DATE: December 5, 2017
SUBJECT:
Title
UPDATE PRESENTATION REGARDING DISTRICT INVENTORY OF LOWER COST VISITOR AND RECREATION FACILITIES AND DIRECTION TO STAFF REGARDING NEXT STEPS, INCLUDING WITHOUT LIMITATION A POTENTIAL PORT MASTER PLAN AMENDMENT
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EXECUTIVE SUMMARY:
At the March 6, 2016 Board of Port Commissioners (Board) meeting, the Board adopted BPC Policy No. 775 - Guidelines for the Protection, Encouragement and, Where Feasible, Provision of Lower Cost Visitor and Recreational Facilities (Policy) (Attachment A), which sets the District’s policy for lower cost visitor and recreational facilities within the District. The Policy affirms the District’s intent to protect, encourage and, where feasible, provide such facilities consistent with the California Coastal Act (Coastal Act) and the District’s powers and authority under the Port Act and Public Trust Doctrine. The Policy states, consistent with the Coastal Act, that there are a number of ways to provide lower cost visitor and recreational facilities, including but not limited to: active and passive parks, promenades, bike paths, seating, public fishing piers, lower cost or free berthing, dock and dine piers, and overnight accommodations. Since the Board’s adoption of the Policy, District staff has completed an inventory of lower cost visitor and recreational facilities located within the District and that inventory has been compiled into a report (Attachment B). The inventory lists a variety of District-owned and operated facilities, including but not limited to: boat launch ramps, parks, sanitary pump out stations, and fishing piers. Additionally, the inventory also lists tenant-operated facilities such as but not limited to: parks, dock and dine slips, sanitary pump out stations, and overnight boat stays. The inventory, which may be updated as needed in the future, is a reflection of known existing facilities at the present time - all of which are consistent with the Policy.
This agenda item also provides an update on the Lane Field Hotel Development’s “lower cost overnight accommodations mitigation fee,” required pursuant to its Coastal Development Permit (CDP), which was issued by the California Coastal Commission (Coastal Commission) in 2013 after an appeal. In April 2014, the District and Coastal Commission entered into a Memorandum of Agreement (MOA) that provided the framework by which the Lane Field mitigation fees were to be collected, managed, and expended by the District1. These mitigation fees total $6,000,000, for which $3,000,000 was deposited into an interest-bearing account at the District in 2016, and the remaining $3,000,000 are proposed to be deposited into the same District account in late 2018, upon completion of Lane Field South. Per the MOA, the funds are earmarked for the establishment of “lower cost overnight visitor accommodations such as hostel beds, tent campsites, cabins or campground units, at appropriate locations on Port Tidelands within the City of San Diego.” The MOA indicates that if any of the Lane Field mitigation fees remain five years after they were first transferred to the District, that the Coastal Commission may require that any remaining funds be transferred to another entity to provide lower cost visitor serving amenities in the County of San Diego coastal zone. Additionally, the CDP for the Shelter Pointe Hotel (Kona Kai Resort) Expansion Project, which was issued by the District in 2013, requires that the permittee pay an in-lieu fee for lower cost visitor accommodations at a rate of $31,000 per room for 25% of the new hotel rooms, which totals approximately $307,500 for the proposed 41 new rooms.
Given the availability of funds from these projects for the establishment of lower cost overnight visitor accommodations, staff recommends pursuing the establishment of an intrinsically lower cost overnight accommodations facility on District tidelands within the City of San Diego. Staff has reviewed potential geographic areas for such a facility and as detailed in this agenda sheet, staff believes that a lower cost overnight visitor accommodations facility could be established in the Airport Related Commercial Subarea of Planning District 2 (Harbor Island/Lindbergh Field) (see Attachment C for location of subarea). Therefore, staff recommends the Board direct staff to start environmental review under the California Environmental Quality Act (CEQA) and processing a Port Master Plan Amendment (PMPA) for the establishment of an intrinsically lower cost overnight visitor accommodations facility in the Airport Related Commercial Subarea of Planning District 2 (Harbor Island/Lindbergh Field). If the PMPA is approved by the Board and certified by the Coastal Commission, a CDP could be issued and the estimated $6,307,500 in funds may be used to develop the facility.
RECOMMENDATION:
Recommendation
Staff recommends the Board receive an update presentation regarding the District’s inventory of lower cost visitor and recreation facilities and provide direction to staff regarding next steps, including without limitation, commencing CEQA review and processing a PMPA for the establishment of “intrinsically lower cost overnight accommodations” in the Airport Related Commercial Subarea of Planning District 2 (Harbor Island/Lindbergh Field) of the Port Master Plan.
