Western Real Estate Business

OCT 2017

Western Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Western United States.

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www.REBusinessOnline.com Western Real Estate Business • October 2017 • 43 COASTAL ACT CONFERENCE ADDRESSES CA'S TOUGHEST DEVELOPMENT ISSUES By Stanley Lamport, Partner, Cox, Castle & Nicholson in Los Angeles. Lamport acted as co-chair of the Annual Coastal Act Conference, along with April Winecki, a coastal planning consultant. CLE Interna- tional's Annual Coastal Act Con- ference has be- come a forum for a well-rounded discussion of cutting-edge is- sues affecting d e v e l o p m e n t within Califor- nia's 1,100-mile long coastal zone. This year, coastal commissioners and staff spoke and attended the conference along with elected officials and representatives from many of California's coastal cities, counties and ports, the devel- opment community and conserva- tion interests. Jack Ainsworth, the Commis- sion's executive director, opened the conference with an interesting discussion regarding the state of the Commission. He highlighted the Commission's renewed effort to implement the Coastal Act through local government coastal programs, which are in the process of being ad- opted and updated. The balance of the conference focused on two of the issues Ain- sworth highlighted in his address: (i) low-cost overnight lodging in the coastal zone and (ii) responding to sea level rise. As a result of AB 2616, which took effect at the beginning of this year, the Coastal Act was amended to require the commission and local government to consider "environ- mental justice, or the equitable dis- tribution of environmental benefits throughout the state when carrying out the Coastal Act's mandates." The Commission staff has identi- fied low-cost overnight lodging as one of its environmental justice ini- tiatives. The Commission and the State Coastal Conservancy gave a joint presentation in which they dis- cussed their objective of increasing the supply of rooms at rates that would be in the $80 to $100 range, which is appreciably below what can be economically delivered in many areas in the coastal zone. The panels that followed considered short-term rentals and market in- centive approaches to meeting that demand. The Coastal Commission has an- nounced that local regulations that restrict short-term rentals in the coastal zone require Commission approval to be enforced. At the same time, the Commission has in- dicated a willingness to be flexible in how local governments regulate short-term rentals. Jared Ficker of California Strategies led a panel that discussed the pros and cons of increasing the supply of short-term rentals, as well as strategies for reg- ulating them. Bruce Baltin of CBRE Hotels and Maurice Robinson of Maurice Rob- inson & Associates led a panel with hotel developers to discuss ways in which the state and localities can create sustainable subsidies to support direct investment in low cost lodging. Working off a generic pro-forma, the panel explained the economic infeasibility of low-cost lodging, as well as the limitations of having high-cost units subsidize low-cost units through development fees and other exactions. The second day extensively fo- cused on responses and adaptations to sea-level rise. The Commission has adopted a sea-level rise guid- ance that emphasizes "planned retreat," which focuses on private development and infrastructure retreat from the coast as sea levels rise. The approach places much of the burden on the property owner and could, in some cases, result in private property owners losing their property as the state land boundary moves inland with the rising tide. The presentations at the conference highlighted that there are now a number of potentially viable options that protect the coastline without degrading beaches and habitats that can occur with traditional forms of armoring. A number of general themes emerged from the conference that will be important for anyone who owns property or proposes to de- velop in the coastal zone going forward. First, the Commission is rapidly adapting its staff culture to fully implement AB 2616's envi- ronmental justice mandate, which those dealing with the Commis- sion will need to understand in working with the Commission go- ing forward. Second, this is a time of transition in the consideration of hotels and other family lodging development in