2.3 Staff ReportW3
DATE:
TO:
FROM:
SUBJECT:
MEETING DATE: 02/02/16
ITEM NO: 2.3
COUNCIL AGENDA REPORT
JANUARY 19, 2016
MAYOR AND TOWN COUNCIL
LAUREL PREVETTI, TOWN MANAGER
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.
RECOMMENDATION:
After opening and closing the public hearing, it is recommended that the Town Council:
1. Move to waive the reading of the Ordinance and ask the Clerk Administrator to read the title of
the proposed ordinance; and
2. Move to introduce the Ordinance of the Town of Los Gatos effecting the amendments of Town
Code Amendment A-15-004 (Attachment 4) and make the required findings that the
amendments are consistent with the General Plan and its Elements and that the amendments
are exempt from the California Environmental Quality Act [Section 15061 (b)(3)].
BACKGROUND:
In September 2015 at the request of the Town Council Policy Committee, the Town Council began
discussing a variety of issues that relate to businesses in Los Gatos. One of the issues was the
Town's regulation of formula retail businesses. The Town defines formula retail businesses in
Chapter 29 of the Town Code (Section 29.10.020) as:
Formula retail business means a retail business which, along with seven (7) or more business
locations, is required by contractual or other arrangement to maintain any of the following:
standardized merchandise, services decor, uniforms, architecture, colors, signs or other similar
features. (29.10.020)
Staff benchmarked other jurisdictions and provided a recommendation for definition amendments
for the Town Council to consider including the number and location of existing
PREPARED BY: MONICA RENN
Economic Vitality Manager
191
Reviewed by: Assistant Town Manager Town Attorney Finance
CAUsers\Slombardo\Desktop\Staff Report - Formula Retail.Doc
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MAYOR AND TOWN COUNCIL
SUBJECT: FORMULA RETAIL DEFINITION
FEBRUARY 2, 2016
BACKGROUND (cont'd):
business locations as well as qualifying factors to more easily identify formula retailers. At the
October 6, 2015 meeting, the Council continued their discussion of formula retail businesses, and
recommended that the Planning Commission consider and make a recommendation on the
definition amendment presented by staff. This draft was discussed by the Planning Commission at
their January 13, 2016 meeting. The verbatim minutes are attached to this report (Attachment 1).
DISCUSSION:
The proposed definition is:
Formula retail business means a type of retail sales establishment or restaurant which, along
with seven or more other retail sales establishments or restaurants located in the United
States, maintains two or more of the following features: a standardized array of merchandise or
menu, a standardized facade, a standardized decor and color scheme, standardized uniform
apparel, standardized signage, a standardized layout, a trademark, or a servicemark.
1. Standardized means identical end or substantially the same.
2. Array of merchandise or menu means 50% or more of in -stock merchandise or menu
items.
3. Fnade means the face or front of a building, including awnings, looking onto a street ' 1
or an open space.
4. Decor means the style of interior finishes, which may include but is not limited to, style
of furniture, wallcoverings or permanent fixtures.
5. Color Scheme means the selection of colors used throughout, such as on the
furnishings, permanent fixtures, and wallcoverings, or as used on the facade.
6. Uniform Apparel means the standardized items of clothing including but not limited to
standardized aprons, pants, shirts, smocks or dresses, hat, and pins (other than name
tags) as well as standardized colors of clothing.
7. Signage means a business sign pursuant to Section 29.10.135 of the Town Code.
8. Trademark means a word, phrase, symbol or design, or a combination of words,
phrases, symbols or designs that identifies and distinguishes the source of the goods
from one party from those of others.
9. Servicemark means a word, phrase, symbol or design, or a combination of words,
phrases, symbols or designs that identifies and distinguishes the source of a service
from one party from those of others.
PLANNING COMMISSION RECOMMENDATION:
During the January 13, 2016 meeting, the Planning Commission spent time discussing the
proposed amendments. In a 4-3 vote, (Commissioners Erekson, Hudes and O'Donnell opposing)
the Commission moved to recommend adoption of the proposed amendments with the two
modifications shown above in bold type. For the three Commissioners who were opposed to the
32
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MAYOR AND TOWN COUNCIL
SUBJECT: FORMULA RETAIL DEFINITION
FEBRUARY 2, 2016
`-' PLANNING COMMISSION RECOMMENDATION(cont'd):
motion, they expressed concern about using the United States as the qualifying boundaries for
existing locations, rather than anywhere (i.e. globally), as the current definition reads. In addition,
several of the Commissioners expressed interest in the Council establishing a ratio of independent
restaurants and retailers versus formula restaurants and retailers that may exist within the Town
limits at any one time. A specific ratio was not included in the final motion.
CONCLUSION:
It is the recommended that the Town Council accept the Planning Commission's recommendation
and move to introduce the Ordinance, by title only, amending Section 29.10.020 of the Los Gatos
Town Code (Attachment 4).
ALTERNATIVES:
Alternatively, the Council may:
1. Reject the Planning Commission's recommendation and not modify the definition
of formula retail; or
2. Accept the Planning Commission's recommendation with modifications; or
3. Continue this item to a date certain with specific direction to staff; or
�. 4. Refer the item back to the Planning Commission with specific direction.
COORDINATION:
This report was coordinated with the Town Manager's Office, Town Attorney's Office, and
Community Development Department.
ENVIRONMENTAL ASSESSMENT:
The project is exempt from environmental review pursuant to CEQA Guidelines under the General
Rule [Section 15061 (b) (3)] because it can be seen with certainty that the proposed Town Code
amendments will have no significant negative effect on the environment.
Attachments:
1. Verbatim minutes from the January 13, 2016 Planning Commission Meeting
2. Planning Commission Staff Report prepared for the January 13, 2016 meeting, including
Exhibit 1
3. Letter from McCarthy Ranch presented to the Planning Commissioners at the January 13, 2016
meeting.
4. Draft Ordinance
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A P P E A R A N C E S:
Los Gatos Planning Kendra Burch, Chair
Commissioners: Mary Badame, Vice Chair
Charles Erekson
Melanie Hanssen
Matthew Hudes
D. Michael Kane
Tom O'Donneil
Town Manager: Laurel Prevetti
Interim Community Development Joel Paulson
Director:
Town Attorney: Robert Schultz
Transcribed by:
Vicki L. Blandin
(510) 337-1558
J4
LOS GATOS PLANNING COMMISSION 1/13/2016 ATTACHMENT 1
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P R O C E E D I N G S:
CHAIR BURCH: We are now going to open the public
portion of the hearing this evening and we are going to
consider Item 4, Town Code Amendment Application A-15-004,
which is considering amendments to Section 29.10.020 of
Chapter 29, Zoning Regulations. This is regarding the
definition of formula retail business.
We are being asked, my fellow Planning
Commissioners, to forward a recommendation or comments or
whatever to Town Council this evening.
Ms. Renn, I understand that you're going to be
giving us a Staff Report.
MONICA RENN: Yes, good evening. I'm Monica Renn;
I'm the economic vitality manager.