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FISCAL IMPACT:
If the Board directs staff to commence CEQA review and processing a PMPA for an intrinsically lower cost overnight visitor accommodations facility, funds for work associated with this CEQA documentation and associated PMPA would be reallocated within the Planning Department’s FY2018 Professional Services expense account (#620100).
Compass Strategic Goals:
This agenda item supports the Strategic Goals adopted by the Board in 2012 because it encourages increased access to the waterfront and the balance of visitor serving uses within the District. More specifically, this agenda item supports the following Strategic Goals.
• A Port that the public understands and trusts.
• A vibrant waterfront destination where residents and visitors converge.
• A Port with a comprehensive vision for Port land and water uses integrated to regional plans.
DISCUSSION:
Background
The District is responsible for managing nearly 6,000 acres of tidelands and submerged waters in and around the San Diego Bay. The length of the District’s shoreline is roughly 33 miles, which is approximately 61% of the Bay’s total shoreline. A broad array of uses can be found within the District’s jurisdiction including, among others, shipyards, marine terminals, moorings, docks, piers, recreational vehicle parks, hotels, parks, restaurants, shops, hiking trails and open space (or undeveloped) areas. Visitors come to District tidelands from across the State, the country, and the world, to enjoy the views, parks and other commercial and recreational amenities located along San Diego Bay. The District recognizes the importance of providing public amenities, including lower cost visitor and recreational facilities.
The District is entrusted with managing State tidelands in a manner that is consistent with the Coastal Act, Public Trust Doctrine and Port Act. As the lead planning and regulatory agency for certain tidelands and submerged waters of San Diego Bay, the District is responsible for overseeing public and private investments in a manner that is consistent with these laws. At the same time, the District must manage the tidelands responsibly, which, among other things, requires a balance of fiscal growth and revenue generation with investments that do not produce revenue - like lower cost visitor and recreational facilities - especially considering the District does not impose or collect any taxes. In other words, lease revenues from public and private investments enable the District to develop and maintain lower cost visitor and recreation facilities around San Diego Bay and without such revenues, the District is unable to provide and maintain such facilities.
Additionally, the District is within the California Coastal Zone and hence, is subject to the Coastal Act. Consistent with the Coastal Act, the District’s certified Port Master Plan sets forth goals, policies, and objectives, as well as land and water uses within the District. The Coastal Act does not dictate the exact policies or uses that must be in the Port Master Plan. Rather, the Coastal Act grants the District the flexibility and autonomy to impose a variety of different policies and uses to ensure consistency with the Coastal Act.
One of the policies codified in Chapter 3 of the Coastal Act, is Section 30213, which states: “Lower cost visitor and recreational facilities shall be protected, encouraged and, where feasible, provided. Developments providing recreational opportunities are preferred.” Section 30213 also states that “The commission shall not: (1) require that overnight room rentals be fixed at an amount certain for any privately owned and operated hotel, motel, or other similar visitor-serving facility located on either public or private lands; or (2) establish or approve any method for the identification of low or moderate income persons for the purpose of determining eligibility for overnight room rentals in any such facilities.”
Under the Coastal Act, the District has the ability to decide among numerous policies and possibilities on how it will comply with Section 30213. Additionally, Section 30213 prohibits requiring certain room rates be fixed or establishing methods to identify incomes for determining eligibility to stay at overnight accommodations. As illustrated by the inventory, District staff believes the District has implemented Section 30213 by providing a diversity of lower cost visitor and recreational facilities both on leased and non-leased lands.
Previous Board Direction and Approvals
At the October 7, 2015 Board of Port Commissioners (Board) meeting, staff received direction to prepare a policy regarding lower cost visitor and recreational facilities for the Board’s consideration. On March 8, 2016, the Board adopted BPC Policy No. 775 - Guidelines for the Protection, Encouragement and, Where Feasible, Provision of Lower Cost Visitor and Recreational Facilities (Policy), which affirmed the District’s intent to protect, encourage and, where feasible, provide such facilities consistent with the District’s powers and authority under the Port Act and Public Trust Doctrine. The Policy also implements Section 30213 of the Coastal Act.
