MEMORANDUM TO: FROM: BY: CITY COUNCIL TERESA McCLISH, COMMUNITY DEVELOPMENT DIRECTOR MATTHEW DOWNING, ASSOCIATE PLANNER SUBJECT: CONSIDERATION OF CONDITIONAL USE PERMIT 14-010; SALE OF DISTILLED SPIRITS; LOCATION: 1168 W. BRANCH STREET; APPLICANT: WALMART STORES, INC.; REPRESENTATIVE: MALOU REYES, GRESHAM-SAVAGE DATE: JULY 28, 2015 RECOMMENDATION: It is recommended by the Planning Commission that the City Council adopt a Resolution approving Conditional Use Permit Case No. 14-010 for the sale of distilled spirits at Walmart. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: None. BACKGROUND: Location Subject Property Item 9.b. - Page 1
CITY COUNCIL CONSIDERATION OF CONDITIONAL USE PERMIT CASE NO. 14-010 JULY 28, 2015 PAGE 2 The subject property is part of a prior Planned Development (PD-1.2) area, and therefore requires City Council action to amend the previously approved plan. The project site is located within the Five Cities Center, has vehicular access from West Branch Street, Rancho Parkway, and Camino Mercado, and is zoned Regional Commercial (RC). The site is currently developed and contains the Arroyo Grande Walmart store. Staff Advisory Committee The Staff Advisory Committee (SAC) reviewed the proposed project at a meeting on January 14, 2015. The SAC had concerns regarding the originally proposed location of the distilled spirits in the store and in a location being easily accessible to minors, given that the store generally focuses sales on items for everyday living. In order to address this concern, the applicant modified the project description to include relocation of the liquor storage to be in locking cabinets near the registers, where tobacco products are stored. Following the change in project description, members of the SAC were in support of the project with conditions of approval identified in the attached Resolution. Planning Commission The Planning Commission reviewed the proposed project at a meeting on June 16, 2015 (Attachment 1). The Commission was in support of the project as refined by the SAC, recommending approval of the project. The Commissioners included conditions of approval that required a security camera dedicated to the locking display cabinets and that any expansion of the area dedicated to liquor sales be reviewed and approved by the Planning Commission. ANALYSIS OF ISSUES: Project Description The applicant has submitted an application for a conditional use permit (CUP) to expand existing alcoholic beverage sales at the subject property to include distilled spirits. Current alcoholic beverage sales are limited to beer and wine only. The intensification of alcoholic beverage sales requires a CUP in accordance with Municipal Code Table 16.36.030(A). Approval of the CUP would also allow the applicants to seek a Type 21 License from the California Department of Alcoholic Beverage Control (ABC). No modifications or expansions to the exterior of the building are being proposed as part of this application. Type 21 Liquor License The Type 21 Liquor License is issued by the ABC for Off Sale General alcohol sales. This authorizes the sale of beer, wine and distilled spirits for consumption off the premises where sold. Additionally, it is issued for locations where minors are allowed on premises. The Type 21 License is the license carried by traditional liquor stores. Walmart currently has a Type 20 License, which authorizes the sale of beer and wine for consumption off premises. Item 9.b. - Page 2
CITY COUNCIL CONSIDERATION OF CONDITIONAL USE PERMIT CASE NO. 14-010 JULY 28, 2015 PAGE 3 Locked Liquor Cabinets The applicant has included placing the distilled spirits in approximately thirteen (13) locked cabinets as part of the project description, as suggested by the SAC (Attachment 1). In order to allow flexibility in future cabinet locations, Condition of Approval No. 11 was created requiring the locked cabinets, but no specified location. The Council could require the cabinets be located near the registers at all times, if desired. Limitations on Retail Stores in Excess of Ninety Thousand Square-Feet Arroyo Grande Municipal Code Section 16.52.220 addresses limitations on retail stores in excess of ninety thousand square feet. The purpose of these requirements is to limit the development of large retail stores by restricting their ability to sell nontaxable items to such an extent that they negatively impact the rural, small town character of the City and change exiting land use patterns. The Arroyo Grande Walmart store has a total building area of 100,459 square-feet and therefore should be subject to these standards. However, areas not dedicated as sales areas, including restrooms, offices, backrooms, storage spaces, etc., do not count toward this total building area. As shown on the project plans, Walmart contains 88,822 square-feet of enclosed sales floor area. This is slightly less than the 90,000 square-feet required for the regulations to be triggered. Therefore, the limitations on nontaxable items