whatever it may be can be reused for the new project and so there were a series of analyses that our CEQA consultant prepared and was reviewed by staff so traffic and transportation historic analysis to clarify is that what's in this document I've yet to be able to read? Yes so that document goes through and does identify some of that information the studies themselves I believe those are separate the findings are referenced in that report and so are those publicly available? They're all public information Where would we access them? Samantha can answer any questions that you have related to that and that I will say that I did just learn that the council received that checklist that you were referring to last night it is available under the planning commission's web page as well so it's been publicly available there with respect to the council it was identified as an attachment to the planning commission staff report and it was available on the planning commission website but apologies for having just realized that it was forwarded to the council yesterday evening there were a whole series of analyses that were conducted the historic analysis the trees with the arborist report the air quality and archaeology and so forth and so while we were confident that the downtown plan EIR and the general plan have mitigation measures to address those and have thoroughly analyzed those all those impacts we did conservatively take the approach to doing new analysis on those and for example in the planning commission staff report it identifies the number of trips that were anticipated from this project and it identifies that that trip count was adequately evaluated and anticipated as part of the downtown plan EIR so there are those linkages in the materials that the council has seen and also that the planning commission reviewed in advance of their decision but happy to answer any other questions that you may have Any other questions regarding that Council Member Cronin? In a letter the Sierra Club wrote this project does not meet the requirements for an exemption to CEQA do you think perhaps because they hadn't seen this document that Council Member Brown was holding up? That document was available for their viewing I don't know the date of that letter but that document was prepared in advance of the planning commission and that CEQA exemption I will say the statutory exemption is just one of a three-prong approach that we're taking with this project to the downtown EIR it's relying on the downtown EIR and the general plan EIR in conjunction with that exemption in order to have the project qualify for that CEQA review Okay so great so we have any other questions thank you Mr. Butler I'm now at this point in the hearing I'm going to open it up to public comment Monterey Bay Economic Partnership Kate Roberts asked for some additional time First before she speaks how many people would like to speak to this item that are here present can I get some short hands so we're going to abbreviate the 20 okay I see 11 which means 20 correct Kate you'll have two minutes okay if you could come speak to the clerk because I sent you an email in response and hopefully you saw that she doesn't represent one minute yeah oh my god good afternoon my name is Kate Roberts president of the Monterey Bay Economic Partnership I just wanted to thank you all for your thorough research on this really important project for downtown obviously it is an alignment with our housing initiative and our program criteria mixed use utilizing vertical space effectively maximizing existing infrastructure near jobs and services and as staff mentioned it helps get the city closer to its rena goals so we're pretty excited about the project we've done a lot of work to get communicate to people about the importance of this project in hopes that it does get through it's in line with the downtown plan and it will enhance the downtown given what's currently there so it seems like it's all good from that perspective and I think the creativity that's involved here by contributing key parcels of the land to the city that are adjacent to the site in order to assist with the land assemblage that the city is undertaking for an affordable mixed use project will actually allow for more affordable units and that is also something that as we're talking about being our triple bottom line and really focusing on equity too is really important to us this is an example as I said of innovative solutions between public and private sectors to create more housing for different income levels we hope it serves as a template for other high density housing opportunity and these creative solutions that create more housing and provide economic development is something we really want to support more of so thank you again for your thoughtful consideration and I just want to give a quick shout out to those who came here on their own time using their break and lunch to support this project so good job guys thank you okay thank you now those of you that are lined up to my left are on line to speak at least if you want to go first you did send me in advance an email I mean you're speaking out individually but if you wanted to come up and speak please go ahead yeah we're going to go one minute based on the number of people that are here today and the amount of proceedings yes my name is Elise Caspi I'm going to make a motion that speakers get two minutes two minutes each this is a significant project this is really important and this is in the middle of the day so many of these people have come out here today to speak and if it was at night we'd have maybe a little more time we'd have a lot maybe even more people so is there a second to that motion would the maker of the motion be willing to go to a minute and a half or a second okay so all those in favor of allowing 90 seconds for public comment per person please say aye aye those opposed please say no that motion passed unanimously so you'll have 90 seconds we'll reset the clock I've got to change it thank you again everyone for your patience okay you're on actually it's not correct okay I need it reset then at the start please a full minute yeah reset please so it's going to say a minute but I can go an extra 30 seconds excuse me okay could I please have my full minute I'm trying to get straight on the time please to be clear I had to reset another button for 30 seconds so you will have a minute and 30 seconds to speak okay 90 seconds and thank you my name is Elise Caspi I'm a community organizer and I live in California where the Loller Project is going to be built I've been canvassing businesses and residents in the area the overall project is being rushed through this is a very politically maneuvered project we're getting a snow job sales job and unfortunately it's very deceptive highly deceptive in the most basic language for example the head shop does not intend to sell to Romo of Calderon Tires barely knows about this project and I hope you're not just going to counter what I'm saying there is zero affordable housing being provided it's probably going to be a lawsuit about this but it's not going to go to workers in the city so what's happening here is sad I want to say that when I went to get the 41 page report the other day from the planning commission a developer I'm not sure who I really don't know was bellowing actually bellowing to some of the city workers in the room where they were meeting which is right next to the desk where I got the report I've given $800 to an affordable housing fund and the city worker was saying we're going to play by the rules we're going to play by the rules this sales job snow job is full of bureaucrates it's extremely hard to follow for the city council members the public can't follow this it hasn't been vetted sufficiently by the public but if these parcels get sold where's the bus company going to be and I really think that it's atrocious that you've had the final hearing for this project with all these all this information and all this detail that you rushed this through before the outgoing council goes out it's political it's a bad deal and bad faith the emperor is wearing no clothes this is a crying shame next speaker please next speaker I'm disgusted Robert thank you next speaker please I'm not going to shut up until I get out the door because this is an outpage he can wait this is a world outpage you have a warning thank you Elise thank you point of order thank you sergeant at arms if you can help thank you please begin