MEETING DATE:
MARCH 10, 2026
SUBJECT:
Title
ORDINANCE NO. 2026-1577 AND RESOLUTION NO. 2026-9549 - DAVIA VILLAGE-MARC SPECIFIC PLAN AMENDMENT AND CONDITIONAL USE PERMIT TO ALLOW UP TO 10 RESIDENTIAL UNITS WITHIN 15,000 SQUARE FEET OF GROUND FLOOR COMMERCIAL SPACE IN AN EXISTING MIXED-USE BUILDING LOCATED AT 1045 ARMORLITE DRIVE (SPECIFIC PLAN AMENDMENT (SPA24-0002) AND CONDITIONAL USE PERMIT (CUP24-0001))
Body
Recommendation
Recommendation
APPROVAL of the following in the order set forth below:
1. ADOPT an Addendum to the previously adopted Mitigated Negative Declaration (ND 13-003) in compliance with the California Environmental Quality Act (CEQA).
2. APPROVE Specific Plan Amendment (SP)24-0002 an amendment of the Davia Village-MARC Specific Plan.
3. APPROVE Conditional Use Permit (CUP)24-0001) to allow the temporary conversion of commercial space for up to ten (10) residential apartment units on the ground floor of an existing mixed-use building.
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Board or Commission Action
On February 2, 2026, the Planning Commission voted 6-1 (Commissioner Carroll dissented) to recommend approval to the City Council of a Specific Plan Amendment (SP) 24-0002 and Conditional Use Permit (CUP) 24-0001 and adoption of an addendum to Mitigated Negative Declaration (ND) 13-003.
Executive Summary
The 11.79-acre project site is currently developed with a mixed-use development (“The Marc Apartments”) consisting of 416 residential units, 15,229 square feet of retail space, a 1.157-acre public neighborhood park (Innovation Park), and associated parking and landscaping. The proposed project would amend the Davia Village-MARC Specific Plan to allow the temporary conversion of up to 15,000 square feet of existing vacant ground floor commercial tenant space into 10 residential units. The proposed project includes a CUP to allow the conversion for a period of ten years.
Discussion
The Davia Village-MARC Specific Plan is an existing mixed-use development consisting of 416 residential dwelling units and 15,229 square feet of retail space. The proposed project is limited to the ground-floor commercial tenant space of Building 6, which is located on the northwest corner of the site and fronts Armorlite Drive and Innovation Park. Adjacent uses to the east and south consist of industrial buildings within the Light Industrial (L-I) Zone. To the west of the project site is a mixed-use development located within the Specific Plan Area (SPA) Zone. To the north is a mixed-use building within the Palomar Station SPA Zone, as well as industrial buildings in the Industrial (I) Zone and the L-I/MU-1 Transitional Zone. Site access is provided via Armorlite Drive and Bingham Drive. The project site is located approximately .12-miles south of the Palomar College Sprinter Station.
On January 14, 2014, the City Council approved General Plan Amendment (GPA 13-003), Specific Plan (SP 12-55), Rezone (R 13-002), Multifamily Site Development Plan (MFSDP 12-52) and Site Development Plan (SDP 12-352) for the mixed-use development. Construction of the project site began in 2015 and was completed in 2017. On March 19, 2018, the City Council approved modification of a multifamily site development plan (MFSDP 17-0003) to remove conditions imposing a fee related to maximum resident occupancy levels within the Davia Village-MARC Specific Plan, due to potential conflicts with fair housing law.
On December 16, 2024, the applicant submitted this request to amend the Davia Village-MARC Specific Plan to allow the conversion of 15,000 square feet of ground floor commercial tenant space into ten residential units. The conversion would not expand the building footprint, increase building height, or significantly alter the architecture of the building. The amendment does not eliminate all ground-floor commercial uses, as approximately 3,225 square feet of commercial space would remain in use as the on-site leasing office. The proposed conversion to residential use responds to current housing demands in transit-oriented areas, while maintaining the ability to revert to retail, should market conditions change over the term of the CUP.
