Staff Report - Automobile Dealership SitesCOUNCIL STUDY SESSION REPORT
DATE: March 16, 2006
TO: MAYOR AND TOWN COUNCIL
FROM: DEBRA J. FIGONE, TOWN MANAGER
SUBJECT:
MEETING DATE: 3/20/06
STUDY SESSION TO DISCUSS SUGGESTED PROCESS TO REVIEW
REDEVELOPMENT PROPOSALS OF AUTOMOBILE DEALERSHIP SITES
RECOMMENDATION:
1. Receive public input
2. Provide direction to staff
PURPOSE OF STUDY SESSION
The purpose of the March 20, 2006 study session is to develop a common understanding among the
Town Council, affected stakeholders, and the community about why the Town is concerned about
the status of local automobile dealerships, what actions the Town could take to address this concern,
and what the various actions mean.
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. Affected stakeholders present at the meeting expressed concern about
the impacts of the resolution. Given their comments, Council requested staff to hold a study session
to provide clarification regarding the intent of the resolution and how it would be applied. This staff
report builds upon and adds to the discussion and the staff report and resolution presented on March
6th (Attachment 1). This staff report provides information about the following:
Reason for the Town's interest
Current process for a change of use on automobile dealer sites.
Alternatives to the draft resolution.
�,.L
PREPARED BY: BUD N. LOR Z,
DIRECTOR OF COMMUNITY DEVELOPMENT
Reviewed by: \'/Assistant Town Manager Attorney Clerk Finance
Community Development Revised: 3/16/06 3:55 pm
Reformatted: 5/30/02
Attachment 3
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MAYOR AND TOWN COUNCIL
SUBJECT:
March 16, 2006
Meaning of the polices set forth in the resolution.
Potential changes to the draft resolution.
• Potential impacts of changes in use on automobile dealer sites.
• Overview of national, regional and local trends in the automobile industry.
DISCUSSION
Why is the Town concerned about the status of local automobile dealerships?
As the Council is aware, three Los Gatos automobile dealerships will be closing: Los Gatos Auto
Mall, Swanson Ford, and Los Gatos Hummer. Developers have met with staff to discuss
preliminarily the redevelopment of two of the dealership sites to other uses. The potential change
in the use of these sites raises policy, service, and economic issues for the Town.
From a policy perspective, the General Plan specifically cites the importance of automobile
dealerships to the Town. The Economic Vitality Program also addresses the importance of
automobile dealerships in providing resident -serving retail (both for purchase and for servicing of
vehicles), jobs and sales tax. The Commercial Design Guidelines adopted by Council last year
provides specific design guidelines for dealerships in recognition of their importance to the Town.
Given these policy statements, it is reasonable for the Town to monitor the viability of auto
dealerships in Los Gatos and to consider steps to support their continued viability.
Regarding Town service issues resulting from potential changes in land use, the Town typically
considers the impacts on traffic, public safety, public infrastructure, and schools associated with
various land uses. In the case of auto dealerships, the impacts on these services are less than is
typically the case with other retail, office, and/residential uses. The costs and capacity to provide
greater services in each of these areas are issues that directly affect the Town, and thus, would be
ones the Town would want to consider and, in fact, does consider through the normal environmental
review process.
From an economic perspective, the Town's automobile dealerships contribute significantly to Town
revenues that fund Town services such as library, public safety, parks, street maintenance, etc. Sales
tax revenue generated from dealerships currently represent 23% of all sales tax revenue and 6% of
all Town revenue. The loss of revenue from dealerships impacts the Town's General Fund, and
ultimately the level of services the Town can provide. While some larger retail uses may generate
similar sales tax revenue, most other development would not produce comparable revenues from
either sales tax and/or property tax.
For these reasons, the Town regularly monitors the status of the automobile dealerships. With the
announced closing of several dealerships, the Town Council at its retreat in January requested staff
to explore measures to support the continued viability of Los Gatos dealership sites.
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MAYOR AND TOWN COUNCIL
SUBJECT:
March 16, 2006
What is the current process for redevelopment of automobile dealer sites?
All the automobile dealerships in Town with the exception of the downtown Silicon Valley Auto
Group (Bentley dealership) have a General Plan land use designation of Mixed Use Commercial and
are zoned CH (Restricted Highway Commercial). To redevelop an existing automobile dealership
site, a developer would need to file a development application with the Town. The type of
application would depend on the proposed use of the property. Retail or office uses are allowed in
the CH Zone as a matter of right. Consequently, only an Architecture and Site (A&S) application
is required and the Planning Commission, not the Town Council, is the deciding body. The
fundamental land use issue is not a consideration in an A&S application, only issues of design.
If a residential use is proposed, a Conditional Use Permit application is required and the Planning
Commission is the deciding body. It is also possible to file a Planned Development application for
a residential or mixed use project which is reviewed by the Planning Commission and its
recommendation is forwarded to the Town Council for final action.
