MEMORANDUM. SUMMARY: The attached Ordinance would amend the City s Land Use Code to adopt formula business regulations.

Transcription

1 MEMORANDUM TO: Mayor Skadron and City Council FROM: Jessica Garrow, Community Development Director RE: First Reading - Formula Business Regulations Ordinance 6, Series of 2017 DATE: February 27, 2017 SUMMARY: The attached Ordinance would amend the City s Land Use Code to adopt formula business regulations. STAFF RECOMMENDATION: Staff recommends approval of the proposed Ordinance, on First Reading. LAND USE REQUESTS AND REVIEW PROCEDURES: This meeting is to review potential changes to the City s Land Use Code. Pursuant to Land Use Code Section , City Council is the final review authority for all code amendments. All code amendments are subject to a three-step process. This is the third step in the process: 1. Public Outreach 2. Policy Resolution by City Council indicating if an amendment should be pursued 3. Public Hearings on Ordinance outlining specific code amendments. BACKGROUND: In December, a group led by Jerry Murdock approached City Council with a request to consider such regulations. After extensive public feedback at the November 28 th public hearing on AACP code amendments, City Council requested the group continue to work with others in the community, including business owners, brokers, and land owners. The culmination of this work was a January 19 th forum at the Aspen Institute. The group presented the findings and a draft resolution (attached as Exhibit B) at the February 6, 2017 work session with City Council. At that work session a majority of City Council directed staff to return with a policy resolution to amend the land use code. Attached as Exhibit C is a listing of formula businesses as identified by Bill Stirling, a member of the group, which was presented at the forum. On February 13 th, City Council approved a Policy Resolution directing staff to move forward with a code amendment to create a Conditional Use Review for Formula Businesses in certain zone districts (See Exhibit B). Council also requested additional community outreach, including a check-in with the Planning and Zoning Commission and a public meeting. Code Amendment Formula Business Regulations First Reading 2/27/2017 Page 1 of 4

2 OVERVIEW: The proposed regulations would require a Conditional Use review for any new formula restaurant, bar, entertainment, or retail use in the following zone districts: Commercial Core (CC), Commercial (C-1), Main Street Historic Mixed-Use (MU), Lodge (L) 1, and Commercial Lodge (CL) 2. Attached as Exhibit E is a map illustrating these areas. The draft ordinance is based off of similar ordinances in communities such as Sonoma, CA, Fredericksburg, TX, and Sausalito, CA, and defines formula businesses as an establishment with eleven (11) or more locations and includes at least 2 of the following features: a standardized array of merchandise, standardized array of services, a standardized facade 3, a standardized decor and color scheme, uniform apparel, standardized sign, a trademark, or a service mark. Exemptions: The draft ordinance provides exemptions for buildings and businesses that currently exist. Specifically, buildings that are already constructed, have approvals to be constructed, or have applied for a development order (i.e. are in the development pipeline) are exempted from the conditional use review. This means any chain store could operate in one of these buildings by right. The proposed exemptions mean that an existing business can be relocated within any existing or proposed building without a review. It also means that an existing space that currently houses a non-formula business can be converted to a formula business by right. The result is that the ordinance attempts to adopt a no additional harm philosophy by exempting existing and proposed buildings and requiring all new buildings and major remodels to be subject to a Conditional Use review. In addition, the draft ordinance contemplates activities that would result in the loss of an exemption. Following direction at the Policy Resolution public hearing, staff has updated the draft Ordinance to better reflect existing triggers in the land use code. These changes tie triggers to those in the Growth Management Quota System, as well as the code definition of demolition, 1 Under the land use code, all retail uses are a conditional use in the Lodge zone district. 2 Under the land use code, all retail uses on upper levels is a conditional use in the Commercial Lodge zone district. 3 It should be noted that a standardized façade is not permitted under the city s Commercial Design Guidelines. Code Amendment Formula Business Regulations First Reading 2/27/2017 Page 2 of 4

3 and removes the loss of exemption for relocation of historic buildings. The draft Ordinance language proposed by Jerry Murdock s group includes a requirement that if 50% or more of the space in a building is remodeled then the exemption is lost. Staff has highlighted that language in the attached ordinance, and recommends it be removed. This trigger is not currently tracked by tenants or through the building permit process, and would result in significant additional work for prospective tenants. They would be required to research the entire history of the building s remodel work, and calculate an entire building s net leasable space rather than their individual space. This has a real time and financial impact, particularly on smaller businesses. Conditional Use Standards: The draft ordinance includes four new Conditional Use Standards that attempt to determine if the proposed formula business will promote diversity and a balanced mix of commercial uses; the design is consistent with the historic character of the zone district; the business will be compatible with the existing uses and permitted uses in the zone district; the use will not result in an overconcentration of formula uses in the zone district. A previous draft was reviewed by the City s moratorium and AACP Code consultants, Mark White and Alan Richman, which included standards tied directly to AACP statements, which has not been included in the draft Ordinance. These standards are attached as Exhibit D, and would require an applicant to meet at least five (5) of the thirteen (13) criteria. If Council is interested in pursuing these additional criteria, staff will continue to work on refinements to the language for second reading. REFERRALS & OUTREACH: In addition to various meetings with City Council and at the Aspen Institute, the citizens group is sponsoring an open house at the Limelight on February 23 rd from 5-6:50pm. CCLC has had an initial discussion about the proposal, and their draft minutes are attached as Exhibit G. P&Z met on February 21, and their comments will be presented at the First Reading hearing. Finally, the Aspen Community Voice webpage includes a survey and open ended questions about the topic ( The website will be open at least through February 27, Public comment received through the packet deadline are attached as Exhibit H. Any additional comments will be included in the second reading packet. RECOMMENDED MOTION (ALL MOTIONS ARE PROPOSED IN THE AFFIRMATIVE): I move to approve Ordinance No. 6, Series of 2017, on First Reading, and set the public hearing for March 6, ATTACHMENTS: Exhibit A Staff Findings Exhibit B City Council Policy Resolution 23, Series 2017 Exhibit C Formula Business Map/List Exhibit D Potential additional Conditional Use Review Criteria Exhibit E Map of Potential Conditional Use Review Areas Exhibit F Chain Store Regulation white paper 11/16/2016 by Mark White Exhibit G CCLC draft minutes Exhibit H Public Comment received through Feb 20, 2017 Code Amendment Formula Business Regulations First Reading 2/27/2017 Page 3 of 4

4 Code Amendment Formula Business Regulations First Reading 2/27/2017 Page 4 of 4

5 ORDINANCE NO. 6 (SERIES OF 2017) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, AMENDING CHAPTERS , , AND OF THE ASPEN MUNICIPAL CODE TO REGULATE FORMULA USES WHEREAS, pursuant to Section (A), the Community Development Department received direction from City Council to explore code amendments related to the creation of regulations for formula, or chain businesses; and, WHEREAS, pursuant to Section (B)(1), Public Outreach to gain feedback from the community on potential code changes was conducted through a series of individual meetings with business owners, property owners, and interested community members, as well as through a January 19, 2017 forum at the Aspen Institute, a January 23, 2017 Open House, and through the Aspen Community Voice webpage; and, WHEREAS, pursuant to Section (B)(2), during a duly noticed public hearing on February 13, 2017, the City Council approved Resolution No. 23, Series of 2017, by a five to zero (5 0) vote, requesting code amendments to the Land Use Code to implement a formula business conditional use review in certain zone districts with certain exemptions; and, WHEREAS, the City of Aspen is a unique, international community with historic roots and attentive civic mindset; WHEREAS, the City serves as a home to a diverse group of people who provide the underpinnings of the community s unique character and the City s status as a destination resort; WHEREAS, over time, the Aspen downtown commercial core has undergone a transition that has altered the City s community character, in particular, through the proliferation of formula use; WHEREAS, the Aspen Area Community Plan identifies this concern, stating: There is a concern that businesses providing basic necessities will be replaced with businesses providing non-essential goods and services. High-profile locations in the downtown have steadily converted from restaurants to retail spaces, some retail spaces have transformed to offices, and high rents have resulted in a continuing shift towards exclusivity. The character of our community is bolstered by a diverse commercial mix. While we have taken some steps to increase retail diversity, we must pursue more aggressive measures to ensure the needs of the community are met, and to preserve our unique community character. See Aspen Area Community Plan, p. 20;

