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Prepare an ordinance amendment implementing Council review and final action on any conditional use permits in the Central Business District (C -2 zoning); 2. Until Council reviews and takes action on the above ordinance amendment, appeal, without fee, the approval of any conditional use permits in the Central Business District (C -2 zoning) related to the conversion of any retail space to non - retail use or for the conversion of non - formula retail to formula retail; and 3. Report annually on the current distribution of Downtown private property uses such as retail, restaurant, personal services businesses, and the types of retail (i.e., formula vs. non - formula). BACKGROUND: At the last Town Council meeting on April 4"', Mayor Joe Pirzynski and Vice Mayor Steve Rice requested scheduling a future Council discussion and action regarding the review of Downtown conditional use permits and use conversions. This agenda item fulfills that request. PREPARED BY : GREG LARSON� Town Manager C: \Users\pjacobs\Desktop \4.18.11 TC Repaml)u stow CUP Convenions.doc Reviewed by: Assistant Town Manager Clerk Administrator Finance own Attorney nunity Development ATTACHMENT4 PAGE 2 MAYOR AND TOWN COL71CIL SUBJECT: COUI\TCIL REVIE \W OF DONTT'NTO`W CONTDITIONAL USE PERMITS AND USE WOM"T MMUMM April 13, 2011 The Town of Los Gatos has existing policy direction regarding the conversion of Downtown properties from: • Retail to restaurant • Retail to personal services • Non - formula retail to formula retail These policies are embodied in the Town Code, Council resolutions, and prior Council actions and directions. ANALYSIS: Currently, only alcohol beverage service conditional use permits are required to go before the Town Council for final action upon the recommendation of the Planning Commission. Other conditional use permits can be approved by the Planning Commission unless appealed to the Town Council by any member of the public. Several such permits have recently been appealed to the Town Council. In the past two years, four conditional use permits for formula retail in the Downtown have been approved by the Planning Commission without subsequent Council review and action. The four formula retailers are: Restoration Hardware (26 Santa Cruz Ave.), site of former Smith & Hawkens Francesca's Collection (29 University Ave.), first location in northern California Title Nine Sports (218 Santa Cruz Ave.), previous formula retail site Lululemon USA (326 Village Lane), appointment -only retailer In each case the Planning Commission scrutinized the application and based its decisions on location, parking, retail differentiation and market saturation. \While the process has worked well recently, the increasing turnover of retail properties Downtown, recent conversion applications, and the continuing economic recession have led to increased community. Council and staff discussion regarding maintaining and strengthening the balance of uses and retailers that make Downtown unique and vital. Further, at the April 13 public hearing before the PlaTming Commission regarding expansion of Guardino's restaurant, the Commission requested guidance from the Council on the policy related to conversion of retail space to restaurant use. Consequently, to improve consistency with Council review of all Downtown use permits and property conversions, staff is recommending that any conditional use permits in the Central Business District affirmed by the Planning Commission be brought to the Town Council for review and final action. On an ongoing basis this procedural change can be implemented through an ordinance change which will take two to four months to draft and adopt. In the meantime, staff is requesting direction to appeal to the Town Council any conditional use permits approved by the Planning Commission that entail a PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: COUNCIL REVIEW OF DOWNTOWN CONDITIONAL USE PERMITS AND USE CONVERSIONS April 13, 2011 conversion in the property use as described above. The more limited focus for the interim appeals on conversions only is to minimize the impact on pending permit applications that do not involve conversions from the most recent use of the property. These appeals would also apply to permit applications for conversions that staff is recommending for approval. However, the appeal review packet for Council would simply consist of a cover memo transmitting the materials provided to the Planning Comrission and would be scheduled for the next available Council meeting, upon proper noticing which can require a minimum of 3 weeks, to minimize the impact and potential delays for the permit applicant. In addition, to aid the Planning Commission and Town Council in the future review of Downtown conditional