The prospective developer of the Swanson property, Sand Hill Property Company, has indicated that
they intend to submit a Planned Development application for a mixed use development including
residential, retail and office uses. The prospective developer of the former Los Gatos Auto Mall
property, Westwood Company/Hamlin LLC, intends to redevelop the property with a retail
development. It is unclear if they will file a Planned Development Application.
What are the alternatives to the Draft Resolution?
The Council has a range of alternatives as it considers the redevelopment of automobile dealerships.
The following is a short list of alternatives.
1. No Action: Do not take any action concerning the automobile dealerships. The Town would
review redevelopment of auto dealership sites utilizing existing codes, policies, and
processes.
2. Resolution Expressing Support: The Council could adopt a resolution that would simply
express support for the Town's auto dealerships and state that land use changes would be
reviewed carefully by the Town. Such a resolution would not attempt to clarify issues of
concern to the Council nor make any changes to existing requirements and processes.
3. Resolution Enhancing Review: This is the current Draft Resolution. The Draft Resolution
expresses strong support for the Town's auto dealerships and clarifies the Council's
expectations and potential issues of concern as the Town reviews redevelopment of
automobile dealership sites.
4. Rezoning: As stated in the previous staff report, the Town could develop a new zoning
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MAYOR AND TOWN COUNCIL
SUBJECT:
March 16, 2006
district or an overlay zone specifically for auto dealership sites. The new code would greatly
reduce the range of allowed uses and/or would contain specific requirements and standards
for dealership sites.
5. Moratorium: This alternative would be used in conjunction with any of the aforementioned
alternatives. Council could adopt a moratorium on conversion of automobile dealership sites
while analyzing this issue in further detail. State law establishes processes that allow a
moratorium to be in effect for up to two years.
What does the Draft Resolution say?
The Draft Resolution is intended to clarify the Town's expectations and interests with redevelopment
of an automobile dealership site prior to an application being filed. The Draft Resolution seeks to
highlight key General Plan policies relating to the review of major development applications. The
Resolution also summarizes Town codes and policies pertaining to automobile dealerships in the
interest of supporting the dealerships and providing key information to potential developers. The
intent is not to state that a dealership site cannot be converted to another use, but rather to outline
the Town's approach and expectations.
The following contains a listing of the major policies in the Draft Resolution and the intent of each
policy:
1. It is preferred that any proposed change in the use of an automobile dealership be processed
as a Planned Development application.
The redevelopment of automobile dealer properties would be a significant land use change
and a major development project for the Town. Staff believes that these projects should have
the benefit of Town Council review. Unless a Planned Development application is filed, the
Town Council does not have the ability to hold a public hearing, provide input, and decide
such a project unless an appeal of the Planning Commission's action is filed.
Under the existing CH zoning code, retail uses are permitted by right and a retail project
would only require Architectural and Site (A&S) approval. The fundamental land use issue
is not a consideration in an A&S application, only issues of design. The Town Code requires
a Conditional Use Permit for residential uses in a CH district and the Planning Commission,
not the Council, is the deciding body. The intent of this section is to have conversion
applications heard by the Town Council due to the significant potential impact of the land
use change to the community.
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MAYOR AND TOWN COUNCIL
SUBJECT:
March 16, 2006
2. The applicant is required to submit a fiscal impact analysis to assist the Town in assessing
the fiscal impact of the proposal. The analysis shall evaluate the impacts to both Town
revenues and expenses potentially incurred due to Town service demands.
Based upon the fiscal impact analysis, the applicant shall propose mitigation measures to
offset Town service impacts associated with the project.
The General Plan contains policies requiring a review of fiscal impacts/benefits to the Town
and local school districts and also states that the Town should only allow projects in which
the public costs can be justified by overall community benefit. These two policy statements
in the Draft Resolution are intended to highlight the General Plan requirements and provide
clarification on how the requirements could be met. They do not require a dealer that is
going out of business to provide personal financial data or "open their books" for review.
3. The applicant must demonstrate that an automobile dealership use is no longer a feasible
use on the site.
The burden of proof rests with the applicant to demonstrate why the change of use is
necessary, unavoidable and consistent with the Town General Plan.
The General Plan states that the Town should retain and enhance its auto dealerships and
auto related uses shall be allowed to remain. The policy statement in the Draft Resolution
outlines how an applicant can demonstrate compliance with the General Plan policies. As
an example, the applicant could provide a market analysis demonstrating that an automobile
dealership use is no longer feasible due to changes in the regional automobile retailing
marketplace or due to a site's size and shape.
4. The Town Council expresses its strong preference that the existing automobile dealer uses
be retained on their current sites.
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.
These statements recap existing Town policies contained in the General Plan and other
policy documents previously adopted by the Town.