Starting in September the Council began a
conversation about the provisions that we have for
businesses to be permitted in town, and from that
conversation several items were identified that they wanted
to take a look at. Formula retail was one of those items.
On October 6`h the Council considered, one, do
they still think that formula retail restrictions are
appropriate? We heard from both sides on that, but they did
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P R O C E E D I N G S:
CHAIR BURCH: We are now going to open the public
portion of the hearing this evening and we are going to
consider Item 4, Town Code Amendment Application A-15-004,
which is considering amendments to Section 29.10.020 of
Chapter 29, Zoning Regulations. This is regarding the
definition of formula retail business.
We are being asked, my fellow Planning
Commissioners, to forward a recommendation or comments or
whatever to Town Council this evening.
Ms. Renn, I understand that you're going to be
giving us a Staff Report.
MONICA RENN: Yes, good evening. I'm Monica Renn;
I'm the economic vitality manager.
Starting in September the Council began a
conversation about the provisions that we have for
businesses to be permitted in town, and from that
conversation several items were identified that they wanted
to take a look at. Formula retail was one of those items.
On October 6`h the Council considered, one, do
they still think that formula retail restrictions are
appropriate? We heard from both sides on that, but they did
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come to the conclusion at that point that they did think it
was appropriate, and Staff recommended that if we do
(continue with the formula retail provisions that we're much
clearer in what criteria, and the criteria that makes it a
formula versus an independent retailer.
Currently we define somebody with seven or more
locations anywhere as a formula retail store, so if you
have seven existing locations and you want to go downtown,
you would require a Conditional Use Permit. If you want to
go outside of downtown and you're larger than 6,000 square
feet, you would also require a Conditional Use Permit.
The changes that are before you tonight for your
discussion and consideration and then recommendation back
to the Council would be one, that we've changed that to
look at just the United States. There have been two
instances in the recent past where we've had a business
that wanted to open their flagship U.S. location in Los
Gatos, but because it was a franchise or they didn't have
the money, the CUP basically scared them away.
The second was that we've added criteria that's
pretty standard language used in several other
jurisdictions that allows us to say what the criteria that
we're looking for is. It's been pretty ambiguous in the
past and we've had to just tell someone, "Hey, we looked on
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your website. Looks like you have seven," or whatever it
is, so this just gives us the ability to provide a clearer
explanation to the applicant.
That concludes my presentation. If you have
questions, I'm here for you.
CHAIR BURCH: Does anyone have any questions of
Staff? Commissioner Hanssen, then Commissioner Erekson.
COMMITTEE MEMBER HANSSEN: I went back and looked
at the Council discussion. I had no problem with the
definition and the proposed changes to the definition, but
this is clearly part of a bigger picture where a lot of
things are in play and the definition is just one thing. I
wondered just from looking at it if there was any
discussion about the actual number of locations being
different for a formula retail?
What I'm bringing up is—and if it didn't come up
for Council or it isn't an issue, then so be it—it seemed
to me that there's a huge, huge difference between a
company that has seven locations in the United States, or
even in the state of California per se—for instance, Super
Duper Burgers who is not downtown but over at Los Gatos
Boulevard—and Apple, or Starbucks or something that has
thousands of locations. So I just wondered if the number
had been discussed, is it the right number?
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MONICA RENN: Thank you for the question. One
thing that I failed to mention in my intro is that
restaurants were also added to the definition. Thank you
for that, it jogged my memory, but the Council did have
quite a bit of discussion about the number. Seven seems to
be the most restrictive number of any of the jurisdictions
that we looked at. Some were a little bit harder to
enforce. One jurisdiction locally said you couldn't have
more than nine in the Bay Area, which then you would have
to define Bay Area. Lots of places will say more like 13,
15, and 20 in the United States.
Staff had asked Council if they wanted to make
that change, to go higher or lower. They felt that seven
was appropriate. We don't have any historical data on where
that seven even came from when the original formula retail
definition was put into place.
So there definitely was that discussion, and
nobody that I worked with through the benchmarking, and
nobody in the room at the time, really had any magic number
that they felt comfortable with outside of seven.
COMMITTEE MEMBER HANSSEN: So the follow up
question is does the Council intend to -it seemed that the
answer is yes -put in some kind of metric for how many
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formula retail owners we should have relative to other
kinds of independent retailers downtown?
MONICA RENN: I don't believe so. That was not
discussed. There was kind of this thought out there at some
point that we had an 80/20 rule, and the reality is that
80/20 rule was never actually established, it was just kind
of this idea that had been talked about. There's never been
a limit to the number of formula retailers you can have
versus the number of independent in our downtown or
anywhere, and it don't think that there is the intention to
that.
COMMITTEE MEMBER HANSSEN: So then the actual
definition of the formula retailer doesn't mean all that
much, because all we're doing is flagging them as a formula
retailer and then it comes to the deciding body to say it's
too much or not? We've seen a few of these, and then it's
like you know what the numbers are or how many of them
there are, but since there's no guideline on how many there
should be, it's like all you can do is say that they are a
formula retailer.
MONICA RENN: You're correct, and I think
actually something that you all could consider tonight as a
Commission is a) Would you recommend that we keep the
formula retail back to the Council? or b) If we do, would
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you recommend some sort of magic balance or some sort of
limits on that? That's certainly something that you could
add to your recommendation to them.
COMMITTEE MEMBER HANSSEN: That answers my
questions, thank you.
CHAIR BURCH: Commissioner Erekson.
COMMITTEE MEMBER EREKSON: Thank you for the
great work on this, as well as another item we're going to
talk about tonight.
I have a question about the addition of the
United States. I understand your answer to it, but I guess
I always assumed that a primary reason for having this
definition, and then having some steps to go through if you
had a formula retail, was in part to protect the backside,
to then ensure that we had, not always locally,
independently owned, which have a different nature and a
different flavor that a "formula retail" business.
If that's a primary reason for it, it's not clear
Ito me why it matters if the seven were in Canada as opposed
to in the United States. And don't we leave ourselves open
to let's say that the seven exist internationally, if we
then put a limitation in the United States that we become
the first, and a month later there's one in San Mateo, and
two months later there's one in you name the next place,
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and seven months later it's effectively a formula retail,
because we just happened to be the first place in the
United States that did it?
This is a two-part question. Why does it matter
that they're outside of the United States if it's the
flavor of a formula retail? And then do we leave ourselves
vulnerable to have let someone appear not to be a formula
retail when really we just happen to be the first place in
the United States where they opened a shop?
MONICA RENN: I have I guess two thoughts for
that.
One is I think part of the intent of the Formula
Retail Policy was really to add interesting different types
of shops in a certain area, so that you aren't a Valley
Fair or Santana Row or something that we're used to seeing
the same stores over and over. Hypothetically speaking we
could be their first U.S. store, or we could also be their
sixth U.S. store, and they now go gangbusters and there's
600 in the U.S., but as long as they were here first,
whether they were in Canada or here, there is still the
potential that they could become formula retail at some
point, but we wouldn't make them go back through the
process as long as the one that was here was within their
first seven.
