By Gene Williams
Staff Writer

April 20, 2011 -- Downtown developers are worried that their projects could get wrapped up in red tape under a recently enacted interim ordinance that redefines the city’s development process. But City officials say the situation may not be as bad as they think.

The stop-gap measure, which took effect March 11, is aimed at enforcing building standards outlined in the city’s 2010 Land Use and Circulation Element (LUCE) update, a document that will guide development in the beach city for the next 20 years.

Included under the new rules are projects that had already started the development process with the City before the measure took effect.

Of the 750,000 square feet of planned projects in Santa Monica recently pending review, about 500,000 square feet are in Downtown. Of the pending Downtown projects, about 125,000 square feet were slated to proceed under the old guidelines before the interim ordinance kicked in.

Specifically, the interim ordinance requires pending and future projects that exceed 32-feet in height to enter into lengthy and often arduous development agreements with the city to ensure they conform to the new LUCE standards.

Developers, many of whom were caught off guard, are crying “foul,” saying they had been led to believe that the LUCE didn’t apply to Downtown projects.

They had been under the impression that the previous rules – which allowed for a simplified administrative process as an incentive to build housing – would continue until a new Downtown Specific Plan is completed in spring 2012, they say.

Downtown and City officials agree that incentives under the old standards led to the creation of new, vibrant neighborhoods in the District. They don’t want to put a chill on further residential growth, they say.

Kathleen Rawson, CEO of Downtown Santa Monica, Inc., said Downtown officials are working with the City toward a solution that will balance LUCE goals with continued investment by developers in the area.

“The City wanted more control over the design of projects already in the pipeline, and we wanted a less arduous process that won’t discourage investors,” Rawson said. “The good news is that this situation appears to be getting resolved to a certain degree.”

Development agreements require a discretionary review process – which typically includes a public hearing at City Hall and an Environmental Impact Report (EIR) under the state’s California Environmental Quality Act (CEQA).

The part that worries developers the most is CEQA -- an EIR can add years and significant costs to the time it takes before a project is ready to break dirt, they say.

But housing developers may not have to worry about the new guidelines delaying the process, City officials say. Incentives in CEQA for housing and public transit may get a number of projects off the hook.

Residential projects Downtown -- such as those with fewer than 100 units that are less than one-half mile from a major public transit hub – might be exempt from CEQA and therefore would not be required to undergo an EIR, officials say.

Major public transit hubs include the Big Blue Bus, Transit Mall and the intersection of Lincoln and Pico boulevards. Because there is so much public transit Downtown, an exemption might cover many of the district’s pending projects, City officials say.

But Downtown stakeholders will have to wait to see what happens when staff returns to council in April or May.

“We have looked at various strategies to streamline the CEQA process, and that will be part of our report to council,” said Francie Stefan, the City’s Community and Strategic Planning Manager.

Even if a project isn’t exempt from CEQA, City Council wants to reduce red tape at the local level. During deliberations before a January vote on the interim measure, Mayor Richard Bloom and other council members said they didn’t want to stand in the way of continued progress Downtown.

“My concern is that we don’t lose the momentum built up during the last decade,” Bloom said, referring to the District’s recent residential growth.

As council passed the ordinance, it directed staff to find ways to streamline the process and create new incentives – that could possibly include waiving development agreement fees.

City staff is working on what they are calling a “DA Lite” – a development agreement that is less daunting and time consuming. A “DA Lite” will probably include ways to eliminate or speed up various levels of departmental review so the agreements can move more quickly up the ladder to the Planning Commission and City Council.

The less arduous development agreement could shave several months off the process, planning officials say.

Because the temporary ordinance is only good for sixty days, it will come back to City Council for renewal by early May, at which time it is expected to be amended.