too because then they just took it out and put a refusal for commercial space because that wasn't
the original refusal it referenced commercial space that's right so okay all right so that's
been fixed but we'll still get we need to make um we'll ask ellen i to make one more change
because we do need to have all three addresses listed for the properties that are proposed to
be consolidated okay and and verne we have a recommendation of opposition from south
kensington and a letter of opposition from council member lazada yeah i am familiar with that thank
Thank you.
And our vice chair has a few questions for you.
Thank you.
Morning, Counsel.
Do you agree to wait a week or stipulate to his accuracy?
Have you emailed in all the required documents that's needed to proceed today, five days in advance?
Yes, sir.
Thanks, Vern.
Please proceed and share your screen.
Yeah, I guess I shouldn't stipulate to the accuracy of the refusal, though, based on what Hillary just told me.
I just learned that.
But other than that, yeah, we're good.
I have a 50-page exhibit packet here that I'd like to get to.
The application is initially for 18 dwelling units across these four properties that are being consolidated into one large parcel.
They're all CMX2.
There's a shuttered commercial space on the first floor, and there were apartments above.
We can do 10 units by right.
Unfortunately, as the evidence will show, I'm going to walk you through the proforma because of the cost of construction and the current interest rates.
And we have an expert who's going to also confirm the accuracy of the presentation of the proformas.
10 just doesn't work.
You can't possibly get a lender to loan that money to build.
You can't possibly get a lender to loan that money to build 10 units on this property.
And the numbers speak for themselves.
It's prima facie evidence of hardship in that regard.
However, we did have three separate RCO meetings.
And we made lots of different changes that I'll go down the list on.
This is the property currently, and we are proposing a total of 16 units.
And Ian Toner, Toner Architects, is here today, who will walk you through the property.
But the gist of the three separate RCO meetings is that there were changes made at every step of the way based on the recommendation of the RCO.
First, we've reduced the number of units from 18 to 16.
We removed all living space from the basement.
We now have storage for the residents as well as bike storage and additional room for the utilities.
And that was at the recommendation of the RCO as well in the community.
We installed, as I said, the bike storage.
we installed a large common area trash room on the first floor, which is right here where my
cursor is, so that all units have access to it. Of course, it'll be commercial trash pickup.
And we also made the rear yard compliant. So the dimensional variance with respect to that is now
100 compliant also the community at all three stages we had initially proposed one bedroom
one bath units and i'm going to show you uh why
they seem to be the most marketable because
give me one second
right here's our property right here over here is the americana apartment building
75 units all one bedroom one bath over here is the luxe apartment building
Over 60 units, all one bedroom, one bath.
So when we came here, this is a vacant lot, by the way, as we can see here.
There's the vacant lot where people illegally park, and here's our parcel.
And as the neighbors ask that we provide a product that is not like those other large, huge, one bedroom, one bath proposals.
so we offer instead a mix of product we have studios which are on the less expensive side
we have two bedroom apartments for small families and then we have one bedroom apartments as well
because that that's the mix that they asked for uh so that's what we landed on
As I said, across the street is a large vacant lot with lots of illegal parking, and just beyond the lot, within 400 feet of the subject property, we have two very large, 55-plus high apartment buildings with close to 200 units, in addition to co-working office space, pools, roof decks, a gym.
So this is all within that residential conglomerate on American Street.
And what we want to do is put these high-end finishes in this property at approachable price points.
Our studios are less expensive than those two other apartment buildings, one bedrooms.
Our two-bedroom units will be less expensive than the two-bedroom units in the Lux and the Americana as well.
And with that, I want to call Ian Toner, the architect of the project, to go over some of the design details and the steps we made that got us to this point.
Mr. Toner?
Mr. Toner.
Mr. Toner has been allowed to speak
Mr. Toner, could you please state your name
and spell for the stenographer
Sure. Ian Toner, I-A-N-T-O-N-E-R.
Sure, Ian Toner
I-A-N-T-O-N
We're affirmed to tell the truth, the whole truth, and nothing but the truth.
Please proceed, counsel.
