STAFF REPORT CITY OF LAKE OSWEGO PLANNING AND BUILDING SERVICES DEPARTMENT

STAFF REPORT CITY OF LAKE OSWEGO PLANNING AND BUILDING SERVICES DEPARTMENT APPLICANT City of Lake Oswego LOCATION Industrial Park (IP) Zone DATE OF REPORT January 31, 2017 FILE NO. LU 17-0002 STAFF Jessica Numanoglu PLANNING COMMISSION HEARING DATE I. APPLICANT'S REQUEST A request from the City of Lake Oswego for an amendment to the Community Development Code to allow bakeries in the Industrial Park Zone. The affected sections are LOC 50.03.002.3, Commercial, Mixed Use, Industrial and Special Purpose Districts Use Table, and LOC 50.03.003.6.g, Use Specific Standards. Ordinance 2736, which would enact these changes, is attached as Exhibit A-1. II. APPLICABLE REGULATIONS A. City of Lake Oswego Comprehensive Plan Land Use Planning Goal: Development (Community Development Code) Policy A-1.b Policy A-1.c Policy A-1.i Land Use Administration Policy D-1 Policy D-6 Planning Commission Public Hearing LU 17-0002 Page 1 of 13

Community Culture Goal: Civic Engagement Policy 1 Inspiring Places and Spaces Goal: Goal 1: Policy 1.b Economic Vitality Goal: Economic Development Policy A-2 Policy A-3 Policy A-4 Policy A-7 Policy A-9 Employment Zones Policy B-1 B. Metro Urban Growth Management Functional Plan Title 4: Protection of Employment Areas, Metro Code Section 3.07.440 C. State Transportation Planning Rule OAR 660-012-0060 Plan and Land Use Regulation Amendments D. City of Lake Oswego Community Development Code LOC 50.07.003.3.c. LOC 50.07.003.16a LOC 50.07.003.16b LOC 50.07.003.16c LOC 50.07.003.16.d.iii LOC 50.07.003.16.e Published Notice for Legislative Hearing Legislative Decisions Defined Criteria for Legislative Decision Required Notice to DLCD Planning Commission Recommendation Required City Council Review and Decision III. INTRODUCTION/BACKGROUND INFORMATION The proposed amendment was initiated by the City Council in response to a request by a production bakery to locate in a tenant space in the IP zone. Production bakeries, as used in this proposed code amendment, means a business that primarily manufactures and distributes baked goods for off-site sale and consumption, but may include some accessory retail sales onsite. Bakeries, are defined in the Community Development Code (CDC), LOC 50.10.003.2, as Planning Commission Public Hearing LU 17-0002 Page 2 of 13

a facility for the production, distribution, or retail or wholesale sale of baked goods, primarily for consumption off site. The products may be prepared either on or off site. Such use may include incidental on-site food and beverage consumption that complements consumption of baked products. Bakeries are not currently a permitted use in the IP zone; however, other types of food manufacturing, processing and distribution facilities could be allowed in the IP zone as light manufacturing (LOC 50.10.003.2). Because the definition of bakeries is broad, it includes both large production bakeries and small retail bakeries. Prior to the recent adoption of the Commercial Code Streamlining amendments (LU 15-0035), there were four different listings for bakeries in the Use Table (LOC 50.03.002.3), none of which were permitted in the IP zone. The bakery listings were differentiated by whether the baked goods were manufactured on or off site and the size of the facility. Bakeries were not defined at that time. The Commercial Code Streamlining amendments collapsed all four of the bakery listings into one use type, bakery, added a definition of that use (see above), and included use-specific standards to limit the size of bakeries in certain zones. There were no changes to which zones bakeries were permitted in. Due to the lack of a definition for bakery prior to the Commercial Code Streamlining amendments, one might have considered whether production baking facilities were previously distinct from the undefined bakery use, and thus permissible in the IP zone under either light manufacturing, processing or assembly of product or facilities for the manufacturing, warehousing, processing or assembly of products. It is not clear whether, and under which use a production baking facility would have been permitted as the City was not previously called on to make that interpretation; however, it is conceivable that such a use could have been differentiated from a small retail bakery as a permitted light manufacturing use in the IP zone. After the Commercial Code Streamlining amendments were adopted, the new definition of bakery encompassed both small retail and production baking facilities, so there is no longer any ambiguity in the meaning of bakery that would allow for an alternate interpretation; however, staff also finds no legislative intent to specifically disallow production bakery use in the IP zone. The proposed amendment would allow the broad range of bakery uses in the IP zone, but with a 2,000 sq. ft. size limitations on retail sales, a requirement that retails sales either co-locate in a building with another permitted use or be accessory to a production bakery, and a prohibition against drive-thru service, to be consistent with the purpose of the IP zone. The use-specific standards match the limitations for accessory restaurant uses that are currently permitted in the IP zone (see LOC 50.03.004.1.b.iv). This would allow small retail bakeries that are 2,000 sq. ft. or less in size to be co-located with another permitted use in the IP zone or production bakeries of any size, provided the accessory retail area does not exceed 2,000 sq. ft. IV. NOTICE OF APPLICATION A. Newspaper Notice On February 2, 2017 public notice of the proposed bakery amendment and Planning Commission public hearing will be published in the Lake Oswego Review. Planning Commission Public Hearing LU 17-0002 Page 3 of 13