A Retail Conversion Land Use Market Analysis (Attachment G) was prepared by the applicant and demonstrates that the existing ground floor retail space has remained vacant since construction. The analysis concludes this was due to structural market constraints, including insufficient surrounding residential density, limited customer parking, and a lack of sustained tenant interest. Despite efforts to secure commercial tenants, the property owner has received, on average, only one letter of intent per year. Similar mixed-use developments in the vicinity, have experienced comparable challenges and have also converted retail space to residential uses. The proposed temporary conversion of vacant retail space to residential units responds to demonstrated housing demand, provides street activity, and contributes additional workforce housing in a transit-oriented location.
As discussed further below, the proposed project has been evaluated for environmental impacts through an addendum (Attachment D) to the previously adopted Mitigated Negative Declaration for the Davia Village-MARC Specific Plan and would not result in any new or more severe significant environmental impacts.
Specific Plan Amendment
The proposed Specific Plan Amendment modifies the allowed land uses table of the Davia Village-MARC Specific Plan to allow for the temporary conversion of existing ground-floor commercial space to residential units with a CUP. A redline and strikeout version of the Davia Village-MARC Specific Plan included as Attachment F, with a summary of these changes below:
• Page 40: The Density Section has been updated to from 35.8 du/ac to 36.1 du/ac, reflecting the project density with the proposed addition of 10 units. This density remains consistent with the allowed density range of 30 to 45 du/ac under the existing Davia Village-MARC Specific Plan.
• Pages 42 and 43: The Retail and Commercial Space Section has been modified to include language detailing the ability for retail spaces to be converted for residential use with the approval of a CUP, and preparation of a market analysis to support economic conditions leading to the conversion. Parking is also accounted for in this section to verify existing retail parking spaces shall be reallocated for each converted residential unit, and no additional parking will be required, as commercial parking supply exceeds residential parking requirements.
• Page 44: The allowed Commercial Mixed-Uses table has been modified to add residential uses on the ground floor, with a maximum of 10 units subject to the approval of a CUP.
Together, the proposed amendments clarify development standards and approval requirements for the conversion of ground floor commercial space to residential use within the Davia Village-MARC Specific Plan.
Conditional Use Permit (CUP)
Under a CUP, the project design is reviewed for compliance with the design guidelines and development standards established in the Davia Village-MARC Specific Plan and other applicable regulatory provisions.
Architecture and Floor Plans
The proposed project involves interior tenant improvements only and does not include modifications to the building footprint, height, or exterior architectural character. The overall building design would remain consistent with the approved Davia Village-MARC architecture and development standards of the Specific Plan. Each residential unit will have a private patio area proposed along the building façade facing Armorlite Drive, patio sizes range between 90 and 144 square feet. The patios would be enclosed with 48-inch-high fencing and include landscaped planters, providing individual private outdoor space for residents while maintaining a consistent and orderly streetscape.
Open Space and Landscaping
No changes to the approved open space are proposed as part of the conversion project. Residents of the new ground-floor units would have access to the existing common open space amenities within the Specific Plan. Minor landscape modifications are proposed in front of Unit 1, as shown in the approved project plans (Attachment E), to provide a private patio and a pedestrian walkway connecting to the existing sidewalk. All existing landscaped areas would continue to be maintained by the property owner or homeowners’ association, as applicable.
Parking and Circulation
The project would utilize existing on-site parking facilities approved under the Davia Village-MARC Specific Plan. Pedestrian access to the ground-floor units would be provided via existing walkways and building entrances, with no changes to vehicle, bicycle, or pedestrian circulation patterns. Parking spaces that were previously allocated to serve the ground-floor commercial suites would be reassigned to serve the ten new residential units. As seen in Tables 1 and 2 below, the commercial uses required a higher parking ratio than residential uses. As a result, the existing parking supply will exceed the required parking associated with the proposed residential conversion by 32 parking spaces. As a result, the excess required parking spaces would remain available to serve guest parking and shared parking demands on the site.
|
Table 1: Commercial Parking Requirements |
|
Land Use |
Quantity |
Parking Ratio |
Required Spaces |
|
Existing Commercial |
15,229 SF |
3 spaces / 1,000 SF |
46 spaces |
|
Table 2: Residential Conversion Parking Requirements |
|
Land Use |
Quantity |
Parking Ratio |
Required Spaces |
|
Proposed Residential |
8 one-bedroom units |
1.25 spaces per unit |
10 spaces |
|
|
2 two-bedroom units |
1.75 spaces per unit |
4 spaces |
|
Total Required Residential Parking |
14 spaces |
An approved Parking Management Plan exists for the site which provides general parking rules on resident parking, guest parking and parking enforcement by the property manager. No changes to the approved parking layout or circulation pattern are proposed. The site currently provides existing electric vehicle (EV) charging spaces in compliance with the Davia Village-MARC Specific Plan, and because the overall number of parking spaces on site is not increasing and is only being reallocated from commercial to residential use, no additional EV parking spaces are required.