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Does that make sense? So even if they don't have
a store in Canada, if they open their sixth here and now
they open them worldwide, they still potentially could
become that large corporation.
COMMITTEE MEMBER EREKSON: Can I ask a follow up
question?
I understand that. I don't think you really
addressed the question of the flavor of an independently
owned business versus a formula retail and why it matters
that the other formula retails are outside of the country,
because it would seem like to me it would still have the
flavor. So I could hypothetically have 100 in Canada, and
this would just be the 1018L one.
MONICA RENN: I don't think there's a specific
answer for that. I think it would be also up to what
somebody would see as the flavor. Does it bring something
new to Los Gatos if the next nearest one is in Canada? I
don't know, I think that would be completely subjective to
whoever was thinking of it. I'm sorry, I wish I
(inaudible).
COMMISSIONER O'DONNELL: No, that's okay. That's
fine. No apologies; that's a fine answer.
CHAIR BURCH: Commissioner Hudes.
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COMMISSIONER HUDES
work on this.
Thank you, Ms. Renn, for the
I think that since this is not coupled with a
ratio of formula retail stores it's really important that
we get this right, and so my question is to what extent has
the new definition come from benchmarking, and where on the
scale are we with all of these nine criteria?
MONICA RENN: With the exception of the seven,
that definition is pretty standard. There's at least three
other jurisdictions in California—and I don't want to
rattle those off off the top of my head, because I wouldn't
be exactly correct on them—but that's a pretty standard
definition that's adopted for cities that use formula
retail outside of the ones that have had the one-off of the
Bay Area and things like that.
CHAIR BURCH: Commissioner Badame, and then
Commissioner O'Donnell.
VICE CHAIR BADAME: Would that include the United
States limitation as well?
MONICA RENN: Yes.
VICE CHAIR BADAME: Thank you.
COMMISSIONER O'DONNELL: I have a minor point
that I'd really like to address to the Town Attorney.
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On the draft, which is Exhibit 1, under the
definition, in the first line we say formula retail
business means a type of retail sales establishment or
restaurant, which I understand. In the next line, however,
when it says which along with seven or more retail sales
establishments, but doesn't say restaurant, I would suggest
that it say, `nor restaurant." That's the really huge
comment I've got.
CHAIR BURCH: We're going to pause for a moment
with our questions for Ms. Renn and open this up to the
public.
We have one card: Larry Arzie. Mr. Arzie, you've
got three minutes, and just make sure you pull that
microphone close up to you, and state your name for the
record.
LARRY ARZIE: I wasn't going to talk very much,
but a couple of things have come up.
Thank you, Mr. Erekson, for bringing up what you
have about the loophole, should we say, in this ordinance.
Benefit, when they came in, is an international operation
and they don't have a CUP, to my knowledge. They just
opened up and were given an (inaudible), so we have a big
loophole where that's concerned.
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Also, to answer your comment about where did the
formula retail number come from, we originally had the
ordinance was any more than one store would require a CUP.
I got up and fought for twelve, and we compromised at
seven, so now you know, Monica.
Secondly, Monica brought up another comment that
I don't understand, that the CUP concept was brought into
concurrence because we wanted interesting shops. Well, the
CUP Ordinance was not brought in to bring in interesting
shops; it was brought in to keep them out. We did not want
a supply of nationals coming into Los Gatos.
To define formula retail is wonderful, but the
loophole that allows new franchisees to avoid formula
regulations only adds to the problem if a franchise
operation just starts and they intend on opening up 100
stores across the nation and the first one is going to be
in Los Gatos, then they're a franchise organization. There
should be a CUP requirement to get a CUP, or an ordinance
to get a CUP. That's the biggest hole we have.
That's what happened to the candy shop, which is
on the agenda tonight, but that's not what I'm talking
about. They opened up without a CUP because they were the
second operation to open up and they didn't have to have a
CUP because of that.
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If we can recommend to Council to formulate some
concept of how do you handle a new investment company with
the intention of opening up multi chain stores across
America, and their first one just happens to be Los Gatos,
then we should designate this operation as a chain store
operation. If you make that announcement that franchises
are available and for sale, then this is a franchise store.
That's a big loophole. I only brought up two
issues where that happened, but thank you for bringing that
up to them.
CHAIR BURCH: Thank you. Does anyone have any
questions for the speaker? No? Thank you very much. All
right, we're going to close the public portion of this item
and ask if any of my fellow commissioners have questions of
Staff, or comments on what to recommend?
Commissioner Erekson.
COMMITTEE MEMBER EREKSON: I have a question
probably for Mr. Schultz. Given Mr. Arzie's comments -I'm
not suggesting that we should, but let's assume for the
moment that we had an interest in doing that -is there a way
to effectively write the ordinance that would allow for the
potential of anticipated (inaudible)?
ROBERT SCHULTZ: Not only during my research for
this town, but I've done it for other cities and towns, I
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have not seen an ordinance that has tried to approach that
just from a logistic standpoint of being able to get an
applicant to admit that they are going to be franchising or
know they're going to be franchising, and once you've given
them that vested right, then you can't take that away.
But it's something that if the Planning
Commission thinks that's an issue, we could research it
further. I haven't done the research on that specific
issue; I'm just going by what I've seen in all the other
jurisdictions on this issue. There's been quite a lot of
case law on this issue on whether there... I almost see at
some point in time there might be legislation to prevent
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These formula retail ordinances, a couple of them
have gone so far as when you're having a formula... The main
case is the Subway versus Arizona case where they tried to
make certain that you could bring Subway in, but you had to
change your sign, they didn't want the yellow signs, and
they lost that case. So there are tremendous restrictions
on what you can and can't do. I know this one is legal, but
we can certainly look at that issue if it's something the
Planning Commission wants to do.
CHAIR BURCH: Commissioner O'Donnell.
COMMISSIONER O'DONNELL: Two points.
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one Commissioner Erekson already made and I agree
with him. I don't think the international thing really
applies. What I'm really concerned with is the somewhat
cookie cutter store. Whether they're in Europe or whether
they're in Canada, they can still be a cookie cutter store.
So I don't agree with saying the international doesn't
count, it's only what's in the United States.
Secondly, on the franchise that Mr. Arzie makes
the point, I agree with both of you. I think it's very
difficult to enforce that, although at the end of his
remarks he talked about somebody having franchise
information out, and it would seem to me that if I'm the
first store than I'm going to be the franchisor, and I
already have circulating that intention. I don't know what
you do with that, because if I come into town and I want to
sell widgets, and my long-term goal is to sell widgets all
over the United States, that doesn't make me a chain store,
and most widget stores haven't done well, but if in ten
years I've got 100 of those stores, so be it.
If you could come up with some way to show that's
what a person was doing, but I'm not sure it's worth the
effort. I would agree with them if there were some way to
really know that, but I have a feeling we would just get
sidelined and the arguments legally would not be pleasant.
