Half Moon Bay City Council Special Meeting: Appeals of 555 Kelly Avenue Affordable Housing Project (June 27, 2024)

The Half Moon Bay City Council held a special meeting on June 27, 2024, to hear and decide on three appeals (the Moore, Ferreira, and Nagengast appeals) challenging the Planning Commission's May 14, 2024, conditional approval of a Coastal Development Permit and Architectural Review for the 555 Kelly Avenue Affordable Housing Development Project. The project, proposed by Mercy Housing in partnership with ALAS, includes a five-story, 40-unit senior farmworker housing building (deed-restricted for extremely low- and very low-income households) with a Farmworker Resource Center and 18 parking spaces on a city-owned 0.38-acre site. The project’s height was reduced from 59 to 54.5 feet, and the unit mix was adjusted to 6 studios, 32 one-bedroom, and 2 two-bedroom units, contingent on confirming funding. The Council heard staff presentations, appellant statements, public testimony, and applicant rebuttal before deliberating and voting.

Appeal Presentations

• Staff Presentation (Mike Noce, Housing Programs Manager): Summarized the project’s background, the three appeals, and staff’s responses to each ground. Noted that the project qualifies for a State Density Bonus (including a super density bonus for 100% affordable projects) and a CEQA Class 32 exemption.
• Moore Appeal (Jennifer Moore): Argued that the lot line adjustment creates a false infill site, the site is in a liquefaction zone, the project is not near a major transit stop (failing to meet the 15-minute bus interval requirement), and that the city failed to conduct meaningful community engagement. She questioned the need for senior farmworker housing over other workforce populations.
• Ferreira Appeal (Michael Ferreira): Challenged the process, noting that the original RFQ proposal (4 stories, 31 studios) changed to 5 stories with larger units without City Council approval. He argued that the city, as property owner, is not bound by State Density Bonus Law in the same way as a private applicant, questioned the use of on-demand transit (SamTrans Ride Plus) to qualify as a major transit stop, and raised concerns about the contract planner and deputy city attorney being from the same firm (appearance of conflict). Also noted the lack of story poles.
• Nagengast Appeal (Paul Nagengast): Focused on the lack of a comprehensive parking and pedestrian/bicycle safety plan for the area. He requested that the city commit to safety improvements at the Kelly Avenue/Highway 1 intersection (where a cyclist was killed in 2023), a sidewalk to the shopping center, and a parking management plan before the project begins construction or receives a certificate of occupancy.

Public Comments & Testimony

• Support (21 speakers): Included farmworkers, ALAS board members, faith leaders (Rabbi Hein, Pastor Sue Holland, Lisa Warner Carey), elected officials (Mayor of East Palo Alto Antonio Lopez), representatives from Peninsula for Everyone, Senior Coastsiders, Coastside Faith in Action, and community members. Key points: Farmworkers are essential and face housing crises; the project provides dignity and stability; the Farmworker Resource Center offers culturally competent services; the project is consistent with the city’s values and response to the 2023 shootings; community engagement was thorough; parking and traffic concerns can be managed; delays risk losing funding.
• Opposition (12 speakers): Appellants and other residents (Dan Haggerty, Patricia Stevenson, Sandy Vela, Jane Lewis, Nancy Fontano, Frank, etc.) raised issues: The project is too large and out of scale; parking is inadequate (40 units with 18 spaces); the building will worsen traffic and pedestrian safety at the Kelly/Highway 1 intersection; the process lacked transparency (changes not approved by Council); the site is not a true infill; concern about using on-demand transit for density bonus; potential precedent for other developers; the city should prioritize safer locations.
• Councilmembers: Both supporters and opponents acknowledged the need for farmworker housing but differed on process and impacts.

Key Outcomes

• Motion to Deny All Three Appeals: Moved by Councilmember Brownstone, seconded by Councilmember Penrose. The Council voted 4-0 (Councilmember Ruddock participated remotely) to deny the appeals and uphold the Planning Commission’s conditional approval of the Coastal Development Permit and Architectural Review.
• Motion to Form Council Subcommittee for Lease Negotiations: Moved by Councilmember Penrose, seconded by Councilmember Ruddock. Passed 3-1 (Councilmember Brownstone voted no). The subcommittee will enter into negotiations with Mercy Housing on the lease agreement (Development and Disposition Agreement).
• Council Discussion on Conditions: Councilmembers expressed support for strengthening conditions related to parking management, construction activity notification, and pedestrian safety improvements. Councilmember Ruddock recommended not using on-demand transit (SamTrans Ride Plus) as a justification for the super density bonus to avoid setting a precedent; she suggested pursuing an LCP amendment instead. Vice Mayor Rarback supported the super density bonus for 100% affordable projects and noted that the city will be involved in lease negotiations. Councilmember Penrose, despite initial reservations, voted in favor, stating she followed her heart.
• Next Steps: The Council’s decision is final (project not appealable to the California Coastal Commission). Staff will proceed with processing the Coastal Development Permit and Architectural Review, and the newly formed subcommittee will work on the lease terms.