Term of CUP
The CUP also establishes an initial term of 10-years. At the conclusion of the CUP term, the applicant may request renewal of the permit, which would be subject to review of market conditions at that time. This ensures that the City retains discretionary control over the continued residential use of the space and the ability to evaluate the conversion in consideration of future land use needs or market conditions.
To implement this term, a condition of approval limits residential lease terms to be consistent with the term of the CUP and to not extend beyond the permit term. Condition H additionally requires that all tenants be provided with written notice disclosing that their lease is subject to termination, or renewal, based on the validity of the CUP.
Environmental Review
The initial approval of the Davia Village-MARC Specific Plan Area included the adoption of a Mitigated Negative Declaration (ND 13-003, SCH 2013061059), which evaluated the development of the site with a mix of residential and commercial uses. An addendum (Attachment D) to the previously adopted MND has been prepared in accordance with CEQA Guidelines Sections 15162 and 15164 to evaluate whether the proposed changes would result in new or more severe environmental impacts than those previously analyzed. The addendum concludes that the proposed project would not result in any new significant environmental impacts, would not substantially increase the severity of previously identified impacts, and would not require new or revised mitigation measures. The proposed conversion remains within the scope of development evaluated in the original MND and 2019 addendum related to MFSDP17-0003.
Pursuant to CEQA Guidelines Section 15164, preparation of an Addendum does not require public circulation and may be adopted by the decision-making body concurrently with approval of the project. Adoption of the Addendum is appropriate for the proposed project.
Public Comment
During project review, staff did not receive any comments from the public. The City mailed a Notice of Application to 834 property owners and occupants. Additionally, a Notice of Public Hearing was sent to 937 recipients, including property owners, occupants, regional agencies, and tribal representatives.
Planning Commission Hearing
During the Planning Commission hearing, Commissioners shared concerns related to convenient access to parking, ADA accessibility to the converted units, and the loss of commercial square footage in the mixed-use development. Draft Planning Commission Minutes are provided as Attachment H, below is a summary of the Planning Commission discussion.
The applicant confirmed that the project includes one ADA accessible unit and all required ADA parking spaces and paths of travel are provided. Consistent with the existing development, the proposed residential units would not have direct access to parking (i.e. connected garages) and will need to utilize common areas to access parking spaces. The nearest parking spaces to the units are along the project driveway, approximately 160 feet east of the area proposed for residential conversion. This distance is similar to other walking distances between existing units and parking areas within the development and does not involve the use of elevators or stairways.
Additionally, Commissioner Carroll expressed concern that approving the proposed conversion of commercial space to residential use could set a precedent for other mixed-use developments and potentially undermine the City’s mixed-use policies. In response, the applicant stated that the request is based on site-specific circumstances, including documented and long-term difficulty leasing the commercial spaces.
Commission discussion acknowledged that while mixed-use can be effective in the right conditions, this site has struggled to attract tenants despite the applicant’s efforts. The change is intended to activate previously vacant storefronts, improve community cohesion, and respond to market conditions, while allowing commercial use of the space to return.
Attachment(s)
1. Ordinance 2026-1577 (Specific Plan Amendment SP24-0002);
2. Resolution 2026-9549 (Conditional Use Permit CUP24-0001);
A. Vicinity Map
B. Requested Entitlements
C. Site & Project Characteristics
D. Addendum to Mitigated Negative Declaration
E. Project Plans
F. Davia Village-MARC Specific Plan Redline Copy
G. Retail Conversion Land Use Market Analysis
H. 02.06.2026_Planning Commission Minutes Final
Prepared by: Corina Flores, Associate Planner
Reviewed by: Sean del Solar, Principal Planner / Sustainability Program Manager
Joe Farace, Planning Division Director
Submitted by: Issac Etchamendy, Director of Development Services & City Engineer
Approved by: Michelle Bender, City Manager