PURPOSE:

This report recommends that the City Council approve a Zone Text Amendment (ZTA) that would modify the list of permitted uses in the Rancho commercial zones.  The proposed amendment would require a Conditional Use Permit (CUP) for �grocery/market� uses in Rancho zones where such uses are currently permitted by right.

BACKGROUND:

In February and March 2007, the City Council considered and denied an appeal of the Planning Board�s decision to deny a proposed Whole Foods market at the corner of Alameda Avenue and Main Street in the Rancho Commercial zone.  During the Planning Board�s and City Council�s consideration of the application, some Board and Council members and members of the public expressed concern that allowing markets as a permitted use in the Rancho Commercial zone and other Rancho zones was not consistent with the intent of the 1993 Rancho Master Plan.  The Board and Council both requested that staff return to the City Council for further discussion.  On June 26, 2007, staff presented a report to the City Council regarding this issue.  The Council directed staff to proceed with the subject ZTA to require a CUP for grocery/market uses in all Rancho zones where grocery/markets are now permitted by right.

Burbank Municipal Code (BMC) Section 31-502 provides that grocery/markets are permitted by right, with no CUP required, in the NB Neighborhood Business, GO Garden Office, RC Rancho Commercial, and RBP Rancho Business Park zones (Exhibit A).  Grocery/markets are prohibited in the C-R Commercial Recreation zone.  Each of these zones was created in 1993 in conjunction with the Rancho Master Plan.  The Master Plan itself is part of the Land Use Element of the General Plan, and the Rancho zones implement the Plan.  The Rancho commercial zones are located in the area generally bounded by Mariposa Street, Oak Street, Main Street, and Riverside Drive (Exhibit B).

Zoning Use List History

Prior to 1998, permitted, conditionally permitted, and prohibited uses for each zone were listed in separate lists under each respective zone.  When the Rancho commercial zones were created in 1993, new use lists were added to the BMC for each individual zone, based upon existing use lists.  Most of the use categories in the lists were not defined in the Code.  The use lists at that time included multiple use categories for food sales establishments, including �food market� and �foodstore-specialty.�  Neither of these uses was defined in the Code.  When the Rancho zones were adopted, �food specialty store� was listed as a permitted use in the Rancho Commercial zone.  Food specialty stores were not listed as a permitted use in any other Rancho zone.  However, other food related uses such as bakeries were permitted in other Rancho zones.

In 1997, the City Council adopted an ordinance to establish new discretionary review requirements for residentially adjacent grocery stores.  The ordinance required a CUP for any grocery store located within 150 feet of a residentially zoned property to operate between the hours of midnight and 6 a.m.  As part of the ordinance, a new definition was created for �grocery/market.�  Grocery/market was defined as follows:

�Grocery/Market� shall mean a grocery store, a convenience grocery store, a liquor store and/or a mini-market and shall also include any other retail market selling a variety of prepackaged food items, groceries, household goods and other similar items.

This definition grouped all types of food retail stores into one category for the purpose of determining when a CUP was required for late night business operations.  Different types of food stores remained in the individual use lists, including food markets and food specialty stores.  Although combined under a single definition for the purposes of the restrictions on late night operations, the ordinance did not combine the uses into a single category for the purpose of determining whether the use was permitted in the zone.  BMC Section 31-1119(d), which was created by the ordinance, provides that businesses fitting under the grocery/market definition are subject to the requirements of the ordinance �regardless of the establishment�s use classification for zoning purposes and regardless of the establishment�s business license classification.�  The individual use categories remained undefined.

In 1998, the City Council adopted an ordinance to reorganize the Zoning Ordinance and replace the lists of permitted uses for each zone with a single use table.  The use list table consolidated the use lists from all existing commercial and industrial zones, including the Rancho commercial zones.  One of the goals of creating the use list table was to simplify the lists of permitted uses by combining multiple uses into consolidated categories whenever feasible.  Based upon the above definition of grocery/market that was created under the 1997 ordinance, food retail uses including food market and food specialty store were combined under a single use category of grocery/market.  The grocery/market definition was retained and remains in the Code today.  Grocery/market uses were permitted by right in those zones where food markets and/or food specialty stores had previously been permitted and in other zones where related uses had been permitted by right.  As such, grocery/market became a permitted use in all of the Rancho zones except for the C-R Commercial Recreation zone.  The concern that this permission was inconsistent with the intent of the Rancho Master Plan did not come to light until the Planning Board and City Council considered the proposed Whole Foods project.