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MAYOR AND TOWN COUNCIL
SUBJECT:
March 16, 2006
What are some changes to the Draft Resolution that Council could consider?
Assuming that Council supports the general approach of the Draft Resolution, the Council could
consider the changes listed below. In addition, staff can suggest additional modifications based upon
Council discussion during the study session and/or Council direction.
1. If a conversion of an automobile dealership site is proposed without a Planned Development
application, the Draft Resolution currently reads that the Town will initiate a rezoning of all
dealership sites. This statement could be changed to may initiate a rezoning of all dealership
sites. The intent is to have conversion applications decided by the Town Council due to the
potential impact of the land use change to the community.
2. The Council could eliminate the statement that a Planned Development application is the
preferred process to change the land use of an auto dealer property.
3. The Council could exempt the former Los Gatos Auto Mall site (15200 Los Gatos
Boulevard) from the provisions of the resolution due to the site's limited size and odd shape
(staff understands that such a request will be made of Council). The Conceptual
Development Advisory Committee reviewed a plan for a 11,500 square foot retail building
on this site at their meeting of March 8, 2006. It should be noted that a dealer has recently
expressed interest to staff in placing an automobile sales facility (no service or repair) on this
property.
4. Council could amend Policy D to state that the applicant shall demonstrate that the
replacement use(s) provide much needed uses, goods, or services and will provide equivalent
community benefit to the Town.
What are the potential fiscal and traffic impacts in converting auto dealership sites?
Based upon preliminary information from developers, staff has prepared an initial assessment of the
fiscal and traffic impacts of redevelopment of the Swanson Ford and Los Gatos Auto Mall sites.
Staff used this information to estimate the impacts of redevelopment of the Los Gatos Hummer site.
For the purposes of this assessment, staff assumed a mixed use project on the Swanson Ford site
consisting of residential condominiums, retail and office uses, and a retail project on the Auto Mall
site. Staff estimates an increase of 685 average daily trips over the previous automobile dealerships
and a loss of $430,000 in revenue to the Town. The revenue estimate reflects an increase in property
tax and a loss of sales tax revenues.
What are the current national, regional and local trends affecting the Los Gatos auto
dealerships?
Staff conducted a series of outreach meetings with local dealers to gain insight as to how changes
in the auto industry may be impacting the viability of their business. The purpose of this effort was
PAGE 7
MAYOR AND TOWN COUNCIL
SUBJECT:
March 16, 2006
to determine which, if any, of the existing auto dealers may be leaving the Town in the futures, and
whether other auto franchise dealerships would be interested in locating in Los Gatos.
Attachment 2 provides a synopsis of the anecdotal information shared in this dialogue, an overview
of trends affecting the industry. A clarification is provided on the California Department of Motor
Vehicle New Vehicle Board's "10-mile rule" process, which all dealerships must follow in order to
establish themselves in a given market place. This clarification is based on staff s research of this
issue as well as follow-up discussions with some of the auto dealers.
Attachments:
1. Town Council Staff Report for March 3, 2006.
2. Los Gatos Auto Dealership Overview
3. Letter from South Bay Honda dated May 15, 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
Robert Swanson Family Partnership LP, 16005 Los Gatos Blvd, Los Gatos, CA 95032
Nancy J. Bowen, Russell V. Roessler, Trustee, 111 W. St John St, #1040, San Jose, CA 95113
Grant R. Bishop, Trustee, PO Box 125, Los Gatos, CA 95031
BNL:RT:mdc
N:\DEV\RANDY\Town Council\AUTO DEALERSHIPS\LGAutoDlrRpReso032006.wpd
Lc IATOS AUTO DEALERSHIP OVEI DEW
Upon receiving news that long-time family dealership Swanson Ford would be closing
their business on Los Gatos Boulevard, Town staff began conducting a series of "check -
in" meetings with local auto dealers (Exhibit A is a matrix showing all of the Los Gatos
Boulevard auto dealers). Staff met with the owners of all auto dealerships in Town.
These meetings provided staff with a better understanding of trends affecting the auto
industry, the viability of auto dealers on Los Gatos Boulevard, and what limitations if
any, the Town has in recruiting new private or public auto dealership franchises.
Although partially anecdotal, this information provides an overview of the auto industry
and the national, regional, and local trends that are impacting Los Gatos Boulevard
dealerships.
INDUSTRY OVERVIEW:
There are two types of auto industry business models: the private (sole entrepreneur)
dealerships which are typically locally owned, and the public (corporate) dealerships such
as AutoNation and United Auto Group, Inc. (only one Los Gatos Boulevard dealership
falls under this corporate umbrella, the majority of dealerships are locally owned). Each
dealership must apply for a permit from the California Department of Motor Vehicles
New Motor Vehicle Board to operate their franchise of choice.