B. ORS 227.186 (Measure 56) Notice As the proposed text amendment expands the list of permitted uses, no notice of the proposal was required by ORS 227.186 (Measure 56) to owners of property in the affected zones. C. DLCD Notice Pursuant to LOC 50.07.003.16.c and ORS 197.610, staff provided required notice of the proposed CDC text amendment to the Oregon Department of Land Conservation and Development (DLCD). D. Metro Notice Pursuant to Metro Code 3.07.810 and.820, staff provided notice of the proposed CDC text amendment to Metro not less than 35 days prior to the hearing date. V. COMPLIANCE WITH APPROVAL CRITERIA A. City of Lake Oswego Comprehensive Plan Land Use Planning Goal Policies: Development (Community Development Code) A-1. Maintain land use regulations and standards to: *** b. Promote compatibility between development and existing and desired neighborhood character; c. Minimize and/or mitigate adverse traffic impacts generated by new development on adjacent neighborhoods *** i. Enhance opportunities for mixed use development in Employment Centers, Town Centers, Commercial Corners, and appropriately zoned areas within Neighborhood Villages. Response: The IP zone is designated as an employment center in the Comprehensive Plan and is located in the Southwest Employment Area Plan, a special district plan incorporated in the Comprehensive Plan (SWEA Plan). According to the Comprehensive Plan, the community s vision for employment centers is to encourage development that results in uses with higher employee concentrations (Policy A-7(a), Economic Vitality chapter). In accordance with this vision, the goals of the SWEA Plan include increasing job densities, making the district an attractive business location with supportive uses such as small restaurants, and providing Planning Commission Public Hearing LU 17-0002 Page 4 of 13

additional flexibility for property owners to meet evolving market demands (see SWEA Plan Section 5, Land Use and Regulatory Structure). In order to assure compatibility between development in the SWEA Plan District and the surrounding neighborhoods, site and design standards for the district have been adopted to buffer adjacent residential areas from industrial activities and land uses and to provide a safe, efficient and effective transportation network for cars, freight trucks, bicycles, pedestrians, and transit (see LOC 50.05.008, Southwest Overlay District standards). Bakery development will be subject to these standards the same as they are applied to all other types of development in the IP zone. One of the SWEA Plan implementation actions is to change the permitted uses in the IP zone, which was completed as part of the Commercial Code Streamlining project in 2016 and included an amendment to allow restaurants (also includes coffee shops and delis) as accessory uses throughout the IP zone. Accessory restaurant uses cannot exceed 2,000 sq. ft. in gross floor area and must be co located in a building with another permitted use. In addition, drive-thru windows are prohibited. (See SWEA Plan Section 6 Implementation, Regulatory Actions). Small retail bakeries are substantially similar to accessory restaurant use in terms of trip generation, parking, and hours of operation. Trip Generation: The use, with restrictions on retail, is substantially similar in terms of trip generation to accessory restaurants, which are permitted in the IP zone subject to the same size and drive-thru limitations if also colocated with another permitted use. The trip generation rate for a fast food restaurant use without drive thru, which is permitted in the IP zone, is 26.15 vehicles per hour for the p.m. peak hour, per 1,000 square feet of building area (ITE code 933). Bread/bagel shops (ITE code 939) have a slightly higher trip generation of 28 vehicles per hour for the p.m. peak hour, per 1,000 square feet of building area; however, not all types of bakeries fit the description of bread/bagel shops in the ITE manual (e.g., bakeries that specialize in manufacturing single products primarily for wholesale without a drive-thru would not fit the bagel/bread shop description). Parking: Restaurants without a drive-thru window require 13.3 spaces per 1,000 sq. ft. of gross floor area while specialty food stores, such as coffee, bagels, juice bars (take-out food/drink primarily) require 9.9 spaces per 1,000 sq. ft. of gross floor area. Light Manufacturing requires 1.6 spaces per 1,000 sq. ft. of gross floor area. Production bakeries require parking for the primary bakery use (akin to manufacturing) and any accessory uses, such as retail. Planning Commission Public Hearing LU 17-0002 Page 5 of 13

