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5S WN p Y a I os coos DATE: FrIf FROM: MEETING DATE: 12/02/13 ITEM NO: COUNCIL AGENDA REPORT NOVEMBER 25, 2013 MAYOR AND TOWN COUNCIL GREG LARSON, TOWN MANAGER SUBJECT: CONDITIONAL USE PERMIT APPLICATION U -13 -011. PROJECT LOCATION: 32 N. SANTA CRUZ AVENUE. PROPERTY OWNER: FLICK FAMILY TRUST. APPLICANT: NAPA STYLE. CONSIDER A REQUEST OF APPROVAL TO MODIFY AN EXISTING CUP FOR A FORMULA RETAIL STORE (NAPA STYLE) TO ALLOW BEER AND WINE TASTING, SALES, AND EVENTS ON PROPERTY ZONED C- 2:LHP. 529 -03 -055. PLANNING COMMISSION RECOMMENDATION: The Planning Commission recommended that the Town Council: 1. Adopt the resolution (Attachment 4) and deny Conditional Use Permit U -13 -011 (motion required). ALTERNATIVES: Instead of the aforementioned action, the Council may: Make the required findings (Attachment 3), adopt the resolution (Attachment 5), and approve the application (motion required); or Make the required findings (Attachment 3), adopt the resolution (Attachment 5), and approve the application subject to modified or additional conditions of approval (motion required); or Continue the project to a date certain with specific direction (motion required). PREPARED BY: SANDY L. BAILY ��i^]t Director of Community Development Reviewed by: J� Assistant Town Manage4 Town Attorney Finance N: \DEV \TC REPORTS\2013 \NSC 32.docx Refonnatted: 5/30/02 PAGE MAYOR AND TOWN COUNCIL SUBJECT: 32 N. Santa Cruz Avenue /U -13 -011 November 25, 2013 BACKGROUND: The subject site is located on the east side of N. Santa Cruz Avenue, between Main Street and Elm Street. The existing formula retail Conditional Use Permit (CUP) was approved in 2004 for Traditions, which was a formula retail store that focused on the sale of home furnishings. Napa Style has been operating under the original CUP (Exhibit 4 of Attachment 1) since 2007. DISCUSSION: A. Project Summary The applicant is requesting approval to allow off -site wine and beer sales and to provide sample tastings during regular business hours of 10 AM to 6 PM. The applicant is also proposing a limited number of special events for non - profit organizations from 6 PM to 9 PM. See Attachment I for full description of the project. B. Planning Commission On July 24, 2013, the Planning Commission considered the subject application. See the verbatim minutes (Attachment 2) for the Commission's full discussion. The Planning Commission recommended denial (with a vote of 4 -3) of the application based on the finding that the approval would lead to an intensification of parking and alcohol service in the downtown without a clear benefit to the community. C. Staff Notes In addition to the concerns included within the Planning Commission's motion noted above, the Commission discussed several additional items which are bulleted below in bold. Subsequent to the meeting, the applicant submitted additional information in an attempt to respond to these concerns (Attachment 6). The applicant's responses are summarized after each bulleted concern. Staff provided additional information in italics where appropriate. • Compatibility of beer and wine sales and tastings to the sale of home goods and packaged foods: The applicant discussed why the addition is important for their unique business. • Subleasing of beer and wine sales and tasting: The applicant's intent of this allowance is to permit a local or regional winery to utilize this location as their single offsite location permitted within their type 02 license for a winery. If the Council approves the application, the following condition may be added or modified to provide f n-ther clarity: SUBLEASING: Use of the offsite beer and wine sales and onsite tastings shall be limited to the primary business operator or a single winery, permitted by an existing ABC license. PAGE MAYOR AND TOWN COUNCIL SUBJECT: 32 N. Santa Cruz Avenue /U -13 -011 November 25, 2013 • Intensification of alcohol within the Downtown area: The applicant discusses the Planning Commission's concern regarding intensifying the number of alcohol uses within the Downtown; which is not currently discussed within Town Code or the Town's Alcohol Beverage Policy. In addition, it should be noted that this operation, if approved, would be the only existing retail operation with wine and or beer tasting within the Central Business District. Both Fleming Jenkins and the French Cellar had CUP's which permitted wine tasting and both have ceased operations. The French Cellar recently closed and is unoccupied; therefore, a similar business could occupy this space under the existing CUP within one year of the closing of the French Cellar. Staff has also provided the information below on some other topics. The information is followed by staff comments in italics: • Limiting how much of the retail space can be used to stock or sell wine and beer: There is currently not a square footage restriction on the amount of retail space used to stock or sell wine and /or beer for off -site consumption. If the Council would like to place limits on this CUP then a condition could be added to reflect that. • Building occupancy: Based on the Uniform Building Code and Tenant Improvement Building Plans for Napa Style from 2007, the maximum occupancy for this tenant space is 90 people. • Hours: The existing CUP allows hours from 9 a.m. to 9 p.m. Exhibit 5 was prepared by the applicant and references 10 a.m. to 6 p.m. These are the hours that the store is typically open to the public. Exhibit 3 of Attachment 1 (Condition 4) references hours of operation as 9 a.m. to 6 p.m. However, if the Council would like to limit the hours to 10 a.m. to 6 p.m. that modification can be made. • Current CUP use definition: USE. The approved use is a regional formula retail business solely for the sale of home f urnishings. This excludes the sale of hardware, groceries, clothing, and general merchandise. Regional formula retail is defined pursuant to these conditions as the San Francisco Bay region. • Special event versus charity event: A Special Event is defined by Town Code Section 14.100.015 (g) as follows: Special Event. Any event, not to exceed three (3) consecutive days, which is scheduled to take place on or contiguous to a Town street, sidewalk, alley or other right -of -way or on Town property including its parks and the grounds of its buildings, which in the judgment of the Chief of Police is likely either: PAGE 4 MAYOR AND TOWN COUNCIL SUBJECT: 32 N. Santa Cruz Avenue/U -13 -011 November 25, 2013 (1) To obstruct, delay or interfere with the normal flow of pedestrian or vehicular traffic; or (2) To attract participants or spectators who are not likely to comply with traffic laws or controls; or (3) To generate a crowd ofsufficient size likely to obstruct, delay or interfere with the normal flow of pedestrian or vehicular traffic, or to restrict access to parks, recreation areas or other public areas; or (4) To require police regulation, monitoring, or control to maintain public safety. Examples of special events include, but are not limited to: athletic events such as runs, walkathons, bicycle races, etc., parades, street,fairs, festivals, carnivals, car rallies, farmers markets, block parties, sidewalk sales, outdoor music concerts, and gatherings of merchants, craftsmen, artists or other sellers of goods for the primary purpose of display and sale to the public of arts, crafts or goods. The events the applicant is requesting approval,for do not meet the requirements to be defined as Special Events. The applicant is requesting to have Charity Events limited to 501 (c)(3) or (c)(6) entities and regulated by the parameters stated in Exhibit 3 of Attachment I (Condition 7). • Reference to restaurant parking formula at Planning Commission hearing: Staff did not use the restaurant parking requirements ,for this application. The parking requirement for this type of use is I space.for every 300 square feet of space. The reference by the project planner was for comparison purposes specifically for the Charity Events. This was to illustrate that the proposed number ofguests for Charity Events was not creating a parking impact even when using a different parking standard. PUBLIC COMMENTS: The Town has not received any public comments regarding this item. CONCLUSION: The Planning Commission recommended denial of the application based on a concern for intensification of parking demand and alcohol service within the downtown without a direct benefit to the community. ENVIRONMENTAL ASSESSMENT: The project is Categorically Exempt according to Section 15061 of CEQA as adopted by the Town, which exempts permitting an activity where it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment. No significant PAGE 5 MAYOR AND TOWN COUNCIL SUBJECT: 32 N. Santa Cruz Avenue/U -13 -011 November 25, 2013 effect on the environment will occur since the project uses an existing structure with no increase in floor area. FISCAL IMPACT: None Attachments: Previously under separate cover 1. October 23, 2013, Planning Commission meeting staff report 2. October 23, 2013, Planning Commission meeting verbatim minutes Received with this report: 3. Required Findings 4. Resolution Denying the Conditional Use Permit Modification 5. Resolution Approving the Conditional Use Permit Modification (includes Exhibit A, Recommended Conditions of Approval) 6. Additional letter from applicant Distribution cc: Napa Style Inc., 360 Industrial Court, Suite A., Benicia, CA 94510 Flick Family Trust, 130 Stacia Street. Los Gatos, CA 95030 KC Branch, Napa Valley, PO Box 2528, Youmville, CA 94599 SLB:MM:ct THIS PAGE INTENTIONALLY LEFT BLANK N F TOWN OF LOS GATOS PLANNING COMMISSION STAFF REPORT Meeting Date: October 23, 2013 �SS�GA \DS PREPARED BY: Marni F. Moseley, Associate Planner mmoseley losgatosca.gov APPLICATION NO: Conditional Use Permit U -13 -011 ITEM NO: 3 LOCATION: 32 N. Santa Cruz Avenue (Located on the east side of N. Santa Cruz Avenue between Main Street and Elm Street) APPLICANT: Napa Style PROPERTY OWNER: Flick Family Trust CONTACT PERSON: KC Branch APPLICATION SUMMARY: Requesting approval to modify an existing CUP for a formula retail store (Napa Style) to allow beer and wine tasting, sales, and events on property zoned C- 2:LHP. APN: 529 -03 -055. DEEMED COMPLETE: July 30, 2013 FINAL DATE TO TAKE ACTION: January 30, 2014 RECOMMENDATION: Forward recommendation for approval to Town Council PROJECT DATA: General Plan Designation: Central Business District Zoning Designation: C -2: LHP; Central Business District Applicable Plans & Standards: Town Alcohol Policy Parcel Size: 6,534 Sq. Ft. Surrounding Area: CEQA: Categorically Exempt pursuant to Section 15061 of the State Environmental Guidelines as adopted by the Town. ATTAC1tI ENT Existing Land Use Gene ....... North : Commercial Central Business District C -2 East ornmercial Central Business District C -2:LHP South Commercial Central Business District _. C -2:LHP West Commercial Central Business District C -2 Categorically Exempt pursuant to Section 15061 of the State Environmental Guidelines as adopted by the Town. ATTAC1tI ENT Planning Commission Staff Report - Page 2 32N. Santa Cruz Ave.A U -13 -011 October 23, 2013 FINDINGS: ■ As required by Section 15061 of the State Environmental Guidelines as adopted by the Town that this project is Categorically Exempt. • As required by Section 29.20.190 of the Town Code for granting a Conditional Use Permit. • The project is consistent with the Redevelopment Plan for the Central Los Gatos Redevelopment Project area. ACTION: Recommendation to the Town Council EXHIBITS: 1. Location Map 2. Required Findings (one page) 3. Proposed Conditions of Approval (one page) 4. Existing Conditional Use Permit (one page) 5. Floor plan and proposed hours chart (eight pages) 6. Letter of Justification and supplemental information (72 pages) received July 30, 2013 BACKGROUND: The existing formula retail Conditional Use Permit (CUP) was approved in 2004 for Traditions a store that focused on home furnishings. Napa Style has been operating under the original CUP (Exhibit 4) since 2007. Napa Style has been adding offsite sale of beer and wine along with tastings to their stores over the last few years. This model along with the special charity events has been used successfully at several other locations in the region. PROJECT DESCRIPTION: A. Conditional Use Permit The existing formula retail tenant is proposing to add wine and beer off site sales and to provide sample tastings during regular business hours of 10 AM to 6 PM. The applicant is also proposing a limited number of special events for non - profit organizations from 6 PM to 9 PM. B. Location and Surrounding Neighborhood The site is located on the east side of N. Santa Cruz Avenue between Main Street and Elm Street. The property is surrounded by commercial uses and Town parking lot number five runs along the rear of the property. Planning Commission Staff Report - Page 3 32 N. Santa Cruz Ave .\ U -13 -011 October 23, 2013 C. Zoning Compliance The designated zoning for the property is C -21HP (Central Business District with a Landmark Historic Preservation Overlay). The C -2 zone allows the proposed use subject to the approval of a CUP. ANALYSIS: A. Retail Sales The application is for retail sales of wine and beer. The proposal conforms to Town Code, and does not include late night hours. The applicant will be obtaining the appropriate license from the Alcoholic Beverage Control Board (ABC) for the proposed use if the application is approved. Staff has included a condition that requires the beverages provided for offsite sales be sold at room temperature to ensure compliance with the intent that the beverages be consumed in appropriate locations, outside the immediate vicinity. B. Tastin s Tastings of beer and /or will be provided within the designated (200 sq. ft.) area only, and be limited to a maximum of five one ounce samples per customer per day. A fee will be charged for the tastings. No more than nine customers will be permitted within the tasting area at a time. The applicant will have local wine makers, or brewers available for tastings whenever possible. The Police Department has reviewed the application, and has no comments or concerns. C. Charity Events The applicant is requesting up to three charity events per month with a maximum of 24 events per year. The charity events would be for registered non -profit organizations and would take place after regular business hours between 6 PM and 9 PM. A maximum of 25 guests would be permitted at each event and food and beverages may be provided by an ABC licensed caterer (Exhibit 6). D. Traffic and Parkine The proposed use will not result in any additional parking or traffic impacts. E. General Plan Specific applicable goals and policies of the 2020 General Plan includes but is not limited to: Planning Commission Staff Report - Page 4 32 N. Santa Cruz Ave.A U -13 -011 October 23, 2013 • Policy LU -9.2 — Maintain a variety of commercial uses, including a strong Downtown commercial area combined with Los Gatos Boulevard and strong neighborhood commercial centers to meet the shopping needs of residents and to preserve the small - town atmosphere. • Policy LU -9.3 - Encourage a mix of retail and office uses in commercial areas, except in the Central Business District designation, where retail should be emphasized and office should be limited to upper floors and other areas as defined by the Town Code. F. Environmental Review The project is Categorically Exempt according to Section 15061 of CEQA as adopted by the Town, which exempts permitting an activity where it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment. No significant effect on the environment will occur since the project uses an existing structure with no increase in floor area. G. CUP Findings When reviewing a Conditional Use Permit (CUP), the deciding and recommending bodies should consider the information in the applicant's business plan;. however, the key consideration should be the explicit proposed use since the business plan can change from owner to owner. The explicit use may be, and is often, defined in the recommended conditions of approval as a "use" condition. The CUP runs with the land, and the deciding and recommending bodies should review applications based on the explicit use as opposed to the applicant or the applicant's business plan. In order to grant approval of a Conditional Use Permit, the hearing body must make the following findings: (1) The proposed use of the property is essential or desirable to the public convenience or welfare; and (2) The proposed use will not impair the integrity and character of the zone; and (3) The proposed use would not be detrimental to public health, safety or general welfare; and (4) The proposed use of the property is in harmony with the various elements or objectives of the General Plan and the purposes of the Town Code. The proposed use is desirable to the public convenience and welfare, in that it provides additional merchandise options within an existing retail use. The proposed use will not impair the integrity of the zone, in that the proposed use is appropriate for the C -2 zone. In regards to the third finding, the proposed use will not be detrimental to public health, safety or general welfare, as the conditions regarding operating hours, special events, and tasting restrictions on the permit will mitigate potential impacts. In regards to the final finding, the proposed use is in harmony with the General Plan and Town Code. Planning Commission Staff Report - Page 5 32 N. Santa Cruz Ave.A U -13 -011 October 23, 2013 H. Public Comments At this time, the Town has not received any public comment regarding this application. CONCLUSION AND RECOMMENDATION: A. Conclusion Staff has recommended conditions of approval regarding the operating hours, special events and tasting limitations. Traffic and parking will not be impacted by the proposed use which will provide additional retail merchandise options within an existing established retail use. The proposed application is in conformance with Town Code and is supported by the General Plan. B. Recommendation If the Planning Commission finds merit with the proposal, it should: 1. Find that the proposed project is categorically exempt, pursuant to Section 15061 of the California Environmental Quality Act as adopted by the Town (Exhibit 2); and 2. Make the required findings as required by Section 29.20.190 of the Town Code for granting approval of a Conditional Use Permit (Exhibit 2); and 3. Recommend approval to Town Council of Conditional Use Permit application U -13- 01 l with the conditions contained in Exhibit 3. If the Commission has concerns with the proposed use, it can: 1. Continue the matter to a date certain with specific direction; or 2. Recommend approval of the application to Town Council with additional and /or modified conditions; or Recommend denial of the application to the Town Council. F �4 Prepared by: Approved Marni F. Moseley, AICP Sandy L. B ily _ Associate Planner Director of Community Development SLB:MM:ct cc: Napa Style Inc., 360 Industrial Court, Suite A., Benicia, CA 94510 Flick Family Trust, 130 Stacia Street. Los Gatos, CA 95030 KC Branch, Napa Valley, PO Box 2528, Yountville, CA 94599 NADE TC REPORW2013192 NSC.doc This Page Intentionally Left Blank I I ♦ l a EXHIBIT � of Attachment 1 This Page Intentionally Left Blank PLANNING COMMISSION — October 23, 2013 REQUIRED FINDINGS FOR: 32 N. Santa Cruz Avenue Conditional Use Permit Application U -13 -011 Requesting approval to modify an existing CUP for a formula retail store (Napa Style) to allow beer and wine tasting, sales, and events on property zoned C- 2:LHP. APN: 529 -03 -055 PROPERTY OWNER: Flick Family Trust APPLICANT: Napa Style FINDINGS Required finding for CEQA: ■ The project is Categorically Exempt pursuant to Section 15061 of CEQA as adopted by the Town, which exempts permitting an activity where it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment. No significant effect on the environment will occur since the project uses an existing structure with no increase in floor area. Required findings for a Conditional Use Permit: ■ As required by Section 29.20.190 of the Town Code for granting a Conditional Use Permit: (a) The deciding body, on the basis of the evidence submitted at the hearing, may grant a conditional use permit when specifically authorized by the provisions of the Town Code if it finds that: (1) The proposed use is desirable to the public convenience and welfare in that it provides additional merchandise options within an existing retail use; and (2) The proposed use will not impair the integrity of the zone, in that the proposed use is appropriate for the C -2 zone; and (3) The proposed use will not be detrimental to public health, safety or general welfare, as the conditions regarding operating hours, special events, and tasting restrictions on the permit will mitigate potential impacts; and (4) The proposed use is in harmony with the General Plan and Town Code as discussed within the staff report. N 0EVAFfNDINGS\2013\32 NSC.doc EXHIBIT 2 of Attachment 1 This Page Intentionally Left Blank PLANNING COMMISSION — October 23, 2013 RECOMMENDED CONDITIONS OF APPROVAL FOR: 32 N. Santa Cruz Avenue Conditional Use Permit Application U -13 -011 Requesting approval to modify an existing CUP for a formula retail store (Napa Style) to allow beer and wine tasting, sales, and events on property zoned C- 2:LHP. APN: 529 -03- 055 PROPERTY OWNER: Flick Family Trust APPLICANT: Napa Style TO THE SATISFACTION OF THE DIRECTOR OF COMMUNITY DEVELOPMENT: Planning Division 1. APPROVAL: This application shall be completed and operated in accordance with all of the conditions of approval listed below. 