my name is Moss Modegao Denzi I am the public relations and community relations director for the Santa Cruz Warriors I want to express that a positive vote for this mixed use and housing development is a positive vote for what I do which is my responsibility which is building a connection between our players our coaching staff and our front office staff with the children citizens and community in our neighborhood here in Santa Cruz County that starts with connecting where we play which is 140 front street up to our front office which is at 903 Pacific Avenue making that a better foot traffic area with residential and community space will allow us to walk around Pacific to go to the boys and girls club downtown chapter will allow us to walk up front street to serve produce to citizens with food not bombs and in turn it will allow us to use Kaiser Permanente arena as more of an event space for community organizations so that families schools and after school programs will allow us to use that space in those property manners real quick just because in front of my mind last Wednesday because game of the season I was walking with a fan interested in purchasing tickets for that game on Wednesday the 5th we turned the corner and found a man bleeding profusely out of his mouth and face because just seconds before we turned the corner someone hit him with the face and took his phone with his skateboard and took off I feel that that happened at Pacific and Laurel Street that would not have happened with the amount of foot traffic on with this project thank you for your comments next speaker please Pete Kennedy planning commissioner you've read my report heard my recommendation this is a great project I urge you to vote it through it's hard to hear allegations of last minute when you've been through all the meetings and all the work that has gone into this I want to acknowledge this is a big building for Santa Cruz and we quibble about 10 grand here 20 grand there this is 200 apartments let's build them an architect said when I was up there and he was over here you have a choice today you can vote yes on housing or no on housing and I urge you to vote yes on housing thanks thank you Pete and again like Pete's example you don't need to use a full amount of time just come right up and speak your piece thank you next speaker I'm Sean Heabard carbon is local 505 member on this council campaigned on affordable housing and their successors campaigned on affordable housing and we all believe that this is something that needs to be addressed immediately in this community everyone has ideas and they're all different the only consensus that we have is that we need something that is multifaceted and addresses all the different elements of the affordability crisis excuse me my interest in this is not academic I didn't learn about poverty in college and I'm here representing a roomfully union carpenters that believe in this project and the jobs that will create with all due respect to council member Cron I think his argument about our members expectation of living these units is specious we built the apple campus and nobody working there right so we're talking about real jobs in this community we're talking about pathways with apprenticeship and living wages retirement benefits and health benefits for these members and their families when we talk academically about putting this unit here and that unit there we think about them like little monopoly pieces like we just grab them and stick them there the building of these units is how these members feed their families and I know it's not the same when you get to build affordable housing you got 30 units 30 plus units that could come from this project and I know it's not the same if you don't get to stick it to the man and get those units out of him but the people you're really sticking it to are the people in this room thank you next speaker please hi mayor thank you council members my name is Jack Williams I'm a member of local 505 I'm also an apprentice carpenter I just want to say I'm in support of this this project you know I live in Santa Cruz County and I've lived here my whole life finding work in Santa Cruz County for what I do is very difficult this project not only for the apprenticeship the jobs that are going to be generated from this project are going to be immense and the apprenticeship has been able to give me and my two children the opportunity to put them all the medical benefits that they need my daughter needs massive amounts of medical benefits and this apprenticeship and this union has been able to provide that for me I've been able to come from a place of poverty in my life where I did grow up in section 8 housing I completely understand the importance of that but the reality is this is jobs for our people jobs for me to support my children I don't have to drive to San Francisco every single day come back see my daughter for like 30 minutes you know because I'm stuck in traffic for four and a half hours like these are jobs here in the city that I grew up in in the city that I love thank you thank you next speaker please the development you are considering before you would contribute land and cash equal to building 5.5% affordable units if you understand that please ask your staff not a whole outrageous circular thing about what else is going to happen the number is 5.5% the fact that it will help build housing next door is great whatever but the contribution that this developer is proposing is 5.5% it is not 15% the city is wagging the tail of capitalism when you should be setting the rules you had a consultant decide how much the developer could afford instead of setting a rule that says this is how much you will provide in affordable housing but if it's a big developer then you decide well I had to follow the rules because you busted me right but if it's a big developer then you say how much could you afford you're coming and begging for some amount of affordable housing when you should be setting the rules what the staff are proposing is some kind of well meaning collusion with capitalism it's like the Hillary Clinton form of government but in a few hours we'll have a new council with a majority of its members committed to reforming capitalism and endorsed by Santa Cruz for Bernie to enforce its own standards on the largest development proposed in the next 30 years then the new council should reconsider that decision market rate housing is failing our city which is why the citizens demanded at least 15% affordable housing you have no right to unravel that thank you next speaker please I'm Danielle Wilcox and I've been a resident of Santa Cruz for about 12 years with no plans to make or else my home soon as someone who works downtown I appreciate the efforts to help grow develop businesses and to make the streets safer and cleaner our limited access to restaurants and stores has made it challenging to support the local scene but it's clear that the downtown plan will continue to make this easier one of my biggest pain points as a resident is how difficult it has been to find viable and affordable housing with respectable landlords having a mixed use housing project that will utilize parking to its residents would create more opportunities for individuals like me to be housed this housing project will also encourage continued downtown growth stimulate the economy and create further motivation to keep our streets safe and clean especially this area of Pacific I know I look forward to this project moving forward and enjoying the amenities it will create and seeing the added benefits of its execution thank you next speaker please hi again I'm Stacy Nagel I'm the chair in support of the new downtown plan allowed this project so I'm super excited here Looker just hired their 300th employee in Santa Cruz we just opened an 18,000 square foot floor in Santa Cruz we are hoping to stay in Santa Cruz but Santa Cruz has to provide what our employees need and if you think our board and our VCs aren't pressuring us to leave then you're wrong it's a fight so we need you guys to provide what we need housing housing housing we're hiring to have a conscious choice that they do not want cars they do not want to get to work in a car they live very differently from the way we were grown up so having the ability to walk to work to bike to work having downtown housing is huge they're college educated many of them have families and still don't have cars we have people coming here from our other offices in