use permits and conversions, staff could annually prepare an updated inventory of current permitted uses by type (e.g., restaurants, personal services businesses, non - formula retail, formula retail, etc.). If approved, staff plans to have the first such inventory completed at the same time as the implementing ordinance described above is brought back to Council for review and approval. The resulting database would provide additional ongoing benefits for our Economic Vitality efforts. FISCAL IMPACT Preparation of the proposed ordinance, potential appeals and the first annual inventory would entail the unplanned use of existing staff time and direct costs of up to $10,000. Other projects being undertaken by the Community Development Department and the Town Attorney's Office may be delayed to accommodate the preparation of this ordinance. The recominendation would waive the fee otherwise paid for an appeal given the minimal additional staff work required to forward the Planning Commission packet for appealed items to the Town Council. In addition, the requirement for verbatim minutes would also be waived; however, the Town Council would be able to view the public hearing using the Town's website. Affected permit applicants would face an additional one to two month delay in the final review and action on their application, likely delaying their openings an equivalent period of time, if approved. THIS PAGE INTENTIONALLY LEFT BLANK EXCERPT TOWN OF LOS GATOS PLANNING COMMISSION MEETING ACTION MINUTES TOWN COUNCIL CHAMBERS 110 E. MAIN STREET WEDNESDAY, APRIL 27, 2011 Chair Marico Sayoc called the meeting to order at 7:00 p.m. ROLL CALL Present: Chair Marico Sayoc, Vice Chair Marcia Jensen, Commissioner John Bourgeois, Commissioner Charles Erekson, Commissioner Thomas O'Donnell, and Commissioner Joanne Talesfore. Absent: Commissioner Jane Ogle Others: Town Attorney Judith Propp, Planning Manager Sandy Baily, Contract Planner Heather Bradley, Associate Planner Jennifer Savage, Assistant Parks and Public Works Director Kevin Rohani, Associate Civil Engineer John Gaylord, Assistant Civil Engineer Trang Tu- Nguyen, and Recording Secretary Linda Rowlett. PLEDGE OF ALLEGIANCE Led by Commissioner John Bourgeois. Chair Marico Sayoc noted that the agenda items will be heard out of order. Item #3 will be heard first, followed by Items #1, 92, #4 and #5. APPROVAL OF MINUTES OF APRIL 13, 2011 Commissioner John Bourgeois commented that he was absent at the meeting of April 13, 2011, but he has reviewed the minutes and will be participating in the vote. Motion by Commissioner John Bourgeois and seconded by Commissioner Charles Erekson to approve meeting minutes of April 13, 2011. Motion carried 6 -0 with Commissioner Jane Ogle absent. Planning Commission Minutes Page 1 April 27, 2011 ATTACHMENT 5 • Commented that the crossing guards are hired by the school district. • Commented that the University Avenue and Highway 9 improvements will use Community Benefit funds that were designated for the intersection improvements that have been on hold from a previous project. Chair Marico Sayoc noted that there were no requests for public testimony, so she closed the public input portion of the hearing and returned to the Commission for deliberations. Motion by Commissioner Joanne Talesfore and seconded by Commissioner John Bourgeois to recommend approval of the Five -Year Capital Improvement Program Projects for Fiscal Year July 1, 2011 to June 30, 2016, and forward to the Town Council for final consideration. The CIP is consistent with the General Plan, Hillside Specific Plan and Central Los Gatos Redevelopment Plan. Motion carried 6 -0 with Commissioner Jane Ogle absent. 4. Report from Director of Community Development (Heard out of order.) a. Memo —Town Council Policy Direction on C -2 Zone District CUPS for Retail Space Conversions Planning Manager Sandy Baily commented that Town Council has adopted a procedural change for it to review all Conditional Use Permits (CUPS) for conversion of retail space to formula retail or another use by the Planning Commission. Vice Chair Marcia Jensen asked that this item be placed on the agenda for the retreat with Town Council. She does not understand why the Planning Commission is doing anything if everything will be appealed by the Town Council. Planning Manager Sandy Baily commented that she would pass on the request to add this to the retreat agenda. Commissioner John Bourgeois asked what triggered this motion to be brought up at Town Council. Planning Manager Sandy Baily commented that it was due to the increasing changes in the downtown with some large stores leaving and the Council's concerns of what uses would go into those places. Chair Marico Sayoc referenced the four examples in the memo and asked if these were examples that the Council