For a new auto dealership to open or relocate, the New Motor Vehicle Board requires a
prospective dealer to properly notify the Board, and each franchisee of the same "line -
make," as to their intentions to establish a dealership in a specified market location. If no
protest is filed by any existing same "line -make" auto dealership, or disputes are resolved
through mediation, the incoming auto applicant has "cleared the market," and may move
forward in opening their dealership. This process is often referred to as the "10-mile"
rule. Manufacturers looking to establish a "satellite" facility, also referred to as a "'/2
point/companion" dealership by one Los Gatos dealer, must also go through a "clearing
of the market" within two miles of the proposed location.
Protest probability of an incoming dealership trying to enter a market where an existing
same "line -make" proprietor is already established is likely; however a recent precedent -
setting ruling was made locally when an exception to the "l0-mile" rule was granted for a
dealer trying to gain market entrance in Milpitas. In light of this recent ruling, incoming
auto entrepreneurs trying to establish new dealerships in "market saturated" areas should
become more feasible in theory.
Commercial Models
Location choices for the auto industry primarily fall into three categories:
■ Auto Mall: numerous contiguous dealerships provide consumers with convenient
shopping variety. Local examples: Steven's Creek Auto Mall, and Capital
Expressway Auto Mall.
• Freeway/Easy Access Auto Mall: provides high visibility and lower land costs for
the auto dealer, which is ideal for volume -based sales. Local examples: Milpitas and
Dublin Auto Mall.
• Neighborhood Dealership: provides a "hometown" personable shopping
environment, convenient location to consumer base for sales and ongoing
maintenance needs. Local examples: Los Gatos Boulevard, Sunnyvale, and Menlo
P ark.
ATTACHMENT 2
NATIONAL TRENDS
Internet's Effect in the Marketplace
Changes in consumer behavior and consumer preference are affecting the way
manufacturers and auto dealerships conduct business. Consumers with a high aversion to
bargaining are using the Internet to become better informed consumers. Nearly 72% of
auto consumers use the Internet as a research tool before purchasing a specific vehicle.
Of those consumers, 56% of them also use "Online Buying Services" for price
comparisons, and dealer referrals.
"Online Buying Services" like Autobytel.com and CarsDirect.com differ from auto
manufacturer websites. Consumers requesting quotes from manufacturers are referred to
the closest dealerships, while Internet online buying services refer consumers to an
affiliated subset of dealers. This distinction is an important aspect of the auto business
model, as these independent referral sites drive incremental business to a given
dealership, thus significantly adding to the dealership's vitality. Online buying services
also provide auto dealers with an exclusive "virtual" territory, which increases their
presence in the marketplace beyond the traditional 2-10 mile auto market radius. Due to
the large volume of consumers using online buying services, affiliated dealers increase
their customer base, which results in lower prices and ultimately changes the way price
negotiations are conducted.
Domestic Auto Industry
Several Los Gatos auto dealers remarked on the outlook for domestic auto manufacturers,
and the decreased market share that is occurring nationally. As imports continue to gain
consumer preference, the domestic manufacturing industry is working to rebuild a
consumer "brand preference" for domestic automobiles. Decreased market share and an
"over -dealership" of the domestic marketplace have caused layoffs and closures for
dealerships through the United States. Many of the auto dealers felt this was a cyclical
occurrence and will not negatively impact all Los Gatos dealerships.
Auto Manufacturers
Manufacturers are encouraging auto dealers to explore facility upgrades to create a more
"high -end" or "club -like" experience as part of the brand rebuilding process for the
domestic auto industry. The goal of future upgrades is to cultivate a unique environment
that is pleasurable and likely to encourage repeat business and future referrals. The
Town's recently -adopted Commercial Design Guidelines addresses the needs of auto
dealers to make these types of improvement.
REGIONAL/LOCAL TRENDS
A general consensus that Los Gatos Boulevard is a viable auto district, and can remain
viable in future years, was expressed by a majority of the auto dealers. Concerns were
raised, however, that if additional dealerships leave, the stability of the existing auto
dealers could be affected. Many of the remaining auto dealers (including domestic
dealerships) commented that their businesses were doing well, and that future remodel
plans would be forthcoming.
REGIONAL/LOCAL 7 :AIDS (CONT'D)
Several of the local dealers reflected on the advantages of doing business in Los Gatos,
including the natural beauty of the physical environment, the close proximity to their
customer base, and the relaxed atmosphere customers experience. Also noted, was the
branding power and recognition their dealerships received by operating out of Los Gatos.
The majority of the auto dealers were fairly positive on the ability to attract other
franchises in spite of the 10-mile rule, and several reported that some manufacturers were
currently looking to establish a point within the South Bay region. Many of the local
dealers felt that the "'/2 point/companion" franchise model seemed particular feasible for
Los Gatos.