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ROBERT SCHULTZ: Certainly from the standpoint
where you explained with the widgets and you're opening
your first one, there might be some mechanism we can do
where you've got the person like you just mentioned that
maybe have three or four, they fall under the seven, but
certainly if you do the research on them you can see they
want to grow to many, many more, so within a year or two
you're going to be over the seven, that might be something
that we can add additional language or look into.
COMMISSIONER O'DONNELL: The only problem I have
is I don't think we want to say to our local businesses
please don't grow; please don't be successful, because if
you do we're going to have all these rules. I would love to
see everybody in town be successful, and if they have their
first store and that's all they have really in Los Gatos
and then they're wildly successful and they have 100
stores, God bless them.
CHAIR BURCH: Commissioner Hanssen.
COMMITTEE MEMBER HANSSEN: As I was listening to
this I had a question. Since there isn't any guideline or
limit on how many formula retails we can have in town, when
it comes in as a CUP couldn't if the deciding body as part
of their investigation determines that this is going to be
a 1,000 location retailer, whereas they're only at five
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now, couldn't that be a reason to say no since there isn't
any guideline saying that you can't say no? Okay.
CHAIR BURCH: Commissioner Erekson, then
Commissioner Kane.
COMMITTEE MEMBER EREKSON: I want to follow up on
the answer, the nodding of the head from Mr. Schultz.
Assume what Commissioner Hanssen just asked, on
what basis would we be able to turn down or force them as a
town... Essentially we would force them to get a CUP, right?
So the Staff would have to have some basis to then force
them to have a CUP. One what basis would the Staff have to
do that, not just to let them go forward with it? On the
speculation that they might have seven stores at some point
in time? I don't want to try to be the Town Attorney, but
it seems like to me that's really...
ROBERT SCHULTZ: It would be very difficult to
write that language on...
COMMITTEE MEMBER EREKSON: That would be
challenging to
ROBERT SCHULTZ: To know, and as Joel just
pointed out, from a Staff standpoint if they don't meet
that criteria right away and that's what they put in their
business license application, it just goes to a business
license application and doesn't get that detailed review of
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us doing the research to see where they're at, so it does
become very problematic.
CHAIR BURCH: Do you have a follow up question?
COMMITTEE MEMBER EREKSON: I have a different
question.
CHAIR BURCH: Can we go to Mr. Kane and then back
to you? Commissioner Kane.
COMMISSIONER KANE: I understand the intent of
Item 1 on the nine items in the Staff Report and in the
proposed amendment to the Town Code, and if I do understand
it I'd suggest clarity for Item 1, "Standardized means both
identical and substantially the same." I think it would
have effect, and if my Commissioners agree, then it should
simply say, "Standard means identical or substantially the
same," instead of trying to meet two conditions to create
more arguments. You say this condition or that condition,
and boom. So I would take out the word "both" and I would
substitute the word "and" for the word "or." Thank you.
My second point was on a probability standpoint,
this may not be germane, but if there were seven Parisian
dress shops and they're going to come to the United States
and they're thinking New York, Chicago, San Francisco, or
Los Gatos? Let me work on that. What's the probability of
somebody targeting us for their invasion of the United
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States? It's possible, and I didn't think about what the
Commissioner said, I just don't think it's probable, but
you must have put it in there for a reason.
MONICA RENN: We did recently have one retailer
who came from New Zealand. There were 100 locations in New
Zealand, and they wanted Los Gatos to be their first one.
That was Blue Illusion, and they ended up opening up in
Santana Row because the CUP process just took longer than
it did in San Jose. We heard quite a bit of feedback on
that, and the way that this particular business runs their
business is that whoever they select as their manager
actually runs the store like the owner, so they choose the
merchandise, they choose that stuff, so it's actually each
store is unique. It's not a business model we see here very
often, but it was definitely the opportunity to look at
this whole conversation from a different lens.
COMMISSIONER KANE: I'm just thinking that if
there is an organization that has seven locations somewhere
on the globe, whatever they're selling is probably
interesting if they want to bring it to Los Gatos, and I
would want that to happen, I think. That's it.
CHAIR BURCH: Commissioner Erekson, you had
another question.
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COMMITTEE MEMBER EREKSON: This is a question for
Ms. Renn. I can't imagine this, but I'm not an expert in
this area as you are, but is there any way that we should
think about this in relation to the shifting retail
environment that is more online? To go nationwide, I may be
able to do that based in Los Gatos without opening
franchises in other places, because I can do it online. So
is there any relationship to think about this in
relationship to that shifting environment? I don't know,
but that's not my area of expertise; it's yours.
MONICA RENN: That's a really interesting
conversation, and that's actually where all of this started
from, that we are seeing sales tax decline.
How the sales tax works currently is if there's
online shopping in this county the money goes into a county
pool and we get a percentage, a very small percentage,
based on our size. There is legislation looking at actually
sending the sales tax back to the zip code that it was
purchased from rather than going to this county pool, which
I think would probably be quite a benefit for us, because
we probably do have a fair amount of people who do online
shopping, and I think not just online shopping but delivery
services, all of that.
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People don't leave their homes as often for
retail goods, and I think that's also why we're seeing the
shift in some of the vacancies and some of the smaller
stores not being able to survive. It's the question of
creating a place where people want to come that has
shopping, that has dining, that has all of these things,
and whether the formula piece plays a huge role in that I'm
not sure. I don't know how it's going to line up, because
things are progressing so quickly, and people are coming up
with these concepts so quickly, that you just don't know
where retail is going to be a year from now and I'm not
sure how much this plays into that conversation.
COMMITTEE MEMBER EREKSON: Thank you.
CHAIR BURCH: Commissioner O'Donnell.
COMMISSIONER O'DONNELL: I've been on this
Commission a long time now and I remember when this
started. My recollection is what we said is we don't want
downtown Los Gatos to look like every other shopping center
around, so that's where it started.
When, however, people came in like Apple, like
Jos. A. Bank... With Jos. A. Bank, for example, we said there
are no other men's stores in town basically, and we said
fine, that's okay. Apple came in and said you've got two
choices. You can either take us the way we are, or you
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don't get us. I remember people said, "I don't like the
front of your store," and they said, "We don't care if you
like it or not, do you want Apple?"
Now we're getting into this vacancy thing, and I
think if somebody wants to explore the whole thing, are we
worried about looking like Santana Row, because if that's
still the driving force, that's one thing. It isn't clear
to me anymore if we're worried about the change in retail
and the effect of the Internet whether we ought to revisit
that whole thing, but I think we're kind of tweaking the
bomb rather than defusing the bomb
What we're doing tonight I don't think gets to
the real issue of what are we trying to accomplish? What we
were trying to accomplish quite a while ago was in a better
retail market and we felt that we wanted Los Gatos to be
unique, and I still feel that way, but as vacancies come up
it may require us to rethink, because I'd rather have
stores in town than not.
CHAIR BURCH: Commissioner Kane.
