SR-410-001-04 (3)SEP 9 2003
PCD:SF:AA:f:\plan\admin\downtown task force\promenade uses study issues.doc
Council Mtg: September 9, 2003 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Promenade Uses - Study Session on Formula Business Regulation,
Bayside Assessment Formulas and Proposed Work Plan for
Implementation of Promenade Uses Task Force Recommendations
INTRODUCTION
This report provides background for the City Council's study session on formula
business regulation, Bayside District assessments and a work plan for implementation
of the Promenade Uses Task Force recommendations.
BACKGROUND
As directed by the City Council, the Promenade Uses Task Force held a series of
meetings and workshops during late 2002 and early 2003. The Task Force reviewed a
series of issues and strategies related to maintaining and enhancing the character and
experience of the Third Street Promenade and Bayside District.
DISCUSSION
On June 10, 2003, the City Council reviewed the recommendations of the Promenade
Uses Task Force and directed staff to return with the following:
1 Background information on regulation of formula businesses and current Bayside
District assessments to facilitate a City Council study session on related issues;
2 A proposed work plan for implementation of the Task Force recommendations;
and
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SEP 9 2003
3. An interim ordinance implementing the Task Force's recommendation that retail
uses on the Third Street Promenade be limited to no more than 50 linear feet.
FORMULA BUSINESS REGULATIONS
From its initiation, Third Street Promenade has been characterized by a blend of
relatively small, locally owned unique retail shops and restaurants, and major chain
movie theaters. A recent trend occurring in Santa Monica and in other popular,
pedestrian-oriented downtown areas has been the gradual replacement of pioneering,
locally owned, entrepreneurial establishments with "formula" businesses (see definition
below) attracted by the productive commercial activity found in successful commercial
venues.
The Task Force considered various disincentives and restrictions on formula
businesses to better preserve independent and local retailers and restaurants.
However, the majority of Task Force members opposed creating regulatory barriers to
the commercial marketplace based upon the ownership character of the business.
Definition of Formula Business
Municipalities that have enacted regulations directed towards formula businesses have
generally focused on the following features to determine whether a restaurant, retail or
other commercial establishment falls within the definition of a formula business:
• Business name common to a similar business located elsewhere
• Standardized features, services or uniforms, including menus, ingredients and
food preparation, common to a similar business located elsewhere I
. Interior decor common to a similar business elsewhere
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• Architecture, exterior design elements or themes and/or signage and farade
treatment common to a similar business located elsewhere
• Use of a trademark or logo common to a similar business located elsewhere, but
not including logos or trademarks used by chambers of commerce, better
business bureaus or rating organizations
• A name, appearance, business presentation or similar features which make a
business substantially identical to a similar business located elsewhere
Movie theaters, transient occupancy facilities (hotels, motels, hostels), drug
stores, grocery stores and automobile service stations are typically excluded
from formula business regulation
Public Purpose of Formula Business Restrictions
Various municipalities have adopted or considered findings that cite local public benefits
that arise from instituting regulatory restrictions or outright bans on formula businesses
within their jurisdictions. Among the aforementioned findings of adverse impacts of
large-scale influx of formula businesses are:
• Contribution to traffic congestion and increased parking demand
• Increased commercial rents to the disadvantage of locally owned businesses
• Change in small town neighborhood character
• Loss of unique and/or essential neighborhood services
Loss of non-traditional or unique goods
• Reduced pedestrian orientation
• Reduced recycling of business revenue and profits into the local economy
• Loss of local influence in content of products or merchandise available
Significant change to the physical scale of business facilities
A key goal of formula business regulations is to promote a diverse retail base with a
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unique retailing personality comprised of a mix of businesses. Such regulations
attempt to prevent a business district from being taken over by generic chain stores and
to create a commercial marketplace that is well-balanced in its appeal to the mixed
residential, employee and visitor markets.
A review of literature associated with anti-formula business organizations and the
alleged adverse impact on local economies by formula businesses purportedly arising
from reduced diversity of products or merchandise, diminution in local capital
reinvestment, hiring or spending, and detrimental change in community character
discloses it to be generally anecdotal and value-laden There are instances where local
non-formula businesses in certain market segments are larger and more intrusive than
nearby formula businesses.
In Davis, California, a group of residents attempted to use the California Environmental
Quality Act (CEQA) to require the city to utilize its design review discretion to exclude
formula businesses from locating in a publicly supported redevelopment project. The
California Court of Appeal found that the city could not use its discretionary design
review ordinance to exclude formula businesses, that State constitutional provisions
delegating to cities the power to make and enforce local ordinances and regulations not
in conflict with general law did not obligate the city to utilize discretionary review, that
the ownership character was insufficient to require additional project review under
CEQA, and that the social and economic effects of the presence of formula business did
not constitute potentially significant change in the environment warranting additional
CEQA review. (Friends of Davis v. Citv of Davis (2000) 100 Cal.Rptr. 413). However,
the case does not preclude formula business regulations generally.
