SAN JOSE CAPITAL OF SILICON VALLEY

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1 COUNCIL AGENDA: 06/27/17 ITEM: 10.3 CITY OF SAN JOSE CAPITAL OF SILICON VALLEY TO: HONORABLE MAYOR AND CITY COUNCIL Memorandum FROM: Planning Commission SUBJECT: SEE BELOW DATE: May 24, 2017 COUNCIL DISTRICT: 7 SUBJECT: FILE NO. NO. CP & ABC CONDITIONAL USE PERMIT AND DETERMINATION OF PUBLIC NECESSITY TO ALLOW THE OFF- SALE OF ALCOHOLIC BEVERAGES (BEER AND WINE) AS PART OF A FULL SERVICE GROCERY STORE (120 SQUARE FEE DEDICATED) ON A 2.17-GROSS ACRE SITE, LOCATED AT THE NORTHEASTERLY CORNER OF RANCHO DRIVE AND MONTEREY ROAD (3840 MONTEREY ROAD) RECOMMENDATION The Planning Commission voted (Bit-Badal, Absent) to recommend that the City Council approve the proposed Conditional Use Permit and Determination of Public Convenience or Necessity for the property located on the southeast corner of Rancho Drive and Monterey Road. OUTCOME Should the City Council approve the Conditional Use Permit and Determination of Public Convenience or Necessity at the subject site, the applicant would be able sell alcoholic beverages (beer and wine) off-site incidental to the full-service grocery store. BACKGROUND On May 24, 2017, the Planning Commission considered the proposed Conditional Use Permit and Determination of Public Convenience or Necessity. This item was heard on the Planning Commission's Consent Calendar. No members of the public asked to speak on this item, and there was no discussion by the Commissioners. The motion to recommend that the City Council approve the Planned Development Permit and Determination of Public Convenience or Necessity for the subject property was approved by a vote (Bit-Badal, Absent).

2 HONORABLE MAYOR AND CITY COUNCIL May 24, 2017 Subject: File Nos. PDI6-020 and ABC Page 2 ANALYSIS Analysis of the issues regarding the proposed Conditional Use Permit and Determination of Public Convenience or Necessity, including General Plan conformance and proposed resolution, are contained in the attached Planning Commission staff report. EVALUATION AND FOLLOW-UP If the Conditional Use Permit and Determination of Public Convenience or Necessity are approved, the applicant would be able to sell alcoholic beverages (beer and wine) off-site incidental to the full-service grocery store. PUBLIC OUTREACH Staff followed Council Policy 6-30: Public Outreach Policy to inform the public of the project. A notice of the public hearing was distributed to the owners and tenants of all properties located within 500 feet of the project site and posted on the City website. This staff report is also posted on the City's website. Staff has been available to respond to questions from the public. COORDINATION This project was coordinated with the Police Department and City Attorney's Office. CEOA Exempt, per CEQA Guidelines Section 15301(a) for Existing Facilities. /s/ ROSALYNN HUGHEY, SECRETARY Planning Commission For questions please contact Steve McHarris, Planning Official, at Attachments: Planning Commission Staff Report Draft Resolution Police Memo

3 CITY OF SAN JOSE CAPITAL OF SILICON VALLEY PC AGENDA: ITEM: 4.b. PLANNING COMMISSION STAFF REPORT File No. CP16-010, ABC Applicant: Jesus Lopez Location 3840 Monterey Road Existing Zoning District CN Commercial Neighborhood Historic Resource No Annexation Date: July 18,1963 CEQA: Exempt per CEQA Guidelines Section for Existing Facilities APPLICATION SUMMARY: Conditional Use Permit and Determination of Public Convenience or Necessity to allow the offsale of beer and wine (ABC Type License 20) at an existing 13,200-square foot full-services grocery store (Mi Rancho Supermarkets) located in an existing building and shopping center, in the CN Commercial Neighborhood District, on an approximately 2.17 gross acre site. RECOMMENDATION: Staff recommends that the Planning Commission recommend that the City Council approve the proposed Conditional Use Permit and Determination of Public Convenience or Necessity based upon the facts and findings in this staff report and the attached draft Resolution. PROJECT DATA GENERAL PLAN CONSISTENCY General Plan Designation Neighborhood/Community Commercial ITI Consistent O Inconsistent Consistent Policies VN-3.1; LU-5.10; FS-4.2 Inconsistent Policies None SURROUNDING USES General Plan Land Use Zoning Existing Use North Neighborhood/Community Commercial & Residential Commercial General & R-l-8 Residential Auto Sales and Single Family Residential Neighborhood South Neighborhood/Community Commercial & Mixed Used Neighborhood Commercial Neighborhood & R-M Residential Mixed Multifamily Residential, Public Eating and Drinking Establishments, Retail, and Salon Services East Mixed Use Neighborhood R-M Residential-Mixed Multi-Family Residential West Combined Industrial/ Commercial A(PD) Planned Development Drive-in Movie Theatre