Limiting factors to additional franchise attraction include land values and the smaller size
of Los Gatos auto sites. According to one of the dealers, the land values on Los Gatos
Blvd. are higher than on Stevens Creek Blvd., and contributes to the reason why a
dealership on Los Gatos Blvd. may not "pencil out."
3
Swanson Ford - used cars (Closed)
Swanson Ford (Closed)
South Bay Honda - used cars
'South Bay Honda
Moore GMC Truck, Pontiac, Buick
Los Gatos Chevrolet
Los Gatos Auto Mall (Closed)
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Hummer of Los Gatos
Bentley of Silicon Valley
Bentley of Silicon Valley
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15400 Los Gatos Blvd.
Los Gatos, CA 95032
16005 Los Gatos Blvd
Los Gatos, CA 95032
(408) 356-2101
16212 Los Gatos Blvd
Los Gatos, CA 95032
(408) 395-6100
16213 Los Gatos Blvd
Los Gatos, CA 95032
(408) 395-6100
15500 Los Gatos Blvd
Los Gatos, CA 95032
(408) 356-8111
15600 Los Gatos Blvd
Los Gatos, CA 95032
(408) 356-6161
15200 Los Gatos Blvd.
Los Gatos, CA 95032
16151 Los Gatos Blvd
Los Gatos, CA 95032
(408) 358-8000
620 Blossom Hill Road
Los Gatos, CA 95032
(408) 358-7070
47 E. Main Street
Los Gatos, CA 95032
66 E. Main Street
Los Gatos, CA 95032
(408) 354-4000
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Bruce Swanson
Bruce Swanson
David Moeller
David Moeller
John Moore
David Spencer
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Russ Hill
Mark Maxwell
Ron Battistella
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Marc Chase
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James and Paula McHugh Trustees
Robert Swanson Family Partnership
Elizabeth Dodson
Grant Bishop Trust
Tom Moore Trustee
Gayle Jones Trustee
Elias (Louis) & Dimitra Tsigaris
Gus & Theodora Tsigaris
Nancy Bowen, Russell Roessler Trustees
Nancy Bowen, Russell Roessler Trustees
Peter Hoffman
Marc Chase
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^' ?'roperty Owner Parcel Size
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EXHIBIT A
03./15/2006 12:25 6509922486
CITY TOYOTA
PAGE 02/02
cud
SOUTH BAY H oN DA
16213 LOS GATOS BLVD
LOS GATOS, CA. 95032
(408) 395-6100
May 15,2006
Town Of Los Gatos
Mayor and Town Council.
110 E. Main Street
Los Gatos, CA 95031
RE: Consideration of a resolution estab i a r Quiremeuts to cb ae the use of
exsting_automobile dealership sites.
We are writing to show our support for the proposed measure to support the
automobile dealerships in Los Gatos.
Los Gatos is a very viable place to sell automobiles. We currently sell
approximately 150 new and used vehicles per month and continue to be profitable.
We are very concerned that the redevelopment of automobile dealerships properties
on Los Gatos Blvd. will have a negative impact on the remaining dealers. Dealerships are
substantially more successful when they are surrounded by other dealerships in the
immediate vicinity.
Honda has asked us to consider upgrading our current facility to their new image
standards and also to look for additional property to expand our operation. We are
concerned that alternative uses of dealership properties will make it impossible to expand
our operations in Los Gatos.
As outlined in your proposal, auto dealers comprise a significant part of the Town's
economic base. We believe this proposal would have a positive impact on the ability of
the dealers to remain viable in Los Gatos, and we would like to that%you for showing your
support.
cerely,
bavg*Ioeller
Partner
South Bay Honda
Los Gatos, CA
Attachment 3
TOWN OF LOS GATOS, CALIFORNIA
TOWN COUNCILJPARKING AUTHORITY
JOINT REDEVELOPMENT AGENCY
March 20, 2006/STUDY SESSION MINUTES
Los Gatos Civic Center
110 E. Main Street
Los Gatos, CA 95030
TIME
ITEM
ACTION ON ITEM
TOWN COUNCIL
The Town Council/Parking
Authority/Redevelopment Agency of the Town of
Los Gatos met in the Council Chambers of the
Town of Hall, 110 East Main Street, at 5:15 PM,
March 20, 2006, in a study session session.
5:30 PM
ROLL CALL
Present: Steve Glickman, Joe Pirzynski, Barbara
Spector, Mike Wasserman, and Mayor/Chairman
Diane McNutt.
Absent: None
5:31 PM
OPEN/CLOSED
VERBAL
COMMUNICATION
None.
5:31 PM
PRESENTATION
AUTOMOBILE
DEALERSHIP
DISCUSSION
Discuss suggested process to review
redevelopment proposals for automobile
dealership sites.
Staff report made by Bud Lortz.
