Staff Report
PREPARED BY : MONICA RENN
Economic Vitality Man ager
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Community Development
Director
110 E. Main Street Los Gatos, CA 95030 ●A 40 8 -354 -68 32
www.losgatosca.gov
MEETING DATE: 06/19/18
ITEM NO: 19
TOWN OF LOS GATOS
TOWN COUNCIL REPORT
D ATE : JUNE 1 4 , 2018
TO : MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: A DOPT A RESOLUTION REGARDING TOWN CODE SECTION 29.20.745 AND
SUSPENDING A PORTION OF 29.20.755 (2) REGARDING THE ASSIGNMENT
OF DUTIES TO ALLOW THE DEVELOPMENT REVIEW COMMITTEE TO
APPROVE CERTAIN MODIFICATIONS TO EXISTING CONDITIONAL USE
PERMITS FOR RESTAURANTS FOR A PERIOD OF 18 MONTHS AS
RECOMMENDED BY THE POLICY COMMITTEE.
RECOMMENDATIO N :
A dopt a resolution (Attachment 1) regarding T own C ode S ection 29.20.745 and suspending a
portion of 29.20.755 (2) regarding the assignment of duties to allow the D evelopment R eview
C ommittee to approve cer tain modifications to existing Conditional Use P ermits (CUPs) for
restaurants for a period of 18 months , as recommended by the P olicy C ommittee.
BACKGROUND :
Since 2015, the Policy Committee and Town Council have been discussing a variety of land use
policies and ordinances that govern businesses in Los Ga tos . Within these discussions and
those around S trategic P riorities , the Council and Policy Committee have considered
streamlining and simplifying theATown’sAbusinessAprocesses,AidentifyingAwaysAtoApromoteA
community vitality and business innovation, and fostering an environment of economic success
forAtheATown’s business districts, while preserving the unique character and charm of Los Gatos.
PAGE 2 OF 5
SUBJECT: A DOPT A RESOLUTION TO ALLOW THE DEVELOPMENT REVIEW
COMMITTEE TO APPROVE CERTAIN MODIFICATIONS TO EXISTING
CONDITIONAL USE PERMITS FOR RESTAURANTS FOR A PERIOD OF 18
MONTHS AS RECOMMENDED BY THE POLICY COMMITTEE.
JUNE 1 4 , 2018
S:\COUNCIL REPORTS \2018 \06 -19 -18 \CUP Amendments \Staff Report.FINAL.docx
DISCUSSION :
As the commercia l environment continues to evolve, existing businesses are challenged with
remaining relevant and competitive while creating in -store experiences for customers that
cannot be matched by online shopping platforms. Additionally, sales tax information and
industry reports indicate that food uses such as restaurants are a growing sector of the retail
environment and often are the destination s that draw customers to an area, wh ere they then
patronize surrounding businesses.
Through the work of the Policy Committee, Planning Commission , and Town Council, the Town
has taken strides to creat e , modify , and rescind Town policies and Code language to generate
opportunities for busines ses to continue to grow in Town , i ncluding the a doption of : a Late
Night Entertainment Policy ; an Outdoor Seating Policy; Town Code language permitting
business es to offer v alet p arking; a resolution suspending formula retail regulations for 18
months; and an amendment to the Town Code language to allow restaurants to calculate
parking requirements and seating capacities separate ly.
In addition, o n April 3, 2018 theATownACouncilAvotedAtoArescindAtheATown’sA lcoholABeverageA
P olicy given that the StateAofACalifornia’sA Alcohol Beverage Control (ABC) provides enforcement
and over sight of the s tate law and permit requirements for businesses t hat sell and serve
alcohol.
The adoption s , amendment s , or rescissions noted above provide a menu of options for new
and existing businesses to use to thrive in Los Gatos . Some existing restaurants would need to
modify their current CUPs to bring them into alignment with these new options . Staff has met
with several downtown businesses over the last year that would like to make minor changes to
their CUPs; howev er, the risk of the time and money associated with the current process,
coupled with the uncertainty of approval is a deterrent for them to apply. As a result, the Policy
Committee is recommending a streamlined, simplified, less expensive, and shorter pat h
forward for restaurant uses to modify their existing CUPs. While most businesses currently
expressing interest in CUP modifications are located in the C -2 zone/d owntown, the intent is to
open this opportunity to restaurants Town -wide.
The CUP modific ations that current Los Gatos restaurants have inquired about include:
changing ho urs of operation ; amending language that disallows indoor entertainment before
10:00 p.m. and/or outdoor seating ; adding a beer and wine license so that mimosas may be
served with brunch or beer and wine may be served with lunch ; switch ing from beer and wine
only to full liquor to allow for craft c ocktails ; and other similar requests which are in line with
indus try standards for restaurants. For example, b usinesses that may seek to clean -up
PAGE 3 OF 5
SUBJECT: A DOPT A RESOLUTION TO ALLOW THE DEVELOPMENT REVIEW
COMMITTEE TO APPROVE CERTAIN MODIFICATIONS TO EXISTING
CONDITIONAL USE PERMITS FOR RESTAURANTS FOR A PERIOD OF 18
MONTHS AS RECOMMENDED BY THE POLICY COMMITTEE.
