Agenda Packet_2023-12-05 - Laserfiche WebLink

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4th and Mortimer Mixed-Use Development Project December 5, 2023 Page 2 3 8 3 9 December 1, 2020, the City Council denied Appeal No. 2020-02, upholding the determination of the Planning Commission to approve the subject entitlements. Pursuant to Section 41-647 of the Santa Ana Municipal Code (SAMC), entitlements such as variances automatically become void should the property owner fail to institute an action to comply with the provisions of the entitlements within two years of its approval. This section also allows the property owner to request an extension of the entitlement up to a period of three years from the date of the expiration. The subject entitlements were in effect until December 15, 2022. However, the applicant experienced delays in moving the project forward and constructing the development. During this time, a state of local emergency was declared stemming from the COVID-19 pandemic, which provided relief to residential developers by extending approvals of residential entitlements to December 31, 2022. By September of 2022, the applicant had not obtained the required building permits for development of the project. As a result, on September 9, 2022, the applicant submitted a request for a one-year extension to ensure the entitlements remain valid by the time permits were ready for issuance. On December 6, 2022, the City Council voted unanimously to extend the entitlements for the development for a period of one year to December 15, 2023. On August 1, 2023, the applicant obtained all required building permits for development of the project, including demolition permits for existing buildings at both project sites. Analysis Due to increased cost of materials, changes in construction loan interest rates, labor shortage, and market changes impacting the applicant’s ability to develop the project, the applicant is requesting a second one-year extension through December 15, 2024. Specifically, recent increases in interest rates beginning the first quarter of 2022 and continuing through 2023, and their impacts on construction loans and land development costs, have resulted in additional delays to the project’s ability to begin vertical construction of the project by the December 15, 2023, deadline that was established the City Council-approved entitlement extension. As a result, the applicant is requesting a second one-year entitlement extension pursuant to Section 41-647 of the SAMC. In an effort to encourage construction of entitled projects, it is the Planning Division’s policy to recommend no more than one-year extensions at a time. As previously discussed, the applicant has pulled required building permits and paid over $4.5 million in City permitting and impact fees to date. The applicant is also in process of demolishing existing onsite buildings, including the former Northgate market, so that the site will be ready for development once ready to proceed with construction. Demolition is expected to be completed by December 31, 2023. The applicant intends to begin vertical construction by the second quarter of 2024, in order to effectuate its City Council 12 – 2 12/5/2023