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1 Â Âjx ã ÄÄ ÜxyÄxvà à{ {x atà ÉÇtÄ güxtáâüx Ç ã{ v{ ãx Ä äxê STAFF REPORT PLANNING COMMISSION MEETING OF SEPTEMBER 20, 2018 TO: FROM: RE: City of South Lake Tahoe Planning Commission Courtney Weiche, Assistant Planner Considerati ion of an Appeal of VHR Permit # , 1300 Glenwood Way, APN South Lake Tahoe, California. RECOMMENDATION: 1. The 2. The 3. The PERMIT INFORMATION: VHR Permit Number: VHR Location: 1300 Glenwood Way APN: Property Owner: 1300 Glenwood, LLC BACKGROUND: Planning Commission could uphold staff decision. Planning Commission could overturn staff decision. Planning Commission could take no action and refer the matter to the City Council. The subject property is 6.8 acres and is located at 1300 Glenwood Way within Plan Area Statement 101, Bijou Meadows. The property is developed with a 4,200 square foot single family residence, with access from Glenwood Way. Adjacent to the property to the east is the Bijou Municipal Golf Course and to the west is developed residential uses. The property owner, 1300 Glenwood LLC, is appealingg the revocation of VHR permit # The permit was revoked pursuant to South Lakee Tahoe City Code (SLTCC) Section (C) )(2) which states all [VHR] permits issuedd by the city pursuant to this article [V] shall be non-transferable to a different person or entity to whom said permit was issued. A single exception to the prohibition to transfer VHR permits is found at SLTCC Section (C) )(2)(a), which provides that a permit mayy be transferred from one owner of a vacation home rental to another owner as long as the transferee was an owner of the vacation home rental at the time the vacation home rental application was submitted to the City.

2 1300 Glenwood Way Appeal September 20, 2018 Page 2 of 11 Pursuant to SLTCC Section (A)(4), a VHR permit shall automatically be revoked where there has been a transfer of a VHR permit to another person, entity, or property. On April 12, 2013, Jonathon R. Cefalu and Laura K. Cefalu submitted a VHR permit application for 1300 Glenwood Way (See Attachment 1). On April 23, 2013, VHR permit # was issued to Jonathon R. Cefalu and Laura K. Cefalu. On March 12, 2018, an application to register a Foreign Limited Liability Company (LLC) was submitted to the Secretary of State (See Attachment 2). El Dorado County Assessor s records indicate the property was conveyed to 1300 Glenwood LLC on March 15, 2018 (See Attachment 2). The Cefalu s subsequently requested their active VHR permit be reprinted to reflect the new LLC on March 16, City staff confirmed the Cefalu s were still members of the new LLC via the grant deed (See Attachment 3) and reprinted the VHR permit to reflect the ownership name change to 1300 Glenwood LLC and indicating April 30,2018 as the permit expiration. On April 3, 2018, the permit was reissued following reciept of the renewal application and fee. Although the renewal application reflected the recent name change, the original application is distinct from the renewal in that the Cefalu s were not identified on the application. Shortly thereafter, discrepencies in advertising were raised regarding new ownership of the property. City staff researched and determined a new Secretary of State Statement of Information form was submitted for 1300 Glenwood LLC on April 23, 2018 indicating Aaron King as the sole member of the LLC, confirming that Jonathon R. Cefalu and Laura K. Cefalu were no longer members of 1300 Glenwood LLC and thus a transfer of ownership had occurred (See Attachment 4) pursuant to SLTCC section (C)(2). The exception provided by SLTCC Section (C)(2)(a) would not apply since neither Aaron King, nor Glenwood LLC was an owner, as defined by SLTCC section at the time the vacation home rental application was submitted to the City. Due to the transfer of the Vacation Home Rental permit to another person, entity or property, VHR permit #006220, for 1300 Glenwood Way, was revoked on July 13, 2018 pursuant to SLTCC Section (A)(4). A certified letter indicating the revocation was sent on July 13, 2018 to the following: 1300 Glendwood LLC, CC: Aaron King, previous property owners Johnathon and Laura Cefalu, and the VHR property manager, Staci Patton (See Attachment 5). The letter further stated that the owners of 1300 Glenwood Way had (15) days to appeal the revocation. On July 30, 2018, Feldman McLaughlin Thiel LLP filed an appeal with the City Clerk, on behalf of 1300 Glenwood LLC (See Attachment 6). The reason for appeal states there was no transfer to a different person or entity under the clear language of the City Code. Please refer to Attachment 5 for complete appeal rationale.

