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Staff Report PREPARED BY: MONICA RENN Economic Vitality Manager Reviewed by: Assistant Town Manager Town Attorney Finance N:\SHARE\COUNCIL REPORTS\2016\10-04-16\08 Seats to Parking\08 Staff Report FINAL.docx MEETING DATE: 10/04/16 ITEM NO: 8 COUNCIL AGENDA REPORT DATE: SEPTEMBER 21, 2016 TO: MAYOR AND TOWN COUNCIL FROM: LAUREL PREVETTI, TOWN MANAGER SUBJECT: ADOPT AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AMENDING SECTION 29.10.150 OF CHAPTER 29 OF THE LOS GATOS TOWN CODE TO REVISE THE REQUIRED PARKING REQUIREMENTS FOR RESTAURANTS. RECOMMENDATION: Staff recommends that Town Council accept public comment and then move for introduction and first reading of an Ordinance, by title only, amending Section 29.10.150 to the Los Gatos Town Code. BACKGROUND: Since September 1, 2015, the Council has been considering a series of policies and Code amendments that relate to businesses including formula retail, paid valet parking service in downtown, a revised outdoor seating policy, policies allowing entertainment, retail and restaurant definitions, and the relationship between parking requirements and seating capacities in restaurants. At the October 6, 2015 meeting, the Council requested that these items be considered individually at a series of future meetings. On December 15, 2015, the Town Council considered the potential separation of parking requirements and seating capacities. During this discussion, the Council expressed interest in exploring options that provide businesses with the most flexibility to operate their restaurants BACKGROUND (cont’d): with a number of seats that is both safe and operationally feasible. During this meeting, the Council discussed the relationship between parking requirements and seating capacities, the history of the Parking Assessment District (PAD) and how it relates to seats, and benchmarking BACKGROUND (Cont’d): PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENTS TO SECTION 29.10.150 OF CHAPTER 29 OF THE LOS GATOS TOWN CODE TO REVISE THE REQUIRED PARKING REQUIREMENTS FOR RESTAURANTS SEPTEMBER 21, 2016 information from other jurisdictions. It was noted at that time that removing the relationship between parking and seating capacities within downtown would in no way alter the current status of the PAD, or the number of spaces credited to each parcel. The Council voted unanimously to direct staff to present options to the Planning Commission regarding potential ordinance language to decouple parking and seats in the Code and a recommendation back to the Town Council. DISCUSSION: Per Council’s direction, staff prepared a report for the Planning Commission’s meeting of January 13, 2016 that identified several options (see Attachment 1). The Planning Commission considered the Council’s discussion and requested that staff provide more information as well as do additional outreach. The Commission voted unanimously to continue the item to a special meeting on March 16, 2016. On March 16, 2016, the Planning Commission conducted a special meeting and considered the additional requested information. Currently, Town Code Section 29.10.150 has the following language, including restrictions for downtown and other commercial zones: The parking requirement for various uses in the downtown are as follows: (1) Retail and commercial stores and shops. One (1) parking space for each three hundred (300) square feet of gross floor area. (2) Business and professional offices, banks, financial institutions, insurance companies, social service agencies and studios. One (1) parking space for each two hundred fifty (250) square feet of gross floor area. (3) Restaurant (no separate bar). One (1) parking space for each four (4) seats. (4) Restaurant (separate bar). One (1) parking space for each three (3) seats. (5) Bars, taverns and nightclubs. One (1) parking space for each three (3) seats. ... Outside downtown parking requirements. (9) Retail and commercial stores and shops. One (1) parking space for each two hundred thirty-five (235) square feet of gross floor area. (10) Business and professional offices, banks, financial institutions, insurance companies, social service agencies and studios. One (1) parking space for each two hundred thirty-five (235) square feet of gross floor area. DISCUSSION (cont’d): PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENTS TO SECTION 29.10.150 OF CHAPTER 29 OF THE LOS GATOS TOWN CODE TO REVISE THE REQUIRED PARKING REQUIREMENTS FOR RESTAURANTS SEPTEMBER 21, 2016 (15) Public eating establishments, taverns, and nightclubs. One (1) parking space for each three (3) seats in such public eating establishments, taverns or nightclubs. Staff suggested that the Planning Commission focus on two questions as they formulated their recommendation(s): 1. Should the Town Code be amended to decouple seating from parking requirements for restaurants? 2. If so, what metric should the Town use to regulate seating capacities in restaurants? a. Seats based on square footage; b. Seats based on Fire Code occupancy; or c. Some other metric. The Commission engaged in a lengthy and thoughtful discussion, then made the following recommendation: Motion made by Commissioner O’Donnell to recommend to the Town Council to decouple parking from seats, with the decoupling requiring approval of what would be substituted for the present measurement; and that 150 square feet was the factor discussed to determine how many parking spaces are required and 40 square feet was a factor discussed to determine the maximum number of seats allowed. After a second by Vice Chair Kane, Commissioner Hudes requested that the motion be amended to include: the seating not exceed fire code; and that the staff look at not only one seat per 40 square feet, but look at the other numbers that were discussed, including one seat per 22 square feet. The maker and seconder of the motion both accepted this amendment and the motion passed 3-2 with Chair Badame and Commissioner Erekson opposing. (Commissioners Burch and Hansen were absent.) The Planning Commission has forwarded its recommendation to the Council to adopt an ordinance to decouple seats and parking spaces. Its recommendation is to use square footage as the metric to calculate seating capacities. The Planning Commission asked that staff add more examples on the seating calculation chart presented to the Commission including one seat per 22 square feet. Staff has added the requested examples. (Attachment 5) Attachment 