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Attachment 5 - April 26, 2023 Planning Commission Verbatim MinutesLOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A P P E A R A N C E S: Los Gatos Planning Commissioners: Jeffrey Barnett, Chair Steve Raspe, Vice Chair Susan Burnett Melanie Hanssen Kathryn Janoff Emily Thomas Town Manager: Laurel Prevetti Community Development Director: Joel Paulson Town Attorney: Gabrielle Whelan Transcribed by: Vicki L. Blandin (619) 541-3405 ATTACHMENT 5 LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 P R O C E E D I N G S: CHAIR BARNETT: We’ll now move on to Agenda Item 2, which is a request that the Planning Commission forward a recommendation to the Town Council on Land Use and Economic Recovery Amendments to Chapter 29 (Zoning Regulations) of the Town of Los Gatos Code Regarding Personal Service Businesses, Bars and Markets, Banks and Financial Services, Formula Retail, Group Classes, Veterinarians Offices, and the Definitions, and the proposed amendments to the Town Code are not considered a CEQA project. I’ll ask if there are any disclosures by the Commissioners. Seeing none, I’ll ask if Staff has a report on Item #2. SEAN MULLIN: Thank you and good evening. Throughout the years the Council has identified strategic priorities related to community vitality, economic recovery, permit streamlining, and policies and ordinances related to supporting the business community. In line with these priorities Staff has brought forth a series of policy LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and ordinance changes over time offering reduced costs, streamlined processes, and flexibility. In response to the pandemic emergency the Town Council adopted an Economic Recovery Resolution to provide businesses with options for flexibility to modify their business offerings. As a result, the Town experienced fewer vacancies and business attrition during the pandemic and was quick to assist businesses in reopening. The Council recently adopted a priority related to economic vitality and pandemic recovery, and tonight as a first step Staff is bringing forward recommendations for code amendments to formalize some components of the Economic Recovery Resolution and to continue the streamlining work that began prior to the pandemic emergency to support the business community during the recovery. Your Staff Report and exhibits detail the six subjects for which Staff is seeking a recommendation from the Commission to the Council, and briefly these six items are: 1) Allowing personal service businesses as a permitted use in the C-2 and O zones; 2) Defining new uses to increase flexibility and opportunity for different business models within the restaurants to bars spectrum; 3) LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Introducing new definitions for banks and financial investment services to better clarify the uses; 4) Reducing regulatory impediments to large formula retail businesses; 5) Allowing group classes as permitted use in the C-2 zone; and 6) allowing veterinarians without a kennel to operate in the C-1 zone with a CUP. A thorough discussion of each topic is included with your Staff Report. An addendum has been distributed including public comments received after publishing the Staff Report. In conclusion Staff recommends the Planning Commission review and provide a motion on each of the proposed amendments and forward a recommendation to the Town Council. Along with Planning Staff, Monica Renn, the Town’s Economic Vitality Manager, is here tonight to support your discussion and answer any questions you might have. This concludes my presentation and I’m happy to answer any questions. CHAIR BARNETT: Thank you, Mr. Mullin. Are there questions from the Commissioners? Commissioner Hanssen. COMMISSIONER HANSSEN: I have two questions. One is about a personal service business. I seem to remember LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 reading in the news a while ago that there were some issues, and I did a little bit of checking. There has been on and off issues with massage parlors and illicit activities of various sorts, none that I could find in Los Gatos, but in the Bay Area, San Jose and whatnot. I didn’t see it clearly called out as a permitted use in the discussion, but then when I looked at the definitions page massage therapist was in there, so my question is do we have a reason to maybe think twice about that particular category? SEAN MULLIN: Thank you for that question. I know you have a follow up as well. It is permitted in certain zones, and those massage therapists that want to come in and open that business need to obtain a Use and Occupancy Permit as well, and under that permit process they need to receive clearance from the police department and provide that information to the Town. That’s how the Town typically is regulating it, and the Commission could discuss carving that out if that’s something that they’re amenable to. COMMISSIONER HANSSEN: I was just kind of curious, and I do imagine that we have not only code enforcement but also our police department, so should LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 anything like that happen and people report it, it could be addressed. SEAN MULLIN: To follow up on that, the regulations that we’re looking at in the C-2 zone are real specific location-wise. It’s really about ground floor in the C-2 zone. In other zones it’s a permitted use, and in the C-2 zone if you’re not ground floor it’s a permitted use. COMMISSIONER HANSSEN: Very good. My other question is about the formula retail, which has been a big discussion topic for many, many years. There was a time where I thought we used to track the percentage of large retail versus smaller retail. Do we do that anymore, and where do we stand? MONICA RENN: Monica Renn, Economic Vitality Manager. We stopped tracking that back when we got rid of the formula retail regulations for establishments fewer than 6,000 square feet. Right now the question is do we want to expand that to those over 6,000 square feet? I could probably quickly look down North Santa Cruz on a map and come up with a number for you, but since the removal of that regulation I think we’ve only even had one or two come in, and that was in 2018. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COMMISSIONER HANSSEN: Okay, very good. CHAIR BARNETT: Do other Commissioners have questions of Staff? I’m not seeing any, so we’ll now open the public portion of the public meeting and invite comments on this item from members of the public. We do have a card on this now, and Mr. Paulson, are there any members of the public on Zoom who wish to speak? Again, if you’d please come to the microphone to speak and state your name and address, if you wish. CATHERINE SOMERS: I’m Catherine Somers, Executive Director at the Los Gatos Chamber of Commerce. I’m surprised there are not a lot more people wanting to speak on this issue. I’m here on behalf of my Board of Directors. We would like to express our appreciation of the Staff’s continued work on economic recovery and streamlining of the new business permitting process. Certainly the June 2020 Economic Recovery Resolution did create flexibility and increased opportunities for existing and new businesses. We particularly appreciate the subsidies provided for those that wanted to update their CUPs; it added vitality and vibrancy. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Tonight we’re here to support almost everything that the Staff recommends in this report as it relates to making that 2020 resolution permanent, however, we have a few exceptions. We hope tonight you will take a little closer look at the language around specialty retail and how it might relate to the coffee industry. The downtown core currently has a unique and abundant variety of coffee businesses. We feel the discretion provided at the Development Review Committee level would be appropriate to guide any newly proposed coffee businesses in the C-2. In other areas, we’re not as concerned. We also want to point out that for formula retailers 5,000 square feet was a policy meant to regulate larger box retail. In hindsight, that number could have been altered or addressed a few years ago when the resolution was put in place and it was not. There are some spaces in the Commercial zone, again C-2, that would benefit from marketability of what would be considered a formula use as an approved use within the zone. There are leases in place, building size, and other constraints that self-regulate the concern of overly competitive big box LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 retailers entering the market and creating destructive competition for our Mom and Pop retailers. The notion of formula retail is antiquated. With the aggressively changing landscape of retail we almost want to welcome a few quality retailers that are left to bolster our shopping experience and gain tax revenue. We suggest eliminating this limitation completely. Lastly, we also think the definition of banks and financial institutions needs to be more straightforward. Recalling the Planning Commission meeting about a year ago, you unanimously agreed to allow Charles Schwab to open in the now vacated Gap space. The Chamber appealed that. The Council agreed with our appeal and denied the project. In that we did say that the definition should include ATMs and having cash on hand. I think you should really be specific with that definition so that we don’t run into that same problem, that is, if you do not want to have offices on the ground floor. Again, we appreciate everything that you do and all of the elements of this plan. CHAIR BARNETT: Thanks so much for that presentation and for all you do for the Town of Los Gatos. Are there any questions? Commissioner Hanssen. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COMMISSIONER HANSSEN: Thank you as always for your great comments and help in what we’re doing for our town businesses. There was a letter in the addendum from one of our General Plan Committee members who is also an architect raising the question about the competition with the small businesses, and I felt like I knew the answer to it because I attended a presentation on the future of retail about five years ago, and everything has come true and is continuing to come true. My question to you is I don't know if you’ve seen that letter, but do you feel confident that were we to make these changes that we aren’t going to push out a bunch of small business owners that would want to be setting up retail locations? CATHERINE SOMERS: I have a perfect example of that. Our House, which is taking over Banana Republic and the Sur La Table space, I want to say—and Monica Renn may know—it’s at least 8,000 square feet; it’s a huge space. I was a little concerned when I heard they were coming into the Old Town space, and before I could even go out and talk to some of our members or business owners that I know, Cherie Rose said it’s awesome that they’re coming. She said that, and so did The Maids Quarters, and the reason is when LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you have a draw like that in town people come to that, but then they stay and they have lunch and then they venture into Cherie Rose, and they go into The Maids Quarters, and the go into the boutiques. Those big retailers that are now out there that have made it through all of this attrition of all the legacy stores, those are the ones that people come to and they will help our Mom and Pops; I really believe that. CHAIR BARNETT: Commissioner Thomas. COMMISSIONER THOMAS: I have a follow up to that question, and again, thank you for coming tonight and offering some suggestions. Do you feel like your members feel that way with Sephora and Anthropologie there? Sephora is not that big, but is that what they’re seeing with those two locations, that people are coming to those spots and then staying around downtown? CATHERINE SOMERS: Yes. As much as competition is certainly a thing I think it’s the crowd massing that is more important, and so people are coming for Sephora. Again, exactly as I said to Commissioner Hanssen, they do then walk around. They park once and they’re like what else does this town have to offer? I’m going to come here for dinner. They see so much, Anthropologie, all of those LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 stores. Warby Parker, a huge addition to town because people are coming here for that and then they venture out and see everything else that we have here. COMMISSIONER THOMAS: I do have a follow up, if that’s okay. CHAIR BARNETT: Please. COMMISSIONER THOMAS: You just want to eliminate all… There are no issues associated with that? Can you just repeat your recommendation? CATHERINE SOMERS: That’s a big ask, and that is what my board actually does recommend, eliminating it completely, partly because they think—and Monica Renn could answer some of this as well—the market economics downtown, first of all there are not that many spaces that are over 10,000 feet. The Williams Sonoma, (inaudible) Ranch, that whole space is 6,800 square feet, and that would be more marketable to a really high-end, cool retailer if it doesn’t have all these restrictions and other stuff lopped onto it that’s going to take a long time to go through the building process. Those big companies still look at all that stuff and think how do I come in easily and open up shop as quickly as I can, which is what Our House was able to do. I don't know if that answered your question. I don’t LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 think you have that problem downtown. I don’t think you have to worry downtown that that’s going to happen, that there are going to be retailers that we don’t like downtown. We want to make it as easy as possible. COMMISSIONER THOMAS: Thank you. My other question was could you clarify the definition about the banks? CATHERINE SOMERS: With the banks, I don't know if you remember, last year it was Charles Schwab, I believe, that wanted to go in where the Gap space is, and it was a big contentious debate about what qualified as a bank. We really believe that to be a banking institution, or to consider yourself a bank where people are going in and out all day so that it brings people in, it’s not an office, you really do need to have an ATM and you need to have cash on hand that you’re doing transactions with people, and you’re talking and you’re not just going into your office; an office is like a Charles Schwab. That brings up a whole other conversation really about our banks in town have such a big footprint; it’s like what to do with them as we move through. I think that may be next to come, but I think banks are getting smaller and smaller, and so you really do want to make sure that LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you have that face-to-face communication at the banks. Maybe that’s the other thing you put in, there’s got to be some face-to-face or at least face with an ATM machine. COMMISSIONER THOMAS: Okay, thank you. CHAIR BARNETT: Other questions of the speaker? No. Thank you very much. We have a card from Bess Wiersema. BESS WIERSEMA: Hi, I’m Bess Wiersema; I’m a local architect. You guys all know me probably from my one business, Studio3, which is in town. I also own another business called Shop the Studio that is a trade only showroom, and it occupies about 8,000 square feet and it sits at that second level of the opera house. I would like to concur and support exactly what the Chamber is saying, because I hear it from both my own clients at Studio3 who are looking to have maybe some work done on their own homes or are building a home, but as well as a ton of other designers and architects that use the trade show room that we operate, and that is that if downtown is vital it’s easier for them to get clients to come and visit here and stay more. One might assume that Our House going in, similar to like a Restoration Hardware or something, might be in LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 direct competition with a designer who maybe wants to be able to sell to the trade or only product available as opposed to having their clients go in and shop at an Our House, a Restoration Hardware, or Harvest or anything like that, but honestly, they’ve all said that they welcome it, just like Cherie Rose did. I think the more we can establish ourselves as a boutique destination with not big box stores that are like Bed Bath and Beyond or Walmart, but with ones that fit at that more niche level, and those are the kinds of businesses that are only going to take 10,000 square feet or less. Those of us who have to do business plans and qualify for SBA and meet the general needs of running a business, whether it’s retail or trade only, manage all the time any bank loans with what is the footprint of our space. How much traffic are we getting, and how can we increase traffic to us while still maintaining the unique nature of why we have chosen to be in a location. I would encourage you to let the architecture of the space and the footprint of the space do the talking, and eliminate exactly what you’re afraid of and create a space and a place that can become something besides just LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the same old stuff that we see downtown, because that’s the only thing right now we’re attracting is the same thing that we all know exists. That’s it, just a local business owner. CHAIR BARNETT: Before you go, I want to ask Commissioners if they have any questions of you. I’m not seeing any, so thanks again. We don’t have anyone on Zoom or a further card, so I will now close the public portion of the public hearing on Item 2. I’m going to propose to my fellow commissioners that we proceed through each of the suggested amendment groups A-F in turn and ask the Commissioners on each item if they have questions of Staff, wish to comment on the request, or make a motion to the Town Council concerning the proposed amendments. I understand that each motion will need to include the required findings that are in Exhibit 1 on page 27 of the report. Let’s see if we have anything further before we go on. It was my intent to see if we can get through this item before we take a break, but if it ends up being rather long, then we’ll certainly take a break, and anyone can suggest that we do that. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Is there a Staff Report on this item? SEAN MULLIN: Staff would be happy to provide additional detail if you’d like as we go item-to-item. I didn’t prepare remarks, but I can provide a brief summary as we go, or we can just answer questions, whatever you prefer. CHAIR BARNETT: Why don’t we proceed in that way? Page 14, Item A, is Personal Service Businesses as a permitted use in the C-2 and O zones, and this relates to all the many businesses that are described there, which I won’t read. I’ll ask Commissioners, based on the Staff Report or any questions they may have of Staff, what their thoughts are on that proposed amendment? Commissioner Hanssen. COMMISSIONER HANSSEN: After reading through it the only question I have is the one that I brought up about the massage parlors, and I’m satisfied with Staff’s response to that in that they have to communicate with the police department prior to operating their business anyway, and we also have code enforcement and police enforcement should anything happen. Considering the spirit of this, that we really need to give all our businesses all the help they can get LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (inaudible) think we should take away any more impediments to opening these kind of businesses, and these are exactly the kind of businesses that don’t have a lot of money to throw into permits, so I would say yes on A. CHAIR BARNETT: Other comments? Commissioner Janoff. COMMISSIONER JANOFF: I wanted to kind of back up a bit and say what the Town did to provide assistance during the pandemic. The Town was struggling before in some respects with regard to retail; the pandemic just sort of forced the issue. The changes that were put in place made a whole lot of sense at that time, and they still make really good sense. Reading through the entire item, I was happy to see so much good change that would be assisting businesses. The other thing I’d like to say is we’ve been reminded on occasion that businesses really know what businesses need to do to be successful themselves, so creating hurdles when we don’t need to have hurdles, when business owners already know. They tick through the requirements, what their expectations are, and this has come up with regard to parking as well. If they can make an argument for themselves and their bankers to be successful, LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 then I think we should do whatever we can to make that a successful outcome, so I’m also in favor of item A. CHAIR BARNETT: Thank you. Commissioner Thomas. COMMISSIONER THOMAS: I had a question about adding personal service businesses to the required parking for retail and commercial shops. I know that we’re kind of the trend around the country and here in that we’re trying to reduce parking minimums and everything, so could you just elaborate on that and talk about what’s happening with that? Thank you. SEAN MULLIN: Sure, thank you. This is actually just recognizing formally how we already regulate it; it’s just not in the code. This is an opportunity not only to introduce these streamlined processes and flexibility, but also to catch some things that are contained in Staff’s knowledge and put it in the code to provide more clarity and make it easier moving forward. COMMISSIONER THOMAS: So we’re already doing this is basically what we’re saying? SEAN MULLIN: That’s correct. COMMISSIONER THOMAS: Is there any concern that we soon in the future might be moving away from what we are LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 currently doing because the trend is to go away from parking minimums and things? SEAN MULLIN: I think Planning Manager Armer can speak to that. JENNIFER ARMER: Thank you for that question. Yes, I would say that we do hope in the future to be looking comprehensively at our parking regulations, but at this time it is helpful to Staff to be able to have that clarity in the code consistent with what the regulations are for other uses. COMMISSIONER THOMAS: So we would have to update. If this is included, it’s not like then we’re going to have to go back and undo it, because we’re going to have to go back and undo a lot of stuff across all of our code? JENNIFER ARMER: Correct. I anticipate a comprehensive update if we do get to the point of updating parking code. COMMISSIONER THOMAS: Perfect. Thank you. CHAIR BARNETT: Other questions or comments on this item? Vice Chair Raspe. VICE CHAIR RASPE: Thank you, Chair. Just a procedural comment as to the form of the motion. I understand we have several changes that would be included. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Would the motion include all those changes, or could we simply refer to changes noted in the report? SEAN MULLIN: You could simply refer to the report. VICE CHAIR RASPE: With that being said, Chair, I’d like to make a motion. CHAIR BARNETT: Please proceed. VICE CHAIR RASPE: Thank you. With respect to the category of Personal Services Businesses as a permitted use in the C-2 and O zones, I would like to forward a recommendation to the Town Council for the changes as noted in the Staff Report on page 5 of our Staff Report specifically. Do I have to make specific findings? JENNIFER ARMER: You can make the findings that are listed at the end of the report, or we could have a final motion referring back to the individual motions, at which time the findings could be made; it’s up to the Commission. VICE CHAIR RASPE: Chair, I’ll just make the findings as referred in the report so it’s a self-contained motion. CHAIR BARNETT: Very good. Do we have a second? Commissioner Janoff. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COMMISSIONER JANOFF: Second. CHAIR BARNETT: Discussion? Seeing none, I’ll take the roll. Commissioner Hanssen. COMMISSIONER HANSSEN: Yes. CHAIR BARNETT: Commissioner Thomas. COMMISSIONER THOMAS: Yes. CHAIR BARNETT: Vice Chair Raspe. VICE CHAIR RASPE: Yes. CHAIR BARNETT: Commissioner Burnett. COMMISSIONER BURNETT: Yes. CHAIR BARNETT: Commissioner Janoff. COMMISSIONER JANOFF: Yes. CHAIR BARNETT: And I vote yes as well, so it passes unanimously. Now we can move on to Item B, which is on page 16, and this concerns Bars, Markets, and other miscellaneous commercial businesses, and Staff is standing by for any questions that we may have, but at this time I’m going to invite any questions or comments that Commissioners may have on Item B. Commissioner Hanssen. COMMISSIONER HANSSEN: I was just going to make a comment that I read through the comments on Item B and I LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 didn’t find anything that needed to be changed or that I was concerned about. CHAIR BARNETT: Thank you. Other comments? Vice Chair Raspe. VICE CHAIR RASPE: Thanks, Chair. Just one question. The tap tasting room has operating hours of 10am to 10pm, and I was curious as to how those hours were determined? Is it what other jurisdictions are using? I’m curious as to how we came up with that definition. SEAN MULLIN: Thank you for that question. We looked at some businesses in other cities and looked at their hours. I tried to find some other municipalities that had this category and I wasn’t very successful in that. But we also recognized what the ABC licensing would be for alcohol, which is I believe it’s like 6am to 2am, and wanted to make a strong distinction between a bar and a tap tasting room. The opening times of similar businesses that we found was not before 11am, so we decided to give the flexibility of 10am and then 10pm as consistent with what we found with these types of businesses, and that also aligns with our Entertainment Policy. VICE CHAIR RASPE: Thanks for that answer. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CHAIR BARNETT: Other question or comments? I have one issue and I think it’s a very small nit, but on the bottom of page 17 the last sentence says, “Food service is not required for tasting rooms or taps,” and I wanted to raise the question with Staff whether that should be made, “Food service is possible but not required”? SEAN MULLIN: We could certainly make that change if that helps clarity. I think in the end it says the same thing, but if it’s more approachable with that language, we certainly can make that change. CHAIR BARNETT: I appreciate that. Commissioner Hanssen. COMMISSIONER HANSSEN: I had one question with regard to what Ms. Somers brought up. What she said about coffee, that it would be a self-resolving process, I just wanted to bring up if there was any discussion that we needed to have around that, because we went through a thing a few years ago where we had a bunch of juice companies, cold pressed juices—and they even brought juices to the Commission—so you can get this herd effect. I’m asking a question of the other Commissioners or Staff: Do we need to worry about having too many coffee places? LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MONICA RENN: The coffee is actually captured under the specialty retail, so the next… COMMISSIONER HANSSEN: Is that a separate category? MONICA RENN: Are we doing those all under B? COMMISSIONER HANSSEN: I thought it was all under B. MONICA RENN: If the Commission will indulge me for a minute, I spoke with the Board president of the Chamber at length yesterday and we walked through different stakeholder groups and what their position was on the coffee piece. From a Staff perspective what we try to do is present the Commission with a very wide menu, really wide open, and Mr. Foley and I started walking through some of the possibilities and some different things that have happened in the past, and I think what Commissioner Hanssen is referring to is just different cycles of businesses, and coffee seemed to be one that could be concerning. Right now a coffee house is a restaurant. Once you do something made-to-order it becomes a restaurant, so when we were looking at this new specialty retail definition we tried to align it with our traffic impact fee LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 definition, which does include coffee, and the concern from the Board president of the Chamber is when there is a public hearing, even though any coffee house could come in and apply for a Conditional Use Permit through a restaurant and would likely go through the process, there’s still a public noticing, and so he felt like for the sake of some of our smaller coffee shops having that public hearing was a piece of mind for them, and so I think that’s where those comments from the Chamber are stemming from. It’s not like we don’t want any more coffee shops or we’re trying to say no juice or no this or that, but there are some things that could throw off the balance, and so on one hand we let the market control what happens, and then on the other hand I think there is some preservation and that Los Gatos has always come from a place of presentation, so I do think that’s where the concern came from and it was definitely coffee-specific, but I think that the Commission could definitely talk a little bit about that definition and your comfort level with it based on how the Chamber feels about that made-to-order piece being added and now being allowed by right. COMMISSIONER HANSSEN: What you said, for example, Great Bear Coffee is considered a restaurant? LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MONICA RENN: Correct. Actually, anything that makes something to order, so every ice cream shop, everything that you can walk up and specialize something is a restaurant. CHAIR BARNETT: Did that answer the question? COMMISSIONER HANSSEN: Yes. It sounded to me like there might be further discussion, but since people that have made-to-order foods are not part of this streamline process, they would have to go through the process that a restaurant would. MONICA RENN: Correct, which is the DRC. Specialty retail is a by right use and it does not need a CUP, whereas a restaurant does, and so what we were looking at with this modification was to broaden the specialty retail definition and allow businesses that may have been restaurant before to now be a specialty retail, a frozen yogurt shop for example, so it would really be the Commission’s purview to look at that and see where you think that stop/start should be between a restaurant and a specialty retailer. Perhaps you think what the Town has been doing works; that could also be a recommendation that’s going to Council. I just don’t want to stand up here LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and advocate for something that I’ve heard very strongly from one of our biggest business advocates in town. CHAIR BARNETT: Other questions or comments? Commissioner Janoff. COMMISSIONER JANOFF: Just to clarify, on page 20 we have a table and the coffee house is showing current code as a CUP and a DRC approval. The amended use is specialty shop over the counter, and I want to clarify, is what we’re hearing tonight the recommendation that a coffee shop not be moved to a specialty use? MONICA RENN: This is what we’ve heard from the Chamber, correct. I think what Ms. Somers came forward and was asking was that particularly coffee shop causes a pain point if we move it into the specialty retail category. COMMISSIONER JANOFF: All right, thank you. CHAIR BARNETT: Further questions, comments? Motion? Commissioner Thomas. COMMISSIONER THOMAS: I have a question for fellow commissioners and Staff, I guess. How do we distinguish between… I guess where do we draw the line? That’s what Ms. Renn is saying, that we need to decide. So what type of business is considered specialty, that we feel like is specialty food retail versus a full restaurant? I LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 do understand right now if there is any food prepared, it’s a restaurant and everything is considered a restaurant, but we do need to be moving more options into specialty food retail shops so that smaller places can open. Where do you all see us drawing the line? What type of food retail? And I don't know if you guys have some other definitions, or where this was pulled from, or what other towns have done. Any more information would be helpful. SEAN MULLIN: I can offer a couple of things. First, the definition was sort of developed by looking at the two policies that are floating around with the Town, the Traffic Impact Policy and the Director’s Policy, and in close consultation with Monica on the reality of the business community. Planning Staff doesn’t always have our ear to the ground with that, so it’s very valuable to get that information. The second piece that I’d point out is just from a functional standpoint. If there’s a particular category that you see listed here in this draft definition that you didn’t want to include, instead of just removing it from the definition we can specifically call it out that it is not considered specialty food retail or that it is still LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 considered a restaurant, but we can take your direction and provide that. CHAIR BARNETT: Follow up? COMMISSIONER THOMAS: I hear that in my brain, and this is for my fellow commissioners, like what is the difference between coffee and, let’s say, tea at the tea shops that are downtown versus really then what is the difference between the tea shops and yogurt places? That’s what I want you guys to tell me. Thank you. CHAIR BARNETT: Commissioner Hanssen. COMMISSIONER HANSSEN: I want to ask a clarifying question. I’m looking again at page 20 and it says, “Frozen yogurt shop, coffee house,” and then, “specialty food retail shop offering alcohol for offsite on onsite consumption.” So in the case of a coffee house, if I understand what Staff just said, the Chamber was advocating for us not to include coffee houses even though it was in the Staff Report this way, so a possible recommendation from us could be to say yes, because we’re concerned about potential conflicts with the existing businesses, we would do everything except for coffee houses and leave coffee houses the way it is now where they have to have a CUP? LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEAN MULLIN: That’s the potential motion, correct. COMMISSIONER HANSSEN: That’s a potential outcome of this. CHAIR BARNETT: Vice Chair Raspe. VICE CHAIR RASPE: Thanks, Chair. I wanted to respond to Commissioner Thomas’ comment; I think it’s a good one. I think logically there is no difference between a coffee shop, a tea shop, a juice shop, and as I read the definition this past week to me it was a logical grouping that it made sense to treat equally. That being said, it’s clear that there’s something more than words going on here, there’s an economic