5:39 PM
COUNCIL COMMENT
• Clarification regarding used car lots in
Los Gatos.
• Questioned if proposed applications
would have to comply with California
Environmental Quality Act requirements.
• Questioned advantages regarding the
Planned Development process.
• Clarification regarding a letter sent to the
Town by representatives from Swanson
Ford.
• Clarification regarding the process
relating to the 10-mile rule.
• Would like to hear more information on
variables regarding the 10-mile rule
relating to potential expansion of
dealerships in Town.
Attachment 4
Town Council Minutes
Redevelopment Agency
AUTOMOBILE
DEALERSHIP
DISCUSSION
Continued
OPEN PUBLIC
COMMENT
March 6, 2006
Los Gatos, California
Mr. Bruce Swanson
• Commented that there has been no
interest from other dealership franchises
wanting to locate in Los Gatos.
• Supports alternative number one (No
action) regarding redevelopment of auto
dealership properties in Los Gatos.
• Commented on the abundance of
dealerships on Stevens Creek Boulevard.
• Commented that larger parcels of land
are more favorable environments for auto
malls.
• Commented on Swanson Ford's attempts
to remodel in the past 11 years.
Council Comment
• Clarification regarding remodel attempts
at Swanson Ford.
• Questioned if any auto dealers have
made offers to lease or purchase
Swanson Ford.
Ms. Bowen
• Commented that business is changing,
and asked Council to work with the
property and business owners.
• Supports alternative number one
regarding redevelopment of auto
dealership properties in Los Gatos.
• Commented that empty buildings will not
bring revenue to the Town of Los Gatos.
• Commented that most points contained in
the resolution are covered under the
General Plan.
Council Comments
• Questioned if sales tax revenue could be
considered as part of a proposed
application process.
• Clarification on the "peer review" process
as part of a proposed application
process.
• Suggested looking to the Planned
Development process for all potential
changes to dealerships.
Mr. Moore
• Supports alternative number one
regarding redevelopment of auto
dealership properties in Los Gatos.
• Suggested that the Town provide
incentives to attract dealerships to Los
Gatos.
N:\COUNCIL\M I N UTES\2006\M20060320SS. doc
2 of 6
Town Council Minutes
March 6, 2006
Redevelopment Agency Los Gatos, California
AUTOMOBILE
DEALERSHIP
DISCUSSION
Continued
PUBLIC COMMENT
Mr. Moore (Continued)
• Commented on the decrease in sales for
the last two years.
• Commented that the General Plan
addresses a majority of the requirements
listed in the proposed resolution.
• Commented on the 10-mile rule.
• Suggested a fast track permit process for
the dealerships.
Council Comments
• Commented on the negative impact if
there where no dealerships in Town.
• Commented on working as a team to
attract new dealers to the community.
• Clarification regarding the benefit of
having many dealerships verses fewer
dealerships in a community.
• Clarification on the amount of property
desirable for dealerships.
Mr. Robert Swanson
• Commented that no auto dealer has
made an offer on his property.
• Supports alternative number one
regarding redevelopment of auto
dealership properties in Los Gatos.
• Commented regarding the 10-mile rule
process.
Council Comments
• Questioned if alternative number two
would be a consideration to the
automobile dealers.
Mr. Morici
• Commented regarding his property
located on Los Gatos Boulevard, and
asked Council to consider releasing his
property from the overall process.
Mrs. McHugh
• Supports alternative number one
regarding redevelopment of auto
dealership properties in Los Gatos.
Mr. Stansbury
• Commented on a retail analysis relating
to potential sales tax revenue for the
Swanson property.
• Commented on retail proposals for the
Swanson property.
N:\COUNCIL\MI NUTES120061M20060320SS.doc 3 of 6
Town Council Minutes
Redevelopment Agency
March 6, 2006
Los Gatos, California
AUTOMOBILE
DEALERSHIP
DISCUSSION
Continued
PUBLIC COMMENT
Council Comments
• Clarification regarding square footage
and sales tax revenue.
Mr. Claxton
• Commented on encouraging retail
business for Los Gatos Boulevard.
• Supports alternative number one
regarding redevelopment of auto
dealership properties in Los Gatos.
• Supports fewer restrictions for
redevelopment on dealership properties.
Council Comments
• Clarification regarding the process for
Planned Developments on dealership
properties.
• Clarification on Land Use requirements
relating to re -zoning of automobile
dealership properties.
Mr. Hirschman
• Commented on the effects the resolution
would have on his property.
• Supports alternative number one
regarding redevelopment of auto
dealership properties in Los Gatos.
6:46 PM
MOTION TO CONTINUE
THE STUDY SESSION
Motion by Mr. Wasserman to continue study
session following the regular Council meeting.
Seconded by Mr. Glickman.