COMMISSIONER KANE: Commissioner O'Donnell makes
me think it's not just Santana Row, it's not just
Sunnyvale, what we're trying to do here is underscore,
create, and support vitality, and we have met the enemy and
he is us, because what you left out of it was the North 40,
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and that makes me think now if I can do anything for the
Central Business District, that's what I would be doing,
because we're going to have some challenges in the future
to support Main Street/North Santa Cruz, so if this goes to
that end, I'm in favor of it.
CHAIR BURCH: Commissioner O'Donnell.
COMMISSIONER O'DONNELL: I suggest that we at
least think about sending this back to the Council with
these questions, because what we have before us I think,
again, it's kind of fine, we could tweak it a little bit,
but I think we're raising something that they're aware of
and that we're not raising something they're not aware of.
I just wonder if it's not the right time to address it?
Perhaps we could be helpful to the Council by saying let's
knot tweak this thing, let's really consider changing the
whole ballpark.
Now, we might say but in the interim here's how
we feel about what's before us, for example, language
changes we've talked about, the international thing. I
still think whether there are 100 stores in Canada or 100
stores in the United States, they're a formula store, and
the fact that we may say if they're in Canada they ought to
be able to come in, but if there happens to be 100 stores
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in the United States, they can't, doesn't make a lot of
sense to me.
So maybe we want to just get to the exact thing
that's before us, or maybe we want to say a decision is
premature, could we consider the issue? Now, knowing that,
and knowing how long it took us before just to come up with
the initial ordinance, it may be the Council says let's get
something done now, and now we'll investigate it. I don't
know, but I tend to think, having heard tonight's
conversation, that it's a much bigger issue than the narrow
matter before us.
CHAIR BURCH: All right, so if I can pose a
question quickly to my fellow commissioners. I think that's
a good point. I think this has been a very good
conversation.
I would like to know maybe from Staff, if we were
to move forward, if what we might be able to do is broach
our direction to Council with, similar to what Commissioner
O'Donnell said, maybe two options, one being we feel that
there's actually a lot more work that needs to be done here
based on Internet sales and other things, however, in the
sake of time, if they want to say yes, that's something
we're going to do but we need to have some language set in
place for the immediate future, then we recommend the
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following changes to the wording pending that
investigation, is that a direction we could provide?
JOEL PAULSON: That definitely is.
CHAIR BURCH: I'd like to ask my Commissioners
how you feel about it? Commissioner Badame.
COMMISSIONER KANE: I'll second that motion.
CHAIR BURCH: You'll second the motion? Okay.
Motion and a second. Comments?
VICE CHAIR BADAME: I do like the idea of adding
in the fact that it's made stricter by including
restaurants, so I'm in favor of that.
CHAIR BURCH: Commissioner Erekson, you had a
comment?
COMMITTEE MEMBER EREKSON: I would say the effort
to clarify the definition is right on, that's taken at face
value. I would not support including the language about the
United States for reasons that are obvious, and while Mr.
Arzie has been a source of perspective in history for the
downtown area for me since I've been on the Planning
Commission and I respect that, I would want the Council to
be forward-looking, not backward -looking, as they think
about this issue, not losing sight of history, but not
being bound by history.
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It would be helpful to me for them to be clearer
about what their intentions are as they look forward in the
context of what we've been talking about, the change in
retail, what their intention is for having a definition
like this. There's no requirement to have a definition like
this. Another option would be just eliminate it from the
code. So as they think about this, why would they want it?
Why would they want a definition and what would their
intention be? That would be helpful.
In my time on the Commission it's not always been
clear on what basis we should approve a CUP for a formula
retail, and so it would be helpful for them to be forward-
looking from my perspective and to help us understand what
the intent is.
CHAIR BURCH: And I would probably expect that
all these comments then would be shared with the Council in
this discussion with our recommendation.
Commissioner Hanssen, then Commissioner
O'Donnell. Did you have a comment, Commissioner Hanssen?
COMMITTEE MEMBER HANSSEN: I did. I just wanted
to agree with what Commissioner Erekson said.
I had talked about this earlier. When we've seen
these CUPs in the past we'd get a map of where all the
formula retails are, and then it's like what criteria do
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you use to make a decision? There's the thinking from the
beginning where we wanted Los Gatos to be like this, but
the retail world is changing, and so it's not always clear
how to do this. And this, I thought the minute I picked it
up it's just one piece in a whole picture, in a whole
strategy for the town, and this is just a small item that
doesn't reflect the bigger picture.
I have no problem with the language of this as
proposed, but it begs the question of what's going to
happen after this? Is there going to be more discussion
about what kind of retail balance do we want, and how does
that play with the North 40, and so on and so forth?
CHAIR BURCH: All right, Commissioner O'Donnell.
COMMISSIONER O'DONNELL: If I understood
Commissioner Erekson's last remarks correctly, and I may
not have, it seems to me that it might be well to make a
motion now to not adopt the proposed amendments, but rather
to tell the Council the reason we're not adopting the
proposed amendments is we think that the issue should be
revisited, and before we tweak it the whole thing be looked
at.
Now, they may say look, that would take six
months or whatever it would take, and therefore let's get
some things implemented in the interim. But we don't know
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that, and I am concerned, because there are two Town
visions on what we're dealing with here.
Personally, I would like to say I don't think
this is the time to be dealing with these amendments as
opposed to dealing with the basic issue, and therefore I
would propose that we adopt that kind of resolution as
opposed to telling the Council in the background we'd kind
of like you to look at this, but oh by the way, we're also
going to tweak the ordinance.
I'm not in favor of tweaking the ordinance, at
least at this point, unless the Council just tells us time
being what it is it's better to get something done and then
we study it, but I don't think that we should presuppose
that the Council would necessarily say that.
CHAIR BURCH: So we actually have a motion out
there, and since I was the one I guess that worded it, I
was not saying I recommend approval. That was not what I
was saying. I was actually saying that we recommend further
investigation based on this conversation, and I just
confirmed with Staff they would get verbatim notes of this
conversation right now. Hold on.
COMMISSIONER O'DONNELL: (Inaudible) back to the
Council?
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CHAIR BURCH: It does go back to Council. We're
recommending to Council that in the immediate future if
something needed to be dialed in on this, then we would
approve this wording, but we're not recommending approval,
we're recommending further investigation.
Joel.
JOEL PAULSON: Which is definitely one direction
that you can go. I would just offer that if that is the
direction without a recommendation either for or against
the ordinance amendments before you, then should they say
no we want to do something in the interim, this comes back
to the Planning Commission, we have another hearing, and
then you forward a recommendation that could be modified as
you're proposing, or something completely different. Not
knowing how that Council discussion is going to go, it may
create some delay in and of itself if there's not a
recommendation one way or another for the ordinance.
ROBERT SCHULTZ: I guess there are two issues,
and I don't want to confuse those two issues for you.
The definition change really primarily is for
Staff. We've had ones come in and we wrestle without the
definition of all those terms, whether they fall within it
or don't fall within it.
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OR
It also helps the applicant. They might look at
it and say maybe I don't fall under that, because I don't
know what the definitions are here.
