Non-Conforming Formula Retailers Expanding or Relocating in the Central Business DistrictjOWN pF MEETING DATE: 1/09/2012
ITEM NO:
1p COUNCIL /AGENCY AGENDA REPORT
DATE: JANUARY 5, 2012
TO: MAYOR AND TOWN COUNCIL /CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
FROM: GREG LARSON, TOWN MANAGER/EXECUTIVE DIRECTOR
SUBJECT: POLICY DIRECTION ON PENDING UPDATES TO CONDITIONAL
USE PERMIT REQUIREMENTS IN THE CENTRAL BUSINESS
DISTRICT (C -2) FOR NON - CONFORMING FORMULA RETAILERS
EXPANDING OR RELOCATING IN THE CENTRAL BUSINESS
DISTRICT (C -2 ZONE)
RECOMMENDATION:
Affirm staff's interpretation that a formula retail CUP does not need to be appealed to the
Town Council in those limited instances where the proposed CUP is for an existing
nonconforming formula retailer expanding into a non - retail space.
BACKGROUND
On April 13, 2011, the Town Council directed staff to prepare an ordinance amendment
implementing Council review and final action on conditional use permits (CUP) in the
Central Business District (C -2 zone). Council agreed that until they review and take
action on the ordinance amendment, that any CUP in the Central Business District that is
approved by the Planning Commission, where the use relates to the conversion of any
retail space to non - retail use or the conversion of non - formula retail to formula retail,
shall be appealed without fee to the Town Council (Attachment 1). Staff is requesting an
interpretation on a scenario which involves a nonconforming formula retail business
expanding into a nonretail business and whether or not this change in use should
necessarily be forwarded to Town Council for final action.
PREPARED BY : �essica von Borck, Economic Vitality Manager
F endie R. Rooney, Director of Community Development
Reviewed by: (Assistant Town Manager /Deputy Director
Town Attonley /General Counsel Finance
Page 2
January 5, 2012
MAYOR AND TOWN COUNCIL /CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
SUBJECT: POLICY DIRECTION ON PENDING UPDATES TO CONDITIONAL USE
PERMIT REQUIREMENTS IN THE CENTRAL BUSINESS DISTRICT
(C -2) FOR NON - CONFORMING FORMULA RETAILERS EXPANDING
OR RELOCATING IN THE CENTRAL BUSINESS DISTRICT (C -2 ZONE).
DISCUSSION:
In drafting the required ordinance as discussed above, staff is requesting an interpretation
on a scenario which involves a nonconforming formula retail business expanding into a
non - retail business.
An example of this scenario would be an existing downtown business classified as non-
formula (less than seven stores) opening additional stores within the region such that the
business would now fall under the formula retail classification. As a result, the business
would be considered non - conforming since they would not have a CUP. If that business
wanted to expand into an adjoining non - retail business, they would be required to obtain
a CUP for their proposed expansion, as well as for their existing space.
Based on the Council action on April 13, 2011, it appears that if the Planning
Commission were to approve such an application for a CUP, the decision would not need
to be appealed to Council because a formula retailer would not be displacing an
independent retail space. In fact, it would be a positive change to the Central Business
District by providing more retail space which would meet various goals of the Town's
General Plan regarding commercial viability in the Downtown.
CONCLUSION:
Based on the discussion above, staff is recommending that Council's direction on April
13, 2011 be interpreted that in the case of a CUP to expand a formula retail business into
a nonretail business it shall not be forwarded to Town Council for final action. The
deciding body will continue to review any CUP formula retailer application based on the
following assessment pursuant to Town Code:
1. The proposed use of the property is in harmony with specific provisions or
objectives of the general plan in that it supports an active business community
that provides a wide variety of goods and services and a broad range of
employment opportunities;
2. The proposed use will not detract from the existing balance and diversity of
businesses in the commercial district in which the use is proposed to be located;
3. The proposed use would not create an over - concentration of similar types of
businesses, or
4. The proposed use will not detract from the existing land use mix and high urban
design standards including uses that promote continuous pedestrian circulation
and economic vitality.
If Council concurs with staff's interpretation, staff will incorporate the interpretation in
the draft ordinance and process the any CUP application under this interpretation.