New York San Francisco they would love to relocate to headquarters but they need that walkable life so we need to provide that for them also having trouble with we're outgrowing our downtown hotel options we're filling up the paradox nothing else is walkable downtown we need more hotels that provide walkable options let's create a downtown where people when they get here don't have to use their cars again right also as looker employees we are a group of residents who want downtown more usable and comfortable and we're sick of telling people to stay away from the dodgy end of Pacific I want to stop telling people that it's embarrassing to be better so please approve this thank you next speaker please good afternoon mayor council members I'm Robert singleton also planning commissioner in support of this project I just want to speak to a couple key concepts in terms of this being rushed in any way this project has through incarnations of the downtown plan and through years and years of planning and public outreach we've had over 30 community hearings about this the planning commission we personally have done this in several separate times so this isn't new this isn't coming out of the woodwork this is actually the project that we've all had in mind when going through those hearings this is exactly what we were looking for and here it is before us so we have a huge opportunity here and you'll see a countless number of business owners of local employees of nonprofit housing developers I mean these are there's like a huge consensus around getting this done and the contributions right next door that could be 100% affordable go far beyond what you would get by mixed in inclusionary units I mean you're going to get more bang for your buck it's going to be done efficiently and we've been waiting for this to happen it's time to pull the trigger and move forward thank you next speaker my name is John McKelvie I think it's an exciting opportunity that this project represents I think the staff and the applicant have done a really amazing job putting together a very comprehensive proposal I believe that this is not a subtractive proposal it's an additive proposal to downtown it's going to generate significant economic activity in addition to the housing that's provided I also believe that all housing improves all additional housing improves affordability not just low and very low income but this project with the land allocations and the possible project that the city is proposing will give, will end up having more widespread and deeper affordability than it would otherwise have just with a simple inclusionary requirement I believe this project is a down payment on writing the housing ship that we have founded on for 40 years I really encourage you to support it and let's have more like it thank you thank you next speaker please I'm Zeeman Strowkey I'm back with Santa Cruz UMB we're in support of the project and a lot of people have talked about the main things that make this a great project it's looking at as a whole with the deal with building the affordable next door it's really more like 30% affordable it's right next to a transit center and then one other thing I'd like to add is kind of the environmental argument it's a trade off of downtown where else are people going to live do this mean people are commuting and clogging up Highway 1 when they commute from Salinas or something yeah that's all I got thank you next speaker please Robert do you want to excuse me hold one second Mr. Norse were you in line to speak not yet okay my name is Zachary Buck I've lived at the corner of Laurel Pacific for over 10 years and I love this part of Santa Cruz it is beautiful south of Cathar I don't understand it's my favorite part of town I love how it is and the idea that anyone could enhance it developers, real estate gentlemen could enhance that it's like talking about enhancing the woman I've spent 12 years with it can't be enhanced it's perfect it's part of the community and my father worked construction by his projects he's proud of the work he's done and I'm proud of my father for doing that but my dad cannot live in these houses they're not affordable and this is not the world that I grew up in I live on Laurel Pacific because that is my home I love how it is I would love more development in this community that built the community that was planned to be a beautiful aesthetic thing that could be loved and cherished this looks like anywhere else in the country that has venture capital behind it which is fine I guess I don't want the calculations for affordable house being to be the future I think they should be now it's speculative we don't know what's going to happen to the global economy and you don't know if you'll be able to afford to build these or if any developer will you're flushed with cash right now but things can change so thank you for letting me ramble on thank you business south of whatever it's really beautiful and nice thank you next speaker please and before you speak people are speaking and when you get into conversation it gets distracting so if you could thanks go ahead my name is Zachary Davis business owner downtown been on the downtown commission for six years I think I first went to a visioning for this project or some early incarnation this project maybe four years ago so I've been following it for a little while a fear and a hope my fear is that we'll look at this project in isolation we'll say we can't make it perfect but we're going to try we'll settle the developer with all kinds of rules requirements and they'll say can't be done to walk away and we'll throw up our hands we'll say we tried, we failed and nothing will change housing crisis will continue my hope is that we'll look at this in the greater context as a piece of building a downtown community a place where we want to spend time where we want to start businesses where we want to bring our families where there's housing for all types of people and I see this as a piece of that puzzle an important piece but I encourage you not to stop there I came to the library discussion the last time that was brought up and one of the council members said I see there's a housing component in this but I just don't believe that's going to happen you are the elected leaders you say we're going to do this project all of the things happen I really ask you to seriously accept that commitment do this project do the affordable housing and don't stop there keep going, thank you next speaker please good afternoon council I'm Chip I work downtown I want to speak in support of this project I think it does quite a bit to increase the walkability of downtown obviously housing is huge approving this project will approve a number of market housing as well as affordable housing not approving this project 15% of nothing is a Taco Bell drive through so I encourage you to support this for all of the reasons you'll hear about thank you so much thank you next speaker please mayor council members my name is Matt Wertham housing program manager with the Monterey Bay economic partnership here to support the project one hit on a couple key pieces thank you all for your leadership this is a project that has been very thoughtfully put together and I've lived in affordable housing I've been doing affordable housing development for nearly 20 years it's hard I wish that we had a wand and could have this be 100% affordable but guess what until we have a national discussion on affordable housing and actually invest in affordable housing at 100% the same way we need to with health care and the other things that we need for our shared community we're just not going to get there it takes this kind of layered conversation this kind of very intense way of doing development in order to squeeze out the kind of public benefit that we need so unfortunately council member crone and others that have these concerns about affordability this is how it gets done the state needs to do its part our local and regional governments need to do their part and this is what is going on so I'm really pleased though that the affordable piece here is going to be honored by the land dedication and potentially the in lieu piece and can at least match or maybe even exceed that 15% requirement that the local folks here want to see in this development so I urge you to move forward with this project it's a major step forward and meeting your affordable housing needs here regionally thank you thank you next speaker in the design and construction