6:46 PM
MAYOR CALLED THE
QUESTION
1 Carried unanimously.
1
7:40 PM
STUDY SESSION
RESUMED
7:41 PM
PUBLIC COMMENT
Continued
Mr. Davis
• Commented regarding the Conditional
Use Permit at the former auto dealership
located on Los Gatos Boulevard.
7:44 PM
CLOSED PUBLIC
COMMENT
7:44 PM
AUTOMOBILE
DEALERSHIP
DISCUSSION I
Continued
COUNCIL DISCUSSION
• Commented on supporting the Town's
automobile dealerships.
• Suggested looking into alternatives that
provide similar benefits to the Town.
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4 of 6
Town Council Minutes
March 6, 2006
Redevelopment Agency Los Gatos, California
AUTOMOBILE
DEALERSHIP
DISCUSSION
Continued
COUNCIL DISCUSSION
• Expressed support for Alternate number
two.
• Suggested working with the dealerships
to maintain their vitality in the community.
• Would like information on sales per
square foot for retail.
• Would like information regarding existing
controls and processes for proposals that
have a change in the land use of a site.
• Preferred that Planned Development be
required for any change in use.
• Clarification relating to process if an
applicant does not go through a Planned
Development.
• Commented that Los Gatos Boulevard is
at a pivotal point relating to auto
dealership businesses.
• Would like to create an environment that
is conducive to a healthy vibrant auto
dealer business in Los Gatos.
• Suggested that any application that will
have short or long term impacts on the
community go through the Council.
• Would like information on impacts to the
community.
• Clarification regarding the Commercial
Guidelines, relating to the option of used
car lots. Suggestion would be to include
input from auto dealers if this was an
option.
• Suggested staff come up with a package
to include:
a. Town would prefer to keep
auto dealers in town.
b_ Any changes to an auto
dealer property site should
come through Council.
c. Council is provided with
complete information for
proposals that have a
change in the land use of a
site.
d. Encourage the current
automobile dealers to
upgrade their property to
make their business as
successful as possible.
e. Suggested staff to come up
with some incentives
including financial and permit
streamlining incentives.
N:\COUNCIL\MINUTES\2006\M20060320SS.doc 5 of 6
Town Council Minutes
Redevelopment Agency
March 6, 2006
Los Gatos, California
AUTOMOBILE
DEALERSHIP
DISCUSSION
Continued
COUNCIL DISCUSSION
Mrs. Figone clarified that a report could be
brought back to Council on April 17, 2006.
7:57 PM
MEETING ADJOURNED
Submitted by:
ATTEST:
Jackie D. Rose, Deputy Clerk MarLyn Rasmussen, Clerk Administrator
N:\COUNCIL\MINUTES\2006\M20060320SS.doc 6 of 6
Town of Los Gatos
1,000 500 0
1,000 Feet
CH Zoning District
Showing Locations of
Properties with 40,000 sq. feet or more
Properties with
40,000 square feet or more
Attachment 5
C
MEMORANDUM
COMMUNITY DEVELOPMENT DEPARTMENT
To: Mayor and Town Council
From: Bud N. Lortz, Director of Community Development
Subject: Information on Current Review Processes
Date: April 6, 2006
This memorandum will provide the Town Council with information on the existing review
processes for development and land uses in the CH (Restricted Commercial Highway) Zoning
District. The Town has two primary processes that apply to projects in the CH
zone —Architectural and Site Approval and Conditional Use Permits. Each process will be
discussed in more detail below.
ARCHITECTURAL AND SITE APPROVAL
Applicability:
Any new development in the CH zone requires Architectural and Site (A&S) approval. The
Planning Commission is the decision -making body.
Scope of Review:
As the title implies, the focus of A&S review is the architectural design and site planning of a
proposed project. This review does not directly involve the land use of the building except as
necessary to determine compliance with Zoning Code provisions such as parking. The Town
Code states that the purpose of A&S approval is to "regulate the height, width, shape, proportion,
siting, exterior construction and design of buildings to insure that they are architecturally
compatible with their surroundings" (Section 29.20.140(d)).
Considerations in Reviewing A&S Applications:
The Town Code (Section 29.20.150) establishes that review of an A&S application shall consider
the following:
• Traffic
• Signs
• Landscaping
• Site planning
• Architectural design
• Lighting
ATTACHMENT 6
PAGE 2 0
MAYOR AND TOWN COUNCIL
INFORMATION ON CURRENT REVIEW PROCESSES
April 6, 2006
CONDITIONAL USE PERMITS
Applicability:
The CH Zoning Code currently allows uses such as retail, personal service, and office by
right —no discretionary land use review is required (at the April 17, 2006 meeting, the Town
Council will consider a Code Amendment to require a Conditional Use Permit (CUP) for new
office building but will not require a CUP for retail/office mixed use projects). The Town Code
also identifies conditional uses that may be allowed with approval of a CUP. Conditional uses in
the CH zone include restaurants, automobile dealers, residential, and shopping centers greater
than 30,000 square feet.