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The Court of Appeal recently upheld a Coronado, California ordinance requiring formula
businesses to obtain a special use permit. In granting a formula business special use
permit, the ordinance requires findings that the establishment contributes to an
appropriate balance of local, regional and national-based busine~sses and
medium and large-sized businesses,
Survey of Regulatory Policies
Following is a summary of approaches adopted by various municipalities to address
formula business proliferation and to preserve the character of neighborhood
commercial districts. Copies of pertinent zoning codes and ordinances are available for
Council review. Additionally, many communities, including Santa Monica, have adopted
building size restrictions to prevent development of "big box" retail centers unless
subject to special use permits. These size restrictions appropriately address design,
traffic and commercial district character issues while preventing an undue concentration
of retail activity. The restrictions generally range from 20,000 s.f. to 120,000 s.f., and
are not the focus of this discussion. Similarly, building design and massing are
commonly addressed through community design guidelines to minimize visual impacts
from large-format retail facilities.
As shown in the summary below, several communities have adopted caps or outright
bans on certain types of formula businesses, most typically formula fast food
others focus on restricting the size and amount of street frontage of businesses
generally to maintain a desired scale and character of commercial development.
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Arcata, CA (2002)
• Caps formula restaurants at 9
• No new formula restaurants except as replacement
• Considered but did not adopt restrictions on formula retail busin~esses
Calistoga, CA (1996)
• Bans formula restaurants and formula visitor accommodations
• Special use permit required for all new formula retail businesses and all new
visitor accommodations
• Special use permit required for all commercial structures or multiple structures in
a single development in excess of 20,000 s.f. gross floor area and all parking lots
or multiple parking lots in a single development in excess of 50 .~paces
Carmel, CA (1986)
• Bans all fast food restaurants and all formula restaurants
Coronado, CA (2000)
• Caps formula fast food restaurants at 10
• Special use permit required for new formula retail and fast food restaurants
• Bans use of corner locations by formula fast food restaurants
• Caps commercial street frontage by single business at 50 feet and two floors
Pacific Grove, CA (1995)
• Bans formula fast food restaurants
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San Francisco, CA (2001)
• Formula businesses are not regulated or restricted
• Size of commercial development in Central Business District not constrained
except by CEQA impact anatysis
• Neighborhood Commercial Individual Area Districts (NCDs) created to maintain
appropriate scale of development, promote a balanced mix of retail and
restaurants, and preserve an equilibrium of neighborhood-serving specialty
shopping and dining
• Commercial size limits (movie theaters exempted) for each NCU as follows:
North Beach - 2,000 s.f.
Union Street, the Haight - 2,500 s.f.
Broadway, Upper Market - 3,000 s.f.
Other Districts - 4,000 s.f. to 6,000 s.f.
• Special use permit required for projects exceeding NCD thresholds, permissible
with finding that commercial activity is not such that allowing the use will
foreclose other needed neighborhood serving uses; proposed use will serve the
neighborhood in whole or in significant part; and structure is designed in discrete
elements which respect the scale of development in the NCD
Santa Cruz, CA (2000)
• Formula businesses are not regulated or restricted
• Special use permit required for all projects in excess of 16,000 s.f. in Central
Business District, permissible with finding that use adds a new type of business
to CBD; proposed project contributes to an appropriate balance of local, regional
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or national-based businesses with presumption that local and regional-based
businesses more effectively serve diversity (rebuttable by applicant); project
contributes to an appropriate balance of traditional and non-traditional
businesses; and contcibutes to an appropriate balance of small, medium and
large businesses with presumption that small and medium-sized businesses
more effectively serve diversity (rebuttable by applicant)
• Incentive program for community-based (local) businesses (not yet created)
• Adopted CBD Retail Specific Plan/Strategic Action Tasks to create recruitment
and retention strategy for local small businesses; develop guidelines for balance
of local, regional and national businesses; develop architectural design
guidelines and criteria; provide grants to existing businesses and low-interest
loans to new businesses for faCade improvements; and develop list of targeted
uses and business types for recruitment, with three-year abatement of parking
district fees and permitting assistance for targeted business types
Solvang, CA (1994)
• Bans formula restaurants
Palm Beach, FL (1988)
• Formula businesses not regulated or restricted
• Identifies "town-serving" commercial zone
• Commercial use greater than 2,000 s.f. require special use permit, permissible
with finding that at least 50% of customers will be persons living or working in city
• Regulation upheld in Florida court as reasonably in the public interest to limit
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displacement of local businesses
Boulder, CO
• Considered but did not adopt "Community Vitality Act" to cap number of formula
businesses; ban leasing of public property to non-local businesses; and establish
a city purchasing preference for locally owned businesses
Summary
Relatively few cities have enacted regulatory restrictions on formula restaurants, None
have banned or differentially restricted formula retail businesses, although special use
permits are required in Calistoga and Coronado. Those jurisdictions that do restrict
formula restaurants typically utilize zoning ordinances as the means to control the
number or to ban them entirely. These restrictions have reportedly not yet been
challenged in a California court, and it is therefore unknown whether they may stand or
be overturned. Santa Monica has established preferences for local independent
businesses in the leasing of its owned real estate assets on the Pier and within Bayside
District. Formula business caps are also under preliminary consideration in Aspen, CO
and 8anff, Alberta, Canada. The City of Palm Beach ordinance severely restricting
commercial size was tested in the Florida courts and upheld because it applied to
equally all commercial uses, and not narrowly to formula business.
