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Item 14 Staff Report Consider Adopting an Ordinance Extending Moratorium on Personal Service Businesses Located on the Ground Floor in the C-2 Central Business District Commercial ZoneCOUNCIL AGENDA REPORT DATE: October 2, 2003 TO: MAYOR AND TOWN COUNCIL FROM: DEBRA J. FIGONE, TOWN MANAGE SUBJECT: MEETING DATE: 10/06/03 ITEM NO. CONSIDER ADOPTING AN ORDINANCE EXTENDING MORATORIUM ON PERSONAL SERVICE BUSINESSES LOCATED ON THE GROUND FLOOR IN THE C-2 CENTRAL BUSINESS DISTRICT COMMERCIAL ZONE. RECOMMENDATION: a. Open and hold the Public Hearing b. Close the Public Hearing c. Direct the Clerk to read title. d. Waive the reading. e Move to introduce and adopt the Urgency Ordinance extending Ordinance 2117 (four votes necessary). f. Instruct the Clerk to publish the Urgency Ordinance within 15 days after adoption. BACKGROUND: On September 2, 2003, Town Council adopted Ordinance 2117, an Interim Urgency Ordinance, that established a temporary prohibition on approval of applications for personal service businesses located on the ground floor in the C-2 Central Business District Commercial Zone . The purpose of this ordinance was to allow staff sufficient time to prepare development standards for personal service businesses. DISCUSSION: Pursuant to Government Code section 65858, urgency ordinances are only effective for 45 days, unless extended. Therefore, unless further action occurs, Ordinance 2117 will expire on October 16, 2003. Extensions are effective for ten months and 15 days. Before extending an urgency PREPARED BY: BUD N. LORT DIRECTOR OF COMMUNITY DEVELOPMENT Reviewed by: Assistant Town Manager Attorney Clerk Finance Community Development Revised: 10/2/03 11:37 am Reformatted: 5/30/02 PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: URGENCY ORDINANCE ON MORATORIUM OF PERSONAL SERVICE BUSINESSES IN C-2 ZONE October 2, 2003 ordinance, Council must make a finding that there is a current and immediate threat to the public health, safety or welfare, or that the approval of additional development applications would result in such a threat. The draft ordinance, included as Attachment 1, extends the moratorium on personal service business and includes the required findings under Section 2. In summary these findings include: • The Town's long standing recognition of the importance of having a unique downtown business environment with an unusual mix of businesses. • Adopted General Plan policies regarding preservation of the Town's unique commercial retail environment and encouraging a mixture of community oriented commercial goods and services. • The need to have complete and comprehensive information necessary to analyze the current business environment and mix of businesses in the central business district. • Stated public concern of the nationwide and local economic recession that has reduced the demand for many retail goods resulting in retail business failures and increased retail space vacancies in the central business district.. • A recent increase in the number of personal service business applications in the central business district potentially threatens the Town's unique downtown retail environment and mix of uses. • Approval of applications for personal services businesses on the ground floor of the central business district may be in conflict with the Town's General Plan and would, therefore, undermine the purpose of studying such future regulations and thereby reducing the quality of life within the community. Since September 2, 2003 when the moratorium on personal service businesses was established, staff has begun a survey of other city regulations and has prepared a work plan for developing personal service regulations. If the Council adopts the attached Urgency Interim Ordinance, the moratorium on personal service businesses will continue until August 1, 2004. During that time, staff will draft Personal Service Business regulations. Residents and the business community will be afforded opportunities to provide input and ultimately the regulations will be brought to the Council for consideration. It is recommended that the process of drafting the regulations be coordinated through the General Plan Committee. PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: URGENCY ORDINANCE ON MORATORIUM OF PERSONAL SERVICE BUSINESSES IN C-2 ZONE October 2, 2003 CONCLUSION: The extension of this Urgency Ordinance is necessary to help mitigate stated concerns and to ensure that the future central business district provides a mix of land uses and unique retail establishments consistent with the General Plan. Additional time is needed to develop a Personal Service Business Ordinance. Therefore, Council should make the required findings and adopt the draft urgency ordinance to extend a moratorium on personal service businesses. It is essential that Council extend the moratorium at the October 6, 2003 meeting since Ordinance 2117 will expire on October 16, 2003. ENVIRONMENTAL ASSESSMENT: It has been determined that this project could not possibly have a significant effect on the environment; therefore, the project is not subject to the California Environmental Quality Act (Section 15061(b)(3)). FISCAL IMPACT: None. Attachments: 1. Draft Urgency Ordinance BNL:TW:mdc N:\DEVICNCLRPTS\personnelserv.urg.ex. wpd ORDINANCE AN URGENCY INTERIM ORDINANCE EXTENDING MORATORIUM ON PERSONAL SERVICE BUSINESSES LOCATED ON THE GROUND FLOOR IN THE C2 CENTRAL BUSINESS DISTRICT COMMERCIAL ZONE. WHEREAS, Government Code § 65858 allows a legislative body, without following the procedures otherwise required prior to the adoption of a zoning ordinance, to adopt, as a urgency measure, an interim ordinance prohibiting any uses which may be in conflict with a contemplated general plan, specific plan, or zoning proposal which the legislative body, planning commission or planning department is intending to study within a reasonable time; and WHEREAS, the