So it helps us really. I think that was what
Commissioner Hanssen meant was really what does this do for
us? It really is more Staff driven, because we've had that
problem. (Inaudible) is the one that comes to mind that we
wanted code enforcement on, because they didn't believe
they were part of it, and it was an interpretation. Now,
with these changes, they definitely would have fallen under
it.
So that's the first issue really, just it was a
cleanup that we saw, that Council saw also, with which one
should come and shouldn't come for the definition of what a
retail...
Then the second issue was does this need more of
what is the purpose and intent of it, so when it comes to
you what are the findings we're trying to make? What are
the other things we need when it does get to us to really
make us decide on whether we should allow this formula
retail or shouldn't?
I will say yes, our ordinance is not as verbose
as some of the other ones. I was just looking online.
Malibu just did it, and a lot of them do do that percentage
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that we talked about, but some of those have also been
challenged. So I think in my mind the recommendation is
yes, this definition is great, but there's much more work
to be done on this ordinance for us to get where we want to
be.
COMMISSIONER O'DONNELL: (Inaudible) we have a
motion and a second, right? Okay.
Would the maker of the motion consider, after
listening to the Staff, any amendments to the motion, or is
that what we're going to vote on?
CHAIR BURCH: I really don't want to slow down
the process, so I don't know if I change my motion to say
we will recommend approval of the document in front of us,
however, the Commission strongly requests additional
research into this topic based on the conversation.
Can I ask the seconder of the motion what he
thinks?
COMMISSIONER KANE: I agree with you. I think we
should move forward. This is a recommendation, not a ruling
or an ordinance. This is us telling them what we think.
They've asked us to do that with this one and with the next
item on the agenda, so we've kind of already done our job
if they watch the tape or read the transcript, so I'm okay
with what you said, Madam Chair, that we have some
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amendments to this language—Tom made a suggestion, I made a
suggestion—and that our recommendation is approval and get
it back to Council, but then add all the other concerns
we've had.
We've got issues coming on the North 40, and we
want to keep Business District here in Town vital and
vibrant, and what can we do along those lines? I support
your amended motion. I still second it.
CHAIR BURCH: All right. Commissioner O'Donnell.
COMMISSIONER O'DONNELL: I just want to make
sure, I've heard at least a couple of us say we don't think
the distinction on international versus national is a good
one. So I don't know whether that's in the motion or not.
I've also heard Commissioner Kane say, and I
agree with him, that number one should say, "Standardized
means identical or substantially the same," and I agree
with that.
I think we had one or two other things. Yes, the
language about the retail sales including a restaurant, but
the next line didn't include a restaurant, and I think we
probably agree on that.
I guess what I'm wondering is does that motion
include those three items, or not?
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ROBERT SCHULTZ: I think right now with
definitely the two and the three, I think there was no
opposition to that, but I think the first one, if in fact
you want to change United States or eliminate that and put
international, I think there would be more discussion
necessary, or the motion would have to definitely reflect
Ithat.
CHAIR BURCH: Commissioner Kane.
COMMISSIONER KANE: Well, again, the
recommendation is listening to what we've said, and we've
voiced our opinions. I'm thinking about the downsides to
what Commissioner Erekson has brought up, but I like my
Parisian dress shop example. If there's somebody out there
with stores in Batchawana Land, or Paris, or wherever, and
they want to come here with that store, they've probably
got something interesting, and that would be good for
downtown.
I'm looking for the downside and the upside, and
I'm leaning toward the upside. Whether or not that screws
up this process of now we're going to have (inaudible), I
don't care. I'll vote for it, but I hope they're watching
what I said, which is whatever that shop is, it's probably
going to be interesting, and I'd recommend it.
CHAIR BURCH: Commissioner Hanssen.
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COMMITTEE MEMBER HANSSEN: I have a question for
I'm looking at the Staff Report from the October
6th Council meeting. It talks about that our ordinance
without the changes is more restrictive than just about any
place, because of the international versus U.S., and so
that was the reason for their recommendation. So if our
intent is to make it easier for downtown businesses to get
a CUP done, I don't know why we would change the
recommendation unless there's more research that needs to
be done on that.
MONICA RENN: Would you like a response, or was
that just a comment?
CHAIR BURCH: Was that a question, or just a
comment?
COMMITTEE MEMBER HANSSEN: I guess I'm asking you
to confirm that that is the main reason that was brought,
because in your research you've learned that having it be
seven locations internationally versus U.S. makes it more
restrictive compared to other jurisdictions, is that
correct?
MONICA RENN: That's correct, and I think either
way we need to be clearer about it, because that's probably
one of the number one questions I first get: "Seven
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Item #4, Town Code Amendment A-15-004
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locations where? Seven locations in California?" Because we
just don't say it. We say seven existing locations, and
then you respond, "Anywhere in the world," and it's a
little bit of a shock for that applicant to think about
that for a minute. So whatever the choice is, I think we
just need to be clear on what we're considering for those
existing locations.
CHAIR BURCH: To clarify, as the maker of the
motion I would prefer to keep it as it is. I do believe
with the second and the third word changes, but the motion
that I have made is going to keep the wording as is for
various reasons, but I'm going to keep it as is.
Commissioner O'Donnell.
COMMISSIONER O'DONNELL: (Inaudible)?
CHAIR BURCH: I do not. I want it to stay just
the United States. I do not want to make that change. My
motion is going to make the other changes in Item 1, and
the other item where we're adding the restaurant, but
keeping the first paragraph where it states located in the
United States as is. Does the seconder agree with that?
COMMISSIONER KANE: Yes.
CHAIR BURCH: Commissioner O'Donnell.
LOS GATOS PLANNING COMMISSION 1/13/2016
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COMMISSIONER O'DONNELL: I just want to be clear.
You're saying if I have 100 shops in Canada, that doesn't
count?
CHAIR BURCH: What I'm saying is I feel we have a
very capable Staff, and if somebody comes in with a chain
of the Canadian equivalent of Applebee's, I imagine they're
going to take a good look at that and probably say we're
having a hard time making a decision, and because we feel
that this maybe rides on the fence, I think that we would
probably see it or we may see some recommendations on this,
or they just come on through.
JOEL PAULSON: I'd look to the...
COMMISSIONER O'DONNELL: Unfortunately, the
reason we have it now is a chain store is a chain store is
a chain store, and it doesn't make any difference where
their locations are. We're making a substantial change to
that and saying if you've got 100 stores in Mexico and 100
stores in Canada, it don't count. If you've got eight
stores in the United States, it does count. I don't think
that makes much sense.
And as far as the dress shop is concerned, it's
never been a question of is it a good store; it's been a
question of is it a chain store? We could always admit a
good chain store, which we've done in the past, but we have
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to make that determination, a use permit determination,
which is the normal use permit requirements that you
wouldn't have to do if you didn't need a use permit. So I
will not support the motion if we're going to say we only
penalize American stores.
CHAIR BURCH: Any other comments, questions, or
do we want to go ahead and take a vote? There's a motion on
the table, and a second.
All in favor? Okay. All opposed? Passes 4-3,
recommendation to the Council.
I assume because this is just a recommendation
there are no appeal rights?
