City Council Meeting: April 10, 2007

Agenda Item: 8-B 

To:                   Mayor and City Council 

From:              Andy Agle, Director, Housing and Economic Development

Subject:          Bayside Leasing Guidelines Modification to Allow Restaurants With or Without Alcohol in the Promenade Pavilions

 

Recommended Action

Staff recommends that the Council amend one section of the Bayside Leasing Guidelines, adopted July 8, 2003, relating to preferred uses in the two pavilions on the Third Street Promenade, to include as a preferred use restaurants, with or without alcohol service.

 

Executive Summary

The Bayside Leasing Guidelines establish the preferred uses for City-owned property and public rights-of-ways within the Bayside District, the core Downtown area that includes the Third Street Promenade. For the two City-owned pavilions on the Third Street Promenade, the existing leasing guidelines identify restaurant/café uses with outdoor seating without alcohol service as preferred uses.  Since adoption of the Guidelines, Council has approved ordinances to implement recommendations of the Promenade Use Task Force, including an ordinance to allow for administrative approval of alcohol service for Promenade restaurants, and a provision allowing enclosed outdoor dining areas at the two pavilions. Staff recommends that the Bayside Leasing Guidelines be modified to align with these other City policies. There is no budget impact associated with this item.

 

Discussion

Background

The Bayside Leasing Guidelines were approved by Council on July 8, 2003. The guidelines establish the preferred uses for City-owned properties and public rights-of-ways within the Bayside District. The guidelines also describe the tenant recruitment process, terms for negotiating leases and licenses, and delegate authority for executing licenses and leases in accordance with the guidelines.  The Bayside Land and Assets Committee has begun a comprehensive review of the guidelines and will make recommendations to the Bayside Board and City Council in the coming months.

 

One element of the Leasing Guidelines that requires immediate consideration is the language relating to the City’s preference for uses in the two pavilions on the Third Street Promenade. The adopted Leasing Guidelines state that the preferred use is for restaurant/café uses with outdoor dining without alcohol service. Since approval of the Guidelines, several changes have occurred, related to the work of the Promenade Uses Task Force.  The Council-appointed Task Force explored a variety of measures to maintain and enhance the Promenade’s diversity of uses, including restaurants.  The Task Force recommendations included streamlined approval of alcohol service at Promenade restaurants and expanded opportunities for outdoor dining on the Promenade.  In response, on February 22, 2005, Council approved an ordinance allowing for administrative approval of alcohol service at Promenade restaurants.  Additionally, on April 25, 2006, Council approved amendments to the Third Street Promenade Outdoor Dining Standards to allow for outdoor dining areas adjacent to the pavilions. This action allowed restaurants in the pavilions to provide outdoor dining, install dining barriers and serve alcohol, if desired and pursuant to all regulatory permits.  The Bayside Leasing Guidelines should have been amended at that time to bring them into conformance with these other policies.

 

Following the Council’s February 2005 approval of an ordinance allowing restaurants with alcohol to obtain permits administratively, staff issued a Request for Proposal for a restaurant use in the Promenade North Pavilion.  The North Pavilion is located immediately north of Arizona Avenue.  The RFP stated that the preferred use was a food-service establishment that offered outdoor seating, with or without alcohol service.  The City and Bayside staff evaluation committee that reviewed the responses to the RFP recommended a restaurant that will serve a full menu including sandwiches, specialty quiches, soups, salads and wine and cheese.  City staff advised Bayside Board’s Land and Asset Committee and the full Board of its recommendation on January 10, 2006, and January 26, 2006, respectively, and advised the Board that execution of a license would be dependent upon Council’s upcoming decision to allow outdoor dining in the pavilions, as alcohol service is an integral element of the restaurant’s business plan.  The Council approved the outdoor dining amendments on April 25, 2006 and a License Agreement for the restaurant was executed on May 10, 2006.  Tenant improvements are currently underway in the North Pavilion and the new restaurant is expected to open in the coming weeks.  In order to ensure that the restaurant is in compliance with all regulatory and proprietary City requirements, staff recommends that the Guidelines be amended prior to the restaurant opening.

 

Environmental Analysis

The proposed amendment to Leasing Guidelines is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the State Implementation Guidelines in that CEQA only applies to projects having the potential to cause a significant effect on the environment.  The proposed amendment does not have this potential as it does not change the permitted uses in the subject district and does not change the development standards or amount of development that can occur in the district.

 

Public Outreach

On March 13, 2007, the Bayside District Land and Asset Committee recommended this change to the Leasing Guidelines.  The full Bayside Board approved the Committee’s recommendation at its meeting of March 22, 2007.

 

Budget/Financial Impact

An amendment of the Bayside Leasing Guidelines has no impact on the City’s budget.

 

 

 

 

 

Prepared by:

Miriam Mack, Economic Development Manager

 

Approved:

 

Forwarded to Council:

 

 

 

 

 

 

Andy Agle, Director

Housing and Economic Development

 

P. Lamont Ewell

City Manager