zoning provisions of the Los Gatos Town Code does not provide a definition of "Personal Service Business" nor does it contain adequate procedures for investigating and addressing the impacts of a new Personal Service Businesses in the central business district; and WHEREAS, applications have been received by the Town for approval of two new Personal Service Businesses in the central business district, and inquiries have been made of Town staff in anticipation of a third such application; and WHEREAS, concerns have been raised in the community regarding potential detrimental impacts of additional Personal Service Businesses in the central business district, including but not limited to, location, parking, traffic circulation, and land use mix; and WHEREAS, concerns have also been expressed that decisions regarding applications for new Personal Service Businesses should consider the importance of a balanced mix of land uses throughout the central business district; and WHEREAS, the Town does not have complete and comprehensible information analyzing the current business environment of the central business district, describing the total number, type and mix of businesses located therein or the trend of applications for types of businesses, including Personal Service Page 1 of 5 ATTACHMENT 1 Businesses; and WHEREAS, absent comprehensive regulations and a current analysis of the central business district, the Town is unable to ensure informed, consistent, uniform and fair decisions on applications for new Personal Service Businesses in the central business district; and WHEREAS, the Town Council has directed the Town Department of Community Development to evaluate and make recommendations to the Planning Commission and the Town Council regarding the necessity and potential form of regulation of Personal Service Businesses in the central business district; and WHEREAS, approval of applications for new Personal Service Businesses during the time Town staff is studying the business environment and the value of imposing regulations on such businesses in the central business district could result in conflicts with any regulations that might ultimately be adopted, and WHEREAS, since September 2, 2003 when the moratorium on personal service businesses was established, staff began a survey of other city regulations and prepared a work plan for developing personal service regulations. THE TOWN COUNCIL OF THE TOWN OF LOS GATOS ORDAINS AS FOLLOWS: 1. Interim Ordinance. During the term of this Interim Ordinance, no building or zoning applications for permits for Personal Service Businesses located on the ground floor in the C-2 central business district commercial zone received by the Town after August 29, 2003, or has executed a lease by or before August 29, 2003 for locations which Personal Service Businesses would operate, shall be approved by the Town. 2. Findings. a. The Town of Los Gatos has long been recognized as having a unique downtown business environment with an unusual mix of business that distinguishes it from other retail areas and has contributed to its long time vibrancy and financial success. Page 2 of 5 b. The Town's General Plan contains numerous goals, policies and implementing strategies intended to preserve its unique retail environment. For example, the land use designation CBD for central business district (2.4.2) is described as "[encouraging] a mixture of community -oriented commercial goods, services and lodging, that is unique in its accommodation of small town style merchants and the maintenance of a small town feel and character." Elsewhere, concerning the historic downtown area, is a goal to maintain mixture of goods and services, identity, environment and commercial viability (LG.6.2) and a policy to "[e]ncourage the development and retention of small business and locally -owned stores and shops that are consistent with small town character and scale." (L.P.6.2) c. The Town does not have complete and comprehensible information analyzing the current business environment of the central business district, describing the total number, type and mix of businesses located therein, or the trend of applications for types of businesses, including Personal Service Businesses. d. While the precise number of Personal Service Businesses in the central business district has yet to be determined, an initial review of Town business license information indicates that in calendar year 2001 approximately 35 locations in the central business district were used for Personal Services Business, that the number increased slightly to 37 locations in calendar year 2002, and that thus far in calendar year 2003 the number has increased to approximately 40 locations. These include hair salons, barber shops, nail salons and day spas. e. A nationwide economic recession has reduced demand for many retail goods resulting in retail business failures and increasing retail space vacancies in the central business district. f. Within the 30 to 60 day period preceding this ordinance, applications have been received by the Town seeking permits for two new Personal Service Businesses in the central business district and inquiries have been made of Town staff in anticipation of a third such application. Page 3 of 5 g• While the total number of Personal Service Businesses may vary upon completion of a more detailed survey, the preliminary information referred to herein, coupled with the pending and anticipated applications for more such businesses, suggests the existence of a large and rapidly increasing number of businesses in the central business district specializing in hair, nails and skin care and a trend of vacant retail spaces converting to personal service uses. h. An increase in the existing number of Personal Service Businesses in the central business district potentially threatens the Town's unique downtown retail environment in a number of ways, including, but not limited to, an over concentration