Proposed Zone Text Amendment

The proposed ZTA would amend BMC Section 31-502 (the zoning use list) to make grocery/markets a conditionally permitted use in the NB Neighborhood Business, GO Garden Office, RC Rancho Commercial, and RBP Rancho Business Park zones where grocery/markets are currently permitted, meaning that a CUP would be required (Exhibit C).  Grocery/markets would continue to be prohibited in the C-R Commercial Recreation zone as they are under current zoning.  The existing CUP requirement for grocery/markets selling alcoholic beverages would remain unchanged.

A CUP is a discretionary land use permit that is approved or denied by the Planning Board.  The Board�s decision to approve or deny a CUP may be appealed to the City Council by the project applicant or any interested party.  The purpose of a CUP is to provide increased City and public review of particular land uses that must be considered on a case by case basis due to the nature of the use and its potential impacts on surrounding properties.  A CUP allows for specified types of uses to be carefully reviewed to ensure that the use would be compatible with surrounding uses and properties.  To approve a CUP, the Planning Board must determine that certain findings, as specified in BMC Section 31-1936, can be made.  The required findings are as follows:

1. The use applied for at the location set forth in the application is properly one for which a conditional use permit is authorized by this chapter.

2. The use is not detrimental to existing uses or to uses specifically permitted in the zone in which the proposed use is to be located.

3. The use will be compatible with other uses on the same lot, and in the general area in which the use is proposed to be located.

4. The site for the proposed use is adequate in size and shape to accommodate the use and all of the yards, setbacks, walls, fences, landscaping and other features required to adjust the use to the existing or future uses permitted in the neighborhood.

5. The site for the proposed use relates to streets and highways properly designed and improved to carry the type and quantity of traffic generated or to be generated by the proposed use.

6. The conditions imposed are necessary to protect the public health, convenience, safety and welfare.

The Planning Board may place conditions of approval upon a CUP to help mitigate any potential negative effects and to ensure compatibility with surrounding uses.  CUPs must be considered by the Board at a noticed public hearing to provide nearby property owners, residents, and businesses an opportunity to comment on the proposed project.

Currently, new grocery/markets in the Rancho zones would be required to go through the Development Review (DR) process.  Most DR applications are approved or denied by the Community Development Director, and that decision may be appealed to the Planning Board and City Council.  To approve a DR application for a project within 150 feet of a single family residential zone, the Director must make certain findings related to the compatibility of the proposed use with nearby residential uses.  Although this provides some degree of discretion, the discretion that may be exercised is not as broad as that provided through the CUP process.  DR applications for projects generating 50 or more vehicle trips during the AM or PM peak traffic hours are considered directly by the Planning Board and are subject to additional traffic-related findings.  New grocery/markets would continue to be subject to the DR requirement; the CUP requirement would be in addition to existing requirements.  The CUP application would be processed concurrently with the DR application.

Public Input

In addition to the required newspaper notice, notices of both the Planning Board and City Council hearings for the proposed ZTA were mailed to all property owners and tenants in the Rancho Master Plan area, including all commercial and residential properties.

Prior to the Planning Board hearing, staff received two phone calls from a Rancho area resident and an owner of residential property in the Rancho area, both of whom expressed support for allowing a new market to open in the Rancho area.  At the Planning Board hearing, several Rancho area residents spoke at the public hearing and expressed their opinion that the proposed ZTA did not go far enough to protect the Rancho neighborhood and would still not be consistent with the intent of the Rancho Master Plan.  The speakers called for reinstating the food specialty store use category from the original Rancho zoning.  Some speakers recommended creating a new definition for food specialty store, which was lacking from the original Rancho zoning (and previously existing zoning), to clearly memorialize the intent of the Rancho Master Plan and zoning and to eliminate future debate and interpretation over the type and size of food store uses.  Some speakers advocated prohibiting grocery/markets until such time that the food specialty store category is reinstated.

ANALYSIS:

Existing Uses

If any businesses meeting the definition of grocery/market were currently operating in any of the affected Rancho zones, the uses would become legal non-conforming uses as a result of the proposed amendment.  This means that the businesses could continue to operate without penalty or restriction for an unlimited period of time.  However, the businesses would not be allowed to expand their size or intensify their operations without first obtaining a CUP.  Further, if the businesses were demolished or destroyed beyond the thresholds provided in the BMC, they would lose their legal non-conforming status and would be required to obtain a CUP before rebuilding or reopening.  Further, if any grocery/market went out of business and was replaced by a different business that was not a grocery/market, the legal non-conforming status would be lost and a grocery/market could not re-occupy the space in the future without first obtaining a CUP.

