The Hot Springs Planning Commission unanimously approved a short-term rental project's application for a specialty zoning designation in February, endorsing the planning and development department's recommendation to convert 20 acres off Buena Vista Road to Planned Development, or PD, zoning.
On Tuesday night, the Hot Springs Board of Directors said the planning commission's review of the recommendation was incomplete, voting 4-3 to send the application back for further analysis.
The PD designation has become more sought after amid the city's shrinking inventory of land that can be developed within conventional zoning strictures. The property's current Lakes Area Residential, or R-L, designation attached to it when the city annexed 621 acres along the Hot Springs Creek basin of Lake Hamilton in the summer of 2018.
The city absorbed the land over the objection of residents in the area. Some of those same residents spoke in opposition Tuesday night to developers Josef France and Chris Post's plan to build short-term vacation rentals on the 20 acres they acquired between Aberina Street and Five Points Road in July for $1.75 million, according to property records.
The city's annexation of the Lake Hamilton adjacent enclave brought it under the city's zoning regime, imposing regulations that wouldn't apply if residents had prevailed in their attempt to keep the 621 acres in the unincorporated area.
Short-term rentals have come under heightened scrutiny since the planning commission's Feb. 11 approval of the zoning change. Their proliferation in residential areas has caught cities off guard. Many, such as Hot Springs, have few, if any, laws to regulate or tax short-term rental businesses. The city zoning code's table of uses doesn't include short-term or vacation rentals.
City directors established a more than four-month moratorium, effective May 30, on issuing business licenses for short-term residential rentals at their March 2 meeting. The city plans to present short-term rental regulations for the board to consider at its May 18 business meeting.
France and Post's PD application, which listed short-term rentals as a potential use, was on the March 2 agenda, but the board wouldn't suspend the rule requiring ordinances be read at three different meetings. The rule wasn't suspended at the March 16 meeting, forcing the board to act on the application Tuesday night.
Directors Elaine Jones, District 2, Marcia Dobbs-Smith, District 3, Carroll Weatherford, District 4, and Karen Garcia, District 5, voted in support of Garcia's motion to send the application back to the planning commission for further review. Directors Erin Holliday, District 1, Steve Trusty, District 6, and Mayor Pat McCabe voted against the motion.
The motion called for the planning commission to flesh out the reasoning behind its finding that the application met two of the five threshold criteria for PD zoning and to explain which elements of HS2040: Forward Hot Springs Comprehensive Plan informed their decision.
The board adopted the comprehensive plan last fall. Developed by Design Workshop for $274,870, the planning document provides the framework for land use and infrastructure policies the city will implement over the next two decades.
The plan identified the 20 acres as a lake and amenity community and its shoreline as an environmental preservation corridor. Development should be low impact, with a focus on conservation and minimal land disturbance, in those areas, according to the plan.
But no elements of the plan have been incorporated into the city's zoning code, the regulatory scheme the planning commission used to forward the PD application to the city board.
"It sounds like you're looking hard for an argument to defeat it," Aaron Burroughs, the engineer France and Post hired to prepare and present their rezoning application, told Garcia. "I wish you were working as hard to look for an argument to approve development as you are to defeat development. ... It seems like the board is now asking questions beyond what is in code for approval of this project."
The planning and development department and planning commission found the application met two criteria for PD zoning, determining the project would develop an infill parcel that couldn't be made productive under other zoning designations and is consistent with high quality or innovative urban design.
Planning and Development Director Kathy Sellman told the board minimum lot sizes dictated by the property's current R-L zoning would require extensive site work and land disturbance. The zoning code doesn't stipulate minimum lot sizes for PD zones.
"We're looking at property where there are in places slopes that are around 22%, which is quite extreme," she said. "The PD zone district allows for some modification of those lot sizes to more carefully blend with the existing topography. Many times we see development where topography, which is beautiful, is completely erased. This zoned district allows for the maintenance of some of those existing topographic features.
" ... The Planned Development designation is intended to allow those existing contours to be as little disturbed as possible."
Attorney Burt Newell, who is representing residents on Five Points Road, told the board the planning commission didn't properly apply the six criteria the zoning code requires it to consider when reviewing PD applications. He focused on the first criterion: Providing a public benefit that would not be achievable through normal zoning regulations.
"If you passed the ordinance based on the planning commission analysis, your decision could be considered by a review in court as arbitrary, capricious or lacking a rational basis," he said. "We are replete with short-term rental options. We have no proof that we as a city need more, and we do not have an accurate account of what we have in place. If there's no established need, if there's no established shortage, there can be no finding of public benefit."