Lower Cost Visitor and Recreational Facilities Policy
As more particularly described above, the Policy in part provides that it is the policy of the District to:
Protect, encourage and, where feasible, provide for lower cost visitor and recreational facilities to enhance the public’s enjoyment of the San Diego Bay. The protection, encouragement and provision, where feasible, of lower cost visitor and recreational facilities should be examined on a project-by-project basis taking into account, without limitation, the Port Master Plan, the type and nature of the project and project site, whether a nexus exists that justifies the project’s protection or provision of the facilities, the project’s fair share for protecting or providing the facilities, as well as whether the protection or provision of the facilities can be accomplished in a successful manner within a reasonable period of time considering economic, environmental, social, legal and technological factors.
There are many types of lower cost visitor and recreational facilities that are consistent with the Policy, as well as other laws, such as Section 30213 of the Coastal Act. The Policy also established that the protection, encouragement and provision of lower cost visitor and recreational facilities can be accomplished in a number of ways, such as, but not limited to:
• Public recreational opportunities such as active and passive parks, open space, gardens, promenades, walkways and bikeways/bike paths.
• Wayfinding signage, seating, bicycle racks and other enhancements to public access areas.
• Free or lower cost public events or tours.
• Public art, museums or exhibits.
• Public viewing areas or piers.
• Free or lower cost transportation, including shuttles, van pools, water taxis and bicycle racks.
• Public fishing piers or floating docks.
• Low cost or free moorings or boat slips.
• Dock and dine piers.
• Parking facilities/spaces that are free or lower cost.
• Kitchenettes, free Wi-Fi, free or reduced cost breakfast, and free parking at hotels or motels.
• Hostels, motels, hotels, campgrounds, yurts, RV parks, or tent campsites; provided, however, the amount for overnight stay at such facilities shall not be regulated through a Coastal Development Permit or the Port Master Plan and therefore, the District needs to further evaluate on how this type of accommodation could be provided.
Inventory of District Lower Cost Visitor and Recreational Facilities
Since the Board’s adoption of the Policy, staff has completed an inventory of lower cost visitor and recreational facilities within the District, and that inventory has been compiled into a report, which is included as Attachment B to this agenda sheet. This inventory was gathered from a variety of sources, including District Engineering’s AMP inventory the District website, tenant lease reviews and internet searches. The inventory lists a variety of District-owned and operated facilities, including but not limited to: boat launch ramps, parks, sanitary pump out stations, and fishing piers. Additionally, the inventory also lists tenant-operated facilities such as but not limited to: parks, dock and dine slips, sanitary pump out stations, and overnight boat stays. The inventory, which may be updated as needed in the future, is a reflection of known existing facilities at the present time - all of which are consistent with the Policy, as well as Section 30213 of the Coastal Act.
Overnight Accommodations
In addition to the types of facilities identified in the District inventory, another type of facility that would be consistent with the Policy is lower cost overnight visitor accommodations. Existing lower cost overnight visitor accommodations and a potential opportunity for an additional lower cost overnight accommodations facility are discussed below.
On-Water Overnight Accommodations/Boat and Breakfast
Lower cost overnight visitor accommodations can take many forms, including without limitation hotels, motels, hostels, yurts, RV parks, cabins, and tent campsites. In addition, opportunities exist for lower cost-overnight visitor accommodations on the water. A number of marinas operated by District tenants allow for overnight accommodations or “boat and breakfast” use. In 1997, the Board adopted guidelines for “Boat and Breakfast Operations” in San Diego Bay (see Attachment D). The guidelines are as follows:
• The number of guests per vessel shall be limited to six;
• Guest stays shall be limited to seven days;
• No cooking on open flames shall be permitted on vessels;
• The number of marina slips devoted to the bed and breakfast uses shall not exceed 4% of the total marina slips;
• Written documentation of waste pump-out must be submitted to the District on a monthly basis; and
• Any sublease operations related to “boat and breakfast” shall be reviewed annually by the District to verify compliance with the above guidelines as well as the terms of any consented-to sublease agreements.
These overnight accommodations/boat and breakfast opportunities allow non-boat users to stay overnight on the water, which provides an affordable and unique overnight accommodations opportunity on the Bay. Several of these opportunities are available to the public via a number of rental websites such as VRBO and Airbnb. Based on staff’s research, for a majority of the calendar year, nightly rates for these stays can be as low as $45 during the low-season (November) and $106 during the high-season (August) (see Attachment E).
Chula Vista RV Park
The District’s existing lower cost overnight visitor accommodations consist of the Chula Vista RV Resort, which is located in the Chula Vista Bayfront. The Chula Vista RV Resort has 237 recreational vehicle (RV) spaces.
