"It's really going to depend on what Morningside wants to do," Hunt said.
Morningside operates seven drug- and alcohol-rehabilitation group homes in Newport Beach: three on Lido Isle, three in West Newport, and one in Newport Crest.
City staff recommended going forward with the ordinance, according to the staff report.
Continuing with the agreement would have been the best scenario for the city if Morningside had stayed in compliance, but monitoring and enforcing the agreement became too expensive and too difficult, Hunt said.
Morningside founder and President Jeff Yates agreed that the agreement is too expensive and time-consuming for the city, but said the zoning agreement is enforced in a way that makes it impossible for Morningside to fairly follow it.
Yates said the residents' group Maintaining Our Residential Neighborhoods, or MORN, watches everything one of the Lido Isle facilities does and then reports it, even if it's not an issue, or is an issue without a permanent solution.
Despite the complaints, Yates said Morningside has done its best to comply. He plans on attending Tuesday's council meeting to show the group homes' good-faith efforts, adding that he wants the council to continue the zoning agreement.
But if the council decides to go forward with the ordinance, Morningside would fall under the purview of the 2008 ordinance that restricts group homes in the city, Hunt said.
Hunt said Morningside could apply for state license, ask for special accommodations under the Americans with Disabilities Act, or close its doors.
Morningside has already started the process of licensing all its Newport Beach facilities, Yates said.
"We're prepared for the development agreement to go away," he said.