6 City of Aspen, Colorado Ordinance No.6 Series 2017 Page 2 of 11 WHEREAS, to address this concern, the Aspen Area Community Plan adopts the following policies as they relate to the Commercial Sector (emphasis added): V.1. Encourage a commercial mix that is balanced, diverse and vital and meets the needs of year-round residents and visitors. V.2. Facilitate the sustainability of essential businesses that provide basic community needs. V.3. Ensure that the City Land Use Code results in development that reflects our architectural heritage in terms of site coverage, mass, scale, density and a diversity of heights, in order to: Create certainty in land development.. Protect our small town community character and historical heritage.. See Aspen Area Community Plan, p. 26. WHEREAS, the City Council finds that the proliferation of formula retail and restaurant uses in the downtown core undermines the goals and policies of the City of Aspen by: (i) eliminating commercial diversity meeting the needs of year-round residents; (ii) driving out locally serving and essential business; and (iii) threatening the City s small town community character; WHEREAS, the City Council wishes to: (i) maintain the unique character of the community and the appeal of its downtown core; (ii) protect the community s economic vitality by ensuring a diversity of businesses; and (iii) foster businesses that serve a variety of needs, including those of year-round residents; WHEREAS, the City Council wishes to further the goals and policies of the Aspen Area Community Plan and those stated herein by regulating new formula retail and restaurant uses as conditional uses in certain zone districts, as set forth in this Ordinance; WHEREAS, recognizing the investment backed expectations of building owners and developers, the City Council wishes to exempt existing buildings and structures, development approvals, and development applications from this Ordinance; WHEREAS, by requiring new formula retail and restaurant uses to undergo a conditional use review process, the City will have a better opportunity to examine the impacts of such uses; and

7 City of Aspen, Colorado Ordinance No.6 Series 2017 Page 3 of 11 WHEREAS, the Planning and Zoning Commission discussed the proposed formula business regulations at their February 21, 2017 meeting and recommended ; and WHEREAS, the Commercial Core and Lodging Commission discussed the proposed formula business regulations at their February 15, 2017 meeting and recommended the city not move forward with the proposed regulations; and WHEREAS, the Aspen City Council finds that the amendments meet or exceed all applicable standards pursuant to Chapter and that the approval of the amendments is consistent with the goals and elements of the Aspen Area Community Plan; and WHEREAS, the Aspen City Council finds that this Ordinance furthers and is necessary for the promotion of public health, safety, and welfare. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO THAT: Section 1. Section Use Categories of the Aspen Municipal Code is hereby amended to include the defined term formula use in subsection C, as follows: Use Categories. *** C. Definitions. *** Formula Use Characteristics Any restaurant, bar and entertainment uses and retail uses, as defined in this Chapter, that has eleven (11) or more other establishments in operation, or with local land use or permit entitlements already approved and effective, located anywhere in the United States. In addition to the eleven (11) establishments either in operation or with local land use or permit entitlements approved for operation, the business maintains two (2) or more of the following features: a standardized array of merchandise, standardized array of services, a standardized facade, a standardized decor and color scheme, uniform apparel, standardized sign, a trademark, or a service mark. 1. Standardized array of merchandise means 50% or more of in-stock merchandise from a single distributor bearing uniform markings.

8 City of Aspen, Colorado Ordinance No.6 Series 2017 Page 4 of Standardized array of services means as a common menu or set of services priced and performed in a consistent manner. 3. Trademark means a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs that identifies and distinguishes the source of the goods from one party from those of others. 4. Service mark means a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs that identifies and distinguishes the source of a service from one party from those of others. 5. Façade means the face or front of a building, including awnings, looking onto a street or an open space. 6. Décor means the style of interior furnishings, which may include but is not limited to, style of furniture, wall coverings or permanent fixtures. 7. Color Scheme means a selection of colors used throughout the establishments, such as on the furnishings, permanent fixtures, and wall coverings, or as used on the facade. 8. Uniform Apparel means standardized items of clothing including but not limited to standardized aprons, pants, shirts, smocks or dresses, hats, and pins (other than name tags), and standardized colors of clothing. Examples Accessory Uses Exceptions Those examples set forth in the definitions of restaurants, bars and entertainment uses and retail uses (general and specialty) that have the characteristics set forth in this definition. Accessory uses may include those accessory uses set forth in the definitions of restaurants, bars and entertainment uses and retail uses (general and specialty). Exceptions include those exceptions set forth in the definitions of restaurants, bars and entertainment uses and retail uses (general and specialty). Section 2. Section C of the Aspen Municipal Code is hereby amended to read as follows, with bold, underlined text added and strike through language deleted:

9 City of Aspen, Colorado Ordinance No.6 Series 2017 Page 5 of Commercial Core (CC). *** C. Conditional uses. The following uses are permitted as conditional uses in the Commercial Core (CC) Zone District, subject to the standards and procedures established in Chapter : 1. Gasoline service station. 2. Commercial parking facility, pursuant to Chapter Automobile showroom and dealership. 4. Formula uses, which shall also be subject to the provisions contained in Section Section 3. Section C of the Aspen Municipal Code is hereby amended to read as follows, with bold, underlined text added and strike through language deleted Commercial (C-1). *** C. Conditional uses. The following uses are permitted as conditional uses in the Commercial (C-1) Zone District, subject to the standards and procedures established in Chapter : 1. Affordable multi-family housing or home occupations on the ground floor. 2. Commercial parking facility, pursuant to Section Automobile showroom and dealership. 4. Formula uses, which shall also be subject to the provisions contained in Section Section 4. Section B.1 of the Aspen Municipal Code is hereby amended to read as follows, with bold, underlined text added and strike through language deleted Service/Commercial/Industrial (S/C/I). *** B. Permitted and Conditional Uses. 1. The following uses may have, in combination, a limited percent of the floor area, devoted to retail sales, showroom, or customer reception, and such uses shall be ancillary to the primary commercial use. This floor area percentage may be increased through Special Review by the Planning and Zoning Commission, pursuant to Section , and according to the

10 City of Aspen, Colorado Ordinance No.6 Series 2017 Page 6 of 11 *** standards of Section (E)1. Where retail sales are allowed, this shall be limited to General Retail uses and may include formula uses that fall in the General Retail category. Section 5. Section C of the Aspen Municipal Code is hereby amended to read as follows, with bold, underlined text added and strike through language deleted Service/Commercial/Industrial (S/C/I). *** C. Conditional uses. The following uses are permitted as conditional uses in the Service/Commercial/ Industrial (SCI) zone district, subject to the procedures established in Chapter Procedures for Review, and the standards established in Section (F). The following Conditional uses shall not be subject to Section , Standards applicable to formula uses; exemptions; determination of formula uses. *** Section 6. Section B.1 of the Aspen Municipal Code is hereby amended to read as follows, with bold, underlined text added and strike through language deleted Neighborhood Commercial (NC). *** B. Permitted uses. The following uses are permitted as of right in the Neighborhood Commercial (NC) Zone District: 1. Uses allowed on all building levels: General retail, restaurant, bar and entertainment uses, formula uses (except specialty retail), service uses, office uses, arts, cultural, civic and community uses, public uses, recreational uses, academic uses, accessory uses and structures, uses and building elements necessary and incidental to uses on other floors, including parking accessory to a permitted use, storage accessory to a permitted use. Section 7. Sections B and C of the Aspen Municipal Code is hereby amended to read as follows, with bold, underlined text added and strike through language deleted Mixed-Use (MU). ***

11 City of Aspen, Colorado Ordinance No.6 Series 2017 Page 7 of 11 B. Permitted uses. The following uses are permitted as of right in the Mixed-Use (MU) Zone District: *** 20. Formula uses, except in the Main Street Historic District. C. Conditional uses. The following uses are permitted as conditional uses in the Mixed- Use (MU) Zone District, subject to the standards and procedures established in Chapter : 1. Commercial parking facility, pursuant to Chapter Automobile showroom and dealership. 3. Formula uses in the Main Street Historic District, subject to the provisions contained in Section Section 8. Section C of the Aspen Municipal Code is hereby amended to read as follows, with bold, underlined text added and strike through language deleted Lodge (L). *** C. Conditional uses. The following uses are permitted as conditional uses in the Lodge (L) Zone District, subject to the standards and procedures established in Chapter : *** 10. Formula uses, which shall also be subject to the provisions contained in Section Section 9. Sections B and C of the Aspen Municipal Code is hereby amended to read as follows, with bold, underlined text added and strike through language deleted Commercial Lodge (CL). *** B. Permitted uses. The following uses are permitted as of right in the Commercial Lodge (CL) Zone District: 1. Uses allowed in basement and ground floors: Lodging uses, conference facilities, retail and restaurant uses, formula uses, office uses, neighborhood commercial uses, service uses, arts, cultural and civic uses, public uses, recreational uses, academic uses, and child care center. Uses and facilities necessary and incidental to uses on Upper Floors. Parking shall not be allowed as

12 City of Aspen, Colorado Ordinance No.6 Series 2017 Page 8 of 11 *** C. Conditional uses. The following uses are permitted as conditional uses in the Commercial Lodge (CL) Zone District, subject to the standards and procedures established in Chapter : 1. Retail and restaurant uses, formula uses (which shall also be subject the provisions contained in Section ), neighborhood commercial uses, service uses, office uses, arts, cultural and civic uses, public uses, academic uses or child care centers located on upper floors. 2. Commercial parking facility, pursuant to Chapter Section 9. Chapter of the Aspen Municipal Code is hereby amended to read as follows with bold, underlined text added: Chapter CONDITIONAL USES Sections: Sec Sec Sec Sec Sec Sec Sec Sec Purpose. Authority. Authorized conditional uses. Standards applicable to all conditional uses. Standards applicable to formula uses; exemptions; determination of formula uses. Procedure for review. Application. Amendment of development order. Section 9. Chapter of the Aspen Municipal Code is hereby amended with the addition of a new Section Standards applicable to formula uses to read as follows: Standards applicable to formula uses; exemptions; determination of formula uses. A. Purpose. This section provides for the case-by-case review of formula uses, as defined in Section C, in order to encourage a commercial mix that is balanced, diverse and vital, and meets the needs of year-round residents and visitors, maintain the unique character of Aspen s downtown, and to provide regulatory flexibility that meets the City s evolving and unique market demands.