2. EXPIRATION: The approval will expire two years from the approval date pursuant to Section 29.20.320 of the Town Code, unless the approval has been vested. 3. USE: This approved use is for a formula retail business for the sale of home and dining accessories. Including limited packaged food items and room temperature beer and wine packaged for off -site consumption. 4. HOURS: Hours of operation are limited to 9:00 a.m, to 6:00 p.m. daily. 5. STORE DELIVERIES: Delivery shall occur at the rear of the building during the hours of 7:00 a.m. to 10:00 a.m. only. 6. TASTINGS: Tastings of beer and /or wine shall occur during business hours in the designated (200 sq. ft.) tasting area only. No more than nine customers shall be in the tasting area at a time. Tastings shall consist of no more than five, one once samples /pours per customer /day. A fee shall be charged for tastings. 7. CHARITY EVENTS: A maximum of three special charity events are permitted per month with a maximum of 24 events annually. Events shall be limited from 6:00 p.m. to 9:00 p.m. with a maximum of 25 guests per event. The events may be served by an ABC licensed caterer. 8. BOTTLE DISPOSAL: Disposal of bottles must occur during regular business hours. 9. MUSIC: No live music is permitted without approval of a Live Entertainment Permit. 10. TOWN INDEMNITY: Applicants are notified that Town Code Section 1.10.115 requires that any applicant who receives a permit or entitlement from the Town shall defend, indemnify, and hold harmless the Town and its officials in any action brought by a third party to overturn, set aside, or void the permit or entitlement. This requirement is a condition of approval of all such permits and entitlements whether or not expressly set forth in the approval, and may be secured to the satisfaction of the Town Attorney, N:ADEVVC0NDITNSC013 \32 NSC.doc EXHMIT 3 of Attachment 1 This Page Intentionally Left Blank CONDITIONS OF APPROVAL 32 N. Santa Cruz Avenue Conditional Use Permit U -04 -3 Requesting approval of a formula store (Traditions) on property zoned C -2 (formerly Los Gatos Porch). APN 529 -03 -055 PROPERTY OWNER: Larry Arzie APPLICANT: Roland Wentzel TO THE SATISFACTION OF THE DIRECTOR OF COMMUNITY DEVELOPMENT (Planning Division) 1. EXPIRATION. Zoning approval will expire two years from the approval date pursuant to Section 29.203 20 of the Town Code, unless the approval has been vested. 2. USE. The approved use is a regional formula retail business solely for the sale of home furnishings. This excludes the sale of hardware, groceries, clothing and general merchandise. Regional formula retail is defined pursuant to these conditions as the San Francisco Bay region. 3. HOURS OF OPERATION. The maximum hours of operation shall not exceed 9 AM to 9 PM seven days a week. N`VDEV\C0ND1TNS \2004 AND 6EFORE \T�DITiON5AP.WPD Pagel of scpeembcr 23.2013 EXHIBIT 4 of Attachment 1 This Page Intentionally Left Blank EXISTING PROPOSED CHANGES Retail hours 10:00 -18:00 10:00 -18:00 18:00 - 21:00 (spec events) Tasting hours none 10:00 -18:00 Special event hours none 18:00- 21:00 Retail sq. ft. 2300 2100 Tasting sq. ft. 2300 200 FXBI SIT 5 of Attachment 1 X 91 a a_ ° 3 g iigg€ n gg 039 e :d sa o �aa � 5I f yy oa z 5 z 0 g E �e gka 5A §� ° 5 °A� ° 3 g iigg€ n gg raI e E �e gka 5A §� ° 5 °A� ID u 3 3 y e j9 iySyl�ID5p� � #��yy��PP E �e gka 5A §� ° 5 °A� I m rm, ............. -k .+! -,-1 �n - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - �ol i lower counter bar stools stanchions ropes ----------- \�� y \.� �� 7� �� \� ƒ) �� \ � \� j, }i |�� . ƒf |§� \� \ CD , ml Of IT ---------- 04, 0 0 6 0 CL Rig- ww- q n 'UI© t i 3 not Ai It �X n N z(T�p Sy a a m n m Ow 7 v J im �o 2 O m n v m F O D 2 N �Y an v � gg a �E m 'A a OR I re Ii' x- 0� � `y��9j fdiYCi i d9 8e 4B 8 l EE5$ J im �o 2 O m n v m F O D 2 N �Y an v � gg a �E m 'A a OR I re Ii' x- 0� Z c� 1� i YI :1 s <1 �I z, -- 1 — _•_ -c i •-__.. .... 4 ..,mod ... Ml ell gill as IIj1 a �g 11 � _ dal IjY � v5a 9 K. CHRISTOPHER BRANCH KC9KCBRAA1CHLA W. COM July 18, 2013 Town of Los Gatos Town Hall 110 E. Main Street Los Gatos, CA 95030 Attention: Marni Mosely 1 177 MARSH STREET, SUITE 100 SAN LUIS OBISPO, CALIFORNIA 93401 (805) 539 - 1700 (805) 539 - 1701 (FAX) P.O. Box 2528 YOUNTVILLE, CA 94599 707 204 95 93 Application Number: U-13-011 Property Address: ♦ t Date of Original Application: Applicant Applicant: Napastyle, Inc. Status of Proposed 1) Sale of Beer and Wine (10:00 t0 Educational . of i to 18:00) 3) Ability to have a licensed caterer serve food, wine and beer (up to 24 times a year, 18:00 to 21:00) following all applicable food service regulations. Dear Ms, Mosely: The instant correspondence represents the Applicant's Shortened Letter of Justification in support of its Conditional Use Permit Application for the above - referenced Parcel ( "Property ") which is being presented in response to the meeting the Applicant had with the City of Los Gatos in April of 2013. For the most part, this letter includes information presented in the original February 13, 2013 letter of justification which is incorporated herein by reference. However, in a few places there is additional information, along the lines requested by the representatives at the April 2013 meeting. Those are emphasized by underscores. There is no significant change of use or occupancy and the space will continue to exist primarily as a retail gift store, as it has for the last five (5) years. ;HIBIT 6 of Attachment 1 SHORTENED STATEMENT OF JUSTIFICATION July 18 2013 CUP Application U -13 -011 Page 2 The proposed project simply represents a modification of the use of this existing retail store to add three additional components, all of which involve the sale and consumption of alcohol. No modifications to any structure are necessary to add the additional uses. The use does not involve on site food preparation so there is no need for kitchen or ventilation system. The tasting glasses can be washed in the existing 3 sink arrangement that currently exists at the property. The placement of furniture and the establishment of a small barrier will accomplish the goals. 1. CURRENT USE The Applicant leases the Property pursuant to a lease (Exhibit A) with the Flick Family Trust ( "Landlord "), has done so continuously since April 2007, and plans to continue the lease through the options available under the lease to 2027. The Landlord is the owner of the property (Exhibit B) and it has consented to the proposed uses (See Exhibit C) At the Property, the Applicant currently maintains a built -out Retail Store ( "Store ") that sells home, kitchen food & wine related products. The Store includes the ground floor of the leased premises, save and except a unisex bathroom; a small storage /office area; and a stairwell to the second story of the Property. The second story has several storerooms, an employee break arealoffice, and two separate sinks. The original build out plans are attached as Exhibit D. At this time, neither the Applicant nor the Landlord engages in the proposed additional uses. While Applicant is in the process of applying for an ABC license to sell and sample wine and beer, if for any reason Applicant is unable to obtain an ABC license, Applicant may lease out those two uses to an ABC license holder, such as an existing winery who might wish to have a tasting room on the premises. As such the instant request for a conditional use permit is requested to include not only the Applicant but any such potential sublease. For purposes of brevity, the word "Applicant' in the remainder of this letter shall include both Napastyle, Inc. and any such potential sublease, collectively. 2. PROPOSED PROJECT— Three Additional Proposed Uses: Wine /Beer Sales, Wine /Beer Fee - Based Sampling, Charity Based Catered Events including Wine /Beer Service No modifications to the existing structure become necessary and hence none are being proposed for the additional uses. Rather, there is only an addition of 1) the non- fixtured rope and stanchions, and 2) the non - fixture sampling bar. In all portions of the Store where alcohol is to be sold or consumed, the lighting is sufficient to check ID and to observe patrons for the enforcement of liquor laws and rules, including apparent intoxication. a. Wine /Beer Sales SHORTENED STATEMENT OF JUSTIFICATION July 18 2013 CUP Application U -13 -011 Page 3 In the first requested use, Applicant would sell full bottles of wine displayed around the store and could be purchased at a specific register. No beer bottles less than 20 ounces would be for sale individually. No employees of the store who operate the cash registers would be under 18 years of age. Promotion of the off -sale liquor sales will be from in house displays and a refrigerated non - fixture case as well as in offsite advertising using customary media such as print, audio, video, and social media. Applicant's employees would not be permitted to open bottles for customers. Applicant's Wine /Craft beer Inventory will be in compliance with the ABC methodology. Applicant would be responsible to ensure that the accounting procedure is up -to -date and complete. Wine /Craft beer would be stored in the upstairs locked storage room. Only store managers would have access to keys or a combination number. Applicant would sell all wine /craft beer at a price that is not lower than cost. b. Fee Based Wine /Beer Sampling The Beer/Wine Sampling Zone naturally fits within the existing build out of the Store, as can be seen in Exhibit E -1 and E- 2. The area is currently enclosed on three sides by existing walls. The fourth side would be enclosed by a rope and stanchion divider. There will be a 10 foot tasting bar divided into two portions. This will not be fixed to the floor. The area of the bar in darker blue is at a height of 42 inches and the area in the lighter blue is at a height of 36 inches, to accommodate patrons in wheel chairs and others who choose not to sit at the higher bar. The bar will sit 3 feet out from the wall. 4 feet out from the tasting bar, Applicant will place a rope and stanchion, similar to the one depicted in Exhibit F. There will be a tasting bar at about 42 inches in height with 5 bar stools and a lower tasting bar at 36 inches in height with regular chairs that can accommodate those customers in wheel chairs. Patrons will not be allowed to take samples out of the Beer/Wine Sampling Zone. Applicant will conduct Beer/Wine Sampling in the Beer/Wine Sampling Zone during regular business hours. No more than 9 people could taste at any one time. No more than 1 oz. of up to 5 wines /beers could be tasted by Customers of Applicant in any one day. A minimum charge of $1.00 per house would be charged. Wines /beers tasted will be wines owned by Applicant, purchased either through wholesalers or manufacturers, including Santa Clara County vintners /craft brewers. Where possible, vintners /brewers will be invited to share their knowledge about the wine and their respective winery. Applicant would be responsible for ensuring that all persons in the Beer/Wine Sampling Zone, including employees and agents of Applicants, are over 21 years of age whether or not there is Beer/Wine Sampling occurring at that particular time, and that anyone participating in Beer/Wine Sampling not take Beer/Wine Sampling glasses beyond the confines of the Beer/Wine Sampling Zone. Applicant will also strategically place signs, visible both in and out of the Beer/Wine Sampling Zone indicating the prohibition of underage consumption of alcohol, the requirement that no wine samples may leave the Beer/Wine Sampling Zone, and other signage and warnings as required by law. The Beer/Wine Sampling Zone will be barely visible from the street and there will only be one small notation on the chalkboard, at the main entry to the store of the opportunity for Beer/Wine Sampling. All employees of Applicant who conduct beer /wine samplings would be over 21 and be educated in SHORTENED STATEMENT OF JUSTIFICATION July 18 2013 CUP Applicabon U -13 -011 Page 4 accord with the Napastyle Alcohol Handling Handbook ( "NAHH) that includes policies and procedures prohibiting the use of alcohol to incentivize customers to purchase alcohol or retail items, beyond the mere educational sampling represented by the Beer/Wine Sampling experience. Applicant will offer nonalcoholic alternatives to guests if its employees feel concerned that they may be becoming intoxicated. Applicant will offer water with drinks and refill water glasses often. Applicant will wash the glasses in the commercial restaurant style 3 part sink located in the non - public upstairs area of the Premises. (This would be the only use of the sink and represents the only dishes that Applicant would have to wash under any of the proposed uses.) 3. Charity Catered Events including Beer Wine Service Applicant wishes to invite local charities, i.e. those entities with I.R. S. 501 (c) (3) or ( c) ( 6 ) tax exemption stations the Premises as a venue for gatherings. These Charity Events would take place 24 times each year. At these gatherings which would take place after normal business hours, between 18:00 and 21:00, Applicant would utilize ABC - licensed Caterers to serve food and wine throughout the entire store. These events would be limited to 25 invited patrons, all of whom would be over 21. During the events the Beer/Wine Sampling Zone would be closed, although guests would have the opportunity to make purchases of alcohol for off - premise consumption. Other than invited friends and supporters of the Charity, the store would not be open to the general public during these Charity Events. While there would be no usage fee charged to the charity, the charity would have to contract with an ABC licensed caterer to serve food and beer /wine. Applicant, in the past, donated a percentage of the profits made from sales of merchandise during the 20 or so charitable Events at its former Costa Mesa, Orange County, California location back to the organization as well, and would expect to continue that tradition. At that location, the local charities appreciated not only the opportunity for fund - raising from these events, but to have venue where the charity was not subject to a usage charge and work with a caterer to obtain wine and beer at reasonable costs making this kind of opportunity much less cost intensive relative to having such an event at a restaurant. The caters could bring hot foods room temperature foods, and cold foods along with beer and wine, as contracted for (with the caterer) by the Charity, in accord with applicable regulations for food for such gatherings with which the caterer would be responsible for following. The usage requested in the instant application is limited to allowing Applicant to provide a venue where beer/wine/food can be served. For these gatherings all food preparation and all dishwashing would be performed off - premise and /or Applicant (or its caterers) Hence there is no need for any kitchen facility. In fact there would be no need to use the existing sink for such events. Also for these gatherings, all employees of Applicant would be over 21 years of age and all would act in accord with the NAHH. Finally, there would be no entertainment at these events nor would any other uses requested by the instant application have an entertainment aspect. 4. IMPROVEMENTS AND DESIGN CHANGES: NONE SHORTENED STATEMENT OF JUSTIFICATION July 18 2013 CUP Application U -13 -011 Page 5 No construction or modification in any structure, floor or ceiling of the Premises is necessary. Furniture will simply be moved around, added and deleted. There is no need for any restaurant equipment or for any type of commercial kitchen to be added to effectuate the proposed uses Applicant does not see any need for any changes to the fire protection system 5. EFFECT ON OUTSIDE SPACE None of the proposed usages will occur in outside space. 6. LACK OF DETRIMENT TO PUBLIC HEALTH, SAFETY, AND GENERAL WELFARE While there is a public health and safety issue with regards to alcohol sales and consumption for all businesses that sell and offer alcohol to their customers, the proposed use by the Applicant will have a negligible effect on the general welfare of the community. In conclusion, as set forth herein, and the Application to which this Letter is attached, and the exhibits attached hereto, we believe that the City of Los Gatos should grant the Conditional Use Permit because it will add to the convenience of the townspeople, promote the pedestrian lifestyle, charitable giving, all the while having an almost negligible effect on the amount of alcohol being sold in the Town of Los Gatos by the large retailers and the bars /restaurants. Certainly the limited nature of the offerings and the timing of the educational sampling will not contribute, much, if at all to any negative situation that might result from the sale of additional alcohol in the Town of Los Gatos. Thank you for allowing us to present this Letter of Justification to you. If you have any questions or comments, please do not hesitate to contact the undersigned. Very K. Christopher Branch For the KC Branch Firm, A California Law Firm List of Exhibits: A — Lease B — Deed of Trust C — Declaration of Landlord's Consent D — Build Out from Original E — Additional furniture with dimensions for proposed wine /craft beer sampling zone F — Rope and Stanchion Pictures G — NAHH 8AVE&SH&R:FLICK P0 Box 0F Lo*GwWs,CA3503i RETAIL SPACE LEASE 32 NORTH SA 4TA CRUZ AVENUE, LOS �GATQSCALIFORN'A Thi�ousodraeuaso(th� o|Apn|280Tin made bynnUbow/eon Dave and SoarlF\�k, « Lease. dated |xo`LwnN NwPoS�e,mc {iere|n called ^Tenun�> Ovv^�,(ha�e*�n v."/°" � PRE/�|8ES'�od|u,dVoo�ne,vby|na��m(oowntandTonuotxomhy|aa*o,|mm/nx|u��xu. oo,p,omi�op^\noma`rmguopwnm�o/y2JnSp«o�/a/ne`on/:eymon: cota~ space (»«/amoaa , ;� �:oounon0Uoo'nx»zzamnoSaidp/nm.x*�u'v floor Plus apy/uxm�ucdx00Oto8«0 square oee» of California, »nmmnn�knnwnou |oc*teamu,e Town nf Lcw(�ems. County ofSaohaQa/a State o/i}a ro��/�xw�S*acel 32mnnh Salto Cmz&vnooe'(ho,oioa�erro&no0voax the `*on/Space u T$sLease )nsuNectm the Terms, onvonu»mand«ood�konsho/mnset forth andmuTo^*o//d cuvonanba*anum�/i*pmuo�&omonsWora�oo for this Lease m keep ^o4p*nn/n each and a/ po.dwpno�cn^anants and cood|t�vobyi|wde kept and po�onnou 2TER10 T�o*,rmofmmLoavwm`|/curomnn000ponmoRon/CummooCex*ot�[wtoanuvwoen� � J��nnm(voowoDmo(inlfunoamndn, years o�e/to*uonCnmmancow exp|raonmeJo»«^ry |,h^*o�.�ooroptionon»moww Dmoa *# el ,led, m* 21 Tenant shat ho^vtxn Option teux�nniun Term for two 2 $Ui.o^alpenodso(fvo (5) y * vn m *ma and rn^dMan^o[U:� Lease, except nnm each (each being on^Em Tenant shall have no former right to extend the, Term after the spcond Extension Pence, and the Minimum Rent shall bo.ocr*psod,u the amounts s*l forth \n Section 31 below /oo applicable om o n to extend may h c exercised hy Tenant giving Landlord written notice 'be/no,no later ',buonne ronV/adeighty(180)daysb*{»/a/hnc»mmo»cnmnotof'hoExt*nmonPo,iodThadatnx;»/ tr* nm!ce are August ',2017 and Augiws12022in the event Tenant fails /»ywaA4'.uwnoiicoao provided ^hnva, ,acogntuiTona*tmo*anU 'he Term shall continue kn^, aondnfmn(10)Uosmoso uaysfoUwwm0rac«`P'Uy Tenant «ta notice from Landlord advising Tenant orI's failure , nexa,c anwo |o�^/ then applicable mnowa|»*«»»}m the exomTenant continues mmi cne the renews: ^p'mn within the ter! (10) "lay period teen the /ooe*a|op ui or Off ^Fair Market Rental Rate" shall mean the annual oini�ouw rental rate. that Landlord should wasooaoiy heob|wm Obtain for the P/o*sas*tTnm|vo the first day of the Extension Period Fail Market �Room! ^,| Ra/ox�Ubot�: v�mm�Pmv�|wymnw|m�hxop�emmpunx@ommermm�e mmm/,o ~ size ub�xxs� anu�u�nVmmmmuccorn,moa�,nv' the |n�;�ovcandnw ev» r ions v' the Lease no|od.n0The i|mi,a rnnt u or Extension Period the Pa/^vue^ use and the other orn^m 10&l��pa�n�huTond,<1U, )Lensey �u' Tn « /k*%i*imunRents»a/i»otu«g'm»m/thu 1, below, w;Ew*n^| onp* nud shall hnaoyrn S�nn3, Minimum Rent for the w:cu g|niohn|ipro,iUononc*mTonuntofiuU��ormmaUnoof theFairW}a/kntRmnu$Rmtowkhm �onu right on�d`Torm\9i��mv`n/lo)Jey n a/m, mveoty(2o) doYso �m' T*oan|exen,on«I*�m mv'\ mU to ,00*iv�yxucvdouvmin»kon(`T o« v»''s Rwv|nwp*nod")�Tvn*n,noo|l|xavnc*Ny"|ont. do One of The !noo*oO <> accept Landlord I»dem»i na.i»n, o'(/ object to Landlord's de term ination onso��o«»a�'sdom' nvoadon`do`aFmr mu/xw tRental Rou� |( Tenant n v nr" viWsuchno food Yoth*z agree upon such Fair m^/~er Rental Rate. k objects, Landlord and Tenant shall use �h roomem�imin;0e««(15) days [o\�*mioaTonoo�sRrmow Lan$k`/UmoVTe»a»\fa|)m'«a »yi��u�vp,b|,m0ooma,cn,uao^* With the Oo*xm/,aox/m»mm« pa"e�/hmomemaxnr��»||u*«u»m rorirvvn�a like nqonoutmn) `heom � o&rb«,aVon��vn�ia�on(�xon�uc00000 � R«(ro»y'»*w*u"«*�|o»�xm8h*fmolond binding upon the pan|*s }f Tenant fails ,osopuceo,u. a�emS«o»««x«�w»a �R(�wpn/mdTnnancsxa\!cvn^|us�e|yhadmum*dwnnv^ oWu*mv/h�nQ*&hioTo«»n|ne»R�c��u;'`inodhyLanVkxd approved o( the Fair No/kot Rental n �./ \i Tenant objects wLandlord's determination oY Fair Market Rental Rate mioccvxi�ncvwuh�m/n�»or im1a,vk�E��eneinnPohodxho��oFair��ar:a,nonn/nnm.» being po,°R above .Ju'mqany �»r |�W)nipoumRar�*qv»}m15O'uof\heunoua\kWnim«m°m the above, Tenant nxaApay o^nu* �wx'oov,m ^1°m".r^ Y � aI, tire h;gnost rate d if inq line PI eceding Terns and, after site Far tilarket Rental Rate is detem,wnep, it einanT has under paid Minimum Rent far sard barren, , enari shall pay Landlord the amount due within thirty (30) days aft nu cIelpano, are if tenant overpaid Minimum Rent a credit shat; be given Tenant against me next Rent r_urning due under file Lease. S.?. e i.d! vMULi RENT tal ' he tern) Cf the i -ease and Tenants obligation to, pay reins Will comire n Gen ,, 'Rent tJOmrmencerrert Date " "? upon fine earlier to occur of the dais Tenant opens for business to the public at the Premises, er 60 days after Iar;dlord's delivery and Tenants acceptance of completed shell ant all oiler wore described on Exhibit Al .'b} Tenant shall par= Landard minimum guaranteed rent ( "yMinimun Rent '; tar the Premises in moriffiN payments in advance. commencing on the Rent Commencement Date, and thereafter n rile rust fist' day of each succeeding calendar month as follows. Minimum Rent; Thirteen Thousand Dollars ($13,000; per month for year one and two Years three throug]n ten annual CPI increases tint Less ?hen 2.011, and not greater than 4.0%,_ Or. ".