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Staff ReportDATE: TO: FROM: SUBJECT: MEETING DATE: 12/15/15 ITEM NO: 10 COUNCIL AGENDA REPORT DECEMBER 7, 2015 MAYOR AND TOWN COUNCIL LAUREL PREVETTI, TOWN MANAGER Y�l A�� POTENTIAL SEPARATION OF PARKING REQUIREMENTS AND SEATING CAPACITIES RECOMMENDATION: Provide direction on the potential separation of parking requirements and seating capacities. BACKGROUND: Since September 1, 2015, the Council has been considering a series of policies and Code amendments that relate to businesses including formula retail, paid valet parking service in Downtown, a revised outdoor seating policy, retail and restaurant definitions, and the relationship between parking requirements and seating capacities in restaurants. At the October 6, 2015 meeting, the Council requested that these items be broken apart and discussed individually at upcoming meetings to more fully address each topic. This report addresses options for the Council to consider regarding the relationship between parking requirements and seating capacities, as well as benchmarking information from other jurisdictions (Attachment 1), and a summary of the history of the Parking Assessment District (PAD) (Attachment 2). If the Council should choose to remove the relationship between parking and seating capacities within Downtown, it would in no way alter the current status of the PAD, or the number of spaces credited to each parcel. In addition, as requested by the Council, staff reached out to the approximately 230 property owners within the PAD to request their input on this discussion by way of an online survey and received fourteen responses. Of those responses, eight property owners were in support of changing the way the Town calculates seating capacities in Downtown, five were opposed, and one felt that they needed to understand the discussion and reasons further. PREPARED BY: MONICA RENN Economic Vitality Manager STd� Reviewed by: � Assistant Town Manager Town Attorney NA Finance NAMGRWdminWorkFiles\2015 Council ReportsTlecember I Slstsaing to parking staff report.doc PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: POTENTIAL SEPARATION OF PARKING REQUIREMENTS AND SEATING CAPACITIES. DECEMBER 7, 2015 DISCUSSION: As trends emerge from the food and beverage industry, seating styles often change to meet these trends. Seats or gathering areas may take many forms, some of those may include: stand -up counter space without seats; large communal tables seating multiple parties; couches, benches, ottomans, and lounge chairs; and traditional tables with chairs or fixed booths. Currently, the number of approved seats in Los Gatos restaurants is linked to the number of parking spaces credited to the commercial space. However, as some patrons use alternate transportation, ride together, or park once and visit several locations as is the case with Downtown, the linkage of seats to parking spaces may no longer be an appropriate guideline. In addition, it often becomes difficult to assign a number of "seats" to seating options that do not include an individual chair. Thus, it may be more appropriate to have parking requirements based on other metrics, such as square footage or maximum fire code occupancy. Below are considerations for this discussion: Commercial Zones: The Town consists of several residential and commercial zones. Those that currently allow eating and /or drinking establishments include: C -1, C -2, CH, LM, and CM. The Town code currently addresses parking requirements in two categories: Downtown and Outside of Downtown. If the Council chooses to effect change in the parking requirements for eating/drinking establishments, it could be done in either, or both of these Town Code categories. Conditional Use Permits: All eating and drinking establishments in Town require a Conditional Use Permit (CUP) to operate in Town. The deciding body for the associated CUP depends on the type of eating/drinking establishment and the location of the proposed establishment; however, all CUPS include a condition that provides for seating capacity based on the number of parking spaces and credits in the PAD associated with the proposed location at the time of approval. Should the Council choose a method other than parking space credits to calculate seats, ordinance language could be included to allow those with previously approved seating capacities to opt for the new calculation method, or whichever method is least restrictive. Moving forward, all new CUPS would be given a seating capacity condition based on the approved ordinance change. Current Code Provisions: The number of seats a restaurant may have within the establishment is