Hours of Operation: Limited retail uses that support the higher employment densities in the area would naturally constrain their operations to the hours that provide service to those workers. Bakeries by contrast, are similar to manufacturers in that their work shifts may not be limited to retail customer hours. Other types of large food production and processing facilities are already permitted in the IP zone as light manufacturing. By adopting the same use-specific standards as accessory restaurants to limit the size of the retail component of bakeries to 2,000 sq. ft., requiring retail components to be co-located in a building with another permitted use in the zone, and prohibiting drive-thru windows, the amendment to allow bakeries in the IP zone will assure the size and scale of the use is appropriate for the SWEA Plan District as envisioned in the Comprehensive Plan and that the traffic impacts and employee concentrations will be substantially similar to uses already permitted in the SWEA Plan District, e.g., accessory restaurants and light manufacturing. The Comprehensive Plan defines mixed use broadly to include a variety of complementary and integrated uses on a single tract of land. It lists residential, office, retail, public and entertainment uses, but the list is not exhaustive and any combination may constitute a mix of uses so long as it is on a single tract of land. Adding bakeries to the list of allowed uses increases the options for mixed-use with a focus on manufacturing with limited retail. These criteria are met. Land Use Administration D-1. Coordinate the development and amendment of City plans and actions related to land use with other affected agencies, including county, state, Metro, federal agencies and special districts. *** D-6. Legislative amendments may be initiated only by staff, the Planning Commission or City Council. Any interested person may request that the Planning Commission or City Council initiate a legislative amendment. Response: This proposal includes public notice of the proposed text amendments in compliance with adopted land use regulations. Staff has also provided notice of the proposal to Metro and the DLCD. The proposed amendment was initiated by the City Council in response to a request by a prospective business. These criteria are met. Planning Commission Public Hearing LU 17-0002 Page 6 of 13

Community Culture Chapter/ Civic Engagement Policies: 1. Provide citizen involvement opportunities appropriate to the scale of a given planning effort, and ensure those affected by a Plan have opportunities to participate in the planning process. Response: The amendments are being reviewed in a public hearing before the Planning Commission and a public hearing will also be held before the City Council. Notice of both hearings have or will be mailed to neighborhood and business associations and other affected organizations. This criterion is met. Inspiring Places and Spaces Chapter Policies: 1. Adopt implementation measures and guidelines that ensure: *** b. New development in mixed-use, commercial and employment areas: i. Promotes a safe and attractive pedestrian environment; ii. Reflects high-quality aesthetics, considering size, scale and bulk, color, materials, architectural style and detailing, and landscaping; and iii. Includes buffering and screening to protect residential uses and neighborhoods. Response: Policy 1.b applies to development standards, not uses. Nevertheless, the existing development standards of the Southwest Overlay (applicable to IP zone development) provide for a safe and attractive pedestrian environment and highquality building and site design, including landscaping, buffering and screening abutting residential uses and neighborhoods. Economic Vitality Chapter Policies: Economic Development A-2. Fully utilize existing buildings and maximize use of employment land through the following: a. Promote redevelopment of underutilized land; and b. Optimize the development of vacant employment land. Response: The proposed amendment promotes utilization of existing buildings and redevelopment by adding a permitted use in the IP zone. These criteria are met. Planning Commission Public Hearing LU 17-0002 Page 7 of 13

