Live Entertainment Zoning Code Amendmentrow" of MEETING DATE: 4/7/14
ITEM NO: Q'
`os`GA`os
COUNCIL AGENDA REPORT
DATE: March 27, 2014
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: ZONING ORDINANCE AMENDMENT A -13 -04 AND TOWN CODE
AMENDMENT REGARDING LIVE ENTERTAINMENT. APPLICANT:
TOWN OF LOS GATOS.
A. INTRODUCE ORDINANCE ADOPTING AMENDMENTS TO CHAPTER
29 (ZONING REGULATIONS) OF THE TOWN CODE REGARDING
ENTERTAINMENT.
B. INTRODUCE ORDINANCE TO CHAPTER 3 (AMUSEMENTS) OF THE
TOWN CODE REGARDING A PERMIT FOR LIVE ENTERTAINMENT.
C. ADOPT A RESOLUTION TO AMEND THE ALCOHOLIC BEVERAGE
POLICY.
RECOMMENDATION:
After opening and closing the public hearing, and asking the Clerk Administrator to read the title
of the proposed ordinance, it is recommended that the Town Council:
1. Accept the Planning Commission's findings and recommendations in the form of meeting
minutes (Attachment 6) (no motion required).
2. Make the required finding that the proposed Zoning Ordinance amendments (A- 13 -04) are
consistent with the General Plan and its Elements. (Attachment 8) (motion required).
3. Move to introduce the ordinance of the Town of Los Gatos effecting the Zoning Ordinance
amendment of the Town Code A -13 -04 (Attachment 9) (motion required).
4. Move to introduce the ordinance of the Town of Los Gatos effecting the Town Code
amendment regarding entertainment (Attachment 10) (motion required).
5. Move to waive the reading of the two Ordinances (motion required).
6. Adopt the resolution amending the Alcoholic Beverage Policy (Attachment 11) (motion
required).
7. Direct staff to return to Council with a resolution to establish the fee to process the
entertainment permit (motion required).
PREPARED BY: SANDY L. BAILY 5�,t
Director of Community Development
Reviewed by: Assistant Town Manager Town Attorney Finance
N: \DEV \TC REPORTS \2014\ABP.Entertainmentord.docx Reformatted: 5/30/02
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ALTERNATIVES:
Instead of the actions above, the Council may:
• Introduce the ordinance(s) and /or approve the revised Alcoholic Beverage Policy with
modifications (motion required);
• Continue the matter to a date certain with specific direction to staff (motion required);
• Continue the matter to a date uncertain and create an ad hoc subcommittee to refine the
amendments (motion required);
• Remand the matter to the Planning Commission with specific directions; or
• Not adopt or take action on the ordinance(s) and /or Alcoholic Beverage Policy.
BACKGROUND
The intent of the Alcoholic Beverage Policy (ABP) which was originally adopted in 1990, is to
outline the Town's expectations for establishments serving alcohol and to provide a process for
reviewing applications proposing alcohol service. The Town last amended the ABP in 2001. The
current ABP states, "Entertainment in association with an eating or drinking establishment may
be allowed if standards and a permit process are adopted." Over the last several years, the Town
has received and considered numerous applications for entertainment uses. The lack of standards
and a defined process has caused challenges for applicants, staff, Planning Commission, and
Town Council when reviewing such requests. In addition, the Town has received several
requests to serve and sell alcohol with or without meals based on current trends which are not
accommodated in the ABP. Therefore, Town Council has directed staff to revise the ABP to
assist staff, applicants, and decision makers in assessing applications and proposals and to
develop an entertainment ordinance or policy.
In August 2011, the Town Council held a joint study session with the Planning Commission on
proposed Entertainment Permit review process concepts and the proposed changes to the ABP.
Town Council and Planning Commission provided considerable input at the study session
(Exhibit 6 of Attachment 1).
Staff held several meetings with residents and conducted an informational meeting for business
owners in 2012. In December 2012 Town Council held a study session regarding the proposed
ABP changes and the Entertainment Permit process (Exhibit 7 of Attachment 1).
On September 12, 2013, Town staff held two separate informational meetings, one for
stakeholders and one Town wide meeting. Notices for the Town wide meeting were sent to all
properties and businesses within Los Gatos and 17,367 notices were mailed. Approximately 14
people attended the stakeholder meeting and approximately 27 people attended the Town wide
meeting. Exhibit 8 of Attachment 1 is a summary of the comments received at these meetings.