currently governed by Town Code, Section 29.10.150, thus any changes to this section would require a public hearing by both the Planning Commission and Town Council. PAGE MAYOR AND TOWN COUNCIL SUBJECT: POTENTIAL SEPARATION OF PARKING REQUIREMENTS AND SEATING CAPACITIES. DECEMBER 7, 2015 DISCUSSION (cont'd): The Town Code parking requirements for retail, office, restaurants, and drinking establishments, both in Downtown and in other commercial zones are: The parking requirement for various uses in the downtown are as follows: (1) Retail and commercial stores and shops. One (1) parking space for each three hundred (300) square feet of gross floor area. (2) Business and professional offices, banks, financial institutions, insurance companies, social service agencies and studios. One (1) parking space for each two hundred fifty (250) square feet ofgross floor area. (3) Restaurant (no separate bar). One (1) parking space for each four (4) seats. (4) Restaurant (separate bar). One (])parking space for each three (3) seats. (5) Bars, taverns and nightclubs. One (1) parking space for each three (3) seats. Outside downtown parking requirements. (9) Retail and commercial stores and shops. One (1) parking space for each two hundred thirty -five (235) square feet ofgross floor area. (10) Business and professional offices, banks, financial institutions, insurance companies, social service agencies and studios. One (1) parking space for each two hundred thirty- five (235) square feet ofgross floor area. (15) Public eating establishments, taverns, and nightclubs. One (1) parking space for each three (3) seats in such public eating establishments, taverns or nightclubs. Benchmarking: Staff reached out to neighboring and other jurisdictions in California to understand how they regulate parking and/or seating, and received several responses, see Attachment 1. Calculation Options: Seating calculation methods most widely used in the State of California include maximum fire code occupancy, seats per parking space, seats per square footage, or some combination of the three. Many jurisdictions that use a method other than maximum fire code occupancy have different seating allowances for their Downtown establishments and other commercial zones. CONCLUSION AND NEXT STEPS: The Council should provide direction regarding parking and seating. From there, staff could research the calculation options and discuss the options with the Planning Commission. Staff would then draft a Code amendment. The draft amendment would first be considered by the Planning Commission, who would then make a recommendation for the Council to consider and make a final decision. PAGE 4 MAYOR AND TOWN COUNCIL SUBJECT: POTENTIAL SEPARATION OF PARKING REQUIREMENTS AND SEATING CAPACITIES. DECEMBER 7, 2015 ALTERNATIVES: The Council could decide that the current relationship between seats and parking space credit within Town Code Section 29.10.150 is most appropriate and direct staff to do no further investigation on alternative calculation methods. COORDINATION: The preparation of this report was coordinated with the Town Managers Office and the Community Development Department. Attachments: 1. Benchmarking 2. Historical Summary of the Parking Assessment District BENCHMARKING ON SEATING REQUIREMENTS JURISDICTION REQUIREMENTS FOR EATING/DRINKING ESTABLISHMENTS Los Altos 3 seats per 1 parking space. City does not count outdoor seats in total seat count. One space for each seventy -five square feet of floor area. In addition, if the restaurant Saratoga has outdoor dining, one space for each seventy -five square feet of outdoor dining area shall also be provided. 1 parking space is required for every 100 square feet of gross floor area, and seats are Morgan Hill only limited by the fire code. Drinking Establishments: 1 space per 2.5 seats or 1 space per 40 square feet of drinking area, whichever requires the greater number of parking spaces Entertainment (with any food or alcohol service): 1 space per 40 sq. ft. of area open to the public Outdoor dining incidental to a public eating establishment or a retail establishment: 0 spaces up to 25 seats, 1 space per 2.5 for seats over 25 San Jose Public eating establishments: 1 space per 2.5 seats or 1 space per 40 square feet of dining area, whichever requires the greater number of parking spaces Take -out only establishment (including but not limited to pizza delivery, ice cream shops, doughnut shops): 1 per 75 sq. ft. of area open to the public, minimum of 5 spaces, plus 1 per delivery vehicle (if applicable) Downtown Restaurants in San Jose do not require parking. Downtown: 1 space per 4 seats Outside of Downtown: Eating/Drinking