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2011041808 - Review of Downtown Conditional Use Permits and Use ConversionsMEETING DATE: 04/13/11 ITEM NO: s COUNCIL AGENDA REPORT DATE: April 13, 2011 TO: MAYOR AND TOWN COUNCIL © " FROM: GREG LARSON, TOWN MANAGER SUBJECT: COUNCIL REVIEW OF DOWNTOWN CONDITIONAL USE PERMITS AND USE CONVERSIONS RECOMMENDATION: Direct staff to: 1. Prepare an ordinance amendment implementing Council review and final action on any conditional use permits in the Central Business District (C-2 zoning); 2. Until Council reviews and takes action on the above ordinance amendment, appeal, without fee, the approval of any conditional use permits in the Central Business District (C-2 zoning) related to the conversion of any retail space to non -retail use or for the conversion of non -formula retail to formula retail; and 3. Report annually on the current distribution of Downtown private property uses such as retail, restaurant, personal services businesses, and the types of retail (i.e., formula vs. non -formula). BACKGROUND: At the last Town Council meeting on April 4ti', Mayor Joe Pirzynski and Vice Mayor Steve Rice requested scheduling a future Council discussion and action regarding the review of Downtown conditional use permits and use conversions. This agenda item fulfills that request. PREPARED BY: GREG LARSON Town Manager C:\Users\pjacobs\Desktop\4.18.11 TC Report.Downtown CUP Conversions.doc Reviewed by: j' S)Assistant Town Manager Clerk Administrator Finance e Town Attorney ommunity Development PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: COUNCIL REVIEW OF DOWNTOWN CONDITIONAL USE PERMITS AND USE CONVERSIONS April 13, 2011 The Town of Los Gatos has existing policy direction regarding the conversion of Downtown properties from: • Retail to restaurant • Retail to personal services • Non -formula retail to formula retail These policies are embodied in the Town Code, Council resolutions, and prior Council actions and directions. ANALYSIS: Currently, only alcohol beverage service conditional use permits are required to go before the Town Council for final action upon the recommendation of the Planning Commission. Other conditional use permits can be approved by the Planning Commission unless appealed to the Town Council by any member of the public. Several such permits have recently been appealed to the Town Council. In the past two years, four conditional use permits for formula retail in the Downtown have been approved by the Planning Commission without subsequent Council review and action. The four formula retailers are: Restoration Hardware (26 Santa Cruz Ave.), site of former Smith & Hawkens Francesca's Collection (29 University Ave.), first location in northern California Title Nine Sports (218 Santa Cruz Ave.), previous formula retail site Lululemon USA (326 Village Lane), appointment -only retailer In each case the Planning Commission scrutinized the application and based its decisions on location, parking, retail differentiation and market saturation. While the process has worked well recently, the increasing turnover of retail properties Downtown, recent conversion applications, and the continuing economic recession have led to increased community, Council and staff discussion regarding maintaining and strengthening the balance of uses and retailers that make Downtown unique and vital. Further, at the April 13th public hearing before the Planning Commission regarding expansion of Guardino's restaurant, the Commission requested guidance from the Council on the policy related to conversion of retail space to restaurant use. Consequently, to improve consistency with Council review of all Downtown use permits and property conversions, staff is recommending that any conditional use permits in the Central Business District affirmed by the Planning Commission be brought to the Town Council for review and final action. On an ongoing basis this procedural change can be implemented through an ordinance change which will take two to four months to draft and adopt. In the meantime, staff is requesting direction to appeal to the Town Council any conditional use permits approved by the Planning Commission that entail a PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: COUNCIL REVIEW OF DOWNTOWN CONDITIONAL USE PERMITS AND USE CONVERSIONS April 13, 2011 conversion in the property use as described above. The more limited focus for the interim appeals on conversions only is to minimize the impact on pending permit applications that do not involve conversions from the most recent use of the property. These appeals would also apply to permit applications for conversions that staff is recommending for approval. However, the appeal review packet for Council would sirnply consist of a cover memo transmitting the materials provided to the Planning Commission and would be scheduled for the next available Council meeting, upon proper noticing which can require a minimum of 3 weeks, to minimize the impact and potential delays for the permit applicant. In addition, to aid the Planning Commission and Town Council in the future review of Downtown conditional use permits and conversions, staff could annually prepare an updated inventory of current permitted uses by type (e.g., restaurants, personal services businesses, non -formula retail, formula retail, etc.). If approved, staff plans to have the first such inventory completed at the same time as the implementing ordinance described above is brought back to Council for review and approval. The resulting database would provide additional ongoing benefits for our Economic Vitality efforts. FISCAL IMPACT: Preparation of the proposed ordinance, potential appeals' and the first annual inventory would entail the unplanned use of existing staff time and direct costs of up to $10,000. Other projects being undertaken by the Community Development Department and the Town Attorney's Office may be delayed to accommodate the preparation of this ordinance. The recommendation would waive the fee otherwise paid for an appeal given the minimal additional staff work required to forward the Planning Commission packet for appealed items to the Town Council. In addition, the requirement for verbatim minutes would also be waived; however, the Town Council would be able to view the public hearing using the Town's website. Affected permit applicants would face an additional one to two month delay in the final review and action on their application, likely delaying their openings an equivalent period of time, if approved. THIS PAGE INTENTIONALLY LEFT BLANK