industry I have a business downtown and I'm also a renter in Santa Cruz and this is a hugely pivotal project in helping create more housing in our town there are not very many lots like this left so I agree with a lot of the statements that have already been said I don't want to repeat them I just want to encourage everyone to approve this project and create some much needed housing in our community thank you next speaker please my name is Barbara river woman child there was a great philosopher thinker called Henry George he said that the land belongs to all people it doesn't belong to anybody any individual for private profit so and this development will draw the value not only of the downtown land which is prime land but it will also draw on the value of the beautiful river so I have an alternative proposal that I would like to see you pass tonight I approve we approve the staff recommendation to develop Pacific front development with the understanding that the property will revert to public ownership by the year 2018 or as soon as the developer has recovered it's cost and made a 6% profit over that amount I hope you pass that instead of the present proposal thank you next speaker please hello my name is show CBU cannon and I work downtown and rent in the city of Santa Cruz when I graduated from UC Santa Cruz a little over a year ago every one of my peers with rare exception was for sleep area I heard the same sentiment from all my classmates that though they love this town and they did not believe oh that though they love this town they did not believe there would be ever be an opportunity for them to live here or find jobs here jobs that would benefit the city many members of the community complain that UCSC students are only temporary residents when they what they don't realize is that we are almost forced to be let's make a town where young educated people living and working in Santa Cruz is no longer the exception I urge you to vote for housing and for future generations of Santa Cruz residents Santa Cruz needs more housing creating housing where people work is an important step to creating a better future now and for everyone thank you thank you next speaker please good afternoon I'm Ron Pomerance I find the planning department staffs been working really hard and I'm shocked shocked at the outcome you the council have allowed for a huge swath of the downtown to be re-zoned for higher densities and height in order to allow developers more profitability to assure affordable housing would be built in my view your planning department has cut a sweetheart deal with DEF CON Lawler to make sure not one affordable unit is included in the project important public benefits have been minimized taxpayers paid for a study that concluded a paltry 5.5% inclusionary apartments would be financially viable no other studies no second opinions no updates even though the real estate market is blown through the roof DEF CON Lawler have no contractual responsibility to make sure any of the affordable housing gets built staff works for you and the community in order to provide community benefits for the great majority of residents not the case here staff is not to be a shield for developers did staff agree to a nondisclosure statement with a developer open up the developers books to see how accurate the financial projections have been why has the project been so clearly fast tracked is the urgency different because you're worried about the new council are we Santa Cruz or are we Wisconsin this project is a litmus test for giving developers incentives to provide affordable housing providing public benefits work for those or your legacy will be an embarrassment I strongly encourage you not to approve the project today thank you thank you next speaker please good afternoon I do not agree that we have a housing crisis I instead believe that we have an affordable housing crisis that was the conclusion of the state and what people in the city are seeing and on the listening tour that was a resounding plea from the community so why are we considering a project that could provide 15 percent which would be over 30 units why are we considering approving it even if you required the developer to produce 15 percent it would mean that 85 percent would not be affordable you know we are the most unaffordable city in the united states 60 percent of our residents are renters but most of our renters need affordable housing not market rate which will gentrify and displace the current residents I support workers and I want you to have jobs but believe me you would still have a job if this project were changed land dedication is a tricky business there's no guarantee that that affordable housing would ever be is that it? okay thank you would ever be built thank you very much next speaker comes up are there any other members of the public that wish to speak that are already standing to the left any other members of the public that haven't spoken that wish to please line up now okay next speaker please hi everyone my name is Alexia and I'm here on behalf of the Monterey Bay Economic Partnership to express my support for this important housing development I'm also a student at UCSC and in addition to experiencing the effects of the housing crisis firsthand I would like to thank the University to support Student Housing West which is a non-campus housing development that would provide over 1,000 units of housing to students and the reason I bring this up is because Pacific Laurel has the potential to create more student housing opportunities by increasing housing stock and thereby relieving existing housing stock our community urgently needs more student housing additionally the contribution of three key land parcels has the potential of creating another 100 units of student housing opportunity for the city to do its share when it comes to housing and I urge you to support this development thank you thank you next speaker please good afternoon mayor council thank you very much for your time my name is Rafael Hernandez I'm also with the Monterey Bay Economic Partnership Housing Program quick points you've received communications through our action center from various businesses affordable housing developers plus members for O2 the points about the downtown plan the advocacy around that set the criteria that this development is in alignment with there was a comment about setting the rules that you set the rules and the thing about the rules that have been in place haven't helped alleviate the situation that we're in so the way this project is proposing to provide for inclusionary housing is an innovation that could set a template a precedent for others to follow and one point I want to make in closing about the environmental point a Eurocentric view of looking at things environmentally limits actually the way things can be done an indigenous view of environmentally conscious lens applied would say that people are also part of the environment so we can't disregard folks in being an environmentalist thank you very much next speaker please Mayor Tarazza's council members my name is Gillian Greensight and I'm here speaking for the Sierra Club you received our letter last week like to read the main points from it the Sierra Club has reviewed the environmental checklist for determination of secret exemption and concludes that a secret exemption for this project is inappropriate this project should not be considered exempt from secret analysis because its environmental impacts were not fully considered under the program EIR for the downtown plan amendments or under the general plan EIR an initial study must be completed to assess the environmental impacts and risks of this project by a negative deck or EIR as listed on page 3 of the proposed project requires a number of design and development variances from the downtown plan amendments these variances need environmental review the claim that this project is exempt because the other documents were done is inappropriate because the city acknowledges that vulnerability study indicates there are significant flood risks. I'm running out of time you have the letter I would like to add also that there's a lot of glass in this project and I've heard nothing about bird safe design as a condition of approval for this project I would ask that you look at that carefully in your deliberations. Thank you. Next speaker please. Hi my name is Kim Dowling I don't understand a lot of what's been said here today and I can't really address it