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APPEAL OF THE PLANNING COMMISSION’S DENIAL OF A USE PERMIT TO ESTABLISH A BAR WITH THE ON-SALE OF GENERAL ALCOHOLIC BEVERAGES IN AN EXISTING BUILDING AT 222 NORTH SUTTER STREET (P16-0307)
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution denying the appeal and upholding the Planning Commission’s denial of the Use Permit to establish a bar with the on-sale of general alcoholic beverages in an existing building at 222 North Sutter Street, in accordance with the findings of fact detailed herein.
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Summary
The City Council is asked to consider an appeal of the Planning Commission’s denial of a Use Permit application to establish a bar with the on-sale of general alcoholic beverages in an existing building at 222 North Sutter Street (Attachment A - Appeal Letter). Staff recommended that the Planning Commission deny the Use Permit based on underlying facts showing inconsistency with the Development Code’s location restrictions, public safety concerns, blight, and proximity to other problem uses.
Following public testimony, the Planning Commission deliberated and expressed concerns regarding the number of calls for police service at the existing business and the potential adverse impacts that could be associated with adding another bar in the downtown area. As a result of these concerns, the Planning Commission was unable to make affirmative findings to support the request, and the application was denied December 15, 2016.
This appeal comes before the council as required by the development code and Council is asked to decide whether the Planning Commission’s denial should be upheld given the Commission’s findings and concerns regarding location restrictions, public safety concerns, blight and other problem uses.
DISCUSSION
Background
The applicant, Amar Singh Mathfallu, is seeking to convert an existing restaurant (Rubie’s) with the on-sale of general alcoholic beverages to a bar with the on-sale of general alcoholic beverages in an existing building at 222 North Sutter Street (Attachment B - Aerial Photograph/Site Plan). The applicant’s proposal would convert an existing 7,400-square foot restaurant with the on-sale of general alcoholic beverages into a bar with the on-sale of general alcoholic beverages. The proposed action requires a Type 48 license (on-sale general) from the State Alcoholic Beverage Control because the proposed use (a bar) cannot operate under the existing Type 47 License (On-Sale General for Bona Fide Public Eating Place).
The site is zoned CD (Commercial, Downtown) and is bounded to the:
• north by a two-story commercial building and a multi-story office building (Medico-Dental Building) zoned CD,
• west across Sutter Street by a parking lot zoned CD,
• south by a vacant lot (formerly a motel) zoned CD, and
• east by a parking lot and a three-story commercial building zoned CD.
The General Plan designates the project site for Commercial land use. This land use designation and the accompanying CD zoning conditionally allow a bar with the on-sale of general alcoholic beverages, subject to securing an approved Use Permit.
The structure on the subject site has existed since before 1936 and appears to have been originally constructed as a retail store. The building has been occupied by various restaurants since approximately 1947, under a variety of names, including Seven Seas, the Pump Room, the Pancake and Chicken Pantry, Joe’s, and Torino’s.
Project Description
The applicant is proposing to convert the site’s existing 7,400-square foot restaurant with the on-sale of general alcoholic beverages, known as Rubie’s, to a bar with the on-sale of general alcoholic beverages (Attachment C - Floor Plan). No modifications to the interior of the building were proposed and the applicant initially intended only to paint portions of the exterior of the building at the time the application was submitted to staff (Attachment D - Street Elevation). At the Planning Commission hearing, the applicant submitted a plan showing the existing brick façade being covered with stucco.
The applicant’s Use Permit application lists the existing restaurant’s hours as Tuesdays, Thursdays, and Saturdays, between 2:00 p.m. and 7:00 p.m., and Fridays, between 2:00 p.m. and 12:00 a.m. (midnight), for a total of approximately 25 hours per week. The application proposes to convert the restaurant to a bar that would only be open two days per week - Friday and Saturday - between the hours of 5:00 p.m. and 12:00 a.m. (midnight), for a total of 14 hours per week. At the Planning Commission hearing, the applicant’s attorney cited alternate hours of operation: reversing the existing and proposed days and hours of operation that had been proposed by the applicant in his Use Permit application. According to the attorney’s statement, the existing restaurant is open 14 hours per week and the proposed bar that would replace the restaurant would be open 25 hours per week.
