San Clemente council advances zoning work on short‑term rentals and hotel standards; adopts staff plan 4‑1

The San Clemente City Council voted 4‑1 on June 17 to adopt a staff resolution directing city planning work on short‑term lodging units (STLUs) and on development standards for a proposed hotel at the Outlets site.

Adam Matamian, community development director, told the council the package contains five separate staff recommendations: keep the current amortization timetable for nonconforming STLUs, initiate a zoning amendment to increase development potential for hotels and motels, study expansion of where STLUs may be allowed (focused on commercial and mixed‑use zones, not residential), carry out an amendment to the Marblehead Coastal Specific Plan for the outlet hotel, and maintain the city’s current first‑come, first‑served processing of conversion applications. "This item is a reconsideration of an item that was brought to the city council on May 20," Matamian said, and he summarized staff’s revised approach.

Why it matters: the council action preserves the city’s existing end date for amortized short‑term lodging permits but directs staff to pursue new standards and areas where short‑term lodging could be allowed outside residential neighborhoods and to pursue limited, event‑focused temporary options. The initiative also restarts a formal process to define development standards for a hotel at the Outlets (the property previously identified in the Marblehead specific plan), an item that has been the subject of repeated public comment and earlier environmental review addendums.

Council decision and immediate effect

- The council adopted the staff resolution (modified text provided by staff) by a 4‑1 vote. The motion called for initiation of the five work items Matamian described, including revoking the council’s prior direction (from May 20) that would have extended the amortization period for certain STLUs. The resolution language circulated with the meeting materials and a corrected (redline) version in the chamber packet were the documents voted on.

What staff said about scope and counts

- Matamian told the council there are 29 amortized licenses that remain under the code; 10 of those have not been rented short‑term and do not currently pay transient occupancy tax (TOT). He said about 12 STLUs may be candidates to convert to the city’s owner‑occupied STAR permit process, and that staff will retain the city’s existing first‑come, first‑served system for processing conversions: "they're done on a first come first served basis," Matamian said.

Public comment and community concerns

More than a dozen residents addressed the council during the lengthy public comment period. Major themes included neighborhood impacts of STLUs, enforcement concerns, economic and TOT consequences, and opposition to a proposed fifth‑floor rooftop bar at the hotel pad at the Outlets.

- Matthew Flesher (resident) urged the council to "revoke the city council's previous direction on 05/20/2025 regarding initiation of a zoning amendment related to the amortization process of short term lodging units," saying he and his neighbors want residential neighborhoods to remain residential.

- Several Marblehead residents asked the council to delay any decision on a rooftop bar or additional height until story poles are erected and view impacts are photographed from affected homes. David Monk said the council should "table the hotel fifth floor until story poles can be erected to determine the view impact" and recommended photos from specific streets in Marblehead.

- Multiple speakers from Marblehead and Highland Light homeowners associations raised concerns about noise, light and view impacts from a 5th‑floor open‑air bar and asked for more detailed environmental analysis or conditions if the project is pursued. Denise Zavolich and Don Hickman cited photos and elevation comparisons they said showed significant potential view loss and urged stricter review.

- Speakers who operate or support regulated STLUs emphasized the local economic contribution. Tim McGrath and Colby Wright quoted revenue and occupancy figures and warned that other California cities that tightened restrictions saw large drops in permitted units and local revenue.

Council comments and clarifications

Councilmembers asked staff for clarifications during the discussion. Questions and clarifications included: - whether an environmental addendum or a full CEQA review would be required for any change to the Outlets hotel (Matamian said similar work previously took the form of an addendum rather than a full EIR but that noise and light impacts would be studied either through an addendum or a focused sound study if a rooftop bar were proposed); - how the city would treat competing conversion applications (staff said the code does not currently provide a mechanism to prioritize by past compliance history and that is normally a factor in a public hearing process); - the counts of amortized permits and how many currently pay TOT (Matamian provided the 29/10/19 breakdown described above).

What the council directed staff to do

By adopting the resolution the council directed staff to: - confirm that the current amortization schedule for nonconforming STLUs would remain in place (i.e., no blanket extension of the amortization for residential STLUs); - initiate a zoning amendment to increase development potential for hotels and motels and to prepare the related environmental review work for the Outlets hotel pad (an amendment to the Marblehead Coastal Specific Plan); - initiate a separate zoning amendment to expand allowable locations and capacities for STLUs, targeted at commercial and mixed‑use areas and including potential limited‑term, event‑related expansions (for example, around regional events such as the 2028 Olympics), explicitly excluding new allowances in single‑family residential neighborhoods; - maintain the city’s established first‑come, first‑served processing for conversion applications; and - produce public hearings and further study at each step so that specific amendments and project permits return to public hearing bodies with environmental review and opportunities for comment.

