07/12/2016ANAHEIM CITY COUNCIL REGULAR AND
REGULAR ADJOURNED MEETING OF JULY 72, 2076
The regular meeting of July 12, 2016 was called to order at 3:00 P.M. and adjourned to 4:00
P.M. for lack of a quorum. The regular adjourned meeting of July 12, 2016 was called to order
at 4:03 P.M. in the chambers of Anaheim City Hall, located at 200 S. Anaheim Boulevard.
The meeting notice, agenda, and related materials were duly posted on July 8, 2016.
PRESENT: Mayor Tom Tait and Council Members: Lucille Kring, Kris Murray, Jordan
Brandman, and James Vanderbilt.
STAFF PRESENT: City Manager Paul Emery, Acting City Attorney Kristin Pelletier, and City
Clerk Linda Andal.
WORKSHOP: Annual update to the Underground Conversion Program's 5 -Year Plan
The scheduled workshop was cancelled due to lack of a quorum.
ADDITIONS/DELETIONS TO CLOSED SESSION: None.
PUBLIC COMMENTS — CLOSED SESSION ITEMS:
William Fitzgerald provided comments related to contracts and union labor.
CLOSED SESSION: At 4:07 P.M., Mayor Tait recessed to closed session for consideration of
the following items:
1. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
Subdivision (d)(1) of Section 54956.9 of the California Government Code)
Name of Case: City of Anaheim v. HPT IHG-2 Properties Trust et al. OCSC Case No.
30-2009-00125412-CU-EI-CXC; HPT IHG-2 Properties Trust et al. v. City of Anaheim,
OCSC Case No. 30-2012-00608509-CU-PT-CJC
2. CONFERENCE WITH LEGAL COUNSEL -EXISTING LITIGATION
Subdivision (d)(1) of Section 54956.9 of the California Government Code)
Name of Case: American Ground Transport, Inc. v. City of Anaheim, OCSC Case No.
2013-00688977
At 5:08 P.M., the City Council session was reconvened.
Mayor Tait requested a moment of silence in memory of Fermin Vincent Valenzuela III.
INVOCATION: Rabbi Joel Berman, Temple Beth Emet
FLAG SALUTE: Council Member James Vanderbilt
ADDITIONS/DELETIONS TO THE AGENDA: None
City Council Minutes of July 12, 2016
Page 2 of 42
Mayor Tait announced he had been called by the White House to join activists, academics, and
mayors to meet with the President to discuss issues facing the country and would have to leave
the meeting by 9:45 P.M. Mayor Tait expressed his interest to limit public comments to 90
seconds per speaker and with no objection by City Council, comments were limited to 90
seconds.
PUBLIC COMMENTS (all agenda items, except public hearings): Prior to receipt of public
comments, a brief decorum statement was provided by City Clerk Linda Andal.
Phil Salerno, Local 500 Cement Masons, discussed the job and employment opportunities
available through building luxury hotels and remarked that the transient occupancy tax (TOT)
incentive policy was a good thing to keep Anaheim competitive and pro -growth.
Cynthia Ward requested Council bifurcate the meeting to discuss hotels at a separate meeting
in a larger venue, recommending the Convention Center as a possible location.
Peter Page, resident, stated that the ban of short-term rentals (STRs) must be followed -through
with to restore neighborhoods and quality of life for residents.
Victoria Michaels, resident, reintroduced her concept of "Hug a Cop" as complementary to the
City of Kindness and requested the city stand behind police officers to show support and
appreciation.
Connor Traut, Centralia School District Board of Trustees President and chair of the West
Anaheim Neighborhood Council, recommended the approval of Items 24, 25, and 26 to bring
good projects to Anaheim and its residents, noting the historic nature of the hotel proposals by
including veterans preferences, prevailing wage, and collaborate partnerships.
Kathryn Reynolds, resident, supported local hire to keep tax dollars invested in the Anaheim
community.
Ruth Moore, District 4 resident, spoke of news stories and statistics related to STRs and
requested a ban of STRs in Anaheim.
R. Joshua Collins, Homeless Advocates for Christ, read a scripture and commented on
homeless matters.
Nick Berardino, Hero's Hall Veterans Foundation chairman and vice -chair of the OC Fair and
Events Center, reported that $3.9 million has been allocated by the Fair Board to build the first
museum in Orange County to honor and recognize the sacrifices of all veterans in the
community and expressed appreciation for Item No. 3 to help provide scholarships and bussing
of students to the facility.
Tal Price, Item No. 20, submitted a letter and offered his view that the STR proceedings up to
this point were not legally sufficient and requested City Council return the item to the Planning
Commission for review.
Robert Williams, District 4 candidate, congratulated the Mayor on his meeting with the President
and expressed his disappointment that the city had not been more vocal and supportive of its
Police Department in light of recent national events. Regarding the hotel initiative, Mr. Williams
recommended postponing the meeting to a later date to allow all to participate in a cohesive
manner.
City Council Minutes of July 12, 2016
Page 3 of 42
Michael Robbins, resident, requested Council remove STRs from neighborhoods
Jeanine Robbins, resident, thanked Council members for their previous vote for a full and
complete ban on all existing and future STRs with an 18 month amortization period and
requested they remove hotels from residential neighborhoods which she stated were not
compatible in owner -occupied R1 zones.
Robert Rowe, executive director of the Fire Sprinkler Advisory Board of Southern California,
expressed support for the hotel incentive and recommended approval of the 4 -diamond hotel
applications, noting the projects would create thousands of local prevailing wages jobs for local
residents and veterans and also ensure those who occupy the facilities will enjoy the highest
level of skill and craftsmanship.
Luis Aleman expressed his opposition to the hotel tax incentive policy, stating that every project
in the City should be investing in Anaheim citizens.
Martin Lopez, resident, thanked Council for their support and vote of a complete and full ban on
STRs and encouraged them to ratify their vote banning STRs.
Jeff LeTourneau requested Council approve the $25,000 for the veterans' museum, commented
on a recent Police tasing incident expressing the need for the Police Oversight Board to have
full subpoena authority, and thanked Council for their vote to ban STRs.
Bobby Donelson thanked Council for their vote on STRs and requested a 5-0 vote on Item No.
20. He expressed support for the contribution to the veterans' memorial at the Orange County
Fairgrounds and recommended Project Labor Agreements on all jobs within the city, not just big
jobs.
Judy Carroll, Sherwood Village resident, asked Council to confirm their vote for a complete ban
of STRs and that any failure to ban STRs would harm residents by hindering their ability to sell
their homes.
Larry Barnes requested Council reaffirm their vote to ban all STRs to restore neighborhoods.
Laura Robbins thanked Council for voting to ban STRs with an 18 month amortization period,
expressing her hope that it would be a 5-0 vote tonight.
Daniel Robbins hoped tonight's vote would end the STR matter once and for all
Keith Christian, resident, shared his recent experience with a neighboring STR and requested
Council reaffirm their vote for a complete ban on STRs.
Shakeel Syed, OCCORD, called for an inclusive public decision making process in the
development of economic policies in Anaheim and referred Council to OCCORD's Spring 2016
report. Regarding the hotel incentives, OCCORD did not believe the City should grant $560
million as incentives and requested Council develop a method for including residents and
stakeholders in the decision and that they table tonight's vote.
Lou Correa, former State Senator, expressed support for the hotel tax incentive program as an
economic incentive that will create jobs and requested the hotel operators enter into neutrality
agreements with their hotel workers.
City Council Minutes of July 12, 2016
Page 4 of 42
Ron Bengochea questioned information related to 4 -star hotels in a pamphlet from Save Our
Anaheim Resort (SOAR), noting that STRs had generated $3 million in TOT for the General
Fund and requested Council address bad operators but not ban STRs completely.
Dan DeMeyere, resident, described issues he saw with a bus stop on Brookhurst Street and
requested the bus stop be moved to a different location.
Donna Acevedo commented on previous officer -involved shooting and tasing incidents,
encouraged people to attend the Public Safety Board meeting, and requested more
accountability and problem solving.
Vern Nelson discussed police incidents from 2016, requested public access to body -worn
camera videos, encouraged attendance at the Public Safety Board meeting, and requested a
ban on STRs.
Kan expressed his hope that the hotels to be built would go union.
Jose Moreno, District 3, requested Council affirm their previous vote to ban STRs. He also
expressed his view that a $560 million incentive for hotel development was unnecessary and
that the money could be used for more infrastructure, jobs, and neighborhood resources, in
particular community centers and central parks, rather than pocket parks.
Al Jabbar, AUHSD Trustee, asked Council to reconsider the $560 million hotel incentives and
negotiate additional terms including investing back into the community.
Ben DePaul, resident, raised concerns about the water usage of big hotels during a drought and
potentially increased electrical use and rate increases, believing money should be spent on
Anaheim's children.
Fred Cornejo, resident, thanked Council for banning STRs and stated District 4 would like to see
the ban continued.
Mario Saget requested approval of permit parking for S. Claudina St. due to the nearby Packing
House.
Mark Daniels urged a unanimous vote to ban STRs.
Linda Yuen described her experience with STRs and questioned whether notices were placed in
Vietnamese and Spanish newspapers to ensure all were aware of the restrictions.
Lou Noble discussed the homeless population and problems they face and asked for safe zones
for the homeless.
Nancy West questioned recent police actions.
Ashley White requested approval of Item No. 18, permit parking, as they were highly impacted
from nearby apartments and thanked the Anaheim Police Department for their help in the
neighborhood.
Lisa Ramos requested approval of Item No. 18, permit parking, to assist with neighborhood
issues and expressed appreciation for the Police Department.
City Council Minutes of July 12, 2016
Page 5 of 42
Gabrielle Acala stressed her concerns with parking issues, trash, and overcrowding and
requested Council approval of Item No. 18.
Issa Edah-Tally, EID Fesitval chairman, expressed gratitude to the City for allowing them to use
facilities on Center Street Promenade, thanked Council for attending the event, and extended
appreciation for the Anaheim Police Department for their presence and assistance with
protestors, submitting a certificate recognizing their excellent service.
Khaled Alkhalili, EID member, thanked the Police Department for everything they did for the
festival and provided Syrian sweet pastries in appreciation.
Belal Dalati, EID Festival founder, thanked Mayor Tait for chairing the event, the Council
members for attending, and the Police Department for averting protests and protecting all at the
event.
Dalal Alia expressed her appreciation for Anaheim, the EID Festival, and the police.
A female speaker thanked the Council and police officers for attending the EID Festival and for
making Anaheim a safe and happy place.
Maryam Dalati thanked the Council for allowing use of the area to hold the EID Festival and the
police for protecting them from protestors.
A male speaker thanked the Council and Police Department for helping with the EID Festival.
Mirvette Judeh thanked the City Council for allowing the EID Festival to continue in Anaheim
and encouraged all to attend next year, expressing appreciation for the police at the event as
well.
Aziz Abdin shared his experience of bringing his diverse students from Irvine Valley Community
College to the EID Festival, thanked the Council and law enforcement, and prayed for their
protection.
Sadia Dadabhoy, EID Festival committee member, recognized Council's participation in the
event and thanked the Police Department for their support and protection.
William Fitzgerald, Home Owners Maintaining Our Environment, offered comments pertaining to
the rainbow flag and US Army divisions and Council's previous vote.
In response to Mr. Fitzgerald's comments, Mayor Tait stated the microphone was
privileged and could not be limited by government and apologized that people had to
listen to such comments, Council Member Brandman thanked the Mayor for the apology,
and Mayor Pro Tem Kring noted the vote to fly the rainbow flag was 5-0.
Gilbert Moreno, resident, thanked Council for their vote to ban STRs and stated his belief that
STIR owners had already made money and had no need to recoup additional costs.
Benjamin Boatright, resident, described his experience having a STIR next to him and stated his
belief that the money put into the property would not be returned if sold, the city should only
address illegal actions, and that more jobs equaled more freedom.
City Council Minutes of July 12, 2016
Page 6 of 42
A female speaker hoped for a 5-0 vote to ban STRs and restore peaceful neighborhoods.
Addressing hotels, she requested all construction work be done by union workers and union
workers also be in all new hotels.
A female speaker described her experiences in Sherwood Village with STRs and requested a
continuance of the ban.
COUNCIL COMMUNICATIONS:
Council Member Vanderbilt responded to comments and stated the City Council may not agree
on all items but each of them are committed to working together for the benefit and future of
Anaheim.
CITY MANAGER'S UPDATE: None
CONSENT CALENDAR: At 6:29 P.M., the consent calendar was considered with Council
Member Vanderbilt pulling Item No. 3 for further discussion and Mayor Pro Tem Kring pulling
Item No. 20. Mayor Tait declared a potential conflict of interest on Item Nos. 4 and 13 as his
firm has done work with J. De Sigio Construction, Inc. and with OCTA, and Item 12 as his firm
has received income from Discovery Science Center.
MOTION: Council Member Brandman to waive reading in full of all ordinances and resolutions
and to adopt the balance of the consent calendar as presented, in accordance with reports,
certifications and recommendations furnished each city council member and as listed on the
consent calendar, seconded by Council Member Murray. ROLL CALL VOTE: AYES — 5:
(Mayor Tait and Council Members: Kring, Murray, Brandman, and Vanderbilt.) NOES — 0.
Motion Carried.
13105 1. Receive and file minutes of the Community Services Board meeting of May 12, 2016
and Public Utilities Board meeting of May 25, 2016.
D182 2. Approve the proposed Five -Year Underground Conversion Plan for fiscal years 2016/17
to 2020/21.
4.
Determine projects to be performed under this Master Agreement for water system
AGR -7804.A
construction, repair, maintenance and immediate response to support the Public Utilities
AGR -10167
Department shall be categorically exempt under the California Environmental Quality
AGR -6532.B
Act, Sections 15301, 15302, 15303 and/or 15304 of Title 14 of the California Code of
AGR -3025.D
Regulations; approve a Master Agreement with eleven companies (Arnaz Engineering
AGR -4780.0
Contractors, Inc., Charles King Co. Inc., David T. Wasden, Inc., General Pump
AGR -10168
AGR -3070.0
Company, Inc., J. De Sigio Construction, Inc., Kiewit Infrastructure West Co., Paulus
AGR -10169
Engineering, Inc., Ramona, Inc., T.E. Roberts, Inc., VCI Utility Services, Inc., and W.A.
AGR -7808.A
Rasic Construction Co., nd other future contractors prequalified b the Cit in an
Inc.)) p q Y Y,
AGR -10170
amount not to exceed $500,000 per work order, for a term through September 30, 2019;
AGR -65368
authorize the Public Utilities General Manager to execute the Master Agreements and to
take the necessary actions to implement and administer the agreements; and authorize
de minimis changes that do not substantially change the terms and conditions of the
agreement as determined by the City Attorney.
City Council Minutes of July 12, 2016
Page 7 of 42
Due to a potential conflict of interest, Mayor Tait abstained on this item. ROLL CALL VOTE:
AYES — 4: (Mayor Pro Tem Kring and Council Members: Brandman, Murray and Vanderbilt).
NOES — 0. ABSTENTION — 1: Mayor Tait. Motion to approve carried.
5.