A-3. A-4. Provide flexibility for a diversity of spaces and sites to support the opportunity for business incubation and employment growth. Provide flexibility in employment zones to adapt to economic change. Response: Currently, bakeries are not permitted in the IP zone, but other types of food production and processing are permitted as light manufacturing. The proposed amendment would remove this barrier to food-based businesses that primarily manufacture and distribute baked goods (e.g., cakes, bread, pastries, etc.), which was inadvertently created by the Commercial Code Streamlining amendments when a broad definition of bakery was adopted. The proposed amendment would treat all types of food production and processing that meets the use-specific standards of the IP zone the same. These criteria are met. A-7. *** Locate employment and commercial uses in designated areas at appropriate scales and intensities, such as in Employment Centers, Town Centers, Neighborhood Villages, and Commercial Corners: a. Employment Centers focus primarily on higher-intensity employment uses, with supporting retail and service uses, commercial office, residential and cultural uses in select locations. *** A-9. Utilize land for light industrial uses within the SW Employment District and implement the special district plan that accommodates a range of uses including light industrial, office and supporting retail. Response: Please see the response under the Land Use Planning policy A-1, above. Employment Zones B-1 Provide opportunities for redevelopment and development in employment zones while: *** a. Providing required public facilities and services; b. Addressing impacts such as noise, traffic, and visual aesthetics, on adjacent land uses through site and building design; c. Complying with design and aesthetic standards to promote compatibility with Lake Oswego s community character; Planning Commission Public Hearing LU 17-0002 Page 8 of 13

d. Preserving natural resources and providing required open space; e. Addressing the adequacy of all transportation modes to, from, and within the development site; f. Maintaining a street system which provides efficient connections to transportation corridors and other activity centers including Employment Centers, Town Centers, Neighborhood Villages, and Commercial Corners; g. Maintaining safe and convenient pedestrian, bicycle and transit facilities/amenities that support efficient movements of people to and from the site; h. Promoting the efficient use of land by providing adequate* parking for customers and employees, according to national transportation standards; i. Minimizing the impacts of traffic generated on adjoining neighborhoods by routing traffic to major collectors; j. Promoting shared street access, parking facilities, and pedestrian connections with other businesses to provide more developable land area and reduce traffic congestion, parking, and safety problems. Response: Bakery development will be subject to the adopted site design, circulation, building design, Sensitive Lands, open space, and lot coverage requirements that are applied to all other types of development in the IP zone. These criteria are met. B. Metro Urban Growth Management Functional Plan Title 4: Protection of Employment Areas, Metro Code Section 3.07.440 The IP zone in the SWEA Plan District is identified as Employment Land on Metro s Title 4 map. Employment Land is defined as areas of mixed employment that include various types of manufacturing, distribution and warehousing uses, commercial and retail development, as well as some residential development. Retail uses should primarily serve the needs of the people working or living in the immediate employment area, which is defined in the Metro Title through a square footage limitation of 60,000 sq. ft. of gross leasable area in a single building, or commercial retail uses with a total of not more than 60,000 square feet of retail sales area on a single lot or parcel, or on contiguous lots or parcels, including those separated only by transportation right-of-way (defined in LOC 50.10.003.2 as adjacent ). Planning Commission Public Hearing LU 17-0002 Page 9 of 13

Response: The proposed amendment complies with the Metro Title 4 restrictions on retail use by including a 2,000 sq. ft. limitation on the size of accessory retail sales of the bakery products and a limit on the cumulative square-footage of retail businesses or buildings to 60,000 sq. ft. on a single lot or parcel or on adjacent lots or parcels. C. State Transportation Planning Rule The City of Lake Oswego is required to comply with the State s Transportation Planning Rule (TPR) [OAR 660-012-0060]. The purpose of the transportation planning rule is to provide and encourage a safe, convenient and economic transportation system; to coordinate a land use and transportation system that supports a pattern of travel and land use in urban areas that will avoid air pollution, and traffic and livability problems; ensure a mix of transportation facilities and services to ensure economic, sustainable and environmentally sound and accessibility for all Oregonians; and to ensure coordination among levels of government and transit providers. If an amendment to land use regulation would significantly affect an existing or planned transportation facility, then the local government must put in place measures as provided in section (2) of the TPR, unless the amendment is allowed under section (3), (9) or (10) of the TPR. A land use regulation amendment significantly affects a transportation facility if it would: (a) Change the functional classification of an existing or planned transportation facility (exclusive of correction of map errors in an adopted plan); Response: No changes to the functional classification of an existing or planned transportation facility are proposed. (b) Change standards implementing a functional classification system; or Response: No changes to standards implementing a functional classification of an existing or planned transportation facility are proposed. (c) Result in any of the effects listed in paragraphs (A) through (C), below, based on projected conditions measured at the end of the planning period identified in the adopted TSP [Transportation System Plan]. As part of evaluating projected conditions, the amount of traffic projected to be generated within the area of the amendment may be reduced if the amendment includes an enforceable, ongoing requirement that would demonstrably limit traffic generation, including, but not limited to, transportation demand management. This reduction may diminish or completely eliminate the significant effect of the amendment. Planning Commission Public Hearing LU 17-0002 Page 10 of 13

