Should the City Council adopt the first reading of an ordinance to streamline zoning permit requirements for certain business activities likely to encourage economic activity?

From Planning Commission

Adopt the first reading of an ordinance to streamline zoning permit requirements for certain business activities likely to encourage economic activity.

SUMMARY   
The proposed amendments reduce the level of permit review required for certain commercial uses and activities, thereby making it easier for new businesses to open or existing business to expand their service or product offerings.  The amendments were prepared in response to Council direction to develop ways to address declining sales tax and business activity in October and December, 2010.  The Planning Commission recommended adoption of these amendments on April 27, 2011.   

With the proposed changes, land uses that currently require a Use Permit with Public Hearing (UPPH) or Administrative Use Permit (AUP) would require an AUP or Zoning Certificate (ZC).  This will reduce the application fees and amount of time needed for permit approvals, making it easier for new businesses to occupy empty storefronts. 

 
The zoning changes focus on “pedestrian oriented” business activities (those considered likely to generate foot traffic) in order to draw new customers to an area thereby increasing sales at retail shops and restaurants.  Pedestrian-oriented uses targeted with these changes include restaurants, exercise/yoga studios, small-to- medium sized gyms, sidewalk seating, ground floor offices, and group class instruction.  The changes also include beer & wine with food, unamplified live entertainment, and later evening hours of operation. 

 
Staff developed a range of options in response to the Council referrals.  After implementation of the changes proposed with this report, staff will consider modifications to the zoning ordinance related to restrictions on changes of use, restrictions on the conversion of tenant spaces (collapsing/expanding), and parking requirements.  Staff expects to provide recommendations on these future changes to the Planning Commission this fall.

FISCAL IMPACTS OF RECOMMENDATION
The proposed changes should encourage new business activity, thereby increasing City revenues.  By lowering permit requirements for certain types of business activities, income from permit fees will be reduced.  Expense for staff effort and public notice will also be reduced, and should off-set the reduced permit fee income.   

CURRENT SITUATION AND ITS EFFECTS
On April 27, 2011 the Planning Commission held a public hearing on the proposed zoning changes, grouped into eight categories, and voted to recommend adoption of all the changes. The specific Commission actions on each category are provided below under “Background.”   

Sidewalk seating timing – The Planning Commission recommended changes to Title 23 to remove the AUP requirement for sidewalk seating.  At the time of the April 27 Commission meeting, staff was in the process of developing changes to other sections of the BMC to transfer responsibility for sidewalk seating permitting from the Planning Department to the Public Works Department.  Subsequent to the April 27 meeting, staff identified additional changes needed in Title 23, which required a Planning Commission public hearing and recommendation; those changes were scheduled for Commission consideration on June 1, 2011.  Staff proposes to bring all of the BMC changes related to sidewalk seating, both to Title 23 and the other BMC sections, to the City Council at one time on July 12.  Therefore, the attached Ordinance does not include deletion of the AUP requirement for sidewalk seating as recommended by the Commission; this will be provided in July with the companion changes establishing the Public Works Department role.

BACKGROUND
In October and December 2010, the City Council directed staff to identify ways to encourage economic activity in order to address declining sales tax revenues and improve the City’s overall business climate.  In response, staff developed a range of potential zoning amendments and ranked the amendments into three groups based on anticipated level of effort and level of economic impact; these were presented to the Council on March 8, 2011.  The amendments addressed in this report include the “Group 1” items and three “Group 2” items.  The amendments address five of the eight referrals to the Planning Commission from the December 7, 2010 council action.

The changes proposed with the report are grouped into eight categories for discussion purposes (see below).  The changes are not the same in each zoning district.  Staff tried to achieve some consistency within the districts based on neighborhood type as classified in the General Plan (Neighborhood Commercial, Avenue Commercial, and Downtown).  However, the amendments also retain specific regulations of the individual districts to reflect the intent behind those differences.  The table summary included with Attachment 2, the April 27, 2011 Planning Commission staff report, illustrates the different permit levels by district.

At the April 27 public hearing 12 members of the public spoke.  Most of the speakers were in favor of the changes and encouraged the City to act quickly.  Speakers expressed concerns about inadequate parking, high commercial rental rates, and the need to maintain diversity in the types of businesses through quotas and other restrictions.  Public notice was provided with the required newspaper publication; in addition, merchants associations, commercial realtors, neighborhood representatives, and groups interested in policy changes in commercial districts were notified with an email announcement.

The Commission discussed and acted on the eight categories of zoning changes as summarized below.  Each description is followed by the Commission’s April 27 action.

1. Allow beer and wine service with an AUP at restaurants.  In most districts, adding beer and wine service at existing or new restaurants currently requires a UPPH.  This change will lower the review to an AUP in all districts, which will reduce the time and cost associated with adding this service.  This change has already been adopted in most of the downtown.  Restaurants within 200 ft of a residential district would use the AUP process.  Restaurants will still be subject to the restrictions of an Alcohol Beverage Control (ABC) license, and alcohol will not be available for take-out.