therefore I come from more of a heart place but one thing that was said that I don't understand is if a developer knows how much money they're going to be investing in this why can they not say how much the rent is going to be now I guess that that's because they don't know what the market value will be but they know how much they've invested and they know what they can afford maybe they can get more in the future because the market value has gone up but that doesn't mean that they should get more and they should be able to tell us how much the rent is going to be and I have a feeling if we found out how much the rent was going to be we'd all be like going well that's not you know what somebody said about 80% won't be able to afford it even the affordable housing and then I want to read what somebody else started because I thought what she said was really good I wanted to continue it she said maybe the affordable housing should be the first consideration and perhaps a more modest project is more appropriate rather than building luxury housing and having to live up to the amount of money that they've spent to build this luxury housing maybe we should be building something that therefore we could afford the affordable housing for those who are interested in it for Santa Cruz do not approve it's a black eye to those who truly need housing and to disgrace who those do care about working middle and low class wage earners. Thank you. Next speaker Mr. Norse are you ready? Mr. Norse are you up? Members of the community and City Council Huff Homeless United for Friendship and Freedom voted against this project aside from the luxury the rent ambiguities the failure to provide housing for people who need it and to stop those who are being driven away from town the arguments advanced today have been some of them persuasive to me the sweetheart deal I spoke with one individual who said that we couldn't be assured there'd be SROs in it there might be there might not it's a massive gentrification effort and it's being done on the eve of the new council this point has been brought up before I've heard arguments from some council members gee measure M got defeated let's follow the will of the voters well how about the will of the voters to allow the new council to make this decision I think that's what's important here dodgy and a pacific different kinds of attempts to gentrify this whole scene and it's being presented as that let's get rid of the undesirable element that could be poor people low income people throughout the city and will be because of the fact that you're investing money and you're allowing developers to seize a large part of the downtown as part of what looks like a continuing kind of project elsewhere in the downtown this was rushed on to a council agenda packed into the longest agenda I've seen in years other than the budget agendas so don't do it give it time be fair to the community thank you before you begin sir and the jean jacket are you going to speak on this item sir are you going to speak on this item okay you'll be our last speaker good afternoon I attended the community meeting at cruise I O and the planning commission meeting and I appreciated that all the documentation was on the city website prior to the planning commission so I as a member of the public could access it I do support your professional planning staff and your office of economic development staff as well as the unanimous decision from I believe it's actually the city government that dictated this project since this was specifically laid out projects such as this in your city's general plan in the downtown plan and I think most would agree that this helps a problematic portion of the downtown I've just one word Benicio's liquor store in the Taco Bell dry through and see what type of environment that is at 10 p.m. I think this project we would all agree provides increased property tax and utility tax revenue to for example to pay for park fees so yet you can do park capital project improvements and that's one of the only ways you fund park projects in the city the land dedication from this project comes at no monetary cost to taxpayers especially importance it's essential to the affordable housing project which your staff laid out a painful alternative to obtaining the land is imminent domain and that would take years of litigation and that cost would of your time and the litigation would mean the city at some future point would pay highest and best use of the land money that you don't have Santa Cruz does not meet its rena goals by supporting this project you would be closer to your rena goals and would be more eligible for state funds to pay for future low-income housing projects thank you thank you very much I'm gonna just make this final cause are any other member of the public that wishes to speak to this item any other member of the public okay you'll be our last speaker please go ahead I just arrived here but member of the Santa Cruz climate action network and I have heard that no one addressed the environmental impacts of sea level rise and global warming on this project and that is something that is supposed to be considered first with all city actions and policies and I think that the project is inadequate without considering that this project will probably be subject to flooding and sea level rise and it should be assessed in that respect all these developments are irresponsible unless they are assessed this way and I believe that all the development that is planned for close to the ocean should be very carefully considered and most of it either scaled down or rejected or somehow constructed so that whoever buys these things for instance isn't flooded out or taken out of their dwelling this may be profitable for those who develop it but I can't see in view of our current really emergency global warming that this is a wise move to develop that area thank you that closes the public comment portion of this hearing the applicant reserved 4.33 4 minutes 33 seconds from their initial presentation for rebuttal and to answer questions you have that time now and then we'll bring it back to the council for deliberation and action I'll just here to answer questions of the council as you deliberate thank you councilmember matthews I am prepared to put a motion on the floor to get the discussion going I have a couple of brief comments and others I'm sure will kick in I will put on the floor let me just say before I do that I very much support the action and the conditions of approval that have come to us already I have one small amendment to make I appreciate the comments that were made by the planning commission about fully activating the pedestrian experience and so I want to refer to condition number 19 and that says that the plan submitted for building permit shall include the following details and it has to do with street level appearance I would like to modify the existing language very slightly to say and my interest is in activating what are currently long expanses of wall it's extremely important to me that the pedestrian experience at an individual level walking down the street enjoying downtown is activated interesting and beautiful I think it's a relatively small modification to that condition 19a I will propose the staff recommendation and the conditions of approval with the following changed language to 19a the plan shall include the addition of active uses along the ground floor of the front street frontage that will accomplish the objective of substantively enhancing the pedestrian experience along front street the entire area of the parking spaces where the parking spaces are shown in the plans to face front street shall be converted to uses such as commercial uses office uses residential amenities and or public restroom and some portion of the space must be publicly accessible from front street services including access ceiling height size use and architectural features shall substantially meet the requirements of the downtown plan approval of the new design shall be subject to the discretion of the director of planning and community development and it continues as the rest of that condition speaks so that's my one relatively minor change to the conditions of approval one thing I'd like to know whether or not this is something you need to step behind I'd like to first also ask if there is any interest in some sort of historical treatment plaques we've done for some of our structures downtown to recognize some of the sure I'm happy