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Item 19 Staff Report Consider Adopting Resolution Modifying the Downtown Alcoholic Beverage Policy and Expanding Policy Town-WideTOWN OF LOS GATOS COUNCIL AGENDA REPORT DATE: December 28, 1993 TO: MAYOR AND TOWN-COUNCI FROM: TOWN MANAGER SUBJECT: COUNCIL AGENDA DATE: 1/3/94 ITEM NO. / 1 `/3 CONSIDER ADOPTING RESOLUTION MODIFYING THE DOWNTOWN ALCOHOLIC BEVERAGE POLICY AND EXPANDING POLICY TOWN -WIDE RECOMMENDATION: 1. Hold the public hearing and receive public testimony. 2. Close the public hearing. 3. Adopt resolution modifying the Alcoholic Beverage Policy. 4. Direct staff to prepare a Town Code amendment establishing an administrative procedure to enforce conditions related to alcoholic beverage service. 5. Thank the restaurant owners committee for their time and valuable input into this process. BACKGROUND: On November 1, 1993 the Town Council considered a recommendation from the Planning Commission to modify the Alcoholic Beverage Policy for the Downtown and to consider expanding the hours alcohol may be served with meals in restaurants. The Council decided to modify the policy as follows: ■ The sale of hard liquor with meals in restaurants may be permitted. • The morning hour restriction is changed to allow alcoholic beverages served with meals to begin at 10 AM rather than 11 AM. This change accommodates restaurants serving brunch. A definition of meal is established. Alcoholic beverage service outdoors is regulated. PREPARED BY: LEE E. BOWMAN PLANNING DIRECTOR LEB: KH:mb mb09\CNCLRPTS\alcohol.pol ATTACHMENTS: See page 4 for list of attachments DISTRIBUTION: See page 4 for distribution list (Continued on Page 2) 12/28/93 4:23 pm File # Reviewed by: Attorney Clerk Finance Treasurer COUNCIL ACTION/ACTION DIRECTED TO: PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: ALCOHOLIC BEVERAGE POLICY December 28, 1993 The Council did not decide whether to extend nighttime alcoholic beverage service. The Council continued the item and directed staff to draft standards and conditions regulating late night alcoholic beverage service under which restaurants could be reviewed. This matter was returned to the Council on November 15, 1993 and staff recommended that a committee of downtown restaurant owners be organized to assist staff in drafting standards and conditions for establishments serving alcoholic beverages. This committee met with staff on November 30, December 7 and December 15, 1993. The last meeting included Councilmember Patrick O'Laughlin. DISCUSSION: The format of the proposed policy is different from the current policy and the standard "redline" version typically used for amendments to demonstrate changes between the two does not effectively work in this case. For reference, the current policy is Attachment 2 of this report and the proposed policy is Exhibit A of Attachment 1. An explanation of the proposed changes follows: In evaluating the alcoholic beverage policy, the committee and staff wanted to draft a policy that would: 1. Include standard conditions that would apply to all establishments serving alcoholic beverages. 2. Not prohibit responsible restaurant owners from expanding their operation or hours; 3. Provide an administrative process to swiftly and effectively deal with those who do not operate in compliance with the policy. Changes That Are Not Proposed While changes are proposed, there are current policies that are recommended to remain. The policy still recommends that new applications for bars in conjunction with restaurants and new stand alone bars be discouraged. These are major policy issues and no changes are being recommended. Also, entertainment establishments serving alcoholic beverages are also discouraged. However, staff is currently working on a draft policy that would provide a permit process, similar to the special events permit process, for which a business may obtain a permit through the Chief of Police to have entertainment. Proposed Changes 1. The current policy applies only to the Central Business District. It is recommended that the proposed policy be applied Town wide. A major element of this proposed policy is the reference to an administrative procedure (further explanation of this procedure will follow in this report) that provides for swift enforcement action against those in violation of their conditions or Town Policy. As the Council is well aware, the Town has experienced problems with restaurants outside the downtown. 