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Item 23 Staff Report Adopt Resolution Modifying the Downtown Alcoholic Beverage Policy and Continue the Discussion of Late Night Service to January 4, 1994COUNCIL AGENDA DATE: 11/15/93 ITEM NO. TOWN OF LOS GATOS COUNCIL AGENDA REPORT 3 DATE: November 10, 1993 TO: MAYOR AND TOWN COUNCI FROM: TOWN MANAGER SUBJECT: ADOPT RESOLUTION MODIFYING THE DOWNTOWN ALCOHOLIC BEVERAGE POLICY AND CONTINUE THE DISCUSSION OF LATE NIGHT SERVICE TO JANUARY 4, 1994. RECOMMENDATION: 1. Adopt resolution modifying the Alcoholic Beverage Policy; 2. Direct staff to organize a committee of downtown restaurant owners to help draft standards and conditions to be ordained for all restaurants serving alcoholic beverages late night. 3. Continue this matter to January 4, 1994. 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: sm SM04\CNCLRPTS\alcohol.pol (Continued on Page 2) ATTACHMENTS: Resolution and Amended Alcoholic Beverage Policy 11/10/93 3:06 pm File 6 Reviewed by: Attorney Clerk Finance Treasurer COUNCIL ACTION/ACTION DIRECTED TO: PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: ALCOHOLIC BEVERAGE POLICY November 10, 1993 The Council did not decide 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. DISCUSSION: Alcoholic Beverage Policy Amendments The Council adopted changes to the Alcoholic Beverage Policy on November 1, 1993, are described below. In addition to the changes adopted by Council, other language changes are proposed to clarify the policy. POLICY CONCERNING REGULATING THE SALE OF ALCOHOLIC BEVERAGES IN DOWNTOWN LOS GATOS The deciding body may approve a Conditional Use Permit for a restaurant and wine to serve alcoholic beverages with meals owntown, based on the merits of the project if the following minimum requirements are met: 1. lodining areas, alcoholic beverage s Beer d-wine may only be served with meals on-tfte premises. A meal is defined as a combination of food items selected from a menu (breakfast, brunch, lunch or dinner). Appetizers suci as popcorn,;nachos, pretzels, potato skins, relish trays etc (hot or cold) are not considered rneals 2. The service of Max.imum hears of -operation atcoftolic beverages:;; shall not exceed be from 11-0 A.M. to 11 P.M. seven days a week. 3. Alcohoiic beverage service In approved outdoor seating areas maybe permitted f adequate separation from public areas is provided. The separation shall clearly suggest that alcohol is not allowed outside the restaurant seating; area. 34 No entertainment uses shall be allowed for -the in restaurants. 45. The Conditional Use Permit shall be subject to annual review by the Town Police Department Chief. 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 new bar establishments ' 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. Committee of Restaurant Owners Staff recommends that a committee be established consisting of downtown restaurant owners to help draft conditions and standards to apply to all restaurants serving alcoholic beverages, particularly addressing late night service. Staff believes a cooperative effort with the restaurant owners will help build consensus resulting in a true community policy regarding alcoholic beverage service in the downtown. Staff anticipates meeting two or three times with a committee representing five full service restaurants that are established and have operated responsibly. The committee with staff will reach consensus and recommend to Council conditions for adoption. These conditions will be standard for all restaurants wanting to serve Alcohol after 10 PM. PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: ALCOHOLIC BEVERAGE POLICY November 10, 1993 One standard suggested by Council is monitoring gross receipts to determine the percentage of income received for food and alcoholic beverages. The theory being if an establishment's income is heavily dependent on alcoholic beverage sales, operation may not be consistent with a restaurant use. Information provided to the Town's Finance Manager does not categorize gross receipts and the information is not public record. Therefore, a break down of gross receipts must be provided voluntarily by the restaurant owner, probably on a quarterly basis. This is a condition not currently required of a business owner. If the Town determined, for example, that a restaurant collecting more than 50 percent of its income from alcoholic beverage sales is in violation, the restaurant owner is placed in the uncomfortable position of providing information that could seal his fate. The Town has approximately 45 restaurants in the Central Business District. Monitoring this condition will likely be labor intensive and costly requiring an increase in the application fee for restaurants. Also, this condition in itself may not provide a clear indication whether a public nuisance exists. Using the example above, a restaurant may be collecting more than 50 percent of its income from alcoholic beverage sales, but is operating responsibly. Staff recommends establishing criteria that measures the conduct of an operation such as monitoring the number of police service calls, Alcohol Beverage Control License violations, neighborhood complaints and general compliance with conditions of approval. Retroactive Provisions The Alcoholic Beverage Policy was initially adopted in 1986 and it applies to all Conditional Use Permits issued