to include a condition that there be some element of interpretation of the history of that part of town okay thank you I just received a note from someone who said that there was an individual who was waiting outside to speak to this item she says she wasn't allowed to speak is there someone outside waiting to come in to speak yeah that's what says in the note but I'd like to know multiple times let her come in I've made a call out numerous times to speak she wouldn't let okay I'm going to reopen the public comment for this one speaker who I was told was not allowed to come in I'm going to reopen the public comment for this final speaker thank you I didn't know that did you ask did you say you wanted to speak maybe you could tell me afterwards who you spoke with because I just want to make sure that doesn't happen again okay okay you have 90 seconds that's what we agreed to 90 seconds good afternoon everybody so my name is Arnestina Saldana and I'm here to tell you that this is a great project and I support the work for as a union person I support the job for the unions to have it but what I don't support is that you guys are completely invalidated in the 50% to affordable housing in this project and with the crisis that we are and this is like probably the end to the end time that I'm coming in here and asking you to please respect your own rules and keep the 50% inclusionary housing thank you okay that closes the public comment period we have a motion and a second on the floor council member Brown an alternative motion and I have some reasons for that my motion is very simple my motion is to continue this item to a meeting in January and I'll give you January 8th or the 22nd probably the 22nd reasonably in order for the council to have time to review some of the materials that were not really made available to us in any kind of appropriate way so the council we have not seen the reports the staff references that are being used as justification for approval on environmental review as well and we have also not seen information that provides us with evidence, real evidence that to base upon which to base a claim of financial hardship for meeting the 15% affordability requirement that this, the voters of this city approved in 1978 or nine I can never remember measure O there are some debates about the applicability or the potential violation of measure O I think that those are debates that may well play out in court so I have serious concerns as a, I mean we are being asked as a quasi judicial body right now not as a policy making body to approve a project but we have not had sufficient evidence to make those determinations so I just don't think it's responsible for us to do that I'm not willing to do that today I do believe that we need and I'm not saying this is last minute I'm not in any way trying to make the case that this is coming to us last minute I'm saying this is coming to us without the full information that we need to do our job thoroughly and thoughtfully and responsibly so that being said legal challenges that may be coming our way and I have a feeling they will be coming no matter how whatever we decide if we do this now without thoroughly considering and having the access to the evidence we're going to have due process claims potentially coming at us from all sides of this so I have major concerns about that and I do believe that the council has received some of those concerns out there so with that it would be the responsible thing for us to do to give it some more thought and time and discussion I want to add one thing I absolutely support housing at this site I support the workers who are going to build it I absolutely 100% support that I would support I've been a long time supporter of prevailing wage and project labor agreements in new construction I support unions and union wages for those workers what I do not support is us being asked being told that the only way we're going to get any housing built is if the developer is allowed to not meet our affordable housing requirements I just can't support that I do believe that we have other reasons aside from just the overall affordability concern to need more time for these considerations so my motion is to continue this item to January 22nd and I believe it needs to be voted up on before the... you're absolutely correct so there's a motion on the floor from council member Brown which is seconded by council member Crone to postpone or continue this item to the 22nd of January I personally feel that this project like I've heard for Lee is this project consistent with the downtown plan and also our city rules in regards to development thank you mayor the plan that is presented before you has six variations from that the plan has for example some recesses that are included to break up the building mass the project does not conform with all of those and as identified in the agenda report the planning commission and city staff are supportive of four of those variations as miss hasher expressed with the initial presentation the plan does anticipate that there are going to be some variations and it provides that process whereby the council can approve those they are minor in nature they do not have any environmental effects when you're talking about projections into a recess for example however there are two of those six variations that staff has not supported those are the the mezzanine and the front street frontage there the number of units yes the general massing yes this is the type of project that was anticipated as part of the downtown plan amendments that the council approved late last year I'm prepared to vote for this today I feel like this is an important part of our downtown we've had numerous hearings over the past two years and this has been something that's encouraged extensive public outreach this is the absolute type of project that I think our community needs not only for the housing but also to activate our downtown in a positive way I'm prepared to I'm not going to support the motion on the floor call the question please is there a second to call the question yes you do I think you do okay we have a motion to call the question all those yeah the substitute mention first could you read back the substitute motion substitute motion is to postpone this action until 22nd of January okay none of the rest will be recorded in our minutes all those in favor of that substitute motion please say aye oh no those opposed no okay that motion fails with councilmember crone councilmember brown voting in favor councilmember matthews councilmember chase councilmember noroyan vice mayor walk into myself opposed so we'll return back to the main motion unless you have questions on the main motion I now have some comments and questions so I guess a couple of questions for the city attorney related to one possibilities for triggering reconsideration of this item we gave us some information via email but I want to just make sure that I'm totally clear about how we might proceed here given the potential for other actions to be taken that might cause us to want to reconsider this item so I just want to make sure I'm clear here before I make my decision about what to do so if we are if we are sued either on the basis of a measure o law inclusionary failure to comply with our measure our inclusionary and or process issues related to council making a decision of financial hardship lack of need for additional environmental review etc I'm just going to make those general comments or areas of concern if we are sued on any or all of those contentions what would we be able to do in the future as a council in order to address that just wait for the lawsuit to play out or would we be able to reconsider in order to address concerns that are in a legal challenge I want to make sure I'm really clear here should a lawsuit be filed that the city council believes is meritorious then one option would be for the council to rescind the prior action and that is provided for under the council meeting guidelines so a motion for rescission can be made at a subsequent meeting so my understanding of rescinding that would have to be at a subsequent that's when that would take place upon some other outside action being taken the rules do not provide for the council to rescind a decision on the same day that the decision is made that's right so and with respect to motion to reconsider that can be made on the same day if it comes from a council member that has voted in the majority on the initial vote yes