Staff reviewed the businesses in the Rancho area and did not identify any existing businesses in the Rancho zones that fall under the definition of grocery/market.  Therefore staff is not aware of any existing businesses that would be affected by the proposed ordinance.  The Pavilions market on Alameda is located within a Planned Development (PD) zone that would not be affected by the proposed amendment.  Although the Pavilions property is located within the Rancho Master Plan and is included within the Rancho Commercial sub-area (discussed below), the PD zone provides unique zoning that applies only to the property on which the PD zone is located.  Changes to the list of permitted uses in surrounding zones would not affect the PD zone itself.  The PD zone permits several uses that fall within the definition of grocery/market, including dairy products, food market, food store-specialty, and liquor store.  The Development Agreement that provides the property owner with vested rights to the PD zone is in effect through December 1, 2023 and cannot be modified until after that date except as requested by the owner and approved by the City Council through the PD amendment process.

Future Uses

The proposed amendment would subject all future uses included under the definition of grocery/market to the CUP process, including supermarkets, convenience stores, and other similar uses.  This would result in additional cost and time to project applicants to go through the CUP process when they would otherwise be subject only to DR as discussed above.  DR applications may be processed as ministerial or discretionary applications depending upon the project site�s distance from a single family residential zone and the number of vehicle trips that the project is expected to generate during peak traffic hours.  Depending upon the location and size of a proposed market project, the proposed ZTA could result in some projects being subjected to a discretionary review process, including environmental review, that would otherwise be subject to a ministerial process under current Code requirements.

Since many grocery/market businesses sell alcoholic beverages, many of these uses would already be subject to the CUP process, as was the proposed Whole Foods market.  BMC Section 31-1116 requires a CUP for any business selling alcoholic beverages for off-premises consumption regardless of the business type.  However, when considering a CUP for the sale of alcoholic beverages, the Planning Board�s discretion over the application is limited to activities and impacts related to the alcoholic beverages.  Conditions of approval cannot be placed upon the project unless there is a direct nexus to the sale of alcoholic beverages.  Further, if the CUP were denied, the market or similar business could still operate, it would just not be allowed to sell alcoholic beverages.

The proposed ZTA would expand the CUP requirement to all grocery/markets including those not selling alcoholic beverages.  This would expand the scope of issues that could be considered by the Planning Board when making the required findings to approve the CUP and imposing conditions of approval.  The Board would have the opportunity through the CUP process to look at the business as a whole, including the building and physical development of the site and the operations of the business.  The CUP could be approved or denied based upon the Board�s ability to make the required CUP findings as related to the business as a whole.  If approved, conditions of approval could be imposed upon the project to address the possible adverse impacts and compatibility issues with the entire business, as opposed to a single aspect of the business.

General Plan/Rancho Master Plan Consistency

The properties that would be affected by the proposed ZTA have General Plan land use designations of Restricted Industry, Shopping Center, and Limited Commercial.  All three of these land use categories allow for commercial uses such as grocery/markets.  The proposed ZTA would continue to allow grocery/markets in the specified Rancho zones and would be consistent with the intent and policies of the land use designations.

In addition to the underlying land use designations, the areas affected by the proposed ZTA are subject to the Rancho Master Plan portion of the General Plan.  The ZTA would affect the following four sub-areas of the Rancho Master Plan, which generally correspond to the zones that would be addressed by the ZTA.  The Plan�s statement for the intended land uses within each area is as follows:

Rancho Business Park: intended for �offices, media-related uses, and restricted light industrial and quasi-industrial activities�

Rancho Commercial: intended for �community-oriented retail shops and services in conjunction with professional offices�

Garden Office: intended for offices and senior housing; in addition, �incidental retail sales and service uses are encouraged in order to maintain a self-contained development that discourages the mid-day use of the automobile�

Neighborhood Business: intended for a �mix of retail and office uses requiring visibility and convenient access;� uses are �intended to primarily serve the surrounding residential and business neighborhoods�

There has been much debate about whether the allowance of grocery/markets as a permitted or conditionally permitted use is consistent with the intent of the Rancho Master Plan.  Three of the four affected Rancho sub-areas explicitly call for retail uses; the fourth sub-area, Rancho Business Park, does not call for retail uses, but does not prohibit or discourage them.  Since the Rancho Master Plan does not define what is meant by retail uses, including the size or intensity of the use, it may be argued that any type of retail use would be consistent with the plan.  However, there are indications in the minutes of the Rancho Master Plan Advisory Committee that there was intent, at least in the Rancho Commercial zone and sub-area, for retail uses to be of a smaller scale so as to avoid major traffic impacts.  In the original draft of the Rancho Master Plan, food markets were listed as a permitted use.  This was later changed to food specialty stores, apparently in response to concerns that markets would generally be larger in size and would generate more traffic than a food specialty store.  However, food specialty store was not defined, so the intended size and nature of such a store is not clear.  Today, food specialty stores are captured under the grocery/market definition.  The City Council on June 26 considered the option of prohibiting grocery/markets entirely within the Rancho area.  However, this approach too could be argued to be inconsistent with the intent of the Rancho Master Plan, since food specialty stores were permitted under the original Rancho zoning.

The proposed ZTA does not seek to settle this debate but rather to facilitate it by adding a level of discretion to allow the Planning Board (and City Council if appealed) to determine on a case by case basis whether an individual project is consistent with the intent of the Rancho Master Plan.  BMC Section 31-1935 provides that a CUP cannot be approved unless the project is found to be consistent with the �purpose� of the General Plan.  Since the Rancho Master Plan is part of the General Plan, the Planning Board or City Council would have to find that a proposed project is consistent with the Plan before approving a CUP.  The Board or Council would determine whether the size, operations, and other characteristics of a project were consistent with the intent of the Plan and could approve or deny the project accordingly, subject to making the required CUP findings.  While this approach will likely result in a debate with each project about whether it is consistent with the Rancho Master Plan, it accommodates the differences of opinion regarding the intent of the Master Plan.  The ZTA provides flexibility so that the compatibility of future projects within the Rancho neighborhood can be addressed on an individual basis rather than through a blanket allowance or prohibition.

Environmental Review

The proposed ZTA is exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the State CEQA Guidelines. This section provides that a project is exempt from environmental review where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.  The proposed amendment would require a discretionary review process for projects that are currently permitted by right.  The amendment would not cause any development to occur or otherwise directly or indirectly cause environmental impacts.  It is not reasonably foreseeable that any projects will occur as a result of the amendment, and any future projects developed pursuant to the amendment would be subject to environmental review as discretionary actions.

PLANNING BOARD DELIBERATION:

The Planning Board considered the proposed ZTA at a public hearing on August 13, 2007 (draft minutes attached as Exhibit D).  Staff discussed with the Board the City Council�s direction from June 26 to move forward with the ZTA while also planning to revisit the Rancho Master Plan through the ongoing General Plan update process.  The Planning Board members believed that revisiting the Rancho Master Plan through a public process with regard to food specialty stores should be started as soon as possible, separate from the General Plan update.  The public process would focus on the possibility of reinstating the food specialty store use category from the original Rancho zoning.  Some Board members supported the public speakers� statements that a new definition should be created for food specialty stores consistent with the intent of the Rancho Master Plan to remove any ambiguity and avoid future debates about the type of food store uses envisioned by the Plan.

Some Planning Board members believed that the Board�s consideration of the ZTA should be postponed, and the public hearing continued, until staff returned with a public outreach plan and schedule to revisit the food specialty store issue.  Staff indicated that the intent of the proposed ZTA was to act as an interim measure until such time that the Rancho zoning is revisited and revised as deemed appropriate.  Staff prepared the proposed ZTA quickly to allow for City Council consideration and adoption at the earliest possible time such that any future applications for grocery/markets in the Rancho area would be subject to the CUP requirement.  It would therefore not be beneficial to delay the Council�s consideration of the ZTA by continuing the Planning Board hearing.

Some Planning Board members believed that the proposed CUP requirement for grocery/markets should be applied Citywide rather than just in the Rancho area.  Staff and the representative from the City Attorney�s office explained that substantially expanding the scope of the ZTA for Citywide application would require additional public noticing and staff analysis.  The ZTA as proposed is relatively simple because it would not affect any existing businesses.  A Citywide requirement would affect many markets, convenience stores, and other businesses falling within the grocery/market definition, and would create many legal non-conforming businesses.  Further, staff noted that discretionary Development Review findings and the CUP requirement for businesses selling alcoholic beverages already provide the City with the ability to carefully review proposed markets for compatibility and impact concerns.

