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STATE OF CALIFORNIA -- THE RESOURCES AGENCY ARNOLD SCHWARZENEGGER, Governor CALIFORNIA COASTAL COMMISSION SAN DIEGO AREA 7575 METROPOLITAN DRIVE, SUITE 103 SAN DIEGO, CA 92108-4421 (619) 767-2370 Staff: D. Lilly-SD Staff Report: September 22, 2008 Hearing Date: October 15-17, 2008 Th 21a REVISED FINDINGS LOCAL GOVERNMENT: City of Imperial Beach DECISION: Approval with Conditions APPEAL NO.: A-6-IMB-07-131 APPLICANT: Pacifica Companies and Pacific Hosts, Inc. PROJECT DESCRIPTION: Demolition of an existing 38-unit hotel and construction of a new 4-story, 40 ft.-high, 129,845 sq.ft., 78-unit condominium-ownership hotel, including a restaurant, pool, conference facilities, and a 111 space underground parking garage, on a 1.39 acre beachfront lot, removal of an existing perched beach on the seaward side of the hotel, relocation and construction of a vertical seawall 35 ft. inland of its existing location, and street improvements on Date Avenue. PROJECT LOCATION: 800 Seacoast Drive, Imperial Beach (San Diego County) APN 625-262-01 APPELLANTS: Coastal Commissioners Sara Wan and Mary Shallenberger STAFF NOTES: Staff recommends the Commission adopt the following revised findings in support of the Commission’s action on April 10, 2008. In its action, the Commission approved the permit with the deletion of recommended Special Conditions that 1) limited the number of condo-hotel units in the development to 25% of the total 78 rooms (i.e., 20 rooms), and 2) required payment of a fee of $30,000 per room for 10% (8 units) of the total number of overnight visitor accommodations in the approved project in lieu of providing lower cost accommodations on-site. In addition, the Commission required that the applicant agree that Pacifica Hosts Inc. (a business entity with significant assets that will manage the hotel) ensure that the Seacoast Inn operates as a condo hotel or a hotel regardless of who manages the property. Pacific Hosts has also become a co-applicant to the permit as it will then be responsible, along with Pacifica Companies, for ensuring compliance with all of the special conditions of the permit. Date of Commission Action: April 10, 2008 Revised Findings A-6-IMB-07-131 Page 2 Commissioners on Prevailing Side: Achadjian, Blank, Burke, Clark, Hueso, Secord, Neely, Potter, Reilly, Shallenberger, Chairman Kruer. SUMMARY OF STAFF RECOMMENDATION: Staff recommends the Commission approve the de novo permit with several special conditions. The primary issues raised by the subject development relate to the LCP and Coastal Act requirements for public access and lower cost visitor-serving facilities. As proposed, the project would demolish 38 existing, more affordable traditional hotel units, and replace them with 78 condo-hotel units--units that will be less available to the general public than traditional hotel units because each unit will be privately owned and subject to owner occupancy. Ideally, development on prime visitor-serving oceanfront lots would be high-priority visitor-serving uses, such as traditional hotel rooms, restaurants, or public recreational facilities, rather than low-priority condo-hotels. But the 78 condo- hotel rooms, as conditioned herein, will provide some additional overnight accommodations for the public--just not as many as if the site were developed with a traditional hotel with the same number of hotel units. Therefore, staff is recommending that the condo-hotel financing portion of the project be limited to 25% of the proposed units (i.e., 20 out of the 78 units). In addition, while the applicant has indicated that the room rates at the new condo-hotel are expected to be moderately priced ($135-$140), similar to the rates at the existing hotel, the Coastal Act and the certified LCP promote the development of lower-cost visitor and recreational facilities. New overnight accommodations in prime visitor- serving locations should serve people with a range of incomes, either directly on site or indirectly through contribution of a fee towards the construction of lower cost overnight accommodations. In a past action in the City of Oceanside LCPA #1-07, the Commission has required payment of a fee of $30,000 for 50% of the number of new high-cost units being developed when the proposal also involves the loss of existing hotel/motel units. This provision would mitigate the loss of oceanfront land that could otherwise have been available to develop with lower-cost facilities, and was intended to encourage rehabilitation of existing hotel/motel inventory. Since that action, staff has continued to work on both a methodology to define “lower- cost” and to refine the policy questions raised by such proposals. Because the proposed project is not proposing to provide any on-site affordable priced units, but is providing moderately priced units, in this case, staff is recommending a fee of $30,000 be applied to 10% of the proposed units, in this case, 8 units, for a total fee of $240,000, to be used for the construction of lower cost visitor serving facilities in the area. In addition, the permit is conditioned to include operational