a motion to reconsider may be made only on the same day that the action was taken and is this evening session considered part of today's council meeting well given that the rule does not specify only at the same session that says the same day in my opinion that could occur I think it would be since that's not on your agenda the council could not engage in a discussion about that but it could be agendized for a future meeting thank you I'll just make a comment I know we have a motion on the floor but I do feel that the whole purpose while we're here is to have an opportunity for a full and fair hearing to make sure that we get the evidence out on the floor to make sure that we have the process of the questions are answered we have a public body that's here that's heard roughly we started at 11 so we're going on now two three and a half hours of basically hearings and testimony I really feel that the type of discussion when we say that we're anticipating a decision like of because of some circumstance of our hearing later on this evening I think it's unfortunate because I think it erodes the trust that the public has in our hearing process and our decision making body this is a matter that we've had come up before over many years we've talked about housing not only last year but this year we've also had numerous outreach meetings and public discussions this is a project that has the opportunity to significantly transform our downtown in a positive way regardless of what your position is on the matter it is something that I think is going to create new housing units and it also is going to activate spaces that right now I think are underutilized from a public safety standpoint from a community standpoint in my opinion it's a good project when we talk about the idea that we're looking at using our decision making rules to undermine what has been I think one of our best public hearings in terms of evidence that's been presented in terms of the analysis of the costs and the inclusionary value of each of the units what the developer is bringing to the downtown and what our decision making body is I think it's something that we haven't seen that before in a project and I think that's something where it like maybe would deter other people from bringing similar projects before in the future and I think foremost we rely on our planning commission to give us their opinion and analysis we've had that seven member body do a full review and analysis with numerous public hearings and they also unanimously supported this project coming forward so the idea that we're thinking now are anticipating some decision that's going to let's say discount all that I think is unfortunate because it does in my mind as you mentioned we anticipate serious concerns about the process, the hearing process that we're here and about to decide Council Member Matthews I would like to make a few additional comments people will vote however they do on this project I mean this is not the first time in history that a vote is split on a final project that will play itself out I want to make a couple of comments about why I specifically support this project I want to go back to some of the big policy directions that this community has taken back to our community effort in the 70s to protect our green belt and that was done with a very explicit understanding that future growth would rely on infill and increasing density over time after the earthquake there was an enormous lengthy and deep public process with vision Santa Cruz and community engagement to decide about the future of our downtown and out of that came a downtown plan which has gone through some revisions over time but it contains some elements that are reflected in the project that's before us now underlining all that was that our downtown would be active that it would be a mix of components it would contain housing both market rate and affordable housing there would be a mixture of civic and commercial and cultural activities going that our streets would be vibrant that it would be a mix of architectural styles this is a modern building and one of the directions that came out of downtown was not going to be Victorian we're not going to be Spanish we're going to reflect the times we live in and this building does and particularly one of the real concerns that came out of that vision Santa Cruz process was a long standing desire to connect our downtown more effectively and positively to the beach and that's these sort of things don't happen overnight but that's been a goal that's been in our community for many many years particularly want to speak about the housing I think the this particular project can't be considered independently from the gift of land the the dedication of land nearly adjacent next to the metro center for the explicit development of affordable housing that's the package and that's how we get to or exceeding the 15% and the fact that we have several nonprofit housing developers eager to move forward on this dedication of land in a downtown is not a trivial contribution to affordable housing it's a thing that makes it happen so I see this as ready to go it's not a far-off pipe dream that we have to worry about it will I think that's that's a real promise that we have to act on so I see that this project supports both the long-term vision we have for the nature of our downtown an active vibrant place with a whole mix of activities appealing to a whole mix of people and including development of affordable housing so that's my reasoning behind moving this forward thanks councilmember norion and councilmember brown we can sit here and wish all we want for requiring a developer to do a straight perfect 15% you know affordability you know and to say it's the only way it can be done but our own rules allow flexibility and how we get to that 15% and we've done that you know and like councilmember matthew said having land in downtown Santa Cruz that we can work with a nonprofit developer on to build housing is not inconsequential it's actually huge it's a game changer and a life changer for a lot of people and so you know if you really don't want growth I just want people to say it instead of nitpicking projects to death with with you know what I see is you know fake concerns maybe they're not all fake but I see that and issues that waste time and money no housing project is going to be perfect in this environment I mean the realities that we face are we don't have redevelopment agencies anymore to provide funding to subsidize provide money to subsidize affordability hud cut their budget to cities for new housing starts I believe by around 60% over the last 20 years the recession happened so lenders have become very tight with the money that they loaned to developers and have a much higher threshold for developers to meet a certain level of profitability until they can even get the money for the project so all those things combined getting to the 15% inclusionary requirement kind of does require spit and bubble gum approach you know however we can get to it let's get to it and what I haven't liked either is this idea there's not a place for market rate housing it's needed it's definitely needed my physician's assistant was checking me into my doctor's appointment started a conversation with her she's a local she grew up here she graduated from Santa Cruz I in 2008 guess what she's now moving to Monterey County and will be commuting to her job here because as a local she says I can't even find a place that I would run a rent or going you know even trying to go to Watsonville or you know northern Monterey County was so much more compelling price wise for her and I have to say every time we punt building higher density apartments in our urban core and our downtown core we're relegating people having to drive from Monterey and San Benito counties to work here and we're also relegating those areas to develop over farmland and wildlife corridors because they're going to have a demand they're not going to build densely because it's pretty rural in those areas and so as a region we're really being bad players here by telling the counties that surround us they're responsible for our workforce housing so come on folks let's you know the details the devil is in the details sometimes but this is a good project I've lived in this town you know since I was a four-year-old kid the threats of lawsuits nitpicking a project to death this is par for the course for people who don't want growth so you know I am really upset