Approve Contract Change Order No. 1 with HYM Engineering, Inc., in the amount of
AGR -9753.0.1
$54,427.65 increasing the project total to $390,582.65, for the La Palma Avenue
Sidewalk Project and authorize the Director of Public Works to execute the change order
and any related documents.
6.
Approve eleven Memoranda of Understanding with the Anaheim Workforce
AGR -10172
Development Board and eleven one-stop delivery system partners for the America's Job
AGR -10173
AGR -10174
Center of California which provides universal access to full range employment services,
AGRA0175
training and education, and employer assistance (Orange County Social Services
AGRA 0176
Agency, Anaheim Housing Authority, Community Action Partnership Orange County,
AGRA0177
Anaheim Community & Economic Development Dept., California Department of
AGR -10178
Rehabilitation, EDD Unemployment Insurance, Employment Development Dept., Job
AGR -10179
Corps, NOCCCD School of Continuing Education, Southern California Indian Center,
AGR -10180
Inc., SER -Jobs for Progress, Inc.).
AGR -10181
AGR -10182
7.
Approve and authorize the City Manager to execute the First Amendment to CalWORKS
Vocational Training Vendor Agreement with North-West College of Medical -Dental
AGR -9884.1
Assistants & Practical Nurses dba North-West College increasing the maximum
subgrant amount from $50,000 to $150,000 for continued vocational skills training
through June 30, 2017 and authorize the Workforce Development Manager, or his
authorized representatives, to administer the amendment.
8. Approve and authorize the City Manager to execute a CalWORKS Vocational Training
Program Vendor Agreement with United Education Institute dba UEI College, in an
AGR -10183 amount not to exceed $150,000, for occupational skills training through June 30, 2017
and authorize the Workforce Development Manager, or his authorized representatives,
to administer the agreement.
9. Approve and authorize the City Manager to execute the Third Amendment to
Professional Services Agreement with Leighton and Associates, Inc. extending the
AGR -3481.A.3 contract term for three years, with one three-year extension, updating the billing rates,
and increasing the maximum compensation from $500,000 to $1,500,000 for continued
on-call environmental assessment and remediation services.
10. Approve a License Agreement with Children's Bureau for the use of office space at the
AGR -10184 Downtown Anaheim Community Center located at 250 E. Center Street for a period of
five years with the option to extend the license for three additional five year terms after
the initial term.
11.
Approve a Professional Services Agreement with Lilley Planning Group, Inc., in an
AGR -10185
amount not to exceed $150,000; a Professional Services Agreement with Beacon
AGR -10186
Economics, LLC, in an amount not to exceed $110,000; a First Amendment to
AGR -5504.B.1
AGR -971 1.1
City Council Minutes of July 12, 2016
Page 8 of 42
Professional Services Agreement with Thirtieth Street Architects increasing the contract
by $100,000; and a First Amendment to Professional Services Agreement with JSPR,
Public Relations, Writing and Marketing, increasing the contract amount by $100,000, for
on-call creation, evaluation, and execution of development and economic development
strategies to support the Community & Economic Development Department and
authorize the City Manager and the Director of Community & Economic Development to
execute and administer the agreements.
12. Approve an agreement with Discovery Science Center of Orange County, in an amount
not to exceed $50,000, for a recycling education program for Anaheim sixth grade
AGR -8619.A students during the 2016/17 school year.
Due to a potential conflict of interest, Mayor Tait abstained on this item. ROLL CALL VOTE.
AYES — 4: (Mayor Pro Tem Kring and Council Members: Brandman, Murray and Vanderbilt).
NOES — 0. ABSTENTION — 1: Mayor Tait. Motion to approve carried.
13. Approve Amendment No. 1 to Cooperative Agreement No. C-1-2468 with the Orange
AGR -1482.B.1 County Transportation Authority to fund the City's Senior Transportation Services
Program for an additional five year term (Senior Mobility Program).
Due to a potential conflict of interest, Mayor Tait abstained on this item. ROLL CALL VOTE:
AYES — 4: (Mayor Pro Tem Kring and Council Members: Brandman, Murray and Vanderbilt).
NOES — 0. ABSTENTION — 1: Mayor Tait. Motion to approve carried.
14. Approve the Solar Consultant Services Agreement with EcoMotion, Inc. to provide a
solar project feasibility analysis at participating local schools for $75,000 over an initial
two-year period, plus an additional 10% for extra services, and $25,000 per year for up
AGR -10187 to three (3) optional one year extensions, plus an additional 10% each year for extra
services, and authorize the Public Utilities General Manager, or designee, to execute the
agreement and related documents, and take any and all actions as are necessary to
implement and administer the agreement.
15. Approve the Final Map and Subdivision Agreement with Silveroak Investment
AGR -10158.1 Corporation for Tract No. 17882 located at 1609 and 1615 West Cerritos Avenue for the
development of 11 single family homes.
16. Ratify the self -certification of zero percent reduction standard through January 2017
submitted to the State Water Resources Control Board and authorize the Public Utilities
D182 General Manager to self -certify water reduction standards for future years so long as the
standard is calculated in substantial conformance with the formula in Section 864.5 of
Title 22 of the California Code of Regulations as adopted in May 2016.
RESOLUTION NO. 2016-123 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM declaring a water supply shortage and ordering the
implementation of Water Reduction Plan II in accordance with Chapter 10.18 of the
Anaheim Municipal Code.
City Council Minutes of July 12, 2016
Page 9 of 42
Pilo 17. RESOLUTION NO. 2016-124 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM vacating public utility easements pursuant to California Streets
and Highway Code Section 8330, et seq. - Summary Vacation (ABA2016-00340)
(Jefferson Stadium Park located at 1800 E. Gene Autry Way).
18. RESOLUTION NO. 2016-125 A RESOLUTION OF THE CITY COUNCIL OF
D175 THE CITY OF ANAHEIM designating Lullaby Lane from Sherrill Street to Kenmore
Street, Kenmore Street from Chanticleer Road to Cerritos Avenue, Verona Street Cul-
de-sac, and Cerritos Avenue from 2685 Cerritos Avenue to Kenmore Street as "Permit
Parking Only" street within Permit -Eligible Parking District No. 50 ("Lullaby Kenmore")
and determine the action is exempt from the California Environmental Quality Act
(CEQA) pursuant to Regulation No. 15061(b)(3).
19. RESOLUTION NO. 2016-126 A RESOLUTION OF THE CITY COUNCIL OF
D175 THE CITY OF ANAHEIM establishing Permit Parking District No. 52 ("Packing House")
Neighborhood and designating Claudina Street from 314/319 S. Claudina Street to
407/412 S. Claudina Street as 'Permit Parking Only" streets and determine the action is
exempt from the California Environmental Quality Act (CEQA) pursuant to Regulation
No. 15061(b)(3).
With the consent of City Council, the remainder of the agenda was addressed out of order.
END OF CONSENT CALENDAR
20. ORDINANCE NO. 6374 (ADOPTION) AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF ANAHEIM amending Chapter 4.05 (Short -Term Rentals) of Title 4
M142 (Business Regulation) of the Anaheim Municipal Code relating to short-term rentals, and
finding and determining that this ordinance is not subject to the California Environmental
Quality Act (CEQA) pursuant to Sections 15060(C)(2) and 15060(C)(3) of the State
CEQA guidelines, because it will not result in a direct or reasonably foreseeable indirect
physical change in the environment and is not a project, as defined in Section 15378 of
the CEQA guidelines (banning new short-term rentals and regulating the issuance of and
operating conditions applicable to short-term rentals) (Introduced at special meeting of
June 29, 2016, Item No. 1).
ORDINANCE NO. 6375 (ADOPTION) AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF ANAHEIM amending Chapter 4.05 (Short -Term Rentals) of Title 4
(Business Regulation) of the Anaheim Municipal Code relating to short-term rentals,
providing for amortization of certain pre-existing short-term rental uses and finding and
determining that this ordinance Is not subject to the California Environmental Quality Act
(CEQA) pursuant to Sections 15060(C)(2) and 15060(C)(3) of the State CEQA
guidelines, because it will not result in a direct or reasonably foreseeable indirect
physical change in the environment and is not a project, as defined in Section 15378 of
the CEQA guidelines (Introduced at special meeting of June 29, 2016, Item No. 1).
City Council Minutes of July 12, 2016
Page 10 of 42
DISCUSSION: Mayor Pro Tem Kring expressed her non-support of an amortization period of 18
months, stated she would vote no on amortization, and explained her view that the two
ordinances had burdensome restrictions and regulations for a 1 -year period and she believed
18 -month amortization was too short. Upon request by Council Member Kring and with no
objection by the Council, Item No. 20 was bifurcated to allow for separate votes on the two
ordinances.
MOTION: Council Member Murray moved to approve Item No. 20, ORDINANCE NO. 6374
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANAHEIM amending Chapter
4.05 (Short -Term Rentals) of Title 4 (Business Regulation) of the Anaheim Municipal Code
relating to short-term rentals, and finding and determining that this ordinance is not subject to
the California Environmental Quality Act (CEQA) pursuant to Sections 15060(C)(2) and
15060(C)(3) of the State CEQA guidelines, because it will not result in a direct or reasonably
foreseeable indirect physical change in the environment and is not a project, as defined in
Section 15378 of the CEQA guidelines (banning new short-term rentals and regulating the
issuance of and operating conditions applicable to short-term rentals), seconded by Mayor Tait.
Approved Vote: 5-0. Ordinance adopted.
MOTION: Mayor Tait moved to approve Item No. 20, ORDINANCE NO. 6375 AN
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANAHEIM amending Chapter 4.05
(Short -Term Rentals) of Title 4 (Business Regulation) of the Anaheim Municipal Code relating to
short-term rentals, providing for amortization of certain pre-existing short-term rental uses and
finding and determining that this ordinance Is not subject to the California Environmental Quality
Act (CEQA) pursuant to Sections 15060(C)(2) and 15060(C)(3) of the State CEQA guidelines,
because it will not result in a direct or reasonably foreseeable indirect physical change in the
environment and is not a project, as defined in Section 15378 of the CEQA guidelines,
seconded by Council Member Vanderbilt. Approved Vote: 3-2. (AYES: Mayor Tait and Council
Members Brandman and Vanderbilt: NOES: Mayor Pro Tem Kring and Council Member
Murray). Ordinance adopted.
5:30 P.M. PUBLIC HEARINGS:
24. CONDITIONAL USE PERMIT NO. 2016-05858
VARIANCE NO. 2016-05060
C220 FINAL SITE PLAN NO. 2016-00001
AGR -10188 OPERATING COVENANT AGREEMENT NO. MIS2016-00632
AGR -10189 DEVELOPMENT AGREEMENT NO. 2016-00001
APPLICANT: Jeffrey Anglada, Good Hope International, 888 S. Disneyland Drive, Suite
102, Anaheim, CA 92802
OWNER: Paul Sanford, Good Hope International, 888 S. Disneyland Drive, Suite 102,
Anaheim, CA 92802
LOCATION: This 8.8 -acre property is located at 1700 South Harbor Boulevard, at the
southeast corner of Harbor Boulevard and Disney Way.
REQUEST: To approve Conditional Use Permit No. 2016-05858, Variance No. 2016-
05060, Final Site Plan No. 2016-00001 and Development Agreement No. 2016-00001 to
permit the construction of a 580 -room, 8 -story hotel with 50,000 square feet of meeting
space, 25,600 square feet of restaurant space, 20,188 square feet of concierge lounge
space, and fewer parking spaces than required by the Anaheim Municipal Code, in
conjunction with consideration of the report prepared pursuant to Government Code
City Council Minutes of July 12, 2016
Page 11 of 42
Section 53083 and approval of Operating Covenant Agreement No. MIS2016-00632 with
Good Hope International for a subsidy in the form of payments equal to 70% of transient
occupancy tax generated by the hotel for a period of 20 years following hotel opening.
Environmental Determination: The City Council will determine whether an Addendum
to the previously -certified Final Environmental Impact Report No. 311 (FEIR 311) and
Supplemental Environmental Impact Report No. 340 (SEIR 340), together with FEIR 311
and SEIR 340, are the appropriate environmental documents for the proposed project
and that none of the conditions set forth in Sections 15162 or 15163 of the State CEQA
Guidelines calling for the preparation of a subsequent environmental impact report or a
supplement to FEIR 311 or SEIR 340 have occurred.
ACTION TAKEN BY THE PLANNING COMMISSION:
Approved and recommended City Council approval of said Conditional Use Permit,
Variance, Final Site Plan and Development Agreement (Resolution No. PC2016-030)
VOTE: 7-0: Chair Lieberman and Commissioners Bostwick, Caldwell, Dalati, Henninger,
Ramirez and Seymour voted yes (Planning Commission meeting of April 18, 2016).
RESOLUTION NO. 2016-130 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving (1) An Addendum to the Previously -Certified Final
Supplemental Environmental Impact Report No. 340 for Amendment No. 14 to the
Anaheim Resort Specific Plan and Final Environmental Impact Report No. 311 for the
Disneyland Resort Specific Plan, and (2) Mitigation Monitoring Plan No. 329 for
Conditional Use Permit No. 2016-05858, Variance No. 2016-05060, Final Site Plan No.
2016-00001 and Development Agreement No. 2016-00001 (DEV2015-00120)(1700
South Harbor Boulevard).
RESOLUTION NO. 2016-131 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving Conditional Use Permit No. 2016-05858, Variance
No. 2016-05060 and Final Site Plan No. 2016-00001(DEV2015-00120)(1700 South
Harbor Boulevard).
ORDINANCE NO. 6376 (INTRODUCTION) AN ORDINANCE OF THE CITY
COUNCIL OF THE CITY OF ANAHEIM approving that certain Development Agreement
No. 2016-00001 by and between City of Anaheim and Good Hope International, a
California Corporation, and authorizing the Mayor to execute said agreement for and on
behalf of the City (DEV2015-00120)(1700 South Harbor Boulevard).
Adopt the findings and determinations regarding the 1700 South Harbor Hotel, approve
Operating Covenant Agreement No. MIS2016-00632 with Good Hope International, in
substantial form, and authorize the Director of Community and Economic Development
to finalize, execute and implement such Operating Covenant Agreement.
At 6:40 p.m., Mayor Tait introduced the public hearing and requested a staff report.
City Manager Paul Emery announced an overview of the Hotel Tax Incentive Program
applicable to all three public hearings would be provided first, followed by project -specific
information during each individual hearing. Assistant City Manager Kristine Ridge reported that
of the next three public hearings two required various planning actions and all involved
applications for the hotel incentive program, adopted by the majority of Council in June 2015.
The program was designed to bring 4 -diamond, quality hotels to Anaheim by allowing any hotel
developer to apply for an incentive equal to 70% of the Transient Occupancy Tax (TOT) the
luxury hotel generated for 20 years with the city to receive 30% of the TOT for 20 years and
100% thereafter. She advised the three projects would bring nearly 2,000 4 -diamond quality
City Council Minutes of July 12, 2016
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rooms to Anaheim, will expand the lodging market, and ensure we capture the millions of new
visitors expected to come to Anaheim in the next few years with expansion of the Convention
Center and the addition of Star Wars themed lands at Disneyland. According to Visit Anaheim,
each year 10,000 room nights go to hotels in neighboring cities. Anaheim is currently home to
two 4 -diamond hotels, the fewest of any major visitor market, in comparison to Orlando with 30;
San Francisco with 20; Los Angeles, San Diego, and Las Vegas with 13 each; and Denver,
Phoenix, Santa Monica, and Santa Barbara with twice as many or more than Anaheim.
