Loading...
16 Staff Report - Automobile Dealerships Study SessionCOUNCIL AGENDA REPORT DATE: April 7, 2006 TO: MAYOR AND TOWN COUNCIL FROM: DEBRA J. FIGONE, TOWN MANAGER MEETING DATE: 4/17/06 OTHER BUSINESS 1 1010 SUBJECT: CONSIDERATION OF A RESOLUTION EXPRESSING SUPPORT FOR AUTOMOBILE DEALERSHIPS AND DIRECTION ON ACTION ITEMS FROM THE AUTOMOBILE DEALERSHIPS STUDY SESSION RECOMMENDATION: A. Consider adopting the Draft Resolution (Attachment 1) expressing support for the Town's automobile dealerships. If significant amendments are needed to the Draft Resolution, staff will return to Council with a revised resolution reflecting the changes requested by Council. B. Review the list of action items from Council's March 20, 2006 Study Session (Items 1-8). Provide direction on the action items identified in this report. A new action item has been presented since March 20 and is included as Item 9. Staff recommendations are included for each action item. BACKGROUND: At the March 6, 2006 Town Council meeting, the Council considered a resolution encouraging the retention of automobile dealerships and establishing requirements to change the use of existing automobile dealership sites (Attachment 2). Affected stakeholders present at the meeting expressed concern about the impacts of the resolution. Given their comments, Council requested a Study Session to provide clarification regarding the intent of the resolution and how it would be applied. The Council held the Study Session on March 20, 2006 and received input from auto dealers, land owners, and real estate brokers (Attachments 3 and 4). Based upon Council's comments provided at the end of the Study Session, staff has identified a number of follow-up action items. Staff is seeking direction on these items. (Continued to Page 2) PREPARED BY: BUD N. LORTZ DIRECTOR OF COMMUNIT DEVELOPMENT Reviewed by: ssistant Town Manager Attorney Clerk Finance V Community Development Revised: 4/7/06 3:55 pm Reformatted: 5/30/02 PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: RESOLUTION ON AUTO DEALERSHIPS April 10, 2006 DISCUSSION: Staff has identified eight action items based on Council's comments as described in the following sections. 1. Resolution --Alternative 2 Description: Implementation: Council members seemed to favor Alternative No.2 as described in the Study Session Staff Report. The resolution expresses support for the Town's automobile dealerships and states that land use changes will be reviewed carefully by the Town. Staff has attached a Draft Resolution expressing support for the Town's automobile dealerships for Council consideration (Attachment 1). Staff Recommendation: Adopt Draft Resolution or provide additional direction. 2. Require Planned Development Application Description: Implementation: Council members voiced support for the requirement of a Planned Development (PD) to change the land use of an auto dealership site, which would allow Council to review proposed land use changes. This requirement could be applied to automobile dealership sites only or could be expanded to include all sites greater than 40,000 square feet in the CH zone. This would affect 29 parcels (Attachment 5). The Council should provide direction on the preferred approach and staff will initiate a Town Code amendment for review by Planning Commission and Council. The process for amending the code will take about 4-6 months. Staff Recommendation: Require a PD for all sites greater than 40,000 square feet in the CH zone. This will allow Council to review the land use changes that could occur along Los Gatos Boulevard and ensure consistency with the Town's policy documents including the General Plan and Los Gatos Boulevard Plan. 1 1 0 PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: RESOLUTION ON AUTO DEALERSHIPS April 10, 2006 3. Fiscal Impact Information Description: Implementation: Council expressed interest in obtaining additional information on the fiscal impacts of proposed replacement projects as compared to the current use of the property. There are three levels of information that could be required: • Confirmation of the retail sales figures presented by real estate brokers at the Study Session. This is information that staff can provide based upon sales tax data. • Require revenue impact analysis of a proposed project. This would provide information about current and future revenues. • Require fiscal impact analysis of a proposed project. This would provide information about current and future revenues and would evaluate a project's impacts on Town services. As expressed by Council during the Study Session, any fiscal information would not be the deciding factor in reviewing a proposed project but rather would be one piece of information that would be considered in a comprehensive review of an application. The Council should provide direction on the preferred approach. If the Council requests a revenue impact or fiscal impact analysis, this direction should be memorialized in the Draft Resolution. Staff has drafted proposed language below that Council can include in the Draft Resolution to require additional fiscal information. "FURTHER RESOLVED: the Town Council will require an applicant to provide a (revenue impact analysis or fiscal impact analysis) with an application to change the land use of an automobile dealership site. Fiscal impact information will not be the sole consideration in reviewing an application to change the land use of an automobile dealership site but will be one consideration in the comprehensive evaluation of the proposed project." Staff Recommendation: Include the proposed language in the Resolution to require additional fiscal information. As indicated, this will not be the sole factor in deciding an application. It would be used, however, to