-c. a Fiencos leluirilaInrl tent. ' ears 1 1-12, I-a r f laruet Value, but not gremor tha, i 10` , of Minimum Rent parr r se font. I ' 7rr`, -ease Year. Ye ass !3-20, Annum Got Inrreascs not less than 2.03') and not greater than 4.°;._. In the event that the Rent Commencement hate is not the first list) day of a calendar na nth, Muir turn Roe will be pro- a.ed f a r the period `ro!m the Rent Capin enctment hate t o the first l i s t .; day o1 the next +Month. =i The, Minimum Rent will be increased, out in no event decreased, on each an.tivetsazy u4 the Re tt'Commencement Date teach soon anniversary. and "Adlustment Dale") in accordance with the provisions of tnis Paragraph end with reference to the Consumer Price Index iAll ,tents) for All Urban Consumers for tire San Francssc ,- Oakland -San Jose area (1982-1984=1001 (the "fnaex "I published by the Bu =eau of Labor Statistics of the United States Department or Laboir . sloe index published for the date arhich is three (3) caiandar months prior to the Adjustment Date 'the "Adjustment 1ncl shall be conlipared wfh the Index published for the date Which is three l3} calendar months prior to the immediately preceding Adjustment Date, or the Rent Ccmmencernert Darr:,.. in the case of the first such adjustment hereunder (collectively the "Referenced index"), if fl-re Adjustment Index is greater than the Reference Index, then the annual ivlinst$turn Rent payable from and after the Adjustment Date anti' irte tiext adjustment) shall be delmnnined by multiplying the annual Miminum Rent payable for the immediately preceding twelve (I R) month period by a fraction, the numerafor of which shall be the Adjustment Index and the denominator of which shall be the Rererence tndex. Nohvithstanding the foregoing. Minimum Rent snail be increased each year by an amount cubist to at least Twe Percent (2 %j, but not more than Four Percent (4 %i of the annual Minimum Rent payable during the immediately piece rig twelve (12) montA period, When the adjusted annual Minimum Rent is determined after each Adjustment Date, Landlord shall give Tenant wriften notice- indicating the amount and method at computation thereof. It at any Adjustment Data tae index shall not exist, then, Landlord may substitute any official index published by the Bureau of anor Statistics or successor or similar agency that is then must nearly equirvalent to the Index. Tenant, except as otherwise provided for herein, shall perform all at ;as other obligations once, this Lease commencing as of the .gate that possession of the Premises is tendered to Teni tali in the event the Landicrd does not deliver possession by July 2007, the actual Refit Commencement Date shall be delayed and all rent and charges, following opening (or business, shalt abate on the basis of one day of refit abatement for each day of delay from July 1, 2007. In the event the premises are not der vefed by August 1, 2007 then such anatement will be two (2) days of rent shaternent for each day of delay Iron July 1, 2307- Moreover. if the Premises are riot delivered by 5liIfptemher'1, 2007 Tarrant may tefininate the lease if delivery is delayed to or past that gate and Landlord is to rermawse Tenant *or all expenses to negotiate the lease and preDare plans for the Premises in an amount riot to exceed $25.000,00, The provisions of Section 31 ix; are agreed not to be applicable to the delhvery of possession of the Premises or the completion of the Landlord Work he the cat-es set forth herein. ioi Urn es, gave and Snarl rick dc, r:et acquire, the Premises before the Rent Commenuernent Date or as otherwise advised in writing, all rent and other payments will be made payable to Shad Flick at the address set forth in :Scstion 31(xm). t.andlord's FEIN: 55- 9152278_ 3.2. All pay,nents cf rent shall be made Iry iawtui United States currency without deduetion. offset, prior notice o- demand. Rent for any portion o� a month shall be prorated on the basis of a thirty ,30; day month. Rent postmarked after the 5"' of the month +s considered Into and subject to a 10 1r , late fee, provided, however, that Landlord agrees that it will waive the late ran so long as Tenant makes the required payment within five (5; business days after receipt of a notice from Landlord - Notwithstarl tae foregoing, the late fee shall not be waives more than one time in any calendar year The waive., et the late fee provided in this section shall be appiir able to all 1 ^stances ,n which a :ate fee or !ate charge rs provided for in this Lease. v_ USE AND CONDITION. Tenant shall use the Premises only for the retail sale of furniture, ur_ iishmgs, fixtures, kitchen_ fibular and garden hardware tools, implements, and nc, essories, tabimop items such as serving warn. bowls, plates, glassware, platters and flatware, linens, cooking anti other books and electronic media, as offered under the umbrella of NapaStyle and from time to tithe in its cafaloGue, sifted legal fuses. the sale of food and beverages. wines_ cooking demonstration, and wine tasting (COfiectively, the "Permitted Use') provided the safe :,f wines and wine tasting shall be allowed Provided Tenant acquires any necessary licenses or permits for said uses frorn the f owri of Los Gatos and any other necessary agencies and governmental authorities. ! andloid shall provide vanilla shell and ofhar work as per Exhibit A. attached hereto to no cast to Tenant 5. SECURIT`! DEPOSIT AND PR'M -PAID -r2EN7 fNTE`wtT1ONALl Y OA,MTTEii. 6. IMAINT "ENAtiC%E OF C;CdbjMON AREA 1. in addition to tt:e Minimum Rent provided iri Article 3 hereinabove and con menc:ng upon me Rent C ©mmenceinent Date. Tenant small pay to Landlord, as additional rent, Tenant's Proportionate Shar8 of the Cor'nmen Area ; xperrses, as hereinafter mere particularly described Tenant's Proportionate Share Strad be deemed to be the ratio 'hat the entire floor building area of use Premises _xciusively occupied by Tenant bears to the entire Commercial ground floor butHii g area of the whole of the Retail Space. Said areas are as follows: (ai Area occupied by Tenant. Approximately 2,765 Square Free; of ground lavei plus approximately 600 to 800 square Feet of second floor mezzanine dr) enant's Proportionate Share of Entire Buiidmg 40 Percent Notwithstanding the foregoing. the Fixed Common Area Expenses described in section 62 below is the only charge that Tenant will pay as Tenant's Proportionate Share. Th calculation above is to show how the charge to Tenant was defennined and is not subject to adjustment. 6 2 It is understood and agreed that the words "Common Area Expenses" as used herein shall be, construed to include but not be limited to al! reasonable sums expended by Landi-orc in connection wits solo Retail Space_ sut.h as Propsby Taxes and Assessments or any other govemrental tax, including a pariting as' ssraent tar,, charge or levy hereinafter imposed on or m r specs to any portion of said Retail Space. and including the cast of adequate pubic liability and property damage Insurance on the Premises, (in addition to insurance required to be carried by Tenant pursuant to Paragraph 16 heroin). and the Space (which shall be carried and maintained by Landlord), Landlord a:nc} Tenant acknovwledge that th =,= Common Area Expenses include a ten portent (10%! overhead sy harge on all such amounts, other than Property T axes, so paid by Landlord o any such third L' d Ponies o€ ctherJJSC ter solo ad;nini cralion, manage meat, o6ef3titln, ma ntcnance or repair of Lne Premises or Cornmon Areas- Other than the new tax assessment that rot occur due to the 2007 sale, the Tenant shall pct be responsiuie for increases :n the propchy taxes due to any sale of the crGPcnv'.vithir, the; rre,a.!SVe years. Tana ii Pa -u L �- .!sped or t t� firs dab o- each lender r` nth vie Sinn c - .vo Thousand Dollars ,52,000) representing tupoothly ' xed Comrnon Area Expense payments. clot ✓r hstan ins aiything curem to the contrary . cn each anriveraary • f the Rea? Com'meraernent Cate, Tenant's share Of the. Uninnon Area Expenses shall Increase by live percent (5%) over the amount of the Con;mon A; ea Expenses for the period immediately praeedina such anntvefsar v date - B{say Of li,ustrati�n, ti initial Common Area Expenses are $,20. 000 Ur' per year. Beginning win,, the first anniversary p= the Rent Commencement Date Tenant s annual aawnenr for Comnl0r, Area >,pOnSes shah be �Lv� ZG.. -OQ. Payable in equal monthly installments of S2 10 r.DO per month. Thar Parties specifically acknowledge that Tenant shali not be responsible for any funt r costs Or expenses of Landwd, it being the intention of the Parties that the Common Area Expenses are or) inclusive payment by Tenant to Landlord. At such hire as the actual increases over the amount or ren+ estate taxers and insurance costs for the Building are known based upon the invoices received by ra- dlo d from he ppl,aojo governmental authorities and insurance companies Landlord shalt Sand errant ran ;voice setting torm the actual increases in real estate taxes and insurance ✓ditch exceeds the t ✓e percent ( o ✓1) it 0 ase oro ided for in this ParagraPh Within thief; days a'tc, I receipt or'..he in r ,ce from I-andinrd, . e not shall Pay Tenant', Proportionate, Share of the smut nY due. Per clarification, it is acnnotv'edgea by Landlord and Tenant that the five percent 15%) Increase In Common Area Expenses is not intended to be a lirnitaten on the Tenants share of the cost of real estate taxes and insurance. 6A it the estimated payments by Tenant for Common Area Expenses 'or anv accounting portico exceed the actual Cerrmon Area Expenses for such period. Landlord shall refunc the Oiff Bence to Tenant crracurrerily with Landiards statetnert of actual Common Area Expenses Tor such period. >.5. Omittec. —,CCUPHNC`r C-1 -i-IE.PiREE,41SES. _a an'o t+ ,hal r oe uc upan y o the completed vanilla Shell of the Pre^vsesto Tenant or, a tnn,a.e Jurac- ',i1. 20 t7 r'-e de i r ry f the Premises n .f,t oa aPer a d. s has come nil f its wo;k and evidenced L^ a frontten e ceptance from Tenant after Te :a has inspected -Pe Premises and accepts '.,he same x eat as Provided fi a p nr n list and except for defects WhICh are not ;.flscoverable based upc;n a n asonabie visual InSpeCtion 7 2. Tenant acknaeruedges that neither Landlord nor Landlord's agent has ;node any representation or warranty as to the present or future suitability of the Premises for the conduct or enen.'s business or ma` . enants Proposed use of the Premises or its manner or are in compliance with applicable haws or rguvernmental regulations. Landlord and Landlord's agent shat€ not_ under ant, circumstances, be obligated to investigate or confirm the permissibility, propriety, or legality of ,Tenant's proposed use. htotwlthstanding the foregoing, (ii Landlord warrants and represents to "Tenant that the use of the Premises as a retail establishment Is permitted under all applicable laws and governmental regula! ions_ 8 USES PR;3HiBITE0 _ Tenant st o not dot or permit anything to be coup in or about the Premises nor tiring or heap anything Within the promises which will ffi I n any way increase the existing rate of or ct any fire or other insurance upon the Budding Or any of its contents, or cause a cancellation of any insurance, puicy covering said Building Or any part thereof or any of its contents. Tenant shall rKr da or pe;rtfft anytdung to be done in or about the Premises which will h any way obstructor Interferer with the rights of other Tenants or occupants of the Building or injure them or use or atiow the premises to be used for any improper, immoral, unlatiaft l or objectionable purpose: nor shall Tenant Cause, i11^slritaln or permit any nuisance in, or flbDUf the premises. �T Tenant she'I not CtirnIDtt Or dhow to be cortmined any Wasto fn or upon tine Premises. Not<,6hstanding anything, contained it this Section to the convarv„ Tenant shat{ be permitted to use the Premises for it's P_rr iitte d use i py;.'. Tenant shall of use the Premises, o ~)e Tit anything to lop n o! 97COIPiPL1A�tr e `t " >' r . PrY ° - J -t r r:. i „,rcrC- vaq abbot the ismosses. whir,I wil.,n ant vay conflic 'rtith any lay statute. o d man _e at governmental rule or regulation in force or which may hereafter by enacted or promulgated errant shag are its sole cost and expense. prrmpt1%, comply with all laws, statutes, ordinances and governmental rude. regulations or requirements now in force or which may hereafter be in force and with the requirements of any board of fire underwriters or other similar bodies now or hereafter constituted relating to or affecting the condition, ose or occupancy of the Premises, excluding any capital improvements or structural changes not necessitated by Tenant's improvements or particular use_ 1 n ALTBPATIONS AND ADDITIONS- Tenant shall not make or allow tc be merle any aiterations- addttlons or improvements to or of the Premises or any part thereof without first obtaining the written consent of Landlord and any alterations, additions or improvements to or of said Premises, including, but not limiter' to wail covering, paneling and built -in cabinet work• but excepting movable furniture and trade fxtu, es, shall at once become a part of the realty and belong to the Landlord and shall be sure. endered with tea Premises. In tit event the Landlord consents to the making of any alterations . additions or Improvemerrs to the Premises by Tenant, the same shall be made by Tenant at Tenant's sole cost and expense. Upon the expiration or sooner termination of the term hereof. Tenant shall, upon written demand ov Landlord. given at least thirty (30) days prior to the end of the term. at Tenant's sole post and expense, forthwith and with all hue diligence, remove anv alterations, additions, or improvements made by Tenant, designated by Landlord to be rennovr n and Tenant shall_ forthwith and with all due diligence, at its sole cost and expense repair any damage to " -.he Premises caused by sun removal. The provisions of this Section 10 shall not apply to the initial alterations. additions and improvements to be made by Tenant to the Prr ruses which nit;a' aiteratons . additions and lroproverrients may he trade byTenant without Landlord's consent. and Tenant shalt have no obligation to remove any of such Initial alterations, additions or improvoments A_telations. - main shall be allowed to (1) rake alterations or additions a (a) a cosmetic: nature or (b) those for which the cost does not exceed $100.000.00 and (2) install, remove andtor replace any trade equipment and fixtures used in Tenant's business in or to the Premises. in beet? case without sun roiling plans and specifications to Landlord or obtaining Landlord's approval. Co:nstrucao Landlord Sha,l revle-e, plans, whether for the initial attera`;ons.addiacns and improvements being made at the beginning of tit- Lease Term or any future alterations, additions and rmproveme rts afthin iii t5i busim+ days alter funeral, wd; partial p'a3 submittals as may be appropriate under the circumstances and Landlord fo prc�tde apProv rl r r notes or changes which i= made would be, deemed approved within the required time. If the Landlord dots cot respond plans will trio deemed aapproved. I o the extent changes and plans are mandated by the building depari'ren fender aerr oval of the Landlord is not cequi-red. Tenant may submit plans for a building permit even though Landlord may not yet have approved the plans. Landlord shall participate where necessary in the permitting process 11. REPAIRS it 1. Tenant shall ha deemed to have accepted the Premises as being in good, sanitary order, a ondliton and repair. �andle;'d warvalts that alt NVAC. electrical. and plumbing is in good working order, l'enant shall, at Tenant's sole cost anti expense, keep h, ^,e Premises and every part thereof in goon condition and repair inclloing without limitation, the maintenance, replacement and repair of any storefront, doors. window casements, glazing, plumbing fixtures, electrical fixtures., and heating and air conditioning units. T anent shall obtain a service contract for (apart' and maintenance of said system, said maintenance contract to conform to the requirements under the warranty, i any, an said system. Tenant shall, upon the expiration or sooner termination of this lease hereof, surrender thu .Premises to the Landlord in good condition, broom clean. ordinary wear and tear and damage from fire, casualty or other causes beyond the reasonable control of Tenant or from Landlord's failure, to perform its obligations hereunder excepted. .Any damage to adjacent Premises caused by Tenants use of the Premises shall be repaired at the sole cost anu expense of Tenant. subject to section 15 below 11.2. Notwithstanding the pfavisions of Arthfule '. ' 11 here3nabove Landlord shall, at its sole cost and expense. repair, maintain and replace the structural portions of the Building including the exterior W W .�ft 'niln� 3tMfi�C= =dye L wells ulut. root mo nblane Drld plate 3iass - xindocis unless such main nance a _ erails are aused in part or +a who a by the ac. regled, fault or omrssi n. cf any -u -y by the , anent. its agents. sec ante, er ploy eas, OfA00s, to r r',eh case Tenant shah Pay m LacC101d the onti c actua. cast of such maintenance and epaks, sub;ect to Sexton _5 bei:.-w. With tine exception o= plumb g textures ric ?ICCriCal fix tures a.ld heating and air conditioning units set forth in paragmirm 1 1, i , t_ardlord snail at its sour cost and expense, repair and rn airtain and replace the plumb: ad, pipes. electrical Winn,- and conduits wittlin the Prerrfs r. Landard shall not be liable for any facture to make such repairs or to perform any maintenance unless such Failure shall persist for an unraasorab;e tlma after written notice of the need of such repairs or maintenance is given to Landlord by Tenant. Except as provided in Article 25 hemof, there shall be no liability of Landlord by reason of any injury to or interference- with Tenants business arising from the making of any repairs, a-teral,ons or improvements In or to any portion of the Building or the Premis .s or in of to 3xtures, appurtenances send equipment therein. In the event that there is art interference with the ; €enants access, use or ,to vision of uniities isle arse Lacau. e of the a`ds urthe Landlord the enant wiil be provided with rear abatement if tie in+ r a„tion continues for more than two business days- bchwah the rent abatement to then be retroactive. Any entry into She Premises must follow phor written notice to the Tenant and be made in a reasonable manner. With respect to any repairs that !tie Landlord needs tc rake. alterations Or other activiti -s, these must be made in a manner that causes the ;east interruption wbn T enan' s business and with an obligation of the Landlord's part to restore the Premises bJ th respect to any significant activities that would interfere with business operations, ever,r attempt shall be made: for theese to be r erformed after business hours. 