6 contains language to amend Section 29.10.150, amending the provisions of seating capacities based on parking spaces. This amendment decouples seats and parking requirements. Additional amendments may be required to other Sections of the Code if the Council elects a specific square footage calculation that is greater than maximum fire occupancy. Should this be the case, staff will prepare subsequent amendments to the appropriate Code Section for the Council. PAGE 4 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENTS TO SECTION 29.10.150 OF CHAPTER 29 OF THE LOS GATOS TOWN CODE TO REVISE THE REQUIRED PARKING REQUIREMENTS FOR RESTAURANTS SEPTEMBER 21, 2016 ALTERNATIVES: In addition to the Planning Commission recommendation, the Council has other alternatives: 1. Accept the Planning Commission’s recommendation to decouple seats and parking, and allow seating capacities to be governed by maximum fire code occupancy Town-wide. During the Council discussion on December 15, 2015, some Council members expressed their support of regulating seats based on maximum fire occupancy as this model provides the opportunity for businesses to remain flexible with seating areas to maximize their customer experience and complement their type of business, as the Fire Department already regularly inspects and permits occupancy levels that provide a safe environment. For the majority of the restaurants in Town, making a change to maximum fire occupancy would only allow a few additional seats, and would not create a notable change. This is especially true in downtown where properties have purchased additional parking spaces through the former Parking Assessment District, or have shared parking agreements in place. Many restaurants may already be unknowingly above their Conditional Use Permit seat limit but well within the occupancy for health and fire safety. As each business operates differently and targets their own market, not all restaurants can deliver their business model at maximum fire occupancy, and would not add any additional seats. In addition, the Town’s Outdoor Seating Policy allows for seats to be placed outside in compliance with the Americans with Disability Act and with proper permit approval, ultimately offering more space for seat placement. The Town has had one restaurant apply for, receive approval, and begin fully operating a new outdoor dining space under the new Outdoor Seating Policy. As the dynamic market continues to change and more people purchase retail goods online, the desire to eat out and meet at a merchant location where food or beverage options are offered has increased significantly. While in person retail shopping continues to decline, gaps in the market place are filled with restaurant and other service based business patrons, keeping overall visitors to an area more or less steady. This alternative would be the easiest to implement and monitor because seating capacities would be governed the fire code Town wide. This could be accomplished through the attached ordinance amendment. This would not change the number of required parking spaces based on square footage, or any Parking Assessment District credits. ALTERNATIVES (cont’d): PAGE 5 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENTS TO SECTION 29.10.150 OF CHAPTER 29 OF THE LOS GATOS TOWN CODE TO REVISE THE REQUIRED PARKING REQUIREMENTS FOR RESTAURANTS SEPTEMBER 21, 2016 2. Accept the Planning Commission’s recommendation to decouple seats and parking, and allow seating capacities to be governed by maximum fire code occupancy or another square footage ratio within the Downtown, C-2 zone only. The idea of separating the requirements for downtown was discussed at the Planning Commission, although no specific guidance was included in the motion. Given that there is a pool of shared parking in this commercial district, patrons often visit more than one merchant location while only parking in one space which would lend itself to supporting a calculation method for seating capacities other than parking space credits. This alternative would require adopting the attached ordinance language and amendments to the C2 zoning for restaurants. If the Council elects this alternative staff would draft an amendment within an appropriate Code section to reflect the provisions. 3. Amend the Code to remove the seating capacity language and enact a policy that regulates seats. If the Council would like the ability to limit seats in a manner that could more easily be revisited and modified over time, the Council could adopt the attached ordinance, and direct staff to draft a policy that reflects new regulations governing the maximum number of seats allowed in an establishment. If it is discovered that the impact of this change is not that which was expected, then policy could be modified by the Council to reflect a more appropriate square footage calculation or different application in specific commercial zones. 4. Do not accept the Planning Commission’s recommendation to decouple seats and parking, and make no change to the ordinance language as written in section 29.10.150. Staff is not recommending this option. Modifying the ordinance language to allow businesses greater flexibility in response to the dynamic market place for restaurants and retailers would provide the ability for business to operate more easily in Los Gatos and would provide a more regulated code compliance process for seating capacities based on annual inspections for health and safety from the Fire Department. COORDINATION: The report was coordinated between the Town Attorney’s and Town Manager’s Offices, and the Community Development Department. PAGE 6 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENTS TO SECTION 29.10.150 OF CHAPTER 29 OF THE LOS GATOS TOWN CODE TO REVISE THE REQUIRED PARKING REQUIREMENTS FOR RESTAURANTS SEPTEMBER 21, 2016 ENVIRONMENTAL ASSESSMENT: This is not a project defined under CEQA, and no further action is required. Attachments: 1. Staff report prepared for the January 13, 2016 Planning Commission 2. Verbatim minutes from the January 13, 2016 Planning Commission Meeting. 3. Staff report from the March 16, 2016 Planning Commission Meeting. 4. Verbatim minutes from the March 16, 2016 Planning Commission Meeting. 5. Expanded chart of seating calculations as requested by the Planning Commission at their March 16, 2016 meeting. 6. Draft ordinance to Section 29.10.150 with amendments reflecting the removal of seats allowed per parking de coupling of seats and parking.