4 File Nos. CP & ABC Page 2 of 12 RELATED APPROVALS Date Action 7/18/1963 Site was annexed into the City of San Jose 2/11/2003 File No. CP03-010: Conditional Use Permit to allow entertainment/drinking establishment and operation after midnight. 3/28/2016 File No. H16-016: Site Development Permit to allow fa9ade and site improvements to an existing 13,200 commercial building for a future grocery store (Mi Rancho Supermarket). 3/28/16 File No. CP16-010: Pending Conditional Use Permit to allow the off-sale of beer and wine at a future grocery store. 2/1/2017 File No. ABC : Pending Determination of Public Convenience or Necessity for off-sale of alcohol for a new grocery store PROJECT DESCRIPTION AND SITE LOCATION On March 28, 2016, the applicant applied for a Conditional Use Permit to allow the off-sale of alcohol beverages at an 13,200-square foot full-service grocery store (Mi Rancho Supermarkets) located in an existing building at an existing shopping center, in the CN Commercial Neighborhood District, on an approximately 2.17-gross acre site (see Figure 1). Figure 1: Site Plan The off-sale of alcohol would consist of an approximately 120-square foot portion of the 13,200- square foot full-service grocery store (see Figure 2). Existing on-site facilities, including parking and landscaping, are adequate for the proposed use, and no changes are proposed or required. The grocery store will operate from 7:00am to 9:00pm, seven days a week which is within the by-right hours of 6:00 a.m. to midnight daily, and no late night use is requested. The grocery

5 File Nos. CP & ABC Page 3 of 12 store building is in an existing shopping center and will offer full services including a restaurant. The subject site is adequately served by the adjacent public streets and can be directly accessed from Monterey Highway, which is designated as one of the seven Grand Boulevards per the Envision San Jose 2040 General Plan. Grand Boulevards are identified to serve as major transportation corridors for primary routes for VTA light-rail, bus rapid transit, standard or community buses, and other public transit vehicles. There are commercial and single-family detached residential uses to the north, multifamily residential, and commercial uses to the south, multifamily residential uses to the west, and commercial uses to the east. Figure 2: Floor Plan

6 File Nos. CP & ABC Page 4 of 12 ANALYSIS The proposed CUP was analyzed with respect to conformance with: 1) the Envision 2040 General Plan; 2) the Zoning Ordinance; 3) Conditional Use Permit findings for off-sale of alcohol, 4) Determinations of Public Convenience or Necessity for an Alcoholic Beverage Control License; and 5) California Environmental Quality Act (CEQA). Envision San Jose 2040 General Plan Conformance The proposed project site has an Envision San Jose 2040 General Plan Land Use/Transportation Diagram designation of Neighborhood / Community Commercial. This category supports neighborhood serving commercial uses, such as a grocery store. Furthermore, this project site is in the W. Capitol Ex / Monterey Road Growth Area, which is an Employment Area. This designation is in Horizon 3 of the General Plan, and has a planned capacity of 870 jobs. The proposed offsale of beer and wine at the grocery store would help achieve the commercial development goals of the Neighborhood / Community Commercial designation and General Plan Employment Growth designation by providing a neighborhood serving store within walking distance of existing residences and a variety of jobs for the area (see Figure 3). The proposed Conditional Use Permit would allow the expansion of a variety of products and goods ar consistent with the following General Plan policies. 1. Vibrant Neighborhoods Policy VN-3.1: Encourage the location of full service grocery stores within or adjacent to the neighborhoods with limited access to healthful foods with the goal that all San Jose residents be able to live within a X A mile walking distance of full service grocery store. Analysis: proposed grocery The store with proposed beer and wine sales will provide a fullservice grocery to a generally underserved neighborhood. The nearest existing full-service grocery store (Marina Grocery) in the area is approximately one-half mile away. The goal of Policy VN-3.1 is that all San Jose residents be able to live within a one-half mile walking distance of a full-service grocery store. Therefore, a full service grocery store with off-sale of beer and wine at the subject site will better serve the adjacent community in terms of convenience and walking distance. 2. Neighborhood Serving Commercial Policy LU-5.10: In the review of new locations for the off-sale of alcohol, give preference to establishments that offer a full range of food choices

7 File Nos. CP & ABC Page 5 of 12 including fresh fruit, vegetables and meat. Analysis: This with this policy. service grocery full store will offer fresh fruit, vegetables, and meat consistent 3. Fiscally Sustainabilitv Policy FS-4.2: Maintain, enhance, and develop the employment lands within identified key employment areas (North Coyote Valley, the Berryessa International Business Park, the East Gish and Mabury industrial areas, the Evergreen industrial area, the Edenvale Redevelopment Project Area, and the Monterey Corridor Redevelopment Project Area). Protect existing employment uses within these areas from potentially incompatible nonemployment uses. Analysis: Consistent with the policy, the proposed grocery store would employ approximately 20 employees and retain commercial space within the area. Zoning Ordinance Conformance Land Use The property is located in the CN Commercial Neighborhood Zoning District (see Figure 4). Per Municipal Code Section , a grocery store is allowed by right and the building was approved through a site development permit (HI6-016) on October 17, As part of the site development permit approval, findings were made related to zoning conformance, i.e. height, setback, and parking. See Development Permit No. HI6-016 for additional details. The off-sale of beer and wine requires the review of a Conditional Use Permit. Conditional Use Permit for Off-sale of Alcohol The Zoning Ordinance requires a Conditional Use Permit for the off-sale of beer and wine within the CN Commercial Neighborhood Zoning District. The off-sale of beer and wine at the proposed grocery store requires that the Planning Commission articulate facts that affirm all required findings for: alcohol request for beer and wine. Figure 4: Zoning Designation A) a Conditional Use Permit and B) the off-sale of A. Required Findings for all Conditional Use Permits (San Jose Municipal Code Section ) 1. The conditional use permit, as approved: a. Is consistent with and will further the policies of the general plan, applicable specific plans and area development policies; and b. Conforms with the zoning code and all other provisions of the San Jose Municipal Code applicable to the project; and c. Is consistent with applicable city council policies, or counterbalancing considerations justify the inconsistency; and

