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Desk Item 17 Staff Report Discussion of Policy Issues Regarding Personal Services in C-2 Zone and Consideration of Adopting a Proposed Urgency Ordinance to Establish a Temporary Prohibition on Personal Service Businesses Locating on the Ground Floor in thDATE: TO: FROM: SUBJECT: MEETING DATE: 9/2/03 ITEM NO. 17 COUNCIL AGENDA REPORT DESK ITEM September 2, 2003 MAYOR AND TOWN COUNCIL DEBRA J. FIGONE, TOWN MANAGER DISCUSSION OF POLICY ISSUES REGARDING PERSONAL SERVICES IN C-2 ZONE AND CONSIDERATION OF ADOPTING A PROPOSED URGENCY ORDINANCE TO ESTABLISH A TEMPORARY PROHIBITION ON PERSONAL SERVICE BUSINESSES LOCATING ON THE GROUND FLOOR IN THE C-2 CENTRAL BUSINESS DISTRICT COMMERCIAL ZONE Attached please find an inventory of Personal Service Businesses currently located in the C-2 Central Business District Zone. In addition to this inventory, the total number of all businesses located in the C-2 Central Business District Zone is provided. The Town Zoning Code does not include a definition of "personal service businesses" but it has been interpreted to include those uses that provide an occupational rather than a professional service to an individual. Examples of these occupational type services include hair salons, nail salons, day spas, and personal fitness training. The attached letter of concern (Attachment 2) was received after the Town Council Report was prepared. Attachments: Attachmentl: Personal service business inventory. Attachment 2: Letter dated received September 2, 2003. ,k& PREPARED BY: BUD N LORTZ, DIRECTOR OF C011 MUNITY DEVELOPMENT Reviewed by: DV/Attomey Clerk Finance Community Development P5r Revised: 9/2/03 4:28 pm Reformatted: 5/30/01 Town of Los Gatos n Hair/Nail Salons in the Downtown Area Business License Number Name of Business Location Zone Business License Acquired 2001 2002 As of 8/28/03 1 18027 Spa Los Gatos 100 S Santa Cruz Ave C2 y y y 2 12057 Designs by Carol @ Le Chic 106 Royce St C2 y y y 3 17197 Le Chic Salon 106 Royce St C2 y y y 4 11116 Bare Escentuals 115 N Santa Cruz Ave C2 y y y 5 19437 Kiss and Make Up 130 N Santa Cruz Ave C2 y y y 6 20253 Portofino 130 N Santa Cruz Ave C2 y y } 7 14254 Nuance of Los Gatos 130 W Main St C2 y y y 8 15439 Sunny Cuts 14192 Blossom Hill Rd C2 y y y 9 16547 True Nails 15495 B Los Gatos Blvd C2 y y v 10 13448 La Mode Nail Salon 155 N Santa Cruz Ave C2 y y y 11 14151 N & P Nail Inc 191 Los Gatos -Saratoga Rd C2 y y y 12 20209 Millie's Salon 20 S Santa Cruz Ave Suite 204B C2 y y y 13 11883 Cultured Nails 227 N Santa Cruz Ave Suite A C2 y y y 14 11305/13664 Body Therapy/LG Nail Works 23 W Main St C2 y y y 15 12640 Gity's Nail & Waxing Boutique 236 N Santa Cruz Ave, Ste 106C C2 y y y 16 16200 Yvette's institute de Beaute 248 W Main St C2 y y v 17 20590 Nails Emporium 284 N Santa Cruz Ave C2 y y y 18 12977 IMRU Salon 291 E Main St Suite C C2 y y y 19 20291 Tsume Salon 318 N Santa Cruz Ave Suite B C2 y y y 20 14043/22045 Monet Hair Design/Salon Soule 326 Village Ln C2 y y y 21 11176 Beaux Cheveux 332 N Santa Cruz Ave C2 y y y 22 17687 Sirens Salon 338 D Village Ln C2 y y y 23 13345 Kevin's Hair Salon 338 Village Ln C2 y y v 24 11596/22438 Changes Hair Salon/Beauty Town 346 Village Ln C2 y y y 25 17522 Perfect Nails 348 Village Ln C2 y y y 26 14309 Omo 24 Hair Studio 359 1/2 Village Ln C2 y y y 27 20763 Studio 360 360 B Village Ln C2 y y y 28 11353 Brian Hatfield Hair Design 468 N Santa Cruz Ave C2 y y 1- 29 14129 Nail Paris Salon 50 University Ave Suite 4 C2 y y y 30 14037 Model Nails 501 N Santa Cruz Ave C2 y y y 31 17068 Rendevous Hair Salon 527 N Santa Cruz Ave C2 y y y 32 20896 Cultures 59 N Santa Cruz Ave C2 y y y 33 15881 University Ave Style Barber 606 University Ave C2 y y y 34 14214 Nimbus Salon 65 W Main St C2 y y y 35 15659 Preferred Image 663 Industrial Way C2 y v y 36 21641 Priorities Salon 151 N Santa Cruz Ave C2 y y 37 21602 Sanibel Bodycare 50 University Ave Suite 144 C2 y y 38 21843 Ciaccio Salon & Spa 236 N Santa Cruz Ave C2 y 39 22002 Topiary Salon 314 Los Gatos -Saratoga Rd C2 y 40 22317 Obsession Makeup & Hair 343 Village Ln C2 y 41 12771 Hair Tech 515 N Santa Cruz Ave Suite A C2 No Salon in system at his address Total Zone C2 35 37 40 y - Indicates that a Business License was acquired for the year indicated. *There are 2 pending salons not included in this total. TOTAL NUMBER OF ALL BUSINESSES IN THE C2 - CENTRAL BUSINESS DISTRICT ZONE PERCENTAGE INCREASE OF SALONS IN 2003 AS COMPARED TO TOTAL BUSINESSES 730 5.48% 9/2/2003 Attachment 1 August 31, 2003 TO: Town Of Los Gatos Attn: Town Clerk RECEIVED SEN - 2 2003 TOWN OF LOS GATOS PLA !!FiC c7A THE T From: Angela Smith and Brian Hatfield (Capelli Salon) RE: Discussion of policy issues regarding personal services in C 2 zone and consideration of adopting a proposed urgency ordinance to