do not apply. ALTERNATIVES: The following alternatives are provided for the Council s consideration: Adopt the attached Resolution approving Conditional Use Permit Case No. 14-010; Modify and adopt the attached Resolution approving Conditional Use Permit Case No. 14-010; Do not adopt the attached Resolution and instead provide direction for staff to return with an appropriate resolution, including findings, denying Conditional Use Permit Case No. 14-010; or Provide direction to staff. ADVANTAGES: The proposed project will expand the breadth of items available for sale at Walmart. It can allow for a greater one-stop shopping experience by the store s customers. DISADVANTAGES: The expansion of alcoholic beverage sales to include distilled spirits could negatively impact liquor stores within the City as a result of the potential one-stop shopping identified as an advantage. However, distilled spirits are also already sold at other locations in the City, such as drug stores and supermarkets. Item 9.b. - Page 3
CITY COUNCIL CONSIDERATION OF CONDITIONAL USE PERMIT CASE NO. 14-010 JULY 28, 2015 PAGE 4 ENVIRONMENTAL REVIEW: The Community Development Department has reviewed the project in compliance with the California Environmental Quality Act (CEQA) and determined that the project is categorically exempt per Section 15301(e) of the CEQA Guidelines regarding existing facilities. PUBLIC NOTIFICATION AND COMMENTS: On Friday, July 17, 2015, a notice of public hearing was mailed to all property owners within 300 of the project site, was published in The Tribune, posted in front of City Hall and on the City s website. The agenda was posted at City Hall on Thursday, July 23, 2015 and the agenda and staff report were posted on the City s website on Friday, July 24, 2015. No comments have been received by staff. Attachment: 1. Minutes from the June 16, 2015 Planning Commission meeting 2. Project Plans Item 9.b. - Page 4
RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE APPROVING CONDITIONAL USE PERMIT CASE NO. 14-010; LOCATED AT 1168 W. BRANCH STREET; APPLIED FOR BY WALMART STORES, INC. WHEREAS, the City Council adopted Resolution No. 3157 approving land use entitlements for the Five Cities Center development on July 9, 1996 as part of a former Planned Development area; and WHEREAS, the applicant operates the Arroyo Grande Walmart store located at 1168 W. Branch Street; and WHEREAS, the applicant has filed an application for Conditional Use Permit 14-010 to authorize the sale of distilled spirits at an existing commercial business; and WHEREAS, the Planning Commission considered the proposed project at a public hearing on June 16,2015 and adopted a Resolution recommending the City Council approve the conditional use permit; and WHEREAS, the City Council has reviewed the project in compliance with the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the Arroyo Grande Rules and Procedures for Implementation of CEQA and has found and determined that the project is exempt per Section 15301(e) (Existing Facilities) of the CEQA Guidelines; and WHEREAS, the City Council has reviewed the project at a duly noticed public hearing on July 28, 2015; and WHEREAS, the City Council finds, after due study, deliberation and public hearing, the following circumstances exist: Conditional Use Permit Findings: 1. The proposed use is permitted within the subject district pursuant to the provisions of this section and complies with all the applicable provisions of this title, the goals, and objectives of the Arroyo Grande General Plan, and the development policies and standards of the City. Alcoholic beverage sales are an allowed use in the Regional Commercial (RC) zoning district following approval of a conditional use permit per Section 16.36.030 of the Municipal Code and while the retail store currently sells beer and wine, the sale of distilled spirits would be an intensification of that use requiring approval of a conditional use permit to ensure compliance with the Municipal Code. Item 9.b. - Page 5
RESOLUTION NO. PAGE 2 2. The proposed use would not impair the integrity and character of the district in which it is to be established or located. The existing retail store currently sells beer and wine and the intensification of use associated with alcoholic beverage sales would not impair the integrity and character of the RC district in light of the stated purpose of the RC zoning district per Municipal Code Subsection 16.36.020(I) and conditions of approval developed for the project to help ensure integrity and character are maintained. 3. The site is suitable for the type and intensity of use or development that is proposed. The site contains an existing retail business that currently sells beer and wine and therefore is suitable for the expanded alcoholic beverage sales. Conditions of approval have been developed for the project to ensure the expanded alcoholic beverage sales does not result in any adverse impacts on adjacent land uses. 4. There are adequate provisions for water, sanitation, and public utilities and services to ensure public health and safety. The expansion of use for alcoholic beverage sales to include distilled spirits is not anticipated to require addition provisions for water, sanitation, and public utilities and services. Therefore, there are adequate provisions for all utilities and services necessary to ensure public health and safety. 