 
Commission Action: Motion/Second/Carried to recommend allowing permitting for beer and wine with food with an AUP, change number 1 (DS/TC). Ayes: Clarke, Dacey, Eisen, Gurley, Novosel, Pollack, Poschman, Samuels, Stoloff.  Noes: None.  Abstain: None.  Absent: None.

2. Lower review levels for all new restaurants based on size of restaurant.  This change will lower the permit review required for new restaurants from an AUP or UPPH to a ZC or AUP depending on the size of the restaurant.  For most neighborhood commercial districts, restaurants under 1,000 square feet in size would be allowed with issuance of a zoning certificate; for the avenue commercial districts, under 1,500 square feet, and in the downtown, under 2,000 square feet.  (New restaurants will still be subject to the parking requirements for restaurant uses and may be subject to change of use or conversion of space restrictions).

Commission Action: Motion/Second/Carried to recommend lowering permit review levels for restaurants, change number 2 (DS/JN). Ayes: Clarke, Eisen, Gurley, Novosel, Pollack, Samuels, Stoloff.  Noes: Dacey, Poschman.  Abstain: None.  Absent: None.

3. Lower review levels for pedestrian-oriented business.  In some districts, uses that could encourage pedestrian activity through client and customer visits require an AUP or UPPH.  This change will lower those review levels to a ZC or AUP, depending on the use and the district.  Uses (from the “Uses Permitted Table” of each zoning district) considered pedestrian-oriented include restaurants, Video/DVD rentals, department stores, banks, exercise/martial arts studios, group class instruction, and gyms/health clubs. In addition, lower review levels  for incidental food and beverage and incidental live entertainment (unamplified) will allow existing pedestrian-oriented businesses to expand their services and potentially attract more patrons to an area.  

Commission Action: Motion/Second/Carried to recommend lowering permit review levels for pedestrian-oriented uses (change number 3), delete the “video/DVD store” entry for consistency, and delete the restrictions on ground-floor gyms and health clubs in the C-NS (right-hand column of page 28) (DS/JS). Ayes: Clarke, Dacey, Eisen, Gurley, Novosel, Pollack, Poschman, Samuels, Stoloff.  Noes: None.  Abstain: None.  Absent: None.

4. Lower review levels for offices on the ground floor.  In some districts, office uses require a UPPH to be located on the ground floor based in part on concern they will detract from the pedestrian character of the area.  However, clients and employees of the offices contribute to pedestrian activity.  Additionally, ground floor offices can include window displays or a view into the building in order to maintain a visually interesting pedestrian setting.   
 
The proposed changes will allow office uses on the ground floor with a ZC or AUP.  Office uses (from the “Uses Permitted Table” of each zoning district) that would be allowed with a ZC include Insurance Agents, Title companies, Real Estate Agents, and Travel Agents.  Office uses that would be allowed with an AUP include Professionals and Government, Institution, and Utilities, and in some districts, Medical Practitioners.  The proposed amendments would require all offices located on the ground floor adjacent to a street frontage to include a storefront windows display or to be transparent and provide pedestrian viewing a minimum of 10 feet into the tenant space.

At the April 27 meeting, the Commissioners discussed which types of office uses should be allowed with a ZC on the ground floor in commercial districts based on the amount of foot-traffic they are expected to generate.  Some Commissioners felt visitors’ bureaus and accounting offices should be added; some felt title companies should be removed.

Commission Action:  Motion/Second/Carried to recommend lowering permit review levels for offices on the ground floor as proposed by staff, change number 4 (TC/JS). Ayes: Clarke, Novosel, Pollack, Samuels, Stoloff.  Noes: Dacey, Poschman.  Abstain: Eisen, Gurley.  Absent: None.

5. Sidewalk seating and furniture with a non-discretionary Public Works permit.  In all districts, an AUP is currently required to place seating on the sidewalk in the public right-of-way (ROW).  This review is used to ensure that adequate space is maintained for pedestrians, persons with limited mobility, and for access to utilities, fire escapes, fire hydrants, and public transportation.  A ZC with staff-level design review is currently used to allow for sidewalk furniture (benches and planters).  

With the proposed changes, review and permitting for use of the ROW would be subject to the Department of Public Works, not the Planning Department.  A non- discretionary Public Works permit would be used instead of an Administrative Use Permit and design review would no longer be required for sidewalk furniture. The standards for sidewalk seating and sidewalk furniture from the zoning ordinance (Chapters 23E.24 and 23E.26) will be incorporated into the municipal code and used for the Public Works permit (Chapter 14.48).   

The December 7, 2010 Council referral included “Consideration of tables, chairs and planters as of right and consistent with American Disability Act (ADA) standards.”  In consultation with the Public Works Department, staff determined that the best way to make a “by-right” permit for sidewalk seating was to create a non-discretionary Public Works permit.  The Public Works Department administers all other encroachments into the ROW, and is well suited to administer sidewalk seating and furniture permits due to familiarity with the regulation of the ROW and State and federal access requirements. 