It is interesting to note that the municipalities where formula business restrictions have
been adopted tend to be "boutique" communities that are physically isolated from
commercial competition by distance from adjoining metropolitan areas, are
comparatively wealthy, do not possess diverse economies, tend to exhibit distinct
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thematic character (e.g. historic spa community in Calistoga; arts and artisan
community in Carmel; Danish Village in Solvang) and/or are racially and ethnically
homogeneous. Preservation of a rural, small town character may be functionally viable
and economically sustainable in the communities that have enacted constraints on
formula businesses, while not viable where consumer spending may simply be shifted
to adjoining unrestricted taxing jurisdictions.
BAYSIDE DISTRICT ASSESSMENTS
A suggestion has been made that formula businesses in the Bayside District be levied a
differential (higher) mall assessment district fee and/or a disproportionate share of the
annual operations and maintenance assessment, or that the cap on the operations and
maintenance assessment be raised on the presumption that the increased levy would
disproportionately affect formula businesses. A finding of public benefit or necessity for
such a discriminatory levy may be difficult to sustain. Also, unilateral modification of
assessment levies may be legally and contractually problematic, if not impossible to
accomplish.
The Mall Assessment District, established in 1986, secures the debt that paid for
creation of the Third Street Promenade and adjacent Bayside District improvements in
1989. The public improvements funded by the bonds and paid for by the assessment
district include expanded public parking, streetscape and lighting enhancements, and
certain alley, signage and circulation improvements. The Katz/Hollis Report, which the
City relied on to calculate the assessment rate, set forth a formula with rates that vary
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depending on a"zone of benefit" concept depending upon where in the district a
property is located. Since use of assessment district funds is limited to securing the
bonded indebtedness, a differentiated levy based upon the ownership characteristics of
a business appears unsustainable.
The Third Street Promenade and Downtown District Maintenance Assessment, also
established in 1986, pays for supplemental public safety and maintenance costs
incurred by the City in its operations within the Bayside District, including partial funding
of the Bayside District Corporation (BDC) downtown marketing and promotional
activities, The assessment for retail businesses within the Bayside District is equivalent
to the annual business license tax or $0.13 per square foot per month, whichever is
greater. For non-retail businesses, the assessment is equivalent to the annual business
license tax. A maximum of $20,863.64 (effective 07-01-03) applies to both retail and
non-retail businesses, with the rate and cap escalating annually with CPI. It has not
been demonstrated that formula businesses place a disproportionate demand on public
safety and City maintenance services within Bayside District warranting a differentiated
levy.
It is also noted that some non-formula businesses within the Bayside District are
physically larger and generate higher gross sales than formula businesses in the same
commercial category, and these businesses would be adversely affected by a generally
applied increase in assessment rates. Only finro businesses within the Bayside District,
one formula and one non-formula, are currently at the assessment cap, and raising or
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eliminating the cap would accordingly not have the effect of targeting formula
businesses. Fina~ly, the assessment rate structure cannot be unilaterally modified by
the City and is subject to a vote among the assessed property owners.
PROPOSED WORK PLAN FOR TASK FORCE RECOMMENDATIONS
The following proposed approach for implementing the Task Force recommendations
considers completed actions, legislative changes, and programming / leasing capital
improvements.
Completed Actions
Outdoor Dining
On June 10, 2003, the City Council adopted an interim ordinance implementing the
Task Force recommendation for administrative approval of outdoor dining.
Vending Carts and Kiosks
On July 8, the City Council adopted updated Bayside District leasing guidelines for
downtown vending carts and kiosks that broaden the types of incidental foods, goods
and services to be offered, as recommended by the Task Force. Requests for
Proposals (RFPs) for a master Promenade vending cart operating license and for
leasing of the southern Promenade kiosk were issued immediately thereafter. Vending
cart proposals were received on July 31, 2003, and a license agreement is being
completed in accordance with the updated guidelines. Kiosk proposals were received
on August 14, 2003, and a recommendation on award of kiosk leases is expected to
come before the Council in October 2003
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Leqislative Chanqes
Package of Amendments
To facilitate Planning Commission and City Council action on the Bayside Specific Plan
and Municipal Code amendments proposed by the Task Force, staff recommends that
most of the proposed changes move through the review process as a package of
legislative changes. The package would include the following Task Force
recommendations:
• Specific Plan and Code changes so that only a business license is required of
restaurants without alcohol service that conform to all existing standards;
• Code changes to allow alcohol-serving restaurants to open by administrative
approval, subject to pre-defined standard conditions, and to allow modifications
and expansions of existing CUPs by administrative approval, subject to pre-
defined standard conditions;
• Specific Plan changes to allow signage for second-story restaurants to extend
more than 30" above the second-story floor line and to allow portable signs (such
as sandwich boards) on private property such as vestibules;
• Code changes to allow for expansion and consolidated regulation and
management of vending carts in the downtown (Promenade, Transit Mall and
other downtown sites);
• Specific Plan changes to allow for expanded outdoor dining opportunities along
the Promenade; and
• Code changes to limit retail frontages on the Promenade to no more than 50
linear feet,
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Though not considered by the Task Force, the City Council expressed its willingness to
consider the Bayside District Corporation (BDC) Board's recommendation to broaden
the types of alcohol permits within the Bayside District to include alcohol sales incidental
to live theater and alcohol sales at specialty gourmet markets. As the current alcohol
restrictions in the Bayside Commercial District only permit alcohol sales associated with
restaurants, code changes would be necessary.