12_ UENS. = elan, shall keep the Premises and the property in whist! the Premises are situated free from any hens arising our of any work performed materials formshed or obligations incurred by or on behalf of Tenant. to the event of a Iten that is imposed upon the Premises as a result of the actions of Tenant. Tenant shall have the rlg"k. within thirty days after receipt of notice thereof from Landlord, to ether. at Terra t s aleciton, pay oft me lien, bold over the lien Or provide title insurance to protect Landlord and its aOde-f from the effe.ts Of file lien. 13. SSiGN -MENT AND S'UF, -✓ T -fry G. Tenant shall not either voluntarily, or by operation of taw assign, transfer, mortgage. pledger hypothecate or encumber this Lease or any interest therein. and shat! not sub et the sale. Promises mises ° any part thereof. or any right or privilege appurtenant thereto_ Or aiiow any other person fine employees agents, servants and invitees of Tenant excepted} to ccaipy or use the said Premises, or any p'sn t7acreof, without first obi:; ping the written consent of Landlord, which consent shall not be unreasonably withheld, delayed or conditioned. A consent to one assignment. subletting, tycCppatlon or use by any other person shall not tie deemed to be a consent to subsequent assignment, subletting. occupation or use by another person,. Consent to any subletting snarl in no wav relieve T onart of aav liability under this Lease. Any such assignment or subletting without such consent shall be void and shall, at the option, of ihe7 Landlord, constitute a default under the terms of this Lease- if Landlord fails to grant or withheld its consent to a requested sublease or assia n fen_ within five raj days tciluwing T enants request therefore. Landlord shall be deemed to have consented to the sublease it assignment in question. it Landlord consents (or is deemed to have consorted) to any assignment of this Lease, then, upon such assignment, the assigning Tenant shall be automatically fully and completely released and relieved from any and all further Obligations ar;d liabilities under this Lease, and Landlord agrees to `hereafter took solely to the assignee as the "Tenarl' under this Lease_ "l -oho{ shall have the tight to transfer or assign this Lease_ together with all the stores operation under the Tenant`s trade name;. provided- that the Tenant, the assignee or the parent of the asslgnes snail have net Werth equal to or in excess of 510,000,000.00 without the consent or approval of the landlord. Landlord acknowledges that a change of control of Tenant shall not be deemed to be a transfer or assignment for purposes of this Lease - 14. I-iOLD HARkILESS. Tenant shalt indemnify and hold harmless Landlord against and from any and all cojels arising train Tistiant's Tenant's use of the Premises or tram, the conduct of its business or from arly activity, work . or other things delve, permitted or suffered by the Tenant ry, upon, or about the Premises, and anal! further indemnity and hold harmless Laandlord against and from any and all claims arising frown any breach or default in the perfonnance. of any obligation. on Tenant's part to be performed under the terms at this Lease. or arising from any act or negligence of the Tenant, or any �tfqrkr officer, agent, employee. guest, or invitee of Tenant (except to the extent any such claims arise r- -..,�1rt ae ., jh from the negiigence ar willful nniscondurt Of or its authorized age is contractom ar emoic;yeas. N' horn arty failure by Landiordto perform ns obligations under this Lease, or id from any cause covered by Landiord's insurance and net covered by the insurance required to be carried by Tenant under this Lease). and from all costs a romevs' foes, and liabilities incurred in or about the defense of any such claim Tenant upon nosier from Landlord shall defend the same at Tenant's expen.,e dy coo rsst 'en onabiy satisfactory to Landlord Tenant as f rate -af part Of the cors:urnatbn tot' andlord her by assurnas ail esir of carnage tt. Property or inlui ;: o persons in opar-� or about ire Prlernoes. from any cause other than from tie negligence ar vv'llfu� misconduct of Landlord or its authorized agents, contractors or employees or from any failure by Landlord to perfnmi its ooliga[Sons under this Lease, arcs Tenant hereby waves all claims sn respect thereof against Landiord- Tenant shalt give prompt notice to Landlord if,, case, of casualty cr accidents ire the %'trcnflSi;S. Landiord or its agents shalt not be Gable for any " -ass or darnage to person or properry resulting from fire, explosions, t €cling plaster, steam, gas, electricity, .eater or rain which may leak from any part of the Building Or from the pipes, appliances or plumbing works therein or from the roof, street Or subsurface or front any other place resulting from dampness or any other cause whatsoever, unless c fusr;d by or due to the negligence or willful misconduct of Landlord or its authorized agents, contractors or employees or from any ailure by Landlord to perform its obligations under this Lease, including, without limitation a failure of Landlord tic timely respond to notice of a condition requiring ordmoi upper, to prevent in,ury to the inamsea Tenants mercnandrse and Improvements in the Premises dr, the safety of prisons and property. Landlord or its agents shall not be fable for interf >c ranee with the light or air in the °remises. 15. SUBROGATION. Notwithstanding any'tri ng contained in this Lease to the contrary, Larfdrad and Tenant hereby mutually waive :hair respectve rights of recovery against each other for any Toss insured by fire. extended coverage one other property insurance policies existing for the benefi or me rc , ^- ective parties. Each party sha;i apply to their insurers to obtain said waivers of suhrogatson rights from such 3nsarers. Each party shall obtain any special endorsements if - egcired by their insurer to euicPence cnmpiiar. -ce v.•i;h the aforementioned waiver. 16 I..IABILITY INSURANCE. ; emnt shall, at Tenant's expense. Obtain and k'ep in farce during the t rm of this Lease a pot y of commercial general liability insurance insuring Landlord and Ti enan against any fotIflity arising out of the ownership r._e. occupancy or mainteriance of the Premises and all areas appr nenaru tnere a Such insurance shall be n the amount of not less than .31.0d0.000 OC. Sort, insurance shall frohhei insure Landlord and Tenant against liability for propery carnage of at least $100.dfx U.'. the limit of any such insurance shall not however fimit -h 3 Itabil ty of the Tenant hereunder, if Tenant shall fail to procure and maintain said insurance. Landlord may, but shall not be required to. procure: and maintain same, but at the expense of Tenant insurance required hereunder strait be in companies rated A:XII or better in "5asf& Key Rating Guide Tenant shall deliver to ;.andlord, prior to right of eatry =, copies of f slides of liability insurance required herein ar certificates evidencing tale existence and amounts of such insurance, with lass payable clauses satisfactory Y, Landlord. No policy shall be cancelable or subject to reduction Of coverage without prior written notice to Landlord. Ali such policies shall be written as primary policies not contributing with and not In excess a(dnuesage evhich Landlord may carry_ 17, UTILITIES_ Tenant shall pay separately for all utilities, gas, garbage. telephone. Internet ant cable service. All utilities are metered and billed separately. 18 PERSO,'NAL PrIOPERTY I-AXES, Tenant shall pay, or cause to be paid, before. delinquency any and all taxes levied or assessed and which became payable during the term hereof upon all ; merit's leasehold improvements, equipment, furniture, fixtures, and any other personal property located in the premises. In the event any or all of the Tenant's leasehold improvements, equipment_ furniture, fixtures and other personal pro per,, shall be assessed and taxed with the real property. Tenant shah pa,j to Landlord its share of such taxes within thirty (30), days after delivery to Teranr oy Landlord of a statement in writing setfing' forth the amount of such taxes applicable to fe}aants property. 19. RULES AND REGULATIONS Tenant shall faithfully observe and comply with reasonable races and regulations that Landlord shall from time to time promulgate and/or modify. Any such reasonable nand regulations shall be binding upon the Tenant upon, delivery of a copy of them toTenant t an N lon, shall ac p t ilSpot is r !e to an ant •r too nor Iperform at ice of any at sa'd mies and nee Iat i s by any aher tenants or occupants surry ru ns arni nquiatiors chcu notate as rx, bit 6 and small be eaf0fced by the Larrdtord on a non 1r cnm(natcr, aojorrn hasis. No netv or revises rules will impose ary chill tional rass to the Tenant or dlrrrmisr any iignts Wanted under tri s Lease. 20.HOWNG OVER, if IFINIatic realzrial. : r possession of me Premises or ay ,Dart MOW nor MCI ex iration of the terrn nereor will tire. e�xpra s wri ten consana of Landlord such ac ucanc shall be a tenancy liom month to month at a rucral in the a noun[ of the Isar kwonNy ^tinimum Rent, pins all otf.er crarges payable hercwAy. and coon as the [arms herea applicable to a month to munh tenancy 21 _t ] R'f' fi y LANDLORD ando o r- s- pees and shall aa any and ail areas raw, po reasonable navance name t to Tonana the fight to enter the Premises to nspect the same , to s t net said r r,�s to xo pecfh:r ru chassis urn or tr ants u pyre nnrict, of norm s.,cnn br=ity to repaarr Yhc- Pr e nmos and my port, rn of the Buua+ng of wh,t,-t Me Premises are a pan that' an lord may deem necessary Or CEWIrable, mahout abatement of rent, and may ior that purpose r rect cc alldlkuilg .rd other necessary simmu res where e re Jsonatily required by the character A the work to be perfumed, and subject to the prior Knob appt,val or Tenariv always orovsdmg that (fire entrance to the Prtnvses shall net be unreasonably Mocked hereby, and further providing that the lousiness of the Tenant shall c,t be interfered wall unreasonabl, Pro ided I and ord uses commercially reasonable efforts to i inimize interference w,tili Tionant business operations. Tenant hereby waves any claim for damages or for any injury o= income nience to or interference with Tenant's bunness. any loss of occupancy y or ore+ enjoyment of the lommsev and mg oaf err iess omasl red thereat r andlo +d snail tove the from to t. se w a and alt means which t arc 1014, may (.earn proper to open said doors in an emergency rn order to 000r; ente , to the Pren-mes walroa. UaUhty to Tenant except for any failure to exercise crue care or Tenant's fa ;perty and any entry to the Premises obtained by Landlord by any of said m. airs. or U-herwise, shalt not under any circumstances be construed o• deemed, to be a torcibm or u,rt ,anal erxry into or a cletafner of. the Premises, or an ey¢ m-, of Tenar 1 from the Premises -W any Portion thereof. 22.TENAN"S DEFAUL7 _ The occurrence at any one, or more of the fonowaig eo e nc; shaii corstautrt, a default and nreaclb of lots Lease by Tenant. ?,4 .The atrandormen! of the F _raises my Tenant. 22 =2.11r r rl re by, Tenant to r- eke any payment of rant or any carml ,,3y rent re4etr r Ly T o nam e.reuraer, as and la her pan were c, such failure shall continue for a period of fie :r bc.siness days rter written r ot'.n a unieuf by Lannio d tO ; anent. 222 Tfte failure by ; areani to obsewe or pe.rfernf ary of the covenants. conditions or provisions Of this LCmm r r be observed or perfarmed by the Tenant, other than described in Article 22.2., shove . where such fai.ure shall continue for a perind of ten (10) days after written notice tPrered by Landlord to Tenant; provided- however, that a the nature of Tenant's default is such that more than ten { 101 days are reasonably required for its cure, then Tenant shall not be deemed to be !n default if Tenant commences such cure within said ten (10) day Period and thereafter diligently Pn:,sec'Jma such uure to completion. 22.a.The inakinng by 1 errant of any general assignment or general arrangement for We benefit of re i wrs: or ?-re tieing by agsuns° Tenant of a petition to have Tenant adjudged a bankrupt or a pet on at reorganizatic Or arrangement under any lave relating to bankruptcy (unless in the case of a petition filed against l enant, the same is dismissed within sixty (6U) days), or the appointment of a trustee or a receiver to take posse smn of substantlaliy all of Tenants assets located at the P cmrses or of Tenant's interest in this Lease, where possession is not restores' to -errant wahin thirty (30) days 01 toe attachment, axec tenor or ocher judicial sefzt e o. substar rally all c- enant's assets ocated at the Prennoes of J. I err its interact in tkis Laasr . +hero s( of Sciz4lrc _s not discharged within thirty 30) clay -_;. 22.5.Tne failure by Tenant to commence and thereafter complete i ncrovements necessary for Tenant's, (.unhurt of it o r u'ruia a c Jse withu, the Accuses within a easunabie paced of time ollye,ang the delivery oT aocsessi n or me Pre nnses to Tenant as provided in this LsaSe r, AIM D, REMEDIES IN DErAULI. ?n, the event of any such default or breach by Ter- -ant, Landlord may at any time thereafter, in his sole discretion with or without notice or demand and without limiting Landlord ur ilia exercise of aright or remedy, which Landlord may have by reason of such default or UraaCh. 23- 1.Terminate Tenan't's right to possession of the premises by any lawful means, in which case this Lose shat! terminate. and 1 orsant shall immediately surrender possessions cf the Premises to Landlord. In such event Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by mason of Tc n t tt s default :r ctuding but not limited to, the co t of recovering possessions of the Premises expenses of re- lerhng, include g necessary renovation and alteration of the Premises; reasonsolo a tom!y5 fees, tl;o worth at the time of tr•vard by the court having Jurisdiction thereof of the amount by which the unpaid rent and other charges and Adjustments calied for herein for the ba.ance of the fern after the time of such award exceeds the amount of such loss for the same period that Tenant proves could be reasonably avoided: and that portion of any leasing caromissron paid by Landlord and applicable to the unexpired term of this Lease. Unpaid installments of rent or other sums shall bear interest from the date due at the maximum legal rate, or o '.Heinle n °chant t.,vlt= ec e�ossessior,, in Ithtc :asp this Lease shat continue m flee wh ther or not Tenant 9rall have anandoned the Preen ses. In such event I andlorr shall On en tilled to enforce all 13f Landlod-.t s rights and remedies under this Lease. Including the r=ight to recover the rent and any other chhrges and Adjustments as may become due hereunder: or 23.3.Parsue any other remedy now or hereafter available to Landlord under the laws or Judicial decisions of the Stets in which the Premises are located. 23.4,Where this Lease provides for a postponement or abatement of any common area rtatntenanc:e rr t - s, r n ihF rental payments, or other rant concession including but not Vomited to, the period pno to the Rent Commncement Date, such postponed rent or';ree" rent is called the "Abo,ed Rent' e.rdnt "It be credited with having paid all of the Abated Rent on the expirafto•t :rt the Lease Term onto if Tenant has fully, faithfully, and punctually pehormed.all of Tenant's obhfjatrons under this Lease. in-luring. but root limited to, the payment Of fill rent (other than the Abated Renti ane all other monetary obligations and the surrender of the Property in the physical condition requires by this Lease. i€ Tenant defaults hereunder, the then unamortize7 portion of the Abated Rent shat immedratet} he cane due and payable in full and this Lease shall be enforced as it there were no such rent abeherrerd Of other rent concession. For purposes of this provision the Abated Rent shall be amortized evenly ovr -r the entire Lease Term. In such f ase Abated Rent shat! ,e calculated based our the full rate payabe under ?his Lease - u 2A DEFAUL B AN�iO an ar perform obligations r quirad of Landlord within a reasonable time, but in no everrt later than thirty (30) days after written nation by Tenant to Landlord and to the holder of any first mortgage or oeed of 'rust covering the, P e nlses whose name and address shall have theretofore been furnished to Tenant in writing, specifying wherein Landlord has failed to perform such obfigadon; provided, howevef, that if the nature of Landlord's obligation Is such that more than thirty t30;i days are required for performance :hen Landlord shalt not be in default if Landlord commences performance within such thirty (30) day penod and thereafter diligently prosecutes the same to completion in no event shall Tenant have the right to terminate this lease as a result of Landlord's default and Tenant's renxactes shall be limited to damages arI an injunction androrto cure the default in question and deduct any costs incurred by Tenant in connection therewith from the next installments of Minimum Rent parable under ;his Lease. Should. Landlord fail to make any repairs in the Premises which Landlord is obligated to perform under this Lease, and such fa1ure directly and adversely affects Tenaot's use of the Premises, then, if after Tenant has given Landlurd reasonable advance notice (which shall be at least fifteen (15i days except where there is an immediate threat to Tenant's property or business of to persons) Landlord fails to complete the repairs, Tenant may make such repairs io a reasonable manner at the prevaiiing cost of same, and Landlord shall reimburse Tenant therefor an amount not to exceed $3,500.00 within thirty (30) days after the completion of the repairs by Tenant and receipt by Landlord of a copy of the paid invoice from Tartan!. 25RGCONSTRU�T|Ow|nih+cvnn|8`rPromiu000eummu8ndby�reo/noerpn�w�ove000by insurance, Lunu|oxjxgoneom�uhvm/�nreparuamu.aoutmnLnwousho}|/nmam e�~ndodc»«amQ«th,Tenant shall ueon,b|edma;mpo�inoatemoo0 noy/yn��*m m�u!|forooa^d�#eo��x��(^o»ohn*pa|/samuo*ymodnovcoprnpoxivno�e/ouuct*nmue»u�on o�aoa�ec�d�r»a9o»«o»m«*'� andm»Nngo/wuoh/�'aiw shall n:x^nonWyintnderowun'xe upnn,�mom*n��u��`oh�^*onmay*tile p zaoa��go`,neouyTaoao/uc,mgwgoodb��n uomnw�ooaxi�Vunoy,oeTanno�m �em ../" |vtheava/o'hmProomeoarn4unoaqoUasymsvx`8m,y,ausamhortuuo/hwpam000*arau nyh/oaoUam�o�*dnovwrmUn|nxu�nnc*��oan�unj|o/aoxa||fx«hwith�npa//&asame,pnxNsuihw extent (/ 'be des«wdinobo less than h#y(50!4}Pe/cyn,nf the then full oanbnonnmoo,�or,nw prem/�o`m�»�ovux/|on%o»�mcunvo�NaP/om.�asio�nannx/entuf��>(5U"&) vnu=o/o/om/a oi\omh/|\n:p|*cen`uoicnxtu`en-vndmrdoxa|davor»enpcon,(�}*ompai/or�es�nrcsuchmomage thmLease con�|noin8!nm!|iorvo and e�eu.tu,�nomot tu,wpu`porhonesaiye ducal no hom|omUovum tills Article pwvided,or(1) give. notice mTuo*o\m any time within ,hioY(30}days au�/ such damage ,:'minehnO this Leano*oo| the dale opcci�eUi" such nonca,which xn,� shall hs not mv'm than mlov(3U> day" after the giving o|ox:hnotice u the mxon,0 f giving ooux notice his Had all shall tonn*aboonthe data sn u:�n�nho{�nx;io;u"n/ ep e*o, « opoc|i*dinousoo,^cemod,ham»t.«$uccuVvep/»p« om ^m'm /»duouun-hood �s� c�uun*V*iomdnr*d�1hmebum00000ax/eouoby h*xonwo||nNeProm|seu. anymw*ichso mo:m the event ine damage m nor oupob/*of doing o,o" e « pajo up If) data CA SUCh o, is rici ratiprod to me condition prevailing prior to the asualty iiptifin one bunched eighty (180> save io|w*xog the walov,tha�m`wm|8/�/kooTonon/�xd��va/nongx/uvwr�zoxnouoeto�unu!ordgnnn m%hintan(18}Uaysnh,�/ihooxp/ruriuootthenouhundedoigh\yduypododtnmr/nioa`L|Vi:L:oso. Notwithstanding anything m the Contrary noo,wned in this Article, Loodiord shah on, have any ObIqatiort whatsoever to repair, reconstruct or restore the Piermises*hen the damage resulting, frool noynaouo|�y�ovwroJvode/�h�uAuiu|nu�ouodu/|o0 tile fast 6 months n�/hs term of0�is Lease or any extension thereof (m"d,itat the Urnon/»u:xdan,mgvdu,.og�hu|oo�Wmo/x,wni�\uw�anno�|m's Loaseany unoxe"�soduP,|000mmmcnd�n,em,onyt. then 7enan`*haUbegcanaouppuvuonym uxe'n|�n the next available. option ,o extend :oyx if) avoid t|loqna8oat|unn/rh|nparugrov�> iandtnmshmitno,uo/w*oinngmmpui.mnyinjurYnrciamagnoyhrooro,her�;wuoa.o/tnmaxwan� oapa|morrppi:oo.non��o�an��n�oohn/di/n^mvomenm�mowso��oarpcmona(pmnnn9n< Te�ont 26. E;�|NE�TDVhA|N |funyn/thwPmm{owsoh'aUbomkono,apprnpria/ndkyanypyh|ico,o x asi- publicaoihnhtyunda/\ha�m*u/o!»w\nnntdomvin`o/auohanamountV`agthep*emiseoc»nno longer hn used an intended mt the time the Lease was o|qne8` either party detain shall nave, the nQhr, at lts option within sixty, (60) Cave after saici taking, to fienninate this Loase upon thily 130) days �/iuonno,ica}te/�h*/|*mo��nnruw/u�bwo25�4cf||�eP/nmi�e�u/n��kan(oo$nr/�horoartv n . nmm*d}thoW\nxnumnwv`txa/patar'cuo»a}dohmxbanVu«a»� *'oc�sm�r«n�u`*«e*/anP u[`hh.\di u|^arbantnePremises may ue sru'x*»»` reduced �rooroman��c«anyoo»8edu m9o,j�*�ioyhuvoV^e"gn�a,��ooyxiun/n app,n0nut«d,Lmodicr4sha\i*iioino/»ty(0)av�ms�«w»von�o,o»y�aki«0c�approphahun terminals this lease upon wh$:nyvWcam|nnanu in the *^a/oorvnr, Laod\u/d shall bn entitled (* any doe all awards ond/or settlements whin� meyb given �i d|odb/Mmva/uoo�n:yunvxpioouha.mof this Lease, a�d7e/�an/oiy|.�avmood*immqsms'mn / ujud/n/onK|snen��i0� except that Tooant shall bemo�Uodbmmkwn�uiw for and |000emeonvwa noxnUko|u»od _pnper|to its trade f|x1u,mv�oqmpmmnt and \omoo!�n{uw�provo/ne/do,its movm8000mn SundnWi 2' PARKING AND COfaklOfd AREAS Landlord covenants that there are hO charts oarking spaces. 27,1 Tenant shall 0wra.,pnnub/o for /no daily swn*pmg/washinQ and :|eonmWoy\hofront add rear walks and gurLO Is ell an as noododbasis, 18.6/GN$iuodbrdxo:'vmihrdTonan, s8o/kn|ey location and shall appovmmri|o/mg:iago, rma/Tenan� shall have toe "0h\tv mnon i nuhm�c0uY **T «n»«�-iopxciugmphioorwrnh.