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SR 11-27-2018 7C City Council Report City Council Meeting: November 27, 2018 Agenda Item: 7.C 1 of 7 To: Mayor and City Council From: David Martin, Director, City Planning Subject: Introduction and Adoption of an Urgency Interim Zoning Ordinance Prohibiting Fast Food Restaurants on the Third Street Promenade Recommended Action Staff recommends that the City Council adopt an urgency Interim Zoning Ordinance prohibiting fast food restaurants on the Third Street Promenade. Executive Summary The Downtown Community Plan (DCP) adopted on July 25, 2017, sets forth a vision for the continued vitality of the Third Street Promenade as a major public space framed by retail and restaurant uses that form unique experiences enjoyable to both residents and visitors. In order to ensure that the Promenade maintains its authentic characteristics and provides visitors with a distinctive experience not found in most downtown shopping districts, City Council directed staff to prepare an urgency Interim Zoning Ordinance to prevent the proliferation of fast food restaurants on the Promenade. Background The 2015 Zoning Ordinance Update created new classifications for restaurants that provided more flexibility in response to the diversity of eating establishments that were starting to emerge in the market place. With the rise in fast casual dining experiences, the 2015 Zoning Ordinance update significantly simplified the classifications for “restaurants” by creating only two categories: “Restaurant, Full Service” and “Restaurant, Limited-Service and Take-Out.” The “Restaurant, Limited-Service and Takeout” classification includes fast food restaurants as a possible use. Prior to the adoption of the Downtown Community Plan, an Interim Zoning Ordinance was in place that resulted in a temporary prohibition on limited service restaurants only 2 of 7 on the Promenade. The Downtown Commu nity Plan did not change the classifications established in the 2015 Zoning Ordinance in an effort to make minimal changes to the Promenade. Recently, Downtown Santa Monica, Inc. (DTSM) raised concerns about a potential proliferation of fast food formula restaurants that could change the character and balance of uses on the Promenade. On August 14, 2018, Council gave direction to staff to explore methods to limit the proliferation of fast food restaurants on the Promenade and to return to Council with any necessary ordinance amendments. The proposed urgency Interim Zoning Ordinance would create a new classification for fast-food restaurants and temporarily prohibit their establishment on the Promenade. Of the existing businesses in the BC (Promenade) zone, approximately 32% are eating or drinking establishments and 68% are retail. The existing restaurant classifications in the Zoning Ordinance [SMMC Section 9.51.030(B)(8)] divide restaurants into two categories:  Restaurant, Full-Service. Restaurants providing food and beverage services to patrons who order and are served while seated and pay after eating. Takeout service may also be provided. See Division 3, Section 9.31.040, Alcoholic Beverage Sales, where applicable, for further details.  Restaurant, Limited-Service and Take-Out. Establishments where food and beverages may be consumed on the premises, taken out, or delivered. This classification includes cafes, cafeterias, coffee shops, delicatessens, fast -food restaurants, sandwich shops, limited-service pizza parlors, self-service restaurants, ice cream and frozen yogurt shops, and snack bars with indoor or outdoor seating for customers. This classification includes bakeries that have tables for on -site consumption of products. It excludes catering services that do not sell food or beverages for on-site consumption (see Commercial Kitchen). See Division 3, Sections 9.31.040, Alcoholic Beverage Sales, and 9.31.280, Restaurants, Limited- Service and Take-Out Only, where applicable, for further details. 3 of 7 Restaurant, Limited-Service and Take-Out includes “fast food restaurants,” which are currently permitted on the Promenade. Of the 28 existing businesses that serve food, approximately 19 (68%) are classified in the Restaurant, Limited -Service category and 9 (32%) classified in the Restaurant, Full-Service category. On May 24, 2016, during the preparation of the Downtown Community Plan, the Council approved an Interim Zoning Ordinance that, in part, prohibited the conversion of existing full-service restaurants into limited-service restaurants on the Promenade. The impetus for this regulation was concern that the loss of full-service restaurants with outdoor dining may change the nature of the Promenade. On April 18, May 1, and May 15 of 2018, DTSM hoste d a series of public meetings under the title “Promenade 3.0” to discuss the future of the Third Street Promenade and to collect community feedback for possible design and infrastructure upgrades. Roughly 50 community members attended each of the three mee tings and shared what they would like to see on the street. On June 6, 2018, the Planning Commission participated in a recap of the DTSM workshops through a walking tour of the Promenade and discussion about the future of urban retail environments, further setting the stage for the current “Promenade 3.0” planning effort. On October 9, 2018, Council awarded a contract for a needs assessment study for the Promenade including identification of a conceptual design that helps revitalize the Promenade as a walking and shopping corridor. Discussion Fast food restaurants are formula establishments with numerous locations and standardized features (such as façade, décor, color scheme, signage) dependent on brand recognition created through the repetition of the same characteristics for each store in multiple locations. While this consistency breeds familiarity for consumers, it runs counter to the policies in the DCP that value the retention of Downtown’s authenticity and desire to encourage local uses and promote unique visitor experiences. 