establishments with no drive -thru: 1 space for 3 Campbell seats indoor or outdoor, plus 1 space for each 200 SF of non - dining floor area. Take -out only dining with no seats: 1 space for 250 SF, but not less than 2 spaces Menlo Park Requires 6 parking spaces per 1,000 square feet of space. Restaurant/Bar and Nightclubs: 1/3 seats + 1 /employee + 1/36 sq. ft. of dance floor Cupertino Restaurants without Separate Bar: 1/4 seats + 1 /employee + 1/36 sq. ft. of dance floor Restaurant - Fast Food: 1/3 seats + 1 /employee For California Avenue Parking Assessment District: With drive -in or take -out facilities: 3 per 100 sf of gross floor area All others: 1 per 155 sf of gross floor area Palo Alto With drive -in or take -out facilities: 3 per 100 sq. ft. of gross floor area All others: 1 space for each 60 gross sq. ft. of public service area, plus 1 space for each 200 gross sq. ft. for all other areas. ATTACHMENT 1 BENCHMARKING ON SEATING REQUIREMENTS ATTACHMENT 1 Restaurant without Bar: I space / 110 sq ft. Restaurant with Bar: 1/75 sq. ft. Bar Only: 1150 sq. ft.: 1150 sq. ft. Sunnyvale Restaurants with 100% Fixed Seating and No Bar: 1/2 fixed seats + 1/400 sq. ft. of area not devoted to seating Outdoor Seating. Additional parking is required for outdoor seating exceeding twelve seats per business. Seats exceeding this amount are required to provide additional parking at the rate of 0.33 spaces per seat for each seat above twelve. Restaurants, cafes, bars, other eating/drinking places Take -out only: 1 space for each 180 sq. ft. of gross floor area Mountain View Fast food (counter service): 1 space for each 100 sq. ft.; minimum 25 spaces Table Service: I space for each 2.5 seats or I space for each 100 sq. ft. of gross floor area, whichever is greater Outdoor seating: 1 space for each 2.5 seats Maximum occupancy drives seat count, and seats drive parking. If occupancy allows Benicia more seats than parking, the establishment either reduces the number of seats or seeks a parking variance. Sacramento Fire Code dictates the maximum number of seats an establishment may have. Simi Valley Fire Code dictates the maximum number of seats an establishment may have. Lompoc Fire Code dictates the maximum number of seats an establishment may have. Redding 3 seats per I parking space. Grover Beach California Building or Fire Code dictates the maximum number of seats an establishment may have. ATTACHMENT 1 HISTORICAL SUMMARY OF THE DOWNTOWN PARKING ASSESSMENT DISTRICT On October 6, 2015, in response to a discussion regarding definitions and policies for formula retail, specialty retail, outdoor seating, and related business uses and processes, Council directed staff to provide background informational regarding the Downtown Parking Assessment District (PAD). DISCUSSION: The following is a summary regarding the creation and history of the current Parking Assessment District. A. Downtown Specific Plan On May 18, 1982, the Town Council adopted the Downtown Specific Plan (DTSP) to guide and coordinate downtown implementation programs designed to resolve existing downtown issues and address future needs. The DTSP was amended on February 23, 1986, to incorporate a parking program, including priorities for constructing parking facilities. The DTSP was again amended on April 18, 1994 to change the priority of future parking facilities. The DTSP was repealed on August 7, 2000, on the basis that the plan was no longer needed as the implementation measures had either been completed or were carried forward to the General Plan 2000. The DTSP stated that a single unified parking district shall be formed for the Central Business District/East Main St area and membership in that Parking District shall be required for removal of non - conforming status due to parking. A policy of the DTSP was that the non - conforming status of downtown uses due to the lack of adequate parking shall be removed contingent upon the owners' continuing participation in the implementation of the downtown parking program. B. Parking Assessment District A report from the Town's Parking Committee, dated August 17, 1982, in regards to the creation of the Downtown Specific Plan, which ultimately led to the creation of the Town's PAD, notes that parking assessments are based on gross floor area. As defined by Town Code in 1982 (and currently), gross floor area means the entire area of all floors, including basements and cellars, measured from the outer face of exterior walls or, in the case of party walls, from the centerline. The Downtown Parking Survey used for the PAD, dated October 29, 1982, notes that floor areas for business establishments are all estimates. Existing floor areas for