2. A major change proposed is eliminating restrictions on hours of operation. Currently, no new establishment is permitted to serve alcoholic beverages past 11 PM. Many establishments in Town have conditional use permits pre -dating the Alcoholic Beverage Policy that allows them to serve alcohol late night. There are also existing restaurants that have operated responsibly that can not have extended hours because of the restrictions in the current policy. This inequity often penalizes responsible business owners and may in turn hurt the Town. In 1990, an economic study prepared by Economic Research Associates for the Town determined that eating establishments serving alcoholic beverages provides increased revenues. While the Council does not want to determine land use policy from a fiscal perspective, the success of the full service restaurant community plays a major role in the vitality of the downtown which is in everyone's best interest. While no hour restrictions are recommended, restaurants with separate bars would be required to keep their dining areas and kitchens open to avoid the separate bar from dominating the business. PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: ALCOHOLIC BEVERAGE POLICY December 29, 1993 Also, a major ingredient in this policy is that specific hours of operation are determined on a case by case basis under each conditional use permit application. These hours may be restricted for a number of reasons including but not limited to an establishment's proximity to residential neighborhoods or schools, the concentration of establishments serving alcohol in a given area or other reasons that may be raised at the public hearing. 3. Three categories of establishments are recognized; restaurants, restaurants with separate bars and stand alone bars. All three are different and require different rules. A restaurant may only serve alcohol in conjunction with meals which is consistent with current policy. Given the cost for unlimited liquor licenses, it does not appear likely that restaurants without separate bars will request unlimited liquor licenses. Enforcing the requirement that alcohol be served only with meals is difficult. For example, a person could order a drink first and then fail to order a meal. John Watson, of the Alligator Grill, wanted to participate on the committee but was unable to do so. He has suggested alternative means of control, including requiring that restaurants serving alcohol maintain a certain ratio of kitchen space to total space or requiring a certain ratio of kitchen payroll to total payroll. Restaurants with separate bars will be allowed to serve alcohol in the dining area only with meal service. This is also consistent with current policy. New stand alone bars or bars in conjunction with restaurants are still discouraged. 4. Under the new proposal, a "General Policy" section is recommended that would apply to all three categories. Policy #3 under that section establishes conditions that will be standard in all use permits for alcoholic beverage service. This is the area the restaurant committee was most helpful in identifying conditions that are both workable and acceptable. Conditions "a" and "b" have been standard conditions required by staff for the last two years. The added conditions include the requirement for an employee training manual that addresses alcoholic beverage service consistent with the standards of the California Restaurant Association. Through the discussions with the committee, most of the reputable and responsible restaurants have employee training manuals that address alcoholic beverage service. A designated driver program is also required which may include providing complimentary non-alcoholic beverages for designated drivers. Most of the establishments already provide this service. Additionally, taxicab telephone numbers shall be posted in a visible location. The committee expressed a real concern about the lack of taxicabs available in Town. The Council's recent amendment to the Town Code concerning licensing of taxicabs should make taxicabs more accessible to restaurant owners. The committee discussed auditing sales receipts as a condition of alcohol service. Since the consumption of alcoholic beverages fluctuates, the committee expressed concern with how to establish the threshold by which compliance would be determined. Presently, consumption is down, meaning fewer people are drinking. The committee felt it would be very difficult to gauge the conduct of an operation through alcoholic beverage sales. 