JOEL PAULSON: That's correct.
LOS GATOS PLANNING COMMISSION 1/13/2016
Item #4, Town Code Amendment A-15-004
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TOWN OF LOS GATOS
PLANNING COMMISSION STAFF REPORT
rc� Meeting Date: Januars 13, 2016
PREPARED BY: Monica Renn, Economic Vitality Manager
mrenn a losgatosca.go\
APPLICATION NO: Town Code Amendment Application A-15-004
LOCATION: Town Wide
APPLICANT: Town of Los Gatos
APPLICATION
ITEM NO: 4
SUMMARY: Consider amendments to Section 29.10.020 of Chapter 29 (Zoning
Regulations) of the Town Code regarding the definition of formula
retail business.
RECOMMENDATION: Forward to "I'tnvn Council w ith a recommendation for adoption.
CEQA: 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)].
FINDINGS: The Planning Commission must make a finding that the Code
amendments are consistent with the General Plan if the
recommendation is for adoption.
ACTION: Recommendation to Town Council.
EXHIBITS: 1. Draft Town Code Amendments
BACKGROUND:
In September 2015, the Town Council began discussing a variety of issues that relate to
businesses in Lois Gatos at the request of the Town Council Policy Committee. One of the issues
identified was the Town's regulations on formula retail businesses. The Town defines formula
retail businesses in Chapter 29 of the Town Code.
Staff henchmarked other jurisdictions and provided a recommendation for definition
amendments for the Town Council to consider including the number and location of existing
business locations as well as qualifying factors to make identifying and processing formula
retailers clearer.
231
ATTACHMENT 2
Planning Commission Staff Report - Page 2
Formula Retail OrdinanctiA-15-004
January 13, 2016
At their October 6. 2015 meeting, the Council continued their discussion on formula retail
businesses and recommended that the Planning Commission consider and make a
recommendation on the definition amendment presented by staff.
DISCUSSION:
Currently, the Town Code defines formula retail business in Section 29.10.020. The current
definition is:
Formula retail business means a retail business which, along with seven (7) or more
other business locations, is required by contractual or other arrangement to maintain any
of the following: standardized merchandise, services, decor, uniforms, architecture,
colors, signs or other similar features.
The proposed amendments include adding restaurants, limiting location constraints to the United
States, and providing greater detail and qualifying information to allow for clearer guidelines
regarding formula retailers. The proposed definition is:
Formula retail business means a type of retail sales establishment or restaurant which, along
with seven or more other retail sales establishments located in the United States, maintains
two or more of the following features: a standardized array of merchandise or menu, a
standardized facade, a standardized decor and color scheme, standardized uniform apparel.
standardized signage, a standardized layout, a trademark, or a servicemark.
1. Standardized means both identical and substantially the same.
2. Array of merchandise or menu means 50% or more of in -stock merchandise or menu
iterrrs.
3. Fagade means the face or front of a building, including awnings, looking onto a street
or an open space.
4. Decor means the style of interior finishings, which may include but is not limited to,
style of furniture, wallcoverings or permanent fixtures.
5. Color Scheme means the selection of colors used throughout, such as on the
furnishings, permanent fixtures, and wallcocerings, or as used on the facade.
6. Uniform Apparel means the standardized items of clothing including but not limited
to standardized aprons, pants, shirts, smocks or dresses, hat, and pins (other than
name tags) as well as standardized colors of clothing.
7. Signage means a business sign pursuant to Section 29.10.135 of the Town Code.
8. Trademark means a word, phrase, symbol or design, or a combination of words,
phrases, symbols or designs that identifies and distinguishes the source of the goods
from one party from those of others.
9. Servicemark means a word, phrase, symbol or design, or a combination of words,
phrases, symbols or designs that identifies and distinguishes the source of a service
from one party from those of others.
'\
,..,
32
Planning Commission Staff Report - Page 3
Formula Retail Ordinance A-15-004
January 13, 2016
�— CEOA DETERMINATION:
The project is exempt from environmental review pursuant to CEQA Guidelines under the
General Rule [Section 15061 (b) (3)] because it can be seen with certainty that the proposed
Town Code amendments will have no significant negative effect on the environment.
PUBLIC COMMENTS:
At this time, the Town has not received any public comment.
CONCLUSION AND RECOMMENDATION:
A. Conclusion
Based on their consistency with the General Plan, staff recommends that the Planning
Commission forward the draft Town Code amendments to the Town Council with a
recommendation for adoption as outlined below.
B. Recommendation
For the reasons discussed in this report, staff recommends that the Planning Commission forward
the draft Town Code amendments to the Town Council with a recommendation for adoption.
The Commission should also include any comments or recommended changes to the draft Town
Code amendments in taking the following actions:
1. Find 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).].
2. Make the required finding that the Town Code (Zoning Regulations) Amendments are
consistent with the General Plan; and
3. Forward a recommendation to Town Council for adoption of the amendments to the
Town Code (Exhibit I).
Alternatively, the Planning Commission may:
1. Forward a recommendation to the Town Council for adoption of the Town Code
amendments with modifications; or
?. Forward a recommendation to the Town Council for denial of the Town Code
amendments; or
3. Continue the matter to a date certain with specific direction.
1�1— 233
Planning Commission Staff Report - Page 4
Formula Retail Ordinancc/A-15-004
January 13. 2016
A
Prepared
Monica Renn
Economic Vitality Manager
N DEQ' PC REPORTS 2(lih l,, mili RM,I OrdtmmcdocA
Approved by: --------
Jcel Paulson, AICP
Interim Community Development Director
DRAFT AMENDMENTS TO SECTION 29.10.020 OF THE TOWN CODE
CURRENT FORMULA RETAIL BUSINESS DEFINITION
AND PROPOSED DEFINITION
CURRENT DEFINITION:
29.10.020 Definitions.
PROPOSED DEFINITION:
29.10.020 Definitions.
Formula retail business means a type of retail sales establishment or restaurant which, along
with seven or more other retail sales establishments located in the United States, maintains two
or more of the following features: a standardized array of merchandise or menu, a standardized
facade. a standardized decor and color scheme, standardized uniform apparel, standardized
signage. a standardized layout, a trademark, or a servicemark.
1. Standardized means both identical and substantially the same.
2. Arrav of merchandise or menu means 50% or more of in -stock merchandise or menu
items.
3. Fagade means the face or front of a building, including awmings, looking onto a street or
an open space.
4. Decor means the style of interior finishings, which may include but is not limited to, style
of furniture, wallcoverings or permanent fixtures.
5. Color Scheme means the selection of colors used throughout, such as on the furnishings.
permanent fixtures, and wallcoyerings, or as used on the facade.
6. Uniform Apparel means the standardized items of clothing including but not limited to
standardized aprons, pants, shirts, smocks or dresses, hat, and pins (other than name tags)
as well as standardized colors of clothing.
7. Signage means a business sign pursuant to Section 29.10.135 of the Town Code.
8. Trademark means a word. phrase. symbol or design, or a combination of words, phrases,
symbols or designs that identifies and distinguishes the source of the goods from one
party from those of others.