limitations on the condo- hotel portion of the project, documentation of the lateral access grant, a waiver of liability for work performed on the shoreline, and submission of final landscaping plans that use only non-invasive species. Revised Findings A-6-IMB-07-131 Page 3 Standard of Review: Certified Imperial Beach LCP and the public access and recreation polices of the Coastal Act. SUBSTANTIVE FILE DOCUMENTS: Appeal Applications by Commissioners Wan and Shallenberger dated 12/28/07; Imperial Beach Resolution #2007-6559; Imperial Beach City Council Ordinances No. 2007-1061 with Development Agreement; Seacoast Inn Specific Plan; Seacoast Inn EIR; Certified City of Imperial Beach Local Coastal Program (LCP). I. PRELIMINARY STAFF RECOMMENDATION: The staff recommends the Commission adopt the following resolution: MOTION: I move that the Commission approve Coastal Development Permit No. A-6-IMB-07-131 pursuant to the staff recommendation. STAFF RECOMMENDATION OF APPROVAL: Staff recommends a YES vote. Passage of this motion will result in approval of the permit as conditioned and adoption of the following resolution and findings. The motion passes only by affirmative vote of a majority of the Commissioners present. RESOLUTION TO APPROVE THE PERMIT: The Commission hereby approves a coastal development permit for the proposed development and adopts the findings set forth below on grounds that the development as conditioned will be in conformity with the policies of the certified LCP and the public access policies of Chapter 3 of the Coastal Act. Approval of the permit complies with the California Environmental Quality Act because either 1) feasible mitigation measures and/or alternatives have been incorporated to substantially lessen any significant adverse effects of the development on the environment, or 2) there are no further feasible mitigation measures or alternatives that would substantially lessen any significant adverse impacts of the development on the environment. I. MOTION: I move that the Commission adopt the revised findings in support of the Commission’s action on April 10, 2008 concerning approval of Coastal Development Permit No. A-6-IMB-07-131 STAFF RECOMMENDATION OF APPROVAL: Staff recommends a YES vote on the motion. Passage of this motion will result in the adoption of revised findings as set forth in this staff report. The motion requires a majority vote of the members from the prevailing side present at the revised findings hearing, with at least three of the prevailing members voting. Only those Commissioners on the prevailing side of the Revised Findings A-6-IMB-07-131 Page 4 Commission’s action are eligible to vote on the revised findings. The Commissioners eligible to vote are: Commissioners Achadjian, Blank, Burke, Clark, Hueso, Secord, Neely, Potter, Reilly, Shallenberger, Chairman Kruer. RESOLUTION TO ADOPT REVISED FINDINGS: The Commission hereby adopts the findings set forth below for Coastal Development Permit No. A-6-IMB-07-131 on the ground that the findings support the Commission’s decision made on April 10, 2008 and accurately reflect the reasons for it. II. Standard Conditions. See attached page. III. Special Conditions. The permit is subject to the following special conditions: 1. Condominium Hotel Limitations. Up to 25% of the total 78 rooms (i.e., 20 rooms) in the approved project may be financed/operate as condo-hotel units. 2. Lower Cost Overnight Accommodations Mitigation Fee. PRIOR TO ISSUANCE OF THE COASTAL DEVELOPMENT PERMIT, the applicants shall provide evidence, in a form and content acceptable to the Executive Director, that a fee of $30,000 per room for 10% (8 units) of the total number of overnight visitor accommodations (78 units) in the approved project has been paid in lieu of providing lower cost accommodations on-site. The required in-lieu fee of $240,000 shall be deposited into an interest-bearing account, to be established and managed by one of the following entities approved by the Executive Director of the Coastal Commission: City of Imperial Beach, Hostelling International, California Coastal Conservancy, California Department of Parks and Recreation or a similar entity. The purpose of the account shall be to establish lower cost overnight visitor accommodations, such as new hostel beds, tent campsites, cabins or campground units, at appropriate locations within the coastal area of South San Diego County. The entire fee and accrued interest shall be used for the above-stated purpose, in consultation with the Executive Director, within ten years of the fee being deposited into the account. All development funded by this account will require review and approval by the Executive Director of the Coastal Commission and a coastal development permit if in the coastal zone. Any portion of the fee that remains after ten years shall be donated to one or more of the State Park units or non-profit entities providing lower cost visitor amenities in a Southern California coastal zone jurisdiction or other organization Revised Findings A-6-IMB-07-131 Page 5 acceptable to the Executive Director.

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