Resolutions of intention to initiate changes to the specific plan and municipal code are
necessary to begin the process of making the proposed legislative modifications and
are included later on the Council agenda Staff anticipates that preparation and
Planning Commission and City Council review of the proposed amendments could be
completed over a six-month period. An interim ordinance limiting retail fron#ages on the
Promenade to no more than 50 feet is also proposed later on the Council agenda.
Other Legislative Changes
In the event other legislative measures are needed to help improve the balance of uses
on the Promenade, the City could consider the use of density bonuses and transfers of
development rights for deed-restricted restaurant space at a later date, if necessary.
Permit fee reductions for restaurants, independent businesses or community services is
not recommended at this time as these fees cover processing costs and the City is not
in a financial position to subsidize businesses. Revisions to the Bayside District
assessments are discussed earlier in this report,
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Proqramminq / Leasinq / Capital Imqrovements
The Task Force also made a series of recommendations related to programming,
leasing, and capital improvements, as follows:
Cinema Redevelopment: City and Bayside District staff plan to meet with operators of
the cinemas to discuss the City's openness to cinema redevelopment to enhance the
viability of the Downtown. Staff is soliciting expert assistance in exploring options to
encourage the development of contemporary movies theaters. Options may include
combining cinema development with the downtown parking structure reconstruction
program.
New Restrooms: Staff will continue to explore opportunities to create new restrooms
on, or immediately adjacent to, the Promenade. If opportunities arise, staff will return to
the City Council for review,
Expansion of BDC Services: Discussions among BDC staff, board and members are
ongoing,
Pedestrian and Ambient Lighting: The City has received an MTA grant to pursue
streetscape improvements, including pedestrian lighting, on 2"d and 4th Streets. The
project could consider installing infrastructure to support ambient lighting. The design
process is expected to commence in Fall 2003, with construction anticipated to begin in
Fall 2005,
Alley Demonstration Program: Physical improvements to the district alleys could be
considered as part of the downtown parking structure reconstruction program.
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BUDGET/FINANCIAL IMPACT
Consideration of these items will have no budget or financial impact.
RECOMMENDATION
It is respectfully recommended that the Council conduct a study session regarding
regulating formula businesses, Bayside District assessments and a work plan for
implementation of the Promenade Uses Task Force recommendations,
Prepared by: Suzanne Frick, Director
Andy Agle, Assistant Director
Planning and Community Development Department
Jeff Mathieu, Director
Mark Richter, Economic Development Manager
Elana Buegoff, Senior Administrative Analyst
Resource Management Department
Attachments:
A. Promenade Uses Task Force Recommendations
B. June 10, 2003 Staff Report to the City Council
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Promenade Uses Task Force
Recommendations
1. Restaurant Cap: Set a policy limit on the number of food uses within
the District; Bayside District staff will track number of food uses and
inform City if policy limit is being approached; remove the regulatory
caps on the number of food uses so that restaurants need only a
business license to open.
2. Alcohol Review: Allow alcohol-serving restaurants to open within the
District by Administrative Approval, subject to pre-defined standard
conditions; allow modifications and expansions of existing alcohol-
service CUPs by Administrative Approval; CUPs for alcohol service
would be required only when applicant requests modification of
standard conditions.
3. Outdoor Dininq Requlations: Allow Administrative Approval of outdoor
dining, subject to consistency with existing design guidelines.
4. Density Bonus / Transfer of Development Riqhts Consider opportunities
to provide density bonuses and transfers of development rights for new
and existing developments on the Promenade that are willing to deed-
restrict a minimum of 50 percent of the ground-level square footage
and a minimum of 50 percent of the Promenade-facing linear footage
for non-formula restaurants.
5. Development Review Thresholds: Development review threshold level
should be restored as part of the adoption of downtown development
standards, rather than being tied to the restaurant issue.
6. Siqnaqe Standards: More flexibility on signage standards on private
property should be provided for Promenade restaurants, with pre-
defined limits on menus on outdoor railings and more flexibility on
signage standards above the second floor to encourage second-level
restaurants; split recommendation (~3) on whether there should be
more flexibility for sandwich boards in the public right-of-way on the
Promenade and other District streets.
7. Vendinq Cart Proqram: Expand vending cart program to Transit Mall
and other feasible sites; broaden vending options to including
incidental food vending that is not duplicative of existing restaurant
offerings, as well as incidental services and goods (shoe shine, flowers,
etc.)
8. Kiosks: Add restaurant service to southern kiosk, provided that some
mutually acceptable space remains for existing dress shop; police kiosk
may be relocated, as long as t here is a concierge service or other
identifiable presence; look at opportunities for locating newsstands on
nearby blank walls.
9. Expanded Outdoor Dininq Opportunities: Pursuant to the Bayside
District Leasing and Licensing Guidelines, allow for outdoor dining in the
center of the Promenade, at the outer edge of sidewalks and in the
alleys, with some flexibility regarding food preparation,; lease rates for
outdoor dining should be kept low with priority for existing restaurants;
require high quality in furniture and design of outdoor dining areas;
flexibility for climate controls should be provided.
10. Retail Limitations: Frontage of any retail use along the Promenade shall
be limited to 50 linear feet; retail frontage of greater than 50 linear feet
should be permitted only by variance; any remaining frontage should
have a minimum depth of 50 feet.
1 1. Retail Disincentives: Retail uses should not be subject to higher parking
assessments or to new on-site parking requirements for new
construction.