8 File Nos. CP & ABC Page 6 of 12 Analysis: As discussed in detail above, the proposed off-sale of beer and wine is consistent with and will further the policies of the general plan by providing a full service grocery store to an underserved neighborhood. The grocery store will provide fruit, vegetables, and meat and will contribute to the economic vitality of the neighborhood. The CN Commercial Neighborhood Zoning District allows off-sale of alcohol with a conditional use permit. The proposed project is consistent with all applicable city council policies specifically public noticing and off-sale of alcohol. 2. The proposed use at the location requested will not: a. Adversely affect the peace, health, safety, morals or welfare of persons residing or working in the surrounding area; or b. Impair the utility of value of the property of other persons located within the vicinity of the site; or c. Be detrimental to public health, safety or general welfare. Analysis: The adjacent convenience store next to the grocery store currently has an offsale alcohol license. As indicated in a Police Department Memorandum dated May 16, 2017, the proposed use is not located within an area of high crime but is located in an area exceeding the ratio of off-sale retail licenses to population in the county. The Police Department is neutral to No issues of public safety or public nuisance were brought to Planning Staffs attention in the Police memo. Planning staff supports the request in that it is in line with the policies of the General Plan because the off sale of alcohol would be within a full service grocery store and is limited to beer and wine. The proposed off sale use enhances the convenience of the grocery market for the surrounding community, and is intended to be incidental and ancillary to a full-service grocery market that provides fresh produce and grocery goods to the community, consistent with General Plan Neighborhood Serving Commercial Policy LU The proposed off-sale of beer and wine is a small portion of the overall operation (120 square feet of 13,200 square feet grocery store) and will not impair the utility or value ofproperty of other persons located in the vicinity of the area, or be detrimental to public health, safety or general welfare. 3. The proposed site is adequate in size and shape to accommodate the yards, walls, fences, parking and loading facilities, landscaping and other development features prescribed in this title, or as is otherwise required in order to integrate said use with the uses in the surrounding area; and Analysis: The proposed use is not expanding the approved grocery store. The site development permit (HI 6-016) for the proposed 13,200 square foot grocery store was approved on October 17, The existing building and subject site in terms of parking, loading facilities, and landscaping are compatible with the existing use and surrounding areas. 4. The proposed site is adequately served: a. By highways or streets of sufficient width and improved as necessary to carry the kind and quantity of traffic such use would generate; or by other forms of transit adequate to carry the kind and quantity of individuals such use would generate; and b. By other public or private service facilities as are required Analysis: The subject use would be part of an approved full grocery store, the subject site is adequately served by the adjacent public streets and can be directly accessed from Monterey Highway, which is designated as one of the seven Grand Boulevards per the Envision San

9 File Nos. CP & ABC Page 7 of 12 Jose 2040 General Plan. Grand Boulevards are identified to serve as major transportation corridors for primary routes for VTA light-rail, bus rapid transit, standard or community buses, and other public transit vehicles. 5. The environmental impacts of the project, including but not limited to noise, vibration, dust, drainage, erosion, storm water runoff, and odor which, even if insignificant for purposes of the California Environmental Quality Act (CEQA), will not have an unacceptable negative affect on adjacent property or properties. Analysis: See CEQA discussion below. The proposed project was found exempt per CEQA Guidelines Section Section. Based on the above analysis, staff concludes that the above findings related to the Conditional Use Permit can be made. B. Required Findings for Off-sale of Alcohol (San Jose Municipal Code Section A Conditional Use Permit may be issued pursuant to the applicable provisions of this title for the off-sale of any alcoholic beverages only if the decision-making body first makes the following additional findings, where applicable: 1. For such use at a location closer than 500 feet from any other use involving the off-sale of alcoholic beverages, situated either within or outside the City, that the proposed location of the off-sale of alcoholic beverages use would not result in a total of more than four (4) establishments that provide alcoholic beverages for off-site consumption within a 1,000-foot radius from the proposed location. Analysis: There is one other use involving the off-sale of alcoholic beverages, located within the existing building, within a 500-foot radius of the proposed site (6 To Late, Convenience Store). There are no other uses within a 1,000-foot radius of the site. Therefore, this finding be made. can 2. For such use at a location closer than 500 feet from any other use involving the off-sale of alcoholic beverages, situated either within or outside the City, where the proposed location of the off-sale of alcoholic beverages use would result in a total of more than four establishments that provide alcoholic beverages for off-site consumption within a 1,000-foot radius from the proposed location, that the resulting excess concentration of such uses will not: a. Adversely affect the peace, health, safety, morals, or welfare of persons residing or working in the surrounding area; or b. Impair the utility or value of property of other persons located in the vicinity of the area; or c. Be detrimental to public health, safety or general welfare. Analysis: As stated above, the proposed use will not result in more than four establishments that provide alcoholic beverages for off-site consumption within a 1,000-foot radius of the proposed location. The Police Department is neutral to the issuance of the Conditional Use Permit. Planning supports the alcohol sale in that it is in line with the policies of the General Plan because it will be within a service grocery store and is limited to beer and wine. The proposed off-sale use enhances the convenience of the grocery market for the surrounding community, and is intended to