the coastal zone. On the one hand, hotel develop- ment and remodels resulting in in- creased room rates will be facing much closer scrutiny in the coastal zone and may become harder to de- velop. On the other hand, there are also opportunities to develop new affordable lodging at acceptable rates of return. Finally, landown- ers on the coast need to be aware of and plan for responding to sea- level rise now, or they face losing their property to the rising tide as nature takes its course. CA SUPREME COURT FINDS CEQA APPLICABLE TO PUBLICALLY OWNED RAIL PROJECTS By John D. Darling, Shareholder, and Jennifer Tung, Associate, Hunt Ortmann in Pasadena, Calif. On July 27, 2017, the California Su- preme Court issued a nearly 70-page opinion in a hotly watched lawsuit involving the state's cornerstone en- vironmental law, the California En- vironmental Quality Act (CEQA). In Friends of the Eel River v. North Coast Railroad Authority, et al. (Case No. S222472), the California Supreme Court concluded that the federal In- terstate Commerce Commission Ter- mination Act of 1995 (ICCTA) does not categorically trump CEQA, par- ticularly when it comes to publically owned railroad projects. 1 This deci- sion has direct implications for Cali- fornia's bullet train project, which will eventually link San Francisco to San Diego with more than 800 miles of rail. In Friends of the Eel River, the North Coast Railroad Authority (NCRA), a state agency, planned to rehabilitate and resume service on a portion of a rail line it owned in Northern Cali- fornia. The NCRA contracted with the Northwestern Pacific Railroad Company (NWPCo), a private cor- poration, to operate the railway. Between 2001 and 2006, the NCRA voluntarily committed to CEQA com- pliance. In 2011, however, two citizen groups sued the NCRA for allegedly failing to comply. They sought to halt Lamport S E L E C T R E TA I L S I T E S Apple Valley, California Economic Development Office (760) 240-7915 select@applevalley.org S e l e c t A p p l e Va l l e y. c o m Apple Valley offers golden opportunities for retail businesses. JESS R ANCH MARKE TPL ACE Located at Bear Valley Road and Apple Valley Road Weingarten Realty owns and manages this 969,000-square- foot regional center which includes Cinemark Theatres, 24 Hour Fitness, Burlington, WinCo Foods, Red Robin, and Buffalo Wild Wings. Ulta Beauty and Jersey Mike's Subs opened their first stores in the region here. Chase Bank is resuming development of a new branch office at the SEC of Bear Valley and Apple Valley Roads. A limited number of inline spaces are available as well as an adjacent 10-acre parcel for entertainment and hospitality opportunities. APPLE VALLEY COMMONS Located at State Highway18 and Dale Evans Parkway Lewis Retail Centers developed this 469,000-square- foot center at the heart of Apple Valley's Civic Center and includes Super Target, Ross Dress for Less, Dollar Tree, Round Table Pizza, Starbucks, Union Bank and more. Recently opened or coming stores include Juice It Up, WaBa Grill, 76, and Les Schwab Tire Center. A limited number of pads and inline spaces are available for lease as well as a 140,000-square-foot former Lowe's building across Dale Evans Parkway. APPLE VALLEY GATE WAY CENTER Interstate -15 and Dale Evans Parkway In 2016, the Apple Valley Planning Commission approved Apple Valley Gateway Center, a 10-acre, 80,480-square- foot project at the northeast corner of I-15 and Dale Evans Parkway. Belco Development, of Murrieta, is proposing to construct a hotel, retail shops and restaurants. Hotel and tenant interest is now being accepted. QUAIL RIDGE PL A Z A Nor theast corner of Apple Valley Road and Yucca Loma Road Mal Riley and Associates, developer of the highly successful Jess Ranch Marketplace II and III, has returned to Apple Valley to design and develop the site formerly known as The Fountains. Riley has already assembled a remarkable development team and in a rare move signifying the intensity of the project, is bringing in two of the largest commercial brokerage firms, Jones Lang LaSalle and CBRE, to assist in leasing. Located near the strongest median income demographics in the region, the project will be designed as a mixed-use concept including retail, restaurants, office, townhomes (or multi-family) and senior living. Yucca Loma Bridge is now open. Jess Ranch Marketplace Apple Valley Commons Quail Ridge Plaza

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