Ms. Ridge provided historical information of Disneyland originally being a seasonal visitor
market, which has subsequently evolved into a 365 -day world class attraction combined with the
Convention Center hosting over 1,000,000 visitors per year. As the lodging market has not
evolved at the same pace, developers face hurdles in Anaheim such as high land and
construction costs and significant parking requirements in a dense urban setting. Anaheim,
along with other cities, has offered incentives for 15 years unsuccessfully until a council majority
approved an incentive for hotels at GardenWalk in 2013. The current program created a level
playing field for all developers, not just those at a single location. Ms. Ridge reported for the
current fiscal year, TOT from hotels was budgeted to make up half of the general fund. The
proposed three luxury hotels will generate nearly $191 million in new revenue over the next 20
years, after removing the incentives and current taxes that would exist from current uses on the
sites, with the benefit to Anaheim becoming more significant over 30 years as 100% of TOT is
captured, growing to $736.5 million over the 30 year time period. Impacting the economy, the
three luxury hotels are projected to create nearly 9,000 construction jobs and more than 2,000
permanent jobs. Ms. Ridge concluded her presentation by stating these project would bring
entirely new revenue to the city, have no negative impact to the budgeted spending for essential
services, and noted that developers take all the risks associated with these projects, sharing in
revenue for 20 years if they were successful but with no obligation from the city if they were not.
David Belmer, Planning and Building Director, reported this public hearing was to consider a
request to contract a 580 -room luxury hotel with meeting space and restaurant use at 1700 S.
Harbor Blvd. The Planning Commission reviewed the proposal at a public hearing and
unanimously recommended City Council approve the entitlements associated with the project,
including a Conditional Use Permit, parking variance, Final Site Plan, Development Agreement,
and Operating Covenant Agreement. Mr. Belmer provided the following project details:
• 8.8 acre project site current developed with the Anaheim Plaza Hotel & Suites, a 300 -
room hotel constructed in early 1960s with surrounding uses of hotels to the north and
south, Anaheim GardenWalk to the east, and Disneyland Resort across Harbor Blvd. to
the west.
• Site is located within the Disneyland Resort Specific Plan and is subject to that plan's
zoning and development standard and regulations, with current improvement not
representing the full utilization of the property.
• Proposed 8 -story building to be built with a maximum height of 96 feet in compliance
with the height limitation of the Specific Plan, with graduations/stepped setbacks, and
exterior materials of teak, glass, stone, and metal.
Designed to activate the Harbor Blvd. street frontage by incorporating outdoor restaurant
and meeting space usages adjacent to street and high quality architecture. It included a
visual interest with the main entry drive located at the center of the Harbor Blvd. frontage
with a circular porte cochere leading into hotel lobby.
• Project proposes three restaurants and outdoor dining area on the ground floor with
large ballroom and meeting spaces, and an outdoor terrace area facing Harbor; second
floor amenities include guest rooms, lobby area, lounge, terrace, two pools, pool bar,
cafe, two fitness rooms, two ballrooms and meeting rooms; and other guest amenities
City Council Minutes of July 12, 2016
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include a sun deck on the fourth floor, concierge bar and terrace on the eighth floor. A
potential pedestrian bridge is proposed to connect the hotel on the east to the
GardenWalk and facilitate pedestrian movement between the two properties.
Proposed entitlements: Conditional Use Permit (CUP) to allow the two concierge
lounges on the second and eight floors, only accessible from inside hotel with guest key
cards for access. Staff and the Planning Commission recommend approval of the CUP.
Parking variance from the 1,094 spaces required by code to approximately 917 standard
stall spaces and 32 tandem spaces for use by the valet as determined by a licensed
traffic engineer to meet the maximum parking demand for the facility. Given that parking
on site has been met, staff and the Planning Commission recommend approval of the
parking variance. To satisfy requirements of CEQA, an addendum for the project was
prepared building off of two previously certified EIRs prepared for the Resort Specific
Plans. Said addendum concluded there were no additional, significant, unmitigatible
impacts associated with this project, therefore, staff and the Planning Commission
recommended approval of the prepared addendum. As the Zoning Code requires
approval of a Final Site Plan (FSP) for hotels in the Anaheim Resort, the prepared FSP
is appropriate for the site, compatible with surrounding land uses, and in compliance with
the specific plan requirements and is thus recommended for approval by staff and the
Planning Commission. A Development Agreement associated with the project proposes
a five year term and the provision of a public improvement payment of $100,000 by the
developer to the city to be used at its discretion to fund public improvements around the
project area and is recommended by staff and the Planning Commission.
Mr. Belmer concluded his presentation noting the proposed hotel was consistent with the goals
and objectives of the Anaheim Resort Specific Plan and enhanced visitor experiences by
providing a wider range of hotel accommodations, restaurants, and event spaces, therefore, in
whole, staff and the Planning Commission recommended approval of the project and its
associated entitlements.
John Woodhead, Community and Economic Development Director, addressed the Operating
Covenant Agreement and explained that under the Luxury Hotel Incentive Program the
applicant was required to construct a hotel with physical features and operational services that
met/exceeded the American Automobile Association's (AAA) 4-dimaond criteria with a
requirement to spend a minimum per room of $225,000 in shell costs and an additional $30,000
per room, on furniture, fixtures, and equipment (FF&E). The applicant has provided evidence of
site control, a qualified development team, an operating plan for a luxury hotel, conceptual
design, and evidence of interest from a luxury hotel brand. Therefore, staff has determined the
application meets eligibility requirements for the Operating Covenant Agreement (OCA) for
consideration by Council. Mr. Woodhead noted the policy requires the hotel to be constructed
in accordance with AAA's standards reflecting an upscale, refined, and stylish hotel with an
extensive array of amenities. He advised the applicant will submit construction cost verification
and an independent third party audit that the hotel is, or will be, operated consistent with the
policy requirements. Each semi-annual incentive payment is conditioned upon continued
operation within the requirements and the city's obligation to make payments ceases if the
applicant fails to do so. Preliminary review of the proposed project reflects the creation of 1,970
temporary construction jobs and 470 permanent (420 full time, 50 part time) jobs over the two
year construction time frame and subsequent operation. The projected shell and FFE costs are
estimated to exceed $156.6 million in the aggregate, with a total cost of $330.7 million including
parking, land, contingencies, soft costs, financing, and site costs. Projected tax generation of
the project over the two year construction period and initial 20 year operating period is $224
million ($208.8 million transient occupancy tax -TOT, $7.7 million property tax, $9.1 million sales
City Council Minutes of July 12, 2016
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tax) with estimated incentive payments over the same period of $145 million. Mr. Woodhead
concluded that less the tax revenue currently generated by the development of the Anaheim
Plaza Hotel & Suites of $40.4 million and incentive payments, the project was estimated to
generate net incremental revenue to the city of $38.5 million and at the end of the incentive
period projected net city revenue to exceed $12 million per year with over $173 million over a 30
year operating period.
Council Member Vanderbilt questioned information presented in the Orange County Register
regarding a study that the Resort had a capacity for 2,500 4 -diamond hotel rooms, with Ms.
Ridge responded that figure likely came from the 2013 GardenWalk project and that with the
three proposals tonight and the two potential GardenWalk hotel the number of rooms would be
met. Mr. Woodhead added that the market could accommodate 2,500 rooms but not
necessarily be saturated, and Anaheim would have established a 4 -diamond market and its
viability.
Mayor Tait questioned whether the incentive policy should be eliminated after potential approval
of these three applications with Mr. Woodhead responding that the policy had a five year sunset
and that if these hotels were built, the policy would have accomplished its goals. Mayor Tait
asked whether staff would recommend approval of another hotel under the policy if it were not
modified or rescinded if an application came forward, with Mr. Woodhead responding that the
incentive would likely no longer be necessary and staff would likely recommend against.
Mayor Tait opened the public hearing and invited the project applicants to the podium.
Applicant Mark Chan, Wincome Group, shared a recent experience where a friend only stayed
in Anaheim for one night and went elsewhere for the rest of their five night stay due to the nice
hotels and restaurants available in the other location. He was excited to bring these two
projects forward to help attract and retain the guests who would otherwise stay elsewhere and
turn their two -night stays into six -night stays. He referenced the commitment of Good Hope
International to Anaheim, having acquired the Carousel Inn almost 30 years ago and their
acquisition of additional motels on Katella Avenue and the Anaheim Plaza site. He expressed
pride to have this opportunity to elevate the Anaheim Resort and to have increased employment
from 40 employees to a current level of 350 employees, with over 1,000 once the two proposed
hotels were open and operating, especially with their partnership with Orange County trade
unions to use 100% union labor on the construction of the hotels, emphasizing veterans and
local hiring.
Tom Sprinkle, HKS Architects, presented visual depictions of the proposed hotel noting it was
not a themed hotel but incorporated fantasy through its design, emphasizing the forest of white
columns in the motor court leading up to the "jewel box" blue glass main lobby and hotel
entrance. Mr. Sprinkle reported the ground floor of the hotel would house restaurants and retail,
the second floor would include an outdoor dining terrace and concierge lounge, and a rooftop
bar/lounge would be the signature piece of the hotel design. He discussed the open, active
floor plan and lush landscaping. Once inside the hotel, guests would enjoy a living room -feel,
two pools, yoga studio, pool bar, fitness room, ballrooms, concierge lounge, and guest rooms.
The guest rooms provided views to the streets or pool to provide an open feel and the concierge
terraces provided a community resort feel for the guest to relax and enjoy fireworks. Several
suites were included to cater to extended families and all rooms enjoyed clean, modern fixtures
with a sense of whimsy and fun.
Paul Sanford, Asset Manager for Wincome Management and Development, enjoyed the
partnership their firm had developed with the City over the past 25 years and looked forward to
City Council Minutes of July 12, 2016
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this next improvement. Mr. Sanford expected these hotels to continue their progress with
meeting guest demands in a world-class destination, keeping current with trends and
sophistication, and meeting needs and expectations through spas, fitness centers, resort
amenities, and luxurious materials, and looked forward to transitioning the Anaheim Plaza Hotel
and Suites accordingly.
Without City Council objection, Mayor Tait advised general comments would be limited to 90
seconds per speaker.
Jeff LeTourneau suggested two possibilities for the construction of these hotels: 1) hotels could
be built with private capital and no public assistance, and 2) the hotels could not and would not
be built without public subsidy, so if receiving a subsidy and willing to enter a PLA for
construction of the hotel, he believed a card check neutrality agreement should also be entered
for the operation of the hotels.
Cynthia Ward acknowledged the quality of the hotel but did not want to pay for it, disputed dollar
figures surrounding the receipt of TOT by the City, referencing required bond payments and
potential budget deficits, and questioned the removal of feasibility studies from the policy to
ensure applicants actually needed the money.
Mark Daniels questioned when potential subsidies would end and recommended private
businesses take care of themselves.
Ron Miller, Executive Secretary LA/OC Building & Construction Trades Council, supported the
approval of the TOT incentive to boost the local economy and bring needed jobs to the building
trades' members and the local community, further announcing the trades had negotiated a local
hire agreement with all three developers for the construction of the hotels.
Leonard Lahtinen, speaking on Item Nos. 24, 25, and 26, offered support of the program to
encourage 4 -diamond luxury hotel projects, believing the short-term benefits of the labor
agreement for local hire and long-term benefits of lasting facilities would significantly improve
Anaheim's economy through increased tax revenues and repositioning Anaheim among other
cities with millions of visitors.
John Hanna, Southwest Regional Council of Carpenters, supported the program with three
comments: 1) developers were not rushing into Anaheim to build such hotels and this
investment would pay off; 2) an advantage to Anaheim workers who will be trained and a priority
in hiring; and 3) their organization will be able to continue paying for community college units for
its carpenters, allowing them to obtain an AA degree.
Nick Weathers represented Helmets to Hardhats, a 501 c3 nonprofit with a goal of assisting
veterans into apprenticeships in the building trades, and announced over 20,000 veterans had
been successfully placed in building trades apprenticeships since the program's inception,
made possible by veteran local hire policies.
Ernesto Medrano, LA/OC Building Trades Council, stressed the importance of the labor
agreements to create good paying, high skill, high wage jobs and allow community members
and servicemen/women to obtain careers in their local community.
Norma Kurtz, representing Assemblymember Tom Daly, read a letter urging Council to approve
the three proposed 4 -diamond hotel applications under the hotel incentive program. Ms. Kurtz
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referenced the generation of nearly $200 million over 20 years and the creation of 15,000
construction and hospitality jobs to directly benefit Anaheim's residents and neighborhoods and
make the city stronger.
Art Montez, LULAC, thanked Council for their tolerance and applauded the opportunity for
veterans to get a job.
Dave Angel, resident and apprentice at the Convention Center, thanked Council for the
opportunity to give back to his community and work local.
Derek Smith, political director UNITE HERE Local 11, clarified their position in favor of the OCA
with Disneyland but opposed the two Wincome projects for their lack of commitment for union
workers within the hotels following construction and stated Council had an opportunity and
obligation to establish a level playing field and common expectations of what to expect from this
investment.
Council Member Murray addressed Mr. Smith's comments noting OCCORD/UNITE
HERE had not worked earlier to discuss such covenants in the agreements under
consideration despite knowledge that the projects were being considered.
Martin Lopez, UNITE HERE organizer, submitted letters regarding Item No. 24, regarding
doubts about the working and environment conditions for the project and concerns regarding
CEQA compliance through reliance on a stale supplemental EIR-340 from 2012 which they
believed did not address land use and density inconsistency, greenhouse gas and smog
mitigation, diesel construction emissions, cultural resources, traffic mitigation, noise, recreation,
and inadequate variances. He further believed the City should require prevailing wage for
construction phase workers and living wage for operation phase workers.
Daniel Robbins, while not opposing subsidies as a whole, opposed these particular subsidies in
light of the strong hospitality industry and high occupancy rates enjoyed by Anaheim hotels.
Jill Kanzler, Executive Director SOAR, submitted cards and letters of support to invest in the
Resort district to benefit all of Anaheim by creating over 5,000 construction and hospitality jobs
and creating more than $291 million in revenue over 20 years at zero cost or risk to the
taxpayers. She expressed frustration with comments about giving away money and urged
Council to vote in favor of the application.
Kevin Curtis, General Manager Rainforest Caf6 Downtown Disney and chairman Anaheim
Restaurant Council, acknowledged high growth in the industry over the last four years due to
construction and expansion of the Resort and Convention Center and believed the 4 -diamond
hotels would increase revenue to improve the city, business, and workers through visitor
payment of taxes.
Jay Burress, President/CEO Visit Anaheim, stated this was a great move to turn the Resort into
a world class destination including the new Star Wars land and expanded Convention Center.