13 City of Aspen, Colorado Ordinance No.6 Series 2017 Page 9 of 11 B. Applicability. 1. Generally a. No business license shall be issued pursuant to Chapter for any formula use subject to this section unless and until the Planning and Zoning Commission approves a conditional use permit authorizing that use. b. The Community Development Director may establish forms to document exemptions, current uses, and other material information reasonably necessary for the effective administration of this section. 2. Exemptions. a. Exemptions. This section shall not apply to commercial and mixed-use buildings and structures within the CC zone district, C-1 zone district, and the Main Street Historic District (MU zone district) that meet any one (1) or more of the following characteristics: i. Buildings or structures constructed or under construction prior to the effective date of Ordinance **, Series ii. Buildings or structures which will be constructed pursuant to any approval for development granted prior to the effective date of Ordinance **, Series iii. Buildings or structures which will be constructed pursuant to any development application submitted for approval prior to the effective date of Ordinance **, Series b. Loss of Exemption. Any building or structure exempted by this section will become subject to this section upon the occurrence of one (1) of the following activities, provided that they were not caused by the occurrence of fire, flood, or acts of nature: i. demolition, as defined in Title 26; ii. reconstruction of 40% or more of the building or structure; iii. renovation or construction of an existing building or structure (i.e. addition to an existing building or structure) that results in an increase of no more than five-hundred (500) square feet of net leasable space, and no more than two-hundred-fifty (250) square feet of Floor Area, pursuant to Section F, Minor expansion of a commercial, lodge, or mixeduse development,; and iv. remodel or construction of greater than 50% of the net leasable area of the existing building or structure (i.e. gut remodel). c. Notwithstanding the foregoing, the following activities shall not cause a loss of exemption:

14 City of Aspen, Colorado Ordinance No.6 Series 2017 Page 10 of 11 i. rehabilitation and other construction necessary to comply with the law (e.g. ADA compliance); ii. reconfiguration of leased areas; or iii. improvements reasonably necessary for tenant to occupy a leased space. C. Standards. When considering a development application for a formula use as part of a conditional use review, the Planning and Zoning Commission shall be required to determine that, in addition to the standards set forth in Section , the proposed use complies with the following standards. 1. The formula use will promote diversity and variety to assure a balanced mix of commercial uses available to serve both resident and visitor populations, including general retail, specialty retail, restaurant, bar and entertainment uses, and service uses; 2. The design and improvements are consistent with the unique and historic character of the zone district, and will preserve, and be compatible with, the distinct visual appearance and shopping/dining experience of the zone district for its residents and visitors; 3. The formula use will be compatible with existing uses and permitted uses in the zone district and promote the zone district s purpose, economic vitality and long-term sustainability as the commercial, cultural, and civic center of the community; and 4. The formula use will not result in an overconcentration of formula uses within the zone district and within the immediate vicinity of the proposed project based on the current inventory of formula uses. D. Determination of Formula Use. Any development application determined by the Community Development Director to be for a formula use, as defined in Section C, that does not identify the use as a formula use is incomplete and cannot be processed until the omission is corrected. Any development approval or determination that is determined by the Community Development Director to have been, at the time of application, for a formula use that did not identify the use as a formula use is subject to revocation at any time. If the Community Development Director determines that a development application or approval is for a formula use, the applicant or holder of the entitlement bears the burden of proving to the Community Development Director that the proposed or existing use is not a formula use. Section 10. Severability. If any section, subsection, sentence, clause, phrase, or portion of this ordinance is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof.

15 City of Aspen, Colorado Ordinance No.6 Series 2017 Page 11 of 11 Section 11. Effective Date. In accordance with Section 4.9 of the City of Aspen Home Rule Charter, this ordinance shall become effective thirty (30) days following final passage. INTRODUCED, READ AND ORDERED PUBLISHED as provided by law, by the City Council of the City of Aspen on the day of, 20. Attest: City Clerk Mayor FINALLY, adopted, passed and approved this day of, 20. Attest: City Clerk Mayor

16 Exhibit A: Staff Findings Amendments to the Land Use Code standards of review Initiation In reviewing a request to pursue an amendment to the text of this Title, per Section (B)(2), Step Two Public Hearing before City Council, the City Council shall consider: A. Whether there exists a community interest to pursue the amendment. Staff Findings: City Council was approached by a citizens group in November 2016 about implementing chain store regulations in an effort to protect the unique commercial mix of locally owned and locally serving businesses. The effort coincides with other recently adopted code amendments to implement portions of the AACP related to commercial mix and community vitality. Staff finds this criterion to be met. B. Whether the objectives of the proposed amendment furthers an adopted policy, community goal, or objective of the City including, but not limited to, those stated in the Aspen Area Community Plan. Staff Findings: The AACP discusses the importance of maintaining a diverse and unique commercial business make-up. This includes AACP Managing Growth Policies I.4 and V.1 which state, Identify opportunities to reduce the boom-bust nature of the economy, and Encourage a commercial mix that is balanced, diverse and vital and meets the needs of year-round residents and visitors. Staff finds this criterion to be met. C. Whether the objectives of the proposed amendment are compatible with the community character of the City and in harmony with the public interest and the purpose and intent of this Title. Staff Findings: The intent of the proposed amendments are to ensure new businesses encourage continued vitality of the commercial uses in these zones. This is consistent with the intent of the City s Land Use Code. Staff finds this criterion to be met NC and SCI Policy Direction Exhibit A Page 1 of 1

17 RESOLUTION NO. 23, (SERIES OF 2017) A RESOLUTION OF THE CITY OF ASPEN CITY COUNCIL REQUESTING CODE AMENDMENTS TO ESTABLISH FORMULA BUSINESS REGULATIONS. WHEREAS, pursuant to Section (A), the Community Development Department received direction from City Council to explore code amendments related to the creation of regulations for formula, or chain businesses; and, WHEREAS, pursuant to Section (B)(1), Public Outreach to gain feedback from the community on potential code changes was conducted through a series of individual meetings with business owners, property owners, and interested community members, as well as through a January 19, 2017 forum at the Aspen Institute; and, WHEREAS, the Community Development Director recommended changes to the land use code related to formula businesses; and, WHEREAS, the City of Aspen is a unique, international community with historic roots and attentive civic mindset; and, WHEREAS, the City serves as a home to a diverse group of people that provide the underpinnings of the community s unique character and the City s status as a destination resort; and, WHEREAS, over time, the Aspen downtown commercial core has undergone a transition that has altered the City s community character, in particular, through the proliferation of high-end formula retail establishments; and, WHEREAS, the Aspen Area Community Plan identifies this concern, stating: There is a concern that businesses providing basic necessities will be replaced with businesses providing non-essential goods and services. High-profile locations in the downtown have steadily converted from restaurants to retail spaces, some retail spaces have transformed to offices, and high rents have resulted in a continuing shift towards exclusivity. The character of our community is bolstered by a diverse commercial mix. While we have taken some steps to increase retail diversity, we must pursue more aggressive measures to ensure the needs of the community are met, and to preserve our unique community character. See Aspen Area Community Plan, p. 20; and, WHEREAS, to address this concern, the Aspen Area Community Plan adopts the following policies as they relate to the Commercial Sector (emphasis added): Formula Business Regulation Policy Resolution Resolution 23, Series 2017 Page 1 of 3