establish a temporary prohibition on personal service business locating on the grown floor in the C-2 Central Business District Commercial Zone. Hello, our names are Angela Smith and Brian Hatfield, partners in Capelli Salon. I, Brian Hatfield have been in business as Brian Hatfield Hair Designs in Los Gatos for 10 plus years. My ambition was to have a place of my own someday. We found the location at 14 Fast Main Street and thought it was perfect. Our clientele would just need to basically move down the street from where they are today. Our commercial broker and the building owners said we needed to talk with the city to be sure we could put a salon in this location. On June 24th we went down to the City Planners office and spoke with Jennifer Castillo, Asst Planner. She looked up the location and provided us with the C2 Zoning brochure showing that a salon was acceptable in this location. We asked her if there was some sort of form or something in writing we should obtain from her and she said no. We asked her for a card and simply noted the date and her confirmation of location on the card in her presence. 2 weeks later we signed a leased with the building owners for 3 years. Immediately on signing the lease we inquired about permits. The planning staff outlined what would be required for the work we needed to do. We worked out plans and the city accepted them finally on Aug 11 m to present to the board. We received a letter later this week asking us for additional information. Upon receipt of said letter we re -worked our plans and set a meeting with Mark Glendinning our assigned inspector to present them again. It was at this meeting that Tom Williams Assistant Director of Community Development advised that the city was putting a hold and not accepting any further permit drawings for salons. We advised Tom that we talked to the city before signing the lease in this location and started our work with the city back in July. He said he was sorry and that he suggested we attend the town council meeting set for September 2, 2003. We have signed a 3 year lease at this location because we were told we could have a salqn there. We never would have signed this lease had the city informed us before hand. We have purchased all of our furniture and retail supplies that will be sold in the salon, of which most are non-refundable. We have started build out in anticipation of our initial inspection. We are simply trying to continue our business with a previously established clientele at a new location living the American dream of "owning a small business". We Attachment 2 have followed all of the steps the city asked us to. We are asking you to simply let us proceed so that we can continue to support ourselves & provide our clients with the service and products they require. Thank you very much for your time. Best Regards, a, ...„) ( Angela Smith and Brian Hatfield Town Council Minutes September 2, 2003 Redevelopment Agency Los Gatos, California PUBLIC HEARINGS There were no public hearings held this evening. INFORMATION TECHNOLOGY STRATEGIC PLAN (08.42) Pamela Jacobs, Assistant Town Manager, explained that staff was seeking Council's acceptance of the IT Plan as a framework for decision -making related to technological enhancements for the Town. She also noted that the advances in technology and changing community needs and expectations require that the Town continually assess opportunities to improve the way it uses technology to provide and improve services to the community and to establish a framework for making technological investment decisions. Council Questions and Ms Jacobs response: The investments in technology and training are eventually offset by long term savings as online services become more readily available to the public. Before a full redesign of the web site would be implemented, an on-line permitting service could be offered to the public. Acceptance of credit cards for payments are being evaluated to augment the e-permitting process. A call center for customer inquiry and follow up is a module in the asset management system which is in this year's budget. The call center would be offered as an enhancement to the personal service already offered to the public and received at the counter, rather than as a replacement for personal service. When tracking by individuals and forming a comprehensive picture of each customer, we will address the privacy issues involved and who has access and how. The use of a wireless infrastructure was also discussed, and the desire to keep broadcasting available for Council and Commission meetings. A disaster recovery system is in place, and a written plan will be completed. Significant improvements have been made to our website this year. Training of staff should be fundamental in the implementation of any new technology