12.Independent and Food Incentives: Consider incentives (assessment
reductions, fee reductions, etc.) for independent businesses, food-
related uses and community services.
13. Formula Business: Majority recommendation (6-1) that formula
businesses should not be subject to special regulations.
14.Interim Retail - Restaurant Requlation: Majority felt that interim policy
should remain until other measures begin to take effect (4-3); split on
term of interim policy, ranging from 2 years (1 vote), 1 year (3 votes),
and no extension (3 votes).
15. PPS' Recommendations: The PPS recommendations should be pursued
(see Exhibit 1), with the following made highest priority:
a. Create an alley revitalization demonstration project (see
Exhibit 2),
b. Facilitate new cinema development through
development agreements,
c. Expand Bayside District services (event programming,
marketing, cleaning and concierge services),
d. Majority for continuing to explore options for new public
restrooms on the Promenade or immediately adjacent
thereto (5-2), and
e. Continue and expand the pedestrian and ambiance
lighting program in alleys and District streets.
F:\PLAN\ADMIMDOW NTOW N TASK FORCE\RECS032003A.DOC
PCD:SF:AA:f:\plan\admin\downtown task force\promenade task force.doc
Council Mtg: June 10, 2003 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Review of the Recommendations of the Promenade Uses Task Force and
Introduction and First Reading of an Interim Ordinance Extending the
Temporary Moratorium on the Expansion of Retail Uses on the Third
Street Promenade
INTRODUCTION
On March 26, 2003, the Promenade Uses Task Force completed its recommendations
for maintaining and enhancing the mix of uses on the Third Street Promenade and in
the Bayside District. This report provides background on the Task Force process and
discusses the Task's Force's recommendations.
BACKGROUND
Maintaining the proper balance of uses on the Third Street Promenade is an important
Council goal. The original Third Street Mall was primarily a pedestrian retail mall that
failed to attract residents and visitors. That failure threatened the viability of the
downtown area. In response, the City embarked upon an extensive planning and
community participation process culminating in the adoption of the Third Street Mall
Specific Plan, now called the Bayside District Specific Plan. The Specific Plan was
adopted by Council in January 1996 and establishes policies to preserve a unique
mixture of uses, a key element to the success of the Promenade. Over the years,
Council has maintained the balance of uses by enacting zoning regulations that foster
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an appropriate mix of restaurant, retail and entertainment uses.
Information presented to Council in November 2001, showed that the mix of uses is at
risk. Five restaurants had been lost in the previous two years, with four more near or at
the end of their leases. As restaurants leave the Promenade, retail uses are growing.
The growth of retail has already exceeded the ten-year projection contained in the
Bayside District Specific Plan. The Promenade is becoming less unique and more like a
typical outdoor shopping mall. If allowed to continue, this trend will threaten the unique
character and economic and social welfare of the downtown area.
In response, on November 27, 2001, the City Council adopted an interim ordinance
regulating the concentration of ground floor retail uses on the Promenade by limiting the
total linear footage and square footage of retail on each block. The ordinance includes
a 5 percent factor to provide some flexibility for property owners. The Council also
established a Promenade Uses Task Force to study the relevant issues, seek feedback
and input from the community, and make recommendations to the City Council
regarding the appropriate mix of uses on the Promenade. The Task Force included
three Council members, one Planning Commissioner, two Bayside District Corporation
(BDC) board members, and one Third Street property owner. The interim ordinance
has been extended twice in order to enable the Task Force to conduct its work and is
set to expire in September 2003.
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The Promenade Uses Task Force began meeting in May 2002 and met regularly
through March 2003. The Task Force began its meetings by discussing goals, issues
and opportunities related to the vitality of the Promenade. The Task Force also
reviewed existing regulatory documents and improvement plans for the area, including
the General Plan, Bayside District Specific Plan, and Downtown Parking Strategy. Early
in the Task Force process, it became apparent that outside expertise would be needed
to assist the Task Force in its efforts. Project for Public Spaces (PPS), a non-profit
organization that is nationally recognized for helping communities enhance their public
spaces, was engaged to provide technical assistance in support of the Task Force's
efforts.
PPS commenced its efforts with the Task Force by focusing on the elements that make
great public spaces, including examples of a variety of successful public spaces from
around the globe. Under PPS' guidance, the Task Force also participated in the "Place
Evaluation Game", where participants go to a public space, make critical observations
of the place with respect to a variety of criteria (comfort and image, access and
linkages, uses and activities, etc.), and make recommendations for short-term and long-
term improvements.
To help create an analytical framework for the Task Force's deliberations, PPS
conducted user intercept surveys, time-lapse filming, and activity mapping of pedestrian
patterns on the Promenade and in the Bayside District. Some of the key findings of this
analysis included:
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^ Unique shops and restaurants tend to be a greater draw to passersby than do
formula retail establishments;
^ The quality and creativity of individual storefronts has an even greater influence on
pedestrian appeal, irrespective of chain affiliation; and
^ Outdoor dining that is located on the sidewalk immediately next to a restaurant tends
to disrupt the pedestrian flow along the sidewalk and discourage pedestrians from
approaching the adjacent storefronts.