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4 1300 Glenwood Way Appeal September 20, 2018 Page 4 of 11 Attachment 1 Original Vacation Home Rental Application, dated April 12, 2013

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6 1300 Glenwood Way Appeal September 20, 2018 Page 5 of 11 Attachment 2 Application to Register a Foreign Limited Liability Company (LLC) dated March 12, 2018

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8 LIMITED LIABILITY COMPANY AGREEMENT OF 1300 GLENWOOD LLC This Limited Liability Company Agreement (this Agreement ) of 1300 GLENWOOD LLC, a Delaware limited liability company (the Company ) is entered into as of March 14th, 2018 (the Effective Date ) by and between JONATHON CEFALU, and AARON KING, as the Members (individually a Member And collectively the Members ). The members hereby form a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del.C , et seq.), as amended from time to time (the Act ), and hereby agrees as follows: 1. Name. The name of the limited liability company formed hereby is set forth above in the caption. 2. Purpose. The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in the business of real estate investment and all activities incidental thereto. 3. Registered Agent. The address of the registered office of the Company in the State of Delaware is c/o Business Filings Incorporated, 108 W 13th St, Wilmington, Delaware Members. The name and the business, residence or mailing address of the Members are as set forth on the signature page hereto. 5. Powers. (a) In accordance with Section of the Act, the management of the Company shall be vested in the Manager, who shall initially be Aaron King. The Manager shall have full, exclusive and complete discretion to manage and control the business and affairs of the Company, to make all decisions affecting the business and affairs of the Company and to take all such actions as it deems necessary or appropriate to accomplish the purpose of the Company as set forth herein and all activities incidental thereto. (b) The Manager is hereby designated as an authorized person, within the meaning of the Act, to execute, deliver and file all certificates required or permitted by the Act to be filed in the office of the Secretary of State of the State of Delaware (the Secretary of State ). 6. Dissolution. The Company shall dissolve, and its affairs shall be wound up upon the first to occur of the following: (a) the written consent of the Members, (b) the entry of a decree of judicial dissolution under Section of the Act. Doc ID: 8c177cc5e8c6df4ee10077dc06cefc268851b4fd

9 7. Capital Contributions; Percentage Interest. The Members shall contribute to the initial capital of the Company cash and/or property in such amounts and descriptions as set forth in the Exhibit attached hereto. The Members shall own 100% of the limited liability company interest in the Company (the Percentage Interest ). 8. Additional Contributions. The Member shall not be required to make additional capital contributions to the Company. 9. Other Businesses. The Members and Manager may engage in or possess an interest in other business ventures (unconnected with the Company) of every kind and description, independently or with others. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this agreement. 10. Allocation of Profits and Losses. The Company s profits and losses shall be allocated in proportion to the Percentage Interest of the Member. 11. Distributions. Distributions shall be made to the Members at the times and in the aggregate amounts determined by the Members. Such distributions shall be allocated to the Members in the same proportion as her Percentage Interest. 12. Assignments. The Members may assign in whole or in part its limited liability company interest at any time. 13. Resignation. The Member may voluntarily withdraw or resign as a Member at any time. If the Member resigns pursuant to this Section, an additional member may be admitted to the Company, with the written consent of the Manager, upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the resignation, and, immediately following such admission, the resigning Member shall cease to be a Member of the Company. 14. Admission of Additional Members. One (1) or more additional members of the Company may be admitted to the Company with the consent of the Manager. 15. Liability of Members. The Members shall not have any liability for the obligations or liabilities of the Company except provided in the Act. 16. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware, all rights and remedies being governed by said laws. 17. Tax Characterization. The Members acknowledge that it is the intent of the Company that it be treated as a disregarded entity for federal and state tax purposes. All provisions of this Agreement and the Company s Certificate of Formation are to be construed so as to effect and preserve that tax status. 18. Entire Agreement. This agreement constitutes the entire agreement of the parties with respect to the subject matter hereof. Doc ID: 8c177cc5e8c6df4ee10077dc06cefc268851b4fd