Due to public concerns raised about enforcement of CUP's this matter was held until Town
Council completed its review of the code compliance process and enforcement of CUP's. As part
of the CUP review, Council concurred that when a CUP is approved or modified, that the
deciding body will continue to include a condition to reevaluate the CUP at a public hearing
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within a specified time period (i.e. one year from occupancy) if the deciding body deems
appropriate. In addition, Council requested follow up information on whether or not CUP's are
required to run with the land. Staff researched this matter and found that pursuant to the State
Office of Planning and Research, CUP's run with the land, not the applicant, based on case law.
DISCUSSION:
A. Project Summer
The items to be considered include: 1) amendments to the Alcoholic Beverage Policy; 2)
addition of Chapter 3, Article VII of the Town Code adopting a new regulatory permit process
for live entertainment; 3) Zoning Ordinance amendments to adopt land use regulations for live
entertainment; and 4) implementation for existing uses. Additional details on these matters are
included in the September 25, 2013 and October 9, 2013 reports to the Planning Commission
(Attachments 1 and 4).
1. Alcoholic Beverage Policy: Based on past discussions with the Town Council and Planning
Commission and direction given to staff for previous alcohol - related applications, below are
the major modifications proposed to the ABP which incorporate the modifications
recommended by the Planning Commission at its September 25, 2013 meeting. Attachment
11 notes the changes, and in that attachment the new wording is underlined and deleted
wording is striked,&augh.
a. Meals - Modification of the language regarding appetizers vs. full meals when alcohol is
served. Due to current dining trends, staff is recommending that small plates and
appetizers be considered a meal service when alcohol service is limited to beer and/or
wine. The Policy will continue to exclude bar snacks such as popcorn, pretzels, potato
skins, and relish trays from this definition.
b. Service to waiting patrons - Inclusion of language to permit alcohol service for waiting
patrons. Many discussions have occurred around the issue of serving alcohol before food
is ordered, whether it is at the table or while patrons are waiting for a table. The language
within the current alcohol policy would not permit either.
c. Benefit to the community — Remove the requirement for a benefit to the community for
late night hours as the intent of this requirement is covered by Section 29.20.190(a)(1) of
the Town Code regarding findings for CUP's. The required finding under this section
states that "the proposed uses of the property are essential or desirable to the public
convenience or welfare." Therefore, since the intent is covered by Town Code for CUP
findings staff recommends that this language be removed. In addition, this requirement is
easily misinterpreted to be a community benefit that is typically required for traffic
increases, which can be difficult to make since it relates to late night service. In order to
remove the confusion between this requirement and the Community Benefit required for
traffic increases, staff recommends that this language be removed.
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d. Definitions — The following definitions have been added to the draft ABP to address
current business operating trends not covered by the policy. Based on Planning
Commission comments, modifications to definition number 4 below are recommended
which is discussed further below under the clarification section of staff comments. In
addition, staff is suggesting for definition number 5 below that the word in bold italics be
considered and included in the draft ABP policy.
(1) Separate Bar: A separate bar is defined as an area within a restaurant that is
separated by a physical barrier from the dining areas and serves alcoholic
beverages. This definition does not include food counters or service bars.
(2) Food Counter: A food counter is defined as a counter area located within an
establishment providing food service where customers may sit and order food and
alcohol.
(3) Service Bar: A service bar is a counter or part of counter where food and /or
beverages are placed for delivery to customers; no customer seating is permitted in
this area.
(4) Retail Wine Service Establishment: A Retail Wine Service Establishment also
called a wine bar is defined as an establishment providing alcohol beverage service
for wine and /or beer as may be determined by the deciding body. A Retail Wine
Service Establishment shall, at a minimum, provide food service until closing.
Specific hours of operation for each establishment are determined in the operational
agreement, if relevant, or the conditional use permit. A Retail Wine Service
Establishment shall meet the Purpose and General Policy of this Alcoholic
Beverage Policy.
(5) Tasting Room: A Tasting Room is defined as limited alcoholic beverage service in
the form of samples (small pours) provided in conjunction with a retail operation.