was unhappy with the decisions of the Commission. Planning Manager Sandy Baily commented that the Council was not unhappy with those decisions, it was merely pointing out that there were only four recent conversions. Planning Commission Minutes Page 18 April 27, 2011 Vice Chair Marcia Jensen asked if Apple that was approved by Council was formula retail. Planning Manager Sandy Baily confirmed that Apple was formula retail. Commissioner Thomas O'Donnell asked if Council was hearing the appeal of Gardino's when this memo adoption came up. Planning Manager Sandy Baily commented that Gardino's will not be heard until next week. That item was not related to this action. Commissioner Joanne Talesfore commented that she believed that the Town had an inventory of the uses and she does not understand the need for incurring the costs for another inventory. Planning Manager Sandy Baily commented that there is an inventory but she will look into it and get back with more information. Commissioner Charles Erekson asked what direction Commission should be taking in the interim based on the action of the Council. Planning Manager Sandy Baily commented that the Commission should proceed as it has been doing. There has been no direction for staff or the Commission to make any changes. Town Attorney Judith Propp commented that a number of CUPs have been appealed and are coming before Council and it gives them the ability to see what is happening in the downtown core until updated policies are in place. This gives an additional opportunity for community input, public process, and the Council to look at these issues for a short period of time. Commissioner Charles Erekson commented that he has the greatest respect for Ms. Baily but considers her response to Council's action a bit naive. He interprets Ms. Propp's response to mean that Council wants to make the decision, so perhaps the Commission should send everything to the Council until the Commission gets direction. Vice Chair Marcia Jensen commented that she agrees with Commissioner Erekson and does not see why the Commission would make any decisions. Since policies are under review, and all actions taken by the Commission will be automatically appealed, it appears that the Commission is wasting its time. Why not have a moratorium on applications until a policy is developed. Commissioner Joanne Talesfore seconds Vice Chair Jensen's comments. Planning Commission Minutes Page 19 April 27, 2011 Commissioner Thomas O'Donnell commented that Council will hear Gardino's expansion proposal next week and it clearly violates the Town's policy. Town Council will make a decision based on its own policy or reject its own policy. He does not have a problem making recommendations, but this is very confusing. Vice Chair Marcia Jensen commented that if the Council really wants to remove discretion from the Planning Commission by establishing an automatic Town appeal, then she has real difficulty understanding why there is a middle range. She has more difficulty in that they have included formula retail when the Commission has never asked for guidance about formula retail. Planning Manager Sandy Baily clarified that the four CUPS referenced in the memo were within the last two years, so Apple and I Crew were beyond that. Commissioner Joanne Talesfore commented that when the Commission asks for direction from Council, it is after a CUP has been reviewed for a recommendation to Council. She is really disappointed by this action. Vice Chair Marcia Jensen commented that if the Commission is supposed to follow the policies, it would be clearer if the action was supported by the Council. Typically the Council is more liberal than the Commission. She is at a loss. Chair Marico Sayoc asked what happens next. Planning Manager Sandy Baily commented that this is an informational item and staff will be following up. Due to workload, this does not have as high a priority as the North Forty and everything else that is going on, such as the Alcoholic Beverage Policy. She anticipates that staff will come back to the Commission with an ordinance in late fall. She will discuss the Commission's comments with the Community Development Director and Town Manager. b. Planning Manager Sandy Baily commented that the Union Avenue project was not appealed. 5. Commission Matters a. Chair Marico Sayoc reminded the Commissioners that the May 11 meeting begins at 6:00 p.m. and that Vice Chair Jensen will be starting the meeting because she will be arriving late. ADJOURNMENT The meeting was adjourned at 11:19 p.m. Planning Commission Minutes Page 20 April 27, 2011 TOWN OF LOS GATOS PLANNING COMMISSION Wednesday, April 27, 2011 Maric 'Kaif APPROVED AS TO FORM AND ATTEST: C y L. Baily g Manager Planning Commission Minutes Page 21 April 27, 2011 THIS PAGE INTENTIONALLYLEFT BLANK