Thank you. Mr. Toner, before we review the pro formas, could you please walk the board through the design and the evolution of the interior?
Sure. I mean, I think you did a pretty, pretty great job of doing it for me, but it was all one bedroom units. Like you said, originally 18 units. In response to the neighbors, we removed units from the basement and adjusted the mix.
So we enlarge some of the one bedrooms to create two bedrooms, which means we made others smaller to accommodate it.
So now we have a range. You'll see four studios. Those are in blue on the screen for two bedrooms are in green and then eight one bedrooms in yellow.
like you said the basement is now storage space available to the tenants which you know according
to other clients that we've worked with helps to keep tenants in the building longer because they
don't feel so cramped when they have extra storage space we do have some roof deck space on top
that is accessed only from the four units that are on the top floor so no community roof deck
no party deck. These are private decks for these four units that are on that top floor.
One of the things that came up at the RCO meeting as a concern was that maybe people on the rear
roof decks would be able to look down into the neighboring properties. We offered to reduce
those roof decks, provide a setback so that that wasn't a possibility. Even the people who asked
about it weren't really interested in that. So I'm not sure what the real reason was for the
objection, but when the solution was provided, it wasn't something they were interested in.
One thing you mentioned was the trash rooms, the trash room on the first floor. And
in conjunction with that, there's actually a plan to have a trash chute coming down from the upper
floor. So we're not even going to have people carrying garbage like down the stairs or anything
like that. That's going to go right down the trash chute to the trash room. So it's going to
make it very easily for everyone to be responsible about trash and make sure it's going where it's
supposed to go. Mr. Toner, going back to that point where one could see into other folks,
you know, rear properties, if you stand in the backyard of this property, would you be able to
see? Yes. Right. So the fact that a roof deck could do it, but so could a person who just goes
in the back of this property's yard.
Yeah, where someone's standing in their apartment
looking out their windows.
So it didn't seem, anyway, it never went anywhere.
Okay, but you did, in fact, offer to pull it back.
We did.
Okay, very good.
Mr. Chair, I also want to go over the performance
that were put together very briefly.
here's uh 10 two-bedroom two-bath units
the most uh the monthly gross income would be 17 100 after expenses for the month
the gross income was $12,300. But the monthly debt service, because of the interest rate,
6.5%, and a very modest $270 per square foot on construction, the debt service gets us to $15,000,
which puts us completely underwater, with a negative annual cash flow of just over $33,000.
We'll go over to the next scenario with the 16.
Right here, the four two-bedrooms, eight one-bedrooms, and four studio.
You'll see the gross monthly income at $20,900.
After the monthly expenses, about $15,500.
The debt service is $15,000, which gives us a minimal, very small margin, cash flow of $5,000.
The 10 one-bedrooms, again, the first scenario.
the 10-1 bedrooms. Again, the first scenario was 10-2 bedrooms. 10-1 bedrooms has monthly gross
income of $12,003 after expenses for the month at $8,000. The monthly debt service is $12,000.
And that gives us a negative annual cash flow of 49. We've tried every one of these numbers
between 10 and 16, and 16 gets us to a nominal but positive annual cash flow. Mr. Toner, you have
experience in putting together project proposals for clients and the cost of construction. Is that
correct? Yes. Okay. And in your expert opinion, these numbers make sense? They do. Okay. Thank
Thank you. Mr. Chair, because of the fact that we already have just a couple hundred feet away
beyond a large vacant property, a vacant lot, nearly 100 plus units, because there's a corner
property, that's going to actually be four properties consolidated because we have worked
with and through the RCO system with three separate meetings and made numerous adjustments.
And because, as the evidence shows, the 16-unit number is what can get us to at least a small but positive annual cash flow, we respectfully request the granting of this variance.
And with that, I'd like to ask Ariana Akay to raise her hand.
Vern, before your client comes on.
And I know you said you've met three times.
You've made some changes.
What's driving the vote?