18 V.1. Encourage a commercial mix that is balanced, diverse and vital and meets the needs of year-round residents and visitors. V.2. Facilitate the sustainability of essential businesses that provide basic community needs. V.3. Ensure that the City Land Use Code results in development that reflects our architectural heritage in terms of site coverage, mass, scale, density and a diversity of heights, in order to:. Protect our small town community character and historical heritage.. See Aspen Area Community Plan, p. 26; and, WHEREAS, the City Council finds that the proliferation of high-end formula retail establishments in the downtown core undermines the goals and policies of the City of Aspen by: (i) eliminating commercial diversity meeting the needs of year-round residents; (ii) driving out locally serving and essential business; and (iii) threatening the City s small town community character; and, WHEREAS, the City Council wishes to: (i) maintain the unique character of the community and the appeal of its downtown core; (ii) protect the community s economic vitality by ensuring a diversity of businesses with sufficient opportunities for independent entrepreneurs; and (iii) foster businesses that serve a variety of needs, including those of year-round residents; and, WHEREAS, the City Council wishes to further the goals and policies of the Aspen Area Community Plan and those stated herein by regulating formula retail and restaurant establishments; and, WHEREAS, many communities in the United States with unique character have similarly regulated formula retail and restaurant establishments; and, WHEREAS, by requiring formula retail and restaurant establishments undergo a conditional use review process, the City will have a better opportunity to examine the impacts of such establishments; and WHEREAS, this Resolution does not amend the Land Use Code, but provides direction to staff for amending the Land Use Code; and, WHEREAS, the City Council finds that this Resolution furthers and is necessary for the promotion of public health, safety, and welfare. Formula Business Regulation Policy Resolution Resolution 23, Series 2017 Page 2 of 3

19 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN AS FOLLOWS: Section 1: Code Amendment Objective The objective of the proposed code amendments is to ensure new businesses contribute to the unique, on-of-a-kind commercial mix Aspen has historically been known for, and well as encourage continued vitality of the commercial uses, through the regulation of formula businesses. Section 2: Proposed Code Changes City Council provides the following direction regarding regulation of formula businesses: A. A Conditional Use Review should be required for new formula businesses located in the Commercial Core (CC), Commercial (C-1), and Main Street Historic District (MU) zone districts. B. Formula businesses should continue to be permitted by right in the Neighborhood Commercial (NC), Service/Commercial/Industrial (SCI), and non-historic portions of the mixed-use (MU) zone districts. C. Zone districts that currently require a conditional use review for retail or restaurant uses, including the Lodge (L) and Commercial Lodge (CL) should also require a conditional use review. D. Certain exemptions for existing buildings, buildings that have a valid development order, buildings that have applied for a land use review that will result in a development order, and minor remodels should be incorporated. Section 3: This resolution shall not affect any existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the resolutions or ordinances repealed or amended as herein provided, and the same shall be conducted and concluded under such prior resolutions or ordinances. Section 5: If any section, subsection, sentence, clause, phrase, or portion of this resolution is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. FINALLY, adopted this 13 th day of February, Steven Skadron, Mayor ATTEST: APPROVED AS TO FORM: Linda Manning, City Clerk James R True, City Attorney Formula Business Regulation Policy Resolution Resolution 23, Series 2017 Page 3 of 3

20

21

22

23

24

25

26

27

28

29

30

31 Exhibit D: Draft Additional Conditional Use Standards Standards. When considering a development application for a formula retail and restaurant use as part of a conditional use review, the Planning and Zoning Commission shall be required to determine that, in addition to the standards set forth in Section , the proposed use complies with at least five (5) of the following thirteen (13) standards, and complies with at least one (1) standard relating to at least three (3) of the following four (4) objectives, as provided below: Aspen wishes to maintain a balanced and diversified retail experience in its downtown area for both resident and visitor populations. Objective Standard 1. The formula business will not result in an overconcentration of similar uses within the block or along the street frontage of the proposed project. 2. The proposed use will help to diversify the mixture of uses present in the downtown area, and will not result in a duplication or over-abundance of the types of goods and services already sold in the City of Aspen. 3. The formula business will contribute to the adequate availability and diverse existing mix of retail and restaurant businesses providing basic necessities, serving city-wide customers, and providing for residents and visitors daily needs within the zone district and within the immediate vicinity of the proposed project. 4. The formula business will be mutually beneficial to and enhance the economic health of the surrounding uses in the zone district. The City of Aspen has a long tradition as a community that has welcomed innovation and enabled new ideas to flourish. The City wishes to provide opportunities for its next generation of young entrepreneurs to pursue their own dreams and innovations. The City seeks to ensure that within its limited commercial areas, the daily or frequently needed goods and services of its residents and visitors can be met. Aspen has a unique image in the international resort market as a place where residents and visitors can not only enjoy a recreational experience in an unspoiled natural environment, but also can be entertained or be culturally or artistically enriched in a community whose entertainment opportunities compliment the natural beauty of the Upper Roaring Fork Valley. 5. The proposed use represents or encourages an innovative or creative business idea. 6. The proposed use provides an opportunity for an entrepreneur to offer new services or explore new products. 7. The proposed use helps to place Aspen in a leadership position as a place of innovation and creativity. 8. The proposed use offers goods and services that meet the daily or frequent needs of Aspen s resident and visitor populations. 9. The proposed use offers goods and services that are affordable to and needed by a broad range of Aspen s residents and visitors. 10. The formula business, together with its design and improvements, is consistent with the unique and historic character of the zone district; 11. The proposed use provides opportunities for residents and visitors to enjoy one-of-a-kind recreational, cultural or entertainment experiences while they are in the Aspen Area. 12. The proposed use, together with its design and improvements, will preserve, and be compatible with, the distinct visual appearance and shopping/dining experience of the zone district for its residents and visitors. 13. The formula business will be compatible with existing uses in the zone district and promote the zone district s economic vitality and long-term sustainability as the commercial, cultural, and civic center of the community.

32 Memo To Mayor Skadron & City Council From Mark White CC Alan Richman Re Supplemental Information on Chain Store Restrictions Comments: Summary of research on formula zoning restrictions Introduction One type of land use regulation to address use mix is a restriction on retail chains, typically known as a formula zoning regulation. Council initially passed on formula based zoning restrictions as a potentially ineffective, or even detrimental, tool to achieve the Community s use mix goals. Restrictions on chain businesses have become somewhat of a trend in resort communities throughout the nation. Some residents and businesses have continued to express interest in this type of restriction in Aspen. This memo summarizes the state of the practice with formula zoning restrictions, restates their advantages and disadvantages, and provides information on select programs from around the country. It also includes regulations from several communities cited as examples of how such regulations might be developed in Aspen. What is Formula Zoning? Formula based zoning defines chains, typically by reference to the number of business locations (generally 11) and the standardization of its image through uniforms, signs, design, and similar factors. Controls on formula businesses can take a variety of forms, such as: 1. Allocating formula businesses to designated districts. 2. Requiring formula businesses to undertake discretionary review, such as conditional use permit review, with or without additional conditional use permit standards. (The Sonoma, California regulations attached to this memo are an example of the conditional use permit approach with supplementary standards.) 3. Establishing design or performance-based standards for formula businesses. These standards may influence the exterior appearance of a store or the manner in which the business operates. This is the model used by San Francisco in the sample regulations (attached), which are the most comprehensive in the country. 4. Setting a cap on the number of formula businesses in a given zone district or the community. 5. Limiting chain stores to overlay zones. White & Smith, LLC Tel NE Missouri Road, Suite 200 Lee s Summit, MO mwhite@planningandlaw.com

33 Memo Pg Imposing size restrictions on chains. Note that size limits alone would not respond to Aspen s goals related to locally serving and essential businesses. In some instances, larger spaces such as grocery and hardware stores - tend to serve the local population. However, size limitations associated with locational limitations (such as limits on the size of commercial spaces that may occur along the alley, in a walk-down space or on a second floor) may help to ensure that these spaces are one-of-a-kind operations or that they are incubator spaces where new businesses can be started by a local person. Size limitations may also benefit the NC and SCI zones to keep operations small and scaled to the neighborhood. For example, the small size of the storefronts surrounding Clark s Market tends to ensure that these will be occupied as neighborhood serving commercial uses. The location of the NC district, away from downtown, also contributes to the fact that it has remained a local serving area. Formula businesses are typically defined as those operating in multiple locations, and with standardized features such as building exteriors, uniforms, and product lines. The specific metrics for judging a formula store vary from one community to the next. But the essential feature of any such regulations is that the criteria for judging whether a use constitutes a formula business are clearly articulated and applied in the regulations.