The Task Force also participated in presentations and discussions with Larry Lund, a
retail expert, regarding current trends in national and local retailing. A national trend
that is particularly relevant to the Promenade is the consolidation of retailing by a small
group of large retailers. This trend has impacted the Promenade, as well as most cities
throughout the nation, over the past few years and is not expected to abate within the
foreseeable future. The Task Force explored whether there is a formula regarding an
appropriate mix of retail, restaurant and entertainment uses for successful urban
environments. Mr. Lund's research shows a wide variety in the mix among successful
areas, ranging from restaurant-heavy areas to areas that are virtually devoid of
restaurants in the prime area, though restaurants can usually be found on nearby side
streets.
On November 17, 2002, the Task Force hosted a public workshop attended by
approximately 25 interested members of the community, including residents,
restaurateurs, retailers, property owners. The workshop included a presentation by
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PPS of ideas and opportunities for enhancing the mix and vibrancy of the Promenade
and Bayside District, followed by attendees' participation in the Place Evaluation Game.
Some of issues, findings and recommendations identified by PPS, the Task Force and
the workshop participants included:
^ The use and activity issues on the Promenade cannot be studied and improved in
isolation, as the Promenade and adjacent streets have a symbiotic relationship and
present opportunities to create a whole that is greater than the sum of its parts.
Certain places within the District, including Second and Fourth Streets and the
alleys, are in need of the same level of attention that has been directed toward the
Promenade and Transit Mall streets.
^ While the high rents for Promenade storefronts are out of reach for most restaurants,
establishing outdoor cafes in the center of the Promenade and at the outside edges
of the sidewalks could maintain the food opportunities and environmental amenities
associated with restaurants. Cafes could be associated with restaurants and
kitchens that are located in more affordable locations. Restaurants might also be
created on second floors with dining terraces overlooking the Promenade.
^ In addition to retail and restaurants, entertainment is a key element of the
Promenade's success and acts as a draw to help support other uses. The existing
movie theaters are outdated and likely will become less competitive in the near
future unless they can provide appropriate amenities such as stadium seating. The
current theater sites are generally too small to provide for these modern amenities.
However, encouraging new theater development along Second and Fourth Streets
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could expand the vitality of the District while maintaining this critical element in the
mix of uses.
^ More flexibility in the design elements on the Promenade (seating, planters, fixed
kiosks, etc.) is needed to allow for outdoor dining and a greater variety of activities.
^ Street vendors of a more local nature could make the area more unique and help
support Santa Monica-based micro-enterprises.
^ Appropriate resources for event programming, public space management and local
business recruitment is needed to support the enhancement and expansion of the
vitality of the Bayside District.
In the months following the workshop, the Task Force held additional meetings with
PPS and Larry Lund and concluded their meetings in March with a series of
recommendations.
DISCUSSION
The Promenade Uses Task Force's recommendations are included as Attachment A.
Since the Task Force completed its work, staff of the Planning and Community
Development, Resource Management, Environmental and Public Works Management,
Police and Fire Departments and the City Attorney's Office have had an opportunity to
review the Task Force recommendations in order the provide the Council with additional
considerations regarding the recommendations. In addition, the Bayside District Board
has reviewed and made recommendations regarding the Task Force strategies (see
Attachment B.)
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The strategies recommended by the Task Force are organized into categories and
discussed below
LEVELING THE PLAYING FIELD
The Task Force discussions and expert input pointed to the fact that most restaurants
are unable to pay the rents that Promenade-fronting space currently commands. The
Task Force also commented that the City's regulatory mechanisms are weighted
against restaurants, and are especially adverse to independent operators, thereby
creating additional barriers to new restaurants. The following recommendations were
meant to address this inequity.
Restaurant Cap
In response to concerns regarding an overabundance of establishments serving food
and drink on the Promenade, in the early 1990s the City adopted caps on the total
number of restaurants and alcohol-serving establishments permitted within each block
of the Promenade and within the Bayside District as a whole. Due to the drop in the
number of restaurants since that time, the caps are not in danger of being approached.
As of February 2003, there were 59 food uses existing within the District, while the caps
permit 76 total food uses. Similarly, 52 food uses are permitted within the three blocks
of the Promenade, while 31 food uses existed as of February.
Although the restaurant caps are not currently being approached, the existence of the
regulatory mechanism requires any new restaurant that opens within the Bayside
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District to secure a permit from the City, including review of where the new restaurant
stands relative to the cap. While this permit does not require a public hearing, it does
involve an additional step in the process that competes for limited staff resources within
the Planning Division. The Task Force considered eliminating any restaurant cap, but
expressed concern that an overabundance of restaurants could become a problem in
the future and that some limit on the number of restaurants helps to protect existing
restaurants from oversaturation of the market. In order to eliminate the permit
requirements for restaurants, yet maintain a way to monitor their total number, the Task
Force recommended that the Council establish a policy limit on the desired number of
restaurants that would exist within the District. The BDC could monitor the number of
restaurants and inform the City if regulatory measures needed to be deployed. This
change would allow restaurants without alcohol-service to simply obtain a business
license, thereby reducing one of the barriers to new restaurants in the District. Such a
change would require the Council to adopt an ordinance modifying the existing
Municipal Code sections governing restaurants in the Bayside District, adopt a policy on
the desired total number of restaurants in the District, and direct the BDC to track the
number of restaurants in the District and inform the Council when the policy limit was
approached.