He believed the new properties would bring a new market with them, not impinge on other
hotels, and requested Council approve all three projects.
Mike Robbins, resident, offered his thoughts that a $25 million per year subsidy was not
necessary in an industry enjoying an 81 % occupancy rate. He believed hoteliers would build in
Anaheim regardless and provided other areas where the money could be better used, such as
City Council Minutes of July 12, 2016
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police officers, fire department, parks, and needed infrastructure
Neal Lauzon, president IBEW Local 441, supported the opportunity to create nearly 11,000
construction and hospitality jobs in Anaheim with local hire and the Hardhats to Helmets
program to assist veterans and asked Council to support Item Nos. 24, 25, and 26.
Jeanine Robbins urged Council to vote no on the subsidies for hotels, recommending an auction
approach for the opportunity to develop in Anaheim with projects going to those willing to pay
the most for parks, police men, firemen, etc.
Craig Farrow stated his support for the hotel incentive program adding the revenue from this
program would have a positive impact on that funding.
Larry Slagle, Yellow Cab Company, reported the benefit of the Resort district from TOT and its
impact on the local economy for jobs and local spending.
Jim Adams, resident, supported the TOT sharing agreements for Item Nos. 24, 25, and 26,
believing if not for tourism and Resort income, Anaheim would be similar to Stanton.
David Lawhorn, resident and training director Orange County Electrical Apprenticeship, asked
Council to support Item Nos. 24, 25, and 26 to support apprenticeship programs that provide
skilled job opportunities and classroom credit toward AS degrees as well as provide additional
revenue.
Kevin Hogan, resident, requested Council deny the three hotel subsidy requests stating 3 -
diamond hotels charging lower rates would bring more TOT revenue to the city than 4 -diamond
hotels charging higher rates but receiving a subsidy over 20 years, He objected to using the
city's taxation power to take money from visitors and return it to developers rather than investing
in the community.
Pete Mitchell, consultant for Anaheim Police Association and executive director Orange County
Coalition of Police and Sheriffs, stood in strong support of the three hotel projects to create new
revenues without taking from existing funds to help the city grow and flourish.
D.R. Heywood remarked this was a unique opportunity to increase TOT and create thousands
of new jobs. He believed this added revenue would enhance investments in neighborhoods,
parks, libraries, public safety personnel, and programs and the PLA would create apprenticeship
opportunities for veterans and local workers.
Rick Cheatham, president Anaheim Firefighters Association Local 2899, urged Council to
approve the proposed 4 -diamond hotel applications under the inventive program, stating
Anaheim Fire & Rescue with nearly 190 sworn firefighters responding to over 40,000
emergency calls for service each year was 33% busier with calls than Los Angeles City,
indicating a need for 95 more firefighters just to match the level in that city.
Jeremy Keith, AFA Local 2899, believed luxury hotels would make the city stronger through
more revenue and jobs and encouraged their approval and immediate construction.
Jim Ramirez. Vice President AFA, supported the measure to grow the Fire Department and the
city's budget.
City Council Minutes of July 12, 2016
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Diana Kotler, Executive Director Anaheim Transportation Network, encouraged Council to forge
another partnership in the resort community and approve the program and proposed
developments.
Shakeen Saed, OCCORD, remarked on special interests advocating for taxpayer money and
questioned what workers would receive from providing subsidies to luxury hotels, indicating
OCCORD needed additional information to determine whether to support the program.
Jerry Alder, general manager Anaheim GardenWalk, urged Council to approve the hotel
proposals and continue to strengthen Anaheim's position as a leader in clean industry,
anchored by a world class destination.
Rich Good, YMCA, urged Council to support the projects to further the good work that Resort
industries play in the community, recognizing that the projects will increase revenue to the city
and provide jobs to those in need.
Gilberto Ortiz, resident and Local 803 union, asked for support for the local hotel incentive
program and PLA to hire local and veterans and keep money in the community, recommending
approval of Item Nos. 24, 25, and 26.
Henry Vandermeier, Chair Orange County Democratic Party, applauded the consideration of
projects with PLAs to ensure that workers are local, paid a living wage, provided state -approved
apprenticeship and training programs, and employ veterans. He supported the inclusion of PLAs
for these projects and any future projects receiving tax benefits from the city and urged Council
to go one step further to add an amendment that ensured future projects with tax incentives are
not just union built but become union venues employing union members and workers of
Anaheim.
Ed Fuller, CEO Orange County Visitors Association, celebrated the decisions that supported
Disney, the Convention Center expansion, and the incentives put forth in support of these hotel
projects. Referencing his past work with Marriott, he explained the importance of incentives and
the ability of 4 -star hotels to attract new customers and meeting groups, provide greater tax
dollars to the city, and provide careers for hotel workers.
John Machiaverna thanked Council for attending the Manzanita grand opening and stated how
public/private partnerships were prevalent in the United States and referenced additional
revenue streams that come with construction beyond TOT such as increased sales tax revenue,
increased property values, and increased public utilities revenue.
Cory Tullman, resident, supported the hotel incentive to allow him to work closer to home and
support his family, create more jobs for the community, and deter crime.
John Baca, representative IBEW Local 47, supported the hotels to generate TOT and
water/electric usage to support the city and stated he was in favor of the item.
Ross McCune, Chairman Anaheim Chamber, thanked Council for approving the policy for 4 -
diamond resorts and recommended approval of the three applications within that policy to bring
$1.5 billion in design and build of the facilities to the community.
Linda Lobatos, resident, spoke against the subsidies seeing no need for 4 -star hotels in
Anaheim, requesting programs and parks be provided for the children.
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Cathy Heard, Anaheim Elementary Chapter 54, offered comments opposing Disneyland.
Vern Nelson spoke against the subsidies stating they would subject the city to crippling debt.
Rene Balenti offered comments pertaining to previous police incidents and requested
accountability and transparency.
Mariana Rivera (Translation: Spanish) felt she was losing her city to Disneyland and questioned
why money was available for hotels but not for the community.
John Palacio offered his support for the 4 -diamond hotel incentive program as an opportunity to
create thousands of highly paid construction jobs and increase the economic profile with tens of
millions of dollars to be reinvested in the Anaheim community.
Joanne Sosa commented on riots in 2012 when people felt their voice would not be heard and
opposed the proposed hotel incentives as not needed by Disney.
Nancy West questioned why she should pay for hotels and how would they benefit her.
William O'Connell, Best Western Stovall's Inn, reported he had received no money under the
incentive program and shared the Hotel Incentive Policy was not a giveaway but would add
many millions of dollars to fund many Anaheim programs over the 20 year life of the incentive
and then even more once it sunsets. He felt Disney, Wincome, and his family were being
wrongly maligned and that the 4-dimaond hotels would benefit all Anaheim residents, workers,
and other hoteliers.
A male speaker questioned why these specific projects were selected for a tax incentive instead
of lowering the hotel tax for everyone to increase the market for 4 -diamond hotels. He believed
the program was not pro -market but pro -crony capitalism and bad policy for the taxpayers.
AJ Blackwood, Progressive Interfaith Alliance, asked how the hotels would be held accountable
for operating at a higher level.
Brian Chuchua believed the subsidy created unfair competition for other hotels and may be
illegal, asking Council to ask the applicants if they would build the hotels with a subsidy less
than 70%.
William Fitzgerald stated his belief that workers at the Convention Center and Star Wars land
were not union labor.
Daniel DeMeyere discussed his previous interactions with Disneyland and believed they did not
require a tax break from the Council, suggesting Council use the money to expand the size of
the Council Chamber instead.
Evelyn, resident, offered her thoughts that the hotels should not be built with tax dollars but by
investing their own money.
A male speaker questioned the giveaway of a half billion dollars when there were 32,000
homeless children in Orange County and asked Council to vote no.
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Denise Barnes, resident, requested Council to vote no and focus on public safety, quality of life,
the homeless, and the economy of the city, requesting a subsidy for developers to address west
Anaheim.
Angel VanStark referenced the statistics provided of 5% of the city providing 50% of the taxes
and questioned what the cost of city services to the same 5% were and suggested leveraging
the opportunity to ask the developers to pay a $15 minimum wage to every employee to allow
them to live in city.
Jose Moreno discussed city investments in the Resort District over the last 20 years which were
still being paid for before potentially giving away more money, believing the money could be
better used to improve the health and well-being of the entire city.
Doug Pettibone spoke about the use of public money not serving a public purpose and used a
2003 Los Angeles case as an example for the city to validate what they are doing in terms of
subsidies.
An unidentified speaker, representing sheet metal workers, asked Council to consider the sports
teams and visitors that stay in other locations even if visiting Disneyland and requested approval
of the incentives to keep them and their money in Anaheim and provide opportunities for
workers to work locally to earn money and give back to their own community through volunteer
efforts.
Mirvette Judeh spoke in opposition to the subsidies believing the hotels would be built without
an incentive and asking Council to spend the money on the people of Anaheim through schools,
streets, parks, and lighting.
Greg Diamond, representing Brian Chuchua and Anaheim Small Business Organization-ASBO,
submitted a letter and stated a lawsuit was being prepared if Council voted without amending
the proposals to provide for a set floor room -rate to limit the ability of the 4 -diamond hotels to cut
prices during economic downturns and therefore encroach on the market of the 3 -diamond
hotels.
An unidentified speaker described his concern for his community affected by graffiti and drug
dealers and did not see the logic in giving money to large companies.
Victoria Michaels asked Council to oppose the $500 million subsidy for hoteliers and use the
money to repair sidewalks and streets, fund the police and fire departments, and build real
parks with luxury swimming pools.
Mark Chen addressed items brought up during public comments stating no 4 -Diamond Hotels
had been built in Anaheim in the last 15-20 years outside of the Grand Californian and their own
previous attempt to do so was turned down by the banking industry as not financially viable
enough to make a loan on. He also stated that Anaheim needed to stay competitive with other
markets that had convention centers where each have 10-20 4 -Diamond Hotels. In response to
Mayor Tait's question of building a 3 -diamond in lieu of a 4 -diamond, Mr. Chen remarked their
Katella property was currently a 3 -diamond hotel and the only other option for 1700 S. Harbor
Blvd., if the banks did not finance a 4 -diamond hotel, would be to build one or two 3 -diamond
hotels but their company had not given that extensive thought or analysis. Mr. Chen continued
that the banks were unlikely to finance a 4 -diamond hotel absent the subsidy nor would they put
up their own capital and the possibility of a lesser subsidy would require additional analysis of
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various factors.
With no further comments offered, Mayor Tait closed the public hearing
Mayor Tait presented information through a slide -show, stating he disagreed with staff's
presentation. In his view, much of the information provided by SOAR, via funding by the hotel
industry and Disney, included half-truths. While statistics were provided that the Resort District
encompassed only 5% of Anaheim's land but generated almost 50% of general fund revenue,
they did not show the other half of equation of how much that area costs and what money is put
into it from the city.
Referencing the current budget, Mayor Tait reported that while $163 million in TOT, property,
sales and use, and business taxes come from the Anaheim Resort, $92.7 million goes directly
to pay debt service on bonds, not directly in support of residents; he added that while 50% of
the gross general fund comes from the Resort, the Resort cost is approximately 25% so net
revenue to the general fund was only about 24%. Mayor Tait continued that only 10% of TOT
from the 4 -diamond hotels would go into the general fund for the next 20 years while 80% of
TOT from 3 -diamond hotels would go into the general fund making 3 -diamond developments
better for the residents of Anaheim. Mayor Tait expressed his disagreement with incentivizing
4 -diamond hotels and with the premise that the land would remain vacant for 20 years, an
assumption used when calculating potential revenues, as the Anaheim Resort was a central hub
in Southern California with a thriving hotel market. He reported many hotels had been built over
the last three years without subsidies. Mayor Tait reported Alan Ray, a leading hotel expert,
believed the hotels would be built without a subsidy in the hottest hotel market in years and
noted that the applicants were not asked if they needed the money or to prove a feasibility gap.
While he would personally love more 4 -diamond hotels in the Resort district, he believed the
free market would support them if allowed and stated his opposition to all three proposals,
believing them to be financially devastating to the city and future services if passed.
MOTION: Council Member Vanderbilt moved to approve:
RESOLUTION NO. 2016-130 A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ANAHEIM approving (1) An Addendum to the Previously -Certified Final Supplemental
Environmental Impact Report No. 340 for Amendment No. 14 to the Anaheim Resort Specific
Plan and Final Environmental Impact Report No. 311 for the Disneyland Resort Specific Plan,
and (2) Mitigation Monitoring Plan No. 329 for Conditional Use Permit No. 2016-05858,
Variance No. 2016-05060, Final Site Plan No. 2016-00001 and Development Agreement No.
2016-00001 (DEV2015-00120)(1700 South Harbor Boulevard); RESOLUTION NO. 2016-
131 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving
Conditional Use Permit No. 2016-05858, Variance No. 2016-05060 and Final Site Plan No.
2016-00001(DEV2015-00120)(1700 South Harbor Boulevard); and ORDINANCE NO. 6376
(INTRODUCTION) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANAHEIM
approving that certain Development Agreement No. 2016-00001 by and between City of
Anaheim and Good Hope International, a California Corporation, and authorizing the Mayor to
execute said agreement for and on behalf of the City (DEV2015-00120)(1700 South Harbor
Boulevard), without the Operating Covenant Agreement, seconded by Mayor Tait.
DISCUSSION: Council Member Vanderbilt expressed his views that the planning actions and
land use could be voted on with additional debate and questions surrounding the Operating
Covenant Agreement ("OCA") to continue. He questioned whether the top -floor lounge with
fireworks viewing would be accessible to the public, with the applicant replying it was for guest
City Council Minutes of July 12, 2016
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access only and required key card entry, but that the first floor restaurants would be open to the
public.
Council Member Murray requested Finance Director Debbie Moreno address revenue streams.
Ms. Moreno confirmed studies had been done on all three hotel proposals by an outside
economist and reviewed by Finance Department staff for reasonableness and accuracy of
calculations. Council Member Murray asked whether these hotels would contribute to paying
down the bond debt faster, with Ms. Moreno stating the potential was there as the resort debt
would only be outstanding for the first 16 years of the operating period. Thus, the final four years
of the incentive would see greater revenue to the city. Ms. Moreno continued that if
assumptions held true and revenues came in greater, the city may be able to pay off the bonds
a year earlier. Council Member Murray continued her comments that, in her view,
characterizing this policy as a subsidy implied that resources and general fund commitments
were being made, but found it more technically accurate to use term "tax rebate" as it was a
rebate on dollars generated once these hotels were built and operating. She stated the city had
no essential risks because it was not backing the hotels and if they did not generate any
revenue then the city would not rebate them any percentage. Council Member Murray believed
this would have no impact to city services, using the city's long-term policies, to encourage a
new investment and have a share of that for a set time period be returned to the developer with
Ms. Moreno indicating there would be a positive impact to the city services that could be
provided even during the initial incentive period and substantially more after the initial 20 year
period. Discussion continued with Ms. Moreno not seeing a scenario in which the city would be
in jeopardy financially or where fiscal certainty was threatened by this policy. Kristine Ridge,
Assistant City Manager, stated Sections 401-403 of the OCA provided the city the opportunity
for a third party audit to establish the property had met all requirements of the OCA and to
ensure it was still maintaining the standards of the 4 -diamond policy, noting if the hotel ceased
to operate at the 4 -diamond standard, the city could rescind the OCA and cease payments.