plan for changes in revenues or services contemplated by the replacement project. PAGE 4 MAYOR AND TOWN COUNCIL SUBJECT: RESOLUTION ON AUTO DEALERSHIPS April 10, 2006 4. Allow Used Car Dealers Description: Implementation: Council indicated a desire to consider an amendment to the Town Code to allow used car dealerships. The Town Code currently allows used cars to be sold in association with a new car dealership. Based on Council input, staff and the General Plan Committee (GPC) would prepare a Town Code amendment, develop standards for used car dealerships, and determine if modifications should be made to the Commercial Design Guidelines to address used car dealerships. The Council should determine if staff should pursue this action item. Staff will develop a Town Code amendment and associated standards for review by the GPC, Planning Commission and Council. The process for amending the code will take about 4-6 months. Staff Recommendation: Pursue a thorough evaluation of used car dealerships and develop alternative approaches. 5. Incentive Package for Current Dealerships Description: Implementation: Council suggested that a package of incentives might be provided to existing auto dealers to encourage upgrades to their current sites. The package might include financial and permit streamlining incentives. The possibility of small directional signs along Highway 17 and 85 was also mentioned. This action item will require additional time and study by staff. Council has streamlined the development review process to encourage automobile dealerships to upgrade the architecture of their facilities through recent amendments to the Zoning Ordinance and adoption of new Commercial Design Guidelines. Council could similarly streamline the process for significant changes or reconstruction of dealerships and/or adopt a policy to direct how applications will be processed. This process will involve GPC input, as well as broad public input. The Council should determine if staff should pursue this action item. Staff will develop potential incentive packages and return to Council with alternatives and seek further direction. The process for developing incentive packages will take about 4-6 months. c PAGE 5 MAYOR AND TOWN COUNCIL SUBJECT: RESOLUTION ON AUTO DEALERSHIPS April 10, 2006 Staff Recommendation: Explore potential incentives in more detail. 6. Information on Existing Processes Description: Implementation: Staff Recommendation: 7. Obtain Dealer Input Description: Implementation: Staff Recommendation: 8. Market Study Description: Council requested information on the existing Architectural and Site Approval and Conditional Use Permit processes, including the scope of review for each process and the required findings. This information is provided in Attachment 6. Advise if any further clarifications are required. Council encouraged staff to obtain input from the automobile dealers as it continues to work on issues relating to the dealership community. Staff will need to work closely with the dealers in developing an incentive package discussed above. Staff will obtain input from the auto dealers at a strategic point early in the process. Convene a formal meeting with the auto dealers when the Town Code amendments and draft incentive package are prepared to obtain their input prior to the public hearing process. Although not directly addressed by the Council, staff is seeking direction from Council on a Town -initiated market study of automobile dealership uses. The study would provide information on the long-term viability of automobile dealerships in the Town and could provide meaningful information in preparation of an incentive package. The study would also provide background information for the upcoming General Plan update. For example, the study's findings would guide the Town in reviewing General Plan policies supporting automobile dealerships and/or in crafting a vision for Los Gatos Boulevard should additional dealership sites be redeveloped. It will also be of use in evaluation whether automobile dealerships should be encouraged on the North 40. PAGE 6 MAYOR AND TOWN COUNCIL SUBJECT: RESOLUTION ON AUTO DEALERSHIPS April 10, 2006 Implementation: The Council should indicate if staff should undertake a Town - initiated auto dealership market study. If authorized, staff would bring the market study, scope of work and contract to Council for consideration. The market study will be provided to Council or review in conjunction with or prior to the Town Code amendments and incentive package. The market study will be available in 4-6 months. Staff Recommendation: Proceed with Town -funded market study to provide background for future Town actions. 9. Development Agreement: Description: Implementation: Staff recently met with the Peter Pau, the developer currently in contract for the Swanson Ford property. He raised the possibility of entering into a development agreement with the Town as a means to guarantee that the Town would not lose revenue from the land use change. The State Government Code authorizes cities to enter into a binding development agreement (DA) with property developers. The DA must be consistent with the General Plan and shall specify the permitted uses of the property, the maximum density and/or intensity of the project, and the maximum size and height of buildings. The DA may also contain terms and requirements for subsequent discretionary permits and specify a time within which construction shall be commenced. A DA can provide a form of vested right given that they can establish that the planning, zoning, and building regulations in force at the time of the agreement remain in effect for the life of the agreement. A DA is a legislative act and cities are not required to enter into a DA; however, State