\a*ura|b/ o*ia satellite dish Or' the roof, subject toLandlord o location approval. T radename. Landlord shall not'use the name, trademark or Logo of Tenant Or any of tenant s affiliates in any advertising. brocieures, description of the building or for any other purpose whatsoever without the prior written, approval of the Tenant_ whim approval shall be not just of the use but of the context in which such use appears, and Umich approval rnay be withheld within Tenant s sole and absolute discretion, 29. DISPLAYS. The Tenant may not r ispiay or sell merchandise or allow grocery carts or other similar devices within the control c % Tenant to be, stored or to mina;n ounade tole defined extoller walls and permanent doorways of the premises In violation of applicable laws. 30. BROKER, Fence" Retail group, inc. s the authorized agent representing :'chant and will be compensated by Landlord as per a separate agreement between Landlord and Fandel. it GEN' -RAf PROVISIONS. (i) Plats and Riders- Clauses. plats, rides, addendtims, and Exhibits. if any atiixed to this Leass are; a part hereof. )ii) Waivers, The wrraar by Landlord of any term, covenant or condition herein contained snail not tie deemed to be a waiver of such term, covenant or condition for any su"asogicent t+reach of the saa:e or any other term, covenant or nondltion herein contained. The subsequent acceptance of rent hereunder by Landlord shall net be deemed to be a waiver of any preceding default by ? enant of any term . covenant or condition of this L ease. other than the failure of the Tenant to pay the particular rental so accepted. regardless of Landlords knowledge of such preceding default at the time of the acceptance ofsuchrent. iii) Join[ Obligation. if there is more that? one ? enant the obligations hereunder imposed shall be joint and sereFgl. Prfb9arrj n is Headings. The marginal headings and article titles to are articles of this Lease are ,)Or part of t . Lease and shall nave no effect upon the construction or inrprpretabor,- of any part hereof rime. Time u of -he essence of this Le,JSe and each and all of its provisions in which aerforranc:' is a fnctor. (vi} Successors and Assigns_ fine covenants and conditions herein contained, subject to [tie provisions as to assignment. appty to and bind the heirs. successors, executors. administrators and assigns of the parties herein. vii) Quiet Prssess;on. Upon Tenant paying the rent reserved hereunder and observing and perferming all of the covenants, conditions and provisions on Tenant's part to be observed and performed hereunder, Tenant shall have quiet possession of the Premises for the entire term hereof, subject to in the previsions of this Lease 'Viii) Late Charges. Tenant hereby acknowledges that late payment by Tenant to Landlord of rent or other sums due hereunder ~Hill cause Landlord to incur costs not aoritentolated by this Lease. the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to processing and accounting charges, and late charges which may be imposed upon Landlord by ferms, of any mortgage or trust deed covering the Premises. Any rent riot postmarked by the fifth of the month when clue shall be automatically charged a 10% late fee subject to the notice provision provided elsewhere in this Lease. Accordingly. if any installment of rent or amt sum due from Tenant shall not be received by Landlord cr Landlord's designee within flare (,5) days after written notice that said amount is past due, then Tenant shall pay to Landlord a Fate charge equal to the maximum amount ©ermitted by lasv land in the absence of any governing iaw, then ten (10 %l percent of such overdue amount), plus any attorneys' fees and /or other costs incurred by Landlord by reason at Tenant's failure to pay rent andr`oi other charges when due hereunder. The parties hereby agree that such late charges represent a thir and reasonable estimate of the cost that Landlord will incur by reason of the Bate payment by Tenant. Acceptance of such late oranges by the Landlord shall in no r n constitute^ a vvalver of Tenants default with respect to such overdue amour nor prevent Laro ilord from- exeraSng any of the !other rigf,ts and remedies granted hereunder. "tx)Prior figreetrrerts. This Lease contains all of the agreements of the parties hereto with ros,tect ?e t ,v antler ccveo d or rhentroned in this Lease and no pun agreements or understanding to any aucn mailers shall brt efze I,ve for any purpose. No provision of this Lea e nay Ile air rasa or adds c` o except by an aareerteni in ruing signed b: in a parties hereto o the i = espective s�uc,cessvrs rn interest, This i ease sl all nit he e fective of binding on any l7ai -, rill l full r executed by both pa ies hereto. Tai ant vza. rants and represents that there have been rio rrepresenaabons or state tnents of tact alfri re5pec' to the prcn lses, the Space, the surrounding area or cthenvise, iwh5ther by Landtc:rd its Agents or reoiese tathjes, any Lease Broiler of One other person wh;ct: -ecreseriontons nr statt.mrrtn nave it any way riduceo Tenant to enter into tills Lease or wnwli have Served as the bas hz 31W im Tei sn "s deci iun to execute this Lease, except as expressly" onta,ced in this Le_.se:. 6 Inabiiit v io Perform" this Lease and the obligations Of the Landlord and T enant hereunder sha, not be aected or iforia ud because if,, parties are unable to fulfill any of their obligations hereunder or are delayed .n doll.- so, it such =nabilbrl or delay is caused by reason of strike, labor troubles, acts of God. or env other cause bevond the reasonable control of file,)arty_ txif Partial Invalidity. Any Provision Of this _ease which shall prove to ne invalid" vrild. or illegal st aE in n3 way affect, impair of invaltna e any other Provision hereof and such other provision shall remain in full force and effect. ixiq Gu;nuia ire Remedies. No remedy or electron hereunder shall be deemed exclusive bet shat!, whenever poss!bie, be, cumulative with alt other remedies at law, or in equkY . exkh Choice of Law. This Lease s -all be governed by the laws of the, State in vd ich the Premises are located_ Boflt 1' -- Rtes have agreed to a, nitration under Santa Clara County, rules prior to filing any regal r- ornplaints. ixiv) Attorneys' Pees to the event of any action nr proceeding brought by ether party against the Other under this Lease tit- prevailing parry shall be entitled is recover for the fees of ,ts attorneys in su Jn action or proceeding including costs oI appeal, if any, in such amount as the court may adjudge reasonable as attorneys fees_ In addiltion, should it be necessary for either party to employ legal counsel to enforce any df lire Provisions herein contained, the other party agrees to pave ail reasonable attorneys' fees and court costs reasonably incurred. txv j Sale of Premises by Landlord In fee iv vent of any sale of the Premises an. "or the Retail space by Landlord, Landlord shaft be and it; batch,, entirely freed and relieved of all liability under any and ai of its covenants On! obligations contained in or derived from this Lease arising out of any act, d<xumance ar omission occurring after the consummation of such sale, and 'Le purchaser, at such sale or any s�bs2quaat sale of the Premises sha!? b© deemed without anv further agreement between the parties of their successors in interest or between the parties and any such purchaser, to have assumed and agreed to carry out any and all of the covenants and Obligations or the Landlord under this Lease. rxvi) Subordinwital, httornrne;i upon request of the Landlord, Tenant will in writing subordinate As rights hereunder to file lien, of any mortgage or deed of trust, to any bank, insurance company or other lending institution, new or hereafter in force against the Premises, and to all advances made or horsehar to be made upon the security thereof, provided any such subordination agreement includes an agreement by the lender under the mortgage or deed in thus: in guestlon that this Lease and Tenant a rights hereunder shall not be disturbed or affected following any foreclosure or deed in lieu thereof so long as Tenant is not in default under Lease- In the event anti proceedings are Or ought for mriacrasure. Or in the event of the exercise o` the power Of Batt; Under any mortgage or deed Of trust made, by the,. Landlord covering the Premises, the Tenant Shall attorn I the purchaser upon-, any sucn foreclosure or sale and recognize such purchaser as the Landlord under this Lease The provisions of this Article to the contrary notwithstanding, and so long as Tenant is not n deelranit hereunder, this Lease shall remain in full force and effect for the full term hereof. f 6� -..,y. ,. ,. i'tt (, andtord shall noorm a c rdten and executes' nun- distumanu e agnitern rt with m5p ct to Iris Lease from anv entity that nag a lien of a mortgage, dead of trust or trust deed or ground or underlying lease on the Premises as of the date possession Is delivered to Tenant icoilectively, the 'Lender'1 The non- 'iistu dance agreement shall be in such `orm as is reasonably acceptable to the Tenant and pro -de assurance to Tenant that its rights, title and possession of the Premises and under this Lease shall nor be disturber, as a rs nit of a Landlord default under any agreements wiItt the Lender or a foreclosure or other Civestiture of Landlord's the in the Premises in the event such non-disturbance agreement is not ploVe.e; to Tenant as herein required, then Landlord must still deliver possessor, of the Premises on the recurred delivery date but the Minimum Rent shat be reduced by one -half until a non disturbance agreement in form and content reasonably acceptable to Tenant and executed by the !..ender is so delivered to TOrion,. xvl Natwe All now, ..y and demands which may or are to be requred or permit ed to oe given by erff er party on he other heretunce shall be rn writing. All notices and demands by the LandlorC to tile. Tenant shall be sent b, United States Mail, postage prepaid. or by recognized Overnight sourer service such as Federal Express; addressed to the Tenant at the address herenbelow -or to such offnpr place ati Tenant mcy Tram time to time designate in a notice to the Landlord - All notices and derriands by the Tenant to the Landlord shall be sent by United States Mail. postage prepaid, or by mccgmzed overnight courier service addressed to the Landlord at the address set forth herein. and to such other person or place as the Landlord may tram time to time designate in a notice to the Tenant All notices are effective Oniy upon delivery or refusal of the addressee to accept delivery o Landicrd at Dane :rnJ sha + -; FtCK. P.G. Box GF, Los Gatos. CA. 9503 if mailed and to if sent by overnight courier. To Tenant au klapaStple. Inc. 5_14 Gateway Dr.. Napa, G.4 94558, Attn: Chief Financial Officer. cc: DunkerBiddleGardne-C:artgn. 'f 91 North `A'acker Dr . Suite 3700, Chicago. Illinois 60606-1698 Ann Barnett P Ruttenbe1c, Esa.. tgvIii) Tenant's statement: ea �nr Baal/ at any time arc from "!me to Par u so t not ;ess khan ten +'td) days prior wntter. notice 1ro-n Landlord execute, ear owledge and deliver to Landlord a s,atement in writing (a r'ftlr that this Lease is unmodified and In full force arid effect fort if rnotsrpu. slating the nature of such modification and certifying that this Lease as so modified is n it, torso and of tch, and Ino date in which the rental and other ( harges are paid in advan=ce, if any and (bf doknowle.daing that Ihefe are not. to Tenant's knowledge. any uncured defaults on the part at the s is tdlo+ 7 he ande or ) if rmg suer defaults It any are claimed. and to) setting forth the date of cam reneem. rr or ?an I and expira +ion of the terns hereof- Any such statement may be relied floor by the prospective purchaser or encumbrancer of all or any portion of the real property of which the Premises are a part Landlord, at the request of Tenant. agrees that it will provide a statement similar in content to the foregoing within ten (10f business days following written request thereof r`rom Tenant ^ ?ix) Author ity oaf Tenant. if Tenant is a corporarbn, each individual executing this Lease on Dehalf of said corporation represents and warrants that he is duty authorized to execute and deliver this Lease or behalf of said cor gorehon, in accordance with the bylaws of said corporation, and that this Lease is binding upon said corporation. ixxi No Conditional Payment. No payment by -t enant or receipt by Landlord of a lesser amount than the total of all slams clue hereunder shalt be deemed to be other than on account of the earliest stipulated rent or other monies due under this Lease, nor shall any endorsement or statement on any check, other payments or any accompanying letter be deemed an accord and/or satisfaction and Landlord may accept such cash and/or negotiate such check or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy provided in this Lease or otherwise, regardless of avueiher Landlord makes any notation on such insbument of payment or otherwise notifies Tenant he,, Such acceptance, cashing or negotiation is without prejudice to any of Landlord's righis- lxxi No C7tstion- fhb submission of this Lease by Landlord. its agent or repress rtat6re for to Tenant to or offer from i- �rd c xa :rinatron or execution by Tenant does not constitute an option torrl rycasu he Premises upon the term and conditions contained herein or a reserra *v r of th�Rrer -uses =arerortF oa�� -,� in favor of Tenant. it bein11 .ntenderl h ieL - that this irase shall become binding upen Landlord Ol irngon andtord s xecutio and e =iva a of tilts Lease to Tenan i - e r &cem (w hich stall include the Cashing =teposd Y G'der nagovafion rif n cc'cs, money orders and the like) of any monies by Landlord which arc, t,nderid by Tenant along with a Tenant executed cap, of tilts i _case, or at arty Urn& prior to Landi-ord's delivery of a full} execute^ copy of this Lease to Tenan., srali not constitute an eccectar.ce of Tenam s offer *.c lease as confined herein. xxii ;, In evo abl offer to' ease- nor -,it rd in consideration o ardiord s final detrrm net on of `e tar fs desirability as a Ter raw in the Center, wr i h beterminatiorl shall include tivithout linata6on . an investigation and evaluation e- Tenant's creditworthiness and t ancia s rengih. -a nt agrees 1hal: ey execritin this Lease and belt e ri tg the sorbet '.L '-andl m i extant is extending to Landlord an offer to enter into this Lulse. whi .F; for the rust fourteen i 11 4) days follow =ng execution and delivery of this . e asp by Tenant u Lan bland said offe shat1 be ire ocabie and thereafter. said oft hail rte c rn , revocable, union v,nttei notie.e from T en i " p Landlrrh it the vent Tenant so evokes said afu, o ci oulit i a Hord notify Tenant Of as rejection of the same, Land cl shall thereafter prom ptig ratan slid return IN deposits and other monies -tendered to Landlord py Tenant Said refund shah be without siny obligation an the part of Landlord to oav Tenant interest on said d- post mones'laid by Landlord, suer interest, i" any, Leing doomed addit oral .cony, deranon to Landlord far ci�Gh rewes±aet,ticn and eviwanan of Tenan. s crediPrsorthress and financial strength. txxiih Mutual Aiat - y: Co -Ten a rt uach Tenant nant here .b/ appoints earn remaining Tenant at. tits nor or is gar gaPT, repr sentative, and attu net n fact, to act for and on debtaff of said Tenant with resi,e ,t all m etters relaang i r or arcing from thIS ease. he tenancy cleared hereby, , the of lic.atio ns file rein `; .'. fort a and ire u -e and occupancy of the subject Promises, spiel fica = Y i vn ii,dhng, but n limited to the r,oht, a att modify, axtend uppiemen and terminate this lease, and the tenai cc created herounder. This agency shall continue and irrevocable at all iar ;es during the period this the Premises art occuQed by any Co Tenant Tenant hereby appoint, eac €i rail aining Ti onan. as cis her, or Its ae ent rc:- service or legal process, and agent for service and receipt of noUCC,- zrnd o ;5er commorrications dive n - r made w ader this ; uase. as the case may ' e. ixxivl till j tea. rxv =xh L A.. is att ,chid ':n, am and it abe _a kart n t this !._ease. vt. Landlord an ants job represents to Tel that ' anal trd has a t nc-ci diurnal cent act tie plit.cnasis the P er uses fi Pnt *t e Current t owner thereof and fie lowing tsitich will be the so -e Owner of the Retail ii Space and tint tri re are Ila 3drr art rata (xivisiants. ,;onuitjons, restrictions or onlar :ratters of any kind that vould afie the ncirk,, gramed to ienaci under this Ll3ase Or in an act - interfere with - chart s tise of I:he rPreirilses. X IE) L Air -herd sha i t urchase and keep Ia fG r'ti th T3U 'Ia 1 the Term ihic Lease. a a0 i y Ot' +actiierns of ill ) commercial general liabi�ity protecting against anv and ail cinims to personal injua death. property damage or cater liabilities related to the condition, use or occupancy ro the Building, and t2) fire arid casualty Insurance coffering lass or damage to the Promises and the Bviidingm the amount of the iaq replacement cast thereof, providing protection against thrise p&fiis covered by ail risk insurance, together with insurance again.., sprinkler damage. vandalism and mah ious mischief, which insurance f shaft inCled!? a waiver o the subrogation rights of The insurer thereunder as provided .h Section 15 oboes zxvsii Whenever never in this Lease t.andtord or Tenant have a right err consent or approval, such consent or apprnvak shaft not be L.,hreasonabry withheld, delayed or conditioned, tUhenevx �. in the Lease andlord or Tenant have the right to exercise discretion, such discretion omit be exeroisod r. a .aascinab'e mangier. t 1 €_y Mt61LL (_tm9t ;rd� T Dave Flvk- Snon Flick Tenant NapaStye c. By ,nf ( 5 The undersigned are the ovmers of the Premises as Of the date hereof They join in the execution of this Lease to evidence their approval of the Lease-, to ratify the terms and obligations therein and agree to be bound ov and to perform, all of the terms, covenants and provisions as the landlord in the event the named. Landlord. Dave and Shari Ffick, do not acquire title to the Premises prior to the Commencement Date- Moreover, vie agree to give Tenant notice of the address that rent and other notices are to oe delivered to it Dave and Shan Flick, do not acquire title to the Premises poor to the Commencement Date lr) " will also deliver a notice to Tenant when Dave and Shari Rink acquire titre to the Premsee i! rl AL, - -- Larfy AiXrn `t -- -- Ovid St nesffer h f "'_ I F o'w'-7 NRPnSTYL CON&TONS OF DELIVERY OF PREMISES me basie invent of the condition of delivtery is a fully finished vanilla 001 to enable tenant to add their in for dean t1 ekoitenis and fixtures. Landlord and I enanfc archintct and construsion prAect coordin:anr shall work tollethei to achieve this condifiun of deli ve; v. ion Wsos MIA A brir 1 ,FGaa _ WInh A! aplihotihio,odo, in, Ad if AD,:,. , i ztru t ,yl:hh, o; ,_ 1 I &,V OW angq? phaw, nximmumnn"itimg Mo. dtarot t . two U M- r uai AW, rinplow n : ig of th .,r r. e uni.= -i Mont ar:.titt e ,itu-dlca.t nvs to Intl' . hs. .:S.ved ,;uelet; c:ti .v adwI Mims WOW Ic ti:rn. he stir r : ar of all uW u .enor i..as!a lWyog ! Inmomp, � l c4 in,, exiun,, iieh Jurang th,,ndrr (runt trnz?.;.+ *urx= sree.. -znvs t,.. I " 'ha� Ve .e- v SOU P& jolval And and ury MO tontDUtii;�- ,u:d arunled it; a pI ldbh texture, Suoalnz t t 1 ,,aunt'; finvAn ,ondk„ i �la i [ 'snn wwt Ala er wg Ir"Wing Mo wo onum a inn ut mt:camy +<_d OW rzlint5h .,a non A,' W It sowed mood Wiring is nt ufoCknL lor li,irallI" u d .andi -o -shad; �erno"on'! owvid' [nshes3'Iuu Eonu Tnnr ' o"n fle'n ulsko!ijuon �on,-rctitcr a :a in war" b Ete;_ncSr ,Ii unisiic'E,idd, =.ar "f an,.lrii:c:i nni ar,d!t* il ,}ail pro, Wo all r ,:ci,._w . r s :o We t i _nbmg; and rre'lemt k, S S.t .:a to nrnpiiment ..leans ia:pru,e :Went Dian,. ;n3do 3alx ps000., a_utn_r'_r ,new n' y - .str;n Sn tu,ie u[wtm's<a i 'hrtr to n,inS ,t' a a.at I,, tn' L�Irnt'sti ar!:xrthrn s}'. irr,l do to xi:': ..;rdlrit� lratt c =eiv .= of lln! t ashiel ,x.7 z r. „_hh .aGVnom. -per: r, au7n; ,.ad !;(area 4a. ;arc ,u h,u.�.�ct. ;: at.ta :fre m•.�atutu an•at h.holo_ bc. t; :al ed" tndni srn,h,tn. �_s:n d t t.:- ?gtem,lionl c. >tu6,xi.fot7�LSind,.: dsnt+7lLa nttia ncai i (tict .x a13�t r trnan=nrz v:,ad,a �s1r�tU rena: ,, t...ab., sa sane tart nJ ;s,'sU�t =v runt. cult addit' -::zl I :Nmi ,shall kvstaila t aor do n_ c.:,hutto, ,. Somwt L 1 t it cif, "nJ ail,>u rs,'oo"Ing mw cot <., at ucsty r. ,,i r,aand t, nsassA t.:tn i[tiFTSOi £ll LlSt-St¢,h'. �2emot ( I= ,t;ez t xnv ova a ..A➢_ from r.n'01 a .rmiLrno due tvill roll ait n 4; v«. Warn lol— lot Land|ord, ronam N DaVuRiox --'-_�-'-__---._� 3xnnRmk ns, TxouodamiAnadno:menwn:rsufthopo*m/srousof\hed*uxkon:oiThayjomIn,hoexoouUnonf this Lease to evidence their approval of the Lease, to raTifv the, terms and obligations therein and agrols to be counc by a,-,d to perform all at the terms, covenants and provisions as tho landlord in the event me named -andlord. Dave and Shari Flick be not acquire tile to the Premises onur to the Cummoo��m�n,D»teMomnvo/rv:a agree to give Tenant no1e-eo, the address that rent and mho, ontices. are to be delivered to f Dave and Shan Flick, do not acquire title to the Premises pnor to me Cummonre/nnn/Date and v||i^!ooue|iw*.aouhrom Tenant w*dn Dave and Shari Rcx acquire t�na *o\i'oP/om/�a» � ADDENDUMM THIS ADDI PNDUIVI (t) is made in reference to thatcertain.L:ease dated April 4, 2007, by and between DAVE & SHARI FLICK (Landlord) and NAPASTYLE, INC. (Tenant), for the premises located at 32 North Santa Cruz Avenue, in the Town of Los Gatos, County of Santa Clara, State of Califorfl$. Notwithstanding anything to the contrary as contained in the Retail Space Lease, the Parties agree to the following: i . Th2 iarr,z o f the lease 5 ;alt commence (the "rent commencement Date') upon August i 30 ?, 2. Landlord has delivered, and Tenant has accepted the completed shell and the stork described on Exhibit "A ", NAPASTYLE,:CONDITIO.NS OF DELIVERY OF PREMISES, . as of Jut, 25.2007. Landlord Dave Flick Date Shan Ffic—---- k- -°-- -- Date . Tenant: ,4APASTYLE, VNC. By Batted; Recording Requested By North American Title Company Escrow No. 57170403 AND WHEN RECORDED MAIL TO: Name Flick Family Trust Street 130 Stacia Street City & Los Gatos, CA 95030 DOCUMENT: 19412435 I Pages: 3 Fees 23 00 Taxes. 440010 Copies AMT PAID 4423 00 REGINA ALCOMENDRAS RDE n 007 SANTA CLARA COUNTY RECORDER 5/04/2007 Recorded at the request of 8:80 AM North American Title Company SPACE ABOVE THIS UNE FOR RECORDER'S USE APN tt 529 -03 -055 DOCUMENT TRANSFER TAXIS: $ 4,400.00 (Tax must be a good multiple of .55cents) ( X) computed on full value of property conveyed ( ) computed on full value less value of liens and encumbrances remaining ) Unincorporated Area ( X ) City of: Las Gatos CITY TRANSFER TAIL I5; NONE kA (Tax must be a good multiple of $1.65) SIGNATURE OF DECLARANT: A Grant Deed DOCUMENT TITLE SAME AS ABOVE MAIL TAX STATEMENT TO: SEPARATE PAGE, PURSUANT TO CA, GOVT CODE 27361.6 Recording Requested By North American Title Company Order No. 57170403 Escrow No. 56007 - 57170403 -AMD AND WHEN RECORDED MAIL TO: Name Flick Family Trust Street 130 Stacia Street Address City & Los Gatos, CA 95030 State ABOVE THIS UNE FOR RECORDER'S USE INDIVIDUAL GRANT DEED Documentary transfer tax is $ City transfer tax is $ NONE ( X ) computed on full value of property conveyed, or ( ) computed on full value less value of hens and encumbrances remaining at time of sale. ( ) Unincorporated area: ( X ) City of Los Gatos, and FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Larry J. Arzie and David A. Stonesifer, Trustees, the Arzie Charitable Reminder Trust and David A. Stonesifer and Larry J. Arzie, Trustees, the Stonesifer Charitable Remainder Trust, as Tenants is Common horeby GRANT(s) to David Alan Flick and Shari Flick, Trustees of the David Alan Flick and Shari Flick 2000 Family Trust Agreement dated September 12, 2000 the following described real property in the City of Los Gatos, County of Santa Clara, State of CALIFORNIA: LEGAL DESCRIPTION ATTACHED HERETO AS EXHIBIT " A" AND MADE A PART HEREOF Dated May 3.2007 STATE OF CALIFORNIA, )SS. Larry J. A4 and David A. Stonesifer, Trustees, COUNTY DFS.