Page 3
January 5, 2012
MAYOR AND TOWN COUNCIL /CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
SUBJECT: POLICY DIRECTION ON PENDING UPDATES TO CONDITIONAL USE
PERMIT REQUIREMENTS IN THE CENTRAL BUSINESS DISTRICT
(C -2) FOR NON - CONFORMING FORMULA RETAILERS EXPANDING
OR RELOCATING IN THE CENTRAL BUSINESS DISTRICT (C -2 ZONE).
Additionally, staff will consider options for encouraging growth of small businesses in
the C -2 zone, addressing how a non - formula retailer's growth to a formula retailer will be
processed. Staff will incorporate recommendations in the CUP ordinance revisions to be
reviewed at a later date by Town Council.
ENVIRONMENTAL ASSESSMENT
Is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT
There is no fiscal impact associated with the provision of additional policy direction
regarding ordinance amendments. However, staff's policy interpretation would be a
positive fiscal impact in that tax dollars would be generated with a new retail use as
opposed to maintaining a non - retail use.
Attachments:
1. April 13, 2011 Town Council Report— Downtown Conditional Use Pen-nits
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COUNCIL AGENDA REPORT
�g GAtO
DATE: April 13, 2011
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
MEETING DATE: 04113/11
ITEM NO: 9
SUBJECT: COUNCIL REVIEW OF DOWNTOWN CONDITIONAL USE PERMITS AND USE
CONVERSIONS
RECOMMENDATION
Direct staff to:
1. Prepare an ordinance amendment implementing Council review and final action on any
conditional use permits in the Central Business District (C -2 zoning);
2. Until Council reviews and takes action on the above ordinance amendment, appeal, without fee,
the approval of any conditional use permits in the Central Business District (C -2 zoning) related
to the conversion of any retail space to non - retail use or for the conversion of non - formula retail
to formula retail; and
3. Report annually on the current distribution of Downtown private property uses such as retail,
restaurant, personal services businesses, and the types of retail (i.e., foi - mula 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
CAUsun%pjacaWDesktop \4.18.11 TC Repott.Downtown CUP Convenions -doe
Reviewed by: MAssistant Town Manager
Clerk Administrator Finance
Attorney
ty Development
Attachment 1
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: COUNCIL REVIEW OF DOWNTOWN CONDITIONAL USE PERMITS AND USE
CONVERSIONS
April 13, 2011
The Town of Los Gatos has existing policy direction regarding the conversion of Downtovtni 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 Cotmcil actions and
directions.
ANALYSIS:
Currently, only alcohol beverage service conditional use pennits 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 (21 S Santa Cruz Ave.), previous formula retail site
Lululemon USA (326 Village Lane), appointment -only retailer
In each case the PIaiming 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 Planning
Commission regarding expansion of Guardino's restaurant, the Commission requested guidance from
the Council on the policy related to conversion of retail space to restaurant use.
Consequently, to improve consistency with Council review of all Downtown use permits and property
conversions, staff is recommending that any conditional use permits in the Central Business District
affirmed by the Planning Commission be brought to the Town Council for review and final action.
On an ongoing basis this procedural change can be implemented through an ordinance change which
will take two to four months to draft and adopt. In the meantime, staff is requesting direction to appeal
to the Town Council any conditional use permits approved by the Planning Commission that entail a
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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 Commission and would be scheduled for the next available Council meeting, upon proper
noticing which can require a minimum of 3 weeks, to minimize the impact and potential delays for the
permit applicant.
In addition, to aid the Planning Commission and Town Council in the future review of Downtown
conditional use permits and conversions, staff could annually prepare an updated 'inventory of current
permitted uses by type (e.g., restaurants, personal services businesses, non - formula retail, formula retail,
etc.). If approved, staff plans to have the first such inventory completed at the same time as the
implementing ordinance described above is brought back to Council for review and approval. The
resulting database would provide additional ongoing benefits for our Economic Vitality efforts.
FISCAL IMPACT
Preparation of the proposed ordinance, potential appeals aid the first annual inventory world entail the
unplanned use of existing staff time and direct costs of up to $10,000. Other projects being undertaken
by the Community Development Department and the Town Attorney's Office may be delayed to
accommodate the preparation of this ordinance. The recommendation would waive the fee otherwise
paid for an appeal given the minimal additional staff work required to forward the Planning Commission
packet for appealed items to the Town Council. In addition, the requirement for verbatim minutes
would also be waived; however, the Town Council would be able to view the public hearing using the
Town's website. Affected permit applicants would face an additional one to two month delay in the
final review and action on their application, likely delaying their openings an equivalent period of time,
if approved.
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