MORGAN HILL, CITY OF v. BUSHEY

Respondent, City of Morgan Hill, Request for Judicial Notice

Cal.December 12, 2017

IN THE SUPREME COURTOF THE STATE OF CALIFORNIA CITY OF MORGANHILL, Plaintiff and Respondent, Vv. SHANNON BUSHEY, AS REGISTRAR OF VOTERS,etc., et al., Defendants and Respondents; RIVER PARK HOSPITALITY, Real Party in Interest and Petitioner; MORGANHILL HOTEL COALITION, Real Party in Interest and Respondent. Case No. 8243042 Sixth Dist. No. H043426 Santa Clara Super. Ct. No. 16- CV-292595 SUPREME COURT ED DEC 122017 Jorge Navarrete Clerk Deputy PLAINTIFF AND RESPONDENT CITY OF MORGANHILL’S REQUEST FOR JUDICIAL NOTICE ON REPLY; DECLARATION OF SHERRI S. KAISER; MEMORANDUM OFPOINTS AND AUTHORITIES LOUIS A. LEONE (SBN: 099874) *KATHERINEA. ALBERTS(SBN:212825) LEONE & ALBERTS 2175 N. California Blvd., Suite 900 Walnut Creek, CA 94596 Tel: (925) 974-8600 Fax: (925) 974-8601 Email: lleone@Iconealberts.com kalberts@leonealberts.com Attorneys for Plaintiff and Petitioner CITY OF MORGANHILL IN THE SUPREME COURYOF THE STATE OF CALIFORNIA CITY OF MORGAN HILL, Plaintiff and Respondent, Case No. 8243042 ve Sixth Dist. No. H043426 SHANNON BUSHEY, AS REGISTRAR Santa Clara Super, Ct. No. 16- OF VOTERS, cte., et al., CV-292595 Delendants and Respondents; RIVER PARK IIOSPITALITY, Real Partyin Interest and Petitioner; MORGANHILL IIOTEL COALIMION, Real Party in interest and Respondent. PLAINTIFF AND PONDENT CITY OF MORGANRILL’S REQUEST FOR JUDICIAL NOTICE ON REPLY; DECLARATION OF SHERRIS. KAISER; MEMORANDUMOFPOINTS AND. AUTHORITIES LOUIS A. LEONE (SBN; 099874) *KATHERINE A. ALBERTS(SBN; 212825) LEONE & ALBERT 2175 NN.California Bivd., Suite 900 Walnut Creek, CA 94596 Tel; (925) 974-8600 Fax: (925) 974-8601 Email: licone@jIconealberis.com kalberts@leoncalbert: mn Attorneysfor Plaintiffand Petitioner CITY OF MORGANHILL. TO THE HONORABLE TANI CANTIL-SAKAUYE, CHIEF JUSTICE; THE HONORABLE ASSOCIATE JUSTICES OF THE CALIFORNIA SUPREME COURT; AND ALL PARTIES AND ‘THEIR ATTORNEYS OF RECORD: Pursuant10 California Evidence Code sections 450et seq., and California Rules of Court, Rules 8.252 and 8,520, Plaintiff and Respondent City of Morgan Hill (“the City”) respectfullyrequests this Courtto take judicial notice ofthe document listed below. The documentis relevant to determiningthe intent ofthe referendumatissue in this matter for the purposes ofthe City's compliance with Elections Code section 9241. The document was notpresented to the (rial court, and il does nol relate to proceedings occurring after the order that is the subjectofthe appeal Dated: December 11,2017 LEONE & ALBERTS Aff Vs THERINE A” ALBERTS Attorneys for Plaintiff and Respondent CITY OF MORGAN TILL DECLARATIONOFSILERRI S. KAISER IN SUPPORT OF PLAINTIFF AND RESPONDENTCITY OF MORGAN HILL’S REQUEST FOR JUDICIAL NOTICE ON REPLY I, Sherri 8. Kaiser, declare as follows: 1. Lrepresont the City of Morgan Hill in this matter, and if called as a witness,| could and would provide the information set forth below on the basis of my ownpersonal knowledge. 