�`c- C..i.c-flk ) the Afitie 'table Remainder Trust personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose ru mc(s) i re ubscribed to the within insttumem and acknowledged to me that b i t etC^v, P(muted the same in histh heir,. thorized capacity(ics), and that by hislhof(Tiet�yfi signatufe(s) a a Instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument, WITNESS my hand an ftici18 1 Signature MAIL TAX David A. Stonesifer and Larry J. Arzie, Trustees, the esifer;Charitable ruler Trust Pr a. , Pm; J. (This area fur official notarial seal) EXHIBIT "A" LEGAL DESCRIPTION Real property in the City of Los Gatos, County of Santa Clara, State of California, described as follows: LOTS 7 AND 8 AND THE NORTHWEST 21 FEET OF LOT 6, AND THE SOUTHWEST 10 FEET OF LOT 9, MAP OF LYNDON'S SUBDIVISION, WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON JANUARY 10, 1906, IN BOOK F-2 OF MAPS PAGE 39. APN: 529 -03 -055 01/7-,V2313 'j5:1 b r �!.r:_:N i=,*'k 17Lz rivau !?�r u• To: City of Cos Gatos, Planning Deparirnenr 1. The undersigned Is a Trustee of the Flick Family Trust, Owner of the parcel of land located at 32 N. Santa Cruz, Los Gatos, California, Santa Clara Assessors Office parcel Number: 523- 03-055 "(Property') and am such am authorized to make any necessary Consent on its behalf, such as the consent made by the instant statement. 3. The Property is currently leased to Napastyle, lne. under a written lease" 3. Napastyle, Inc Operates a gift =hop at the Property. 4. = understand that Napastyla, inc. wishes to sell bottles of wine and beer at the Property, wishes :o have wine sampling at the Property, and wishes to have charity events where wine and beer will be served in the store an the property, after normal operating hours_ s. t understand that this statement will be attached to a conditional use permit application being hied with the City of Cos Gatos, to obtain its permission to engage in the activities listed in paragraph 4 of this statement. o. i understand that these usages do not require any modification to any fixtures or structures at the premises, 7, i hereby consent to Napastyle, inc. selling battles of wine and beer atthe Property, having wine sampling at the Property, and having charity events where wine and beer will be served in the store on the Property, after norma l operating hours. Date: ! b', /I3 Signature:_�.�` J Shari Plick address: ,' >Zi Tetephonel%lumber(s):� Email Address; _ -- - .. ' = Q. jF4 -Lo L?. 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Napastyle has sought legal counsel to develop these policies and procedures as part of their commitment to employee and customer safety. These guidelines are not intended to provide legal advice or establish standards of reasonable behavior. No responsibility is implied or assumed for any damage or loss resulting from omissions or inaccuracies as part of this publication. This manual is designed to be read and understood by all employees of Napastyle, regardless of age. We realize that only employees who are age 21 and over will be serving alcohol but every employee in our retail environment needs to be aware of and understand the risks and issues involved with serving alcohol beverages. We believe that risk management is crucial to success with our foodservice and retail operation. This manual outlines our policies to serve alcohol responsibly and provides knowledge to assist in preventing working through difficult situations. This includes information on understanding alcohol law and your responsibility, checking identification, recognizing and preventing intoxication, being aware of and handling difficult situations. The information provided is intended only to inform and assist our employees in understanding basic areas of alcohol law and the responsibilities involved therein. The information provided should not be considered legal advice. To develop these materials, we convened foodservice and legal experts to build a training program that focuses on what front -of -house employees need to know to serve alcohol responsibly. By implementing these policies and procedures, fundamentals of responsible alcohol beverage service Napastyle will enhance the quality of life in the State of California by maintaining effective enforcement of liquor laws while maximizing revenues through responsible alcohol sales. The Town of Los Gatos requires that the Napastyle Employee Training Manual addresses alcoholic beverage service consistent with the standard of the National Restaurant Association and this Handbook is based in part on those Standards. No part of this publication maybe reproduced, stored in a computer database or retrieval system, or transmitted in any electronically, mechanical, photocopying, recording, and /or scanning, without prior permission of Napastyle. President Napastyle 360 industrial Court, STE A Benicia, CA 94510 • s Table of Contents introduction • I k ! !# Message from the President of NapaStyle .............. .................. .................................. .. ................................. A Overviewof NapaStyle ............................................................................................................... ..............................1 How to Use the Fundamentals of Responsible Alcohol Beverage Service .......... .......... ..................... 1 Management and Organizational Team Training................ ............. ................. ..... .... ..... ...... .... ....... ...... .....2 NapaStyle Employee Values ..................... ...................... ............ ........................... .......................................... ....... s NapaStyle Wine /Craft beer Information Binder. .... ....... .................... - ....... ..................... - ..................... -- ... * .... * ...... * ...... 2 IL Alcohol Law and What it Means to You and NapaStyle TheRole of the Liquor Authority_ ....................................................................................... ...__...............,.........3 TheRight to I nspect............................ .. ................ ... ................................................. ...................... ...... .. ........ .......... o Age Restrictions on Purchasing, Selling, and Serving Alcohol ..................... ........ .......... ........... ............. 3 DramShop Laws ....... .... ....... ..................... .......................................... .... ..... .......... .................................... ......,......... 4 CriminalLiability ........................................ ..............................4 CivilLiability ................................................................................................................................... ..............................4 III. Napastyle's Alcohol Handling Procedures Advertising.. ................................................... ........... ...................... .......... .......... ................. S Sales& Commissions ............. ...................... .. ................................... ................ ... ........ ..... .. ....... .. ... ... ........ ... .......... .S DesignatedDriver Program ..................................................................................................... ..............................6 OutsideDrink Service ................................................................................................................. ..............................6 NoDrinking on the job.. ......................... 1-4 ............... ...... ................................... ......... -- .................... .......... .6 Opening& Closing Responsibilities..... .................................... - ......... ................. ............. — .... ....... ................ 6 BreakTimes ....... .... ................ ............. .................... ................... .. ......... ............. ... ............................. .. ......................... 7 Discounting Wine /Craft beer Products...._ ................................................................................................ ..............................7 Discounting Wine /Craft beer for Hours of Alcohol ProhibitedPractices .... ........... ........................................... ....................................... ............ ..„... ............. . ..... .... .... .... Sipping& Shopping...... ................................... ................... . ............ . ................... ................. ...... . ..., ......... . ...... .. .... ....8 ServerPolicies for Busing Tables .......................................................................................... ..............................8 Taxi /Transportation Services.. .... -- ......................... --- ............. -- ........................... ....... ........ ............ ......... 8 Wine /Craft beer Inventory.................... . ........................ ......... ........................................................................ ..............................8 IV. Checking identification Acceptable Forms of IDs... Non - Acceptable Forms of When to Check IDs.. ............ Howto Check IDs ........................................................................................................................ ..............................7 Dealingwith a Fake ID ................................. .. ................................................................................................... .... 10 RefusingAlcohol Service to Customers .... .... ........ ............. ............................ ............. .................. .................. 10 V. Recognizing & Preventing Intoxication RecognizingSigns of Intoxication ....................................................................................... .............................11 TheEffects of Alcohol on the Body ..................................................................................... .............................11 CustomerTypes and Alcohol ................................................................................................. .............................12 Communication............................................................................................................................ .............................13 VI. Handling Difficult Situations IntoxicatedGuests ...................................................................................................................... .............................14 Whenit's Time to Cut Off Service ........................................................................................ .............................14 PotentiallyViolent Situations ...... .... .................. ............. ........ ........ ............. .. ............. ......... - ................... ......... 1.4 Record Keeping & Documenting Incidents ......... ___ ..... . ..... . .......... ___ ... .... ................. ,..... ..... .... .... ........ ..15 VII. Attachments Wine /Craft Beer Manager Job Description.................................................................................... .............................17 TastingRoom Server Job Description ............................................................................... .............................18 IncidentLog - Example ............................................................................................................ .............................19 TransportationServices ........................................................................................................... .............................20 Store Back Office Wine /Craft beer Notes - Inventory In and Out- .............................. .............. .............. .............. 21 EmployeeResponsibility Statement.... ............ .... ............................ .. .................... .............. _. .............. .......... .22 4 i i • lb] . ' I. Introduction a. overview of NapaStyle NapaStyle, Inc. is a lifestyle retailer of Home, Kitchen Food & Wine /Craft beer products. Our mission is to bring the aesthetic beauty, simplicity and bounty of California to our customers across the United States. An integral part of this culture and lifestyle is the understanding and enjoyment of wine /craft beer. With a Mediterranean climate and rich soils, California produces some of the finest wine /craft beer and beer in the world and champions a rich culture of food and wine /craft beer. The goal of our wine /craft beer sampling is to introduce our Los Gatos customers to new and interesting wine /craft beers /beers, educate our guests on the qualities of each wine /craft beer, allow them to taste and experience our wine /craft beer selection and finally purchase a bottle or two for home enjoyment. Our goal is to accomplish this in a responsible manner that ensures the complete and effective enforcement of California Liquor Laws. S 1' Anyone working in the alcohol wine /craft beer sampling area is required to take TIPPS training and /or be LEAD certified. This would need to be retroactive for anyone who is going to sell wine /craft beer or gain commissions from the sale of wine /craft beer at NapaStyle. The Department of Alcoholic Beverage Control's Licensee Education on Alcohol and Drugs Alcohol Seller /Server Training Program (LEAD) requires re- certification every two years. Employees will be compensated for training hours. The California Restaurant Association also offers a similar 3 -hour training online course. Napastyle expects all employees to be currently certified. If you have questions, please ask your supervisor. u, u aSMW Employee Values All NapaStyle employees are expected to demonstrate these values in every interaction with customers, with one another, and when dealing with liquor authority and other law enforcement officers. 0 Respect for people o Clear and honest communication 0 Professional Conduct o Accountability by honoring our commitments o Efficient Operations 0 Involvement and inclusion of stakeholders and employees The NapaStyle Wine /Craft beer Information Binder provides information on wine /craft beers available for purchase in the retail section, information on wine /craft beers that are being tasted. This information will change periodically as new wine /craft beers are introduced. The Binder is used to provide and an easy reference and is maintained by the Wine /Craft beer Sampling Manager. II. Alcohol Law and What It Means To You and Napastyle Getting a liquor license is not a right. It is a privilege granted to establishments that meet certain conditions. Citations can be issued to owners and employees if these conditions are violated. The Mission of the California Alcoholic Beverage Control Board (ABC), the federal Alcohol and Tobacco Tax and Trade Bureau (TTB), and the Town Los Gatos is to serve the public by preventing the misuse of alcohol through controlled distribution, enforcement, and education. An alcohol law violation can result in a fine for the server and the owner. The establishment's liquor license can also be suspended or revoked, which can put it out of business. As a member of the service staff, you must understand your legal responsibilities and liabilities regarding alcohol service. If you break liquor laws, you personally and the business could face: o Law suits o Criminal charges o Fines o Imprisonment o Closure of the business Local law enforcement, Town, TTB, and ABC officers and agents can visit your establishment at any time. Always be polite when you greet them. Then notify your manager. Cooperate when law enforcement enters your establishment. To ensure that licensees are complying with all applicable local, state, and federal liquor and tobacco laws and rules, TTB and ABC agents, as well as our local police, have a right to inspect licensed the California Alcoholic Beverage Control Board (ABC), the federal Alcohol and Tobacco Tax and Trade Bureau (TTB), and the Town Los Gatos is to serve the public by preventing the misuse of alcohol through controlled distribution, enforcement, and education, An alcohol law violation can result in a fine for the server and the owner. The establishment's liquor license can also be suspended or revoked, which can put it out of business. As a member of the service staff, you must understand your legal responsibilities and liabilities regarding alcohol service. If you break liquor laws, you personally and the business could face: o Law suits o Criminalcharges o Fines o Imprisonment o Closure of the business b. The Right to Inspect Local law enforcement, Town, TTB, and ABC officers and agents can visit your establishment at any time. Always be polite when you greet them. Then notify your manager. Cooperate when law enforcement enters your establishment. To ensure that licensees are complying with all applicable local, state, and federal liquor and tobacco laws and rules, TTB and ABC agents, as well as our local police, have a right to inspect licensed premises and to examine books and records, including any financial records, purchase invoices and supporting document, and take samples of liquor for analysis. Ott Under federal law, the legal age to purchase alcohol is 21 in all 50 states. It is a violation of the law to sell or serve alcohol to a person under age 21. Minors are permitted in the retail areas of the store, but no one under age 21 is permitted in the Wine /Craft beer /craft beer sampling Zone. Employees who are age 18 or over may sell beer and wine /craft beer to customers for off- premises consumption. Only employees over age 21 may serve samples of wine /craft beer to customers in the Wine /Craft beer /craft beer sampling Zone. Many states, including California, have laws known as "dram shop laws." (A dram is a British term for a small quantity of liquor, similar to a shot.) Compared to other states, California's dram shop laws are relatively limited in terms of the civil liability they impose upon the owners and employees of licensed establishments. Under California law, alcohol- related accidents are regarded as being caused by the consumption, rather than the sale, of alcohol. Therefore, an establishment that sells alcohol is generally not civilly liable for damage that occurs as a result of that person's intoxication, even if the seller knew or should have known that the person was intoxicated at the time of sale. There is one major exception: An establishment that sells alcohol to a minor who is visibly intoxicated is civilly liable for any damage that occurs as a result of the minor's intoxication. However, while civil liability is relatively limited under California's dram shop law, an establishment that sells alcohol to an obviously intoxicated person may still be subjected to criminal penalties. It is a criminal misdemeanor under California law to sell or serve alcoholic beverages to a person who is visibly intoxicated. e, f riminal .1a I itv As a seller or server of alcohol, you may face criminal charges if you break state, county, or municipal alcohol laws. You may be criminally liable if you serve alcohol to a minor, serve a guest who is or appears to be intoxicated, and/or if you possess, sell, or allow the sale of drugs on the premises. The consequences of these violations can be serious. You could be placed on probation, fined, or even given jail time. f. Civil •i bility Under California's dram shop laws, an establishment that sells alcohol to a minor who is visibly intoxicated is civilly liable for any damage that occurs as a result of the minor's intoxication. It is illegal to deny alcohol service to a woman because she is pregnant. This would be considered gender discrimination. However, California requires licensed establishments to post warning signs about the risks of consuming alcohol during pregnancy as well as the dangerous chemicals listed under proposition 65. IIl. NapaStyle's Alcohol Handling Procedures a. Adverti in In general, advertising may not refer to "free" or "complimentary" alcohol whether or not it is combined with a meal or event. Retailers cannot offer to treat customers to a meal or drink as part of a promotion. "Guest event vintners" may conduct a maximum of three promotional tastings a year in each retail location. These events may not be promoted as offering "free wine /craft beer." b, sales R commissions Tasting room guests are to be served five one ounce pours. Each customer may have only one drink at a time. As a food service professional, working at NapaStyle's Wine /Craft beer Bar, you are selling and recommending wine /craft beer to guests. Therefore, it is important to gain a general knowledge of wine /craft beer. Familiarize yourself with the wine /craft beer /craft beer sampling menu, the wine /craft beer offered in the retail section of the store, and also alcohol items such as the variety of beers offered in the caf6 at NapaStyle Yountville. Wine /Craft beer is meant to be enjoyed and it can be enjoyed on many different levels. Guests will look to you for recommendations and although it is impossible to know about every bottle, you can familiarize