The proposed alcohol service would be supplemented by limited food service, consisting of packaged snack foods and warmed or thawed prepared food items. The proposed food service does not qualify as a full-service restaurant, according to both State Department of Alcoholic Beverage Control (ABC) standards and City Development Code standards and definitions. As a result, the applicant must secure a Type 48 ABC License. The applicant stated to both ABC and planning staff that he would give up his existing Type 47 License, if he secures an approved Use Permit and a Type 48 License for the proposed bar, to avoid increasing the number of alcohol licenses in the downtown area.
The applicant indicated to staff that he purchased the property in 2008 and has been operating the business since that date. According to ABC staff, the business incurred a violation in 2014 involving sales to minors. A fine was paid to ABC and, as a result, the license was not suspended. In 2015, the operator’s license was suspended by ABC for “failure to operate as a bona fide eating place” and “purchasing alcohol from a retailer for resale.” Following corrective actions, the operator was allowed to re-open the restaurant in 2016.
Census Tract Overconcentration
The project site is located in Census Tract 1.00. ABC has determined that three (3) on-sale and three (3) off-sale alcoholic beverage establishments are allowed within the Census Tract. Currently, there are 31 existing on sale licenses, including the applicant’s Type 47 License, and nine (9) existing off-sale licenses in the Census Tract (Attachment E - Census Tract 1.00/Liquor Licenses). Therefore, the area is over-concentrated with both on-sale and off-sale establishments. According to ABC staff, exchanging the applicant’s Type 47 License for a Type 48 License will not result in a net increase in the number of active licenses and will not increase the existing overconcentration. Therefore, a Finding of Public Convenience or Necessity (PCN) will not be required for this project.
Location Restrictions
Stockton Municipal Code (SMC) Section 16.80.040 contains the following locational criteria for alcoholic beverage sales establishments:
Proximity to Schools and Parks
Section 16.80.040.D(2) requires a minimum separation of 500 feet between new alcoholic beverage sales establishments (including both on-sale and off-sale uses) and public or private academic schools for students in kindergarten through 12th grade, nursery schools, preschools, day care facilities, public parks, playgrounds, recreational areas, or youth facilities. The nearest school, Stockton Collegiate Elementary and High School, a charter school located at 321 East Weber Avenue, is approximately 390 feet to the southwest of the project site. According to records maintained by the San Joaquin County Office of Education, there are no County OneSchools located within 500 feet of the project site. The nearest traditional public schools, Pittman and Alex D. Spanos Elementary Schools (Stockton Unified School District), are located approximately 2,000 and 2,700 feet, respectively, to the northeast and south of the project site (Attachment E - Census Tract 1.00/Liquor Licenses). Finally, staff is not aware of any parks, playgrounds, recreational areas, or youth facilities within 500 feet of the project. Due to the proximity of the noted charter school, the subject use does not comply with the noted minimum required separation.
High Crime Reporting District
SMC Section 16.80.040.D(2)(d)(i) provides that a business with the on-sale of alcoholic beverages shall not be located in a Crime Reporting District (CRD), where the average number of crimes in that district exceeds the average number of crimes for all CRDs Citywide by more than 20 percent. The project site is located in CRD No. 102, consisting of 24 blocks in the downtown area between Park Street, California Street, Weber Avenue, and El Dorado Street. For the purpose of tabulating CRD crime statistics, the Police Department tracks only Part 1 crimes, which consist of homicide, rape, robbery, aggravated assault, burglary, auto theft, larceny, and arson. According to statistics maintained by the Police Department, CRD No. 102 had 222 Part 1 crimes reported from 2013 through 20153. That number is 161.18% above the average number of calls in the City for that period which is 85. Therefore, the subject use does not comply with the noted restriction.