9. Servicemark means a word.. phrase, symbol or design, or a combination of words,
phrases, symbols or designs that identifies and distinguishes the source of a service from
one party from those of others.
EXHIBIT 1 235
N-\DEV\PC REPORTS\2016\Formula Retail Ordinance Exhibit 1.Dock
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lntentionaU),
Left Blank
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®i MCCARTHY
R A N C H
January 13, 2016
Town of Los Gatos
Attn: Planning Comission VIA EMAIL
110 E Main Street
Los Gatos, CA 95030
Honorable Planning Commissioners,
In December 2015, Town staff approached the council on certain topics regarding the
relationship between parking and restaurant seating in the downtown. The council
directed staff to bring some options forward to you for consideration, indicating the
Council feels there are some issues that need addressing. We would urge you to
seriously consider this matter, as our downtown is suffering more and more as they
days go by from fierce competition for commerce from nearby communities. We are in
strong support of Staff's recommended language to allow seating capacity to be
governed by parking per square footage and firellife safety code.
Please also refer to the letter we submitted to Town Council on December 14, 2015
which is included below for reference.
Additionally, In October 2015, the Council gave direction on Formula Retail policy. This
policy is also creating difficulties for Los Gatos to compete for business. There is a fear
that if there were no restriction on formula retail that Los Gatos would become "the mall"
overnight and lose its charm and vibrant mix of uses. This is an unreasonable
assumption, and the fact is Los Gatos is currently losing its charm and vibrant mix of
uses due to new strong competition from neighboring downtowns. Due to the nature of
the buildings downtown with various constraints such as on-site parking, size,
amenities, visibility, etc., there are many locations that would simply not be suitable for
formula style retail tenants. Couple this with the close attention that the Town staff pays
to all projects processing though the Town, if the Town thought that additional formula
retail uses were becoming detrimental to the stability of downtown, there would be
plenty of time to take corrective action to reinstate the restrictions on formula uses. At
this point in time, however, we need to work to create more of a draw to our downtown
to in turn support all of the mom & pop businesses that would benefit from added
shoppers, and a good way to do this is to allow for new concepts, whether they are hard
goods, services, or restaurants; and regardless of their "formula" definition.
The proposed language the Town Staff has provided in fact makes it more difficult for
Formula business to open in Town, and for some reason now includes restaurants.
There are many new restaurant concepts that would be considered formula that we
should be welcoming to Town that would be a draw. These restaurants typically
incubate in states where real estate is more affordable, so by the time they enter the
California market, they will most likely surpass the number of locations that qualify as
formula, so the Town would be eliminating this market from the outset.
These changes seem to stand directly in the way of progress to bring back vitality
to the downtown. We recommend eliminating the policy on formula retail, even if
only temporarily. 237
ATTACHMENT 3
McCarthy Ranch/Rootstock Wine Bar
15425 Los Gatos Blvd Suite 102 Los Gatos, CA 95032 (408) 356.2300 Fax (408)356.2338
ORDINANCE NO. '_"N
ORDINANCE OF THE TOWN OF LOS GATOS
AMENDING SECTION 29.10.020 OF THE LOS GATOS TOWN CODE
TO REVISE THE DEFINITION OF A FORMULA RETAIL BUSINESS
WHEREAS, the Town Council wishes to provide greater detail and qualifying information
to allo%% for clearer guidelines reearding tomtula retailers; and
WHEREAS, the Town Council wishes to include restaurants in the formula retail
definition; and
WHEREAS, the Town Council wishes to apply the definition of Formula retail business
to businesses located in the United states rather than globally; and
WHEREAS, the proposed code amendments are consistent with the General Plan and
its Elements.
NOW, THEREFORE,
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS FOLLOWS:
SECTION I
The definition of formula retail business in Los Gatos Town Code Section 29.10.020 is
hereby amended to read as follows:
Sec. 29.10.020. Definitions.
Formula retail business means a type of retail sales establishment or restaurant which, along
with seven or more other retail sales establishments or restaurants located in the United States,
maintains two or more of the following features: a standardized array of merchandise or menu, a
standardized facade, a standardized decor and color scheme, standardized uniform apparel,
standardized signage, a standardized layout, a trademark, or a servicemark.
1. Standardized means identical or substantially the same.
2. Array of merchandise or menu means 50% or more of in -stock merchandise or menu
items.
3. Fagade means the face or front of a building, including awnings, looking onto a street or
an open space.
4. Decor means the style of interior finishes, which may include but is not limited to, style
of furniture, wallcoverings or permanent fixtures.
_38
ATTACHMENT 4
5. Color Scheme means the selection of colors used throughout, such as on the furnishings,
permanent fixtures, and wallcoverings, or as used on the facade.
6. Uniform Apparel means the standardized items of clothing including but not limited to
standardized aprons, pants, shirts, smocks or dresses, hat, and pins (other than name tags)
as well as standardized colors of clothing.
7. Signage means a business sign pursuant to Section 29.10.135 of the Town Code.
8. Trademark means a word, phrase, symbol or design, or a combination of words, phrases,
symbols or designs that identifies and distinguishes the source of the goods from one
party from those of others.
9. Servicemark means a word, phrase, symbol or design, or a combination of words,
phrases, symbols or designs that identifies and distinguishes the source of a service from
one party from those of others.
SECTION II
The Town Council finds and determines that the adoption of this ordinance is exempt
from the requirements of the California Environmental Quality Act (CEQA) per CEQA
Guidelines under the General Rule [Section 15061(6)(3)], which sets forth that the CEQA
applies only to projects which have the potential for causing a significant effect on the
environment. It can be seen with certainty that the proposed Town Code text amendments will
have no significant negative effect on the environment.
SECTION III
If any provision of this ordinance or the application thereof to any person or circumstance
is held invalid, such invalidity shall not affect other provisions or applications of the ordinance
which can be given effect without the invalid provision or application, and to this end the
provisions of this ordinance are severable. This Town Council hereby declares that it would have
adopted this ordinance irrespective of the invalidity of any particular portion thereof and intends
that the invalid portions should be severed and the balance of the ordinance beenforced.
SECTION IV
Except as expressly modified in this Ordinance, all other sections set forth in the Los Gatos
Town Code shall remain unchanged and shall be in full force and effect.
`-' 239
SECTION V
This Ordinance was introduced at a regular meeting of the Town Council of the Town of Los
Gatos on February 2, 2016 and adopted by the following vote as an ordinance of the Town of
Los Gatos at a meeting of the Town Council of the Town of Los Gatos on February 16, 2016.
This ordinance takes effect 30 days after it is adopted.
In lieu of publication of the full text of the ordinance within fifteen (15) days after its passage, a
summary of the ordinance may be published at least five (5) days prior to and fifteen (15) days
after adoption by the Town Council and a certified copy shall be posted in the office of the Town
Clerk, pursuant to GC 36933(c)(1).
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
N:1DE V \ORDSQO 16,FonnulaRetaitDefinition.docx
',
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