34 Memo Pg.03 Benefits of Formula-Based Zoning Regulations Benefits of formula based zoning regulations include: 1. Preserve businesses with unique local character, avoiding the standardization associated with chains. 2. Avoiding the generic appearance of store fronts or blocks dominated by businesses that are seen everywhere or lack vitality and foot traffic. 3. Potentially minimize the escalation of rents associated with the demands created by national chains, who are often in a better position than local businesses to compete for limited space. Proponents of formula regulations believe that this facilitates the competitive position of local businesses who operate on more limited operating margins. 4. Avoid dark spaces that occur when national chains, responding to economic conditions and with few local ties and allegiances than local businesses, abandon their spaces in favor of lower rents or more favorable economic conditions. 5. Encouraging the capture of business revenues in the local market (note that this is an objective of some, but not all, programs and is not necessarily the motivation behind this ordinance). Disadvantages and Risks of Formula-Based Zoning Regulations Some disadvantages and risks of formula zoning include: 1. A chain or formula retail use can be a locally serving business. Some chains provide local goods and services at affordable prices, which accomplishes one of the objectives previously identified by City Council and the community. Ace Hardware, Radio Shack, City Market, Verizon and AT&T are examples of chains that meet daily consumer needs in Aspen. Arguably, some chains serve the local population s needs to a greater degree than many one-of-a-kind, locally created businesses. The Gap was a chain that most locals patronized, and Lululemon is now quite popular with residents. City Market is one of the City s two operating full service grocer at this time, and is operated by Kroger a national chain ( Clark s Market, the City s other full service grocer, started in Aspen and now operates a chain of grocery stores throughout Colorado.

35 Memo Pg Chains can reflect Aspen s unique culture, particularly when they begin as local businesses. Boogies was the local branch of a chain. The White House Restaurant is part of a chain. Aspen Sports started in Aspen and was purchased by a chain. Those businesses are not often perceived as chains because they have a locallyestablished brand and/or a one-of-a-kind style of business. In other words, they do not rely on the fact that they are part of a chain to survive in Aspen. Many of the businesses that have been controversial are those that promote themselves as part of an international chain (e.g., Gucci, Prada) and that do no serve daily consumer needs. A typical objection is not necessarily that the business is a chain or formula business, but rather that it is an out-of-town company that sells extravagant goods to ultrawealthy visitors. Chains such as North Face or Marmot seem to be well-received by Aspen residents because they reflect its outdoor culture, while some might object to a more exclusive chain like Dolce & Gabbana. However, it is not possible to develop defensible zoning regulations that respond only to individual personal preferences. 3. Some chains are locally based, beginning in Aspen and expanding to other locations. For example, Cos Bar started in Aspen and has grown into a chain. A formula zoning regulation could (depending on how it is written) punish those businesses for their success. 4. Is not clear whether the number of chains in Aspen is a real or perceived issue. While Aspen does have chains, including high-end ones, it is not clear that they pose a significant, quantifiable obstacle to the establishment of locally serving businesses, or whether the ratio of chains in Aspen exceeds that of other locations or similar communities. 5. Formula zoning poses some legal risks. The 11 th Circuit Court of Appeals invalidated two chain regulations in Islamorada, Florida (one that banned chain restaurants, and one that attached special requirements to formula retail). 1 An intermediate state court 1 See Cachia v. Islamorada, 542 F.3d 839, 843 (11th Cir. 2008) (ban on "formula" restaurants "does not facially discriminate between in-state and out-of-state interests"); Island Silver & Spice, Inc. v. Islamorada, 542 F.3d 844, 846 (11th Cir. 2008) (restrictive regulation of "formula" retail establishments "does not facially discriminate against interstate commerce"); Bobrowski, The Regulation of Formula Businesses and the Dormant Commerce Clause Doctrine, 44 The Urban Lawyer 227 (Winter 2012), Dormant Commerce Clause Limits on the Regulation of Big Boxes and Chain Stores: An Update, 58 Case W. Res. L. Rev ( ); Salkin, Municipal Regulation of Formula Businesses: Creating and Protecting Communities, 58 Case W. Res. L. Rev ( ).

36 Memo Pg.05 (in an unreported decision) upheld them under a similar challenge in California, and a case from a federal district court in Utah (in the 10th Circuit, like Colorado) provided qualified immunity for town officials involved in passing a formula restaurant.. 2 That case, out of Springdale, Utah, was later settled by the town for $787,000 and the town has since repealed the formula restriction. While there are only a handful of cases that address this issue, were the City to adopt a version of these regulations, it would not be without risks. 6. As we continue to see innovations in technology, it could be short-sighted to place restrictions on chain businesses that could bring important innovations to the community. Today s technology is well served in Aspen through chains like Verizon, AT&T, etc. It is impossible to predict what companies like Google, Amazon and others may bring to the market in the future. The possibility of placing regulatory barriers on these innovative businesses should be a point of discussion in considering whether formula regulations are appropriate for Aspen. 7. Implementation of chain regulations could be difficult. For instance, if a property owner is in the review process for redevelopment they may have already signed leases with a chain despite the fact that the building is not yet constructed. Similarly, if an existing chain wished to relocate or expand it would need to be determined if they are exempted from a review or prohibition or are forever stuck in their current location. Recommendation If Council is interested in further exploring Formula Business Regulations, the following is recommended to ensure the most defensible regulations possible: 1. Articulate what problem is trying to be solved through the regulation. Chain regulations do not necessarily encourage diversity in business types, nor do they necessarily result in lower rents or cheaper products. However, they could provide additional opportunities for businesses that reflect Aspen s unique character. 2. Limit location. It is recommended that the restrictions be limited to certain zone districts, such as the Commercial Core and Commercial (CC and C-1) zone 2 Coronadans Organized for Retail Enhancement v. City of Coronado, 2003 WL (Cal.App. 4 Dist. 2003); Izzy Poco, LLC v. Town of Springdale (D. Utah, 2011)(law relating to constitutionality of formula-based business bans is not clearly established).

37 Memo Pg.06 districts. Additionally, their location or building level could be considered. For example, chains could be permitted on one building level by right and a conditional use on other building levels. 3. Limit the uses covered. Given the importance of certain chains in Aspen, the restrictions could be limited to restaurant and retail uses only. This would enable office and service uses, such as financial institutions or gyms (such as Wells Fargo and Pure Barre) to continue to open and operate in Aspen. 4. Do not ban outright, and instead use the Conditional Use option. This would require a conditional use review for any new chain seeking to open in Aspen. The review would be completed by the Planning & Zoning Commission, and could be appealed to City Council if it was denied. Conditional use review tends to be subjective, which could make it difficult to deny a potential chain and would create administrative complexities.

38 Memo Pg.07 Sample Regulations Coronado, California From Title 86 ZONING Chapter DEFINITIONS Formula business. Formula business means any type of commercial business establishment that uses a trademark, logo, service mark or other mutually identifying name or symbol that is shared by 15 or more commercial businesses (other than a formula fast food restaurant ) and which maintains any standardized ( formula ) array of service and/or merchandise, decor, business method, architecture, layout, uniform, or similar, standardized feature. (Ord (Exh. A), 2016) Restaurant, formula fast food. Formula fast food restaurant means any fast food restaurant having both of the following characteristics: A. Uses a trademark, logo, service mark or other mutually identifying name or symbol that is shared by 15 or more restaurants; and B. Serves a prescribed ( formula ) menu that is substantially the same as 15 or more restaurants that shares its trademark, logo, service mark or other mutually identifying name or symbol. (Ord (Exh. A), 2016) Chapter ZONE CLASSIFICATIONS Names of zones. In order to classify, regulate, restrict and segregate the uses of land and buildings, to regulate and restrict the height and bulk of buildings and to regulate the area of yards and other open spaces about buildings, and to regulate the density of population, several classes of zones are established to be known as follows: R-1A; R-1A(E); R-1A(CC); R- 1A(CC1); R- 1A(CC2); R-1A(CC3); R- 1A(BF) Single-Family Residential Zone (six to eight dwelling units per acre)

39 Memo Pg.08 R-1B Single-Family Residential Zone (12 dwelling units per acre) R-3 Multiple-Family Residential Zone (31 dwelling units per acre) R-4 Multiple-Family Residential Zone (40 dwelling units per acre) R-5 Multiple-Family Residential Zone (47 dwelling units per acre) C Commercial Zone SP The Orange Avenue Corridor Specific Plan contains the C, R-4, C-U and OS Zones as depicted on the zoning map C-R Commercial Recreation Zone H-M Hotel-Motel Zone C-U Civic Use Zone OS Open Space Zone R-PCD Residential-Planned Community Development Zone R-SCD Residential-Special Care Development Zone MZ Military Prezone (Ord , 2003; Ord. 1742; Ord. 1675; Ord. 1666; Ord. 1560) Chapter SPECIAL USE PERMITS Special uses by permit H-M Zone. The following uses may be established and maintained in the H-M Zone only if the designated type of special use permit is first obtained and thereafter the permittee complies with all of the provisions therein: Use Aquaculture Assemblages of many people/ automobiles, open-air theaters, sport/recreational enterprises Automobile car wash, whether or not in conjunction with any other use Boarding house Clinic, medical Dumps/landfills Public Private Formula fast food restaurants Formula retail Type of Permit Major Major Major Major Major Major Minor Major