10 File Nos. CP & ABC Page 8 of 12 be incidental and ancillary to a full-service grocery market that provides fresh produce and grocery goods to the community, consistent with General Plan Neighborhood Serving Commercial Policy LU The proposed off sale of beer and wine will not impair the utility or value ofproperty of other persons located in the vicinity of the area, or be detrimental to public health, safety or general welfare. Therefore, this finding be made. can Figure 5: Nearby Alcohol Off-Sale Establishments 3. For such a use at a location closer than 500 feet from any child care center, public park, social service agency, residential care facility, residential service facility, elementary school, secondary school, college or university, or closer than 150 feet from any residentially zoned property, that the building in which the proposed use is to be located is situated and oriented in such a manner that would not adversely affect such residential, child care center, public park, social service agency, residential care facility, residential service facility and/or school use. Analysis: The proposed site is not located closer than 500feet from any child care center, social service agency, residential care facility, residential service facility, elementary school, secondary school, or college or university. The project site is within 150 feet from residentially zoned properties; however, the building is oriented towards Monterey Highway with the back of the building facing the residential uses. Additionally, the residential neighborhood is separated by Rancho Drive to the south and

11 File Nos. CP & ABC Page 9 of 12 a drive aisle and fencing along the parking lot to the east. The entrance to the grocery store is over 250feet from the closest residential uses and oriented toward Monterey Highway,the opposite direction of the residential uses. Therefore, this finding be made. C. Requirements for Determination of Public Convenience or Necessity Under California Business and Professions Code Sections and , the Department of Alcohol Beverage Control (ABC) Under California Business and Professions Code Sections and , the Department of Alcohol Beverage Control (ABC) must deny an application for a liquor license "if issuance of that license would tend to create a law enforcement problem, or if the issuance would result in or add to an undue concentration of liquor licenses in the area," unless the City determines that the public convenience or necessity would be served by the issuance of the license (Determination of Public Convenience or Necessity). An "undue concentration" is defined as follows: 1. The premises of the proposed license are located in an area that has 20 percent greater number of reported crimes than the average number of reported crimes for the City as a whole, or 2. The premises of the proposed license are located in a census tract where the ratio of existing retail off-sale licenses to population in the census tract exceeds the ratio in the County as a whole. Per City of San Jose data, the subject site is located within a census tract where the ratio of existing retail off-sale license to population exceeds the ratio in the County as a whole. The census tract allows for 4 off-sale ABC licenses and if approved there would be a total of 6 off-sale ABC licenses. However, the subject site in a high crime area as determined by the San Jose Police Department. Due to the overconcentration in the project site Census Tract, the City would grant a Determination of Public Convenience or Necessity in order for ABC to be able to issue a license for this off-sale use. Chapter 6.84 of Title 6 of the San Jose Municipal Code identifies the process and findings related specifically to off-sale of alcohol and specifies that the Planning Commission may issue a PCN only after first making all of the findings specified below (see San Jose Municipal Code section ): 3. The proposed use is not located within a SNI or neighborhood revitalization area or other area designated by the city for targeted neighborhood enhancement services or programs, or located within an area in which the chief of police has determined based upon quantifiable information that the proposed use: a. Would be detrimental to the public health, safety, or welfare of persons located in the area; or b. Would increase the severity of existing law enforcement or public nuisance problems in the area; and Analysis: This proposed use is not in an SNI or neighborhood revitalization area or other area designated by the City for targeted neighborhood enhancement services or programs. The Police Department is neutral to the issuance of the Conditional Use Permit. No issues of public health, safety or welfare were mentioned in the Police Memo. Planning supports the request in that it is in line with the policies of the General Plan because it will be within a full service grocery store and is limited to the off-sale of beer and wine. The proposed off-sale use enhances the convenience of the n