impact that these words would ascribe to our community and that specifically impacts the coffee houses, and so to me the difference then is not the words, it’s the result of those words, and I think we need to lean into our Chamber. If the Chamber believes that including the language of specialty foods has a deleterious impact on those businesses, then perhaps the best is to exclude coffee houses from specialty and proceed that way even though logically they’re grouped together, because the LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 impact would result in something that as a town we don’t want. CHAIR BARNETT: Thank you for that comment. Commissioner Janoff. COMMISSIONER JANOFF: Great question, Commissioner Thomas. I think if we were only looking at the size of business, type of business, then there really isn’t a difference, but I appreciate the comments that Mr. Mullin has made regarding Staff didn’t know, so we checked with Economic Vitality and Economic Vitality is checking with the Chamber of Commerce. This means experts are talking to experts about what we don’t fundamentally know, because we’re probably not shop owners of this nature. So while it may seem like it’s an inconsistency to treat one type of what could be a specialty use differently, I think the economic arguments that have been presented to us tonight are compelling. We don’t have juice makers or ice cream shops or other issues coming to us, it’s just this one particular niche, and I think if we respect our community and want our community to thrive, we do what we need to do to ensure that that happens, so I’m comfortable making a motion that would remove the coffee house from the specialty use. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CHAIR BARNETT: Other comments or questions? If not, that sounded like a motion. Commissioner Thomas. COMMISSIONER THOMAS: I just want to ask Staff, do we need any justification other than we just want to do this? This isn’t putting us in legal jeopardy of being sued because what’s the difference between coffee and tea or something like that, correct? JENNIFER ARMER: Unfortunately, we don’t have our Town Attorney with us this evening, but this is a recommendation to Town Council as to what types of business you want to be seeing in different parts of town. One thing I’d say, and I think you’ve already discussed it some, is that there may be some kind of tricky situations where somebody has got a juice shop but they want to serve coffee, or it’s a tea house but they want to have coffee available and how do we draw that line? That’s one of the things that Staff would then have to work to implement, so it does make it a little less clear, but if that is the direction the Planning Commission wants to go, then that could be added as an exclusion from the definition of specialty food retail that’s on page 19 of your Staff Report. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COMMISSIONER THOMAS: As a follow up to that, I think that just because this is a recommendation and just going to Town Council that hopefully we can continue to reach out to the community and make sure there’s not any other categories that would feel particularly impacted, like coffee houses would be, because I wouldn’t want them to miss the opportunity and for our downtown character to be changed drastically, because we have some other longstanding businesses like Dolce Spazio has been there for a very long time; I don't know if that would be a concern of theirs too. So I am comfortable and I’m happy that we had this discussion, but in forwarding this recommendation to Town Council I would request that we investigate and make sure that coffee is the only one that should be switched. MONICA RENN: If I may, given the fact that the conversation that I had with the president happened so late in the game—it happened yesterday morning—I think before I can commit to you, before we go to the Council, we will do some more discussions at the Chamber. We can even invite in some of the businesses and have some conversations, and also do a little more benchmarking on maybe what other LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 communities do; we’ll check in with our attorney. I hear those concerns and I share them. I think the number one thing that we were trying to reach was transparency with this one so that the community felt heard if all of a sudden we had a 5,000 square foot coffee house come in that could afford that, because the majority of our small ones can’t and don’t. It’s really difficult because it is a case-by- case and kind of an environmental issue, like what that issue is in that exact location, but I can commit to doing a little more background and research so that we have some more information when we get to the Council. Thank you. CHAIR BARNETT: I’m looking for raised hands or a motion. Vice Chair Raspe. VICE CHAIR RASPE: I can try the motion again. With respect to the category Bars, Markets, and Other Miscellaneous Commercial Businesses I move that we forward a recommendation to Town Council to accept and implement the changes noted by Staff in the report, subject to the change that the definition of specialty food retail would not include coffee/tea houses. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Point of clarification: do you want to include a specific exclusion for it or just remove the language of coffee houses? CHAIR BARNETT: I’d defer to Staff on that issue. VICE CHAIR RASPE: Can we just remove the language, or should we insert a specific exclusion? JENNIFER ARMER: Because there is an interest in not allowing coffee houses to use the specialty retail definition, we would recommend that that be specifically excluded. My understanding from your conversation was that tearooms or teahouses would still be maintained as part of it. VICE CHAIR RASPE: Yes, so again, forward the recommendation with changes noted by Staff as presented in the report, with the change of the definition specialty food retail to delete the word “coffee” in the phrase “coffee/teahouses,” and to insert language specifically excluding coffee houses from the definition of specialty food retail. Chair, did you also have one additional change to add language? CHAIR BARNETT: I think Mr. Mullin gave me the answer I needed in terms of clarification, but thank you. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 VICE CHAIR RASPE: Very good. And as part of the motion I will make the findings as set forth in the Staff Report. CHAIR BARNETT: Thank you for that complete motion. Commissioner Hanssen. COMMISSIONER HANSSEN: I’ll second the motion, but I would ask if the maker of the motion would agree to request that Staff do the additional research we discussed before going to Council to make sure that we aren’t creating a problem of unintended consequences? VICE CHAIR RASPE: Absolutely agree. Thank you. CHAIR BARNETT: So we have a motion and a second. Any discussion? Seeing none, I’ll call the roll. Commissioner Hanssen. COMMISSIONER HANSSEN: Yes. CHAIR BARNETT: Commissioner Thomas. COMMISSIONER THOMAS: Yes. CHAIR BARNETT: Vice Chair Raspe. VICE CHAIR RASPE: Yes. CHAIR BARNETT: Commissioner Burnett. COMMISSIONER BURNETT: Yes. CHAIR BARNETT: Commissioner Janoff. COMMISSIONER JANOFF: Yes. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CHAIR BARNETT: And I vote as well in favor of the motion, and so it passes unanimously. Thank you for that. Forging ahead, we’ll move on to Item C, Banks and Financial and Investment Services. Are we going to have a public hearing on each of these items, or it was already covered by the blanketed first? Okay. I’ll ask if there are any questions of Staff on this matter, comments, or a motion? Commissioner Janoff. COMMISSIONER JANOFF: I just wanted to point out the comment made regarding the definition of a bank, and we had this robust conversation when we were considering Chase moving into the Gap space. I think it’s a clear definition to include. The point that was the main issue of disagreement was whether Schwab was offering cash exchange or that kind of service, and I think it’s a good addition to add. CHAIR BARNETT: Other comments? I agree completely. That was a very hard decision to be made by the Planning Commission on the Schwab matter. Commissioner Hanssen. COMMISSIONER HANSSEN: While you were talking, I was looking at the definition and it does not specifically LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 39 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 say cash per se. It does not include payday lending businesses or check cashing, but I don’t think people are going to think about that. It was more about like having an ATM, so I concur we should add that to the definition that people would be able to withdraw cash