Proximity to Other Alcoholic Beverage Sales Establishments
Section 16.80.040.D(2)(d)(i) provides that when an application for a new alcoholic beverage establishment is reviewed for approval, the proximity to existing on-sale establishments may serve as grounds for denial. Specifically, that section provides that the establishment shall not be located in an area within 500 feet of an existing on-sale alcoholic beverage establishment or any location that would lead to the grouping of more than four (4) on-sale alcoholic beverage establishments within a 1,000-foot radius. There are three (3) on-sale alcoholic beverage establishments within a 500-foot radius of the project site, not including the applicant’s existing on-sale (Type 47) license, and 13 on-sale alcoholic beverage establishments within a 1,000-foot radius of the project site, not including the applicant’s on-sale license. (Attachment E - Census Tract 1.00/Liquor Licenses). Based on the above information, the subject bar does not comply with both of the noted minimum separation requirements.
Waivers
The SMC provides the applicable Review Authority with the discretion to waive the above-noted location restrictions to promote and support local economic business growth, throughout the City, including the Downtown District.
The City of Stockton 2012 Urban Land Institute (ULI) Assessment outlined a recommended focus area for revitalization in the downtown. The ULI Panel recommended that revitalization efforts focus on the Miner Avenue corridor from Weber Point to Cabral Station, including areas within one to two blocks north and south. This area includes the subject site on Sutter Street. The Panel also outlined key characteristics of a successful downtown, including:
• having a broad mix of uses in the public, private, and civic realm, offering commercial, government, medical, educational, cultural, residential, and recreation functions;
• activity across the day (into evenings) and week (including weekends); and
• lively street frontages.
The subject bar does not reflect consistency with these characteristics and staff recommends that the location restrictions not be waived. The applicant proposes no improvements over the existing conditions, other than possibly a slight increase in the very limited hours of operation and adding a coat of stucco over the brick façade. (Attachment D - Street Elevation).
Findings
The Development Code contains specific findings, all of which must be made in the affirmative to support the approval of a Use Permit. If one or more of the findings cannot be made by the review authority, the Use Permit cannot be approved.
General Findings
There are seven required General Findings in SMC Section 16.168.050.A. They require compliance with all applicable provisions in the SMC; maintaining the integrity and character of the applicable zoning district; consistency with applicable General Plan objectives and policies; physical suitability of the site for the proposed use; not endangering or jeopardizing the public health, safety, peace, or general welfare of the public; compatibility with surrounding uses; and consistency with the California Environmental Quality Act. Regarding these General Findings, the project does not comply with applicable provisions of the Development Code, because the proposal is not consistent with the three (3) noted location restrictions and a waiver of these restrictions is not recommended. Also, as indicated in the Proposed Resolution, the project does not strengthen the integrity of either the surrounding area or the overall downtown, could jeopardize or be hazardous to public peace and welfare, and could be incompatible with surrounding land uses.
Problem Use Findings
The proposed bar, which involves the on-sale of alcoholic beverages not in conjunction with a restaurant, is defined by the Development Code as a Problem Use. Section 16.168.050.B requires three specific Findings for Problem Uses, which are defined as uses that have “a blighting and/or deteriorating effect upon their surroundings, and which may be dispersed to minimize their adverse impacts.” The problem use findings are that the use would not interfere with the comfortable enjoyment of life or property, increase deterioration or blight, and be contrary to any program of neighborhood conservation or improvement.
The proposed bar is likely to interfere with the comfortable enjoyment of life or property in the area due to its potential adverse impact on crime problems in the area, because no evidence has been submitted to confirm that it would not increase blight or deterioration in the area, and has the potential to adversely affect the conservation and improvement of the area.
Alcoholic Beverage Findings
Section 16.168.050.C requires four specific findings for Alcoholic Beverages. The first finding addresses the project’s potential to result in nuisance activities on and in close proximity to the subject site. The three remaining findings deal with training in ABC alcohol regulations, compliance with applicable governmental regulations, and the possible need for an ABC Public Convenience or Necessity Finding and do not need to be addressed, because staff is recommending that the City Council deny the appeal. With respect to the first of the required findings, the use can be expected to result in nuisance activities, due to the additional calls for police service that can be expected from the use. The project site is located in an area that already experiences a relatively high level of crime problems.
Public Comments
Staff provided public notice and advertising to the surrounding neighborhood as required by the Development Code and has not received any public communication on the proposed project.