Meals shall not be permitted. Specific hours of operation for each establishment are
determined in either the operational agreement, if relevant, and /or the conditional
use permit. Tasting rooms shall meet the Purpose and General Policy of this
Alcoholic Beverage Policy.
2. Entertainment Ordinance Chapter 3, Article VII: Based on the outreach conducted to
date and a review of other jurisdiction best practices, staff recommends a process that
separates the entertainment permit from the CUP. This would allow the Town to review each
owner, operating staff, and business plan separately to determine whether the permit should
be issued and the types of conditions that should be imposed. The separate entertainment
permit process also provides greater discretion to the Police Chief to immediately address
problems, including permanent or temporary termination of the use for noncompliance
issues. Finally, and most important, the principal advantage to separating the CUP from the
entertainment permit is to prevent the entertainment use vesting with the land through the
CUP. This would be a change to current practices of using the CUP to authorize changes to a
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business's operating conditions. However, it should be noted that some existing CUP's may
require modification if entertainment is to be added, due to specific language in their
conditions of approval which specifically prohibits entertainment as part of their use.
This approach is similar to many other cities in Northern California that allow live
entertainment as part of a business regulatory permit approval process, and not a vested land
use. The regulatory process is proposed to be incorporated outside of the Zoning Ordinance
(Chapter 29) of the Town Code and incorporated in Chapter 3 of the Town Code under
Amusements (Attachment 10).
Based on feedback through this process from the Council, Commission and the public, the
entertainment permit process has been simplified from a previously discussed three tiered
review /approval process down to two tiers. Tier 1, which would be classified as minor live
entertainment, would consist of entertainment proposals that do not have late night hours or
alcohol service, with or without sound amplification. These applications are recommended
to be reviewed and approved by the Planning Commission. Pursuant to Town Code, any
decision of the Planning Commission is appealable to Town Council. Tier 2, which would
be classified as major live entertainment, would include applications that involve late night
hours (past 10 PM) and/or alcohol service, and would require review by the Planning
Commission with a recommendation and final action by the Town Council. See the matrix in
Attachment 15 for an example on how the Tiers would work and the proposed exemptions.
The Police Department will review major and minor entertainment permits and make
recommendations to the deciding body. Major entertainment permits would require approval
of an operating agreement that would outline the terms and conditions of the Entertainment
Permit. Neither the Entertainment Permit nor the operating agreement would be transferable
to another property or operator by right.
Staff is recommending that live entertainment uses be allowed in the following land use
zones (C -1 Neighborhood Commercial, C -2 Central Business District, CH Restricted
Highway Commercial and LM Commercial - Industrial). The basis for this recommendation
is that all of these zones:
• are commercial zones
• allow restaurants and /or the service of alcohol
• currently have approved entertainment type uses
3. Zoning Ordinance, Chapter 29: The following amendments (Attachment 9) are proposed
to implement the regulatory live entertainment permit process as discussed above. New
wording is underlined and there is no deleted wording.
Section 29.10.020. Definitions.
Give Entertainment. Any presentation or activity of any nature which is designed or intended
to divert, amuse or attract the attention of persons observing or listening to such presentation
or activity, including but not limited to any type of presentation or performance in which
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SUBJECT: ALCOHOL AND ENTERTAINMENT ORDINANCE/POLICY
live entertainers, performers, a video jockey (VJ) or a disc jockey (DJ) appears before an
audience of any number of persons or the patrons of a business establishment. The term
"Live Entertainment" shall not include any entertainment provided solely without any human
interaction or control of any radio, television, videos, music recording device /player, digital
recording device /player or juke box for the benefit of an audience or the patrons inside an
establishment.
Live Entertainment (minor). Live entertainment uses that terminate on or before 10:00 p.m.
and that do not include alcoholic beverage service.
Live Entertainment (major). Live entertainment uses that involve late night operation (after
10 p.m.) and /or that include alcoholic beverage service.
Permitted Uses. Incorporate the following language for a permitted use in all commercial
zones (C -1: Section 29.60.210(a), C -2: Section 29.60.320(a), CH: Section 29.60.420(a) and
LM: Section 29.70.100(a)):
Live entertainment may be permitted subject to all of the restrictions and requirements set
forth in this chapter and Chapter 3, Article VII of the Town Code.