40 Memo Pg.09 Use Hospitals General Convalescent Nursing home Rest home Sanitarium Type of Permit Major Major Major Major (Ord , 2003; Ord. 1919; Ord. 1910; Ord. 1881) Special uses by permit C-R Zone. The following uses may be established and maintained in the Commercial Recreation Zone only if the designated type of special use permit is first obtained and thereafter the permittee complies with all of the provisions therein: Use Type of Permit Art galleries Cocktail lounge Marine oriented activities Boat/yacht sales Not refueling facilities Meeting halls Clubs Lodges Assembly halls Restaurant Full service, fast food or formula fast food Theater for the performing arts Tourist oriented specialty shops Compatible uses determined by the Planning Commission to be closely related to uses in this section Major Major Major Major Major Major Major Major (Ord. 1910) Formula fast food restaurants. A. Purpose. The purpose of the standards in this section is to regulate the number, location and operation of formula fast food restaurants in order to maintain the City s unique village character, the vitality of our commercial districts, and the quality of life of Coronado residents.

41 Memo Pg.10 B. Regulations. 1. The formula fast food restaurant shall fully comply with all applicable regulations in this code. 2. The regulations in this section shall be used by the Planning Commission in reviewing an application or amendment for a minor special use permit concerning a formula fast food restaurant, and by staff when reviewing a building permit application, an application for occupancy or a Design Review or Planning Commission application. 3. A formula fast food restaurant may only be established on a site after obtaining a minor special use permit from the City for the operation of that use on said site. Similarly, a formula fast food restaurant may only relocate or physically expand in a manner to increase its seating capacity after obtaining a minor special use permit or minor SUP amendment as applicable. 4. Change of ownership shall not, by itself, require obtaining a minor special use permit or minor SUP amendment as applicable. C. Establishment or Relocation. A formula fast food restaurant may only be established or relocated: 1. On a site that is not located on a street corner; except such a restaurant may be located on a street corner where the immediate prior use was a formula fast food restaurant; 2. Where it would not result in two or more formula fast food restaurants operating on that site (i.e., two or more formula fast food restaurant business entities requiring separate business licenses, or displaying in a manner visible from public property separate business trademarks, logos, service marks or other mutually identifying names or symbols, for the daily or weekly conducting of business on the same site);

42 Memo Pg When it would not result in formula fast food restaurants operating at more than 10 sites under the jurisdiction of this title; and 4. So long as the Planning Commission finds that establishing or relocating the formula fast food restaurant will not increase the intensity of use on the site to a level that will adversely impact: a. Land uses in the area; b. Pedestrian or motor vehicle traffic; or c. The public welfare. D. Physical Expansion. An existing formula fast food restaurant may only be physically expanded in a manner to increase seating capacity: 1. Onto a site other than a corner; 2. Where it would not result in two or more formula fast food restaurants operating on that site (i.e., two or more formula fast food restaurant business entities requiring separate business licenses, or displaying in a manner visible from public property separate business trademarks, logos, service marks or other mutually identifying names or symbols, for the daily or weekly conducting of business on the same site); and 3. So long as the Planning Commission finds that physically expanding the formula fast food restaurant will not increase the intensity of use on the site to a level that will adversely impact: a. Land uses in the area; b. Pedestrian or motor vehicle traffic; or c. The public welfare.

43 Memo Pg.12 E. Trash. The formula fast food restaurant will operate in accordance with a trash disposal plan, approved by the Planning Commission. The plan shall address litter control, trash collection, on-site storage, and pick up on a regular basis. The plan shall include proof of a contract with the City disposal contractor, and specify that such a contract shall be maintained as a requirement for the issuance and retention of the minor use permit. F. Design Review. Establishment or external alteration of a formula fast food restaurant is subject to Design Review Commission review. (Ord. 1901; Ord. 1881) Formula business. A. Purpose. The purpose of the standards in this section is to regulate the location and operation of formula business establishments in order to maintain the City s unique village character, the diversity and vitality of the community s commercial districts, and the quality of life of Coronado residents. It is presumed that establishing or preserving an appropriate and balanced mix of local, regional, and national-based businesses and small, medium or largesized businesses will more effectively serve to achieve this purpose as a strategy to maintain the economic health of the community s business districts and the small-scale eclectic ambiance. B. Regulations. 1. A formula business establishment may be allowed in the Hotel-Motel Zone with a major special use permit; 2. The cumulative expansion of a formula business establishment by 500 or more square feet of floor area shall require a minor special use permit amendment or a minor SUP if the establishment does not already have a major special use permit; 3. A formula business establishment (except for grocery stores, banks, savings and loans, full service restaurants and theaters) shall not have a street level frontage of greater than 50 linear feet on any street or have its retail space occupy more than two stories;

44 Memo Pg A formula business establishment shall fully comply with all applicable regulations of this code including environmental design review; and 5. Change of ownership of an existing formula business establishment shall not, by itself, require obtaining a major special use permit or major SUP amendment as applicable. C. Required Findings for Approval. 1. The formula business establishment will be compatible with existing surrounding uses, and has been designed and will be operated in a nonobtrusive manner to preserve the community s character and ambiance; 2. Approval of the formula business establishment will be consistent with the policies and standards of the General Plan and the local coastal program, and that the proposed intensity of uses on the sites is appropriate given the uses permitted on the site and on adjoining sites by these documents; 3. Approval of the formula business establishment will contribute to an appropriate balance of local, regional or national-based businesses in the community; and 4. Approval of the formula business establishment will contribute to an appropriate balance of small, medium and large-sized businesses in the community. (Ord , 2003; Ord. 1919) Chapter OFF-STREET PARKING Number of spaces required.. J. Eating and Drinking Establishments, Fast Food and Formula Fast Food Restaurants. 1. One space for each three seats and one space for each 54 inches of clear bench space, excluding dance floors and assembly areas without fixed seats which shall be calculated separately as one space for each 50 square feet of floor area; plus one parking space per two employees determined at the month, day and hour when the greatest number of employees are on duty.

45 Memo Pg Fast food and formula fast food restaurants shall have parking requirements calculated by the above standard; however, a minimum of 10 parking spaces shall be provided for these uses. The change of ownership shall not, by itself, require the provision of additional parking. a. For fast food restaurants, required parking shall be provided on site, or by parking allocation credits, joint use, common facilities or facilities on private property on the same block within 200 feet of the site. b. For formula fast food restaurants, parking allocation credits may be applied to satisfy the parking requirement in excess of 10 parking spaces. However, the initial 10 spaces shall be parking spaces provided by means other than utilizing parking allocation credits, and shall be required when: i. A new formula fast food restaurant is established; ii. An existing formula fast food restaurant is relocated; or iii. An existing formula fast food restaurant is physically expanded in a manner to increase the restaurant s seating capacity. Title 88 ORANGE AVENUE CORRIDOR SPECIFIC PLAN Chapter IV COMMERCIAL ZONE (C) REGULATIONS C. TABLE OF USES The following table summarizes those land uses that are permitted, special use permitted, or prohibited in the Commercial Zone (C). Where a use is not listed, the City or designee shall be responsible to make a determination of use as outlined in Chapter of the Zoning Ordinance. This table is provided for convenience to determine whether a use is permitted by right or by special use permit or prohibited. Any use that is a Formula Business or Formula Fast Food restaurant shall refer to this document s Chapter IV, Sections G and H. Following this table is a comprehensive list of uses by category. Table IV-1 COMMERCIAL ZONE USES Eating and Drinking Establishments Use Permitted Minor SUP Prohibited Restaurant, formula fast food X 5 Restaurant, formula full service X 1 Retail Commercial Location Criteria Comment

46 Memo Pg.15 Use Permitted Minor SUP Prohibited Location Criteria Comment Formula Business X 1 See additional regulations in Chapter IV, G. * Permitted retail commercial uses listed above that are greater than 5,000 square feet or have a floor area ratio of 1.8 or greater require a Minor Special Use Permit Location Criteria 1 = Location anywhere in Commercial Zone 2 = Location restricted from ground floor anywhere in the Commercial Zone 3 = Location restricted from Orange Avenue in the Commercial Zone 4 = Location restricted from ground floor along Orange Avenue 5 = Location restricted from street corner locations except where the immediate prior use was a Formula Fast Food Restaurant (Ord (Att. A), 2014; Ord , 2010) D. PERMITTED USES D.2. Eating and Drinking Establishments f. Restaurants, fast food without Drive-thrus/Non-Formula Franchise (See Section H. Formula Fast Food in this chapter of the Specific Plan) E. SPECIAL USE PERMITS These uses are allowed in the Commercial Zone with a Minor Special Use Permit and Coastal Permit. No Major Special Use Permits will be required for Commercial Zone uses. Minor Special Use Permits and Coastal Permits will be granted by the Planning Commission, and subject to an appeal to the City Council. The Special Use Permit process is outlined in Chapter of the City Zoning Ordinance. This Chapter also identifies specific design standards for automobile car wash, auto sales facilities, and veterinarian hospital uses. The Coastal Permit process is outlined in Chapter of the Zoning Ordinance. MINOR SPECIAL USE PERMITS: E.2. Eating and Drinking Establishments. b. Restaurant, Formula Fast Food (restricted from street corner locations except where immediate prior use was of same use).