2. Attached hereto as Exhibit A is a true and correetcopy of the Hotel Coalition presentation, dated March 18, 2015, which T obtained from the City of MorganHill's Official Website, ay attachment No.5 to Staff Report File No. 16-071, Version 1, created on February 9, 2016. The documentis available at, and | retrieved it from, hups:/morgan- hill..cgislatr.con/1 cgislationDetail.aspx21D=2570675&GUID-6AEF1D12- JAK 9-4962-A325-H3379BDE31D46. I declare under penaltyof perjury ofthe State of California that the information above is true and correct. Executed this 11" day of December, 2017, in Walnut Creek, California. E E R E N E e g g MEMORANDUM OFPOINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF AND RESPONDENTCITY OF MORGANHILL’S REQUEST FOR JUDICIAL NOTICE ON REPLY Lvidence Code section 459 provides reviewing courts the same power totake judicial notice of documents as trial courts under Evidence Code sections 430et seq. (Evid. Code § 459.) In tandem, Rules 8.252 and 8.520 ofthe California Rules of Court provide that a court maytake judicial notice of documents relevant to the issues under review. (Cal. Rules of Court, rutes 8.252(a)(2MA), 8.520(g).) Exhibit A,attached to the declaration ofSherti 8. Kaiser, is a presentation that Appellant Hotel Coalition madeto the Morgan [ill City Council while it was deliberating over whether to adopt Ordinance No 2131 (New Series), which is the ordinance that is the subject ofthe referendum atissue in this matter. Exhibit A is judicially noticeable as matetial considered bythe City’s legislative body in its decisionmaking process. (Porter v. Board ofRetirement ofOrange County Employees Retirement System (2013) 222 Cal.App.4th 335, 338, 344-345 [taking judicial notice of legislative commitice and Department of Finance analyses ofproposedbill, prior bill drafts, and letter from bill proponent to member of the Legislature]). Dated: December 1}, 2017 LEONE & ALBERTS “ LESink. tgAbit att La HERINE A. ALBERTS Attorneysfor Plaintiffand Respondent CITY OF MORGANHILL swaoveot? Coty of orga Hil Flo 9:15.07" sigo.tn GityHome ——Legistation «Calendar —=—Cty Councit Boards an Commissions People Meeting Archives prior to June 2018 © 0 (Share) MARS) WeAerie) Detail Reports File #: 16-071 Version: 1 Name: Type: Staff Report Status: (other Business He created: 2/9/2016 In control: Gity Council (Onagenda: 2/17/2016 Final action: 4/1/2016, an CITY ACTIONIN RESPONSE TO REFERENDUM ON 24-34-26: LIGHTPOST-RIVERPARK HOSPITALITY 1, 2-17-16 Resolution Clty CouncilLightpostRivernark HotcLodf, . May 20, 2615 StallReport Attachrrents: 421m,3. March18, 0 5 StaffReport #10, 4, March LS, 2015 #0 StafPresentation,nd5. Morch,18, 2015 #10 Hotel Coalition presentation.pdf, 6. November 19,2014 Staff Repu #14 Histor) Stef Report Text Iron? Group Beport | 2/17/2016 1 Giycounel | accepted —_| Pass Iitpsimorgan-a og ta. com/Log'sotoaDatal aspxD25705758CUINA6AEF:D12-14F9-AB82.4925-E9379BDLIOG ww M a r c h 1 8 " 2 0 1 5 RE: Z A - 1 4 - 2 6 Lightpost — Riverpark Hospitality Preseniation tc C i t y C o u n c i l By ne M H Z o n i n g A m e n d m e n t t r o m Light Indus ; C o m m e r c i c l for Hotel Use eanomCamfort Inn + 2 Hilton Hotels — RiverPark Hospitality T O T A L % I N C R E A S E R O O M S U P P L Y C o r p o r a t e R o o m D e m a n d N o t a b l e jecrease in ey d e m a n d as P a r a m i t t h e y o p e offices Flextronics ntlargecorporatedemand ‘ M o r g a n Hill to 5 existing s u p p l y . O u r hotels a r e b u s y b e c o u s e of S a n J o s e o v e r f l o w . “Note: R o o m c e m a n d differs o e t w e e n notels. D a t a' s b a s e