(A) Types or levels of travel or access that are inconsistent with the functional classification of an existing or planned transportation facility; (B) Degrade the performance of an existing or planned transportation facility such that it would not meet the performance standards identified in the TSP or comprehensive plan; or (C) Degrade the performance of an existing or planned transportation facility that is otherwise projected to not meet the performance standards identified in the TSP or comprehensive plan. Response: The proposed amendment would allow bakeries, but with a limit on the size of the retail component to 2,000 sq. ft., a requirement that any retail use is co-located in a building with another permitted use in the zone or is accessory to the production bakery use, and a prohibition on drive-thru facilities. As discussed under Land Use Policy A-1 on pages 4-5, above, with these restrictions, the use is substantially similar in terms of trip generation to accessory restaurants, an allowed use in the IP zone. Other types of food production and processing facilities are already permitted in the IP zone as light manufacturing. The proposed amendment would correct the inadvertent exclusion of businesses that primarily manufacture and distribute baked goods (e.g., cakes, bread, pastries, etc.) when a broad definition of bakery was adopted with the Commercial Code Streamlining amendments. When the definition of bakery was adopted, there was no finding or legislative intent to exclude production bakeries because they were inconsistent with uses intended for Employment Centers. The proposed amendment would treat all types of food production and processing that meets the use-specific standards of the IP zone the same. D. Lake Oswego Community Development Code Procedural Requirements LOC 50.07.003.3.c. LOC 50.07.003.16a LOC 50.07.003.16b LOC 50.07.003.16c LOC 50.07.003.16.d.iii LOC 50.07.003.16.e Published Notice for Legislative Hearing Legislative Decisions Defined Criteria for Legislative Decision Required Notice to DLCD Planning Commission Recommendation Required City Council Review and Decision Findings: The Community Development Code 50.07.003.16.a defines legislative decisions to include amendments to Comprehensive Plan policies. Public hearings by the Planning Commission for recommendations to the City Council for legislative decisions are required to have at least ten days prior published notice, per LOC 50.07.003.16.d.iii and 50.07.003.3.c. Notice is defined as being published in a Planning Commission Public Hearing LU 17-0002 Page 11 of 13

newspaper of general circulation in the City of Lake Oswego at least ten days in advance of the hearing, and mailed at least ten days in advance to the Commission for Citizen Involvement and to all recognized neighborhood associations. The notice shall include: i. The time, date, and place of the public hearing; ii. A brief description of the proposed legislative amendment; and iii. A phone number for obtaining additional information. Notice of the public hearing was posted at City Hall, the Adult Community Center, and the Library on January 26, 2017. The hearing notice will be published in the Lake Oswego Review newspaper on February 2, 2017. Legislative notice was mailed per LOC requirements on January 24, 2017. The criteria for a legislative decision are addressed in Sections A-D, above. The City notified DLCD and Metro of the proposed action 35 days before the initial evidentiary hearings. Conclusion: Staff concludes that the Community Development Code (CDC) procedural requirements for the proposed legislative decision, including public notice requirements for the public hearing, are met per the applicable CDC criteria. VI. CONCLUSION/RECOMMENDATION EXHIBITS The proposed amendment is in compliance with City Comprehensive Plan policies, state laws, and statewide planning goals. Based on the information presented in this report, staff recommends that the Commission recommend adoption of the Code amendment stated in Exhibit A-1 by City Council. A. Draft Ordinances A-1 Draft Ordinance 2736, dated 01/31/17 Attachment 1: City Council Findings and Conclusions (Not yet available) Attachment 2: Proposed Draft Code Amendments with track-changes and commentary (for reference only), 01/31/17 Proposed Draft Code Amendments, 01/31/17 Planning Commission Public Hearing LU 17-0002 Page 12 of 13