program. Motion by Mr. Glickman, seconded by Ms McNutt, that Council accept Information Technology Strategic Plan for the Town of Los Gatos . Carried unanimously. OTHER BUSINESS LEADERSHIP LOS GATOS/STATUS REPORT (16.28) Chris Miller, praised the program having been through it in 2001-02. He suggested heightened recruitment efforts to encourage more participants. Motion by Mr. Pirzynski, seconded by Ms McNutt, that Council accept report regarding the state of the 2002-03 Leadership Los Gatos program. Carried unanimously. PERSONAL SERVICE BUSINESS/GROUND FLOOR/URGENCY ORDINANCE 2117 (17.38) Bud Lortz, Director of Community Development, introduced the item and spoke of the history of personal service businesses listing those in the downtown area and asked Council to consider this matter and how these services in the downtown might be regulated. Mayor Decker then asked for comments from the audience. The following people from the audience addressed the. Council on this issue: Jennifer Taroni spoke of her retail store which offered personal services at the Opera House. She noted the high end retail that will be displayed in her windows. Sallie Robbins-Druian does not support personal services that affect her business. Asked that they be permitted on the second story only so as not to negatively impact existing businesses in Los Gatos. N:1CLK\Council Minutes\20031M 09-02-03.wpd 4 Town Council Minutes September 2, 2003 Redevelopment Agency Los Gatos, California OTHER BUSINESS CONTINUED PERSONAL SERVICE BUSINESS/GROUND FLOOR/URGENCY ORDINANCE 2117/CONT. Speakers continued: Don Callahan noted that the customers to these businesses tend to come to Town to be pampered and beautified and then they shop and lunch before going home. Angela Smith spoke of her partner who was already in business in Los Gatos and how they had their application and permits in the process, merchandise already purchased and lease signed. Mike Kinderman located on University Ave, spoke of the benefits of this business to the Town. Carol Hamilton spoke of the history of her building in trying to meet the requests of the Town, and noted that her present tenants were looking forward to opening very soon. Sharman Bacigalupi spoke of the many boutiques that had previously been at the location she planning to open in, and that she had begun this permit process back in July. Larry Cohan spoke of fairness and being up front on all decisions to be made. Linda Lubeck asked that this ordinance not be adopted. Rather, the Town should consider regulations of this type judiciously and slowly and that the legislation be worked out with additional study and consideration. Josh Bacigalupi asked that the business market regulate itself and that Council not micro manage. Marlene Rodman supported free enterprise and everyone's right to operate a business and asked that Council not impose restrictions. Harry Max noted that his concerns about allowing projects in the pipeline to proceed had been met by the comments he had heard and by those stated by Council. Mike Taroni noted that they had signed their lease and made their retail purchases but had not yet received their building permit. Laura Moore spoke of living in Los Gatos for twenty years and was in favor of the Council looking at the current mix of businesses and making adjustments. At this point Councilmembers Decker, Glickman and Pirzynski noted that Council did not want to he unfair or cause problems with business arrangements that were already in progress or renege on permits that have already been applied for although they felt that it may be time for an urgency ordinance to be implemented. Speakers continued: Shirley Henderson noted that there were too many hair salons in Town and that Los Gatos had become a destination point for hair, nails and food. She asked Council to restrict personal service businesses and to also take into account the amount of parking needed to support these services. Sue Farwell asked that more thought be given to this issue since an urgency ordinance should be used for safety or health concerns. She suggested four or five months to consider the subject before passing an. ordinance. No one else from the audience addressed this subject. Council Comments: Mr. Glickman believes there is a potential for a problem and there may be cause for harm due to the nature of the impact that these businesses might have. He supported the ordinance if the hold was on new applications but not on any that have already started their process. Ms McNutt does not want anyone affected that has already made an investment in their new business. She spoke of people coming to Town to enjoy the total Los Gatos experience which included tanning, yoga, nails, hair, spa, lunch and shopping. She spoke about watching this issue closely and being cautious but did not believe