5. The proposed use will not be detrimental to the public health, safety or welfare or materially injurious to properties and improvements in the vicinity. The expansion of use for alcoholic beverage sales to include distilled spirits will not be detrimental to the public health, safety or welfare due to conditions of approval developed for the project to ensure public health, safety and welfare. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande hereby approves Conditional Use Permit Case No. 14-010, as presented to the City Council on July 28, 2015 and shown in Exhibit B, attached hereto and incorporated herein by this reference as though set forth in full, with the above findings and subject to the conditions as set forth in Exhibit "A", attached hereto and incorporated herein by this reference. Item 9.b. - Page 6
RESOLUTION NO. PAGE 3 On motion by Council Member, seconded by Council Member, and by the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was adopted this 28 th day of July 2015. Item 9.b. - Page 7
RESOLUTION NO. PAGE 4 JIM HILL, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: ROBERT McFALL, INTERIM CITY MANAGER APPROVED AS TO FORM: HEATHER WHITHAM, CITY ATTORNEY Item 9.b. - Page 8
RESOLUTION NO. PAGE 5 EXHIBIT A CONDITIONS OF APPROVAL CONDITIONAL USE PERMIT CASE NO. 14-010 1168 W. BRANCH STREET This approval authorizes the sale of beer, wine and distilled spirits for consumption off the premises at the Arroyo Grande Walmart store, with appropriate Alcoholic Beverage Control (ABC) permits. COMMUNITY DEVELOPMENT DEPARTMENT PLANNING DIVISION GENERAL CONDITIONS 1. The applicant shall ascertain and comply with all Federal, State, County and City requirements as are applicable to this project. 2. The applicant shall comply with all conditions of approval for Conditional Use Permit Case No. 14-010. 3. The project shall occur in substantial conformance with the plans presented to the City Council at the meeting of July 28, 2015 and marked Exhibit B. 4. The applicant shall agree to indemnify and defend at his/her sole expense any action brought against the City, its present or former agents, officers, or employees because of the issuance of said approval, or in any way relating to the implementation thereof, or in the alternative, to relinquish such approval. The applicant shall reimburse the City, its agents, officers, or employees, for any court costs and attorney's fees which the City, its agents, officers or employees may be required by a court to pay as a result of such action. The City may, at its sole discretion, participate at its own expense in the defense of any such action but such participation shall not relieve applicant of his/her obligations under this condition. 5. A copy of these conditions shall be incorporated into any construction documents necessary for or resulting from this approval. 6. This approval shall expire on July 28, 2017 unless a building permit is issued for the project prior to that date. 7. All conditions of approval from Resolution No. 3157 and subsequent approvals shall remain in full force and effect, in addition to the conditions of approval contained herein. Item 9.b. - Page 9
RESOLUTION NO. PAGE 6 BUILDING AND LIFE SAFETY DIVISION BUILDING CODES 8. The project shall comply with the most recent editions of all California Codes, as adopted by the City of Arroyo Grande. DISABLED ACCESS 9. Provide complete compliance with State and Federal disabled access requirements. OTHER APPROVALS 10. Any review costs generated by outside consultants, shall be paid by the applicant. POLICE DEPARTMENT 11. Distilled spirits displayed for sale shall be located in locking cabinets at all times. An employee of the Arroyo Grande Walmart store shall be required to retrieve distilled spirits and hand deliver it to the purchasing customer. PLANNING COMMISISON CONDITIONS 12. A security camera shall be dedicated to monitoring the distilled spirits case at all times. 13. If the floor area dedicated to increase, the request shall return to the Planning Commission to amend this Conditional Use Permit. Item 9.b. - Page 10
EXHIBIT B Item 9.b. - Page 11
