Beverly Hills Courier
Beverly Hills Courier
Beverly Hills Courier

City of Beverly Hills

City Council Delays Urgency Ordinance Repeal and Enacts Fractional Ownership Moratorium

Unless the Council agrees to every part of the fractional ownership plan, it will not go forward. The developer has not yet submitted a fractional ownership plan, Wunderlich told the Courier. 

BY Michael Wittner July 24, 2021
City Council Delays Urgency Ordinance Repeal and Enacts Fractional Ownership  Moratorium
The Council held its first in-person session since March 2020. Photo by Michael Wittner

In a twist of irony, the Beverly Hills City Council returned to City Hall for its first in-person meetings in almost a year and a half the same day that Los Angeles County reinstated its indoor mask requirement, even for vaccinated individuals, effective July 17 at 11:59 p.m. Since Beverly Hills is required to adhere to all requirements from L.A. County Department of Public Health, the ruling is now in effect in Beverly Hills.

In light of this massive about-face and a surge in Delta variant cases, all five Councilmembers voted to table discussion of the repeal of a number of measures of the urgency ordinance in place since March 2020. 

In another twist, the meeting was led not by Mayor Robert Wunderlich but Councilmember Lester Friedman, who never got the chance to sit in the Mayor’s chair during his whole tenure. As a courtesy, Wunderlich wanted his colleague to experience that at least once before having to wait possibly another four years.

“At first I didn’t accept, but Bob was persistent, and convinced me that it was alright to do so. Bob, I thank you for the honor, and the collegiality you always exhibit,” Friedman said. 

One of the Council’s first actions was to present Dr. Sharona Nazarian,  who recently completed her term as President of the Beverly Hills Rotary Club, with a proclamation recognizing her accomplishments. Nazarian, a psychologist who also serves on the Beverly Hills Public Works Commission and the County of Los Angeles Commission on Alcohol and Other Drugs, led the Rotary Club through a difficult year, while still managing to bring in new members, help fight COVID-19, and raise record amounts of money.

During her tenure, Nazarian created a COVID-19 Task Force, organized blood drives and free COVID testing, created the club’s new website, and oversaw a variety of Rotary committees, among several other accomplishments. Under her leadership, the Rotary Club raised close to $200,000 over the past year. 

“Thank you for this touching and very kind honor,” Nazarian said. “In a year with so much adversity and turmoil, our goal for Rotary was clear: to unite ourselves with our community, and those most in need of both local and international aid, and to be united as we set out to do what Rotarians do best: provide service above self.” 

After approving a number of Consent Calendar items, the Council debated three major votes during its first session back.

Urgency Ordinance Repeal

Before the surprise ruling the Council was set to consider repealing or revising: suspension of penalties and interest on business taxes owed to the city; restrictions on third party food delivery services; relaxed enforcement of signs and banners adjacent to bars and restaurants; the authority of City Manager George Chavez to issue street closure and OpenBH permits, normally authorized by the City Council; the re-designation of metered parking spaces as loading zones to facilitate curbside pickup; and the prohibition on rent increases and residential evictions for nonpayment of rent.

Unlike the repeals of the masking and social distancing requirements that went into immediate effect after the Council’s June 24 meeting, the majority of these changes would go into effect in either August or September, at least 30 days after a second reading of the revised urgency ordinance on July 27. Citing new uncertainties, Councilmembers voted unanimously to indefinitely table discussion on all but two items: the question of the eviction moratorium to the Rent Stabilization Commission, which will meet on Aug. 4, and the curbside pickup regulations, which the Council will reconsider during its Sep. 21 review of the OpenBH program.

“In light of the fact that the circumstances have changed, we would do well at least to postpone decision on this for at least a couple weeks or a month,” Councilmember Julian Gold said. “I think one of the things you don’t do is make sudden moves when everything else is changing.”

Fractional Ownership Moratorium

The Council unanimously approved an urgency ordinance banning fractional ownership, an ownership scheme that allows multiple people to own portions of a single property, usually for vacation purposes. 

The Beverly Hills Municipal Code currently prohibits “transient residential uses” (rentals or leases of single-family residences for less than six months in single-family residential zones, and less than 30 days in multi-family units in multi-family residential zones). However, no such restrictions exist for fractional ownerships in residential or commercial zones, because the short-term users of the property are technically also its owners. 

Fractional ownership often results in noise, loss of privacy and community, a decline in property values, and a reduction in available homes, Director of Community Development Ryan Gohlich said in a presentation. This relatively new ownership scheme came to the fore during the debate over the One Beverly Hills development, which is proposing up to 37 fully furnished condo units with up to 12 different owners, and also because of growing awareness that business entities are seeking to establish markets for fractional ownership in single family residences and condominiums. Because the One Beverly Hills development was approved as a specific plan, it is subject to its own zoning standards.

Before they approve any fractional ownership plan within One Beverly Hills, Council asked developers to come back with a detailed program honoring a number of agreed-upon limitations. These include: no more than 37 units, contained only in the Wilshire Building (an 11-story, 124-foot tall building also known as the Luxury Hotel & Residences Building); no more than 12 ownership fractions of each condo unit; prohibitions on renting condo units as hotel accommodations, and more. 

Unless the Council agrees to every part of the fractional ownership plan, it will not go forward. The developer has not yet submitted a fractional ownership plan, Wunderlich told the Courier. 

Although no fractional ownership arrangements currently exist in Beverly Hills, Councilmembers feel that the possibility represents enough of a threat to immediately pass an urgency ordinance, effective immediately, establishing a 45-day moratorium. “We wanted the urgency ordinance because we didn’t want something to start to happen without us having the opportunity to consider it and to put what we believe are the necessary controls and regulations in place,” Wunderlich told the Courier.

The Council can extend the moratorium up to 10 months and 15 days after the 45 days while it drafts a permanent ordinance.

Councilmembers all supported the ordinance, brought forth by Mayor Wunderlich, but worried that a blanket restriction might complicate unique living arrangements that don’t present the same threats as fractional ownership associated with short-term use of the property. During an afternoon study session, Gold said he knew of divorced couples who each owned a share in a given home so that their children could remain in the same home. 

The ordinance now allows anyone with justifiable grounds to apply in writing to request a hearing to repeal the restriction. 

Approval of Urban Water Management Plan

The Council voted to adopt the city’s 2020 Urban Water Management Plan (UWMP) and Water Contingency Plan, a guidebook assessing long-term resource planning and reliability of service that large municipal water suppliers in California are required to submit every five years. 

On May 21, the Public Works Commission voted that the most recent UWMP complies with regulatory requirements, but forwarded the plan to the Council “without recommendation,” a position officially classified as “neutral.” 

“The Plan represents, in the Commission’s view, a prescribed state formulaic analysis with minimal connection to social, environmental, and economic forces which will determine future water demand and water resource development,” read comments in the May 21 meeting minutes. 

Councilmembers generally agreed the UWMP is prescriptive and not necessarily sufficient, but they felt compelled to support it, since failure to do so might jeopardize state grants. “I echo my colleagues that they really are separate issues: this particular 2020 Urban Water Management Plan versus what we should be doing to accomplish our water needs in the future,” Wunderlich said. 

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