yourself with information presented in the NapaStyle Wine /Craft beer Binder. This binder provides information on some of the wine /craft beers carried in the store. Help your guests feel comfortable, as some guests will be intimidated by wine /craft beer and /or embarrassed to ask about different varietals. Learn how to read your guest's level of wine /craft beer knowledge and accommodate them in an appropriate manner. Tastes of wine /craft beer poured by retail staff should not be used to induce sales of other retail items. This means that you may not require or pressure a customer to make a purchase as a condition of tasting wine /craft beer at the Wine /Craft beer Bar (although if a customer wishes to purchase a bottle of a wine /craft beer they have tasted they are certainly welcome to do so!). c. Des! tpd priver Program NapaStyle has a designated driver program that provides complimentary non- alcoholic beverages for designated drivers. The Wine /Craft beer Bar employee should identify and recognize this person, especially in large groups of guests. d. Opening Bottles There is no seating area at NapaStyle Los Gatos, so you may not open wine /craft beer purchased in the store for a guest to take out. If they desire to do so, customers can purchase a wine /craft beer opener and open the bottle at another appropriate location. NapaStyle Los Gatos employees may not open outside bottles for customers. M No employee may drink alcohol while on duty. As Wine /Craft beer Bar staff, you should smell and taste the wine /craft beer you are pouring for guests, but you should never drink while you are on the clock. if you go to NapaStyle on your day off, however, you may drink alcohol like any other guest. f. Opening &.c sing Respnncibilities Maintain a clean environment at all times. a natural soap product. Wash counters daily, and as needed after tastings, with The employee setting up the Wine /Craft beer Bar for daily tasting should check the date and time each bottle was opened, and check the quality of wine /craft beer in opened bottles. Do not serve guests from a bottle that has been open for more than 48 hours (2 days). When you open a new bottle of wine /craft beer for tasting purposes, mark it with the date and time that it was opened. Smell and taste each wine /craft beer to ensure that it is not corked or otherwise fatally flawed. Re -cork bottles after pouring wine /craft been If there is still remaining wine /craft beer in a bottle that has been opened for longer than 2 days, you may set the bottle aside and talk to the store manager for disposing of it by dumping it down the sink, and disposing of it in the recycling container. It is important, however, to mark the bottles out of inventory. g. Break Times The Store Manager will post a clear schedule of which employee is primarily responsible for the wine /craft beer bar each day. When said wine /craft beer bar employee takes a lunch or break, he or she will designate another manager or trained employee to cover the wine /craft beer bar in his or her absence. h.countiue of Wig tCra_ ft beer r Sale All liquor must be sold at a price that is not lower than what the licensee paid for the liquor. The Store Manager will have discretion to price wine /craft beer accordingly. NapaStyle will allow wine /craft beer to be sold and served to, and consumed by, costumers between the hours of 10:00am to 6:00 pm, or longer if a special event occurs. Di i• Lip-hiting In all portions of NapaStyle premises where alcohol is served or consumed, lighting must be sufficient to check 1D and to observe patrons for the enforcement of liquor laws and rules, including apparent intoxication. k. Prohibited Practices Retail licensees may not have any financial interest in or with any alcohol manufacturer, importer or distributor. Employees need to disclose and direct or indirect interest in any alcohol licensed businesses. Unless specifically allowed by law, retail licensees may not accept any discounts, gifts, loans, premiums, rebates, treats or services from any alcohol manufacturer, importer, or distributor. Tastes of wine /craft beer poured by retail staff should not be used to induce sales of other retail items. It is illegal in California to give away free drinks or offer anything in conjunction with the sale of an alcoholic beverage. Guests may not take glasses of wine /craft beer from the tasting area. NapaStyle employees will call a taxi ride for any inebriated person. Please review the attached taxi transportation list and have easy access to these phone numbers. These phone numbers will be placed in a visible place near the Wine /Craft beer Bar. Wine /Craft beer Inventory will be in compliance with the ABC methodology. The store manager on duty is responsible to ensure that the accounting procedure is up -to -date and complete. Wine /Craft beer is stored in the store room at the NapaStyle retail location. Only store managers will have access to keys or a combination number. 10 Empty wine /craft beer bottles from tasting pours will be kept and inventories and logged at the end of the day. At day opening and day close, wine /craft beer bar staff or store manager will ensure there is no unsupervised access to wine /craft beer bar inventory. IV. Checking Identification a. Acceptable Forms of Identification Only a valid photo ID is acceptable. This includes a driver's license, state ID card, passport, and military ID. It is everyone's job to ensure that guests who are tasting or buying alcohol are 21 years of age. Proof of ID will be required for anyone who looks under the age of 30. A valid ID has specific features. It must be intact and current It must also contain the owner's photograph, signature, and birth date. Verify that the ID belongs to the guest by comparing the guest to the photo and the physical characteristics listed on the ID. States place certain features on minors' IDs to make an underage guest easy to identify. This includes the use of designated colors, text, and specific layout features. Many states also include the date that the minor will be 21. A US Military ID (active, reserve, retired or dependent card) come in different styles and colors. The expiration date is usually on the front the date of birth is on the back. An official Passport, issued by any nation, can be used. Do not accept wine /craft beerry glasses or Wine /Craft beerry Association Passports as ID, as these are not proof of age. Do not accept Birth Certificates, Social Security Cards or other ID cards. These are not legal proof of age for liquor purchases or consumption. c. When to Check IDS 11 You are responsible for ensuring that your guests are of legal age to drink. If you serve an underage guest, you can be held criminally liable. Remember: you have the right to refuse service if you suspect the guest is underage. IDs must be checked according to the procedure below. Any time guests leave the establishment and then return, you should recheck their IDs. You have the legal right to refuse service if you suspect the guest is a minor. 1. Greet the guest. The greeting can tell you if the guest is nervous. This may indicate he or she is a minor. 2. Politely ask the guest for ID. You need to hold the ID to verify it. Ask the guest to remove the ID from his or her wallet. Be sure you look at both sides of the ID. 3. Verify the ID and make sure it Is valid, is not issued to a minor, and belongs to the guest. You can ask quest questions including: what is your address? How tall are you? What is your middle name? e. Dealing with i Fake ID Take the correct steps if you spot a fake ID. This includes refusing service or entry to your establishment. It might also include confiscating the ID, if you are sure it is fake. Otherwise, call the police and allow them to confiscate the ID. Report this incident on the NapaStyle Incident Log. if you refuse service to a guest or are going to cut them off, notify the store manager on duty. Your decision may need back -up if the customer becomes angry. Be friendly and courteous, but firm but do not bargain with the customer or back down. Let the customer know that you would like him to get home safely and would be able to call a cab. Remain calm and respectful. Do not argue, use profanity, or provoke or embarrass the guest by telling him or her that her or she is "drunk" or has had "way too much to drink." Let the guest know that your job and life is on the line and that NapaStyle could lose its license to serve alcohol. If the customer does not cooperate, don't hesitate to call the police. You need to protect your reputation, your life and Napastyle's business license. 12 California State Law does not prohibit intoxicated guests from remaining in the Wine /Craft beer Bar or retail area as long as they are not consuming alcohol or being disruptive. You should encourage them to eat something. When you refuse service to a minor, be firm, but always express regret. Do not sound authoritative or judgmental. You should also avoid embarrassing the person. You might say something like: "I'm sorry, but it's illegal to serve a minor, " "I'm sorry, but I can't serve you without a valid ID ", and /or "I'm sorry, but our company policy will not allow me to serve you." V. Recognizing and Preventing Intoxication NapaStyle will not overserve alcohol. Tastings will be limited to five 1 -2 ounce pours. Make a reasonable effort to anticipate problems and prevent injuries. a. Recqgnizinff Signs of Intoxication Licensees and their employees need to know the signs of intoxication. it is illegal to serve or sell alcohol to anyone who appears to be intoxicated. Counting drinks and observing guests for physical and behavioral changes are the two ways to assess a guest's level of intoxication. A change in behavior is more revealing than the actual behavior itself. There is a big difference between a normally loud guest and a guest who is quiet when he or she first arrives and then becomes loud after a few drinks. Communication is also important. Taking the time to talk to your guests will help you determine the purpose of their visit as well as their level of intoxication. if guests are determined to become intoxicated, you want to know about it. Continue talking to each guest throughout his or her stay. When large amounts of alcohol reach the brain, it can no longer function normally. This causes physical and behavioral changes, including: relaxed inhibitions, impaired judgment, slowed reaction time, carelessness or clumsiness with money, and impaired motor coordination. Inhibitions prevent people from saying or doing things that may be unacceptable to others. As people drink, their normal inhibitions will become relaxed. Guests with relaxed inhibitions may be overly friendly, depressed, or quiet and /or use foul language Remember: 1. Count the number of drinks you serve. 2. Observe behavior and recognize signs of intoxication in the guest such as being loud, and /or making rude comments. 3. Look for relaxed inhibitions 4, offer nonalcoholic alternatives to guests if you feel concerned that they may be becoming intoxicated. 13 5. Drinking alcohol causes dehydration, making guests thirsty. This can cause guests to drink more than they ordinarily would. You can help by offering water with drinks and refilling water glasses often. b. Alcohol and ifs Effects on the Sodv Alcohol moves through a person's body like food does. Unlike food, however, it does not need to be digested to reach the bloodstream. Only the liver can break down alcohol. It does this at a constant rate of about one drink per hour. Consuming more than this will cause a buildup of alcohol in the bloodstream. The amount of alcohol in a person's bloodstream is called blood alcohol content (BAC). It is stated as a percentage. A BAC of .10 means there is about one drop of alcohol for every 1,000 drops of blood in the bloodstream. Several factors can affect the BAC of your guests. These include the rate of consumption, drink strength, and amount consumed. Body type, gender, age, and the guest's emotional state are also factors, as are the amount of food consumed and whether or not a drink is carbonated. The more alcohol a drink contains, the more that will end up in the bloodstream. This will raise BAC. A small person will have a higher BAC than a large person, all other factors being the same. That's because small people have less blood in their bodies to dilute alcohol. A person with a large percentage of body fat will have a higher BAC than a lean person, all other factors being the same. Body fat does not absorb alcohol. This forces it to remain in the bloodstream until broken down by the liver. Alcohol can pass through muscle in a lean person and spread throughout the body. A woman will have a higher BAC than a man, all other factors being the same. That's because women have a higher percentage of body fat. A senior citizen will have a higher BAC than a younger guest, all other factors being the same. Body fat typically increases with age. Enzyme action tends to slow as a person gets older. An emotional guest will have a higher BAC than a guest who is calm, all other factors being the same. When a person is stressed, angry, or afraid, the body diverts blood to the muscles and away from the stomach and small intestine. This reduced blood flow slows the absorption of alcohol into the bloodstream. Guests who drink alcohol while taking medications or using illegal drugs can intensify the effects of alcohol or experience dangerous interactions. A guest who has not eaten will have a higher BAC than a guest who has eaten, all other factors being the same. Food keeps alcohol in the stomach for a longer period of time. This slows the rate at which it reaches the small intestine. A guest who is drinking a carbonated drink will have a higher BAC than a guest whose drink is not carbonated, all other factors being the same. Carbonation may speed the rate at which alcohol passes through the stomach. This causes a person to reach a higher BAC at a faster rate. Keep in mind that some guests will have a combination of these factors and this will result in a higher risk of intoxication. 14 Driving with a BAC of .08 or higher is against the law in all SO states. A BAC of .30 or higher can lead to coma or death. c. Customer Types and Alcohol Guests with a Tolerance to Alcohol People can build up a tolerance to alcohol. Tolerance is the ability to handle the effects of alcohol without showing the usual signs. An experienced drinker can often consume a lot of alcohol without showing any signs. These people have learned to hide them -even after becoming intoxicated. This makes it difficult for you to assess this type of guest by observation alone. Remember: tolerance does not affect a guest's BAC, just his or her ability to hide the effects of alcohol. Regulars Most establishments have guests who are regular patrons. You can become used to their drinking habits and ability to handle liquor. But these people may be leaving your establishment with a dangerously high BAC. In fact, the majority of alcohol- related incidents involve regular patrons. Always count drinks, because it may be difficult to spot signs of intoxication. Inexperienced Drinkers Another type of guest group that should be watched closely is the inexperienced drinker. They often show signs of intoxication after drinking only a small amount of alcohol. Their bodies are not used to alcohol and are sensitive to smaller amounts. d. Communication Monitor guests from the moment they arrive until they are ready to leave. Tell management and the appropriate coworkers if a guest shows signs of intoxication. if guests move to another location in the establishment, pass along any information about the amount of alcohol they have consumed. To be successful when evaluating guests, you will need input from coworkers who have come in contact with them. This includes: o Waitstaff o Bus staff o Bartenders 0 Security, hosts and hostesses, and greeters 15 VI. Handling Difficult Situations a. Intoxicated Guests Despite your best efforts, guests may still become intoxicated. How you handle these situations is very important. You must stop serving alcohol to guests if they show physical or behavioral signs of intoxication. b. When ifs rimy to cut off se rvice Pay close attention to guests so you will be aware of potential problems. Involve your manager early on to determine the best way to handle the situation. Notify the Store Manager if you ever need to stop serving a guest. This will also need to be written on the Incident Report Form. occasionally, you may need to stop service to a "regular." This can sometimes be awkward, especially when the guest has been coming to the establishment for a long time. Never let this get in the way of doing the right thing! When guests have had enough, they have had enough, regardless of their patronage. Again, inform the Store Manager. c. Potentially Violent Situations From time to time you may face situations that are difficult to handle. Your personal safety must always come first. if you feel threatened or you think you're in danger, remove yourself from the situation. Then notify a manager or the owner. You may face situations that could become violent. This might include guests who are rowdy or who are acting inappropriately, it might also include threatening or abusive behavior. You could even be faced with assaults or fights in the establishment. To prevent injuries when handling potentially violent situations: o inform the Store Manager that there is a potentially violent situation and that you or the manager may need to call police. a Do not hesitate to call the police whenever your safety or the safety of others is at risk. o Do not assume that the situation will resolve itself -- it usually won't. • Separate other guests from the situation. This will help prevent them from being injured. • Never touch or try to physically restrain a violent guest 16 d. Record Keeping & Documenting Incidents Document what happened during the incident and what actions were taken. These reports will assist NapaStyle in determining if these policies are effective or whether they need to be revised. NapaStyle maintains an "Incident Diary' and logs any disagreements with or refusals of service to Wine /Craft beer Bar patrons. Please the see attached "Incident Log' and provide accurate information, date and time of incident and list any employees who also witnessed any event and provide a copy to the store manager. Incident reports should be completed when: • Alcohol service has been stopped to a guest. • Alternate transportation has been arranged for a guest. • A guest's ID has been confiscated. • An illegal activity or violent situation has occurred. • Guests are threatening to each other (sometimes happens with wedding groups). 17 VII. Attachments 1. Job Description: Wine/Craft beer Bar Manager 2. job Description: Tasting Room Server 3. Incident Log - Example of the Form 4. Transportation Services - phone numbers 5. Store Back Office Wine/Craft beer Notes - Inventory In and Out 6. Employee Responsibility Statement Fu NapaStyle Job Description: Wine /Craft beer Bar Manager 19 NapaStyle Job Description: Tasting Room Server PEI NapaStyle Incident Log Report Date /Time: Incident: (state the reason for this event such as lack of ID, refusal to serve alcohol, intoxication, odd behavior) Provide a copy to the Store Manager and /or Manager on Duty zi Transportation Services 22 Store Back Office Wine /Craft beer Notes: Inventory In /Out 23 NapaStyIe Alcohol Handling Handbook NapaStyle Los Gatos, California Employee Responsibility Statement Alcohol & Smoking Policies I have read and understand NapaStyle's responsible business practices for alcohol consumption and for serving alcohol. I understand that our business is dedicated to the safe and responsible sale and service of alcohol. I will not knowingly serve alcohol to an underage or obviously intoxicated person. I understand NapaStyle has a designated employee smoking area in order to ensure a healthy and comfortable environment for its guests and employees. I understand that if I follow these policies, management will support my decisions. I also recognize that failure to follow these policies may result in disciplinary action and /or termination. Employee Signature Employee Name (Printed) NapaStyle has developed a beverage alcohol- related policy and procedure manual as part of its commitment to employee and customer safety. The program gives you information on understanding alcohol law and your responsibility, recognizing and preventing intoxication, and checking Identification. n H o N N ; o � � N Z H O U H m N N y� H u. ro O W U u Z N iy O 2 2 N an N M o K E U L O H a N H H ro ,y L �i C7 2 H U K m G O O E ✓ 'H Y O M' a N ] ro G O -H lT N C u N a ro E O u > .> O % W O b W O Y v d 2 O b 0 w ro H U „ N H z° M mu N C C Y C 3 A ro £ a N O O G y U N L v O G H D G L w H ro v " C 'H ro .H C U Y a v o £ G Y L Y D y m '0 p w Y N 3 G > O T a W O e u Y E O ro a ro d F m U ro o N Y b 0 � bt .H X b Y1 b N L v N O O b U N Y m w N G 3 Y a m H m O W G m A N D N o w > ro m p � y N E p1 a a � W m N O ro d a D y N G H w 0 C m T v O ro D ro W D C aLi W w V .H v C n H o N N ; o � � N Z H O U H m N N y� H u. ro O W U u Z N iy O 2 2 N an N M o K E U L O H a N ATTACHMENT 2 H H ro ,y L Nu H ro v L u V .H v C % + N N v E 0 U v 0 v G G m O m G n vIF W %W00.10 N y a ofC W O M O 2 ro H L C E H ro t G N D U H O U N O W O N O N O � C SpH O % W V L WN G y m N bl >+ O Yt b m W O O m O O £ H N Y o -H O N Y N a N m Y0 CH.' 0 0 o ro o N a u a u w F F ATTACHMENT 2 ro C T N D b N H J N 1 N H N O Y 1 T G O C Y A E M H C G C v N b u b N N O N N N O F b O N YN w E U ro G D G N C N N N N O D E N Y Y T U W G A Y Y N N + C rl w m N O N w w m +i F Y N N N J n N N D N u G G L v a v m o o ro o E ro v L + N N W 'J N ro N X G U G H 3 N 3 w O U C O ro u H D u Q x a H u 3 N T w H H E O w u O a u b F O G: E O S O vl G N N L W W U x O N F r Y G w z ro m r 2 w N W Z w W 2 z Y w W Z N O > C w w T O N vl O W O ro G w W O G H G O O O Y H O H a L N O T O H m VI .y Y VI C N W Y N Vl VI N H v N H ro H 'N a H a G N H A qa 0 0. ° °' i m �rz�y E 9 0 U N £ OU � OV U z •i N .i W 'U Y N K N .y C ro O A O N w C O 0 G F O w A m N D ro u ro A Y rn w D N + C N O C F i N A w N G O v L Y ro v G o Y w G v ¢. 