Scope of Review:
The Town Code states that the intent of a CUP is to review "uses that might be compatible with
ordinarily allowed uses if properly located and regulated." In reviewing a CUP application, staff
and the Planning Commission evaluate the compatibility of the proposed use with the
surrounding areas and determine the conditions under which the use should operate to minimize
impacts and assure compliance with the Town Code. The Planning Commission is the deciding
body for CUPs.
Required Findings:
Town Code Section 29.20.190 requires that the Planning Commission make the following
findings to approve a CUP:
(1) The proposed uses of the property are essential or desirable to the public
convenience or welfare;
(2) The proposed uses will not impair the integrity and character of the zone;
(3) The proposed uses would not be detrimental to public health, safety or general
welfare; and
(4) The proposed uses of the property are in harmony with the various elements or
objectives of the general plan and the purposes of this chapter.
The Town Code also establishes findings for denial of a CUP for a personal service or formula
retail business.
PAGE 3
MAYOR AND TOWN COUNCIL
INFORMATION ON CURRENT REVIEW PROCESSES
April 6, 2006
RELATIONSHIP TO CEOA:
0
It should be noted that compliance with the California Environmental Quality Act (CEQA) is
required for both the A&S and CUP processes (and the Planned Development process for that
matter). The level and detail of CEQA review does not change between discretionary review
processes.
N:\DEV\RANDY\Town Council\AUTO DEALERSHIPS\Memo Review Process 041706.wpd
RECEIVED
J 4ariCjn `Danny' Swanson
Mailing Address: P.O. Box 3466, Saratoga, CA 95070 MR&TOINNCOl1N1'fi
Phone: 408-867-0954 FAX # 408-867-1829
March 29, 2006
Mayor Diane McNutt,
Town of Los Gatos
P.O. Box 949
Los Gatos, CA 95031
Greetings:
MAR 3 0 2006
If early businessmen, Grant Bishop (Chevrolet) and Paul Swanson (Ford),
had not chosen in the late 1950s to build their dealerships on what is
now called "the Boulevard," it's hard to say what might have developed
out there. These two visionaries found they needed more land to expand
their "downtown" operations. Ed Moore (Buick) and Jim Countryman
(Oldsmobile & Cadillac) later joined them, and the East Side became the
place to shop for cars.... many older people remember that residents were
sorry to see them move so far away!
For many years, we on the East Side of Town were treated by the Town as
"outsiders," although it was always clear to us that the car dealers were
paying the Town's bills. That feeling of being under -appreciated has
persisted to the present...no where more obviously than in the recent
Emergency Resolution.
I'm sure many of you think the Resolution represents your appreciation
of the dealers, but not one of us has ever been encouraged to think of the
Town of Los Gatos as our "ally." You've always been "the opponents,"
creating ordinances to control us, for fear that we might create
"eyesores" that didn't fit Los Gatos's "downtown village atmosphere."
We've all brought you plans at some time that might have enhanced our
facilities....had you even once encouraged our ideas and our efforts, the
entire Boulevard might have been a greater success for all the current and
former dealers. It's obvious to me that we need to use our current
windows of opportunity, before they close.
Attachment 7
Page 2
As you know, our family believes the "big car lots" are going away. What
happened to our dealership is a series of unfortunate circumstances,
primarily having to do with the economy, an uncaring manufacturer and
new options in car buying. We closed with deep regret....after all, we
aren't "out-of-towners." Bob & I graduated from Los Gatos High School in
the early fifties, and we've witnessed nearly 70 years of changes in the
Town that we care most about in this world.
Maybe it's because we've seen so many changes that we have no trouble
visualizing further "growth and change" in the Boulevard.
Both my husband and I have respect for the difficult jobs you've taken
on. We do, however, fear the way in which you wield your power,
creating chaos in an already struggling business community.
We understand your preferring to control these changes through the
Property Development process. We only hope your focus can expand to
thinking about larger businesses, paired with needed housing, because as
business people, we can see this as an immediate opportunity to replace
lost revenue from declining car sales.
Please understand that we have only good wishes for the success of our
current auto dealers. To keep them "healthy" the town must loosen
restrictions on their building plans. Here's a place where "village
atmosphere" and reality will not co -exist. Make your decision based on
that reality. Listen to the "home -town dealers" you know and trust.
You are often called upon to make decisions related to businesses that
you must feel ill-equipped to do. In the case of the auto business, you've
all made a valiant effort to become informed and have gained the respect
of all of us for your efforts. Now I hope you're prepared to listen to the
Business Real Estate experts.
It should be obvious that the Swanson Family wants to remain part of Los
Gatos far into the future. We wish you well.....please wish us the same.
Mrs. Robert Swanson