Votes at a glance (other formal actions taken at the June 17 meeting) - Resolution adopting staff package on STLUs and initiating zoning work for hotels: Resolution 25‑85 — Approved 4‑1 (motion moved by Mr. Leffler; seconded by Mr. Capral; tally recorded as 4 yes, 1 no). (Provenance: staff presentation and council vote recorded June 17.) - Ordinance introduction: Ordinance 1793 (amending purchasing procedures in San Clemente Municipal Code) — introduced and first reading conducted; motion passed unanimously. - Pension investment policy (Section 115 IPS) — Council adopted the policy and directed staff to proceed; vote unanimous. (Staff and city treasurer presented details about funding and administration.) - Selection of PARS/PFM as Section 115 administrator and investment manager (resolution recorded as 25‑86 in staff materials) — Approved unanimously; council authorized engagement with PARS/PFM for management of the Section 115 assets. - Lifeguard statue maintenance agreement (memorandum of understanding with local foundation) — Council approved a maintenance agreement; members amended language to require joint city/foundation consultation and city approval for donor recognition plaques; motion passed unanimously. - Consent calendar items, including acceptance of Measure M/Measure 2 transit grant funding and several professional services agreements — approved unanimously.

What happens next

Staff will begin the formal amendment processes the council authorized. Each amendment or major project will return for public hearings and environmental review as required. Matamian told the council each item requires distinct processing steps and public hearings: "Each one of those items will be processed separately because they all generally require a little bit, a difference in the amount of work, in the processing time that it takes to complete those," he said.

Context and background

The ordinance and settlement history underpinning the amortization timeline date to decisions and litigation from 2016 and follow‑up council actions and settlement terms that extended amortization and set conversion processes for some operator categories. The Outlets hotel concept has been reviewed in prior environmental addenda; staff noted an earlier addendum included photo simulations of the hotel building from multiple city vantage points and that prior applications were withdrawn before a final project permit was issued.

Voices quoted (first reference includes role) - Adam Matamian, community development director (staff): "This item is a reconsideration of an item that was brought to the city council on May 20." - Matthew Flesher, resident (public commenter): "I encourage the council to keep residential neighborhoods residential." - David Monk, Marblehead resident (public commenter): "I call for the hotel fifth floor to be tabled until story poles can be erected to determine the view impact." - Denise Zavolich, Highland Light resident (public commenter): said photo viewpoints in staff materials did not reflect true elevations for many affected homes and asked for story poles and more precise visual analysis.

Speakers relevant to this article - Adam Matamian — Community Development Director (government) - Mayor — Mayor (government) [name not stated in transcript excerpts] - Councilmember Cabral — Council member (government) - Councilmember Wu — Council member (government) - Councilmember Leffler — Council member (government) - Councilmember Rick (as named in remarks) — Council member (government) [first name used in transcript] - Matthew Flesher — Resident / public commenter (citizen) - Amanda Quintanilla — Resident / public commenter (citizen) - Jean Waddell — Resident / STLU operator (citizen) - David Monk — Marblehead resident / public commenter (citizen) - Tim McGrath — Short‑term rental operator / commenter (citizen) - Colby Wright — Public commenter (citizen) - Denise Zavolich — Highland Light resident / commenter (citizen) - Don Hickman — Highland Light homeowners association representative (citizen) - Douglas McGlaith — Public commenter (citizen) - Joe Janis — Public commenter (citizen) - Chris Connelly — Resident (citizen)

Authorities cited in discussion - San Clemente Municipal Code — short‑term lodging and zoning provisions (ordinance; referenced by staff and speakers) - Marblehead Coastal Specific Plan — proposed amendment target for hotel development standards (policy / plan) - State CEQA Guidelines §15301 (Class 1) — referenced by staff for a separate, withdrawn item and discussed in context of CEQA review options (regulation) - Prior city resolution identifying outlets buildings as landmark (referenced in staff presentation; staff cited a previous council resolution)

Clarifying details extracted from the meeting - "29" amortized STLU licenses remain; of those, "10" have not been rented short‑term and do not pay TOT (Adam Matamian, staff). - "About 12" STLUs could become STAR permits if applicants apply and are processed (staff estimate). - Staff will focus expansion of STLU allowance on commercial and mixed‑use zones and explore "limited term" expansions tied to major regional events such as the 2028 Olympics; staff will not pursue permanent expansion into single‑family residential zones (staff direction adopted by council).