12 File Nos. CP & ABC Page 10 of 12 grocery market for the surrounding community, and is intended to be incidental and ancillary to a full-service grocery market (120 square feet out of 13,200 square feet) that provides fresh produce and grocery goods to the community, consistent with General Plan Neighborhood Serving Commercial Policy LU The proposed offsale of beer and wine will not increase the severity of the existing law enforcement or public nuisance problems in the area or be detrimental to public health, safety or general welfare. Therefore, this finding can be made. 4. The proposed use would not lead to more than four uses with off-premises sale of alcoholic beverage within a one thousand-foot radius from the exterior of the building containing the proposed use; and Analysis: The proposed use would not result in more than four off-sale establishments in a 1,000-foot radius. Although, the concentration within the census tract would be exceeded by one for a total offive off-sale establishments. Since the number of off-sale within 1,000-foot radius is less than four this finding can be made. 5. The proposed use would not be located within 500 feet of a school, day care center, public park, social services agency, or residential care or service facility, or within one hundred fifty feet of a residence; and Analysis: The proposed use is not within 500feet of a school, day care center, public park, social services agency, or residential care or service facility. As noted above in the Conditional Use Permit Findings, the proposed off-sale is located within 150 feet of existing residences. Although this finding cannot be made, staff notes that the building is oriented away from the residential areas and additional separations are provided. 6. Alcoholic beverage sales would not represent a majority of the proposed use; and Analysis: Alcoholic beverage sales would not represent a majority of the proposed use and will be incidental to the full service grocery store;(120 square feet out of 13,200 square feet, approximately 1%) therefore, this finding can be made. 7. At least one of the following additional findings: a. The census tract in which the proposed outlet for the off-premises sale of alcoholic beverages is located is unusually configured and the proposed outlet would act as a convenience to an underserved portion of the community without presenting a significant adverse impact on public health or safety; or This finding can be made. The off-premise sale of alcoholic beverages would be a part of a larger full-service grocery store. The grocery store would serve the adjacent underserved population and provide fruits, vegetable, and meats at a convenient walking distance. b. The proposed outlet for the off-premises sale of alcoholic beverages would enhance or facilitate the vitality of an existing commercial area without presenting a significant adverse impact on public health or safety; or This finding can be made. The off-premises sale of alcoholic beverage would enhance the service of the grocery store and contribute to the vitality of the existing commercial area. The grocery store would operate within normal hours and would not significantly impact public health or safety. c. The census tract in which the proposed outlet is located has a low population density in relation to other census tracts in the city, and the proposed outlet would not

13 File Nos. CP & ABC Page 11 of 12 contribute to an over-concentration in the absolute numbers of outlets for the offpremises sale of alcoholic beverages in the area; or finding This be made. cannot d. The proposed off-premises sale of alcoholic beverages is incidental and appurtenant to a larger retail use and provides for a more complete and convenient shopping experience. This finding be made. This is a full can service grocery store which provides a unique, large selection of fresh produce, groceries, wine, beer, and more to the south San Jose and greater San Jose area. This is differentiated from a corner liquor store or bar in that the price point and patrons it attracts do not loiter or become intoxicated at the site. The off-site sale of beer and wine will enhance the grocery store and provide more convenience for patrons and residents. If the Planning Commission cannot make one or more of the first four findings listed above, then the Planning Commission is required by San Jose Municipal Code section D to make a recommendation to the City Council as to whether the Council should make a determination for the proposed use. Analysis: As stated above, the proposed alcohol sale is within 150 feet of a residence. Therefore, the City Council is the initial decision-maker on the CUP and PCN. Staff is requesting the Planning Commission to recommend the City Council approve the CUP and PCN since three of the initial findings for the PCN can be made and findings 5. a, b, and d of the additional findings for a PCN determination. As noted in PCN Finding 3, although the project site is within 150 feet of existing residences, the building is oriented towards Monterey Highway with the back of the building facing the residential uses. Additionally, the residential neighborhood is separated by Rancho Drive to the south and a drive aisle and fencing along the parking lot to the east. Access to the entrance to the grocery store is over 250feet from the closest residential uses via automobile or walking. Additionally, the building is oriented toward Monterey Highway, the opposite direction of the residential uses. CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) Under the provisions of Section of the State Guidelines for Implementation of the California Environmental Quality Act, this project is found to be exempt from the environmental review requirements of Title 21 of the San Jose Municipal Code, implementing the California Environmental Quality Act of 1970, as amended (CEQA). The Section 15301(a) (Existing Facilities) exemption applies to the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. Examples include but are not limited to: a) interior or

14 File Nos. CP & ABC Page 12 of 12 exterior alteration involving such things as interior partitions, plumbing, and electrical conveyance. The proposed off-sale of alcohol would be incidental to a future grocery store located in an existing structure. The proposed use does not require expansion of the building. PUBLIC HEARING NOTIFICATION In order to inform the public of the proposed project, staff followed Council Policy 6-30: Public Outreach Policy. A notice of the public hearing was distributed to the owners and tenants of all properties located within 500 feet of the project site and posted on the City website. The staff report is also posted on the City's website. Staff has been available to respond to questions from the public. Project Manager: Robert Rivera Approved by: Date:, Planning Official for Harry Freitas, Planning Director Attachments: Exhibit A: Draft Resolution Exhibit B: Police Department Memorandum Exhibit C: Reduced Plan Set Owner: Village Associates c/o Biagini Properties, Inc. 333 West El Camino Real, Suite 240 Sunnyvale, CA Applicant: Mi Rancho Supermarket c/o Jason Noghery 1289 Jefferson Street, Unit C211 Oakland, CA 94612