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O N A .•� .N N U N b N u O et N d Al N G N •1 Al ✓ V N N N > tT V (X Ci y� 1 O F u O �' x c C E Y N O N O H L b m W X N U 3 N N r-I •d U 3 N W m C F O G N 0 •� Y � W C ti N A G m ++ a run b a W E C 3 C m A 0 O A u ro •p ro ro N a 9 1 0 b U b 3 b U u O N N L b b Y O H O U U F 0 O > m W > G N N w p T N LV O ~ N N T N L N u H m � N o .0 E m L U m E 2 N u U G F d F X O N EO y T 0 N AV N H G u L O b O b T > o m U y b w > m 0 z y u a n w- u N ✓ W N H C O O N C O L O m u O N .ti L O 41 TJ h A bl N G U O H p E N N N U N m N u H ro E q V n u u T A .mC -1 E E •U - •O i X �. O m :,.� y N m •p N o G m N m E v d A ro .H L 0 N N N O y ,-� u N m d '•� 'N N N A A m m b ->, o E N v H O N W u E b > N N C A G E N C G Y a O G C O 3 2 N u N N b N N M 3 C ❑ N .ti O U O p O O U en u A ro N C 0� Y L j •U N A G ti C u d G = 3 0� a o` H O C H A A O N H H C N U O N 0 G b Y G .Ti U N ✓ N E ro L N E N C N d N O n O N C O � A N N -I E •� A N "-� d A U F O ''jTH O M1J N a a ..f L N ✓ G G Y 0. r� v a O� H N N •O m L N N N O A H u N O C 1 u O w- G H N x G W N 3 u H tT M m T ro .ti N x li {l m N G G N '1 O ✓ N N O Y G b b d b O. O N A .•� .N N U N b N u O et N d Al N G N •1 Al ✓ V N N N > tT V (X Ci y� 1 O F u O �' x c C E Y N O N O H L b m W X N U 3 N N r-I •d U 3 N W m C F O G N 0 •� Y � W C ti N A G m ++ a run b a W E C 3 C m A 0 O A u ro •p ro ro N a 9 1 0 b U b 3 b U u O TOWN COUNCIL —December 2, 2013 REQUIRED FINDINGS FOR: 32 N. Santa Cruz Avenue Conditional Use Permit Application U -13 -011 Requesting approval to modify an existing CUP for a formula retail store (Napa Style) to allow beer and wine tasting, sales, and events on property zoned C- 2:1,11P. APN: 529 -03 -055 PROPERTY OWNER: Flick Family Trust APPLICANT: Napa Style FINDINGS Required finding for CEQA: ■ The project is Categorically Exempt pursuant to Section 15061 of CEQA as adopted by the Town, which exempts permitting an activity where it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment. No significant effect on the environment will occur since the project uses an existing structure with no increase in floor area. Required findings for a Conditional Use Permit: ■ As required by Section 29.20.190 of the Town Code for granting a Conditional Use Permit: (a) The deciding body, on the basis of the evidence submitted at the hearing, may grant a conditional use permit when specifically authorized by the provisions of the Town Code if it finds that: (1) The proposed use is desirable to the public convenience and welfare in that it provides additional merchandise options within an existing retail use; and (2) The proposed use will not impair the integrity of the zone, in that the proposed use is appropriate for the C -2 zone; and (3) The proposed use will not be detrimental to public health, safety or general welfare, as the conditions regarding operating hours, special events, and tasting restrictions on the permit will mitigate potential impacts; and (4) The proposed use is in harmony with the General Plan and Town Code as discussed within the staff report. NADEVTINDINGS\2013\32 NSC.doc ATTACHMENT 3 This Page Intentionally Left Blank RESOLUTION 2013- RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DENYING THE REQUEST TO APPROVE CONDITIONAL USE PERMIT APPLICATION U -13 -011. APN: 529 -03 -055 CONDITIONAL USE PERMIT APPLICATION: U -13 -011 PROPERTY LOCATION: 32 N. SANTA CRUZ AVENUE PROPERTY OWNER: FLICK FAMILY TRUST APPLICANT: NAPA STYLE WHEREAS, this matter came before the Town Council for public hearing on December 2, 2013, and was regularly noticed in conformance with State and Town law. WHEREAS, the applicant seeks approval to modify an existing Conditional Use Permit (CUP) for a formula retail store (Napa Style) to allow beer and wine tastings, off -site sales, and charity events on property zoned C- 2:LHP. WHEREAS, on October 23, 2013, the Planning Commission considered the request to modify the CUP. The Planning Commission recommended denial of the CUP based on concerns regarding intensification of parking and alcohol service in the downtown. WHEREAS, the Town's Alcohol Beverage Policy requires any new application for the service of alcoholic beverages to be approved by Council, including limited tasting pours. Town Council reviews CUP requests for a new application for alcohol service on a case -by -case basis to ensure that the request is appropriate for the specific use and its location. WHEREAS, Town Council received testimony and documentary evidence from the applicant and all interested persons who wished to testify or submit documents. Town Council considered all testimony and materials submitted, including the record of the Planning Commission proceedings and the packet of material contained in the Council Agenda Report, along with any and all subsequent reports and materials prepared concerning this application. ATTACHMENT 4 WHEREAS, Council finds as follows: A. Pursuant to Town Code section 29.20.190, the request for a CUP is not desirable to the public convenience; will impair the integrity and character of the zone; would be detrimental to public health, safety or general welfare; and is not in harmony with the various elements or objectives of the General Plan and the purposes of the Town Code. These findings are based on the evidence presented in the Council Agenda Report dated November 25, 2013, regarding this application. NOW, THEREFORE, BE IT RESOLVED THAT: 1. The CUP application U -13 -011 to modify an existing Conditional Use Permit (CUP) for a formula retail store (Napa Style) to allow beer and wine tastings, off -site sales, and charity events on property zoned C -2:LHP is denied. 2. The decision constitutes a final administrative decision pursuant to Code of Civil Procedure section 1094.6 as adopted by section 1. 10.085 of the Town Code of the Town of Los Gatos. Any application for judicial relief from this decision must besought within the time limits and pursuant to the procedures established by Code of Civil Procedure section 1094.6, or such shorter time as required by state and federal Law. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 2nd day of December, 2013, by the following vote: COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA NADEV \RES0S\2013 \Deny_32 NSC.doex This Page Intentionally Left Blank RESOLUTION 2013- RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS GRANTING A REQUEST TO APPROVE CONDITIONAL USE PERMIT APPLICATION U -13 -011. APN: 529 -03 -055 CONDITIONAL USE PERMIT APPLICATION: U -13 -011 PROPERTY LOCATION: 32 N. SANTA CRUZ AVENUE PROPERTY OWNER: FLICK FAMILY TRUST APPLICANT: NAPA STYLE WHEREAS, this matter came before the Town Council for public hearing on December 2, 2013, and was regularly noticed in conformance with State and Town law. WHEREAS, the applicant seeks approval to modify an existing Conditional Use Permit (CUP) for a formula retail store (Napa Style) to allow beer and wine tastings, off -site sales, and charity events on property zoned C- 2:LHP. WHEREAS, on October 23, 2013, the Planning Commission considered the request to modify the CUP. The Planning Commission recommended denial of the CUP based on concerns regarding intensification of parking and alcohol service in the downtown. WHEREAS, the Town's Alcohol Beverage Policy requires any new application for the service of alcoholic beverages to be approved by Council, including limited tasting pours. Town Council reviews CUP requests for a new application for alcohol service on a case -by -case basis to ensure that the request is appropriate for the specific use and its location. WHEREAS, Town Council received testimony and documentary evidence from the applicant and all interested persons who wished to testify or submit documents. Town Council considered all testimony and materials submitted, including the record of the Planning Commission proceedings and the packet of material contained in the Council Agenda Report, along with any and all subsequent reports and materials prepared concerning this application. ATTACHMENT 5 WHEREAS, Council finds as follows: A. Pursuant to Town Code section 29.20.190, the request for this CUP is desirable to the public convenience; will not impair the integrity and character of the zone; would not be detrimental to public health, safety or general welfare; and is in harmony with the various elements or objectives of the General Plan and the purposes of the Town Code. These findings are based on the evidence presented in the Council Agenda Report dated November 25, 2013, regarding this application. B. The project is categorically exempt from environmental review pursuant to Section 15061 of the State Environmental Guidelines as adopted by the Town. NOW, THEREFORE, BE IT RESOLVED THAT: 1. The CUP application U -13 -014 to modify an existing Conditional Use Permit (CUP) for a formula retail store (Napa Style) to allow beer and wine tastings, off -site sales, and charity events on property zoned C -2:LHP is approved. 2. The Conditions of Approval attached hereto as Exhibit A are hereby adopted as the Conditions of Approval for this permit. 3. The decision constitutes a final administrative decision pursuant to Code of Civil Procedure section 1094.6 as adopted by section 1.10.085 of the Town Code of the Town of Los Gatos. Any application for judicial relief from this decision must besought within the time limits and pursuant to the procedures established by Code of Civil Procedure section 1094.6, or such shorter time as required by state and federal Law. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 2nd day of December, 2013, by the following vote: COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA NADEV \RES0S\2013\Approve_32 NSC.doex This Page Intentionally Left Blank TOWN COUNCIL — December 2, 2013 CONDITIONS OF APPROVAL FOR: 32 N. Santa Cruz Avenue Conditional Use Permit Application U -13 -011 Requesting approval to modify an existing CUP for a formula retail store (Napa Style) to allow beer and wine tasting, sales, and events on property zoned C- 2:1,11P. APN: 529 -03- 055 PROPERTY OWNER: Flick Family Trust APPLICANT: Napa Style TO THE SATISFACTION OF THE DIRECTOR OF COMMUNITY DEVELOPMENT: Planning Division 1. APPROVAL: This application shall be completed and operated in accordance with all of the conditions of approval listed below. 2. EXPIRATION: The approval will expire two years from the approval date pursuant to Section 29.20.320 of the Town Code, unless the approval has been vested. 3. USE: This approved use is for a formula retail business for the sale of home and dining accessories. Including limited packaged food items and room temperature beer and wine packaged for off -site consumption. 4. HOURS: Hours of operation are limited to 9:00 a.m. to 6:00 p.m. daily. 5. STORE DELIVERIES: Delivery shall occur at the rear of the building during the hours of 7:00 a.m. to 10:00 a.m. only. 6. TASTINGS: Tastings of beer and/or wine shall occur during business hours in the designated (200 sq. ft.) tasting area only. No more than nine customers shall be in the tasting area at a time. Tastings shall consist of no more than five, one ounce samples /pours per customer /day. A fee shall be charged for tastings. 7. CHARITY EVENTS: A maximum of three special charity events are permitted per month with a maximum of 24 events annually. Events shall be limited from 6:00 p.m. to 9:00 p.m. with a maximum of 25 guests per event. The events may be served by an ABC licensed caterer. 8. BOTTLE DISPOSAL: Disposal of bottles must occur during regular business hours. 9. MUSIC: No live music is permitted without approval of a Live Entertainment Permit. 10. TOWN INDEMNITY: Applicants are notified that Town Code Section 1.10.115 requires that any applicant who receives a permit or entitlement from the Town shall defend, indemnify, and hold harmless the Town and its officials in any action brought by a third party to overturn, set aside, or void the permit or entitlement. This requirement is a condition of approval of all such permits and entitlements whether or not expressly set forth in the approval, and may be secured to the satisfaction of the Town Attorney. NADEV \C0NDITNS\2013 \32 NSC.doc OfAttachment 5 This Page Intentionally Left Blank K. CHRISTOPHER BRANCH KC@KCBRANCHL4W.COM November 12, 2013 Town Council Town of Los Gatos Town Hall 110 E. Main Street Los Gatos, CA 95030 Attention: Marni Mosely RECEIVED V,1 12 2013 TOWN OF LOS GATOS PLANNING DIVISION 1 177 MARSH STREET, SUITE 100 SAN LUIS OBISPO, CALIFORNIA 93401 (805) 539 - 1700 (805) 539 - 1701 (FAx) P.O. Box 2528 YOUNTVILLE, CA 94599 707 204 95 93 SUPPLEMENTAL INFORMATION FOR CUP APPLICATION Application Number: U -13 -011 Property Address: 32 North Santa Cruz APN: 529 -03 -055 Date of Original Application: February 25, 2013 Applicant: Napastyle, Inc. Status of Applicant vis -vie property: Tenant Proposed Uses: 1) Sale of Beer and Wine (9:00 to 18:00) 2) Educational Sampling of Beer and Wine (9:00 to 18:00) 3) Ability to have a licensed caterer serve food, wine and beer (up to 24 times a year, 18:00 to 21:00) following all applicable food service regulations. Dear Town Council: You should confirm the staff recommendation and override the Planning Commission recommendation with regard to the above - referenced application and grant the requested Conditional Use Permit. The Planning Commission's concerns and action conflict with Los Gatos' Alcohol and Intensification Policies, conflict with the alcoholic beverage ATTACHMENT 6 Supplemental Information for CUP Application November 10, 2013 CUP Application U -13 -011 Page 2 regulations of the California Alcohol Control Board ( "ABC ") and conflict with the business model of the Applicant. In short, Napastyle, a wine country oriented home and packaged food store, seeks the permission of the Town -- to sell, to sample (for a fee), and to allow licensed caters to serve wine and craft beer for charities at special events — all under extremely tight conditions, self - imposed and offered by the Applicant. The Applicant applied for the CUP, with an intentional purpose to not only work within the ABC and the Town's rules but to be even less intrusive to the Town of Los Gatos than might otherwise be allowed. Unfortunately, despite the Applicant's effort the Planning Commission appears to believe that even though the Application fits squarely within the rules, leaving lots of space around the edges, there simply should be no more approvals for any entity desiring to sell alcohol in the Downtown Area. In general, their concerns regarding the cumulative effect of multiple licenses, parking issues, and that there are enough places to buy alcoholic beverages or have a Special Charitable Event where alcoholic beverages can be served appears misguided in light of the following circumstances. The Town of Los Gatos' Town Code has a specific Policy Regulating the Consumption Service of Alcohol. Unquestionably, this Application meets those criteria, leaving room on all sides. For example, there will be no alcohol sales /service, except for Special Charity Events after 6 pm (and after 9 pm for special charitable events) even though the policy allows for new applications and old ones to allow service to 10 pm, or 11 pm, or even 1 AM, depending upon days and circumstances. It is not a stand -alone bar, lacks any entertainment component, and lacks any need for police enforcement. The Applicant developed an employee training manual that contains all of the required components (exhibit G to application) of the California Restaurant Association and more (designated driver program, taxi cab numbers, etc.) There are no complaints by the ABC against the Applicant for its other stores in Costa Mesa, California (closed now) and Yountville, California, where the proposed use is being currently used, i.e. a gift store on the one hand and wine tasting /sales on the other. Finally, even though not required by the Town Policy, there is a benefit to the community in the charitable events that likely has never come from any other Applicant. Supplemental Information for CUP Application November 10, 2013 CUP Application U -13 -011 Page 3 2. While Town Code section 29.20.197 does codify some of the concerns that the Planning Commission expressed,' that Section cannot apply to Applicant because it only applies to a modification of a CUP to sell wine and beer for a Service Station, not a home goods store like Napastyle. An expansion of the scope of the section to include the Applicant is not warranted, justified or allowed. 3. With regard to the issue of intensification, the staff of the Town of Los Gatos specifically found in reviewing the initial Application and recommending the Planning Commission Grant approval, that the proposed use did not create additional parking requirements nor would it result in 5 or more peak hour trips and thus, the proposed use does not qualify as a intensification of the existing use of the property. Town Code Section 29.20.145 4. Napastyle's mission is to bring the aesthetic beauty, simplicity and bounty of California's wine county to its customers across the United States with home goods, home decorating items, and packaged foods. To be able to allow educational tasting of fine wines and beers and sell them represents a natural extension of that mission. Frankly, customers are from time to time, surprised that a place called Napastyle, doesn't sell wine. One of Napastyle's goals is to bring wines and beers to the local community that are generally unavailable in town, thus saving people from having to travel to buy such special products and thereby keeping sales in the local community. For a home store that sells gourmet packaged food, dishes and home dining accessories, the sales of beer and wine becomes a natural extension of the already approved business at 32 N. Santa Cruz. 5. If the Town Council approves the CUP, the use will run with the land. This means that Napastyle could be replaced by another formula store and use the existing CUP who could do the same business model as did Napastyle, but no more. Also, this means that if Napastyle, or a subsequent tenant at 32 N. Santa Cruz, did not want to go into the wine and beer business, they could lease out the approximately 200 square feet to another entity. The only likely candidate for leasing that space would be an existing winery who wanted to have a place to taste wines. Under ABC law, a regular (type 02) winery can have tastings both at the place where The Planning Commission raised issues such as (i) parking; (ii) that there were too many other places that do the same the same thing nearby [even though there is only one place exclusively for wine tasting, Testarossa Winery, near downtown: I mile away at 300 College Avenue, that offers "free tastings for members "], (iii) advertisements, (iv) on- premise consumption, and (v) a general concern that more alcohol qualifies as an "intensification of use." Supplemental Information for CUP Application November 10, 2013 CUP Application U -13 -011 Page 4 they make the one and one other satellite location. The 200 square feet at 32 Santa Cruz would be ideal for this, in that Napastyle and a winery could co- market to some of the same and some different consumers creating a synergy that could bring additional income to both entities. Such a scenario currently exists in the Yountville (Napa County) Store of Napastyle. While a formula retailer, i.e a small liquor store, might be able technically rent from Napastyle the moratorium on new ABC licenses in Santa Clara County makes the upfront costs huge, making for a economic impossibility. For the Special Charity Events, (not to exceed 24 events per year and not to exceed 3 times per month), Napastyle would allow caterers to use their premises (other than the 200 square feet set for educational sampling) to have events for non - profit entities and serve alcohol. Under such circumstances, the first two privileges sought in the CUP at issue could not occur simultaneously because the holder of the license for those privileges would have to suspend its ABC license in favor of the caterer's ABC license, for the duration of the Special Charity Event. While the Planning Commission was concerned that such events would place too much burden on the existing parking and other infrastructure in and around the 32 N. Santa Cruz location, Los Gatos Town staff opined that the 25 potential guests at each event was less than the 28 person lowest possible maximum allowed based on the parking spaces allotted to 32 N. Santa Cruz. Interestingly, without the granting of the CUP, it appears that Napastyle may do these events as long as beer and wine is not served, at the present time. Thank you for your attention to these issues. As a follow up, if the Council wishes to provide direction to applicant to make a relatively benign application even more benign, the Applicant would agree to the sublease only being available to a winery to use as a satellite location and failing that requests leave to submit a supplement to its Application without the necessity or expense of a new filing. Very truly yours, K. Christopher Branch For the KC Branch Firm, A California Law Firm