One Planning Board member suggested that the CUP for grocery/markets have additional required findings for approval beyond the typical six findings required for other CUPs.  These additional findings would address concerns related to traffic, parking, and other such issues.  Staff noted that the discretionary DR process already includes findings related to traffic impacts and traffic circulation in proximity to residential areas.  Further, concerns about parking management and other such issues would be more appropriately addressed through the conditions of approval placed upon the project rather than through the findings.

The Planning Board deliberated further on revisiting the Rancho Master Plan with regard to food specialty stores and considered whether to continue the public hearing to a later date until a schedule could be prepared for that effort.  All of the Planning Board members expressed concerns over the continued uncertainty that exists in the Rancho area about what type and size of grocery/market may be built and that the proposed ZTA does not remove that uncertainty.  The Board members supported revisiting the Rancho Master Plan and zoning to provide certainty to Rancho area residents about future development of food stores in the area and to settle the ongoing debate about the intent of the original plan.  Staff acknowledged that the ZTA does not remove the uncertainty or resolve the ongoing debate, but at least provides the City with discretion over future grocery/market projects and allows the Planning Board (and City Council if appealed) to determine on a case by case basis which projects are consistent with the intent of the Rancho Master Plan.

The Board ultimately decided not to continue the hearing and requested that staff return within 30 days with a public outreach plan and schedule to revisit the provisions of the Rancho Master Plan and zoning regarding food specialty stores.  The public outreach process would include a discussion of possibly amending the Zoning Ordinance to restore and create a definition for the food specialty store use category.  The Planning Board requested that a proposed schedule for this effort be provided at the September 10 Board meeting.  However, staff is concerned that the Planning Board�s request to move forward immediately with public outreach on this issue may conflict with the direction given by the City Council on June 26.  At that time, the Council directed staff to proceed with the subject ZTA in lieu of taking any other immediate action.  The Council further directed staff to conduct public outreach for the purpose of revisiting the Rancho Master Plan as part of the ongoing update to the General Plan Land Use Element.  Staff believes that moving forward immediately with public outreach to discuss another possible ZTA as requested by the Planning Board may not be consistent with the Council�s direction.  Staff seeks direction from the City Council about whether to move forward now with the public outreach process requested by the Planning Board and/or address the Rancho Master Plan through the Land Use Element update as previously directed by the Council.

At the conclusion of the deliberations, the Planning Board voted 5-0 to recommend approval to the City Council of the ZTA as proposed by staff (Exhibit E).

FISCAL IMPACT:

The proposed ZTA would require a CUP for certain uses that are currently permitted by right.  Processing a CUP requires staff time and City resources.  Since planning application fees do not recover the full cost to the City of processing an application, the proposed ZTA would result in some cost to the City if and when a CUP application is processed.  However, staff expects that very few if any CUP applications will be filed as a result of the proposed ZTA.  Further, as noted earlier in this report, most markets would already be required to go through the CUP process due to sales of alcoholic beverages, as did the proposed Whole Foods.  The cost to the City and the additional staff resources required is therefore expected to be minimal.

CONCLUSION:

The proposed ZTA would provide for an individual analysis through the CUP process of any future grocery/market projects in the Rancho commercial zones.  The proposed ZTA would serve as a short-term measure until the issue of food specialty stores is revisited through a public process and the zoning is revised if deemed appropriate.  This will ensure in the meantime that all grocery/markets in the Rancho area are reviewed by the Planning Board, and if appealed the City Council, to determine whether they are consistent with the intent of the Rancho Master Plan and otherwise compatible with the Rancho neighborhood.

RECOMMENDATION:

Staff recommends that the City Council introduce the proposed ordinance to amend the zoning use list as described in this report.  Further, staff seeks direction from the City Council regarding the Planning Board�s request to move forward with a public outreach process to continue the discussion on the grocery/market issue and discuss possible further amendments to the Zoning Ordinance.

LIST OF EXHIBITS:

Exhibit A          Zoning use list (BMC Section 31-502) excerpt

Exhibit B          Map of Rancho commercial zones

Exhibit C          Proposed amendment to zoning use list

Exhibit D          Draft minutes of Planning Board meeting of August 13, 2007

Exhibit E           Planning Board Resolution No. 3098 dated August 13, 2007

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