that an urgency ordinance was needed at this time. Mr. Wasserman felt that he needed more information before he could make a decision. The issue of retail vs office or personal service needed to be spelled out in more detail for him, but he thinks that those people who came to the Town's building department and were told they could move forward should be allowed to proceed. N:\CLK\Council Minuies\2003\M 09-02-03.wpd 5 Town Council Minutes September 2, 2003 Redevelopment Agency Los Gatos, California OTHER BUSINESS CONTINUED PERSONAL SERVICE BUSINESS/GROUND FLOOR/URGENCY ORDINANCE 2117/CONT. Council Comments continued: Mrs. Decker spoke to the Town's vitality being hampered by a proliferation of this type of personal service business. She would like to see more retail on the first floor. Mr. Pirzynski would like a more enhanced definition of who is in the pipeline and who has been told they can move forward with committed resources and signed leases. He would also like more information about the total mix of businesses in the downtown to make an informed decision. He would pass an urgency ordinance to keep others offering these services on hold until decisions can he made on how to proceed. Motion by Ms McNutt, seconded by Mr. Glickman, that Council introduce and adopt Urgency Ordinance entitled, URGENCY ORDINANCE OF THE TOWN OF LOS GATOS PROHIBITING THE APPROVAL OF APPLICATIONS FOR PERSONAL SERVICE BUSINESSES LOCATED ON THE GROUND FLOOR IN THE C2 CENTRAL BUSINESS DISTRICT COMMERCIAL ZONE, which will put a moratorium on personal services businesses for a short period of time while we look at this situation and which will keep in the pipeline any business that currently has paper work already on file or by Friday, September 5, 2003 comes into Town Hall and files an application of intent to have a personal services business in the C2 District. Motion failed with a vote of 3 Noes and 2 Ayes. Motion by Mr. Glickman, seconded by Mr. Pirzynski, that Council introduce and adopt Urgency Ordinance 2117 entitled, URGENCY ORDINANCE OF THE TOWN OF LOS GATOS PROHIBITING THE APPROVAL OF APPLICATIONS FOR PERSONAL SERVICE BUSINESSES LOCATED ON THE GROUND FLOOR IN THE C2 CENTRAL BUSINESS DISTRICT COMMERCIAL ZONE, and that the applicant has either presented an application by August 29, 2003 or has signed a lease for the rental of a space to operate a personal business by that same date. Carried by a vote of four ayes. Ms. McNutt voted no. RECESS CALLED AT 9:50 Mayor Decker reconvened the meeting at 9:55 p.m. PERSONAL SERVICE BUSINESS/GROUND FLOOR/URGENCY ORDINANCE 2117/CONT. Mayor Decker noted that some additional motions needed to be made on this item. The Town Clerk read the Title of Urgency Ordinance 2117. Motion by Mrs. Decker, seconded by Mr. Glickman, to waive the reading of Urgency Ordinance 2117. Carried unanimously. ADVANCED PLANNING WORK PROGRAM/FISCAL YEARS 2003-2004 AND 2004-2005 (18.09) Bud Lortz, Director of the Community Development, explained the work plan and its coordinating elements. He spoke of the research, study, generation of reports and regulations and then the presentation to Council through the public review process. Those projects included in the work plan over the next two years are the Hillside Development Standards and Guidelines; the Housing Element Certification needed from the State; the development of Commercial Design Guidelines; Personal Services Businesses; the North Forty Specific Plan; and the Residential Design Guidelines for pre- 1941 structures and Residential Design Guidelines for residential and two family dwellings. N:\CLK\Council Minutes120031M 09-02-03.wpd 6 ORDINANCE 2117 AN URGENCY INTERIM ORDINANCE OF THE TOWN OF LOS GATOS PROHIBITING THE APPROVAL OF APPLICATIONS FOR 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 Page 1 of 5 businesses located therein or the trend of applications for types of businesses, including Personal Service 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. 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. 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 Page 2 of 5 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. 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 Page 3 of 5 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. 3. Term. This Interim Ordinance shall be effective immediately and shall remain in effect 45 days from the date of its adoption, or until the Town Council chooses to repeal this Ordinance, whichever is earlier, unless extended pursuant to Government Code § 65858 . Page 4 of 5 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 September 2, 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: ABSTAIN: SIGNED: /s/ Steve Glickman 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 N:\SHARE\Adopted Reso-Ords\Comm-Dev\Personal.Serv.Bus.ORD.wpd Page 5 of 5