47 Memo Pg.16 E.6. Retail Commercial. b. Formula Retail (see Section G. Formula Retail in this chapter of the Specific Plan). G. FORMULA BUSINESS G.1. Purpose The purpose of the standards in this Section is to regulate the location and operation of formula business establishments in order to maintain the City s unique village character, the diversity and vitality of the community s commercial districts, and the quality of life of Coronado residents. It is presumed that establishing or preserving an appropriate and balanced mix of local, regional, and national-based businesses and small, medium or large-sized businesses will more effectively serve to achieve this purpose as a strategy to maintain the economic health of the community s business districts and the small-scale eclectic ambiance. G.2. Definition Formula Business is defined as any type of commercial business establishment that uses a trademark, logo, service mark or other mutually identifying name or symbol that is shared by fifteen or more commercial businesses (other than a formula fast food restaurant ) and which maintains any standardized ( formula ) array of services and/or merchandise, decor, business method, architecture, layout, uniform, or similar, standardized feature. G.3. Regulations b. A Formula Business establishment may be allowed in the Commercial Zone with a Minor Special Use Permit (Minor SUP); c. The cumulative expansion of a Formula Business establishment by 500 or more square feet of floor area shall require a Minor SUP amendment or a Minor SUP if the establishment does not already have a Minor SUP; d. A Formula Business establishment (except for grocery stores, banks, saving and loans, full service restaurants and theaters) shall not have a street level frontage of greater than 50 linear feet on any street;

48 Memo Pg.17 e. A Formula Business establishment shall fully comply with all applicable regulations of this Specific Plan including Design Review; and f. Change of ownership of an existing Formula Business establishment shall not, by itself, require obtaining a Minor SUP or Minor SUP amendment, as applicable. G.4. Required Findings for Approval a. The Formula Business establishment will be compatible with existing surrounding uses, and has been designed and will be operated in a non-obtrusive manner to preserve the community s character and ambiance; b. Approval of the Formula Business establishment will be consistent with the policies and standards of the Specific Plan, General Plan and the Local Coastal Program, and that the proposed intensity of uses on the site is appropriate given the uses permitted on the site and on adjoining sites by these documents; c. Approval of the Formula Business establishment will contribute to an appropriate balance of local, regional or national-based businesses in the community; d. Approval of the Formula Business establishment will contribute to an appropriate balance of small, medium and large-sized businesses in the community. H. FORMULA FAST FOOD H.1. Purpose The purpose of the standards in this Section is to regulate the number, location and operation of formula fast food restaurants in order to maintain the City s unique village character, the vitality of our commercial districts, and the quality of life of Coronado residents. H.2. Definition Formula Fast Food Restaurant is defined as any fast food restaurant having both of the following characteristics: (a) uses trademark, logo, service mark or other mutually identifying name or symbol that is shared by fifteen or more restaurants; and (b) serves a prescribed ( formula ) menu that is substantially the same as fifteen or more restaurants that shares its trademark, logo, service mark or other mutually identifying name or symbol. H.3. Regulations

49 Memo Pg.18 a. The Formula Fast Food Restaurant shall fully comply with all applicable regulations in this Specific Plan and the City s Zoning Code. b. The regulations in this Section shall be used by the Planning Commission in reviewing an application or amendment for a Minor Special Use Permit (SUP) concerning a Formula Fast Food Restaurant, and by staff when reviewing a building permit application, an application for occupancy or a Design Review or Planning Commission application. c. A Formula Fast Food Restaurant may only be established on a site after obtaining a Minor Special Use Permit from the City for the operation of that use on said site. Similarly, a Formula Fast Food Restaurant may only relocate or physically expand in a manner to increase its seating capacity after obtaining a Minor Special Use Permit or Minor SUP amendment as applicable. d. Change of ownership shall not, by itself, require obtaining a Minor Special Use Permit or Minor SUP amendment as applicable. H.4. Establishment or Relocation A Formula Fast Food Restaurant may only be established or relocated: a. On a site that is not located on a street corner; except such a restaurant may be located on a street corner where the immediate prior use was a Formula Fast Food Restaurant; b. Where it would not result in two or more Formula Fast Food Restaurants operating on that site (i.e., two or more Formula Fast Food Restaurant business entities requiring separate business licenses, or displaying in a manner visible from public property separate business trademarks, logos, service marks or other mutually identifying names or symbols, for the daily or weekly conducting of business on the same site); c. When it would not result in Formula Fast Food Restaurants operating at more than 10 sites under the jurisdiction of this Ordinance; and d. So long as the Planning Commission finds that establishing or relocating the Formula Fast Food Restaurant will not increase the intensity of use on the site to a level that will adversely impact: i. Land uses in the area;

50 Memo Pg.19 ii. iii. Pedestrian or motor vehicle traffic; or The public welfare. H.5. Physical Expansion An existing Formula Fast Food Restaurant may only be physically expanded in a manner to increase seating capacity: a. Onto a site other than a corner; b. Where it would not result in two or more Formula Fast Food Restaurants operating on that site (i.e., two or more Formula Fast Food Restaurant business entities requiring separate business licenses, or displaying in a manner visible from public property separate business trademarks, logos, service marks or other mutually identifying names or symbols, for the daily or weekly conducting of business on the same site); and c. So long as the Planning Commission finds that physically expanding the Formula Fast Food Restaurant will not increase the intensity of use on the site to a level that will adversely impact: i. Land uses in the area; ii. iii. Pedestrian or motor vehicle traffic; or The public welfare. H.6. Trash The Formula Fast Food Restaurant will operate in accordance with a Trash Disposal Plan, approved by the Planning Commission. The Plan shall address litter control, trash collection, on-site storage, and pick-up on a regular basis. The Plan shall include proof of a contract with the City disposal contractor, and specify that such a contract shall be maintained as a requirement for the issuance and retention of the Minor Special Use Permit. H.7. Design Review Establishment or exterior alteration of a Formula Fast Food Restaurant is subject to the Design Review Ordinance.

51 Memo Pg.20 J. OFF-STREET PARKING. J.2. Regulations. c. Eating and drinking establishments on any floor are required to provide one (1) parking space per every 100 square feet of floor area. Formula Fast Food restaurants are required to provide a minimum of 10 parking spaces, regardless of floor area... h. An eating and drinking establishment with outdoor dining may be established or expanded in the commercial area and have a total of eighteen seats without providing required parking. (This exemption does not apply to Formula Fast Food restaurants). i. Tandem parking is permitted for business valet and employee parking only and may not be stacked deeper than two cars. APPENDIX 1 GLOSSARY OF TERMS Formula Fast Food Restaurant: Any Fast food restaurant having both of the following characteristics: (a) uses trademark, logo, service mark or other mutually identifying name or symbol that is shared by fifteen or more restaurants; and (b) serves a prescribed ( formula ) menu that is substantially the same as fifteen or more restaurants that shares its trademark, logo, service mark or other mutually identifying name or symbol. Formula Business: Any type of commercial business establishment that uses a trademark, logo, service mark or other mutually identifying name or symbol that is shared by fifteen or more commercial businesses (other than a formula fast food restaurant ) and which maintains any standardized ( formula ) array of services and/or merchandise, decor, business method, architecture, layout, uniform, or similar, standardized feature. Title DESIGN REVIEW Formula fast food restaurants. A. The purpose of the standards in this section is to regulate the construction of formula fast food restaurants in order to maintain the City s unique village character, the vitality of our commercial districts, and the quality of life of Coronado residents.