Community relevance - Geographies: Marblehead, Highland Light, pier basin, Maxford Park, Avenida Aragon; the council and speakers repeatedly cited Marblehead and Highland Light as neighborhoods potentially affected by outlet hotel changes. - Impact groups: residents of single‑family neighborhoods (R‑1), short‑term rental operators, local businesses that gain TOT and visitor spending.

Meeting context - Engagement level: high — large public attendance and some speakers returned from prior hearings; item prompted extended public comment and more than one hour of discussion. - Implementation risk: medium — changes require formal zoning and specific‑plan amendments plus CEQA/environmental review and can be modified by future councils or legal challenges. - History: item revisits council direction from May 20 and earlier environmental addenda for the Outlets project; the amortization regime dates to ordinances and a settlement stemming from 2016 litigation.

Searchable tags:["short-term-rentals","STLU","Marblehead","OutletsHotel","transient-occupancy-tax","zoning-amendment","CEQA","story-poles","neighborhood-views","San-Clemente"]

Provenance (transcript evidence) - topicintro: {"block_id":"block_3315","local_start":0,"local_end":480,"evidence_excerpt":"Thank you, mayor, and good evening, council. Adam Matamian, community development director. I will, cover all the pertinent points with as few words as possible. This item is a reconsideration of an item that was brought to the city council on May 20..."} - topfinish: {"block_id":"block_8255","local_start":0,"local_end":240,"evidence_excerpt":"Motion passed, 4 to 1. And the motion passes."}

Salience - overall:0.72 - overall_justification:Local zoning changes could alter where short‑term rentals are allowed, affect neighborhood character and city revenue; the hotel specific‑plan amendment could change development height and bring recurrent operational impacts (noise, light, traffic). - impact_scope:local - impact_scope_justification:Decisions apply to San Clemente neighborhoods and a major commercial site (the Outlets), not statewide policy. - attention_level:high - attention_level_justification:Large public turnout, multiple speakers from affected neighborhoods, repeated prior hearings. - novelty:0.40 - novelty_justification:The council revisited topics discussed previously (amortization, Outlets hotel) but added refined staff direction and a formal initiation of amendments. - timeliness_urgency:0.65 - timeliness_urgency_justification:Some measures (amortization expiration) have fixed deadlines in 2026; the council requested follow‑up work ahead of future regional events. - legal_significance:0.40 - legal_significance_justification:Potential CEQA review and code amendments; decisions could be subject to future appeals or litigation. - budgetary_significance:0.45 - budgetary_significance_justification:Potential long‑term revenue implications tied to TOT and development; immediate fiscal impacts limited to staff workload for processing amendments. - affected_population_estimate:32000 - affected_population_estimate_justification:Estimate reflects San Clemente city population scale for local policy change; exact affected households will be determined by zoning outcomes. - affected_population_confidence:0.40 - budget_total_usd:0 - budget_total_usd_justification:No direct appropriation decided tonight beyond staff work; subsequent projects (EIRs, implementations) may require budget actions. - decision_deadline:2026-05-26 - decision_deadline_justification:Amortization expiration date cited by staff for existing nonconforming STLUs. - policy_stage:proposal - policy_stage_justification:Council directed staff to initiate study and amendment work; no final ordinance or permit approvals were adopted tonight. - follow_up_priority:8 - follow_up_priority_justification:Council directed staff to pursue multiple amendments with public hearings and environmental review; action needed to implement directions.

Engagement forecast - newsworthiness:{"national":0.05,"regional":0.15,"local":0.90,"justification":"High local interest due to neighborhood impacts, economic implications, and repeated public hearings; limited regional interest except where it intersects with 2028 Olympics planning."}, - notify_recommendation:{"audience":"city","reason":"Decision initiates zoning amendments that affect local neighborhoods and businesses; residents, planning stakeholders, neighborhood associations and short‑term rental operators should be notified."}, - predicted_click_through:0.65, - predicted_click_through_justification:"Local residents and property owners will seek details about the council vote and next steps.", - predicted_read_time_minutes:4, - predicted_shares:35, - predicted_shares_justification:"High local share among neighborhood groups and city interest channels."