10 19. Amendments. This Agreement may not be modified, altered, supplemented, or amended except pursuant to a written agreement executed and delivered by the Manager and Members. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above. MANAGER: Aaron King 03 / 14 / 2018 Date MEMBERS: Aaron King 03 / 14 / 2018 Date Jonathon Cefalu 03/14/2018 Date Doc ID: 8c177cc5e8c6df4ee10077dc06cefc268851b4fd

11 1300 Glenwood Way Appeal September 20, 2018 Page 6 of 11 Attachment 3 Grant Deed from Jonathon R. Cefalu and Laura K. Cefalu, husband and wife, as joint tenants to 1300 Glenwood LLC, a Delaware Limited Liability Company, dated March 15, 2018

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15 1300 Glenwood Way Appeal September 20, 2018 Page 7 of 11 Attachment 4 Secretary of State, Statement of Information form for 1300 Glenwood LLC, dated April 23, 2018

16 Secretary of State Statement of Information (Limited Liability Company) IMPORTANT Read instructions before completing this form. LLC B42380 FILED In the office of the Secretary of State of the State of California Filing Fee $20.00 Copy Fees First page $1.00; each attachment page $0.50; Certification Fee - $5.00 plus copy fees This Space For Office Use Only 1. Limited Liability Company Name (Enter the exact name of the LLC. If you registered in California using an alternate name, see instructions.) 1300 GLENWOOD LLC Digit Secretary of State File Number 3. State, Foreign Country or Place of Organization (only if formed outside of California) DELAWARE 4. Business Addresses a. Street Address of Principal Office - Do not list a P.O. Box City (no abbreviations) State Zip Code 1300 Glenwood Way South Lake Tahoe b. Mailing Address of LLC, if different than item 4a City (no abbreviations) State Zip Code 1300 Glenwood Way South Lake Tahoe c. Street Address of California Office, if Item 4a is not in California - Do not list a P.O. Box City (no abbreviations) State Zip Code 1300 Glenwood Way South Lake Tahoe 5. Manager(s) or Member(s) If no managers have been appointed or elected, provide the name and address of each member. At least one name and address must be listed. If the manager/member is an individual, complete Items 5a and 5c (leave Item 5b blank). If the manager/member is an entity, complete Items 5b and 5c (leave Item 5a blank). Note: The LLC cannot serve as its own manager or member. If the LLC has additional managers/members, enter the name(s) and addresses on Form LLC-12A (see instructions). a. First Name, if an individual - Do not complete Item 5b Middle Name Last Name Suffix Aaron b. Entity Name - Do not complete Item 5a King APR 23, 2018 CA CA CA c. Address City (no abbreviations) State Zip Code 1300 Glenwood Way South Lake Tahoe CA Service of Process (Must provide either Individual OR Corporation.) INDIVIDUAL Complete Items 6a and 6b only. Must include agent s full name and California street address. a. California Agent's First Name (if agent is not a corporation) Middle Name Last Name Suffix b. Street Address (if agent is not a corporation) - Do not enter a P.O. Box City (no abbreviations) State CA Zip Code CORPORATION Complete Item 6c only. Only include the name of the registered agent Corporation. c. California Registered Corporate Agent s Name (if agent is a corporation) Do not complete Item 6a or 6b BUSINESS FILINGS INCORPORATED (C ) 7. Type of Business a. Describe the type of business or services of the Limited Liability Company Vacation rental 8. Chief Executive Officer, if elected or appointed a. First Name Middle Name Last Name Suffix b. Address City (no abbreviations) State Zip Code 9. The Information contained herein, including any attachments, is true and correct. 04/23/2018 Aaron King Member Date Type or Print Name of Person Completing the Form Title Signature Return Address (Optional) (For communication from the Secretary of State related to this document, or if purchasing a copy of the filed document enter the name of a person or company and the mailing address. This information will become public when filed. SEE INSTRUCTIONS BEFORE COMPLETING.) Name: Company: Address: City/State/Zip: LLC-12 (REV 01/2017) Page 1 of California Secretary of State