of Personal Service Businesses that can take over existing retail spaces, reduce the attractiveness of the central business district to retail consumers and to new retail businesses alike, and ultimately limit the ability of the central business district to successfully compete with other business districts in the region. i. For the reasons stated herein, the issuance of building or zoning permits for new Personal Service Businesses located on the ground floor in the central business district commercial zone during the term of this Interim Ordinance poses a current and immediate threat to public health, safety and welfare. j. The Town Department of Community Development has been directed to evaluate and make recommendations to the Planning Commission and the Town Council regarding the necessity and potential form of regulation of Personal Service Businesses in the central business district. k. Approval of applications for building or zoning permits for Personal Service Businesses may be in conflict with the regulations to be analyzed and adopted by the Town and would undermine the purpose of studying such regulation, thereby reducing the quality of life within the community to the extent the overall public health, safety and welfare are detrimentally affected. Page 4 of 5 3. Term. This Interim Ordinance shall expire August 1, 2004, unless extended by Town Council pursuant to Government Code § 65858. 4 Report. At least 10 days prior to expiration of this Interim Ordinance, the Town Council shall issue a written report pursuant to Government Code § 65858 (d) describing the measures taken to alleviate the conditions which have led to the adoption of this Interim Ordinance. 5. Severability. If any part of this Interim Ordinance is held to be invalid or inapplicable to any situation by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Interim Ordinance or the applicability of this Interim Ordinance to other situations. 6. Posting. Within 15 days after its passage, the Town Clerk shall cause this Interim Ordinance to be published once in a newspaper of general circulation published and circulated in the Town and posted in at least three public places within the Town. This Interim Ordinance was passed and adopted at a regular meeting of the Town Council of the Town of Los Gatos on 2003, and adopted by at least a four -fifths (4/5) vote of the Town Council as follows: COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: ATTEST: CLERK OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA N:\DEV\ORDS\PersServOrd2. wpd MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA Page 5 of 5 ORDINANCE 2118 AN URGENCY INTERIM ORDINANCE EXTENDING MORATORIUM ON PERSONAL SERVICE BUSINESSES LOCATED ON THE GROUND FLOOR IN THE C2 CENTRAL BUSINESS DISTRICT COMMERCIAL ZONE. WHEREAS, Government Code § 65858 allows a legislative body, without following the procedures otherwise required prior to the adoption of a zoning ordinance, to adopt, as a urgency measure, an interim ordinance prohibiting any uses which may be in conflict with a contemplated general plan, specific plan, or zoning proposal which the legislative body, planning commission or planning department is intending to study within a reasonable time; and WHEREAS, the zoning provisions of the Los Gatos Town Code does not provide a definition of "Personal Service Business" nor does it contain adequate procedures for investigating and addressing the impacts of a new Personal Service Businesses in the central business district; and WHEREAS, applications have been received by the Town for approval of two new Personal Service Businesses in the central business district, and inquiries have been made of Town staff in anticipation of a third such application; and WHEREAS, concerns have been raised in the community regarding potential detrimental impacts of additional Personal Service Businesses in the central business district, including but not limited to, location, parking, traffic circulation, and land use mix; and WHEREAS, concerns have also been expressed that decisions regarding applications for new Personal Service Businesses should consider the importance of a balanced mix of land uses throughout the central business district; and WHEREAS, the Town does not have complete and comprehensible information analyzing the current business environment of the central business district, describing the total number, type and mix of businesses located therein or the trend of applications for types of businesses, including Personal Service Page 1 of 5 Businesses; and WHEREAS, absent comprehensive regulations and a current analysis of the central business district, the Town is unable to ensure informed, consistent, uniform and fair decisions on applications for new Personal Service Businesses in the central business district; and WHEREAS, the Town Council has directed the Town Department of Community Development to evaluate and make recommendations to the Planning Commission and the Town Council regarding the necessity and potential form of regulation of Personal Service Businesses in the central business district; and WHEREAS, approval of applications for new Personal Service Businesses during the time Town staff is studying the business environment and the value of imposing regulations on such businesses in the central business district could result in conflicts with any regulations that might ultimately be adopted, and WHEREAS, since September 2, 2003 when the moratorium on personal service businesses was established, staff began a survey of other city regulations and prepared a work plan for developing personal service regulations. THE TOWN COUNCIL OF THE TOWN OF LOS GATOS ORDAINS AS FOLLOWS: 1. Interim Ordinance. During the term of this Interim Ordinance, no building or zoning applications for permits for Personal Service Businesses located on the ground floor in the C-2 central business district commercial zone received by the Town after August 