to see the same people who own several homes who've lived here forever actually suggesting we should build a Trump-like wall around our city to keep it the way it was when they moved here in the 70s that's you know I'm sorry that's selfish and it's not taking into consideration the realities that people face when they work here when we say workforce housing those are people who work you know they're people who are not necessarily making high-tech wages but they're not necessarily people making wages that are low enough to be able to qualify for affordable housing we need to consider those folks too they're the backbone of our community they're people like the physician's assistant who checked me into my appointment there are teachers there are people who are clerks at our places of work so we really need to stop thinking like we have for the past 40 years and and consider the population and the region as a whole council member brown well I'm not going to debate this here but I really do have to take issue with the notion that that those of us who don't support letting developers get out of affordable housing requirements are nimbies I have no intention of opposing legitimate affordable housing projects that come our way I believe that is a major priority I believe we have not been given the evidence to suggest that financial hardship is sufficient rationale for the developer not meeting those goals I do not believe the city has the ability to be flexible about how we make laws it is our responsibility to enforce them it is not our responsibility to say okay not this time you know because we believe you that you can't afford it I just don't believe that and so that is why I have said all the things I've said in addition I say we just don't have the evidence and that is why I move to continue and it is why I look forward to having this conversation with a new council so we aren't saying that you know we aren't saying that they haven't gotten to the 15% they have it's not in the perfect ideological straightjacket way that some people want it to be but we have reached that also we had a report we had an analysis it is kind of getting to the point where it is like are we going to just poo poo something that is in front of us because it doesn't fit the information we want I mean that sounds like what happens at the federal level of government these days so we are requiring 15% we do have a report that shows that this is not viable and we could say hey 15% straight up then 0 of 0 is 0 there is no affordable units in that scenario Council Member Chase so among the dozens of housing items that we heard certainly last year and continued presentation on an expert from a non-profit affordable housing developer from the East Bay and she we said tell us how can we develop affordable housing here and she went through all these things and the first thing she said well you have to have dollars you have to have subsidies and since RDA went away we don't have that so we are like okay what's the next thing infill development we don't have that so then we said what's the next thing land dedication so we've finally gotten to the thing that is the way the only path that's on the table right now unless RDA is restored that we're going to get affordable housing we had the project that was referenced earlier that's on ocean or rather not on ocean on water in front of this council no fewer than five times trying to cobble together the multiple sources of funds to fund that project for 63 units which is great and it's fantastic it's finally moving forward every bit of dollars that we had as a council in the trust fund to pay for that it's gone we've got no other infill options this is it council we said we cared about affordable housing this whole time we've been on council together this is our chance to make it happen it really is the thing that when we heard from the community when we listened and we sat through all of these meetings they said they needed and they wanted and here it is it is our responsibility to say yes if we really believe in affordable housing and we really believe in having a diversity in this community that can stay here we have an opportunity to say yes I feel like we have we have to Vice Mayor Watkins I'll just briefly echo the comments made by council member chase I think you know one thing I think I see that we all agree on commitment to providing more housing and more affordability of housing in our community we may have different views on how to get there or beliefs on how to get there but at the end of the day I know that that's something we all share I do think that we need to be in action now we spent the last year looking at housing I feel grateful to have had the opportunity to be part of the housing subcommittee that created a blueprint for supporting affordability of housing in our area there is a reality that we face today that Santa Cruz is on the map for no affordable I mean we are becoming so increasingly unaffordable that we have to be in action and so I'm committed to be in action I know there are imperfections within most things that we see but we have to keep moving in the direction of progress and for that reason I'll be supporting the motion Council Member Brown just have one more quick comment because I want to be and people are throwing out this idea that isn't going to be that even market rate housing is necessary for the physician's assistance I mean a back of the envelope analysis can say that we're talking about given that we're not getting anything from the developer about what anticipated rents will be if we look at the current market rate and don't even adjust for increasing rents which we know has been happening annually we've done 46% in five years so rents are going to continue to go up at some degree back of the envelope these are going to be units that are affordable to people earning $120,000 to $200,000 a year so you know I don't know that to me that's not necessarily affordable to the people who live and work in the city some of whom work for the city who have written to us on other issues recently so you know I don't think I don't call that affordable housing you know I don't call that a real contribution to the needs and the current housing stock and I certainly don't call it a contribution to our arena targets for you know we're well above our arena targets on market rate and above market housing so I just had to say that in response to you know I get it I want more housing but I can't use a project that is not going to provide any affordability or relief for people who live and work here now as an excuse to build a project without more information got some over chase well I agree this is not a place to continue to debate this but 100 affordable units for low and very low meets arena goals because of this project 100 it is the largest affordable housing project we will have in the city downtown exactly where it needs to be next to a transit station walkable with a health center there I mean it's like I don't know what more you would ask for and so I don't know how we're ignoring the land dedication part of this this is going to make that possible absent that we'll get nothing it's like it's I don't know how else you want to slice that but it's going to give us a project we desperately need and it's going to help us meet our goals in the place we need it we can continue to go back and forth I mean it's to me it's a no-brainer I just I'm just going to say I disagree though with all due respect that the one parcel in the land swap is a maker break for getting an affordable housing project I mean we actually own a significant portion of property over there and I know you've been involved much more than I have but I mean I think it doesn't mean all or nothing to me with respect to an affordable project I just can't see that well just what Council Member Chase said I would ask that the city council do what the voters said and enforce measure O and get 15 percent I mean that's what I thought our job is supposed to be I was wondering if Bonnie if you know what the arena if those what those statistics are the high the middle the low the very low what the percentages are do you have that by any chance what we our goals I guess or these are suggested goals or these are they're not mandated do we get penalized if we don't meet them we have a nine-year period and the last time we checked we were about 46 percent of meeting our goals during that during that nine-year period as I mentioned earlier the