after adoption of the policy. Some of the older restaurants having conditional use permits issued prior to the alcoholic beverage policy allow late night alcoholic beverage service. To create a level playing field for all restaurants downtown, it is recommended that the standards and conditions adopted by Council be ordained and made retroactive to existing restaurants. This does not imply that existing restaurants would have to cut back hours. It means all restaurants serving alcoholic beverages late night would be under the same set of rules and conditions. FISCAL IMPACT: If monitoring gross receipts is an adopted condition, the increase in service level may require an increase in fees for restaurants serving alcoholic beverages. RESOLUTION RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS REGULATING THE SALE OF ALCOHOLIC BEVERAGES DOWNTOWN WHEREAS, it is the intention of the Town Council to allow responsible restaurant owners to serve alcoholic beverages with meals including alcoholic beverage service with brunch. RESOLVED: the Town Council of the Town of policy statement as shown on Exhibit A. PASSED AND ADOPTED at a regular meeting 15th day of November, 1993, by the following vote: COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: ATTEST: Los Gatos does hereby adopt the of the Town Council held on the MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA CLERK OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA SM04\RESOS\ALCOHOL.POL POLICY REGULATING THE SALE OF ALCOHOLIC BEVERAGES DOWNTOWN The deciding body may approve a Conditional Use Permit for a restaurant to serve alcoholic beverages with meals, based on the merits of the project if the following minimum requirements are met: 1. In dining areas, alcoholic beverages may only be served with meals. A meal is defined as a combination of food items selected from a menu (breakfast, brunch, lunch or diner). Appetizers such as popcorn, nachos, pretzels, potato skins, relish trays, etc. (hot or cold) are not meals. 2. The service of alcoholic beverages shall not exceed 10 AM to 11 PM seven days a week. 3. Alcoholic beverage service in approved outdoor seating areas may be permitted if adequate separation from public areas is provided. The separation shall clearly suggest that alcohol is not allowed outside the restaurant seating area. 4. No entertainment uses shall be allowed in restaurants. 5. The Conditional Use Permit shall be subject to annual review by the Police Chief. 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 new bar establishments with or separate from a restaurant use. In addition, the Town shall discourage applications for entertainment establishments serving 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. SM04\MISC\ALCOH. POL November 15, 1993 Los Gatos, California DEVELOPMENT REVIEW COMMITTEE/LAND USE PERMITS/ORDINANCE 1963 (14.46) Motion by Mrs. Benjamin, seconded by Mrs. Lubeck, that Council adopt Ordinance 1963 entitled, ORDINANCE OF THE TOWN OF LOS GATOS AMENDING THE TOWN CODE TO PROVIDE AUTHORIZATION TO THE DEVELOPMENT REVIEW COMMITTEE TO BE THE DECIDING BODY FOR DETERMINING CERTAIN LAND USE PERMITS, which was introduced at the Town Council meeting of November 1, 1993, and which will include clarification of the last sentence in Sec. 24.10.020, "The Town Council is the advisory agency for vesting tentative maps." Carried unanimously. ROUTE 85/TOWN STREETS/LANDSCAPING (22.39) Motion by Mrs. Benjamin, seconded by Mrs. Lubeck, that Council approve final Route 85 Landscape Plans for freeway right-of-way as recommended by the Route 85 Landscape Committee. Carried unanimously. Council consensus to continue working with the Traffic Authority and CalTrans, and the Oka Road/Mozart Neighborhood, to establish low maintenance landscaping in that area. ALCOHOLIC BEVERAGE POLICY/LATE NIGHT SERVICE (23.42) Motion by Mr. Blanton, seconded by Mr. O'Laughlin, that Council establish a committee to review the matter of alcohol in the downtown area, composed of restaurant owners and representatives from the police department and other members of the community, and to also review the possibility of looking at gross receipts as one determinant of identifying a restaurant or bar. Carried by a vote of 4 ayes. Mr. Attaway voted no. Motion by Mr. O'Laughlin, seconded by Mrs. Lubeck, that Council adopt Resolution entitled, RESOLUTION OF THE TOWN OF LOS GATOS REGULATING THE SALE OF ALCOHOLIC BEVERAGES DOWNTOWN, which Council considered November 1, 1993, and which modified the Alcoholic Beverage Policy for the Downtown, and specifically states: 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 a.m. rather than 11 a.m., this change accommodates restaurants serving brunch; a definition of meal is established; and alcoholic beverage service outdoors is regulated. To be reopened for discussion in January. Motion failed by a vote of 2 ayes and 3 nays. Mrs. Benjamin, Mr. Blanton and Mayor Attaway voted no. Larry Anderson, Town Attorney, stated that staff would be bringing back an ordinance in mid February, to become effective 30 days later, with the suspension and revocation procedure of use permit that code compliance may use in enforcing this policy. Motion by Mrs. Benjamin, seconded by Mr. Blanton, that Council continue this item until the committee report is returned to Council. Carried by a vote of 4 ayes. Mr. O'Laughlin voted no. TC: D5: MM 111593 7