29, 2003, or has executed a lease by or before August 29, 2003 for locations which Personal Service Businesses would operate, shall be approved by the Town. 2. Findings. a. The Town of Los Gatos has long been recognized as having a unique downtown business environment with an unusual mix of business that distinguishes it from other retail areas and has contributed to its long time vibrancy and financial success. Page 2 of 5 f b. The Town's General Plan contains numerous goals, policies and implementing strategies intended to preserve its unique retail environment. For example, the land use designation CBD for central business district (2.4.2) is described as "[encouraging] a mixture of community -oriented commercial goods, services and lodging, that is unique in its accommodation of small town style merchants and the maintenance of a small town feel and character." Elsewhere, concerning the historic downtown area, is a goal to maintain mixture of goods and services, identity, environment and commercial viability (LG.6.2) and a policy to "[e]ncourage the development and retention of small business and locally -owned stores and shops that are consistent with small town character and scale." (L.P.6.2) c. The Town does not have complete and comprehensible information analyzing the current business environment of the central business district, describing the total number, type and mix of businesses located therein, or the trend of applications for types of businesses, including Personal Service Businesses. d. While the precise number of Personal Service Businesses in the central business district has yet to be determined, an initial review of Town business license information indicates that in calendar year 2001 approximately 35 locations in the central business district were used for Personal Services Business, that the number increased slightly to 37 locations in calendar year 2002, and that thus far in calendar year 2003 the number has increased to approximately 40 locations. These include hair salons, barber shops, nail salons and day spas. e. A nationwide economic recession has reduced demand for many retail goods resulting in retail business failures and increasing retail space vacancies in the central business district. f. Within the 30 to 60 day period preceding this ordinance, applications have been received by the Town seeking permits for two new Personal Service Businesses in the central business district and inquiries have been made of Town staff in anticipation of a third such application. Page 3 of 5 g• While the total number of Personal Service Businesses may vary upon completion of a more detailed survey, the preliminary information referred to herein, coupled with the pending and anticipated applications for more such businesses, suggests the existence of a large and rapidly increasing number of businesses in the central business district specializing in hair, nails and skin care and a trend of vacant retail spaces converting to personal service uses. h. An increase in the existing number of Personal Service Businesses in the central business district potentially threatens the Town's unique downtown retail environment in a number of ways, including, but not limited to, an over concentration of Personal Service Businesses that can take over existing retail spaces, may reduce the attractiveness of the central business district to retail consumers and to new retail businesses alike, and ultimately may limit the ability of the central business district to successfully compete with other business districts in the region. i. For the reasons stated herein, the issuance of building or zoning permits for new Personal Service Businesses located on the ground floor in the central business district commercial zone during the term of this Interim Ordinance poses a current and immediate threat to public health, safety and welfare. J. The Town Department of Community Development has been directed to evaluate and make recommendations to the Planning Commission and the Town Council regarding the necessity and potential form of regulation of Personal Service Businesses in the central business district. k. Approval of applications for building or zoning permits for Personal Service Businesses may be in conflict with the regulations to be analyzed and adopted by the Town and would undermine the purpose of studying such regulation, thereby reducing the quality of life within the community to the extent the overall public health, safety and welfare are detrimentally affected. Page 4 of 5 3. Term. This Interim Ordinance shall expire August 1, 2004, unless extended by Town Council pursuant to Government Code § 65858. 4 Report. At least 10 days prior to expiration of this Interim Ordinance, the Town Council shall issue a written report pursuant to Government Code § 65858 (d) describing the measures taken to alleviate the conditions which have led to the adoption of this Interim Ordinance. 5. Severability. If any part of this Interim Ordinance is held to be invalid or inapplicable to any situation by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Interim Ordinance or the applicability of this Interim Ordinance to other situations. 6. Posting. Within 15 days after its passage, the Town Clerk shall cause this Interim Ordinance to be published once in a newspaper of general circulation published and circulated in the Town and posted in at least three public places within the Town. This Interim Ordinance was passed and adopted at a regular meeting of the Town Council of the Town of Los Gatos on October 6, 2003, and adopted by at least a four -fifths (4/5) vote of the Town Council as follows: COUNCIL MEMBERS: AYES: Steve Glickman, Joe Pirzynski, Mike Wasserman, Sandy Decker. NAYS: Diane McNutt ABSENT: None ABSTAIN: None SIGNED: /s/ Sandy Decker MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: /s/ Marian V. Cosgrove CLERK OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA Page 5 of 5