15 RESOLUTION NO. A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN JOSE APPROVING, SUBJECT TO CONDITIONS, A CONDITIONAL USE PERMIT AND GRANTING A DETERMINATION OF PUBLIC CONVENIENCE OR NECESSITY TO ALLOW THE OFF-SALE OF ALCOHOL OF BEER AND WINE (ABC TYPE 20 LICENSE) AT AN EXISTING 13,200-SQUARE FOOT FULL-SERVICE GROCERY STORE (Ml RANCHO SUPERMARKETS) IN AN EXISTING BUILDING AND SHOPPING CENTER, ON AN APPROXIMATELY 2.17 GROSS ACRE SITE LOCATED AT THE NORTHEAST CORNER OF MONTEREY ROAD AND RANCHO DRIVE (3840 MONTEREY ROAD) FILE NOs. CP and ABC WHEREAS, pursuant to the provisions of Chapter of Title 20 of the San Jose Municipal Code, on November 2, 2016, an application was filed (File No. CP16-010) by the applicant, Jesus Lopez, on behalf of The Jamshid Noghrey Trust, LLC, with the City of San Jose for a Conditional Use Permit and Determination of Public Convenience or Necessity ("PCN") to allow the off-sale of beer and wine (ABC Type 20 License) at an existing 13,200-square foot full-services grocery store (Mi Rancho Supermarkets) on an approximately 2.17 gross acre site, on that certain real property situated in the CN Commercial Neighborhood District and located at the northeast corner of Monterey Road and Rancho Drive. (3840 Monterey Road, which real property is sometimes referred to herein as the "subject property"); and WHEREAS, the subject property is all that real property more particularly described in Exhibit "A," entitled "Legal Description," which is attached hereto and made a part hereof by this reference as if fully set forth herein; and WHEREAS, pursuant to and in accordance with Chapter of Title 20 of the San Jose Municipal Code, the Planning Commission conducted a hearing on said 1

16 application on May 24th, 2017, notice of which was duly given; and WHEREAS, at said hearing, the Planning Commission gave all persons full opportunity to be heard and to present evidence and testimony respecting said matter; and WHEREAS, at said hearing, the Planning Commission made a recommendation to the City Council respecting said matter based on the evidence and testimony; and WHEREAS, pursuant to and in accordance with Chapter of Title 20 of the San Jose Municipal Code, this City Council conducted a hearing on said application, notice of which was duly given; and WHEREAS, at said hearing, this City Council gave all persons full opportunity to be heard and to present evidence and testimony respecting said matter; and WHEREAS, at said hearing this City Council received and considered the reports and recommendations of the City's Planning Commission and the City's Director of Planning, Building and Code Enforcement; and WHEREAS, at said hearing, this City Council received in evidence a plan for the subject property entitled, "Mi Rancho," dated March 28, 2016, last updated February 23, 2017, said plan is on file in the Department of Planning, Building and Code Enforcement and is available for inspection by anyone interested herein, and said plan is incorporated herein by this reference, the same as if it were fully set forth herein; and WHEREAS, said public hearing before the City Council was conducted in all respects as required by the San Jose Municipal Code and the rules of this City Council; 2

17 NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SAN JOSE THAT: After considering all of the evidence presented at the Public Hearing, the City Council finds that the following are the relevant facts regarding this proposed project: 1. Site Description and Surrounding Uses. The project site is located on the northeast corner of Monterey Highway and Rancho Drive, at 3840 Monterey Road in the CN Commercial Neighborhood District. The 2.17 gross acre site is currently occupied by a 13,200 square foot building that was previously used by Fiesta Nightclub and subsequently approved by the Planning Director in October 2016 for a grocery store under a Site Development Permit (File No. H16-016), a 2,061 square foot convenience store, and a 116-seat restaurant. Surrounding land uses include residential uses to the north and east, a restaurant to the south, and a drive-in movie theater to the west. The existing building includes site improvements such as paved parking, loading facilities, and landscaping that are compatible with the existing use and surrounding areas. 2. Project Description. On March 28, 2016, the applicant applied for a Conditional Use Permit and a Determination of Public Convenience or Necessity to allow the off-sale of alcohol beverages at the approved 13,200-square foot full-service grocery store (Mi Rancho Supermarkets). The off-sale of alcohol would consist of an approximately 120-square foot portion of the 13,200-square foot full-service grocery store which is approximately 1% of the total square footage. The proposed project would not expand the footprint of the existing store and the existing on-site facilities, including parking, loading facilities, and landscaping, are adequate for the proposed use. The grocery store will operate from 7:00am to 9:00pm, seven days a week which is within the by-right hours of 6:00 a.m. to midnight daily, and no late night use is requested. The grocery store building is in an existing shopping center and will offer a full-service store with meat, dairy, bakery, and produce, along with a selection of international products and will also include a restaurant located inside the grocery store. 3. General Plan Conformance. The project is consistent with the Envision San Jose 2040 General Plan designation of Neighborhood/Community Commercial. This category supports neighborhood serving commercial uses, such as a grocery store. Furthermore, this project site is in the W. Capitol Ex/Monterey Road Growth Area, which is an Employment Area. This designation is in Horizon 3 of the General Plan, and has a planned capacity of 870 jobs. The proposed off-sale of beer and wine at the proposed full-service grocery store would help achieve the commercial development goals of the Neighborhood/Community Commercial designation and General Plan Employment Growth designation by providing a neighborhood serving store within walking distance of existing residences and a variety of jobs for the area. 3