JUNE 1 4 , 2018
S:\COUNCIL REPORTS \2018 \06 -19 -18 \CUP Amendments \Staff Report.FINAL.docx
DISCUSSIONA(Cont’d):
conditions that prohibit outdoor seating could benefit from a n update with the following
standard condition :
Outdoor seating may be provided in compliance with the Town Council Policy regarding O utdoor
S eating Rules and Regulations .
The Town has also heard testimony during the North 40 Specific Plan hearing s that aA“levelA
playingAfield”A should exist between downtown and t he North 40 Specific Plan a rea , suggesting
that the two commercial shopping areas sh ould have similar business permit requirements and
regulations. The North 40 Specific Plan development regulations allow restaurant uses by right
(without a CUP). Adopting theAPolicyACommittee’sArecommendationAandAtheAattachedA
resolution could create mor e of a level playing field between all commercial districts for those
businesses with existing CUPs.
The recommendation of the Policy Committee is to allow applications for restaurant CUP
modifications to be heard at the Development Review Committee (D RC) for a trial period of 18
months. This process would still require the applicants to complete the full Development
Review Application and associated materials, such as a letter of justification that addresses the
finding s contained within Town Code S ection 29.20.190 , as well as neighbor notification . The
DRC meetings are open to the public and provide opportunity for a full public hearing . The
applicant or any appellants would have appeal rights , initially to the Planning Commission and
then ultimat ely to the Town Council.
A CUP modification at the DRC level would take approximately six to eight weeks to complete,
and with the current fee schedu le , fees would be $3,251.77 . In contrast, a Planning Commission
level modification would take approximat ely four months to complete, and fees would be
$5,343.50; and a Town Council level modification would take approximately four to six months
to complete, and fee s would be $9,047.09 .
ToAimplementAtheAPolicyACommittee’sArecommendation,AtheATownACouncilAisAb eing asked to
adopt the attached resolution and not alter the current language in the Town Code as it relate s
to the assignment of duties . The resolution suspend s a portion of 29.20.755 (2) regarding the
assignment of duties to allow the D evelopment R eview C ommittee to approve certain
modifications to existing C onditional U se P ermits for restaurants for a period of 18 months.
Section 29.20.750 would not need to be addressed at this time , as it assigns CUPs not assigned
to the DRC or Town Council to th e Planning Commission.
PAGE 4 OF 5
SUBJECT: A DOPT A RESOLUTION TO ALLOW THE DEVELOPMENT REVIEW
COMMITTEE TO APPROVE CERTAIN MODIFICATIONS TO EXISTING
CONDITIONAL USE PERMITS FOR RESTAURANTS FOR A PERIOD OF 18
MONTHS AS RECOMMENDED BY THE POLICY COMMITTEE.
JUNE 1 4 , 2018
S:\COUNCIL REPORTS \2018 \06 -19 -18 \CUP Amendments \Staff Report.FINAL.docx
DISCUSSIONA(Cont’d):
In addition, the resolution propose s the following provisions :
The applicant must have a valid and existing CUP for a restaurant ; and,
The modification must be for an existing commercial space , and may n ot include a
request to combine multiple commercial spaces.
T hose business es that do not meet the criteria set forth by the proposed resolution must have
their application heard by the deciding body designated by the Town Code.
ALTERNATIVES :
While the goal of th e proposed resolution is to create a simple and streamlined process for
existing businesses to modify their restaurant CUPs for a period of 18 months , Town Council
may be interested in adopting certain thresholds , that if met by a business , woul d preclude
them from qu alifying for a modification at the DRC level .
These thresholds could include one or more of the following for existing restaurants :
T he addition of outdoor entertainment within 200 feet of a residential property ;
A n expansion of hours earlier than 6 :00 a.m. or later than 11 :30 p.m.;
The addition of full liquor service for businesses without any alcohol service currently ; or
The add ition of another use in conjunction with the approved restaurant use , such as
group cooking clas ses .
CONCLUSION :
The Policy Committee is recommending a resolution regrading T own Code Section 29.20.745
and suspending a portion of 29.20.755 (2) regarding the assignment of duties to allow the
D evelopment R eview C ommittee to approve certain modifications to existing C onditional U se
P ermits for restaurants for a period of 18 months. If at any time during the 18 months, should
t he Council determine the resolution is not p roviding the benefit intended at the time of
adoption, a review may be brought before the Council for consideration. Staff will monitor and
PAGE 5 OF 5
SUBJECT: A DOPT A RESOLUTION TO ALLOW THE DEVELOPMENT REVIEW
COMMITTEE TO APPROVE CERTAIN MODIFICATIONS TO EXISTING
CONDITIONAL USE PERMITS FOR RESTAURANTS FOR A PERIOD OF 18
MONTHS AS RECOMMENDED BY THE POLICY COMMITTEE.
JUNE 1 4 , 2018
S:\COUNCIL REPORTS \2018 \06 -19 -18 \CUP Amendments \Staff Report.FINAL.docx
CONCLUSION (Cont’d):
document the CUP modification s that occur at all deciding body levels and provide an update to
the Council at the e nd of the 18 -month time period, or as requested.
COORDINATION :
The preparation of this report was coordinated with the Town Attorney, Community
Development Department , andAtheATownAManager’sAOffice.
FISCAL IMPACT :
There is no fiscal impact associated with these initiatives at this time.
ENVIRONMENTAL ASSESSMENT :
This is not a project defined under CEQA, and no further action is required.
Attachment :
1. Draft Resoluti on