You had five yeses and 25 noes.
i don't know mr chair i honestly don't uh when we made some changes uh to make some folks happy
uh other folks weren't uh and every every time of the three different meetings different people
showed up so it was very difficult uh to to sort of work through the project um bring your client
for the record this was a real head scratcher you know it's typically after three meetings and
capitulating and doing as much as we can to make folks happy um they typically will at
least offer non-opposition but ariana is allowed to speak could you please state your name is
spelled for the court stenographer. Hi, yes, my name is Ariana Akay, spelled A-R-I-A-N-N-A,
last name A-C-C-A-Y. We're affirmed to tell the truth, the whole truth, nothing but the truth.
Yes, sir. Please proceed, counsel. Thank you. Ms. Akay, did you hear my presentation to the
board today? Yes. Is it true and accurate to the best of your knowledge? Yes. Do you adopt it as
your own testimony? Yes. Thank you. Mr. Chair, I also want to make note that behind the property
is just vacant space, if that makes any difference. And I know this board, and I do as well,
take RCO input very seriously. But in this particular case, this property is vacant and
it's been vandalized and squatted for many years. It's because the current market conditions
only work if we can get a certain number of units from the property. And we want to activate this
space and we want to make it great. So we respectfully request the granting of the
variance. Questions from the board. I have a question. Vern, you said that by right is 10
units. That's not, that's apartment units, not single family units, right? That's correct. By
right, 10 apartments. Okay. Thank you. Yep. This is not zones for single family whatsoever. None
of the lots are. Other questions for the board? Yeah. Go ahead. Sorry. I guess since you zoned
for 10 apartments, had there ever been consideration to do larger apartments and
potentially bring in more cash flow that way? Well, the two-bedroom apartment would be the
largest, right? That would make sense for most folks in old Kensington. And we did that analysis,
I think it's page 48 of my exhibit packet that shows that if we did 10 two-bedroom,
two-bath apartments, it's still a negative cash flow because of, again, the cost of construction
and the interest rate currently uh also my client at the rco is was the one who wanted small
Also, my client, the RCO, was the one who wanted smaller, less expensive apartments.
Right now, right across the street, right across this vacant lot, there's two-bedroom apartments that go for $4,000 a month.
Ours will be half that.
Other questions from the board?
That was my question.
Are you looking for any kind of affordable housing bonus?
you said the rents are going to be lower or how much lower what are the rents for the one bedroom
the two bedroom and the efficiency yeah the our one bedroom i have it right here
our one bedrooms are going to be uh um 1100 to 1300 which is um that's our i'm sorry that's
our studio, which is $500 less per month than the studios across the street. And then our one
bedrooms. I have that information. Just bear with me for one second.
$1,750 or $1,800 a unit for the one bedrooms.
Here they are. $1,150 for the studios, $1,300 for the one bedrooms, $1,750 for the two bedrooms.
Again, right across that vacant lot, we've got two bedrooms as high as $4,000 a month.
Their one bedrooms are $2,000 a month, and their studios are $1,500 a month, starting.
They start there.
So as it relates to the surrounding new construction apartments, these will certainly be more
affordable.
And this is exactly the mix that the RCO members asked for.
They did not want all one bedrooms.
They did not want all two bedrooms.
You're not asking for it, but you're not seeking any kind of affordable housing bonus, though?
No, sir.
Other questions for the board?
Questions or comments from our attorney?
Just briefly, Mr. Anastasio, you mentioned there were multiple meetings with the RCO.
when was the the last meeting because the letter that we received is from june and i don't know if
there had been another meeting since then that's i think the last one okay all right thank you
questions and comments from the virtual audience
there are no hands chair planning commission
amy boyd with the planning commission the property is indicated for commercial mixed
use on the city plan, and it recommends no change to the existing zoning at this location.
There are no unique physical circumstances or conditions of the property that would prevent
it from being used in the conformance with the zoning code. The requested number of dwelling
units represents an overuse. Applying for the mixed income housing bonus would earn additional
dwelling units given that they have not chosen to do this administrative remedy. We recommend
that the requested variances not be granted. Mr. Chair, just about one caveat about the
commercial space. All commercial activity that used to be on Cecil B. Moore is now on American