5. As discussed previously in this report, a key element of this policy is the provision for an administrative enforcement procedure to effectively deal with violators. The procedure would give the Town Manager authority to impose the conditions under #3 and curb the hours of an establishment serving alcoholic beverages late night without having to refer the matter to the Planning Commission. Decisions of the Town Manager would be appealable to the Town Council. For example, if an establishment allowed under use permit to operate until 1 AM experiences alcohol related problems, the Town Manager could curb the hours of operation after 10 PM until the problems are resolved. This procedure provides for swift action as opposed to the time consuming and often ineffective revocation process. Staff is in the process of drafting this administrative procedure for Council review. The administrative procedure would be used for immediate enforcement action. The revocation process will remain in place should the Planning Commission or Council need to take extreme action. PAGE 4 MAYOR AND TOWN COUNCIL SUBJECT: ALCOHOLIC BEVERAGE POLICY December 29, 1993 6. If adopted, the proposed policy will apply only to new applications or modifications to existing conditional use permits. When the administrative procedure for enforcing the policy is presented to the Council, a Town Code amendment will also be proposed that will establish a time period in which any restaurants serving alcoholic beverages, both existing and new, will be subject to the conditions of the Alcohol Beverage Policy. CONCLUSION: While the proposed policy may appear to broaden the scope in which alcoholic beverages may be served it still discourages new bars with or without restaurants and adds a provision for swift and effective enforcement action should alcohol related problems occur. The policy creates a level playing field for all establishments. Staff would like to recognize and thank the restaurant committee for taking time out of their busy schedules, especially during the holiday season, for their significant contribution to this process. During our meetings it was clear that the committee understood the Council's concerns and are in agreement that the image and character of Los Gatos be protected and preserved for the benefit and enjoyment of both business and residents. Of the restaurant owners that were invited to sit on the committee, the following representatives participated: John Hannegan and Chris Benson Andrew and Pete Pavicich Mark Nodurft Paul Matulich Penny Ivanovich FISCAL IMPACT None ATTACHMENTS: DISTRIBUTION: C.B. Hannegan's Los Gatos Brewing Co. California Cafe Steamers Restaurant Valeriano's Ristorante 1. Resolution and Alcoholic Beverage Policy 2. Current Alcoholic Beverage Policy 3. List of Restaurants and Bars in the C-2 zone. Andrew and Pete Pavicich, Los Gatos Brewing Co., 130-G N. Santa Cruz Ave., Los Gatos, CA 95030 John Hannegan/Chris Benson, C.B. Hannegan's, 208 Bachman Ave., Los Gatos, CA 95030 Mark Nodurft, California Cafe, 50 University Ave., Los Gatos, CA 95030 Paul Matulich, Steamers Restaurant, 50 University Ave., Los Gatos, CA 95030 Penny Ivanovich, Valeriano's Ristorante, 160 W. Main St., Los Gatos, CA 95030 Barbara Spector, St. James Park Building, 152 N. Third Street, Suite 50 SJ 95112 John Watson, Alligator Grill, 15 1/2 N. Santa Cruz Avenue, Los Gatos, CA 95030 Joe Hargett, 95 Church Street, Los Gatos, CA 95032 Larry Todd, Chief of Police RESOLUTION RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS REGULATING THE CONSUMPTION AND SERVICE OF ALCOHOLIC BEVERAGES WHEREAS, the consumption and service of alcoholic beverages, if not regulated, can jeopardize public safety, result in an increase of calls for police services and compromise the quality of life for Town residents; WHEREAS, while it is the intention of the Town Council to regulate alcoholic beverage service, it also wants to allow responsible restaurant owners to serve alcoholic beverages with meals to maintain a vibrant, full service restaurant community that contributes significantly to the success of our commercial districts. RESOLVED: the Town Council of the Town of Los Gatos does hereby adopt the policy statement as shown on Exhibit A. PASSED AND ADOPTED at a regular meeting of the Town Council held on the day of , 1993, by the following vote: COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA IEST: CLERK OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA mb09\RESO\alcohol.pol POLICY REGULATING THE CONSUMPTION AND SERVICE OF ALCOHOLIC BEVERAGES Purpose The consumption or service of alcoholic beverages, if not regulated, can jeopardize public safety, result in an increase of calls for police services and compromise the quality of life for Town residents. This policy provides parameters for alcoholic beverage service, particularly addressing late night service when alcohol related incidents are most likely to occur. The deciding body may approve a conditional use permit to serve alcoholic beverages based on the merits of the application and subject to the following requirements: Restaurants: Alcoholic beverages may only be served with meals. Restaurants With