 
Currently, Planning and Public Works staff coordinate review of AUPs: Planning prepares the AUP and Public Works staff conduct the field inspections to verify compliance with the BMC.  By removing the Planning Department’s role, permits will take less staff time and be less expensive to applicants.  Public Works staff estimate permits will be approximately $350.  The permits would be renewed annually, like business licenses, in order to assure that the required liability insurance is maintained.   

Subsequent to the April 27 Commission meeting, staff identified additional changes needed in Title 23.  Staff proposes to bring all of the BMC amendments related to this change to the City Council at one meeting.  This way, the other zoning amendments proposed with this report will not be delayed by the sidewalk seating changes.  Therefore, the attached Ordinance does not include deletion of the AUP requirement for sidewalk seating as recommended by the Commission; this will be provided in July with the companion changes establishing the Public Works Department role.

Commission Action:  Motion/Second/Carried to recommend to City Council that sidewalk seating be a non-discretionary public works permit, change number 5 (GP/PD). Ayes: Clarke, Dacey, Eisen, Gurley, Novosel, Pollack, Poschman, Samuels, Stoloff.  Noes: None.  Abstain: None.  Absent: None.

6. Extended Evening Hours.  The proposed change would extend the night-time hours of operation to 11p.m. in the neighborhood commercial districts and midnight in the avenue commercial districts.  These hours are applicable to existing business that are permitted with issuance of a ZC; for existing business subject to a conditional use permit that includes specific hours as a condition of approval, a use permit modification would be required.

Commission Action:  Motion/Second/Carried to recommend extended evening business hours in the commercial districts, change number 6 (JN/DS). Ayes: Clarke, Eisen, Novosel, Pollack, Samuels, Stoloff.  Noes: Dacey, Poschman.  Abstain: Gurley.  Absent: None.

7. Quota Changes.  For the Solano Avenue district (C-SO), the proposed amendments would suspend the quota restriction for four years.  The proposed amendments add to the North Shattuck district (C-NS) the option to exceed the quota limitations with approval of a Use Permit.  Currently, the C-NS is the only of the four quota districts that does not allow exceeding the quota limits with a Use Permit.  Staff added this provision to the C-NS for consistency and flexibility.  

Commission Action:  Motion/Second/Carried to recommend changes to quotas in the C-SO and C-NS Districts, change number 7, with a 4 year suspension of quota restrictions rather than 3 years in the C-SO (JS/TC). Ayes: Clarke, Eisen, Gurley, Novosel, Pollack, Samuels, Stoloff.   Noes: Dacey, Poschman.   Abstain: None.  Absent: None.

8. Ashby node.  The amendments include a revision to the Ashby/San Pablo node to remove properties fronting on Ashby from the node. This change addresses the limitations placed on ground floor uses in the node, which has made it difficult for the Ashby Lofts property to find tenants for three ground floor spaces.  With this change, one parcel would be removed from the node (the Ashby Lofts parcel); all other C-W zoning will remain the same.  By removing the parcel from the node, office and light manufacturing uses would be allowed in the ground floor space.  Under the current C-W zoning, some office uses are allowed with issuance of a ZC; light manufacturing requires an AUP or UPPH, depending on size.  The property owner has indicated that office and light manufacturing uses are interested in leasing the tenant spaces.

Commission Action:  Motion/Second/Carried to recommend the staff recommendation to modify the Ashby Node, change number 8 (GP/PD). Ayes: Dacey, Eisen, Gurley, Novosel, Pollack, Poschman, Samuels, Stoloff.  Noes: None.  Abstain: None.  Absent: Clarke.

RATIONALE FOR RECOMMENDATION
The Council referrals directed staff to consider ways to address declining sales tax revenues.  Retail activity most directly impacts sales tax, and in the commercial districts most retail is already permitted without discretionary review.  These amendments lower the permit requirements for certain additional retail uses and aim to promote economic activity indirectly by encouraging uses that increase pedestrian activity, fill empty storefronts, and improve the perception of doing business in Berkeley.

ALTERNATIVE ACTIONS CONSIDERED

In addition to zoning amendments, staff are working to identify if other City regulatory requirements or processes may impact economic activity.  Staff developed a range of options in response to the Council referrals and focused first on the amendments considered to be easier to implement.  After implementation of the changes proposed with this report, staff will prepare additional zoning-related amendments for consideration in the fall, which may include modifying the restrictions on changes of use, restrictions on the conversion of tenant spaces (collapsing/expanding), and parking requirements.   

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)
The proposed changes would be exempt from the California Environmental Quality Act pursuant to Guidelines Section 15061(b)(3) because it can be seen with certainty that the proposed amendments to change discretionary thresholds would not have a significant effect on the environment. Any proposed discretionary project would also be subject to CEQA review. No new uses are proposed to be established or eliminated. No changes to existing development standards or development potential are proposed.

To read the entire staff report as well as the zoning ordinance changes click on ZONING CHANGES.