d o n H o l i d a y M o r g a n H > H o s p i r a R e p l a c e d b y S h o e P a l a c e N o r o o m d e m a n d C o m c a s t C u s t o m C h r o m e F o x R a c i n g S u n s e e d N o n e w m a r e m p l o y e Shifting d e m a n d c l o s e r t $ existing businesses rs a r e e n t e r i n g m a r k e t 70 S a n J o s e / M i l p i t a s : val (office) Destination lotel G u e s t s o n W e e k d a y s l e T e l i e e C e i l t s iSureilens H a m p t o n J a n u a r y 2 0 1 4 J a n u a r y 2 0 1 5 e a ! Market: San Jose/Santa Cruz, CA ___Under Construction a _ Properties Rooms Propertias Rooms | & t y Market: SanJose/Santa Cruz, CA : P r a i n g , o S | | Properties Rooms | A B 1 8 8 5 L Z Sega B E B L + S a n J o s e is e x p e c t e d to h a v e a n i n c r e a s e s u p p l y of 4,519 rooms i n n e x t 2 Years (1,063 + 3,454) + Total mid-scale rooms i n S a n Jose / S a n t a C r u z Tract: 29,076. Total r o o m supply: 3 4 , 0 0 0 + % I n c r e a s e : 1 5 . 5 % 4 & F e b u a r y 16%, 2 0 1 5 15pro p e r t i e s a n d over 2 , 0 0 0 r o o m s a d d e d to p i p e l i n e New Supply of: Total Annual Morgan Hill % Occupancy | San Jose Hotel Rooms Room Nights Contribution Contri | ~ 9,435 75,508 16% San Jase 4518 A s s u m p t i o n s : + After S a n J o s e r o o m supply i n c r e a s e , M o r g a n a b l e to c a p t u r e 6 0 % t h e S a n J o s e traffic * L o s e only 40% {quite o p t i m * M o r g a n t otals o c c u p a n c y a r o p s to 5 6 % f r o m 7 0 % - A v e r a g e Daily R a t e ( A D R ) d r a p s b y 15% hatel O72 PES otels a r e c fi imate New Average 2017fo. ‘Annual R o o % Average Room NewOccupancy Daily Rate” New TOT Tax Rooms: ___ightsSupply Geeupancy DallyRate: Revenve AfterSupplyincrease: -1SK__—_Collactione:_ 85 BLczs 70K S a g 5 2,606,100 F 56% S W U721S 30 a285c 70% Ss $ 2,989,250 § 56% $ ma 203,278 30 32850 70% § 5 2,986,250 $298,935 56% S$ ml 203,276 108 38,690 70% § $ 3,385,375 $338,538 58% $ 105 230,208 53 19,885 70% $ Sisgses $143,957 56% S 94 101,230 83 3 0 , 2 8 5 7 0 % $ 2,126,650_§ 222,065 56% $ 8 aaaz8 sa? 185,055 $15,580,590 $1,558,038 $1,059,867 + Hotel r o o m s d o n o t c r e a t e d e m a n d + R a t e w a r b e f w e e n M o r g a n H i + R a t e s f u r t h e r d e p t r e s s e d hotels + T O T collection i s r e d u c e d b e c a u s e of r a t e a n d o c c u p a n c y contraction ( 3 2 % reduction} Hotel i n d u s t r y is e n t e r i n g t h e t o p of a 7 y e a r c y c l e , w h i c h b e g a n i n 2 C O F + T h e m a r k e t c o n d i t i o n in 2 0 1 7 w h e n h o t e l s o p e n - 2 ? S a n J e s e c o r p o r a t i o n s s t o p s e n d i n g their travelers to M o r g e n Hill b e c a u s e t h e r e is a d e q u a t e r o o m s u p p l y in S a n J o s e a t a t t r a c t i v e roles, a n d M o r a c hotels o c c u p a n c y d r o p s b y 1 4 - 2 5 % With 5 8 % i n c r e a s e in r e a m s u p p l y in M o r g a n H 3 0 - 4 0 % e c c u p a n c y w i l l d r o p b y A v e r a g e Daily R a t e D e c r e a s e s b y 1 5 - 4 0 % to a t i r a c t t h o s e c o r p o r a t e clients c a c k t o M e r g a n H i l l C i t y ' s T O T R e v e n u e d r o p s b y a t l e a s t 3 2 % Resulf: L o w e r e n d cliente’e e n t e r i n g M o r g a n Hill M o r e criminal activity, d i s t u r b a n c e s , c a r