Funds for the Expanded Establishment of Land-Based Lower Cost Overnight Visitor Accommodations and Potential Next Steps to Expand the Inventory in the City of San Diego
In 2013, after an appeal, the California Coastal Commission (Coastal Commission) issued a Coastal Development Permit (CDP) for the Lane Field Hotel Development on the North Embarcadero. Special Condition #2 of the CDP required the hotel developer to pay a “lower cost overnight accommodations mitigation fee” in the amount of $6,000,000 - $3,000,000 for the Lane Field North hotel tower, and $3,000,000 for the Lane Field South hotel tower. Each fee was due prior to the hotel tower receiving its certificate of occupancy. In April 2014, the District and Coastal Commission entered into a Memorandum of Agreement (MOA) that provided the framework by which the funds were to be collected, managed, and expended by the District1. Per the MOA, the funds are earmarked for the establishment of “lower cost overnight visitor accommodations such as hostel beds, tent campsites, cabins or campground units, at appropriate locations on Port Tidelands within the City of San Diego.” Expenditure of any of these funds requires written approval from the Executive Director of the Coastal Commission.
Pursuant to the terms of the MOA, on January 21, 2016, Lane Field North deposited $3,000,000 into an interest-bearing account at the District. Lane Field South, which is currently under construction, will deposit the remaining $3,000,000 upon completion of construction, which is anticipated in late 2018. Further, the MOA states that “if any portion of the fee remains five years after it is deposited, the Coastal Commission may require that the funds be transferred to another entity that will provide lower cost visitor amenities in the County of San Diego coastal zone jurisdiction” - which would be January 21, 2021 for the $3,000,000 funds associated with Lane Field North.
Additionally, the CDP for the Shelter Pointe Hotel (Kona Kai Resort) Expansion Project, which was issued by the District in 2013, requires that the permittee pay an in-lieu fee for lower cost overnight visitor accommodations at a rate of $31,000 per room for 25% of the new hotel rooms, which totals approximately $307,500 for the proposed 41 new rooms. Payment of this fee is due prior to the hotel expansion receiving its certificate of occupancy, which is anticipated to occur in January 2018.
Further, as part of the PMPA for the San Diego Convention Center Phase III Expansion and [Hilton Bayfront] Expansion Hotel Project, language was added to the Port Master Plan that requires that any CDP for a future expansion of the Hilton Bayfront develop or designate its fair-share of on-site or off-site lower cost visitor accommodations or pay an in-lieu fee based on a study conducted by the District. However, to date, no application for the hotel expansion has been submitted to the District.
Given the availability of funds for the establishment of lower cost overnight visitor accommodations, staff recommends expeditiously pursuing an intrinsically lower cost overnight visitor accommodations facility on District property within the City of San Diego.
To further the establishment of such facility, staff reviewed three of the four planning districts that are located within the District’s jurisdiction in the City of San Diego - Planning District 1 (Shelter Island), Planning District 2 (Harbor Island/Lindbergh Field) and Planning District 3 (Centre City/Embarcadero) - to evaluate the feasibility of siting intrinsically lower cost overnight visitor accommodations somewhere within these areas. Criteria analyzed included, existing tenancies and expiration date of those tenancies, existing land use designations, level of CEQA review anticipated, existing structures and infrastructure, and location near public transit and the airport. Although Planning District 4 (Tenth Avenue Marine Terminal) is also located in the City of San Diego, staff does not recommend further evaluating siting options in this planning district due to the projected growth and maritime activities anticipated on the working waterfront.
The staff analysis concluded that the Airport Related Commercial Subarea of Planning District 2 (Harbor Island/Lindbergh Field), which is generally between Sassafras and Palm (see Attachment C for location of subarea), is the subarea that could accommodate such a use in the most expeditious manner. More specifically, staff believes that the southern half of the District Administration Building Annex is best suited to establish lower cost overnight visitor accommodations. Although it needs improvements to make suitable for overnight accommodations, it includes an existing structure and infrastructure. The building is also vacant with a recently-ended tenancy. This space, which until 2016 was the site of Budget Rental Car, is currently an approximately 10,000 square foot unleased shell space and is also in close proximity to public transit opportunities and can be accessed by the airport. It is also close to restaurants and other attractions, which is suitable for intrinsically lower cost overnight accommodations. Existing parking is also available adjacent to the building. Alternatively, in the more longer-term, the Port Administration Building may also be a suitable location if the District-operations were ever relocated. In either case, having the shell buildings and built infrastructure would allow the over $6,000,000 to significantly improve the space for overnight accommodations. In other words, utilizing existing buildings and infrastructure would allow for a more cost-effective use of the collected fees by more efficiently improving the space for overnight accommodations versus constructing a new building from the ground up, which would be required in any of the other Planning Districts.