Section 29.20.750. Planning Commission
The Planning Commission:
( -) Determines applications for minor live entertainment permits as referenced in Chapter 3
Article VII of the Town Code.
( -) Hears and forwards a recommendation to the Town Council for major live entertainment
permits as referenced in Chapter 3, Article VII of the Town Code.
Section 29.20.755 Town Council
The Town Council:
( -) Hears and determines Planning Commission recommendations regarding applications for
major live entertainment permits as referenced in Chapter 3 Article VII of the Town Code
4. Implementation of Existing Uses - In regards to existing uses that have a CUP, as discussed
at previous study sessions and noted at the Planning Commission hearings, the requirement
for an entertainment permit has been drafted to not be retroactive to existing CUP's that are
permitted to have live entertainment unless:
• The CUP has a condition of approval that requires the business to comply with a new live
entertainment policy or ordinance.
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• The CUP is modified.
There are some CUP's that have a condition of approval that no entertainment is permitted.
These CUP's will need to be amended to eliminate that condition if the business wants to
apply for a live entertainment permit.
If the Town Council determines that there should be an amortization period to comply with
current entertainment requirements for existing CUPS that are permitted to have
entertainment, then staff should be directed to incorporate this modification in the zoning
ordinance.
B. Planning Commission
The Planning Commission considered this matter on September 25, 2013 and continued the
matter with directions to staff to make further revisions to the documents (see Attachment 3 for
verbatim minutes). Staff modified these documents as directed by the Commission (see Exhibits
14,15 and 16 of Attachment 4). The Commission reconsidered the matter on October 9, 2013 and
made the required findings that the proposed Zoning Ordinance amendments were consistent
with the General Plan and forwarded the matter to Town Council for adoption of the Zoning
Ordinance and Town Code amendments and the Alcoholic Beverage Policy amendments with
the inclusion of the list that was provided by the Planning Commission for issues they want to
make sure were addressed by Council (see Attachment 3 for verbatim minutes). The Planning
Commission comments are summarized in Attachment 6 and are discussed below under staff
comments.
STAFF COMMENTS:
Following are responses regarding the Planning Commission's direction from its meeting of
October 9, 2013, for Council consideration.
Definitions for Proposed Entertainment Ordinance:
The Commission requested definitions for the following items below. Following are suggested
definitions for Council consideration.
• Entertainment Establishment - A facility or business that as part of its regular operation
provides live entertainment to an audience for either direct or in- direct compensation of
the performers, staff, operators or the owners of the facility, including but not limited to
the purchase of tickets, payment of entrance fees, payment of cover charges, provision of
voluntary donations, or the required purchases of food, drink or merchandise as a
prerequisite to experience the entertainment provided.
• Restaurant — A retail food service establishment in which food or beverage is prepared,
served and sold to customers for on -site or take -out consumption. (This definition is
from the Town's Zoning Ordinance)
• Separate Bar — see alternative definition of a separate bar below
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• Indoors (not to include decks or patios, etc.) - Outdoor entertainment means
entertainment provided by a hotel, motel, restaurant, bar or similar establishment
conducted outside the confines of a building including courtyards, pool areas and the
like. (Staff is suggesting defining outdoor as opposed to indoor which is currently defined
by the Town's Zoning Ordinance).
Alternative definition of separate bar:
The Commission recommended an alternative definition of a separate bar and to eliminate the
definition of food counter. The Commission discussed combining the definition of food counter
with the definition of separate bar. Staff does not recommend merging these definitions since it
conflicts with Town Code definitions and parking requirements for bars and restaurants with
separate bars. Town Code defines a bar as a drinking place where alcoholic beverages and
snacks are served. In the downtown area, the Town Code has a higher parking requirement for
bars and restaurants with separate bars compared to stand alone restaurants. In addition, the
current and proposed ABP strongly discourages restaurants with separate bars that serve liquor.
There are numerous restaurants in the downtown that have food counters that are not classified
as a separate bar. Based on interpretation of the definition, if the definitions are merged, it would
result in creating nonconforming parking situations for restaurants that have separate food
counters. If the Town Council determines that the definitions should be merged, staff suggests
that the definition of separate bar be written as follows and that the definition of food counter is
eliminated:
Separate Bar:
A separate bar is defined as any counter within a restaurant that serves alcoholic
beverages with or without meals. This definition does not include service bars.