thefts, etc... > increcsed burden Morgan Hill Police and ant D e f e r r e d m a i n t e n a n c e a r d overall quality of existing r o o m supp! M a r g a n gains r e p u i a t i o n of “hospital g h o s i - t o w n " a n g p o o r q u a l i t y a I a e M o r g a n Hill Hotel Coalition racws: : £ Hotel room supply does NOT crecte hotel raom demand e M o s t of M o r g a n s w e e k d a y g u e s t fravel O U T S I D E of M o r g a n Hill for ESS & High c o n c e r i a t i o n t r a v e l i n g to S a n J o s e M o r g a n H i l l i s a n o v e r f l o w m a r k e t for S a n J o s e a n d i h e B a y A r e a 3 C a n v e n t i o n s | hotel r o o m s o n w e e k d a y s M o r g a n k i l l s n e w noteis: M a r r i o t t p r a p e r t i e s , C o m f o r t inn a n d H o l i d a y oo Inn E x p r e s s w e r e c o n s t r u c t e d in a n t i c i p a t i o n o f C o y o t e C r e e k ’ s ts e x i s t i n g s u p p l y of d e v e l o p m e n t d u r i n g t h e D o t C o m B o o m , b u t t h a t n e v e r m a t e r i c i z e d es O v e r s u p p l y of hoiel r o o m s | W e e k e n d b u s i n e s s : A hojel cannot s u r v i v e o n w e e k e n d business alone: | t a u r i s m a n d sporis t o u r n a m e n t s c r e a t e d e m a n d 7-8 m o n t h s o f t h e y e a r only D o w n t o w n b o u t i q u e hotel c a n n o t b e s u p p o r t with additional s u p a l y Conclusion: T h e m a r Ooms, c a n n o t absord a n additional 190 ro: M o r g a n Hill Hoiel Coalition is N O T anti-growth a A d v o c a t e sustainable g r o w t h & A l l o w 1 hotel only a n d c b s e r v e the rate a n d o c c u p a n c y t r e n d s M o r g a r , s e c o n o m y s h o u l d n e t b e tied to S a n Jose’s fa o w n s t r o n g e m p l o y m e n t b a s e b e f o r e e x p a n c i n g t h e hosoit Attract higher w a g e jabs E x p a n d t h e M o r g a n s p e c u i c t i o n T h e m a r k e t n e e d s m o r e d e m a r i d g e n e r a , SO w e n e e d our ¥ s e c t o r supply in proportion io a c t u a l d e m a n d , not rs. Industrial users a n g of larger c o r p o r a t i o n s T o u r i s m a l o n e c a n n o t s u p p o r t i n c r e a s e d s u p p R e z o n i n g f r o m Industrial to C o m m e r c i a l gives unfair a d v a n i a g e to user Sefs w r o n g e x a m p i e for existing c o m m e r c i a l s p a c e users C h a n g e s risk profile for future d e v e l o p e r s a n d existing hotels O f f i c e or industrial c o m p l e x with F o r t u n a t e 5 0 ° fenant i s History h a s t a u g h t us i m p o r t a n t l e s s o n s in o v e r b u i l d i n g a n d o v e r s u p p l p e s t 15 y e a r s - Let's n o t m a k e the s a m e mistakes a g a i n B A l l o w | hotel d e v e l o p m e n t until t h e r e a r e additional c o r p o r a t e d e m a n d g e n e r a t o r s U n d e r s t a n d t h e o c c u p a n c y a n d r a t e i m p a c t of S a n J o s e R o o m s u p p a s e a n d S t o n e P a r k C a p i t a l ' s p r o p o s e d hotel a 7 Y e a r c y c i e T h e M o r g a n Hill Hotel Coalition intends to f o r m a T B I D A S A P fo p r o m o t e tour w i t h i n M o r g a n e a s e T O T fax collections for city D e d e d marketing b u d g e t to p r o m o t e local businesses a n d events Details ic b e d i s c u s s e d with Edith Ramirez, E c o n o m i c D e v e l o p