B. Findings, Conclusion and Order B-1 Draft Planning Commission Findings, Conclusion and Order, 01/31/17 (Please note the Ordinance and Attachments A and B referenced in the Findings are not included. Refer to Ordinance 2736 and Attachment B above [Exhibit A-1]). C. Minutes [No current exhibits] D. Staff Reports [No current exhibits] E. Graphics/Plans [No current exhibits; reserved for hearing use] F. Written Materials G. Letters [No current exhibits] [No current exhibits; reserved for hearing use] BACKGROUND MATERIAL AND REFERENCES Staff reports and public meeting materials that were prepared for these code amendments can be found by visiting the project web page for LU 17-0002. Use the link below to visit the City s Project page. In the Search box enter LU 17-0002 then press Submit : http://www.ci.oswego.or.us/projects Planning Commission Public Hearing LU 17-0002 Page 13 of 13

ATTACHMENT A Reserved for City Council Findings (not included)

DRAFT 01/31/17 ORDINANCE NO. 2736 EXHIBIT A-1 LU 17-0002 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE OSWEGO AMENDING LOC CHAPTER 50 (COMMUNITY DEVELOPMENT CODE) TO ALLOW BAKERIES IN THE IP ZONE (LU 17-0002). WHEREAS, notice of the public hearing for consideration of this Ordinance was duly given in the manner required by law; and WHEREAS, a public hearing before the Planning Commission was held on, at which the staff report, testimony, and evidence were received and considered; and WHEREAS, the Planning Commission has recommended that this Ordinance, based on the record of LU 17-0002, be approved by the City Council; and WHEREAS, the amendment corrects an inadvertent error created when the definition of bakery was adopted last year that excluded production bakeries as a permitted use in the IP zone when other types of food production and processing are allowed as light manufacturing in that zone; and WHEREAS, the amendment to the Community Development Code is consistent with the Southwest Employment Area Plan, which is part of the Lake Oswego Comprehensive Plan, and complies with the other criteria stated in the staff report; and WHEREAS, a public hearing on LU 17-0002 was held before the City Council of the City of Lake Oswego on March 7, 2017, at which the staff report, testimony, and evidence were received and considered. The City of Lake Oswego ordains as follows: Section 1. The City Council adopts the Findings and Conclusions (LU 17-0002), attached as Attachment A. Section 2. The Lake Oswego Code is amended by adding the new text shown in underlined type and deleting text shown in strikethrough type in Attachment B. Section 3. Severability. The provisions of this ordinance are severable. If any portion of this ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of this ordinance. Section 4. Effective Date. As provided in Section 35C of the Lake Oswego Charter, this ordinance shall take effect on the thirtieth (30 th ) day following enactment. Ordinance No. 2736 EXHIBIT A-1/PAGE 1 OF 2

DRAFT 01/31/17 Enacted at the regular meeting of the City Council of the City of Lake Oswego held on the 7 th day of March 2017. AYES: NOES: ABSTAIN: EXCUSED: Kent Studebaker, Mayor ATTEST: Anne-Marie Simpson, City Recorder APPROVED AS TO FORM: David Powell, City Attorney Ordinance No. 2736 EXHIBIT A-1/PAGE 2 OF 2

DRAFT 01/31/17 Proposed Land Use Regulation Text Amendment (Changes shown in bold strikeout and double underline) ATTACHMENT B (Ordinance 2736) LU 17-0002 50.03.002 USE TABLE 3. COMMERCIAL, MIXED USE, INDUSTRIAL, AND SPECIAL PURPOSE DISTRICTS USE TABLE TABLE 50.03.002-2: COMMERCIAL, MIXED USE, INDUSTRIAL AND SPECIAL PURPOSE DISTRICTS USE TABLE P = Permitted Use Blank = Not Permitted C = Conditional Use A = Accessory Use [x] Table notes located at the end of the table Use Category Use Type NC [8], [9] GC Commercial, Mixed Use, Industrial WLG [4] HC OC EC CR& MC R- [9] [8] [8] D OC RMU 2.5 FMU [4], [7] I IP [5] Special Purpose CI PF [3] PNA Use-Specific Standards **** COMMERCIAL USES [6] 50.03.003.6 **** Bakery P P P P P P P P P P 50.03.003.6.g Bar P [10] P P P P 50.03.003.6.h Food and Beverage Services Food markets < 25,000 sq. ft. gross floor area Food markets 25,000 sq. ft. gross floor area or more P P P P P P P/C P P P P/C 50.03.003.6.l Restaurant P P/C P P P P P P P 50.03.003.6.u [10] **** 50.03.003 USE SPECIFIC STANDARDS **** 6. USE-SPECIFIC STANDARDS FOR COMMERCIAL USES **** (Includes Commentary-For Reference Only) Attachment B (Ordinance 2736)/Page 1 of 2