Clarifications:
• Between restaurant and retail - The difference between a restaurant and retail
establishment is that restaurants (as defined by the Town's Zoning Ordinance), involves
food preparation, service and sales of the food product. If a retail business is offering a
food product that is not prepared at the site and is not sold to a consumer, it would be
classified as a retail use not restaurant use. An exception to this would be a retail bakery
type business, where there are no seats for onsite consumption.
• Between retail and wine bars - Staff is suggesting the following modifications for the
definition of a retail wine establishment /wine bar:
Retail ran:._ ei ie — .µ61:.,l.,,, Wine Bar:
A Retail Won Seiwiee Eslab&hlnent alse ealled a A++Wine bBar is defined as an
establishment providing alcohol beverage service for beer and /or wine ss-mR -be
de�emiined by the deeiding body which may be in conjunction with a retail
operation. A Betai Wine c,,...ie &tabUshnient Bar shall,-at- ' u� s, provide
food service uff6 -wing for all hours of operation during which alcohol is beinjZ
served. Specific hours of operation for each establishment are determined in the
operational agreement required pursuant to the conditional use permit. A Beteil
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SUBJECT: ALCOHOL AND ENTERTAINMENT ORDINANCE /POLICY
Wine Serviee &tablishmen4 Bar shall meet the Purpose and General Policy of
this Alcoholic Beverage Policy.
Enforcement:
• How to raise a complaint — The Police Department should be contacted for noise or
disturbance of the peace when there is a need for immediate attention. All other
complaints can be brought to the attention of the Town by filing a written complaint on
the Town's Code Compliance website, submitting a letter to the Town, or personally
contacting the Community Development Department to discuss the matter or voicing
their concerns under verbal communication at a Planning Commission or Town Council
meeting.
• What are violations to a CUP — A violation would be when the use for which the CUP
was granted is being operated contrary to the conditions of its approval.
• Who responds and tracks complaints — Typically the Code Compliance Officer responds
and tracks complaints. The Community Development Department is currently working
with the Police Department to improve the communication system between departments.
• Code Enforcement Officer needs to provide a timely response — See bullet below.
• Mixed comments that: 1) a Code Enforcement Officer should be available when business
establishments are operating that contribute to problems; and 2) due to financial concerns
a Code Enforcement Officer should only follow up if there is a complaint — The Town's
previous Code Enforcement Officer position was eliminated in 2009 due to economic
downturn. Since then, response to complaints has been provided on a part-time basis by
other Town staff or contractors. Staff is recommending re- establishment of the full -time
Code Enforcement Officer position in the budget for next fiscal year, starting July 1st.
Evening hours scheduling might be possible as needed with additional overtime funding.
Parking:
The Commission questioned if parking should be based on seats or occupancy. For discussion on
this matter, see Intensification of Use below.
Major Permits:
The Commission proposed that maximum occupancy loads, not the number of seats, should
establish parking regulations for major entertainment permits. For discussion on this matter, see
Intensification of Use below.
Intensification of Use:
The Commission shared the concern that both entertainment and alcohol service have the
potential to intensify a use and therefore create parking and /or traffic impacts. Town Code
defines intensification as an increase of five or more peak hour trips. Town Code currently
regulates parking by the use and the number of seats for restaurants and /or bars. The Town has
no codes or policies which regulate intensification of use and /or parking based on the potential or
allowed building occupancy of a tenant space. In considering this matter, it is important to note
that retail and personal service businesses located in the Central Business District typically close
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SUBJECT: ALCOHOL AND ENTERTAINMENT ORDINANCE/POLICY
before 9 p.m. and therefore, parking spaces allocated to these uses within Town parking lots are
available. If Town Council determines that additional parking should be required for uses that
provide entertainment, staff suggests the utilization of Conditional Use Permits (CUP's) for
alternating use of parking for entertainment uses as permitted by Town Code. The basis for this
recommendation is that the majority of the businesses in the Central Business District would not
have the option of providing additional parking due to the lack of available land area to install
new spaces on site.
Following are three policy options Council could consider regarding this matter. The creation of
a policy would be a separate work priority.
• Establish findings to set a cap on the square footage and /or location of entertainment
establishments.
• Create a concentration policy regarding entertainment establishments.