m e n t M a n a g e r R e q u e s t for C o n t i n u a n c e fort h i s p r o p o s a l 4 e d M o r g a n Hil! Hotel Coalition — A p p e n d i x A AG + A f t e r S a n J o s e s u p p l y i n c r e a s e , M o r g a n + A v e r a g e Daily Rate drops 2 0 % + M o r g a n Hill T O T collections falls n y 4 0 % ericated ArvER SI Supply neeaee 2010 fee ‘aval 305m Tnmualoam %of Rooms Room nights s¢Dedaing to Stay Room nights Tew fmaoms: Nights Supply Occupancy i fom San lose From San lose in Mogan il not! Fm Son eeupancy | A Berens ca F s SE 3085 4 courtyard * z280 50% 1498 oo =x fesidenee on 0 32,850 50% Laas 30% 2% 206 2ees0 0% 508 50% 3 13345 50% soe 2 B o 30.285 506 site 2 Pa 185055 was Estimated _ Rew average 207 fe RnivsiRoom 4% ~—~CReagS) = o TOT Tox New Occupancy Dally#ate _NewTOT Tas | Roe ign Supply Occupancy Dally Se: Revenve: 10% _Ater Supply ncrame: 20% Collections: | Hi express 85 33025 70% OS %$ 2,606,100 $ 260,610 53% 3 98 156,368 courtyard 20 32,850 70% $ $ 2,989,350 § 258,935 53x 5 tod 279,361 Residence Inn 90 32850 70% S $7,989,350 § 298,535 23% S w e 179,31 Hampton Inn 106 38.690 70% $ $ 3385275 § 338,538 33% $ 1 0 0 203,223 | 53 19,245 7 0 % $ $1,489,565 $ 148,957 5 3 % $ 8S 89,375 | 33, 30,295 70% $ $2,120,650 $212,065 S R $ 8 8 3 185,055, $15,580,390 $1,558,035 $ 934,823 TOT Collection Change: -$ 623,216 | A v e r a g e Di ly R a t e d r o p s 2 5 % M o r g a n Hill T O T collections f a l l s b y 4 7 . 5 % cated ASTER 51 Supply Insease WATe d , % —Anmal@vom %ufRooms Room nights % Deciding to Stay Roun nights Tota’ Room NewS ‘eRooms: Wight Stpmhy_Oscupaney MighteSold ram Sanose fromSar Jose_in‘VorgenHil not FromSanJ Sccupaney | sn express = n e a c o e | eoureyara 30 20% 15% Residence ton 30 70% ok Hampton Inn 106 708 2 Confer a 53 7006 ‘ | ustty fon ss . 7% sor 188,085 129.839 aa709 see | Estimated New Average RomualRoon ——«%———«verage Room TOTTax: New Oreupaney ally Rate Nights Supply Oscupaney Dallyfate: Revenue 10% __aftersupply increase! | Express = 32,023 70% 8 120 5 2606100 5 260.610 28% ¢ D Courtyard 30 32,859 3 130 $ 798,935 49% r r ) Residence inn 90 32.859 $ 430 $2) 3 298,935 49% S 3 8 Hampton Inn 106 38,590 S 1 2 5 $3,385,375 § 935.538 % $ 3 Comfort Inn 38 29,865 S 1 2 0 $ 4483,565 $ 8 , 9 5 7 r s ) Quality Inn 33 30,295, $__360_$ 2,120,850 $212,065 _ $ s sar 185,055 $13,580,390 $1,558,039 — — M o r g a n Hill Hote! Coalition 9 For further i n f o r m a t i o n , p l e a s e c o n t a c t : | @ A s h i s R o y H o l i d a y Inn Express M o r g a n Hil (408) 300- 4 8 0 0 K a r e n M e n d e z C o u r t y a r d a n d R e s i d e n c e I n n b y M a r r i o t t K o r e n . M e n c e z © pillar [408] 782-6034 | Neil Patel j H a m p t o (8. Re: City of Morgan Hill v. Shannon Bushey, et al. California Supreme Court Case No.:5243042 Court of Appeal Case No.: 11043426 PROOFOF SERVICE |, the undersigned, declare that I am employedin the City of Walnut Creek, State of California, } am over the age of18 years and not a party to the within cause: my business addressis 2175 N.California Blvd., Suite 900, Walnut Creek, California. On December11. 