PLANNING COMMISSION PAGE 2 MINUTES JUNE 16, 2015 Associate Planner Heffernon presented the staff report, recommended that the Planning Commission adopt a Resolution approving Amended Conditional Use Permit No. 15-002, and responded to questions from the Commission. Vice-Chair Keen opened the public hearing. Tricia Knight, applicant, stated Sprint and Nextel have merged together and responded to Commission questions on the proposed project. Hearing no further public comments, Vice-Chair Keen closed the public hearing. ATTACHMENT 1 Action: Commissioner Mack, moved to adopt a resolution entitled A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF ARROYO GRANDE APPROVING AMENDED CONDITIONAL USE PERMIT NO. 15-002, APPLIED FOR BY SPRINT, LOCATED AT 200 HILLCREST DRIVE (CITY RESERVOIR NO. 2). Commissioner Keen seconded and the motion passed on the following roll call vote: AYES: NOES: ABSENT: Mack, Keen, Fowler-Payne None Martin, George 8.b. CONSIDERATION OF CONDITIONAL USE PERMIT NO. 14-010; SALE OF DISTILLED SPIRITS; LOCATION 1168 W. BRANCH STREET; APPLICANT WALMART STORES, INC.; REPRESENTATIVE MALOU REYES Assistant Planner Downing presented the staff report and recommended that the Planning Commission consider the proposed project and make a recommendation to the City Council. Assistant Planner Downing responded to questions from the Commission on the proposed project. Vice-Chair Keen opened the public hearing. Lisa Kolieb, representative of Walmart, Hope Street, Los Angeles, presented the proposed project and responded to questions from the Commission. Shelly Watson, manager of Walmart, responded to questions from the Commission on the proposed project. Hearing no further public comments, Vice-Chair Keen closed the public hearing. The Commission provided the following comments: like the locking cabinets for the distilled spirits; concern with increased sale of distilled spirits in City; if distilled spirits are relocated and increased in the floor area, it should come back before the Commission; would like to see a camera dedicated to the distilled spirit area; and want the doors to the distilled spirits cabinet restricted to Walmart personnel. Action: Commissioner Mack, moved to adopt a resolution entitled A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF ARROYO GRANDE RECOMMENDING THE CITY COUNCIL APPROVE CONDITIONAL USE PERMIT CASE NO. 14-010; LOCATED AT 1168 W. BRANCH STREET; APPLIED FOR BY WALMART STORES, INC. as modified to add a Condition of Approval that a camera be dedicated to observe the distilled spirits case; and add a Item 9.b. - Page 12
PLANNING COMMISSION PAGE 3 MINUTES JUNE 16, 2015 Condition of Approval that if floor area is increased for distilled spirits, the Conditional Use Permit come back before the Planning Commission. Commissioner Fowler-Payne seconded and the motion passed on the following roll call vote: AYES: NOES: ABSENT: Mack, Fowler-Payne, Keen None Martin, George 9. NON-PUBLIC HEARING ITEM 9.a. SUBSTANTIAL CONFORMANCE REVIEW OF CONDITIONAL USE PERMIT CASE NO. 14-005 AND PLANNED SIGN PROGRAM CASE NO. 14-001; ESTABLISHMENT OF A MICROBREWERY AND RESTAURANT; LOCATION 1462 EAST GRAND AVENUE (FORMER APPLEBEE S); APPLICANT FIGUEROA MOUNTAIN ENTERTAINMENT, LLC; REPRESENTATIVE TERRY BOTTENFIELD Assistant Planner Downing presented the staff report and is recommending the Planning Commission adopt the resolution for substantial conformance of façade treatment and sign installation with the plans approved on May 6, 2014. Assistant Planner Downing responded to questions from the Commission on the proposed project. Vice-Chair Keen opened the meeting for public comment. Terry Bottenfield, builder, responded to questions from the Commission on the proposed project. Commissioner Keen provided the following comments: likes the changes but not the process; the builder should have asked before constructing the changes; the ladder/cage is a requirement by OSHA; and is concerned with the location of the ladder/cage due to visual presence. Ted Moore, project representative, stated the project is over budget; indicated a mistake was made with regard to fabrication of multiple signs of the same size; and asked the Commission to approve the façade modifications that has already been made to the building. David Ferndinandi, restaurant representative, stated the cost of the sign was $17,000 and the sign cannot be used at another location. Steve Ross, Garden Street, stated that in the past, when a contractor did something that he was not supposed to do, the City charged the contractor a fee. Mr. Ross suggested charging a fee or fine and use the money for something positive. Hearing no further comments, Vice-Chair Keen closed the public comment period. Commissioner Mack stated the builder has done a substantial improvement; there are some modifications that have made the building more beautiful; questioned the placement of the awnings and if they are blocking sidewalk lights; not happy about the grain tower and cage; the electrical equipment should have been placed elsewhere; likes the windows as they are now; does not have a problem with the sign as it faces the shopping center; applying the trapezoidal method to measuring signs is appropriate; if the north elevation sign were removed entirely, does not think the building would look better and would leave a void; the builder has made the building more attractive; and is ready to move forward. Item 9.b. - Page 13
ATTACHMENT 2 Item 9.b. - Page 14