2.3 Desk ItemCOUNCIL AGENDA REPORT
DATE: FEBRUARY 2, 2016
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
MEETING DATE: 02/02/16
ITEM NO: 2.3
DESK ITEM
SUBJECT: TOWN CODE AMENDMENT A-15-004. FORMULA RETAIL DEFINITION.
INTRODUCE AN ORDINANCE ADOPTING AMENDMENTS TO SECTION
29.10.020 OF CHAPTER 29 (ZONING REGULATIONS - DEFINITIONS) OF
THE TOWN CODE TO REVISE THE DEFINITION OF A FORMULA RETAIL
BUSINESS.
REMARKS:
After the initial staff report was distributed, staff received inquiries from two Councilmembers
regarding the definition for a Formula Retail business. The Council inquiries have been identified
below, followed by staff s response.
`.. Question 1: With all of these economic vitality issues, the common theme from staff is that it is a
dynamic landscape and flexibility is paramount to adapting to the changing retail culture. Is this
another area where formula retail definitions should be taken out of Town Code so that we can
change the details more quickly and easily? Can we write something in the Town Code that
speaks to our overall economic goals for the Town then refer to a set of resolutions that can
capture these definitions for a defined period of time? Similar to our rolling Capital Improvement
Program, can we do something for the Town's economics that can be adapted on a regular basis
dependent on what is actually happening?
Response: The retail and restaurant topics that the Town Council has been considering since
August of 2015 all overlap and together create the landscape that the Town offers for any business
looking to operate here. With this in mind, and with the Council including a Strategic Priority to
draft an Economic Vitality Strategic Plan, staff is preparing to bring a report forward to the
Council for discussion on the specific outcomes for that will result in commercial activities for the
Town's residents and businesses. During this discussion, staff would like to obtain specific
PREPARED BY: MONICA RENN
Economic Vitality Manager
Reviewed by: Assistant Town Manager Town Attorney Finance
CAUse+ Wombardo\DmktopMmk Item 2.3 - Formula Retail.dm
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MAYOR AND TOWN COUNCIL
SUBJECT: FORMULA RETAIL ORDINANCE AMENDMENT
FEBRUARY 2, 2016
REMARKS (cont'd):
direction from Council that may be used to guide further development of a Town Economic
Vitality Strategic Plan.
The Town Council could opt to amend Town Code Section 29.10.020 to omit the Formula Retail
definition completely which would then only classify businesses by their use (i.e., retail,
restaurant, etc.) and would not consider the number of locations.
Alternatively, the Council could opt to amend the definition and modify the planning approval
process for these businesses. The current approval process involves a Conditional Use Permit
application that is decided upon by the Planning Commission or Town Council. Options for
modifications to the review process include: (1) the Town's Development Review Committee
(DRC) becoming the deciding body, or (2) allowing formula retail to be allowed by right in certain
commercial zones without a public hearing, as has been approved for the North 40 specific plan,
and in other commercial zones for formula retailers occupying spaces smaller than 6,000 square
feet.
If the second option is adopted by the Council, the Council could then adopt a policy to restrict or
limit formula retail businesses to a specific ratio in a specific zone depending on the environment
of commercial businesses. The Policy would need to identify if the ratio is firm and no
exceedances would be allowed, or if a proposed formula retail would result in the ratio being
exceeded, then the business would need to apply for a Conditional Use Permit with Planning
Commission as the deciding body.
The Town Council made a similar decision a few years ago when they adopted a resolution that
temporarily allowed businesses in the Downtown C-2 zone to display sidewalk and A -frame
signage to increase marketing opportunities during the height of the economic downturn.
Question 2: Planning Commission was united in that the staff recommendation was a small tweak
Would doubling the number from seven to fifteen stores (in the U.S.) still be a small tweak or
would staff be able to see some changes?
Response: It is the opinion of staff that if the number of existing locations allowed was increased
from seven to fifteen in the U.S., we would not see significant growth in the number businesses
that would no longer be considered a formula retail business. Increasing the store number may
provide a greater opportunity for a very small number of business entities.
Question 3: Regardless of the number of stores the Council decides on Tuesday, with a CUP still
being required, can DRC approve CUPS? Would the Town want a public hearing made available
to the public? Ifso, what is the least expensive and "easiest" process?
Response: The Council could amend the Town Code to allow a formula retail business CUP to be
considered at the DRC level. This would make the process cheaper and faster for businesses.
Since the adoption of the formula retail regulations, only one retailer has been denied.
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MAYOR AND TOWN COUNCIL
SUBJECT: FORMULA RETAIL ORDINANCE AMENDMENT
FEBRUARY 2, 2016
REMARKS (cont'd):
Question 4: Restaurant was added to the definition. What is the implication of this? If a
restaurant is determined to be non formula do they not need a CUP? Are we treating a restaurant
application any different whether it is determined to be formula or not?
Response: All restaurants currently require CUPS. The level of consideration and the deciding
body is determined by the type of restaurant, its proposed location, and the availability of alcohol.
Where we may experience a change is a situation where a formula restaurant would like to take
over an existing CUP. For example, if a restaurant or cafe in Downtown left its location, currently
any restaurant could take over that space with the understanding that the new business must adhere
to the approved CUP since it runs with the land. If this Code amendment is adopted as proposed,
then that new restaurant could not be a large national brand or formula restaurant without
modifying their CUP.
ON