DRAFT 01/31/17 g. Bakery i. In the WLG OC zone, the seating area shall not exceed 700 sq. ft. of gross floor area. ii. Where on-site baked goods are sold within the building in the NC, HC, OC, CR&D, MC, and WLG OC zones, the business shall not exceed 5,000 sq. ft. gross floor area. iii. Where the baked goods that are sold are manufactured elsewhere, the cumulative square footage of retail businesses or buildings on a site shall not exceed 60,000 sq. ft. gross floor area on a single lot or parcel or on adjacent lots or parcels in the MC zone. In the CR&D zone, cumulative retail uses shall not exceed 20,000 sq. ft. gross floor area or 20% of the total building floor area per lot, whichever is less. The maximum numerical limitation on cumulative retail uses shall not exceed the retail square footage amount approved for the site. iv. In the IP zone, retail and on-site consumption of bakery goods shall not exceed 2,000 sq. ft. of gross floor area and must either be co-located within a building with another permitted use or be accessory to a production bakery. The cumulative square footage of retail businesses or buildings on a site shall not exceed 60,000 sq. ft. gross floor area on a single lot or parcel or on adjacent lots or parcels. No drive-through service is allowed. This amendment was initiated by the City Council in response to a request by a production bakery with accessory retail sales to locate in a tenant space in the IP zone. Bakeries are defined in LOC 50.10.003.2 as a facility for the production, distribution, or retail or wholesale sale of baked goods, primarily for consumption off site. The products may be prepared either on or off site. Such use may include incidental on-site food and beverage consumption that complements consumption of baked products. Bakeries are not currently a permitted use in the IP zone. Food production and processing (see definition of light manufacturing ) and wholesale distribution are allowed uses in the IP zone, but because the definition of bakeries is so broad, it includes both production bakeries, where the primary use is for the production and wholesale distribution of baked goods, as well as small retail bakeries. The proposed amendment would allow bakeries in the IP zone with a 2,000 sq. ft. limitation on the size of retail sales, a requirement that retail sales be co-located within a building with another permitted use or be accessory to a production bakery, and a prohibition against drive-through service to be consistent with the purpose of the IP zone. These match the existing limitations for accessory restaurant uses currently allowed in the IP zone (see LOC 50.03.004.1.b.iv). An overall restriction on the cumulative total of retail businesses on a site or adjacent parcels is also included to comply with Metro Title 4 restrictions in Employment Areas. The amendment would allow retail bakeries that are 2,000 sq. ft. or less in size in the IP zone or production bakeries of any size, provided the accessory retail area does not exceed 2,000 sq. ft. (Includes Commentary-For Reference Only) Attachment B (Ordinance 2736)/Page 2 of 2

DRAFT 01/31/17 Proposed Land Use Regulation Text Amendment (Changes shown in bold strikeout and double underline) ATTACHMENT B (Ordinance 2736) LU 17-0002 50.03.002 USE TABLE 3. COMMERCIAL, MIXED USE, INDUSTRIAL, AND SPECIAL PURPOSE DISTRICTS USE TABLE TABLE 50.03.002-2: COMMERCIAL, MIXED USE, INDUSTRIAL AND SPECIAL PURPOSE DISTRICTS USE TABLE P = Permitted Use Blank = Not Permitted C = Conditional Use A = Accessory Use [x] Table notes located at the end of the table Use Category Use Type NC [8], [9] GC Commercial, Mixed Use, Industrial WLG [4] HC OC EC CR& MC R- [9] [8] [8] D OC RMU 2.5 FMU [4], [7] I IP [5] Special Purpose CI PF [3] PNA Use-Specific Standards **** COMMERCIAL USES [6] 50.03.003.6 **** Bakery P P P P P P P P P P 50.03.003.6.g Bar P [10] P P P P 50.03.003.6.h Food and Beverage Services Food markets < 25,000 sq. ft. gross floor area Food markets 25,000 sq. ft. gross floor area or more P P P P P P P/C P P P P/C 50.03.003.6.l Restaurant P P/C [10] P P P P P P P 50.03.003.6.u **** Attachment B (Ordinance 2736)/Page 1 of 2