Council Member Murray then presented a slideshow showing financial data, including the
following: when bonds taken out there would be 25% net revenue but as paid down would
result in $60 million annually for the budget; Anaheim had the largest budget in Orange County,
largely funded through hotel bed taxes paid by visitors rather than the city's taxpayers; robust
revenues allowed for a structurally balanced budget, restored cash reserves, and paid down
pension liabilities, going from 64% to 78% funded pension liabilities over the last four years due
to the strength of Resort district; neighboring cities pay additional taxes and fees such as utilities
user taxes and franchise fees, that Anaheim could avoid; the budget has been able to fund vital
city services, and over $5 million to city schools; compared to other cities Anaheim was much
stronger, spending $200 per resident more than Santa Ana; and the diversified economy
generated by these projects would go directly to neighbors through additional programs,
services, and investments without additional taxes. Council Member Murray continued by
comparing the number of Anaheim's parks, community centers, libraries, police officers, and fire
stations to surrounding cities with Anaheim having more due to the Resort district. Council
Member Murray concluded her comments by stating a desire to continue a decades -long policy
to invest and partner with the private sector to provide skilled trade jobs to ensure local hire and
veterans jobs and also have an investment in neighborhoods through revenue, believing the
policy would be a win-win for the city.
AMENDED MOTION: Council Member Murray offered an amended motion to approve Item No.
24 as presented, in its entirety, including the Operating Covenant Agreement, seconded by
Mayor Pro Tem Kring.
City Council Minutes of July 12, 2016
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DISCUSSION: Mayor Tait indicated he needed to leave to attend a meeting in Washington DC
with the president and offered to cancel his scheduled vacation to attend the next City Council
meeting to further discuss and debate this issue.
MOTION: Mayor Tait moved to continue the public hearings to July 26, 2016, seconded by
Council Member Vanderbilt. Vote: 3-2 (AYES: Mayor Tait and Council Member Vanderbilt;
NOES: Mayor Pro Tem Kring and Council Members Murray and Brandman). Motion to continue
failed. Mayor Tait left the meeting at 9:50 P.M. and Mayor Pro Tem Kring took the gavel.
Mayor Pro Tem Kring reported the Resort generated about $163.2 million. She stated that with
expenses of about $90 million, the city still provided $70 million in revenue that paid for vital city
services. She disputed the Mayor's comparison of 3 -star and 4 -star hotels, stating they often
had widely different numbers of rooms so a fair comparison could not be made and read a
portion of an op ed she authored that included the following points: a feasibility gap was
unnecessary due to the well-established challenge of developing 4 -diamonds hotels in the
Resort area with high land and construction costs for needed parking in a dense urban setting;
Anaheim competed with other markets for development; only the Grand Californian had been
built as a 4 -diamond hotel in the last 60 years with none built for the last 15 years; debt could be
paid off in 16 rather than 20 years; and Anaheim could avoid sales tax increases that had been
implemented by neighboring cities. She concluded her comments stating the hotel program
was as market-oriented as possible with developers taking all the risks and sharing an incentive
for 20 years if successful, but receiving no incentive if unsuccessful, and 100% of TOT going to
the general fund after 20 years, benefiting not just the visitors but the residents.
Council Member Vanderbilt, in review of the originally approved policy, questioned whether staff
could determine a hotel met the AAA 4 -star standards but that AAA may provide it a different
rating. Ms. Ridge clarified there was a difference between 4 -star and 4 -diamond, and stated the
hotels were not required to obtain the rating from AAA but to meet the equivalent standards.
She acknowledged it was possible the hotels could pass city standards but not receive the
rating from AAA, which could trigger an audit to make a determination whether the hotel was
meeting the standards or not. Ms. Ridge confirmed that all three applications included
commitments to spend the minimum expenditures required in shell and FF&E costs as part of
the program requirements. Regarding employment, Ms. Ridge explained requirements in the
OCA included local hire, prevailing wages, and apprenticeships and that the developers had
gone beyond the city's requirements by securing PLAs with the building trades for the hotel
construction. Council Member Vanderbilt questioned whether any opportunities would be
available to Anaheim residents who were not union members, with the project applicant stating
the amount of non-union, trained workers in the construction field was approximately 8% across
the state with the trades having spent about $200 million per year training apprentices and
graduating them out of the program. He provided examples of the union and local hire work at
the Convention Center and Disneyland and explained the hiring tiers were 20% Anaheim
residents from a 15 -mile radius, but that 20% was not a cap and often exceeded. Council
Member Vanderbilt questioned the possibility of the full-time employees for the operating phase
being unionized, with Ms. Ridge confirming that would require separate agreements but was not
a requirement of the policy, just that good -faith efforts be made to hire local Anaheim residents.
As part of the good faith efforts, Mr. Sanford explained their practice was to conduct local job
fairs throughout Anaheim with a preference to hire local Anaheim residents, to create more job
stability and long term employees as they worked close to home.
Council Member Brandman emphasized his support of public/private partnerships and project
labor agreements (PLAs) which in his view ensured that construction was done by the
City Council Minutes of July 12, 2016
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community and offered his support and vote.
Council Member Vanderbilt summarized his position as in favor of the project in terms of quality
and other aspects, but stuck on requirements regarding economic opportunity and public
purpose, and that he hoped for more time to allow for additional discussions and give other
labor groups a chance to work on agreements.
With no further discussion, a vote was taken on the Amended Motion to above Item No. 24, as
presented. Approved Vote: 3-1 (AYES: Mayor Pro Tem Kring and Council Members Murray
and Brandman; NOES: Council Member Vanderbilt; ABSENT: Mayor Tait). Motion to approve
carried and ordinance introduced.
City Council recessed at 10:19 P.M. to address technical issues and reconvened at 10:32 P.M.
25. This is a public hearing to approve an Operating Covenant Agreement No. MIS2016-
00637 with Walt Disney Parks and Resorts U.S. Inc., related to an approximate 25 -acre
property located at 1401 Disneyland Drive, at the southeast corner of South Disneyland
AGR -10189 Drive and West Magic Way, providing for a subsidy in the form of payments equal to
70% of transient occupancy tax generated by the hotel for a period of 20 years following
hotel opening in connection with the development of an AAA Four Diamond Hotel.
Adopt the findings and determinations regarding the 1401 Disneyland Drive Hotel,
approve Operating Covenant Agreement No. MIS2016-00637 with Walt Disney Parks
and Resorts U.S., Inc., in substantial form, and authorize the Director of Community and
Economic Development to finalize, execute, and implement such Operating Covenant
Agreement.
Assistant City Manager Kristine Ridge reported this public hearing was for the second luxury
hotel application under the Hotel Tax Incentive Policy, to be located at 1401 Disneyland Drive.
She reported the applicant was present, represented by Mary Niven, Senior Vice President
Disneyland Resort Operations.
John Woodhead, Community and Economic Development Director, announced there were no
associated planning actions for this project at this time, but the applicant would be required to
undergo final site plan and CEQA review with the Planning Commission at a later date. The
applicant proposed to construct a 700 -room, luxury hotel with 900,000 square feet, including a
rooftop signature restaurant, family restaurant, fitness facility, recreation deck with beach entry
pool, and a serenity pool with full service bar and grill. The project would be located on an
approximately 15 -acre parcel just north of the Disneyland Hotel and Disneyland Resort.
Mr. Woodhead explained that under the Luxury Hotel Incentive Program the applicant was
required to construct a hotel with physical features and operational services that met/exceeded
AAA's 4-dimaond criteria with a requirement to spend a minimum per room of $225,000 in shell
costs and an additional $30,000 per room, on furniture, fixtures, and equipment (FF&E). The
applicant has provided evidence of site control, a qualified development team, an operating plan
for a luxury hotel, conceptual design, and evidence of interest from a luxury hotel brand.
Therefore, staff has determined the application meets eligibility requirements for the Operating
Covenant Agreement (OCA) for consideration by Council. Mr. Woodhead noted the policy
requires the hotel to be constructed in accordance with AAA's standards reflecting an upscale,
City Council Minutes of July 12, 2016
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refined, and stylish hotel with an extensive array of amenities, and the applicant will submit
construction cost verification and an independent third party audit that the hotel is, or will be
operated consistent with the• policy requirements. Each semi-annual incentive payment is
conditioned upon continued operation within the requirements and the city's obligation to make
payments will cease if the applicant fails to do so. Preliminary review reflects the creation of
550 temporary construction jobs and 1,150 permanent jobs (805 full time, 345 part time) over
the two year construction time frame and subsequent operation. The projected shell and FFE
costs are estimated to exceed $306.5 million in the aggregate, with a total cost of $643 million
including parking, land, contingencies, soft costs, financing, and site costs. Projected tax
generation of the project over the two year construction period and initial 20 year operating
period is $400 million ($381.5 million transient occupancy tax -TOT, $11.8 million property tax,
$7.2 million sales tax) with estimated incentive payments over the same period of $267 million.
Mr. Woodhead concluded that less the tax revenue currently generated by the development of
the site and incentive payments, the luxury hotel project was estimated to generate net
incremental tax revenue to the city of $132 million and at the end of the incentive period,
projected net city tax revenue to exceed $25.6 million per year with over $419 million over a 30
year operating period.
Mayor Pro Tem Kring opened the public hearing.
Mary Niven, Senior VP Disneyland Operation, explained that the Grand California was the first
and only hotel that Disney built in Anaheim, having not built Paradise Pier or the Disneyland
Hotel themselves. She continued that for six decades, the Disney Company had been investing
in entertainment experiences and infrastructure support with hotel development taking a back
seat, but that with the Luxury Hotel Tax Incentive policy, they were excited to develop a new
Disney 4 -diamond hotel to complement their existing two 4 -diamond hotels and send a
message that Anaheim is a city with luxury accommodation with the ability to shift hotel stays
from Los Angeles and South Orange County to keep travelers and their dollars within the city.
Disney proposed construction of a 700 -room flagship hotel situated on 10 acres just north of the
Disneyland Hotel, delivering a highly themed environment with world class guest services, an
inviting lobby, outdoor experiences, a serenity pool, a themed play area for kids, and a poolside
bar and grill along with an exclusive view of fireworks from the signature rooftop restaurant and
lounge. Ms. Niven remarked there had been a market in Anaheim for 4 -diamond hotels,
particularly after the expansion of California Adventure and opening of Cars Land, yet not one
single 4-dimaond hotel had been built in nearly 20 years, although over 15 3 -diamond hotels
had been proposed and/or built. With only two 4 -diamond hotels in the Resort area, both
enjoying high occupancy rates year round, Anaheim is losing guests and revenue to other cities
every day. Ms. Niven explained that the incentive was necessary due to high difficulty for any
developer to build in the Resort area due to Anaheim's urban environment that creates a
financial burden even before construction begins. Having already announced investing over $1
billion in the Star Wars theme land, Disneyland's largest land expansion ever and construction
of a new parking structure, a 4 -diamond hotel was not feasible until the incentive policy was
created. With the incentive, Disney is finally able to develop a new Disney hotel, one that will
provide a new and direct revenue stream to the city to help pay for essential city services for its
residents for decades to come.
Ms. Niven explained that while TOT revenues provide nearly 50% of the city's General Fund
that pays for police, fire, libraries, parks, and vital city services, Disney's three existing hotels
were responsible for 1/3 of all current TOT revenues for the entire city, showing the strength of
4 -diamond properties. Ms. Niven commended the TOT policy for addressing the city's current
and future financial challenges by creating new revenues through direct and permanent revenue
City Council Minutes of July 12, 2016
Page 26 of 42
streams that grow annually and doesn't cost the city a dime. She shared statistics that Disney's
hotel alone would generate $150 million in new revenue over a 20 year period, jumping to over
$750 million in 40 years, and over $1 billion over a 50 year period. In addition to tax revenue,
the 4-dimaond hotel would create over 1,500 direct jobs during construction; including good
paying union jobs with a local hire agreement with the building trades and participation in the
Helmets to Hardhats program giving hiring priority to veterans and members of the National
Guard and reserves. Following construction, there would be 1,100 jobs during the operating
period, the majority full time, with jobs ranging from service to management with comprehensive
benefits packages. Ms. Niven stated it was an exciting time for this new chapter in the Anaheim
Resort, with over $2 billion invested by Disney to create jobs, drive increased visitation, secure
the financial future, and change the face of tourism in Orange County, and concluded her
comments by asking Council to support Disney's proposed 4 -diamond hotel which met or
exceeded their requirements.
Greg Diamond remarked another part of a potential lawsuit revolved around rebating 70% of
TOT which was already committed 100% toward bond service, suggesting Council request
clarification from staff and/or go to court for a declaratory statement on the project.
Jeff LeTourneau remarked the Project Labor Agreements (PLAs) with the building trades were
incredible but questioned what would happen to the operational employees following
construction who did not have card check agreements, noting potential unfair competition.
Chris Gardner, for State Senator Bob Huff, urged Council to approve the remaining two
proposed 4 -diamond hotel applications under the program, stating the luxury hotel property
opportunity would generate over three times revenue annually via TOT compared to 3-dimaond
hotels, would benefit Anaheim through increased daily average hotel rates for all hotels,
generate 100s of millions of dollars of tax revenue for city, and directly improve the livelihoods of
Anaheim residents with job opportunities.
Brian Starr, Senior Vice President Orange County Business Council (OCBC), explained
economic development, business retention, and job creation were key functions of OCBC, and
they worked with government partners to develop innovative incentives to attract investments.
He noted OCBC strongly supported the hotel proposals and applauded the city for its innovation
and foresight in designing a policy to attract high-end business travelers and tourists from
around the world.
Matthew Hargrove, California Business Properties Association, representing 10,000 businesses
from across California, applauded the hotel incentive program as good policy to drive additional
types of businesses into the city, and strongly supported the project, knowing they could count
on Disney to do it right as a proven partner of the community for over 60 years.
Mark Lopez, resident, remarked no one opposed jobs or revenue but some opposed the
manner in which it is done, noting he had personal concerns regarding the initial purpose of
TOT to compensate local government for costs incurred while serving tourists that would not
keep pace with costs during the incentive period.
Matt Sutton, California Restaurant Association, urged the approval of the two remaining
applications as a means of creating new jobs and keeping money in the local hospitality
community.
Angel Martinez asked Council to represent Anaheim residents and taxpayers rather than a
City Council Minutes of July 12, 2016
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transcontinental corporation.
Reuben Franco, president Orange County Hispanic Chamber of Commerce, offered support for
all three items, No. 24, 25, and 26, for economic development, job creation, and keeping
Anaheim competitive with other convention centers.
Bobby McDonald, Black Chamber of Commerce of Orange County, asked Council to approve
the program and incentive, expressing gratitude for the emphasis on hiring local veterans
through the Helmets to Hardhats program and the PLAs.
Elizabeth Arteaga, president National Hispanic Businesswomen Association, supported the
Disneyland development and its positive economic impact and supported the three 4 -diamond
hotel applications submitted under the program.