Review of Alcohol-Serving Restaurants
Under the City's existing regulations, new restaurants with alcohol service are required
to obtain a Conditional Use Permit, in addition to securing Alcohol and Beverage
Control (ABC) approval from the State. The Task Force felt that the CUP requirement,
which involves a public hearing before the Planning Commission (appealable to the City
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Council), can be an expensive, lengthy and uncertain process that creates a barrier for
restaurateurs, particularly independent restaurateurs who may not have the resources
both to finance a prolonged approval process and pay the Promenade's elevated rents.
Recognizing that the alcohol conditions that have historically been applied by the
Planning Commission are largely standard conditions, applicable to all alcohol-serving
restaurants, the Task Force recommended that restaurants with alcohol service require
administrative approval only, subject to uniform standards that reflect the conditions that
have historically been applied by the Planning Commission.
The Task Force also acknowledged that existing restaurants with CUPs may wish to
expand or modify their service and thereby recommended that such expansions be
subject to administrative approval pursuant to the established standards. If a proposed
restaurant or restaurant expansion were unable to meet the pre-defined standards, a
CUP and hearing before the Planning Commission would be required. The Task Force
recommended that the regulatory cap on the number of alcohol-serving restaurants
remain in place.
Implementing these changes would require Council to adopt an ordinance establishing
project development standards for alcohol-serving restaurants and the mechanism for
existing CUPs in the District to choose to comply with the project development
standards for expansion or continue to be subject to existing CUPs.
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Outdoor Dining Regulations
The Task Force recognized that outdoor dining is an important element in the vitality
and ambiance of the Promenade and Bayside District and that it can be an additional
amenity that helps restaurants' economic viability. In order to reduce regulatory barriers
to outdoor dining, the Task Force recommended that such dining be administratively
approved, subject to consistency with existing design guidelines. The Council
considered this matter on a citywide basis at its meeting on May 20 and held first
reading of an interim ordinance creating a more certain approval process.
RESTAURANTINCENTIVES
Recognizing that indoor and outdoor dining plays an important role in the mix of uses on
the Promenade and that the loss of this critical element could have long-term
implications for the character and vitality of the Promenade, the Task Force also
considered incentives to encourage the establishment and retention of restaurants on
the Promenade.
Expand Opportunities for Outdoor Dining
The Task Force recognized that outdoor dining is critical to the Promenade's ambiance
and that more opportunities to support sidewalk cafes are essential. The Task Force
reviewed examples from other US and world cities where al fresco dining occurs in the
center of pedestrian streets and on the curbside of sidewalks. PPS also presented
time-lapse video showing that restaurant-contiguous outdoor dining areas tend to
disrupt the pedestrian rhythm along the Promenade, thereby discouraging pedestrians
from approaching the storefronts adjacent to these dining areas. In addition, the Task
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Force expected that the availability of additional outdoor dining areas could make the
overall rental costs per seat more approachable for restaurants. As a result, the Task
Force recommended that outdoor dining opportunities be expanded to encompass non-
contiguous areas, including the outside edges of sidewalks and the three center courts
of the Promenade. Alleys were also identified as a potential dining area, which is
discussed later in this report.
Enabling outdoor dining to occur within these areas would require a discrete
amendment to the Bayside District Specific Plan, which currently permits outdoor dining
within only the first 12 feet of any storefront. In order to ensure fire and emergency
service access, any dining between the curb edges of the Promenade would need to
occur within the "court" areas ("center courY' and adjacent to the dinosaurs on the north
and south blocks) to maintain roadway access. Allowing the public right-of-way to be
used as private space that is only available to restaurant customers could make the City
vulnerable to legal challenge related to privatization of public space and could impact
the City's existing regulatory system on the Promenade. Dining areas not contiguous to
storefronts could also create choke points during rallies and marches, which might
impact the ability to operate the outdoor cafe during those times.
Density Bonus / Transfer of Development Rights
The Task Force also recommended that the City consider providing density bonuses for
new developments and transfers of development rights for existing developments on the
Promenade that are willing to deed-restrict ground-level space for independent
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restaurants. These development incentives may be significant enough to make it
feasible for a property owner to subsidize the rent of a restaurant. The Task Force
recognized that such an incentive might not be utilized and that a long-term deed
restriction may not be an appropriate tool to deal with what may be a short-term
problem, but nonetheless recommended that the development incentives be explored
further.
Flexibility in Signage Standards
In order to enhance restaurants visibility, the Task Force recommended more flexibility
in signage standards that are applied to Promenade restaurants, including more
flexibility on menus on outdoor railings and signage above the second floor to
encourage second floor restaurants. The Task Force split on whether sandwich boards
should be allowed within the public right-of-way. On June 10, the Council will consider
continuing to restrict the placement of sandwich boards on public sidewalks. Such
restrictions could apply in the Bayside District as well.
Other Incentives
The Task Force also recommended that financial incentives, such as reduced
assessments or fees, be considered for food-related uses, as well as independent
businesses and community services.
The Task Force considered other incentives, such as creating a higher development
review threshold for developments with deed-restricted restaurant space. However, the
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Task Force recommended that the 30,000 square foot threshold should be restored as
part of the adoption of design standards, rather than being tied to the restaurant use.
NEW REGULATORY RESTRICTIONS
In addition to reducing barriers to and creating incentives for restaurants, the Task
Force considered disincentives and restrictions on retail uses and formula businesses.