18 a. Vibrant Neighborhoods Policy VN-3.1: Encourage the location of full service grocery stores within or adjacent to the neighborhoods with limited access to healthful foods with the goal that all San Jose residents be able to live within a 1 /4 mile walking distance of full service grocery store. Analysis: The grocery store with proposed beer and wine sales will bring a fullservice grocery store to a generally underserved neighborhood. The nearest existing full-service grocery store (Marina Grocery) in the area is approximately one-half mile away, but is located across Capitol Expressway from the project site, which acts as a visual and physical barrier to the community around the proposed project. The goal of Policy VN-3.1 is that all San Jose residents be able to live within a one-half mile walking distance of a full-service grocery store. Therefore, a full service grocery store with off-sale of beer and wine at the subject site will better serve the adjacent community in terms of convenience and walking distance. b. Neighborhood Serving Commercial Policy LU-5.10: In the review of new locations for the off-sale of alcohol, give preference to establishments that offer a full range of food choices including fresh fruit, vegetables and meat. Analysis: The grocery store will offer a full range of grocery products and services including fresh fruit, vegetables, and meat consistent with this policy. c. Fiscally Sustainability Policy FS-4.2: Maintain, enhance, and develop the employment lands within identified key employment areas (North Coyote Valley, the Berryessa International Business Park, the East Gish and Mabury industrial areas, the Evergreen industrial area, the Edenvale Redevelopment Project Area, and the Monterey Corridor Redevelopment Project Area). Protect existing employment uses within these areas from potentially incompatible nonemployment uses. Analysis: Consistent with the policy, the grocery store would employ approximately 20 employees and retain commercial space within the Monterey Corridor Redevelopment Area. The project site was a former night club and bar and the proposed project would provide more employment for the area without detrimentally impacting the existing employment. 4. Zoning Ordinance Compliance. The subject site is located in the CN Commercial Neighborhood Zoning District. A grocery store is a permitted use in the CN Commercial Neighborhood Zoning District. Setbacks and Height. The existing building is consistent with the height and setback requirements of the CN Commercial Neighborhood Zoning District. It is not above 50 feet and within the 10 feet front setback and 12.5 feet side corner setback. There is no rear setback. 4

19 Parking. The parking requirement for a grocery store or convenience store is one space per 200 square feet of floor area. The parking requirement for the restaurant is one space per 2.5 seats. The grocery store floor area is 11,200 square feet, therefore 56 spaces are required. The convenience store floor area is 2,061 square feet, requiring 11 parking spaces. The restaurant has 116 seats, requiring 47 spaces. The total amount of parking required for these uses is 113 spaces. The proposed project will provide 147 spaces, exceeding the number required.. The bicycle parking requirements is one space per 3,000 square feet of floor area. The total bicycle parking required for the grocery store is four spaces and four are provided. The total motorcycle parking required is one motorcycle space for every 20 code-required auto parking spaces required for commercial use. The total motorcycle parking required is six spaces, and 10 are provided. No additions to the existing buildings are proposed. However, the Zoning District requires a Conditional Use Permit for the off-sale of alcoholic beverages. 5. Environmental Review. Under the provisions of Section (Existing Facilities) of the State Guidelines for Implementation of the California Environmental Quality Act (CEQA), the project is exempt from the environmental review requirements of CEQA and Title 21 of the San Jose Municipal Code, as amended, as the proposed off-sale of alcohol, is located in an existing structure. The proposed use will occur inside of the grocery store and does not require expansion of the building. 6. Conditional Use Permit Findings. The City Council concludes and finds, based on the analysis of the above facts in regards to the Conditional Use Permit and Determination of Public Convenience or Necessity, that: a. The conditional use permit, as approved: i. Is consistent with and will further the policies of the general plan, applicable specific plans and area development policies; and ii. iii. Conforms with the zoning code and all other provisions of the San Jose Municipal Code applicable to the project; and Is consistent with applicable city council policies, or counterbalancing considerations justify the inconsistency; and Analysis: As discussed in detail above, the proposed off-sale of beer and wine is consistent with and will further the policies of the general plan by providing a full service grocery store to an underserved neighborhood. The grocery store will provide fruit, vegetables, and meat and will contribute to the economic vitality of the neighborhood. The CN Commercial Neighborhood Zoning District allows off-sale of alcohol with a conditional use permit. The proposed project is 5