the PAD were calculated from floor plans that were on file with the Town or were calculated from aerial photographs and then allocated to each business by measuring the business frontage. Since this information was not precise, property owners were encouraged at that time to provide additional information regarding the calculations. Since the floor areas were all estimates, the Town has subsequently found that several businesses downtown do not have the precise square footage calculated for the PAD. Typically when a discrepancy is found, it is that the old square footage estimate is less than what really exists. However, Town staff has found a few instances where the property owner over estimated their square footage originally. N:WGRWdminWorkFiles\2015 Council Reports\Dm mber 15\Anachment 2 PAD summary.docx ATTACHMENT 2 PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: Parking Assessment District Background December 4, 2015 The PAD data notes the following category of land uses for each parcel: retail, office, restaurant, and residential. Miscellaneous uses were classified under retail. Although the PAD data notes whether or not a parcel had a residential unit at the time of the survey, and documents the square footage, property owners were not assessed for parking for the residential use. To finance the parking improvement projects of the PAD, on December 5, 1988, the Town issued 25 -year Limited Obligation bonds which sunseted in December 2013. The bonds are not a financial liability of the Town and were issued upon and secured by assessments on properties within the PAD. Installments of principal and interest sufficient to meet annual bond debt service were included in the property owners' regular county tax bills. Property owners were also given the option of paying their assessment in advance. Given the parking challenges and opportunities in the downtown central business district to fund the creation of more parking, the PAD established the number of parking credits for each parcel in the district. The fee was based on a formula and the number of spaces (credits) a property owner purchased, and from that point on, was unchangeable. These credits did not translate into a dedicated space and exclusive ownership, but a right to use space from the "pool" of spaces created by the PAD. The PAD did not provide an opportunity amendment or adding credits. C. Town Code On May 18, 1987, The Town Code was amended concerning rules for properties within a PAD. Section 29.10.150(f)(2) of the Town Code states that the creation of a PAD relieves those properties located within the district which were nonconforming as to parking from having to supply on -site parking spaces as required by Town Code. Based on this code section and that there is no direction in the historic PAD reports on how to handle corrections to the estimates, the Town has not required businesses in the PAD to: Meet required parking for their existing floor area (which would be impossible due to lack of onsite space); or Pay additional funds into the parking assessment district for their existing floor area (it has been documented that there is no mechanism to pay into the district); or Reconfigure their buildings to remove excess square footage (this would be a hardship to the business and property owner and goes in the opposite direction of economic vitality of the downtown). Pursuant to Section 29.10.150(f) (4) of the Town Code, additional parking would only be required if additional square footage was added (excluding those properties which paid into the district to increase their floor area to the maximum permitted) or the use was intensified. It is important to note that the Town has never considered that these businesses that have more floor area than what is documented in the PAD were nonconforming as to parking since the PAD was created to eliminate that nonconformity. D. Parking Credits for Expansions, New Development, and Intensification of Use PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: Parking Assessment District Background December 4, 2015 The maximum floor area ratio (FAR) for new construction in the PAD is .60. The option to include additional floor area in the PAD calculation was intended to give vacant properties and properties with smaller buildings (FAR less than .60) an opportunity for future building or intensification up to a FAR of .60. Some property owners did not take advantage of this opportunity. For those properties that took the opportunity and paid into the district for these credits, they can possibly add additional square to their building or intensify the use without providing on -site parking. Based on the 1998 