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CAJA Environmental Services, LLC 9410 Topanga Canyon Blvd., Suite 101 Chatsworth, CA 91311 Phone 310-469-6700 Fax 310-806-9801 It is Reasonably Foreseeable an STR Ban Will Spur New Hotel Development and the City Must Analyze Associated Impacts The City has reported there are over 700 existing STRs in the City (Staff Report, p. 2). Ramboll has determined there are approximately 1,000. (Ramboll Environmental Analysis, p. 1.) Banning all of these overnight accommodations would translate to the loss of a significant number of overnight accommodation nights in the City. The City's existing commercial overnight accommodation market (hotel/motel/bed and breakfast, etc.) simply cannot absorb the loss of overnight accommodation nights caused by the elimination of the STR market, given the already high occupancy rate of Orange County overnight accommodations. (See Ramboll Economics Analysis, pp. 2-4.) Yet the Addendum makes no mention of the foreseeable development of new hotels that would result from eliminating all existing STRs in the City, a fatal flaw in that analysis which discredits every impact conclusion that the Addendum reaches. As reported by Matthews Real Estate Investment Services in 2023: Hotel occupancy in Orange County is above the national average. Demand for O.C. rooms is still high despite rising rates, as the region is a hot spot for tourism, leisure travel, and business. An increase in business travel demand was generated by tech, financial, BioMed, and medical supply companies implementing large group visiting over the last few quarters." Hotel Valuation Index also reported in 2023: The Anaheim -Santa Ana hotel market spans the entirety of Orange County, which supports a diverse base of economic industries and sectors, including technology, finance, manufacturing, education, and healthcare, among others. Orange County's hotel submarkets include Orange, Garden Grove, Anaheim (which features the Disney theme parks), Buena Park (home of Knott's Berry Farm), Irvine (home to University of California Irvine's campus and numerous corporate headquarters), and the affluent coastal communities of Dana Point, Huntington Beach, Laguna Beach, and Newport Beach. In 2023, occupancy for this market surpassed 70.0%. Major factors driving the 2023 performance level included the rebound of amusement park attendance, the return of major conventions, and the gradual recovery of corporate travel.12 Given the robust Orange County overnight accommodations market, it is reasonably foreseeable that the City's ban on STRs will drive the development of new hotels, the impact of which the City must analyze in an EIR. (See Ramboll Economics Analysis, pp. 2-4.) 11 Matthews Real Estate Investment Services, Hospitality Market Report I Southern California (Feb. 2023) available here: https://www.matthews.com/hospitality-market-report-socal (last visited Oct. 7, 2024). 12 HVS, Hotel Valuation Index — United States — Anaheim -Santa Ana, available here: https://hvi.hvs.com/market/united-states/Anaheim - Santa Ana (last visited Oct. 7, 2024). 0