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SR-9C (3) qc AUG J 1 f \atty\munl\strpts\mJm\foodct City Council Meeting 8-17-99 Santa MOnica, California TO Mayor and City Council FROM City Attorney SUBJECT RecommendatIon to Conduct a Public Hearmg on the Need to RevIse Bayslde District Specific Plan to Protect and Foster Appropnate MIx of Retail, Restaurant and Other Uses on The Promenade and of the Need to Enact Interim Protections DUring the Amendment Process I ntrod u ctlon At Its meeting of July 13, 1999. the City Council directed City staff to suggest alternatives for dealing WIth two concerns an overall shift In the mix of uses on the Third Street Promenade In the direction of more retail outlets and fewer restaurants and the planned conversion of a particular food cou rt on the Promenade Into a retail outlet ThiS staff report responds to that direction Background The Third Street Promenade Isthe heart of the Clty's downtown bUSiness district Secunng and malntamlng the Promenade's economic Viability has been a Significant municipal goal for many years The former Third Street Mall never attained economic success By the mid-1980's Its long- standing phYSical and economic decline threatened the welfare of the entire bUSiness 1 ~99 --- -- ---- dlstnct In 1986, the City Council responded to this threat by adopting the Third Street Mall Specific Plan It provided a framework for revitalizing the mall and thereby enhanCing economic activIty throughout the downtown area Over the next couple of years, the City made substantial public Improvements pursuant to the Plan The pedestnan mall was redeSigned and Significantly enhanced through the addltlon offountams, public art, landscaping, Iightmg and other Improvements This effort created The Third Street Promenade In addition to the public Improvements, slgmflcant pnvate development also occurred Entertamment and restaurant uses Increased substantially, and the Promenade became an entertamment center Overall, the general goal of revitalizing the old mall was attained However, more work was necessary to maXimize the area's economiC success Consequently, the City returned to the planmng process In 1996, the City Council adopted the Bayslde Dlstnct Specific Plan which IS a component of the City's General Plan The specific plan establishes both goals and poliCies for the dlstnct, some general and others qUite specific For Instance, the general goals Include attracting and accommodatmg a mix of day time and evemng uses serving both reSidents and VIsitors Specific poliCies Include adding retail uses to the Third Street Promenade to complIment the Influx of restaurant and entertainment uses which had prollterated over the precedmg decade 2 - DISCUSSion The Council requested staff Input on two matters FIrst, the Council asked for suggestions for reassessing and ensunng the most desirable miX of retail and other uses on the Promenade Staff has begun amassmg factual Information relevant to thiS Issue and will present currently avaIlable data at the CouncIl meeting Staff's prelimInary assessment indIcates that, since the adoption of the Bayslde Dlstnct Specific Plan, the ten year projection for retail growth to be achieved by 2006 has already been met Today the Bayslde District Corporation reports that there are over 530,000 square feet In the Bayslde Dlstnct devoted to retail The Influx In retail establishments has substantially Increased demands on City parking facIlities Moreover, It has significantly Impacted the rental market on the Promenade because retail faclhtles command substantially higher rents than restaurant uses ThiS means the recent trend of increasing the concentration of retail uses and diminishing the concentration of restaurant uses will likely continue and probably escalate because property owners have a strong financial incentive to make the shift from restaurant to retail The continued expansion of retail uses has the potential to fundamentally change the character of The Promenade and Its overall ambIence It could also undermIne the lon9- term success of The Promenade which has as Its foundation the availability of a wide mix of commerCial establishments which serve both the local community and the regIon 3 Based upon information available as of the wrltmg of this report, staff believes that the Council should hold a publIc hearing and delIberate on the issue of whether changed circumstances warrant undertaking amendments to the Bayslde District Specific Plan Additionally, If the information presented to Council suggests that the mix of businesses on the Promenade IS likely to change so substantially dUring the course of that process as to Imperii the Promenade's ongoing economIc Vitality, the Council should also conSider dlrectmg staff to propose Interim measures which Will afford protectIon dUring the amendment process, which could be fairly lengthy At the July 13th meeting, the Council also directed staff to evaluate whether any action could or should be taken to protect eXisting tenants of a food court who are facing eviction because the owner has opted to change the property to a retaIl use. In response, staff obtained Information about that Situation In 1997, pursuant to longstanding plans and based upon the experience of operating the food court, the owner gave the tenants one- year notice that their leases would be terminated litigation ensued, and the owner and tenants have stipulated to a Judgment reqUiring the tenants to vacate by September of thiS year The owner has also already entered Into a long.term lease With a retail establishment Based upon these facts and a review of applicable legal constramts, staff has concluded that the Council has no Viable option for either protecting these tenancies or preservIng the present use 4 Recommendation Staff recommends that the Council hold a public heanng on the Issues of whether the Bayslde Dlstnct Specific Plan should be amended and whether circumstances warrant establishing intenm protections for the penod necessary to conclude the amendment process PREPARED BY Suzanne Fnck, Director of Planning and Community Development Marsha Jones Moutne, City Attorney Barry Rosenbaum, Senior Land Use Attorney 5 --- --- , ---