• Consider the intensification issue on a case by case basis.
Concentration of Permits:
The Commission requested that an impact map be created. Staff has prepared three maps to assist
in the review of concentration of use. While there are uses which exist outside the Central
Business District (C -2 zone), staff believes the C -2 zone is the primary area of concern when
discussing concentration of use and has limited the focus of the maps to this area of Town. The
maps have been broken out to portray concentration of the following uses and include which
locations currently have entertainment allowances per their existing CUP.
• Restaurants without alcohol service, with alcohol service, and with separate bars
(Attachment 12)
• Stand -alone bars (Attachment 13)
• A combination of all restaurants and bar uses indicating the type of alcohol service (i.e.
beer and wine or full alcohol service) (Attachment 14)
Operational Agreements:
While not discussed by the Planning Commission, the language within the draft ABP as
presented and recommended by the Planning Commission includes a new requirement that all
uses which serve alcohol after 10 PM shall have an operational agreement. While operational
agreements can be a helpful tool in enforcing unique business models, requiring them on all new
or modified CUPs where alcohol service is provided after 10 PM may not be necessary. As an
example, a fine dining restaurant that serves alcohol past 10 PM that does not provide
entertainment should not generate a potential negative impact regarding noise and other policing
issues. Therefore, staff suggests the language noted in bold be added as follow:
F. An Operational Agreement between the Town and the Operator may be
required for alcohol service past 10 PM
This modification would allow the deciding body, based on comments by Town staff and the
public, to determine whether or not to require an operational agreement.
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SUBJECT: ALCOHOL AND ENTERTAINMENT ORDINANCE /POLICY
PUBLIC COMMENTS:
Correspondence received on this matter is included in Attachments 1, 2 and 5. All persons who
signed in at the informational meetings noted earlier in this report and all the stakeholders on the
Town's notification list will be emailed a link to this report and the Town Council's agenda for
this meeting on Friday, April 4, 2014.
CONCLUSION:
Town Council directed staff to revise the ABP to assist staff, applicants, and decision makers in
assessing applications and proposals and to develop an entertainment ordinance or policy.
Adoption of the proposed amendments would implement this direction. It is therefore
recommended that Town Council
1. Consider comments and issues raised by the Planning Commission;
2. Approve the recommended amendments with modifications as determined by Council;
and
3. Direct staff to bring back a resolution to establish a fee for the entertainment permit.
If Council determines additional modifications and/or research is required, the matter should be
continued or remanded to the Planning Commission, with specific directions.
ENVIRONMENTAL ASSESSMENT:
It has been determined that there is no possibility that this project will have a significant impact
on the environment; therefore, the project is not subject to the California Environmental Quality
Act (Section 15061 (b)(3)).
FISCAL IMPACT:
Proposed Section 3.70.025 of the Town Code allows Town Council to establish a fee for
processing the entertainment permit. Consistent with other similar Town fees, the fee will be
based on a cost recovery method. If the Council approves the proposed ordinance for a permit,
then the fee resolution to establish a fee will be brought to Town Council for consideration when
the entertainment ordinance returns for a second reading and Council's adoption of the ordinance.
ATTACHMENTS:
Received Under Separate Cover
1. September 25, 2013, Staff Report to the Planning Commission (including Exhibits)
2. September 25, 2013, Desk Item to the Planning Commission (including Exhibits)
3. Excerpt of verbatim minutes from the Planning Commission meeting of September 25, 2013
4. October 9, 2013, Staff Report to the Planning Commission (including Exhibits)
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SUBJECT: ALCOHOL AND ENTERTAINMENT ORDINANCE /POLICY
5. October 9, 2013, Desk Item to the Planning Commission (including Exhibits — Note: There is
no Exhibit 13)
6. Excerpt of verbatim minutes from the Planning Commission meeting of October 9, 2013
7. Summary of Planning Commission questions and issues regarding Draft Alcoholic Beverage
Policy and Entertainment Ordinance
Received with this Report
8. Required Findings
9. Draft Zoning Ordinance, Chapter 29
10. Draft Town Code Ordinance, Chapter 3
11. Draft Resolution with Alcoholic Beverage Policy
12. Restaurant concentration map
13. Stand -alone bar concentration map
14. Alcohol concentration map
15. Matrix
SLB:ct