data, out of the 186 parcels in the district that have the potential for additional floor area, approximately 71 of those parcels have the possibility to do so. This is due to the fact that the Town Code requires PAD properties to maintain whatever existing on -site parking they may have since those spaces were included in the PAD assessment calculations, which greatly restricts adding onto a building. The remaining 115 parcels that paid into the PAD for potential additional floor area have site constraints that may never allow them to add square footage. The square footage that may never be built equates to 318 parking spaces. Therefore, depending on the use of these businesses, there is a possibility that up to 318 spaces within the PAD are not assigned to a use. E. Exceptions Although no mechanism was established in the PAD to allow a property owner to pay into the Assessment District for additional parking spaces, Council has approved two requests to purchase additional parking spaces to intensify a use through the earthquake restoration process. The basis for these approvals was that Town Council adopted Urgency Ordinances 1800 and 1860, which included a provision that allowed any Town Code requirement to be waived in response to the earthquake restoration process. On April 17, 1990, Council approved a request at 19 N. Santa Cruz Avenue to allow on site tandem parking and to pay an in -lieu fee for one parking space to increase the building square footage. The Council found that in this instance, the most logical, safe method of restoring this earthquake damaged building required the construction of additional floor area. The in -lieu fee was estimated be to be $16,000 per space. The property owner chose to reduce the number of restaurant seats to avoid the in -lieu fee. On January 6, 1992, Town Council approved a request for a new restaurant at 21 N. Santa Cruz Avenue, to create on site tandem parking and to pay an in -lieu fee for four additional spaces to increase the number of seats. The Council found that the "appropriate circumstances" to waive the requirements was that it would help revitalize the downtown area since the space had been vacant since the earthquake. The property was badly damaged by the earthquake, the property owner had passed away and the building was going through foreclosure. The applicant paid the in -lieu fee which was determined to be $17,000 per space, for a total of $68,000, and the funds were required to be used by the Town to construct future parking. F. New Parkin$ PAGE 4 MAYOR AND TOWN COUNCIL SUBJECT: Parking Assessment District Background December 4, 2015 Subsequent to the construction of the eight parking lots /structures which equates to approximately 1,005 spaces created through the parking assessment district, the Town has constructed two additional public parking lots in the Central Business District which were not funded through the PAD. In approximately 2003, a 16 space parking lot (Southside Lot) was constructed at 145 S. Santa Cruz Avenue across from the Toll House Hotel. In 2009, 29 off street parking spaces were added to Parking Lot 6 at 224 W. Main Street. These two projects contributed 45 additional off street spaces to the inventory. In addition, in 2002 the Town secured a parking lot lease with Verizon at 15 Montebello Way east of the Post Office (Montebello Lot). The current lease runs until 2019 and is subject to amendments and adds 26 off street spaces. So in all, there have been 71 spaces added to the Downtown Parking Inventory since 2002 that are not included in the PAD. CONCLUSION: Section 29.10.150(1)(2) of the Town Code states that the creation of a PAD relieves those properties located within the district which were nonconforming as to parking from having to supply on -site parking spaces as required by Town Code. Pursuant to Town Code and past actions by the Town, additional parking in the PAD is only required if square footage is added or the use is intensified. As documented in numerous historic reports regarding the PAD, square footages were estimates, there is no mechanism to allow a property owner to pay into the Assessment District for additional parking spaces and there is no direction in the historic PAD reports on how to handle corrections to the estimates. Since there is no mechanism to pay for additional parking, and if there is no room on the site to accommodate additional onsite parking, the Town has historically not required businesses to physically eliminate the excess square footage from the building which would have been the only alternative to balance out the excess square footage issue. LRP:JSP:cg C: \Usm\J Paulson \Dmktop\PADBackground.docx