Separate Bars: 1. Alcoholic beverage service is permitted in the dining area only in conjunction with meal service. Seating for meal service shall be available in the dining area until closing or 11 PM Sunday through Thursday and until 12 midnight Friday, Saturday, holidays and evenings before holidays, whichever is earlier, if late night bar service is available. Specific hours of operation for each establishment are determined upon issuance of a conditional use permit. Hours of operation may be regulated based on an establishment's proximity to residential neighborhoods or schools, the concentration of establishments in an area serving alcoholic beverages or for other reasons that may be raised at the public hearing. 2. The Town shall continue to discourage applications for new restaurants with separate bars. Stand Alone Bars: The Town shall continue to discourage applications for new stand alone bars. General Policy: 1. A meal is defined as a combination of food items selected from a menu (breakfast, brunch, lunch, or dinner). Appetizers such as popcorn, nachos, pretzels, potato skins, relish trays, etc. (hot or cold) are not meals. 2. Alcoholic beverage service in approved outdoor seating areas may be permitted if adequate separation from public areas is provided as determined by the Town Manager. The separation shall clearly suggest that alcohol is not allowed outside the restaurant seating area. EXHIBtT A 3. Any establishment serving alcoholic beverages shall be subject to the following: a. Uniformed privately provided security guards may be required in or around the premises by the Chief of Police if alcohol related problems recur that are not resolved by the licensed owner. b. At the discretion of the Chief of Police, periodic meetings will be conducted with representatives from the Police Department for on -going employee training on alcoholic beverage service to the general public. c. All establishments shall use an employee training manual that addresses alcoholic beverage service consistent with the standards of the California Restaurant Association. d. All licensed operators shall have and shall actively promote a designated driver program such as complimentary non-alcoholic beverages for designated drivers. e. Taxicab telephone numbers shall be posted in a visible location. 4. All conditional use permits issued to establishments for alcoholic beverage service on -site shall be subject to Section ( ) of the Town Code authorizing the Chief of Police and the Planning Director to take enforcement action pursuant to Council Resolution 1993-( ) if it is determined that the sale of alcohol has become a nuisance to the Town's public health, safety and welfare. 5. The Town shall continue to discourage applications for entertainment establishments serving alcoholic beverages. The Alcoholic Beverage Policy is not to be construed to be a right of developments. The Town retains the right of review and approval (or denial) of each project based on its merits. mb09\misc\alcohol.pol POLICY CONCERNING THE SALE OF ALCOHOLIC BEVERAGES IN DOWNTOWN LOS GATOS The deciding body may approve a Conditional Use Permit for a restaurant, including the sale of beer and wine with meals, in downtown, based on the merits of the project if the following minimum requirements are met: 1. Beer and wine may only be served with meals on the premises. 2. Maximum hours of operation shall be from 11 A.M. to 11 P.M. seven days a week. 3. No entertainment uses shall be allowed for the restaurant. 4. The Conditional Use Permit shall be subject to annual review by the Town Police Department. If it is determined that the sale of alcohol is a nuisance, the permit shall be subject to reevaluation by the Planning Commission. The Town shall continue to discourage applications for the sale of hard liquor with meals and for new bar establishments in conjunction with or separate from a restaurant use. In addition, the Town shall discourage applications for entertainment establishments which serve any type of alcoholic beverages. The aforementioned policy statement is not to be construed to be a right of development. The Town specifically retains the right of review and approval (or denial) of each project based on its merits. C31 \MISC\ALCOPOLCLN ATTACHMENT 2 0 u 0 U J 0 Beer and wine E HOURS OF OPERATION E rnj E c c1 E as ?cn c. 