Therefore, staff recommends the Board direct staff to start environmental review under the California Environmental Quality Act (CEQA) and processing a Port Master Plan Amendment (PMPA) for the establishment of an intrinsically lower cost overnight visitor accommodations facility in the Airport Related Commercial Subarea of Planning District 2 (Harbor Island/Lindbergh Field). A PMPA would be required because overnight accommodations are considered an “appealable” project under Section 30715 of the Coastal Act, and per Section 30711 of the Coastal Act, appealable projects need to be listed on the Planning District’s “Project List” in the Port Master Plan. Concurrent with the CEQA and PMPA process, staff will continue work to determine accommodations type, potential operator, and any additional funding source(s), if necessary; for example, partnership opportunities with other agencies or non-profits, such as the California Coastal Conservancy or Hostelling International.
Staff Recommendation
Staff recommends the Board direct staff to commence CEQA review and a PMPA for the establishment of a lower cost overnight visitor accommodations facility in the Airport Related Commercial Subarea of Planning District 2 (Harbor Island/Lindbergh Field) of the Port Master Plan.
General Counsel’s Comments:
The General Counsel’s Office has reviewed the agenda sheet and attachments as presented to it, and approved them as to form and legality.
Environmental Review:
This item provides an informational update presentation on the District’s inventory of lower cost visitor and recreational facilities, and direction to staff on next steps related to such facilities, including without limitation a potential PMPA. This Board item does not constitute an “approval” or a “project” under the definitions set forth in CEQA Guidelines Sections 15352 and 15378 because no direct or indirect changes to the physical environment would occur. CEQA requires that the District adequately assess the environmental impacts of its projects. Further, while the Board may request certain project components be included, alternatives studied or other direction, such direction to staff will not bind the District to a definite course of action prior to CEQA review. Full CEQA analysis will be completed prior to the approval of any entitlements, concept approval, or agreements necessary for any project that could arise from this Board item. Moreover, the Board reserves its discretion to adopt any and all feasible mitigation measures, alternatives to the projects, including a no project alternative, a statement of overriding consideration, if applicable, and approve or disapprove the projects and any permits or entitlements necessary for the same. Those decisions may be exercised in the sole and absolute discretion of the Board. Based on the totality of the circumstances and the entire record, the Board’s direction does not commit the District to a definite course of action prior to CEQA review being conducted. Therefore, no further CEQA review is required for this item. However, any future project that is formulated as a result of this Board item would undergo CEQA review prior to any future Board action on that project.
In addition, this informational presentation and direction to staff allow for the District to implement its obligations under Section 87 of the Port Act because it would eventually result in a form of a public recreation facility that would further the District’s promotion of recreation around San Diego Bay. The Port Act was enacted by the California Legislature and is consistent with the Public Trust Doctrine. Consequently, these items are consistent with the Public Trust Doctrine.
Finally, this informational presentation and direction to staff do not allow for “development,” as defined in Section 30106 of the Coastal Act, or “new development,” pursuant to Section 1.a. of the District’s CDP Regulations because they will not result in, without limitation, a physical change, change in use or increase the intensity of uses. Therefore, issuance of a CDP or exclusion is not required. However, the District’s projects require processing under the District’s CDP Regulations. If a project is formulated as a result of this Board item, the Board will consider approval of the project after the appropriate documentation under District’s CDP Regulations has been completed and authorized by the Board, if necessary. The Board’s direction in no way limits the exercise of the District’s discretion under the District’s CDP Regulations.
Equal Opportunity Program:
Not applicable.
PREPARED BY:
Lesley Nishihira
Director, Planning
Planning & Green Port
Anna Buzaitis
Program Manager, Planning
Planning & Green Port
Attachments:
Attachment A: BPC Policy No. 775 - Guidelines for the Protection, Encouragement and, Where Feasible, Provision of Lower Cost Visitor and Recreational Facilities
Attachment B: Inventory of Lower Cost Visitor and Recreational Facilities located within the District, dated November 2017
Attachment C: Location of Airport Related Commercial Subarea
Attachment D: Resolution re: Board Approval of Boat and Breakfast Operations
Attachment E: Example of Available Lower Cost On-Water Overnight Accommodation
1On file in the Office of the District Clerk bearing Document No. 61732, filed April 23, 2014.