However, the majority of the Task Force opposed creating new regulatory restrictions
on these uses. One new regulation that was recommended by the Task Force is a
restriction on the linear frontage that any new retail use could occupy. This
recommendation arose out of concern for retail uses whose frontages are too large for
the Promenade and thereby adversely alter the visual character and reduce the
opportunity for a wide variety of storefronts along the street. The Task Force
recommended that the frontage of any retail use be limited to 50 feet, with any
remaining frontage within the building or site requiring a minimum depth of 50 feet.
Larger frontages would be subject to a variance. In order to make such a change, a
new ordinance would need to be adopted.
VENDING CARTS AND KIOSKS
In order to enhance the pedestrian environment and broaden the variety of food and
services available in the District, the Task Force recommended that the vending cart
program be expanded to appropriate sites on the Transit Mall and that the vending
options on the Promenade be expanded to include incidental food, goods and services.
The Task Force also recommended that the kiosks be programmed to better support
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food service and outdoor dining. These recommendations could be accomplished when
the City next seeks proposals for the vending cart program and kiosk spaces and
Council approves revised leasing and licensing guidelines for the Bayside District.
OTHER RECOMMENDATIONS
In addition to the measures discussed above, Project for Public Spaces recommended
other strategies to enhance the ambiance of the District. The Task Force identified
several of these as highest priority strategies, as discussed below.
Alley Revitalization Demonstration Project
PPS recommended improvement of the alleys in order to enhance the overall aesthetic
quality of the District and provide additional locations for dining, performance,
independent retailers and other activities. The Task Force recommended that one alley
segment be selected for a demonstration project that includes capital upgrades and
enhanced programming. Given the state of the City budget, implementing capital
upgrades in the alleys presents a major challenge. However, alley upgrades could be
considered as part of the Downtown Parking Structure program. In order to maintain
access for fire vehicles, programming within the alley rights-of-way would be limited to
easily portable items; tables and chairs for dining and tents and canopies for special
events would likely not be permitted. In addition, because the alleys do not have
sidewalks, measures that promote regular pedestrian traffic (such as retail or restaurant
uses fronting the alleys) when vehicles and trucks are in the alleys could make the City
vulnerable in the event of pedestrian injury. Finally, because deliveries and customer
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pick-up now occurs during all times of the day, restricting vehicular access to certain
hours of each day could present logistical challenges for area businesses.
New Cinema Development
Movie theaters are essential to the success, vitality and mixture of uses of the Bayside
District. However, Santa Monica's cinemas are becoming outdated, particularly with
respect to current amenities such as stadium seating, and as a result, are in danger of
losing their market position in the next few years. Reduction of the theaters' viability
could have serious repercussions for the Bayside District, especially District restaurants.
Recognizing that the current cinema sites on the Promenade are too small to
accommodate contemporary theater design, the Task Force recommended that the City
facilitate cinema development through Development Agreements. Locating new
theaters on other downtown streets could help to enliven the entire District. Cinema
development could also be facilitated as part of implementation of the Downtown
Parking Strategy.
Expand Bayside Services
PPS' research shows that many successful urban business improvements districts
provide a more extensive array of services than what is provided through the BDC.
These services include broader and more extensive programming and marketing,
supplemental cleaning services, and concierge services that support the total visitor
experience. Providing enhanced services through BDC would likely require increased
assessments, compounded by the assessment proposed to support the Downtown
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Parking Strategy. Increased City financial support is not currently feasible
Public Restrooms and Lighting
The majority of the Task Force members supported efforts to provide new public
restrooms on or immediately adjacent to the Promenade. The Task Force also
supported expansion of the pedestrian and ambiance lighting program in the alleys and
streets of downtown.
INTERIM REGULATIONS
The majority of the Task Force supported the continuation of the interim retail
conversion moratorium until the recommended measures begin to create the desired
effects in the downtown. The majority was split on whether the measures should
continue for one or two years.
An ordinance extending the interim measures is attached as Exhibit C. As the threat to
restaurants on the Promenade continues, and new measures under consideration by
the Council may take several months or longer to implement, staff recommends that the
interim ordinance be extended for one year. At that time, Council could reassess
whether significant progress had been made to allow easing or elimination of the
moratorium.
CEQA STATUS
The proposed ordinance is categorically exempt from CEQA under Class 5, minor
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alterations in land use limitations. Because the ordinance reflects present retail
concentrations, it will not result in any new changes in land use or density and is
therefore categorically exempt from CEQA. Other strategies that the Council may wish
to pursue would be reviewed prior to final Council action.
BUDGET/FINANCIAL IMPACT
Adoption of the proposed ordinance would not have a direct financial impact on the City.
Implementation of several strategies recommended by the Task Force would require
City funding, which is not currently budgeted, or an increase in assessments levied
within the Bayside District.
RECOMMENDATION
It is recommended that the Council:
1. Review the recommendations of the Promenade Uses Task Force;
2. Give direction on the recommendations, including preparation of ordinances and
initial priorities; and
3. Introduce the attached interim ordinance for first reading.
Prepared by: Suzanne Frick, Director
Andy Agle, Assistant Director
Planning and Community Development Department
Jeff Mathieu, Director
Mark Richter, Economic Development Manager
Resource Management Department
Attachments:
A. Promenade Uses Task Force Recommendations
B. Bayside District Corporation Board Recommendations
C. Proposed Ordinance
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