External Communication
On November 28, 2016, staff received a letter addressed to the Planning Commission from the applicant’s attorney (Attachment F - Supplemental Information from Applicant’s Attorney). The letter addressed a variety of issues, including the site’s proximity to the nearest school, location in a High Crime Reporting District, and proximity to other alcoholic beverage establishments. The letter also addressed the granting of waivers to required Location Restrictions, the project’s required Findings for Approval, and the absence of public comment regarding the project. Page six of the letter also states that the bar would operate only two days per week, contrary to what the attorney stated at the Commission hearing.
Staff reviewed the letter and determined it did not change staff’s recommendation to deny the Use Permit. The applicant’s attorney seemed to imply that the location restrictions did not apply to this request because there is already a restaurant with an on-sale license at the location. In doing so, he failed to recognize that the proposed bar is a new use proposed for the site and is, therefore, subject to the requirement to obtain a new Use Permit and comply with all alcohol-related code requirements; the existence of a license to operate a restaurant did not confer any rights to change the use to a bar, nor did it excuse such a bar from complying with the applicable requirements of the Development Code.
The applicant’s attorney also failed to acknowledge the differing impacts of a bar and a restaurant. The differing impacts of these uses are why bars and restaurants are regulated differently at both local and statewide levels. Locally, a bar requires a Use Permit, while a restaurant with alcohol sales does not; under ABC regulations, a different license type is required for each of these business types. In acknowledging these differences, the Development Code is more restrictive on bars than restaurants, because the intensity of alcoholic beverage sales activity is greater at bars than at restaurants and the Development Code’s objective is to protect the public from the greater impacts of alcoholic beverage sales activity associated with bars. For this same reason, the attorney’s assertions regarding crime reports at the site are not relevant, because they are not crime reports for a bar, but for a restaurant.
Planning Commission Action
At the December 15, 2016 public hearing, the applicant’s attorney spoke in support of the project, citing the operator’s five-year history of operating the business. He discussed the subject site’s five-year history of calls for police service and stated that the subject use would not be incompatible with or interfere with existing uses in the area. The applicant’s attorney also indicated that the ABC violations were committed by an operator who leased the business from the applicant and not by the applicant himself.
During the public hearing, a representative of the Police Department provided clarification to the Planning Commission regarding the five-year history of police calls for service to the subject site. Information that was previously provided to the applicant’s attorney mistakenly cited zero calls for service during the noted period. An updated report indicated that there had actually been 51 calls for service. The applicant’s attorney was advised of the corrected data before the start of the Planning Commission’s public hearing. An updated calls for service report was provided to the applicant’s attorney by the Police Department (Attachment G - Corrected Police Calls for Service). No one spoke in support of or in opposition to the subject project.
Following public testimony, members of the Planning Commission expressed concerns regarding the limited days and hours of operation for the proposed bar, the number of police calls for service over the five-year period that the subject site has been owned by the applicant and the potential adverse impact of a bar at this site on the downtown area. The Planning Commission was unable to make affirmative findings to support the request, and the application was denied on a 6 to 0 vote (Hernandez absent), relying on the findings contained in the Planning Commission’s staff report and as stated in the Proposed Resolution.
Applicant Appeal
On December 22, 2016, the applicant’s attorney filed an appeal of the Planning Commission’s decision, stating that the establishment had been in operation for many years, the site’s proximity to an existing charter school should not have been considered by the Planning Commission, crime reporting criteria was inappropriately applied, and that the subject use should not have been evaluated as a new alcoholic beverage sales establishment.
The City Council may uphold the Commission’s action and deny the appeal with a majority vote or override the Commission’s action with five concurring votes, in accordance with the provisions of SMC Section 16.100.040.G.1.
ENVIRONMENTAL REVIEW
Denial of the application does not constitute a project under the California Environmental Quality Act (CEQA) and, therefore, no environmental analysis is needed for the proposed use.
FINANCIAL SUMMARY
There is no anticipated financial impact to the City as a result of the project.
Attachment A - Appeal Letter
Attachment B - Aerial Photograph/Site Plan
Attachment C - Floor Plan
Attachment D - Street Elevation
Attachment E - Census Tract 1.00/Liquor Licenses
Attachment F - Supplemental Information from Applicant’s Attorney
Attachment G - Corrected Police Calls for Service