using ATM or other methods. CHAIR BARNETT: Vice Chair Raspe. VICE CHAIR RASPE: Thank you. Yes, I think ATMs should somehow be incorporated within the definition of bank. My concern is ATMs are so ubiquitous now that they’re in facilities that are not banks. They’re in grocery stores, they’re in standalone kiosks, so my concern is if we throw ATM into the bank definition it might create issues. CHAIR BARNETT: Commissioner Janoff. COMMISSIONER JANOFF: Thank you. I think the clarification to the definition I’m interested in seeing is ATM and cash, because certainly we don’t want to be like a 7-Eleven that’s got an ATM machine, so I think the notion that there has to be a person there whose function as a clerk is to distribute cash would be part of the change of the definition. CHAIR BARNETT: Further comments? LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COMMISSIONER THOMAS: Yes, I was thinking like a teller also; I think that’s what they’re still calling bank tellers. But also I did have some questions about that, because I know that banks have really changed their hours of operation; like Bank of America is not open a lot, the one over at Blossom Hill and Los Gatos Boulevard. Is that just the trend that is happening? All of those bank-like retail locations are just not becoming a thing anymore, so if we add this definition are we basically saying no more banks in town? Not that there’s a problem with that, but is that what might possibly happen? MONICA RENN: You bring up an amazing point. This is something that we’ve talked about with the Chamber quite a bit, just how much real estate in general a bank takes up and then how little interaction there is. Mr. Mullin may want to expand on this, but I think what we’re really trying to do is with the absence of a definition of a bank it caused some issues with us, so we can still have that conversation about what we want to do in general with banks and zoning at another time, but I think what we were trying to achieve here is that now we have a tool or a mechanism to say yes you’re a bank or no you’re not, and then I think it’s a much broader conversation, but you are right on. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Is it appropriate on every other block downtown anymore or not? But I think this is really just giving us the opportunity to define it and then they would go through the CUP process, so it doesn’t allow it by right, it just defines it. COMMISSIONER THOMAS: As a follow up to that I think that we would have to put in a minimum number of hours that they are available to the public, because if they’re only open one hour a day for one day a week, by definition they’re going to be a bank if they have a teller there one hour a day, one day a week. I don't know, so that’s something, maybe not. But now I understand and I do think that that’s a good future discussion. CHAIR BARNETT: I have a question for Staff. The benefit of the distinction between retail bank and financial services, although they have common features, would be that financial services would be in offices only in the C-2 zone? SEAN MULLIN: That’s correct. As we saw during the Schwab debate, with the lack of definition we were relying on the applicant in that case to tell us what a bank was, essentially not having a code to fall back on. We’re not changing the regulatory framework for banks and LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 financial institutions; we’re just trying to draw a clear distinction between the two. CHAIR BARNETT: Understood, thank you. Commissioner Hanssen. COMMISSIONER HANSSEN: I just wanted to add for clarity, because not everyone was on the Commission when we had the discussion about Schwab, they were going to open in a very prime retail space on University and they were posturing as if they would be accessible. Then the questions were could people just walk in, and then they were like hesitating a bit, and then the question came up about whether or not someone could withdraw cash, and Schwab is not that kind of organization, they aren’t set up for that. I think the way it’s explained here on page 20, it says, “Primarily focus on in-person and customer services such as deposits, withdrawals, loans, checking and savings, currency exchanges, mortgages, personal loans.” That’s not financial advisory like Schwab, so I think there’s enough differentiation; if we add in including cash withdrawals onsite, that would add the one thing that a lot of people would go to the bank for. I don't know what to LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 think about the number of hours, but maybe that’s a broader discussion that’s beyond this. CHAIR BARNETT: Commissioner Janoff. COMMISSIONER JANOFF: Thank you, and I would agree that, again, adding cash clarifies it in a way that we didn’t have available before. As far as hours of operation, to me that’s a business model question. You might change banks if it’s only open one hour a day, but I’m not sure that we’re in the business of dictating the hours of the institution, but I would be comfortable adding cash. More than cash and ATM, but cash for sure. CHAIR BARNETT: I was going to ask the question about an ATM, because I’m not sure I see ATMs inside a bank; they’re frequently on the outside of the bank, so is that what we’re talking about specifically? COMMISSIONER HANSSEN: I think it was more that you could get cash in the venue. I think it is a slippery slope with the ATMs, because ATMs are everywhere. Sometimes they’re at gas stations, they’re in the grocery stores, they could be in the pharmacy; I wouldn’t consider any of those a bank. The definition has to be broader, that they offer a range of service, including cash withdrawals. We LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 44 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 may not even need to mention the word ATM, because a cash withdrawal is one service that can be performed at an ATM, but you can do others, so I would just say cash withdrawals. CHAIR BARNETT: All right. Anything further? A motion perhaps? Commissioner Hanssen. COMMISSIONER HANSSEN: I will make a motion that we should forward a recommendation of approval to Town Council regarding the changes recommended in Item C, and I can make the findings for CEQA and for the General Plan, but that we should modify the definition of retail bank to include cash withdrawals in addition to the other items mentioned. CHAIR BARNETT: And a second? Commissioner Janoff. COMMISSIONER JANOFF: Second. CHAIR BARNETT: Discussion on the motion? Commissioner Thomas. COMMISSIONER THOMAS: Just to clarify, so just put “cash” in front of “deposit/withdrawals”? COMMISSIONER HANSSEN: I think that’s fine. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CHAIR BARNETT: Was that an amendment? No. Clarification, right? Discussion? I don’t see any. I’ll call the roll? Commissioner Hanssen. COMMISSIONER HANSSEN: Yes. CHAIR BARNETT: Commissioner Thomas. COMMISSIONER THOMAS: Yes. CHAIR BARNETT: Vice Chair Raspe. VICE CHAIR RASPE: Yes. CHAIR BARNETT: Commissioner Burnett. COMMISSIONER BURNETT: Yes. CHAIR BARNETT: Commissioner Janoff. COMMISSIONER JANOFF: Yes. CHAIR BARNETT: And I vote in favor of it as well, so it’s unanimously approved. We’re making good progress, so why don’t we move on to Item D, which is on PDF page 21 of the Staff Report. I’ll ask if any of the Commissioners have questions of Staff on this matter, wish to comment on it, or make a motion? Yes, Commissioner Hanssen will start. COMMISSIONER HANSSEN: I asked a little bit of questions earlier, because we also had gotten the letter in the addendum. Maybe five years ago the Planning Commission was given an opportunity to attend a presentation on the LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 future of retail, and as we’re probably all familiar, it’s been fairly bleak and it’s in the news every day about new retail locations that are closing, and I think we’ve been fortunate to keep as much retail as we’ve had in our downtown. What’s really happened in the last few years, I think it was mentioned by Ms. Somers and also by our Economic Vitality Manager, is that we have these businesses that come in like Sephora and Lulu Lemon and whatnot, and those are draw businesses and then people stay in town, and I think we have to think like that. The thing that people might be worried about, which would be like is Walmart going to come in and open up a huge thing, we just don’t have the real estate in downtown to make that happen. I don’t think there is retail space to do it anywhere in town honestly, maybe in the outlying part of town, but in any case I think we should do everything we can to make it easy for businesses to be here, and retail businesses in particular, and removing the CUP requirement I think is just fine, and just simply by the amount of square footage we have and what’s available that it will be a limiting factor to anything showing up. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CHAIR BARNETT: Thank you for those comments? Any further questions or comments? Commissioner Thomas. COMMISSIONER THOMAS: I had a question for Staff about if you know how many retail spaces are vacant right now that are larger than 6,000 square feet? MONICA RENN: Specifically, in downtown we have one. We have the former Williams Sonoma. We actually had a couple of formula retailers look at it and they passed; I don't know if it was about the CUP or not; there are other factors that businesses look at when they come in. Outside of downtown we do have the former Rite Aid spot that’s rather large that’s open, and off the top of my head I think those are the only two big spaces. COMMISSIONER THOMAS: Whatever is across the street next to Lundardi’s too. MONICA RENN: The Rite Aid. COMMISSIONER THOMAS: No, the other right next door, like in between the bank. It’s been nothing for a long time. It was like a Hallmark shop, but then before that it was like a Domus. MONICA RENN: I do anticipate there being some changes there just given that there is a long-term land lease that’s about to expire on that space, and so that may LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 have something to do with the tenants and turnover in the tenants. It’s really interesting, those shopping centers function quite differently, because there is one owner that has kind of an overview plan and idea, and then downtown we have an amazing group of owners, 150 or so, and so it’s a little bit different to do long-term planning, and I think that leads to Ms. Somer’s comment about it’s harder to think we’re just going to combine all of these shops and it’s going to become this massive superstore; that’s less likely to happen downtown given the way it functions. CHAIR BARNETT: Commissioner Burnett. COMMISSIONER BURNETT: Thank you, Chair. My question is one of the comment letters that we received about removing the CUP that we discussed, and of course our great Chamber of Commerce manager, but what he said basically was yes, remove the CUP requirement for the Neighborhood Commercial and the CH, but keep it in the Central District in the LM, the Commercial Industrial, and the reason why he said, and it was an important point and I wish to discuss this with the other Commissioners, was that it would be an incentive for the businesses owners to help retain the small businesses over… Basically it would help LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 with the owners of the properties; it would be an incentive. I don't know if there’s a discussion on that. It could be a concern though if you think about it. CHAIR BARNETT: I appreciate that comment. Commissioner Janoff. COMMISSIONER JANOFF: I think the question was what about the amendment that we received and the recommendation to keep big business or big box out of the downtown area? I read that and thought good point, that’s a really interesting point, however, the discussion tonight has been very compelling in terms of wanting businesses to come into town, and the limited number of sites that are that size anyway, so it’s not likely to transform the character of town, so with all due respect to Mr. Meyer, who makes an interesting point, I’m listening to our persons who are much more tightly tied to business and that outweighs that comment for me, and I think I’m in favor of what Staff has recommended for that reason. CHAIR BARNETT: Thank you. Commissioner Burnett. COMMISSIONER BURNETT: Yes, I appreciate that, Commissioner Janoff, and I agree with you. I just wanted to put that out as a question that was raised by Mr. Meyer and I just wanted to address his concerns, but I do agree. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CHAIR BARNETT: Other questions or comments? We had a brief discussion with Mr. Paulson yesterday in preparing for this meeting, and he brought to my attention that the formula retail restriction has not always been in place, and I was wondering if we had some notion of how long it has been in place? JOEL PAULSON: If I’m taking a guess, I want to say 2004, but I could be off by a couple of years. When I first started here many decades ago there was no distinction, but then there became a concern with formula retail in that mix and not wanting to upset that mix, specifically downtown, so it was implemented, and then even prior to the Economic Recovery Agreement stage we actually pulled back for everything less than 6,000 square feet, so it got modified at that point, and so now this is kind of that final step. The other piece is not only this, but any other ones, because it’s the same thing with personal service downtown. That used to be a permitted use, then there was a concern that all of downtown was going to be salons. We haven’t seen that happen, but that’s when that was put into place, and if any of these things start becoming concerns moving forward, Ms. Renn, the planners, they’re all going LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to keep an eye on that, and we have another discussion with the Council and see if we want to look at maybe pulling back from lessening these restrictions, so there is always that opportunity too. CHAIR BARNETT: Thanks for those comments, and I think that’s good for us all to keep in mind. Commissioner Thomas. COMMISSIONER THOMAS: Thank you. I was hoping that Staff could tell us why 6,000 square feet is the number that’s chosen. MONICA RENN: That was the number that was chosen back in like 2004. We had a distinction between formula retail under 6,000 square feet and then over, so anything over 6,000 needed a CUP anywhere, and anything under only needed the CUP in downtown, and that was the way to really preserve the Mom and Pop retail through the time. I did want to add when we removed the CUP for under 6,000 square feet we did it for like a year, temporary basis, and we came back to the Council and said we’ve gotten none, would you like to extend it, and they extended it again as a temporary basis. So this has now been in place since 2018, and just as we’ve done those quick kinds of trials, we could definitely come back to you LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and come back to the Council if things start to unravel and ask do you want to try a temporary in the other direction. COMMISSIONER THOMAS: So we could temporarily require CUPs again? Okay. MONICA RENN: And we have become kind of a leader in the Bay Area, because for a long time everyone was doing formula, and then the Town pulled back, and so other cities will call and say, “What happened? Did the sky fall? Is this okay?” So with this, and with the parklets, and with a lot of our streamlining we’ve been out there as a leader in the Silicon Valley, and a lot of jurisdictions look to us for making these innovative changes. COMMISSIONER THOMAS: Thank you. At the end of this section it says are there specific types of formula retailers that should still require a CUP, and along with that should we discuss expanding it or forwarding with a recommendation to it being a higher number than 6,000 square feet? What I heard from the Chamber is that it should be higher. What I’m hearing from what’s happened, like 6,000, thus far nothing has made a difference, so should that number be bumped up to 8,000 or 10,000? CHAIR BARNETT: Is there a comment from Staff on that? LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 53 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MONICA RENN: I’m not 100% sure. That’s the first time I’ve heard that comment, so I can’t speak for the Chamber. We really don’t have any buildings in town that I can think of outside of like warehouses that are that big. It would really be something where someone combines them. Most of the time if it’s going to be a new development you’re going to hear about it anyway and it’s going to come before the Planning Commission and the Council. This is really looking at a change of use, so something that exists, and then a new user comes in. So you could certainly do that. I’ve heard in the past people don’t like formula retail defined as seven or more, they like it defined more like 50 or more locations makes you a formula, or 100 or more locations make you a formula, so if that was a better level of comfort, that’s also something you could consider. To be honest, when it comes to retail there’s such a delicate balance between the synergy and the competition, and even in-person shopping in general, that a lot of this conversation has just become obsolete, because those really big box retailers are online and they’re looking for smaller footprints anyway; it doesn’t make sense to occupy 10,000 or 12,000 square feet. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 54 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COMMISSIONER THOMAS: And the Williams Sonoma is 6,800? MONICA RENN: I believe it’s something like that. It’s not bigger than that; it’s just over 6,000. COMMISSIONER THOMAS: Okay, thank you. CHAIR BARNETT: I’ll take Commissioner Janoff next. COMMISSIONER JANOFF: Thank you. I would recommend we stick with the language we have, because it’s the language we’ve been using. These are the parameters we know. If we change more variables you can’t really measure in the same way what change might… There’s nothing to compare to, so you’d be changing something on top of something else. So I would recommend that we stick with the language that we’ve had, open it up as recommended by Staff, and see what happens. And then, as Staff has said, if it becomes a problem it goes back to Council or comes back to the Planning Commission for any modification and we’ll see it then, but I like the idea of taking the historic language and carrying it through to the next logical step, see what happens, and then if another change needs to be made, we can do that. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CHAIR BARNETT: Thank you for that. Commissioner Hanssen and then Vice Chair Raspe. COMMISSIONER HANSSEN: I just have a comment. If you look at what is being proposed here, that language is all going away. The word formula will be gone, 6,000 square feet will be gone, and it’s just going to be retail. Given the dramatic changes in the retail landscape, we heard testimony years ago from retailers here saying things like, “People walk in our store. They go outside and go on the Internet and buy it from somebody else,” and we need to help these guys as much as we can, so I think we should do like Commissioner Janoff suggested and stick with the language here. If there were any discussion worth having, it would be is there any business that we would want to exclude? I would advocate not to do that for the reasons I just outlined, and then let the process go where it goes, and if it turns out we have unintended consequences, we can always pull things back. CHAIR BARNETT: Thank you. Vice Chair Raspe. VICE CHAIR RASPE: Thank you, Chair. The last point that Commissioner Hansson made on whether we should have any uses that we don’t want, we still want some LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 56 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 limitation on; the one that’s noted in our report is perhaps, by way of example, alcohol sales. Do we want to allow without a CUP large alcohol sales? I know we’ve had, for instance, BevMo! just opened up. I don't know how big the BevMo! space was, but it seems to me that at least we should consider maybe that’s a discussion we want to have about that’s an area we may want to limit without the CUP. If you can let me know how big the BevMo! space is. Do we know? SEAN MULLIN: I can add it. I’m not sure how large the BevMo! space is, but I will add with the specifics to alcohol the changes as proposed in here would not remove the CUP requirement for any business that wants to sell alcohol for onsite or offsite. The discussion point added here was really about if there is this further control for these formulas over 6,000 that sell alcohol, so BevMo!, if this gets adopted and incorporated into the Town, BevMo! would still require a CUP simply because the existing conditional use table requires a CUP for offsite sales of alcohol or onsite sales. VICE CHAIR RASPE: So instead of belts and suspenders, we have now have belts or suspenders, but we’re still protected from… LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEAN MULLIN: Alcohol would still require a CUP. It may have not been the best example provided for a discussion point in the Staff Report, but it will help you clarify. VICE CHAIR RASPE: Thank you very much. CHAIR BARNETT: Any further questions or comments on D? If not, I’m looking for a motion from the Commissioners. Commissioner Hanssen. COMMISSIONER HANSSEN: I will make a motion that we should recommend to Council to adopt the changes under D that are mentioned in the Staff Report on page 22, and I can make the findings in accordance with CEQA, and also that this is in compliance with the General Plan, and no changes recommended from what’s in the Staff Report. CHAIR BARNETT: Thank you for the motion. Is there a second? Commissioner Thomas. COMMISSIONER THOMAS: I second. CHAIR BARNETT: Any discussion? If not, I’ll call the roll beginning with Commissioner Hanssen. COMMISSIONER HANSSEN: Yes. CHAIR BARNETT: Commissioner Thomas. COMMISSIONER THOMAS: Yes. CHAIR BARNETT: Vice Chair Raspe. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 58 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 VICE CHAIR RASPE: Yes. CHAIR BARNETT: Commissioner Burnett. COMMISSIONER BURNETT: Yes. CHAIR BARNETT: Commissioner Janoff. COMMISSIONER JANOFF: Yes. CHAIR BARNETT: And I vote yes as well; it passes unanimously. We’re making good progress. We have E and F to complete, and E concerns Group Classes in the C-2 zone, and I wonder if Commissioners would like to make any comments on that matter? Specific issue? Maybe there is no discussion required. If not, I’ll ask for a motion on Item E, please. Vice Chair Raspe. VICE CHAIR RASPE: I have no comment, and hearing no comments from my fellow commissioners, I would make a motion that with respect to Group Classes in the C-2 zone we forward to Town Council to accept and incorporate the changes recommended by Staff as set forth on page 13 of our Staff Report, and I would additionally make the findings as required. CHAIR BARNETT: Thank you for the motion. Second? Commissioner Janoff. COMMISSIONER JANOFF: I’ll second. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CHAIR BARNETT: Discussion? Commissioner Hanssen. COMMISSIONER HANSSEN: I just wanted to mention, since I was on the Commission when all these group classes started, and now there are multiple cycle places, there’s Pilates, Pure Barre and whatnot, that when we had the cycle place on Santa Cruz it was a really long Planning Commission discussion and ultimately it got approved. But when you consider the retail environment, we have to encourage things that bring people downtown, and so those are the kinds of that will bring people downtown. Then that was sort of when the juice companies started coming in and they would go to the juice place next door, so this is all good harmonic things that are happening, so I just wanted to give my encouragement before we voted, and why. CHAIR BARNETT: Thank you. So we have a motion and a second. Is there any further discussion? If not, I’ll call the roll. Commissioner Hanssen. COMMISSIONER HANSSEN: Yes. CHAIR BARNETT: Commissioner Thomas. COMMISSIONER THOMAS: Yes. CHAIR BARNETT: Vice Chair Raspe. VICE CHAIR RASPE: Yes. CHAIR BARNETT: Commissioner Janoff. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 60 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COMMISSIONER JANOFF: Yes. CHAIR BARNETT: Commissioner Burnett. COMMISSIONER BURNETT: Yes. CHAIR BARNETT: And I vote yes as well, so that matter passes unanimously as well, and we’re getting to the end. Item F, Veterinarians in the C1 zone, and I’ll call for any questions or comments on that item. I’m not seeing any, so why don’t we move ahead with a motion? Commissioner Thomas. COMMISSIONER THOMAS: I move to forward the recommendation for Item F, Veterinarians in the C1 zone, and stated in the Staff Report. I can make the required findings and recommendations in the Staff Report. CHAIR BARNETT: Thank you for that, and we’ll look for a second. Commissioner Burnett. COMMISSIONER BURNETT: I second that. CHAIR BARNETT: Any discussion? Seeing none, I’ll call the roll again. Commissioner Hanssen. COMMISSIONER HANSSEN: Yes. CHAIR BARNETT: Commissioner Thomas. COMMISSIONER THOMAS: Yes. CHAIR BARNETT: Vice Chair Raspe. LOS GATOS PLANNING COMMISSION 4/26/2023 Item #2, Land Use and Economic Recovery Town Code Amendments 61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 VICE CHAIR RASPE: Yes. CHAIR BARNETT: Commissioner Burnett. COMMISSIONER BURNETT: Yes. CHAIR BARNETT: Commissioner Janoff. COMMISSIONER JANOFF: Yes. CHAIR BARNETT: And I vote as well in favor of the motion, so it passes unanimously. We’ll confirm that there are no appeal rights on this matter, since it’s a recommendation. JENNIFER ARMER: That is correct; since it’s a recommendation to Town Council there are no appeal rights. CHAIR BARNETT: And the findings have been made on each of the separate motions, so I think we’re in good shape there. (END) This Page Intentionally Left Blank