4 of 7 These policies include:  Policy CCP2.3: “Support Downtown’s role as a visitor destination by encouraging uses that appeal to both locals and tourists, including food, retail, entertainment and overnight accommodations.”  Policy CCP3.1: “Seek to maintain and increase locally-based, independent small retailers that allow residents and employees to meet their daily needs on foot .” The Promenade’s success has resulted from the creation of an authentic urban retail, dining and cinema experience. As the retail landscape evolves, the Promenade’s competitive advantage will depend on the ability to deliver on a range of unique dining, retail, and entertainment uses with an emphasis on promoting a diverse base of eating establishments. It is not the intent to create a Promenade experience that could be found in any number of other Southern California cities. Cities as diverse as Los Angeles, Truckee, Cotati, San Francisco, and Seaside have adopted some form of neighborhood or citywide control on fast food restaurants due to similar concerns. If current regulations continue, there is the potential for small- and medium-sized eating establishments to be eliminated from the Promenade and replaced only with national chains, which would decrease the diversity of food offerings to residents and visitors. This could negatively impact the character and purpose of the Promenade as a successful public place. The Promenade is a public space that is defined as much by the uses that frame the space as the urban design elements. The type of uses influence consumer behavior and the visitor experience. There are also environmental considerations as fast food generates a significant amount of waste due to dependence on disposable tableware and packaging. 5 of 7 Recommended Changes In order to ensure that there remains a diversity of eating and drinking establishments, the urgency Interim Zoning Ordinance proposes a new classification for “Restaurant, Fast Food”, applicable only to the BC (Promenade) zone , as follows: “Restaurant, Fast Food. Establishments having: a) more than 150 locations nationwide at the time that the application for the establishment is deemed complete by the City; and b) characteristics, including but not limited to, orders placed at a walk-up window, counter, or machine; payment prior to food consumption; and food served with disposable, one-time, or limited-use wrapping, containers, or utensils. Typically, such establishments may utilize standardized signage or décor, and permit consumption of food and beverages on the premises within a short period of time or taken off the premises. A revised definition of “Restaurant, Limited-Service and Take-Out”, applicable only to the BC (Promenade) zone, is recommended as follows: “Establishments that are not considered Restaurant, Fast Food where food and beverages may be consumed on the premises, taken out, or delivered. This classification includes cafes, cafeterias, coffee shops, delicatessens, sandwich shops, limited-service pizza parlors, self-service restaurants, ice cream and frozen yogurt shops, and snack bars with indoor or outdoor seating for customers. This classification includes bakeries that have tables for on-site consumption of products. It excludes catering services that do not sell food or beverages for on-site consumption (see Commercial Kitchen). See Division 3, Sections 9.31.040, Alcoholic Beverage Sales, and 9.31.280, Restaurants, Limited-Service and Take-Out Only, where applicable, for further details.” 6 of 7 Effects of Changes The interim prohibition would apply only to establishments with frontage on the Third Street Promenade. Fast food restaurants would continue to be allowed in all other zones citywide. Staff recommends that this interim prohibition be held in place pending completion of the “Promenade 3.0” visioning process. If fast food restaurants are allowed to proliferate on the Promenade in the near future, this could negate the ability to shape land uses and urban design through that planning effort. Concerns have also been raised that creating an interim prohibition on fast food restaurants would impact the ability to establish food halls or similar venues on the Third Street Promenade. As food halls are viewed as an amalgamation of restaurants, there would not be a limitation on the establishment of food halls, so long as any of the restaurants did not meet the definition of “Restaurant, Fast Food”. As noted in SMMC Section 9.10.040 (Land Use Regulations – Downtown Districts), restaurants are a permitted use on the Third Street Promenade. Next Steps In accordance with SMMC Section 9.46.090(D) and Government Code Section 65858, this ordinance shall become effective immediately upon its adoption and will expire within forty-five days, or on January 11, 2019. The City Council may extend the urgency Interim Zoning Ordinance beyond January 11, 2019 for up to 22 months and 15 days for a total of two years, or until November 26, 2020. Environmental Analysis The proposed interim ordinance is categorically exempt f rom the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the State Implementation Guidelines (common sense exemption). Based on the evidence in the record, including, but not limited to, evidence that the interim zoning provisions represent a temporary change to use standards that would be more restrictive than existing use standards, it can be seen with certainty that there is no possibility that the 7 of 7 proposed interim ordinance may have a significant effect o n the environment. Therefore, no further environmental review under CEQA is required. Financial Impacts and Budget Actions There is no immediate financial impact or budget action necessary as a result of the recommended action. Prepared By: Tony Kim, Principal Planner Approved Forwarded to Council Attachments: A. Ordinance - PCD - Fast Food IZO - 11272018 1 City Council Meeting: November 27, 2018 Santa Monica, California ORDINANCE NUMBER _____ (CCS) (City Council Series) AN URGENCY INTERIM ZONING ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA CREATING USE CLASSIFICATIONS FOR RESTAURANT, FAST FOOD AND RESTAURANT, LIMITED-SERVICE AND TAKE-OUT FOR THE BC (THIRD STREET PROMENADE) DISTRICT AND PROHIBITING RESTAURANT, FAST