John Machiaverna, resident, reported only 1,250 out of 31,000 hotels in the AAA national
registry were ranked 4-dimaond, stating investment in the Resort area set Anaheim apart from
the rest of Southern California. He continued that Disney wants Anaheim to succeed and
donated over $16 million to non-profit organizations over the last five years, and over $5 million
through ACT specifically in Anaheim.
Jay Burress, Visit Anaheim, reported criticism heard from meeting planners around the country
was the lack of luxury hotels, dining, and entertainment options in Anaheim, noting the proposal
addressed both issues and provides a win-win for the destination, the industry, and the
community, and offered his support for Item No. 25.
Kevin Curtis, Anaheim Restaurant Council, supported Item Nos. 25 and 26 to keep Anaheim
moving forward, sharing statistics on a number of 4-dimaond hotels in other destinations. He
requested Council continue its support for jobs, local hire, and veteran benefits.
Bill O'Connell stated he was in favor of this proposal and commended Disney as the number
one employer in the county, a great corporate partner for city, and their donations to charity.
Keith Harkey, Ironworkers Local 433, commented on the growth and expansion of Disneyland
and the Convention Center to bring more people to the city and supported the incentives to
capitalize on the growth by creating permanent and construction jobs for local workers and
veterans, allowing them to work closer to home and causing a ripple effect across Southern
California.
An unidentified speaker commented that if the hotels were built, people would come and spend
their dollars, benefiting the community, and stated he endorsed the projects.
Jill Kanzler, SOAR, was thrilled Anaheim was moving forward, offering support for the three
hotels, the thousands of jobs, and millions of revenue dollars paid by visitors to benefit
residents.
Jose Moreno remarked the taxes may be paid by visitors but Anaheim voters envisioned that
money applying to needs within the community rather than given back to the developers. Mr.
Moreno expressed disappointment that the Council did not offer the Mayor the courtesy to
return and participate in a vote on this issue after having been called away by the President and
provided examples of other ways $560 million could be used in the community to help residents.
City Council Minutes of July 12, 2016
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AJ Blackwood, Progressive Interfaith, expressed his disappointment for the discourteous
treatment of the Mayor, believing a two week delay was not too much to ask, and for the
projects not addressing union concerns for ongoing labor and the effects on Anaheim families
William Fitzgerald provided his thoughts on Disney, their hotel development, and staff's
accounting methods related to tax rebates.
John Hanna, Southwest Carpenters, supported the local hire opportunities to help Anaheim
citizens and urged Council to vote yes on Item Nos. 25 and 26.
Ernesto Medrano, LA/OC Building and Construction Trades Council, spoke of the history of
PLAs at Disney, emphasized the local hire and veteran preferences components of the
agreement, and announced a letter of support from Speaker of the California Assembly Anthony
Renden, urging Council to move this item forward and get people working.
Jim Ramirez, Vice President Anaheim Fire Association, offered support for Item Nos. 25 and 26
Nick Weathers, Helmets to Hardhats, mentioned Disney as a staunch supporter of putting
veterans back to work nationwide, and urged a vote of approval.
Linda Lobatos requested money be used to provide for kids in Anaheim through extra -curricular
activities and education.
Todd Ament, president/CEO Anaheim Chamber of Commerce, noted it was an exciting night to
re -position the Resort and bring 4-dimaond hotels to Anaheim with over $1.5 billion proposed in
investments and over 9,000 jobs. He urged Council to approval all three hotel applications.
With no further comments offered, Mayor Pro Tem Kring closed the public hearing.
Mayor Pro Tem Kring explained the $560 million was not being taken from the general fund but
was future money that would only be paid once the hotels were built and operational with paying
guests.
Council Member Murray stated this was more accurately a rebate on future tax dollars, not a
subsidy, as the city was not guaranteeing any funding and there was no bond financing,
explaining the reason for doing this is following a proven track record of developing and
generating revenue through private development. She provided historical information on the
hotel policy as initially developed in 2001 with a 50% rebate adopted unanimously by the City
Council to support the economic engine of city. She reported, for 15 years no hotels were built
under that policy, so it was amended with Mr. O'Connell for hotels at the GardenWalk, which are
also still not built, and then the policy was extended to be open to all willing to develop in
Anaheim. Council Member Murray shared her view that Disney has been an extraordinary
partner to city for 60 years. She shared that other cities have looked at or implemented higher
taxes to address their budget challenges, but Anaheim did not have to due to the billions of
dollars of investments made through corporate partnerships. She believed these hotels would
continue to move Anaheim's momentum forward and help ensure a structurally balanced
budget.
City Council Minutes of July 12, 2016
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Council Member Brandman noted the existence of a Project Labor Agreement on this project as
a foundational compact with the community for the construction of these hotels which will
positively affect generations to come.
MOTION: Council Member Brandman moved to approve Item No. 25, an Operating Covenant
Agreement No. MIS2016-00637 with Walt Disney Parks and Resorts U.S. Inc., related to an
approximate 25 -acre property located at 1401 Disneyland Drive, at the southeast corner of
South Disneyland Drive and West Magic Way, providing for a subsidy in the form of payments
equal to 70% of transient occupancy tax generated by the hotel for a period of 20 years
following hotel opening in connection with the development of an AAA Four Diamond Hotel and
adopt the findings and determinations regarding the 1401 Disneyland Drive Hotel, approve
Operating Covenant Agreement No. MIS2016-00637 with Walt Disney Parks and Resorts U.S.,
Inc., in substantial form, and authorize the Director of Community and Economic Development
to finalize, execute, and implement such Operating Covenant Agreement, seconded by Council
Member Murray.
DISCUSSION: In response to Council Member Vanderbilt, Mr. Woodhead reported the applicant
had provided evidence of meeting the 4 -diamond standards in their application with
approximately 700 rooms in 900,000 square feet but that no renderings were currently available.
Ms. Niven responded to a question that the rooftop restaurant and lounge would be available to
anyone making a reservation continuing that the project was estimated to create over 1,100
career -building jobs following construction to which Mr. Vanderbilt expressed his concern that
jobs be available close to the median income of Orange County. He further noted there was not
much to review in terms of design for this project, with Mayor Pro Tem Kring stating Disney
products were top quality, and Council Member Murray explaining the specific design was not
part of the Operating Covenant Agreement at this time but would come later and anticipated it
meeting or exceeding the requirements.
Approved Vote: 3-1 (AYES: Mayor Pro Tem Kring and Council Members Murray and Brandman;
NOES: Council Member Vanderbilt; ABSENT: Mayor Tait). Motion to approve carried.
26. CONDITIONAL USE PERMIT NO. CUP2016-05859
C220FINAL SITE PLAN NO. FSP2016-00002
AGR DEVELOPMENT AGREEMENT NO. DAG2016-00002
AGR -10190 PURCHASE AND SALE AGREEMENT NO. MIS2016-00633
AGR -10190.1.0.8 PARKING EASEMENT AGREEMENT NO. MIS2016-00634
AGR -10190.1 OPERATING COVENANT AGREEMENT NO. MIS2016-00635
APPLICANT: Jeffrey Anglada, FJS, Inc., 888 S. Disneyland Drive, Suite 102,
Anaheim, CA 92802
OWNER: Paul Sanford, FJS, Inc., 888 S. Disneyland Drive, Suite 102, Anaheim, CA
92802
LOCATION: The site of the Proposed Project is (a) that certain 6.44 -acre (approximate)
parcel of land commonly known as 1030 West Katella Avenue and located on the south
side of West Katella Avenue approximately 130 feet east of West Street/Disneyland
Drive, and (b) that certain 1.67 -acre (approximate) triangular parcel of land currently
owned by the City, located adjacent to the aforementioned 6.44 -acre parcel and
proposed for sale to the Developer.
REQUEST: To approve Conditional Use Permit No. 2016-05859, Final Site Plan No.
2016-00002, Development Agreement No. 2016-0002, Purchase and Sale Agreement
City Council Minutes of July 12, 2016
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No. MIS2016-00633, Parking Easement Agreement No. MIS2016-00634, Operating
Covenant Agreement No. MIS2016-00635, and to permit the construction of a 634 -room,
eight -story hotel with a zero -foot wide interior setback along the east property line, up to
42,000 square feet of meeting space, up to 31,179 square feet of retail, spa, and
restaurant space, and a seven -level parking structure, of which the ground floor would
be dedicated to back -of -house uses for the Anaheim Convention Center (the "Proposed
Project"). Under the Purchase and Sale Agreement, the City would sell to the developer
an approximately 1.67 -acre parcel for fair market value and the City will acquire a
parking easement, also at fair market value which Developer will make available to the
City, as more particularly set forth in the Purchase and Sale Agreement. The terms of
the parking easement are more particularly set forth in the Parking Easement
Agreement. In conjunction with consideration of the report prepared pursuant to
Government Code Section 53083 pertaining to a request for subsidy in the form of
payments equal to 70% of transient occupancy tax generated by the hotel for a period of
20 years following hotel opening and approval of an Operating Covenant Agreement
with FJS Inc., a Texas corporation, doing business as Anabella Hotel for a subsidy in the
form of payments equal to 70% of transient occupancy tax generated by the hotel for a
period of 20 years following hotel opening.
Environmental Determination: The City Council will determine whether an Addendum
to the previously -certified Environmental Impact Report No. 340 (SEIR 340) is the
appropriate environmental document for the Proposed Project and that none of the
conditions set forth in Sections 15162 or 15163 of the State CEQA Guidelines calling for
the preparation of a subsequent environmental impact report or a supplement to SEIR
340 have occurred.
ACTION TAKEN BY THE PLANNING COMMISSION:
Approved and recommended City Council approval of said Conditional Use Permit, Final
Site Plan and Development Agreement (Resolution No. PC2016-45, PC2016-46,
PC2016-47) VOTE: 6-0: Chair Lieberman and Commissioners Bostwick, Caldwell,
Henninger, Ramirez and Seymour voted yes; Commissioner Dalati was absent
(Planning Commission meeting of June 13, 2016).
RESOLUTION NO. 2016-132 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving (1) An Addendum to the Previously -Certified Final
Supplemental Environmental Impact Report No. 340 for Amendment No. 14 to the
Anaheim Resort Specific Plan, and (2) Mitigation Monitoring Plan No. 332 for Conditional
Use Permit No. 2016-05859, Final Site Plan No. 2016-00002 and Development
Agreement No. 2016-00002 (DEV2015-00078)(1030 West Katella Avenue).
RESOLUTION NO. 2016-133 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving Conditional Use Permit No. 2016-05859 and Final
Site Plan No. 2016-00002 (DEV2015-00132)(1030 West Katella Avenue).
ORDINANCE NO. 6377 (INTRODUCTION) AN ORDINANCE OF THE CITY
COUNCIL OF THE CITY OF ANAHEIM approving that certain Development Agreement
No. 2016-00002 by and between City of Anaheim and FJS, Inc., a Texas Corporation
and authorizing the Mayor to execute said agreement for and on behalf of the City
(DEV2015-00134).
Approve Purchase and Sale Agreement No. MIS2016-00633 with FJS, Inc., in
substantial form, and authorize the Director of Community and Economic Development
City Council Minutes of July 12, 2016
Page 31 of 42
to finalize, execute, and implement such purchase and sale agreement.
Approve Parking Easement Agreement No. MIS2016-00634 with FJS, Inc., in substantial
form, and authorize the Director of Community and Economic Development to finalize,
execute, and implement such parking easement agreement.
Adopt the findings and determinations regarding the 1030 West Katella Hotel, approve
Operating Covenant Agreement No. MIS2016-00635 with FJS, Inc., in substantial form,
and authorize the Director of Community and Economic Development to finalize,
execute, and implement the Operating Covenant Agreement.
Assistant City Manager Kristine Ridge reported this public hearing was for the third luxury hotel
application under the Hotel Tax Incentive Policy, to be located at 1030 West Katella Avenue,
and included various planning actions as well as transactional actions pertaining to a Purchase
and Sale Agreement, a permanent easement agreement, and the Operating Covenant
Agreement, with Mark Chan, Chief Operating Officer for Wincome, present as representative of
applicant FJS, Inc.
David Belmer, Planning and Building Director, reported the applicant proposed to construct a
634 -room luxury hotel, with meeting space, restaurant, and retail uses. The Planning
Commission reviewed the proposal at its June 13, 2016 public hearing and unanimously
recommended approval of the associated entitlement applications for a Conditional Use Permit
(CUP), Final Site Plan, Development Agreement, and negotiated agreements. Mr. Belmer
provided the following project details:
• The site consists of 8.1 total acres, 6.44 acres currently improved with the Anabella Hotel
and a 1.67 acre city -owned parcel currently used for back -of -house activities for the
Anaheim Convention Center, which uses to be relocated to the ground and first floor of the
proposed parking structure. The Anabella Hotel is a 358 -room, mid -rise hotel with
restaurant and retail.
• Proposed hotel consists of single -story restaurant and retail along the Katella Avenue
frontage, with an 8 -story, 105 foot height hotel, incorporating contemporary architectural
and materials with a luxury character. The main entry drive is proposed for the center of the
Katella frontage with a circular porte cochere in front of the lobby and a secondary driveway
at the west end of the site with direct access to the parking structure on rear of the site.
The parking structure would provide approximately 1,099 parking spaces; the hotel first
floor would house hotel guest common areas such as a gymnasium, bar, lounge,
restaurant, and pool area; and other guest amenities include a concierge lounge, two open
air terraces on the eighth floor, ballrooms, and meeting spaces.
• The project site is within two different zoning districts: the Anabella site being in the
Commercial/Recreational District and the city -owned parcel being in the Public/Recreation
District. A CUP is required for development in the Public/Recreation District and was
unanimously recommended by the Planning Commission. One technical issue pertaining to
setbacks was detailed in the agenda report, a modification for which was also unanimously
approved by the Planning Commission.
• To comply with CEQA, an addendum to previously -approved SEIR-340 was prepared and
concluded the proposed project would not create any environmental impact beyond those
analyzed and addressed in the previously approved EIR.
• The Development Agreement includes a commitment by the applicant to pay a $100,000
cash payment to the city for public improvements in the vicinity of the project site.
City Council Minutes of July 12, 2016
Page 32 of 42
Mr. Belmer concluded that staff and the Planning Commission found the project consistent with
the goals and policies of the Anaheim Resort, aimed at enhancing visitor experiences, and
recommended approval of the various entitlement applications.
John Woodhead, Community and Economic Development Director, presented the three non -
planning items: 1) Purchase and Sale Agreement: city to sell to applicant an approximately
72,000 square foot, triangular parcel of land currently used for Convention Center back -of -
house activities for fair market value of $8.5 million; 2) Parking Easement Agreement: city would
acquire approximately the same square footage easement for fair market value of $3.3 million,
with a condition precedent for effectuation of the purchase and sale agreement is the
development of a hotel parking structure including the easement and associated improvements;
and 3) Operating Covenant Agreement (OCA) under the Luxury Hotel Incentive Program to
construct a hotel meeting AAA's 4-dimaond criteria with a requirement to spend a minimum per
room of $225,000 in shell costs and an additional $30,000 per room, on furniture, fixtures, and
equipment (FF&E). The applicant has demonstrated site control, a qualified development team,
an operating plan for a luxury hotel, conceptual design, and evidence of interest from a luxury
hotel brand; therefore staff has determined the application meets eligibility requirements for the
OCA.