DRAFT 01/31/17 50.03.003 USE SPECIFIC STANDARDS **** 6. USE-SPECIFIC STANDARDS FOR COMMERCIAL USES **** g. Bakery i. In the WLG OC zone, the seating area shall not exceed 700 sq. ft. of gross floor area. ii. Where on-site baked goods are sold within the building in the NC, HC, OC, CR&D, MC, and WLG OC zones, the business shall not exceed 5,000 sq. ft. gross floor area. iii. Where the baked goods that are sold are manufactured elsewhere, the cumulative square footage of retail businesses or buildings on a site shall not exceed 60,000 sq. ft. gross floor area on a single lot or parcel or on adjacent lots or parcels in the MC zone. In the CR&D zone, cumulative retail uses shall not exceed 20,000 sq. ft. gross floor area or 20% of the total building floor area per lot, whichever is less. The maximum numerical limitation on cumulative retail uses shall not exceed the retail square footage amount approved for the site. iv. In the IP zone, retail and on-site consumption of bakery goods shall not exceed 2,000 sq. ft. of gross floor area and must either be co-located within a building with another permitted use or be accessory to a production bakery. The cumulative square footage of retail businesses or buildings on a site shall not exceed 60,000 sq. ft. gross floor area on a single lot or parcel or on adjacent lots or parcels. No drive-through service is allowed. Attachment B (Ordinance 2736)/Page 2 of 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 DRAFT: 01/31/17 BEFORE THE PLANNING COMMISSION OF THE CITY OF LAKE OSWEGO A REQUEST FOR A LEGISLATIVE TEXT ) LU 17-0002 - 1911 AMENDMENT TO THE COMMUNITY ) (CITY OF LAKE OSWEGO) DEVELOPMENT CODE TO ALLOW ) FINDINGS, CONCLUSIONS & ORDER BAKERIES IN THE IP ZONE ) NATURE OF APPLICATION Ths is a legislative amendment to the Community Development Code to allow bakeries in the Industrial Park Zone. The affected sections are LOC 50.03.002.3, Commercial, Mixed Use, Industrial and Special Purpose Districts Use Table, and LOC 50.03.003.6.g, Use Specific Standards. HEARINGS The Planning Commission held a public hearing and considered this application at its meeting on. CRITERIA AND STANDARDS A. City of Lake Oswego Comprehensive Plan Land Use Planning Goal: Development (Community Development Code) Policy A-1.b Policy A-1.c Policy A-1.i Land Use Administration Policy D-1 Policy D-6 Community Culture Goal: Civic Engagement Policy 1 Economic Vitality Goal: Economic Development Policy A-2 Policy A-3 Policy A-4 EXHIBIT B-1 LU 17-0002 LU 17-0002 EXHIBIT B-1/PAGE 1 OF 3

DRAFT: 01/31/17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Policy A-7 Policy A-9 Employment Zones Policy B-1 B. Metro Urban Growth Management Functional Plan Title 4: Protection of Employment Areas, Metro Code Section 3.07.440 C. Transportation Planning Rule OAR 660-012-0060 Plan and Land Use Regulation Amendments D. City of Lake Oswego Community Development Code LOC 50.07.003.3.c. Published Notice for Legislative Hearing LOC 50.07.003.16a Legislative Decisions Defined LOC 50.07.003.16b Criteria for Legislative Decision LOC 50.07.003.16c Required Notice to DLCD LOC 50.07.003.16.d.iii Planning Commission Recommendation Required LOC 50.07.003.16.e City Council Review and Decision CONCLUSION The Planning Commission concludes that LU 17-0002 is in compliance with all applicable criteria. FINDINGS AND REASONS The Planning Commission incorporates the staff report, dated January 31, 2017, for LU 17-0002 (with all exhibits) as support for its decision. ORDER IT IS ORDERED BY THE PLANNING COMMISSION of the City of Lake Oswego that: 1. The Planning Commission recommends that (Ordinance 2736, per Attachment B, dated 01/31/17 (LU 17-0002), be approved by the City Council. LU 17-0002 EXHIBIT B-1/PAGE 2 OF 3

DRAFT: 01/31/17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 I CERTIFY THAT THIS ORDER was presented to and APPROVED by the Planning Commission of the City of Lake Oswego. DATED this 13th day of February 2017. Chair Planning Commission ATTEST: ADOPTION OF FINDINGS AND ORDER - AYES: NOES: ABSTAIN: EXCUSED: LU 17-0002 EXHIBIT B-1/PAGE 3 OF 3