17 1300 Glenwood Way Appeal September 20, 2018 Page 8 of 11 Attachment 5 Certified Revocation Letter, dated July 13, 2018

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20 1300 Glenwood Way Appeal September 20, 2018 Page 9 of 11 Attachment 6 Appeal Form submitted by Feldman McLaughlin Thiel LLP, on behalf of 1300 Glenwood LLC, dated July 30, 2018

21 CITY OF SOUTH LAKE TAHOE APPEAL FORM APPEAL FROM DECISION OF: Planning Manager, Planning Division DA TE DECISION RENDERED:,_J_ul_, y_l, 3,'-----2_0_18 SUBJECT: Vacation Home Rental Permit No Glenwood Way, APN ACTION TAKEN: Permit was revoked REASON FOR APPEAL: ---=P"--"l=ea=s=e-=se=e:...=a=d=d=iti= o=n=al:...::s=h=ee=t,l..::a=tt=a=ch=e=d:.:_. ~ pp ea l Fee Received in the Amount of$ Feldman McLaughlin Thiel LLP on behalf of 1300 Glenwood LLC Applicant Name Date Stamp RECEIVED JUL 3 O 2018 P.O. Box 1309, Zephyr Cove, NV Mai ling Address Telephone Number 775, Fax Number lew@fmttahoe.com address CITY CLERK'S OFFICE CITY OF SOUTH LAKE TAHOE

22 REASON FOR APPEAL Revocation ofvhr Permit No The Planning Division misapplied the City Code in revoking the VHR permit. Section (C)(2) states that VHR permits are not transferrable to a different person or entity to whom or to which it was issued. The City issued VHR Permit No to the Cefalus on May 23, On April 3, 2018, the City reissued Permit No to 1300 Glenwood LLC (the "LLC"), the entity to which ownership of the VHR property was transferred via grant deed on March 15, The LLC remains the owner of the VHR property. Thus, VHR Permit No was not transferred to a different entity than to which it was issued in violation of Code Section (C)(2). Revocation of the VHR permit pursuant to Section (A)(4) was unlawful. City staff contends there has been an impermissible transfer of the VHR permit. A basic rule of statutory construction is that courts are bound to give effect to statutes according to the usual, ordinary import of the language used in framing them. (Rich v. Board of Optometry ( 1965) Cal. App. 2d 591, 604.) If the words of the statute are clear, the court should not add to or alter them to accomplish a purpose that does not appear on the face of the statute or from its legislative history. (Id.) The pertinent language in the City Code is clear and unambiguous. A "transfer" of the property occurred when the Cefalus, by grant deed, conveyed the property to the LLC, and the City reissued the VHR permit to the LLC. A subsequent transfer to a "different person or entity" than the one to which the City issued VHR Permit No on April 3, 2018 has not occurred. A grant deed would have been required if a "transfer" occurred. The City' s revocation of Permit No was invalid as a matter of law as there was no transfer to a different person or entity under the clear language of the City Code.

23 --=-== T DATE Y/3oJ?-OY No REcE1vEDFRoM 11~7hicl I$~- ~ AAnrk-i"'-~ t Ni)----- QFOR REN!Li ~ 'dl _ ~. ~LLARS. ~ ~p-t-j o_g_ /&Jo ~(JJ_ VJ, ACCOUNT Q CASH ~ PAYMENT BAL. DUE A 2701 T-46800/46802 SL T CITY ADMIN CTR 1901 AIRPORT RD S LAKE TAHOE, CA SALE REF#: Batch #: /30/ AVS: N CVV'L M APPR CODE: Trace: 3 Arlf.X Manu 11 C~ /** AMOUNT $ APPROVED THANK YOU

24 1300 Glenwood Way Appeal September 20, 2018 Page 10 of 11 Attachment 7 Location Map Bijou Golf Course Glenwood Way Subject Property

25 1300 Glenwood Way Appeal September 20, 2018 Page 11 of 11 Attachment Glenwood Way