Mr. Woodhead noted the policy requires the hotel to be constructed in accordance with AAA's
standards for an upscale, refined, and stylish hotel, and the applicant will submit construction
cost verification and an independent third party audit that the hotel is, or will be operated
consistent with the policy requirements. Preliminary review reflects the creation of 1,968
temporary construction jobs and 514 permanent jobs (459 full time, 55 part time) over the two
year construction time frame and subsequent operation. The projected shell and FIFE costs are
estimated to exceed $171.2 million in the aggregate, with a total cost of $306 million including
parking, land, contingencies, soft costs, financing, and site costs. Projected tax generation of
the project over the two year construction period and initial 20 year operating period is $227
million ($211.2 million transient occupancy tax, $6.2 million property tax, $9.5 million sales tax)
with estimated incentive payments over the same period of $147.8 million. Mr. Woodhead
concluded that less the tax revenue currently generated by the development of the Anabella of
$52.9 million and incentive payments, the project was estimated to generate net incremental
revenue to the city of $19.8 million and at the end of the incentive period projected net city
revenue to exceed $11.1 million per year with over $144.6 million over a 30 year operating
period.
Mayor Pro Tem Kring opened the public hearing.
Paul Sanford, applicant, reported Wincome had purchased three hotels on the site in 1998 with
a vision of creating a luxury, state-of-the-art, resort convention -style hotel, which after years of
planning was now coming to fruition. He believe the 6+ acres of land adjacent to the
Convention Center provided one of the last opportunities in the city to offer 4 -diamond luxury at
the Convention Center to attract upscale meeting and groups Anaheim does not currently enjoy.
He indicated they requested the purchase of the adjacent land in order to create the project with
direct access to the Convention Center to facilitate luxury and ease of access to appeal to
Millennials and others along a stimulated portion of Katella Avenue. Mike Hong, design
principal of Michael Hong Architects, presented a video of the project, emphasizing the 4 -star
guest experience through connecting the project and the Convention Center, an elegant
classical motor court entrance, colorful texture, landscaping, beautiful natural elements,
aromatic experience, and classical and contemporary materials to create an elegant and casual
hotel.
City Council Minutes of July 12, 2016
Page 33 of 42
Jeff LeTourneau questioned what would happen to high quality, high paying jobs after the two
year construction period ended and requested the hotels implement card check neutrality
agreements to allow workers to unionize and get good paying jobs. He further suggested that
each property contribute $1 million per year for community benefit such as senior centers,
community centers, and sports fields.
Martin Lopez, resident and UNITE HERE Local 11 representative, wants hotel workers to make
a good wage and be able to afford to live in the city and expressed doubts regarding the
working and environmental conditions on this project, having submitted a letter showing
concerns relative to CEQA compliance and reliance on SEIR-340 from 2012. Mr. Lopez
requested Council to reject the permits and entitlements, direct the applicant to restudy various
issues, require payment of prevailing and living wages, and offer a card check neutrality
agreement.
Jay Burress, Visit Anaheim, submitted a letter from the Customer Advisory Board, a group of
national customer associations and corporations, which supported this project and urged a yes
vote on Item No. 26.
Kevin Curtis, Rainforest Cafe, offered his support for this and the other hotel projects, as more
expansion and investment are good for the Resort and the Convention Center.
Jill Kanzler, SOAR, thanked Council for their support of the hotels, job creation, and increased
revenue through world class hotels and stated they would change the landscape of the Resort
and Anaheim and encouraged approval of the item.
Jose Moreno applauded the inclusion of a Project Labor Agreement (PLA) for workers and
laborers but opposed the item as presented, sharing information about high crime rates, high
poverty rates, children living in motels, and the high percentage of students obtaining
free/reduced cost lunch in Anaheim, questioning the economic impact of the hotels on families
in the city.
Council Member Murray responded to Mr. Moreno's comments, referencing a
presentation by the Police Chief wherein it was noted through FBI statistics that
Anaheim had the third lowest crime rate in the nation for a city of its size and attributing
high poverty rates to the significant numbers of affordable housing units, immigrant
populations, and refugee populations in the city, and stating the increasing revenues
would provide additional service to those most in need. Mayor Pro Tem Kring clarified
that this was new money the city did not currently have and questioned the applicability
of free/reduced cost lunch statistics.
William Fitzgerald offered comments related to specific council members, his views on the
Disney corporation, and the associated costs to the city upon hotel construction.
Ernesto Medrano urged Council to vote in favor of this investment for this property to forge a
partnership with the developer and implement high -paying construction jobs.
Todd Ament, Anaheim Chamber of Commerce CEO, shared his excitement for votes that
contributed to $1.5 billion in investments in the Resort, creation of over 9,000 jobs to build the
hotels, and over 2,000 ongoing jobs. He believed the policy was going to work with the three
City Council Minutes of July 12, 2016
Page 34 of 42
properties doubling their tax contributions over the next 20 years with upwards of $43 million per
year expected after year 20 and supported Council's final vote.
With no further comments offered, Mayor Pro Tem Kring closed the public hearing and then
disputed the use of inaccurate statements regarding the number of rooms in 4 -diamond vs. 3 -
diamond hotels.
Council Member Vanderbilt noted the criteria within the policy that applicants have full site
control and questioned if the applicant was considered by staff to have full site control since the
Purchase and Sale Agreement was pending. Mr. Woodhead confirmed the pending agreement
for the land transaction demonstrated site control, noting that failure to complete the land
transaction would result in not having adequate site control to move forward but that the actions
were not precluded from being taken together as a package, with City Manager Paul Emery
noting the action requesting concurrency of actions rather than two separate actions was under
the direction of the Council.
In response to Council Member Murray's request, Finance Director Debbie Moreno reported
that revenues during the incentive period compared to the current revenue basis were projected
to be: 1) Anabella Hotel: 1.5 times better during incentive period and four times better after
completion; 2) Anaheim Plaza: a little more than two times better during incentive period and six
times better after completion: and 3) Disney property: significantly better over its use as a
parking lot with $41,000 per year. Council Member Murray expressed the program still
generated significantly more during the rebate period than the city currently receives, along with
the creation of nearly 10,000 jobs, congratulating the building trades on working with the
developers on labor agreements and noting there was still opportunity for others to work
together.
Mayor Pro Tem Kring moved to approve Item No. 26, RESOLUTION NO. 2016-132 A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving (1) An
Addendum to the Previously -Certified Final Supplemental Environmental Impact Report No. 340
for Amendment No. 14 to the Anaheim Resort Specific Plan, and (2) Mitigation Monitoring Plan
No. 332 for Conditional Use Permit No. 2016-05859, Final Site Plan No. 2016-00002 and
Development Agreement No. 2016-00002 (DEV2015-00078)(1030 West Katella Avenue);
RESOLUTION NO. 2016-133 A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ANAHEIM approving Conditional Use Permit No. 2016-05859 and Final Site Plan No. 2016-
00002 (DEV2015-00132)(1030 West Katella Avenue); ORDINANCE NO. 6377
(INTRODUCTION) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANAHEIM
approving that certain Development Agreement No. 2016-00002 by and between City of
Anaheim and FJS, Inc., a Texas Corporation and authorizing the Mayor to execute said
agreement for and on behalf of the City (DEV2015-00134); Approve Purchase and Sale
Agreement No. MIS2016-00633 with FJS, Inc., in substantial form, and authorize the Director of
Community and Economic Development to finalize, execute, and implement such purchase and
sale agreement; Approve Parking Easement Agreement No. MIS2016-00634 with FJS, Inc., in
substantial form, and authorize the Director of Community and Economic Development to
finalize, execute, and implement such parking easement agreement; and adopt the findings and
determinations regarding the 1030 West Katella Hotel, approve Operating Covenant Agreement
No. MIS2016-00635 with FJS, Inc., in substantial form, and authorize the Director of Community
and Economic Development to finalize, execute, and implement the Operating Covenant
Agreement, seconded by Council Member Murray.
City Council Minutes of July 12, 2016
Page 35 of 42
Approved Vote: 3-1 (AYES: Mayor Pro Tem Kring and Council Members Murray and Brandman;
NOES: Council Member Vanderbilt; ABSENT: Mayor Tait). Motion to approve carried and
ordinance introduced.
27. CEQA MITIGATED NEGATIVE DECLARATION
GENERAL PLAN AMENDMENT NO. 2015-00505
RECLASSIFICATION NO. 2015-00284
C410 CONDITIONAL USE PERMIT NO. 2015-05832
TENTATIVE TRACT MAP NO. 17959
DEVELOPMENT AGREEMENT NO. 2016-00003
(DEV2015-00101)
APPLICANT: Sagecrest LLC, Greg McCafferty, 2400 East Katella Avenue, Suite 800,
Anaheim, Cam 92806
OWNER: Russell S. Miller, P.O. Box 17725, Anaheim, CA 92817
LOCATION: 415 South Anaheim Hills Road
REQUEST: The following land use entitlements are requested to permit the
development of a 60 -unit, attached single family residential project: a general plan
amendment to amend the General Plan land use designation from Open Space and
Water Uses to Open Space, Water Uses and Corridor Residential; reclassify the subject
properties from the OS (SC) (Open Space, Scenic Corridor Overlay) Zone to the RM -1
(SC) (Single Family Residential, Scenic Corridor Overlay) and the OS (SC) (Open
Space, Scenic Corridor Overlay) Zones; a conditional use permit to permit a 60 -unit
attached single family residential development with modified development standards; a
development agreement between the applicant and the City of Anaheim to provide
funding for open space amenities; and a tentative tract map to create a 60 -unit
residential subdivision.
Environmental Determination: The City Council will consider whether a Mitigated
Negative Declaration is the appropriate environmental documentation for this request
under the California Environmental Quality Act.
ACTION TAKEN BY THE PLANNING COMMISSION:
Approved and recommended City Council approval of the following: Mitigated Negative
Declaration, along with MMP No. 333; General Plan Amendment; Reclassification; and
Development Agreement; Approval of Conditional Use Permit with modification to
Condition No. 21, adding language which requires the applicant to coordinate with the
Electrical Engineering Division of the Public Utilities Department regarding possible
upgrades to the existing street lights on Anaheim Hills Road and modification to
Condition No. 41, adding language to modify the site plan and tract map allowing the
applicant to relocate one dwelling unit from the middle building to the building at the
northerly end of the property; Approval of Tentative Tract Map with modification to
Condition No. 8, adding language requiring maintenance of the vacant property north of
La Paz Road by the homeowner's association. (Resolution Nos. PC2016-050, PC2016-
051, PC2016-052, PC2016-053, PC2016-054, and PC2016-055) VOTE: 5-0-1: Chair
Lieberman and Commissioners Bostwick, Caldwell, Ramirez and Seymour voted yes;
Commissioner Henninger abstained; Commissioner Dalati absent (Planning Commission
meeting of June 13, 2016).
RESOLUTION NO. 2016-134 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving and adopting a Mitigated Negative Declaration and
a Mitigation Monitoring Plan for proposed General Plan Amendment 2015-00505,
Reclassification No. 2015-00284, Conditional Use Permit No. 2015-05832, Tentative
City Council Minutes of July 12, 2016
Page 36 of 42
Tract Map No. 17959 and Development Agreement No. 2016-00003 with Sagecrest,
LLC, A California Limited Liability Company (DEV2015-00101) (415 South Anaheim Hills
Road).
RESOLUTION NO. 2016-135 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving and adopting General Plan Amendment No. 2015-
00505 (DEV2015-00101) (415 South Anaheim Hills Road).
ORDINANCE NO. 6378 (INTRODUCTION) AN ORDINANCE OF THE CITY
COUNCIL OF THE CITY OF ANAHEIM amending the zoning map referred to in Title 18
of the Anaheim Municipal Code relating to zoning (Reclassification No. 2015-00284)
(DEV2015-00101).
RESOLUTION NO. 2016-136 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving and adopting Conditional Use Permit No. 2015-
05832 (DEV2015-00101) (415 South Anaheim Hills Road).
RESOLUTION NO. 2016-137 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving Tentative Tract Map No. 17959 (DEV2015-00101)
(415 South Anaheim Hills Road).
ORDINANCE NO. 6379 (INTRODUCTION) AN ORDINANCE OF THE CITY
COUNCIL OF THE CITY OF ANAHEIM approving that certain Development Agreement
No. 2016-00003 by and between City of Anaheim and Sagecrest, LLC, A California
Limited Liability Company, and authorizing the Mayor to execute said agreement for and
on behalf of the City (Development Agreement No. 2016-00003)(DEV2015-00101).
David Belmer, Planning & Building Director, reported this item was a request to construct a 60 -
unit townhome development on the current 8.4 acre site of the Anaheim Hills Racquet Club on
the west side of Anaheim Hills Rd. between Santa Ana Canyon Rd. and Nohl Ranch Rd. The
Planning Commission reviewed this proposal at its June 13, 2016 public hearing and
unanimously recommended its approval by the City Council. Mr. Belmer provided the following
project details:
• Proposed demolition of the racquet club constructed in 1974 and a proposed new site
plan of eight buildings accessed by a driveway on Anaheim Hills Rd. with the portion of
the site north of La Paz Way to remain undeveloped but be owned and maintained by
the homeowners association.
• Two-story residences, consisting of 3-4 bedrooms ranging 1,511-2,033 square feet with
Spanish architectural style.
• Open space of 69,000 square feet of common recreational and leisure area, exceeding
the minimum required 21,000, consisting of a BBQ area, outdoor fitness equipment,
landscaped paseos, garden area, seating area, and designated pet area.
• The general plan use designated for the property was open space and water land use;
the latter applied to a flood control channel. To develop the site with residential, a
general plan amendment proposes re -designating the property south of La Paz to the
Corridor Residential Land Use Designation which allows for the development of attached
housing that fronts an arterial highway with an allowed density up to 13 dwelling units
per acre, with this project below the allowed density at 10 units per acre. While the open
space designation typically applies to areas of natural open space in the city such as
City Council Minutes of July 12, 2016
Page 37 of 42
utility easements or land areas surrounding water features, this property is unique in that
it was designated open space although developed with a privately -owned, recreational
land use. The proposed land use designation is compatible with the design and density
of the surrounding neighborhood including a mix of single-family residential, townhomes,
and a senior housing development including a 3 -story senior apartment community to
the south with approximately 21 units per acre. In recommending the general plan
amendment, the Planning Commission determined the project would support several
General Plan goals aimed at encouraging quality infill housing that supports the city's
future housing needs and recognized that this property represented a rare infill housing
opportunity in the Anaheim Hills area.
The project has a proposed zoning reclassification to the RM -1 zone to implement the
proposed Corridor Residential General Plan land use designation with the Scenic
Corridor Overlay Zone to remain in place.
