West Hollywood’s Planning Commission unanimously approved subdividing the proposed Walgreen’s mixed-use project at the southwest corner of Santa Monica Boulevard and Crescent Heights into “air-space parcels” at its Thursday night meeting.
Developer Pacific Development Partners requested the project, which was approved by the City Council in May 2012 and includes more than 13,000 square feet of retail space for a Walgreens, 2,138 square feet for other retail stores at ground level and 20 residential apartments on two levels above, be divided into six separate “air-space parcels” to make it easier to secure financing. “Air-space parcels” are a relatively new concept used in larger cities where one company owns the building itself while someone else owns the space between the floor and the ceiling within the building.
John Keho, the city’s planning manager, compared owning air-space parcels to a condominium association where everyone owns part of the building. However, since this proposed building would be rental units, the different air-space owners would make up the equivalent of a condominium association. The city amended its zoning ordinances to allow for air-space parcels several years ago.
Pacific Development proposed the six air-space parcels be (1) parking, (2) large retail space (the Walgreen’s), (3) smaller retail space, (4) 16 market-rate residential apartments (5) two affordable residential units and (6) two more residential units.
The commission first considered the air parcels request at its May 16 meeting but delayed making a decision after questions arose about one landlord owning the air-space for the residential units and another landlord owning the air-space for the parking. City code requires that a parking space be provided with each apartment at no additional cost.
At that May meeting, Commissioner John Altschul suggested it might be a bad idea to have separate air-space owners for parking and residential units. Each owner would have different self-interests and might not cooperate, he said.
“This is a recipe for conflict and a lawyer’s dream,” Altschul said. “There will be six different owners and the tenants will suffer.”
Pacific Development returned Thursday night with an amendment to the proposal. Free parking spaces now must be permanently available for all tenants and patrons. That new language satisfied the commission, which merely added the words “in perpetuity” to the agreement, then approved it without further discussion.
Attorney Todd Elliot, representing Pacific Developers, told the commission that two other recent projects by the Monarch Group had used air-space divisions – one on the northwest corner of Santa Monica Boulevard and La Brea Avenue (site of the old Carl’s Jr. fast food restaurant) and one of the southeast corner of La Brea and Fountain Avenue (site of the old Jon’s supermarket).