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J cd 0 0 J W Z 0 N N U W 2 u7 Z ''a^^ v/ cc Cr7 W cc a EI 0 co cc W 0 I IOURS OF OPERATION LCi C CO O 0 Co Oi E O C O C 0I 0 CI C E y0I0 O (0 O C O QI < IQ► c CO O) 1 Of n to m col m� ail a; N N N > U UIU 0 as e¢ COCU CO) CO vi of COI COI O C O 0 0 EI O co 0 C 0 O C 0 c� `! E o co E Ic o E I• T 0 E E E E LO O cal0co Ci �I CI E 01 0 C C O C 0 1 a) c 0 O C 0I 0 CI C O O J J 01 0 5 5 O C 0 C IQ 0 O C colco 21 = cot 0) 0 N 0 0 0 O In 0 Lo 0 0 I0 0 0 tit 0 IC) o CO N CO (] (') o l (00 RESTAURANT NAME C A 7 0 0 N 0 0 2 0 O 0' V) 0 U R cff c 0I o` 0 0 U C_ t E (a In (0 N 3 -o In a) 3 m 0 7 W C} R UI U 0) y CO Cr O1 0 0 U 0 0 -•0 C 01 0 011 O na DATE: TO: FROM: SUBJECT: Background: COUNCIL AGENDA DATE: 1/3/94 ITEM NO. 19 DESK ITEM TOWN OF LOS GATOS COUNCIL AGENDA REPORT JANUARY 3, 1994 MAYOR AND TOWN COUNCIL TOWN MANAGER CONSIDER ADOPTING RESOLUTION MODIFYING THE DOWNTOWN ALCOHOLIC BEVERAGE POLICY AND EXPANDING POLICY TOWN -WIDE Refer to the attached Administrative Enforcement Policy. PREPARED BY: LARRY J. TODD CHIEF OF POLICE LJT:sf 1/3/94 4:55 pm PDSFO06:A:\CNCLRPTS\ABC.ITM File # Attachment: 1. Administrative Enforcement Policy Distribution: General Distribution Reviewed by: r Attorney Clerk Finance Treasurer COUNCIL ACTION/ACTION DIRECTED TO: 1/4 ADMINISTRATIVE ENFORCEMENT PROCEDURE The following criteria will be used when considering operating restrictions of establishments serving alcoholic beverages as outlined in the Policy Regulating the Consumption and Service of Alcoholic Beverages. Operating restrictions will be taken only after the owner/manager of an establishment serving alcoholic beverage has been informed of the problems/complaints and has been given a reasonable opportunity to correct the problems. Operating restrictions may be ordered based on, but not limited to, any of the following factors: 1. Number and type of calls for service at or near the establishment which are a direct result of patron actions. 2. Number of complaints from residents and other citizens. 3. Number of arrests for alcohol, drug, disturbing the peace, fighting, and public nuisance violations. 4. ABC and/or Health Department actions. 5. Violation of zoning, permit, or housing requirements. 6. Fire or Building Code violations affecting public safety. Attachment 1 January 3, 1994 Los Gatos, California VERBAL COMMUNICATION: John Hernandez, Homeless, spoke of the need for Los Gatos to establish a system for local homeless to have long term housing in Town. HEARINGS ALCOHOL BEVERAGE POLICY/TOWNWIDE POLICY/HEARING (19.43) Mayor Attaway stated that this was the time and place duly noted for public hearing to consider adopting resolution amending Town's policy regarding service of alcoholic beverages. The following people from the audience spoke to this issue: Dan McFadden, 123 University, asked Council to define a restaurant with more specificity. John Watson, 16592 Englewood, representing the Alligator Grill, asked Council to review different ways of defining restaurants using gross receipts or square footage. No one else from the audience addressed this issue. Motion by Mrs. Benjamin, seconded by Mr. Blanton, to continue this public hearing to Tuesday, February 22, 1994, and to request additional input to the Townwide Alcohol Policy from the public, especially those that live adjacent to the business establishments, and have staff prepare amendments to Town Code which address the concerns that were raised this evening. Carried unanimously. NORTH SANTA CRUZ AVE. 130G/CONDITIONAL USE PERMIT U-77-24E THE BREWERY/RESTAURANT/APPEAL (20.09) Mayor Attaway stated that this was the time and place duly noted for public hearing to consider appeal of Planning Commission decision to deny a request for permission to extend hours of operation for an existing restaurant and bar on property in the C-2 zone. Conditional Use Permit Application U-77-24E. Property located at 130-G N. Santa Cruz Avenue. Property owner, Vargo Properties. Applicant: Los Gatos Brewing Company. The following people from the audience spoke to this issue: John Hopkins, 136 Tait, representing the Brewing Company, requested continuance to February 22, 1994. Derik Qualls, 227 Drive, spoke to the wrong issue having wanted to speak to Item 22. Dan McFadden, 123 University, agreed to the continuance to February 22, 1994. No one else from the audience addressed this issue. Motion by Mrs. Lubeck, seconded by Mr. O'Laughlin, that Council continue this hearing to February 22, 1994. Carried unanimously. BROADWAY 93/HISTORIC HOME/DEMOLITION/BRANDHORST/APPEAL (21.09) Mayor Attaway stated that this was the time and place duly noted for public hearing to consider appeal of Planning Commission decision to approve a modification to previously approved application for an addition to a single family residence. This modification is for the construction of a new single family residence which has already 'Yen demolished without approval on property zoned R-1D LHP. Architecture and Site Application S-85-63B. Property located at 93 Broadway. Property Owner: Lynn Brandhorst. Appellant: Brent Ventura. TC:06: MM010394