A Conditional Use Permit (CUP) is required to allow attached single-family residences in
the RM -1 zone, through which the applicant has requested certain modifications to the
development standards as follows: modified street setbacks adjacent to Anaheim Hills
Road from the required 50 feet to a proposed setback of 17 feet and modified setback
between buildings from the required 30 feet to a proposed 20 feet. Staff and the
Planning Commission concluded the requests for modification were justified as the
buildings were oriented to Anaheim Hills Road, included attractive fagade treatments
facing the street, and allowed for the efficient layout of buildings on the site to provide
greater usability of the common recreation and leisure areas.
A Tentative Tract Map subdivides the site into one developable lot, with common areas,
driveways, recreational areas, paseos, and sidewalks owned and maintained by the
HOA.
A proposed Development Agreement would allow the developer to provide a $200,000
payment to the city for park, open space, and recreational improvements in the vicinity of
project site in addition to the required park in lieu fees equaling about $323,000.
A Mitigated Negative Declaration (MND) was prepared and circulated for public review in
compliance with CEQA with no comments received from surrounding property owners
and one comment from the Orange County Public Works Department which was
resolved. Staff and the Planning Commission have determined that with the
implementation of certain mitigation measures, the project impacts would be reduced to
a level considered less than significant and recommend approval of the MND.
Mr. Belmer concluded that during the Planning Commission hearing a resident expressed
concern about the configuration of buildings. In response, the developer agreed to split the
lengthy building on the right of the site by removing the center unit to create a better view
corridor and place the unit on the building on the left of the site; this revision was approved by
the Planning Commission. After consideration of all comments, the project is designed in a
manner to provide a high quality living environment for future residents while also being
compatible with surrounding neighborhoods and providing housing in area of high demand,
therefore the Planning Commission and staff recommended approval.
In response to concerns expressed by Council Member Vanderbilt about the change to open
space zoning, Jonathan Borrego, Planning Manager, explained a general plan amendment was
recommended to allow for the construction of the project but the general plan and zoning for the
flood control channel and the area north of La Paz Way was remaining open space in terms of
the general plan and zoning.
City Council Minutes of July 12, 2016
Page 38 of 42
Mayor Pro Tem Kring opened the public hearing.
Applicant Greg McCafferty, Sagecrest, thanked staff for their work on the project and described
public outreach efforts made with the surrounding community through which no opposition was
received. Mr. McCafferty explained the benefits of the project to include -new housing in an area
of Anaheim Hills that hadn't seen new housing for at least 10 years, several hundred feet of new
sidewalk on Anaheim Hills Rd., undergrounding of two current above -ground circuits, HOA -
maintained landscaping, and a $200,000 payment to the Community Services Department to
enhance open space acreage.
William Fitzgerald agreed with the proposed project as, in his view, it treated Anaheim Hills in
the same fashion as flatland Anaheim.
With no other comments offered, Mayor Pro Tem Kring closed the public hearing and disclosed
she had spoken with the applicant ex parte. Council Member Murray announced she had
spoken to the applicant and several residents, had heard no concerns, and noted the project
had been unanimously approved the Planning Commission. Council Member Brandman
reported he had communicated with the applicant on this item.
Council Member Brandman moved to approve Item No. 27, RESOLUTION NO. 2016-134
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving and adopting
a Mitigated Negative Declaration and a Mitigation Monitoring Plan for proposed General Plan
Amendment 2015-00505, Reclassification No. 2015-00284, Conditional Use Permit No. 2015-
05832, Tentative Tract Map No. 17959 and Development Agreement No. 2016-00003 with
Sagecrest, LLC, A California Limited Liability Company (DEV2015-00101) (415 South Anaheim
Hills Road); RESOLUTION NO. 2016-135 A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF ANAHEIM approving and adopting General Plan Amendment No. 2015-
00505 (DEV2015-00101) (415 South Anaheim Hills Road); ORDINANCE NO. 6378
(INTRODUCTION) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANAHEIM
amending the zoning map referred to in Title 18 of the Anaheim Municipal Code relating to
zoning (Reclassification No. 2015-00284) (DEV2015-00101); RESOLUTION NO. 2016-
136 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving and
adopting Conditional Use Permit No. 2015-05832 (DEV2015-00101) (415 South Anaheim Hills
Road); RESOLUTION NO. 2016-137 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving Tentative Tract Map No. 17959 (DEV2015-00101) (415
South Anaheim Hills Road); ORDINANCE NO. 6379 (INTRODUCTION) AN
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ANAHEIM approving that certain
Development Agreement No. 2016-00003 by and between City of Anaheim and Sagecrest,
LLC, A California Limited Liability Company, and authorizing the Mayor to execute said
agreement for and on behalf of the City (Development Agreement No. 2016-00003)(DEV2015-
00101), seconded by Mayor Pro Tem Kring.
DISCUSSION: Prior to the vote, Council Member Vanderbilt disclosed he had met with the
applicant at their request to discuss the project and requested the applicant address public
comments with Mr. McCafferty confirming the project would be well landscaped with drought
tolerant materials.
Approved Vote: 4-0 (AYES: Mayor Pro Tem Kring and Council Members Murray, Brandman,
and Vanderbilt; ABSENT: Mayor Tait). Motion to approve carried and ordinances introduced.
City Council Minutes of July 12, 2016
Page 39 of 42
Upon recommendation by Acting City Attorney Kristin Pelletier, Mayor Pro Tem Kring disclosed
ex parte meetings with Mark Chen, Paul Sanford, Jeff Flint, and Carrie Nocella. Council
Member Brandman disclosed meetings with the applicants of Item Nos. 24, 25, and 26. Council
Member Murray disclosed meetings with the applicants and communications with stakeholders
and residents regarding Item Nos. 24, 25, and 26. Council Member Vanderbilt disclosed phone
conversations upon the request of the applicants of Item Nos. 24 and 26 and a meeting, upon
request, with the applicant of Item No. 25.
END OF CONSENT CALENDAR
21. RESOLUTION NO. 2016-127 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM authorizing the issuance of City of Anaheim Community
Facilities District No. 08-1 (Platinum Triangle) Special Tax Bonds, Series 2016, in an
aggregate principal amount of not to exceed $60,000,000, authorizing the execution and
delivery of an indenture, an escrow agreement, a bond purchase agreement and a
T105 continuing disclosure agreement and the preparation of an official statement and other
matters related thereto.
RESOLUTION NO. 2016-128 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM establishing policies of intent related to reimbursement
procedures related to the City of Anaheim Community Facilities District No. 08-1
(Platinum Triangle).
T105 22. RESOLUTION NO. 2016-129 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM authorizing the issuance of City of Anaheim Community
Facilities District No. 06-2 (Stadium Lofts) Special Tax Refunding Bonds, Series 2016, in
an aggregate principal amount of not to exceed $8,500,000, authorizing the execution
and delivery of an indenture, an escrow agreement, a bond purchase agreement and a
continuing disclosure agreement and the preparation of an official statement and other
matters related thereto.
DISCUSSION: Finance Director Debbie Moreno presented Item No. 21 and 22 as the issuance
of special tax bonds in an aggregate principal not to exceed (NTE) $60 million for CFD 08-1
Platinum Triangle (Item No. 21) and NTE $8.5 million for Stadium Lofts (Item No. 22). She
explained Platinum Triangle is the City's newest Community Facility District (CFD), as approved
in a 2008 special election in which property owners voted in favor of creating this special
assessment district, issuing debt to provide for improvements to the area, and the levy of
special taxes to pay debt services on these bonds. On July 20, 2010, Council approved the
Series 2010 bonds in aggregate principal amount of $28.630.000 for CFD 08-1 to finance
certain improvements in the district. The proposed financing includes refunding of outstanding
Series 2010 bonds in a principal amount of $25 million due to favorable market conditions plus
the issuance of approximately $30 million for the acquisition and construction of new public
improvements, including widening Gene Autry Way between Interstate 5 and State College
Blvd. and widening State College Blvd. from Artisan Way to Gateway Office at estimated cost of
$10.3 million and the widening of Orangewood Avenue from State College Blvd. to State Route
57 at an estimated cost of $22.8 million. Ms. Moreno explained that authorizing the issuance of
principal NTE $60 million would allow for refunding existing bonds and funding necessary
projects identified in the Platinum Triangle Implementation Plan.
City Council Minutes of July 12, 2016
Page 40 of 42
Ms. Moreno continued that staff was also seeking to amend current right-of-way purchase
policies in response to current development trends which have reduced the expected densities
of proposed projects within the CFD. Recent projects had been approved with residential
densities less by 50% and commercial densities less by 90% than previous projections. Early
development projects in the area generated enough special taxes to purchase required frontage
right-of-way from developers which would traditionally have been dedicated at no cost, however
newer revised projects with reduced densities are not expected to generate enough special
taxes to continue this practice. Proposed amendments would require property owners to
irrevocably offer to dedicate to the city easements for road, utilities and other public purposes in
support of the project within the Platinum Triangle CFD. Development projects exceeding an
annual special tax generation rate of $68,039 per acre would be eligible for right-of-way
purchase only if they satisfied requirements of the Platinum Triangle Implementation Plan and if
CFD bond proceeds were available. Developers who seek to modify development agreements
resulting in special tax generation below $68,039 per acre would be required to waive
reimbursement for right-of-way cost and dedicate the right of way for public use.
Ms. Moreno explained the Stadium Lofts CFD was created in a 2006 special election in which
property owners voted in favor of creating this special assessment district, issuing debt to
provide for improvements to the area, and the levy of special taxes to pay debt services on
these bonds. On January 30, 2007, City Council approved the Series 2007 bonds in an
aggregate principal amount of $9,060,000 to finance certain improvements in the district. Due
to favorable market conditions, staff recommends refunding the Series 2007 bonds in an
aggregate net principle amount of $7.9 million, which is estimated could save $1.1 million on a
net present value basis, which savings would be passed on to property owners in the district
who would see approximate 9% reduction in their annual special tax levy or $89-$235/year
depending on property type. Ms. Moreno concluded that the two items would have no impact
on the general fund, with debt service on the proposed 2016 bonds to be paid by Mello Ross
taxes levied on properties within the districts in accordance with existing rates and methods of
apportionment approved for the CFDs.
MOTION: Council Member Brandman moved to approve Item No. 21, RESOLUTION NO.
2016-127 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM
authorizing the issuance of City of Anaheim Community Facilities District No. 08-1 (Platinum
Triangle) Special Tax Bonds, Series 2016, in an aggregate principal amount of not to exceed
$60,000,000, authorizing the execution and delivery of an indenture, an escrow agreement, a
bond purchase agreement and a continuing disclosure agreement and the preparation of an
official statement and other matters related thereto and RESOLUTION NO. 2016-128
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM establishing policies of
intent related to reimbursement procedures related to the City of Anaheim Community Facilities
District No. 08-1 (Platinum Triangle), seconded by Council Member Murray. Approved Vote: 4-0
(AYES: Mayor Pro Tem Kring and Council Members Murray, Brandman, and Vanderbilt;
ABSENT: Mayor Tait). Motion to approve carried.
MOTION: Council Member Brandman moved to approve Item No. 22, RESOLUTION NO.
2016-129 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM
authorizing the issuance of City of Anaheim Community Facilities District No. 06-2 (Stadium
Lofts) Special Tax Refunding Bonds, Series 2016, in an aggregate principal amount of not to
exceed $8,500,000, authorizing the execution and delivery of an indenture, an escrow
agreement, a bond purchase agreement and a continuing disclosure agreement and the
B105
City Council Minutes of July 12, 2016
Page 41 of 42
preparation of an official statement and other matters related thereto, seconded by Council
Member Murray. Approved Vote: 4-0 (AYES: Mayor Pro Tem Kring and Council Members
Murray, Brandman, and Vanderbilt; ABSENT: Mayor Tait). Motion to approve carried.
23. Consider appointments to city Boards and Commissions where those terms expire June
30, 2016 and appointments to fill the following unscheduled vacancies: Community
Services Board, term to expire June 30, 2018, Cultural and Heritage Commission, term
to expire June 30, 2019, Library Board, term to expire June 30, 2018, and Parks and
Recreation, term to expire June 30, 2019. All scheduled vacancies will be for a term of
four years, expiring June 30, 2020, except the Sister City Commission; terms are for
three years, ending June 30, 2019 (scheduled vacancies and unscheduled vacancy of
Community Services Board continued from May 17, 2016, Item No. 30).
Community Center Authority:
Appointment:
(vacancy of Paul Walters)
Community Services Board:
Appointment: (term ending June 30, 2018)
(Unscheduled vacancy of Teresa Shimogawa)
Cultural and Heritage Commission:
Appointment: (term ending June 30, 2019)
(Unscheduled vacancy of Hema Petel)
Library Board:
Appointment: (term ending June 30, 2018)
(Unscheduled vacancy of Kenneth Shimogawa)
Park and Recreation Commission:
Appointment:
(Unscheduled vacancy of Jim Adams)
Planning Commission:
Appointment:
(vacancy of Victoria Ramirez)
Sister City Commission:
Appointment:
(vacancy of James Dinwiddie II)
Appointment:
(vacancy of Ann Gallaugher)
(term ending June 30, 2019)
(term ending June 30, 2019)
(term ending June 30, 2019)
City Council Minutes of July 12, 2016
Page 42 of 42
Appointment:
(vacancy of John Nguyen)
(term ending June 30, 2019)
With no objection by City Council, Item No. 23 was continued to July 26, 2016.
3. Approve funding, in the amount of $25,000, to support the completion of a Veteran's
D116 museum, Orange County Hero's Hall, to be located at the Orange County Fairgrounds.
DISCUSSION: In response to questions from Council Member Vanderbilt, Deputy City Manager
Greg Garcia explained the Orange County Fair and Events Center had raised almost $4 million
to construct the veteran's museum and was seeking to raise an additional $400,000 to round
out their fund for construction, exhibits, field trips, and operations, noting that earlier public
comments has been the first indication of funding needed for buses. Council Member Vanderbilt
requested a stipulation that the money from Anaheim be used to transport Anaheim students to
the museum, with City Manager Paul Emery agreeing to work with the museum organizers on
the feasibility of the appropriation benefitting Anaheim youth appropriately.
MOTION: Council Member Vanderbilt moved to approve Item No. 3, seconded by Mayor Pro
Tem Kring. Approved Vote: 4-0 (Ayes: Mayor Pro Tem Kring and Council Members Murray,
Brandman, and Vanderbilt; Absent: Mayor Tait). Motion to approve carried.
REPORT ON CLOSED SESSION ACTIONS: None
COUNCIL COMMUNICATIONS:
Council Member Murray expressed her condolences to Debbie Moreno and her family for the
passing of her stepfather, Duane Hove.
Mayor Pro Tem Kring expressed her condolences to the families of the Dallas Police Officers,
Senior Cpl. Lorne Ahrens, Officer Michael Krol, Sgt. Michael Smith, Officer Brent Thompson,
and Officer Patrick Zamarripa, and requested staff return to consider allowing short term rentals
within the Kaleidoscope Condominium Association complex, per their request.
ADJOURNMENT:
At 1:08 A.M., Mayor Pro Tem Kring adjourned the meeting in memory of the five Dallas Police
Officers and Duane Hove.
espe ully submitted:
Linda N. Andal, GMC
City Clerk