2017, I servedthe following documents: PLAINTIFF AND RESPONDENT CITY OF MORGAN HILL’S REQUEST FOR JUDICIAL TICE ON REPLY; ECLARATION OF SHERRI S. KAISER; MEMORANDUM OFPOINTS AND AUTHORITIES COUNSEL FOR MORGAN HILL HOTEL COALITION Asit §, Panwala Law Office ofAsit Panwala 4 [:mbarcadero Center, Suite 1400 San Francisco, CA 94111 COUNSEL FOR DEFENDANT IRMA TORREZ Gary Baum, Esq. Scott Pinsky, Esq. LawOffices of Gary M. Baum 19925 Stevens Creek Blvd., Suite 100 Cupertino, CA 95014 DonaldLarkin, 13s City ofMorgan Hill 17375 Peak Avenue Morgan Hill, CA 95037-4128 tyAttomey Clerk ofthe Court Sixth District Court of Appeals 333 West Santa Clara Street, #1060 San Jose, CA 95113 COUNSEL FOR REAL PARTY IN INTEREST RIVER PARK HOSPITA| Jolie Houston, sq. Berliner Cohen LLP 10 Almaden Blvd., ieventh Floor San Jose, CA 95113 COUNSEL FOR RESPONDENT EY Deputy County Counsel Office ofthe County Counsel Countyof Santa Clara 70 West Hedding Street 9"Floor, East Wing San Jose, CA 95110 Clerk of the Court Santa Clara County Superior Court The Honorabic Theodore Zayner JOIN.First Street San Jose, CA 95113 VIA MAIL 11 Byplacing a true copythereof enclosedin a sealed envelope(s), addressed as above and placing cachfor collection and mailing on that date following ordinary business practices. 1 am readily familiar with my firm's business practice of collection and processing of correspondence for mailing with the United States Postal Service and correspondence placed for collection and mailing would be deposited with the United States Postal Service at Walnut Creek, California, with postage thereonfully prepaid, that same day in the ordinary course of business. [] By placing a truc copy thereofenclosedin a sealed envelope(s), addressed as above, and depositing each envelope(s), with postage thereon fully propaid, in the mail at WalnutCreek, California. VIA OVERNIGHT MAIL/COURIER [X] By placing a wue copythereof enclosed in a sealed envelope(s), addressed as above, and placing each for collection by overnight mail service, ot ovemight courier service. 1 am readily familiar with my firm’s business practice of collection and processing of correspondence/documents for overnight mail or overnight courier service, and that it is to be delivered to an authorized courier or driver authorized by the overnight mail carricr to reecive documents, with delivery fees paid or provided for, that same day, for delivery on the following business day. VIA FACSIMILE T | By arranging for facsimile transmission trom facsimile number 925-974- 8601 to the ubovelisted facsimile nurwber(s) prior ta 5:00 p.m. I amreadily familiar with my firm's business practice of collection and processing of correspondence via facsimile transmission(s) and anysuch correspondence would be transmitted via facsimile to the designated numbers in the ordinary course of business. ‘The facsimile transmission(s) was reported as complete and without error. VIA HAND-DELIVERY 11 By placing a true copythereof enclosed in a sealed envelope(s), addressed as above, and causing each envelope(s) to be hand-served on that day by D&T SERVICESinthe ordinary course of my firm's business practice. VIA ELECTRONIC SERVICE- California Rules of Court, Rule 8.212(¢)(a) 1] Byelectronically filing the document through TrueFiling, per California Rules of Court, Rule 8.212(c)(a), all requirements are satisfied. I declare under penalty ofperjury that the foregoing is true and correct and that this declaration was executed on December 11, ntat Walnut Creek, California. C Jo pentyUIT