20 consistent with Council Policy regarding public noticing. The 6-30 appropriate on-site sign was posted by the applicant. b. The proposed use at the location requested will not: i. Adversely affect the peace, health, safety, morals or welfare of persons residing or working in the surrounding area; or ii. iii. Impair the utility of value of the property of other persons located within the vicinity of the site; or Be detrimental to public health, safety or general welfare. Analysis: As indicated in a Police Department Memorandum dated March 24, 2017, the proposed use is not located within an area of high crime but is located in an area exceeding the ratio of off-sale retail licenses to population in the county. The Police Department is neutral to the issuance of the Conditional Use Permit. There have been no documented issues of public safety or public nuisance identified in the Police memo. The proposed project is in line with the policies of the General Plan because the off-sale of alcohol would be within a full service grocery store and is limited to beer and wine. The proposed off-sale use enhances the convenience of the grocery market for the surrounding community, and is intended to be incidental and ancillary to a full-service grocery market that provides fresh produce and grocery goods to the community, consistent with General Plan Neighborhood Serving Commercial Policy LU The proposed off-sale of beer and wine is a small portion of the overall operation (120 square feet of 13,200 square feet grocery store, approximately 1% of total square footage) and will not impair the utility or value of property of other persons located in the vicinity of the area, or be detrimental to public health, safety or general welfare. c. The proposed site is adequate in size and shape to accommodate the yards, walls, fences, parking and loading facilities, landscaping and other development features prescribed in this title, or as is otherwise required in order to integrate said use with the uses in the surrounding areas; Analysis: The proposed use is not expanding the approved grocery store. The site development permit (H16-016) for the proposed 13,200 square foot grocery store was approved by the Planning Director on October 17, The existing building and subject site in terms of parking, loading facilities, and landscaping are compatible with the existing use and surrounding areas. d. The proposed site is adequately served: i. By highways or streets of sufficient width and improved as necessary to carry the kind and quantity of traffic such use would generate; or by other 6

21 ii. forms of transit adequate to carry the kind and quantity of individuals such use would generate; and By other public or private service facilities as are required Analysis: The subject use would be part of an approved full grocery store, the subject site is adequately served by the adjacent public streets and can be directly accessed from Monterey Highway which is designated as one of the seven Grand Boulevards per the Envision San Jose 2040 General Plan. Grand Boulevards are identified to serve as major transportation corridors for primary routes for VTA light-rail, bus rapid transit, standard or community buses, and other public transit vehicles. The nearest bus stop is 200 feet from the subject site. e. The environmental impacts of the project, including but not limited to noise, vibration, dust, drainage, erosion, storm water runoff, and odor which, even if insignificant for purposes of the California Environmental Quality Act (CEQA), will not have an unacceptable negative affect on adjacent property or properties. Analysis: See CEQA discussion above. The proposed project is exempt from further CEQA analysis per CEQA Guidelines Section Section. Based on the above analysis, these findings related to the Conditional Use Permit can be made. 7. Required Findings for Off-Sale of Alcohol. A Conditional Use Permit may be issued pursuant to Section of the Zoning Ordinance for the off-sale of any alcoholic beverages only if the decision-making body first makes the following three findings, if applicable, to the off-sale of alcoholic beverages: a. For such use at a location closer than 500 feet from any other use involving the off-sale of alcoholic beverages, situated either within or outside the City, that the proposed location of the off-sale of alcoholic beverages use would not result in a total of more than four (4) establishments that provide alcoholic beverages for off-site consumption within a 1,000-foot radius from the proposed location. Analysis: There is one other use involving the off-sale of alcoholic beverages, located within the existing shopping center within a 500-foot radius of the proposed site (6 To Late Convenience Store). There are no other uses within a 1,000-foot radius of the site. Therefore, this finding be made. b. For such use at a location closer than 500 feet from any other use involving the off-sale of alcoholic beverages, situated either within or outside the City, where the proposed location of the off-sale of alcoholic beverages use would result in a total of more than four establishments that provide alcoholic beverages for off- 7

22 site consumption within a 1,000-foot radius from the proposed location, that the resulting excess concentration of such uses will not: i. Adversely affect the peace, health, safety, morals, or welfare of persons residing or working in the surrounding area; or ii. Impair the utility or value of property of other persons located in the vicinity of the area; or iii. Be detrimental to public health, safety or general welfare. Analysis: As stated above, the proposed use will not result in more than four establishments that provide alcoholic beverages for off-site consumption within a 1,000-foot radius of the proposed location. Planning supports the alcohol sale in that it is in line with the policies of the General Plan because it will be within a full service grocery store and is limited to beer and wine. The proposed off-sale use enhances the convenience of the grocery market for the surrounding community, and is intended to be incidental and ancillary to a full-service grocery market that provides fresh produce and grocery goods to the community, consistent with General Plan Neighborhood Serving Commercial Policy LU The proposed off sale of beer and wine will not impair the utility or value of property of other persons located in the vicinity of the area, or be detrimental to public health, safety or general welfare. Therefore, this finding be can made. c. For such a use at a location closer than 500 feet from any child care center, public park, social service agency, residential care facility, residential service facility, elementary school, secondary school, college or university, or closer than 150 feet from any residentially zoned property, that the building in which the proposed use is to be located is situated and oriented in such a manner that would not adversely affect such residential, child care center, public park, social service agency, residential care facility, residential service facility and/or school use. Analysis: The proposed site is not located closer than 500 feet from any child care center, social service agency, residential care facility, residential service facility, elementary school, secondary school, or college or university. The project site is within 150 feet from residentially zoned properties; however, the building is oriented towards Monterey Highway with the back of the building facing the residential uses. Additionally, the residential neighborhood is separated by Rancho Drive to the south and a drive aisle and fencing along the parking lot to the east. The entrance to the grocery store is over 250 feet from the closest residential uses and oriented toward Monterey Highway, the opposite direction of the residential uses. Therefore, this finding be made. 8. Requirements for Determination of Public Convenience or Necessity Under 8