FOOD IN ESTABLISHMENTS WITH FRONTAGE ON THE THIRD STREET PROMENADE WHEREAS, on July 25, 2017, the City Council of the City of Santa Monica (the “City Council”) adopted the Downtown Community Plan (“DCP”) which sets forth a vision for the continued vitality of the Third Street Promenade as a major public space framed by retail and restaurant uses that form unique experiences enjoyable to both residences and visitors; and WHEREAS, the DCP values the retention of the Downtown’s authenticity, encourages local uses, and promotes unique visitor experiences; and WHEREAS, fast food chains are formula establishments with numerous locations and standardized features, such as façade, décor, color scheme and signage, dependent on brand recognition created through repetition of the same characteristics for each store in multiple locations; and WHEREAS, fast food chains are currently permitted on the Third Street Promenade; and 2 WHEREAS, while the consistency of fast food chains breeds familiarity with consumers, a proliferation of fast food chains on the Third Street Promenade is inconsistent with the stated goals of the DCP to preserve the unique character of the Third Street Promenade; and WHEREAS, if current regulations continue, small- and medium-sized dining establishments could be eliminated from the Promenade and replaced with duplicative and formulaic chains, decreasing the diversity of food offerings to residents and visitors, thereby negatively impacting the character and purpose of the Promenade; and WHEREAS, fast food restaurants generate a significant amount of waste due to dependence on disposable tableware and packaging that is not generated by restaurants that do not rely on disposable packaging and tableware; and WHEREAS, such disposable packaging and tableware negatively contribute to pollution of the Santa Monica Bay and the ongoing global crisis of ocean pollution; and WHEREAS, Downtown Santa Monica, Inc. has commenced a planning effort, “Promenade 3.0”, to study the future of the Third Street Promenade; and WHEREAS, the City has commissioned a needs assessment study for the Third Street Promenade, including identification of a conceptual design that helps revitalize the Promenade as a walking and shopping corridor; and WHEREAS, a proliferation of fast food restaurants on the Promenade before completion of the planning processes currently underway could negate the City’s ability to shape land uses and urban design of the Promenade in the future; 3 and WHEREAS, the City Council finds and declares that there is a current and immediate threat to public health, safety and welfare that requires the adoption of the proposed ordinance, in that prohibiting fast food restaurants on the Third Street Promenade on an interim and immediate basis is necessary to protect the unique character of the Third Street Promenade, reduce waste generated by disposable tableware and packaging, and allow for planning efforts for the future of the Promenade to continue. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Interim Zoning Regulations. A) Use Classifications for Restaurant, Fast Food and Restaurant, Limited Service and Take-out. The following Nonresidential Use Classifications shall apply to the BC Promenade District only: 1) Restaurant, Fast Food. Establishments having: a) more than 150 locations nationwide at the time that the application for the establishment is deemed complete by the City; and b) characteristics, including but not limited to, orders placed at a walk-up window, counter, or machine; payment prior to food consumption; and food served with disposable, one-time, or limited-use wrapping, containers, or utensils. 4 Typically, such establishments may utilize standardized signage or décor, and permit consumption of food and beverages on the premises within a short period of time or taken off the premises. 2) Restaurant, Limited-Service and Take-Out. Establishments that are not considered Restaurant, Fast Food where food and beverages may be consumed on the premises, taken out, or delivered. This classification includes cafes, cafeterias, coffee shops, delicatessens, sandwich shops, limited-service pizza parlors, self-service restaurants, ice cream and frozen yogurt shops, and snack bars with indoor or outdoor seating for customers. This classification includes bakeries that have tables for on-site consumption of products. It excludes catering services that do not sell food or beverages for on-site consumption (see Commercial Kitchen). See Division 3, Sections 9.31.040, Alcoholic Beverage Sales, and 9.31.280, Restaurants, Limited-Service and Take-Out Only, where applicable, for further details. B) Prohibited Use. Restaurant, Fast Food shall be prohibited in establishments with frontage on the Third Street Promenade. C) Applicability. Any application for a planning entitlement or building permit, including plan check, determined complete on or before November 27, 2018 shall have a vested right to proceed without complying with this Interim Zoning Ordinance. SECTION 2. In accordance with CEQA Guidelines Section 15061(b)(3), this Interim Zoning Ordinance is exempt from CEQA as it can be seen with certainty that the proposed ordinance does not have the potential to significantly 5 impact the environment. This determination is made based on the record as a whole, including, but not limited to, evidence that the regulations set forth in this Interim Zoning Ordinance represent a temporary change to use standards that would result in more restrictive use standards than existing regulations. SECTION 3. Any provision of the Santa Monica Municipal Code or any appendix thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 4. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 5. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective immediately upon its adoption. 6 SECTION 6. This Ordinance shall be of no further force or effect forty-five days from its effective date, unless it is otherwise extended pursuant to Santa Monica Municipal Code Section 9.46.090 and Government Code Section 65858. APPROVED AS TO FORM: _________________________ LANE DILG City Attorney