law requires cities to establish procedures and requirements for a DA if requested by a developer. The Council should indicate if a DA is potentially of interest to the Council and also indicate if staff should proceed to develop procedures and requirements for considering a DA. The development procedures and requirements for considering a DA will take about 4-6 months. PAGE 7 MAYOR AND TOWN COUNCIL SUBJECT: RESOLUTION ON AUTO DEALERSHIPS April 10, 2006 Staff Recommendation: Discuss the potential of a DA with the developer as the project evolves. Determine if a DA would be mutually beneficial to both parties. Report back to Council as additional information is obtained. CONCLUSION: In consideration of the public input received at the March 20, 2006 Study Session, Council members identified a number of potential action items relating to the Town's automobile dealerships. Staff has summarized the items requiring further action and has prepared a Draft Resolution based upon Alternative 2 described in the March 20 Staff Report. Staff is also seeking Council direction on a number of the other action items as described in this report. ENVIRONMENTAL ASSESSMENT: It has been determined that this item is not a project as defined under CEQA and no further action is required. FISCAL IMPACT: None. Attachments: 1. Draft Resolution 2. Town Council Staff Report for Meeting of March 6, 2006 3. Town Council Staff Report for Study Session of March 20, 2006 4. Town Council Minutes for Study Session of March 20, 2006 5. Map Showing CH Properties Greater than 40,000 Square Feet 6. Memorandum on Existing Processes 7. Letter from Marilyn Swanson dated March 29, 2006 Distribution: John Moore, Moore GMC Truck, Pontiac, Buick, 15500 Los Gatos Blvd, Los Gatos, CA 95032 Ron Battistella, Los Gatos Auto Mall, 620 Blossom Hill Rd, Los Gatos, CA 95032 Marc Chase, Bentley of Silicon Valley, 66 E. Main St, Los Gatos, CA 95032 Bruce Swanson, Swanson Ford, 16005 Los Gatos Blvd, Los Gatos, CA 95032 Mark Maxwell, Los Gatos Acura, 16151 Los Gatos Blvd, Los Gatos, CA 95032 David Spencer, Los Gatos Chevrolet, 15600 Los Gatos Blvd, Los Gatos, CA 95032 David Moeller, South Bay Honda, 16213 Los Gatos Blvd, Los Gatos, CA 95032 Russ Hill, United Auto Group, Inc., 16151 Los Gatos Blvd, Los Gatos, CA 95032 Gayle C. Jones, Trustee, 2272 Channel Rd, Newport Beach, CA 92661 Thomas Moore, PO Box 223179, Carmel, CA 93922 James S. & Paula K. McHugh, Trustee, 16150 Kennedy Rd, Los Gatos, CA 95032 Elizabeth K. Dodson, 15585 Los Gatos Blvd, Los Gatos, CA 95032 e"'" PAGE 8 MAYOR AND TOWN COUNCIL SUBJECT: RESOLUTION ON AUTO DEALERSHIPS April 10, 2006 Robert Swanson Family Partnership LP, 16005 Los Gatos Blvd, Los Gatos, CA 95032 Nancy Roberts Bowen, 16300 Ridgecrest, Monte Sereno, CA 95030 Russell V. Roessler, Trustee, 99 Almaden Blvd, Ste 300, San Jose, CA 95113 Grant R. Bishop, Trustee, PO Box 125, Los Gatos, CA 95031 BNL:RT:mdc N:1DEVIRANDY\Town Council\AUTO DEALERSHIPSILGAUTODLR RPT 041706.wpd C RESOLUTION NO. RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS EXPRESSING SUPPORT FOR AUTOMOBILE DEALERSHIPS WITHIN TOWN WHEREAS, the Town of Los Gatos contains a number of automobile dealerships which are important businesses to the Town and its residents and provide significant revenues to the Town through sales taxes; and WHEREAS, the Town of Los Gatos General Plan contains Goals and Policies encouraging a full range of commercial uses that preserve the Town's economic vitality while maintaining the unique character of Los Gatos. For example, Goal L.G.5.2 is to maintain an "economically stable community within environmental goals"; and WHEREAS, the General Plan contains specific policies addressing automobile dealerships in which the Town will "retain and enhance auto dealerships" and "auto related uses currently existing shall be allowed to remain indefinitely"; and WHEREAS, the Town's Economic Vitality Program addresses the importance of automobile dealerships to the Town in terms of retail opportunities for residents, jobs, and sales tax. The Program states that the Town will assist dealerships to make improvements to their facilities while remaining sensitive to surrounding neighborhoods; and WHEREAS, automobile dealerships represent roughly 23% of the Town's sales tax revenues which comprises approximately 6% of the Town's General Fund operating revenues; and WHEREAS, a decline in revenue can potentially impact the Town's ability to provide municipal services to its citizens; and WHEREAS, one Los Gatos auto dealer has closed and two other dealers have informed the Town that they will close their Los Gatos dealerships in the near future; and ATTACHMENT 1 WHEREAS, the Town Council is very concerned with the health of the Town's auto dealers and seeks to protect the long-term viability of the Town as a desirable location for auto dealerships. THEREFORE, BE IT RESOLVED: The Town Council expresses its support for the automobile dealerships. FURTHER RESOLVED: A change in land use of an automobile dealership site will be reviewed carefully by the Town to ensure the project is consistent with the Town's General Plan, Town Code, and applicable policy documents. FURTHER RESOLVED: The Town Council has streamlined the process to allow automobile dealerships to upgrade the architecture of their existing facilities through adoption of the Policy on Minor Alternations to Commercial Buildings and adoption of the Commercial Design Guidelines. The Council encourages the dealerships to update their facilities consistent with the Policy and Guidelines. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the day of 2006 by the following vote: COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA N:IDEVIRANDYITown Councit\AUTO DEALERSHIPSILGAUTODLR RESO 041706.wpd