52 Memo Pg.21 B. In addition to the other regulations in this code, the regulations in this section shall be used to review an application for a design review permit for proposed improvements to a formula fast food restaurant. C. The Design Review Commission shall deny the application for a design review permit if one or more of the following is found: 1. Proposed improvements will conflict with other development in the area, in terms of design, landscape, or scale; 2. Proposed improvements will result in visual clutter or garish color, or cause the formula fast food restaurant to have conflicting design elements; 3. Proposed improvements will fail to achieve human scale, will be excessively massive, or will dominate the neighborhood; 4. Proposed signage: a. Is not in keeping with the design of the resulting formula fast food restaurant; b. Is not in scale with the size of the building facade and adjacent properties; c. Emphasizes corporate logos; or d. Incorporates unnatural or fluorescent colors, or intense lighting that intrudes on the nightscape; and 5. Proposed improvements will adversely impact the quality of life in Coronado by: a. Discouraging business vitality and diversity; b. Detracting from the village ambiance; c. Detracting from the pedestrian-friendly environment; or d. Detracting from the rhythm of the street (i.e., incompatibility with the scale, facade plane offsets, detailing, fenestration, etc., of existing store facades of the streetscape). (Ord (Exh. A), 2016)

53 Memo Pg.22 San Francisco SEC FORMULA RETAIL USES. (a) Findings. (1) San Francisco is a city of diverse and distinct neighborhoods identified in large part by the character of their commercial areas. (2) One of the eight Priority Policies of the City's General Plan resolves that "existing neighborhood-serving retail uses be preserved and enhanced and future opportunities for resident employment in and ownership of such businesses enhanced." (3) Retail uses are the land uses most critical to the success of the City's commercial districts. (4) Formula Retail businesses are increasing in number in San Francisco, as they are in cities and towns across the country. (5) San Francisco is one of a very few major urban centers in the State in which housing, shops, work places, schools, parks and civic facilities intimately co-exist to create strong identifiable neighborhoods. The neighborhood streets invite walking and bicycling and the City's mix of architecture contributes to a strong sense of neighborhood community within the larger City community. (6) Notwithstanding the marketability of a retailer's goods or services or the visual attractiveness of the storefront, the standardized architecture, color schemes, decor and signage of many Formula Retail businesses can detract from the distinctive character and aesthetics of certain Neighborhood Commercial Districts. (7) The increase of Formula Retail businesses in the City's neighborhood commercial areas, if not monitored and regulated, will hamper the City's goal of a diverse retail base with distinct neighborhood retailing personalities comprised of a mix of businesses. Specifically, the unregulated and unmonitored establishment of additional Formula Retail uses may unduly limit or eliminate business establishment opportunities for smaller or medium-sized businesses, many of which tend to be non-traditional or unique, and unduly skew the mix of businesses towards formula retailers in lieu of unique or start-up retailers, thereby decreasing the diversity

54 Memo Pg.23 of merchandise available to residents and visitors and the diversity of purveyors of merchandise. (8) If, in the future, neighborhoods determine that the needs of their Neighborhood Commercial Districts are better served by eliminating the notice requirements for proposed Formula Retail uses, by converting Formula Retail uses into conditional uses in their district, or by prohibiting Formula Retail uses in their district, they can propose legislation to do so. (9) Neighborhood Commercial Districts are intended to preserve the unique qualities of a district while also serving the daily needs of residents living in the immediate neighborhood; however community members have reported loss of daily needs uses due to inundation of formula retailers that target larger citywide or regional audiences. The City strives to ensure that goods and services that residents require for daily living are available within walking distance and at an affordable price. Establishments that serve daily needs and formula retail establishments are neither mutually exclusive nor completely overlapping. (10) The San Francisco retail brokers' study of 28 Neighborhood Commercial Districts conducted in 2014 found that the healthiest and most viable retail environments offer a mix of retailers who vary in size and offerings; including a mix of conventional and cutting edge retailers as well as established players and newcomers. (11) Formula retailers are establishments with multiple locations and standardized features or a recognizable appearance. Recognition is dependent upon the repetition of the same characteristics of one store in multiple locations. The sameness of Formula Retail outlets, while providing clear branding for consumers, counters the general direction of certain land use controls and General Plan Policies which value unique community character and therefore need controls, in certain areas, to maintain neighborhood individuality. (12) The homogenizing effect of Formula Retail, based on its reliance on standardized branding, is greater if the size of the Formula Retail use, in number of locations or size of use or branded elements, is larger. The increased level of homogeneity distracts from San Francisco's unique neighborhoods, which thrive on a high level of surprise and interest maintained by a balanced mix of uses and services, both independent and standardized. (13) Due to the distinct impact that Formula Retail uses have on a neighborhood, these uses are evaluated for concentration as well as compatibility within a neighborhood. As

55 Memo Pg.24 neighborhoods naturally evolve over time, changes and intensifications of Formula Retail uses should also be re-evaluated for concentration and compatibility within a neighborhood. (14) According to an average of ten studies done by the firm Civic Economics and published by the American Independent Business Alliance in October of 2012, spending by independent retailers generated 3.7 times more direct local spending than that of Formula Retail chains. (15) Money earned by independent businesses is more likely to circulate within the local neighborhood and City economy than the money earned by Formula Retail businesses which often have corporate offices and vendors located outside of San Francisco. (16) According to a 2014 study by the San Francisco Office of Economic Analysis (OEA) report "Expanding Formula Retail Controls: Economic Impact Report" the uniqueness of San Francisco's neighborhoods is based on a combination of unique visual characteristics and a sense of community fostered by small merchants and resident relationships. A Formula Retail establishment is determined by its recognizable look which is repeated at every location, therefore, detracting from the unique community character. (17) The OEA Report found that in general, chain stores charge lower prices and provide affordable goods, but may spend less within the local economy, and can be unpopular with some residents because they can be seen to diminish the character of the neighborhood. At the same time, this OEA Report found that excessively limiting chain stores can reduce commercial rents and raise vacancy rates. (18) Through a 2014 study commissioned by the Planning Department, titled "San Francisco Formula Retail Economic Analysis," staff and consultants conducted one-on-one interviews and worked with small groups including independent retailers, small business owners, merchants associations, formula retailers, commercial brokers, neighborhood representatives and other stakeholders. The Study found that landlords often perceive a benefit in renting to large established chains, which landlords believe typically have better credit and can sign longer leases than local, independent retailers, lowering the risk that the tenant will be unable to pay its rent. The existing land use controls for Formula Retail may create a disincentive for formula retailers to locate where the formula retail controls apply. (b) Definition. A Formula Retail use is hereby defined as a type of retail sales or service activity or retail sales or service establishment that has eleven or more other retail sales

56 Memo Pg.25 establishments in operation, or with local land use or permit entitlements already approved, located anywhere in the world. In addition to the eleven establishments either in operation or with local land use or permit entitlements approved for operation, the business maintains two or more of the following features: a standardized array of merchandise, a standardized facade, a standardized decor and color scheme, uniform apparel, standardized signage, a trademark or a servicemark. (1) Standardized array of merchandise shall be defined as 50% or more of in-stock merchandise from a single distributor bearing uniform markings. (2) Trademark shall be defined as a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs that identifies and distinguishes the source of the goods from one party from those of others. (3) Servicemark shall be defined as word, phrase, symbol or design, or a combination of words, phrases, symbols or designs that identifies and distinguishes the source of a service from one party from those of others. (4) Decor shall be defined as the style of interior furnishings, which may include but is not limited to, style of furniture, wall coverings or permanent fixtures. (5) Color Scheme shall be defined as selection of colors used throughout, such as on the furnishings, permanent fixtures, and wall coverings, or as used on the facade. (6) Facade shall be defined as the face or front of a building, including awnings, looking onto a street or an open space. (7) Uniform Apparel shall be defined as standardized items of clothing including but not limited to standardized aprons, pants, shirts, smocks or dresses, hats, and pins (other than name tags) as well as standardized colors of clothing. (8) Signage shall be defined as business sign pursuant to Section of the Planning Code. (c) "Retail Sales or Service Activity or Retail Sales or Service Establishment." For the purposes of this Section 303.1, a retail sales or service activity or retail sales or service establishment shall include the following uses whether functioning as a principal or accessory use, as defined in Articles 1, 2, 7, and 8 of this Code:

57 Memo Pg.26 (1) Bar; (2) Drive-up Facility; (3) Eating and Drinking Use; (4) Liquor Store; (5) Sales and Service, Other Retail; (6) Restaurant; (7) Limited-Restaurant; (8) Take-Out Food; (9) Sales and Service, Retail; (10) Service, Financial; (11) Movie Theater; (12) Amusement and Game Arcade; (13) Service, Limited Financial, except single automated teller machines at the street front that meet the Commission's adopted Performance-Based Design Guidelines and automated teller machines located within another use that are not visible from the street; (14) Service, Fringe Financial; (15) Tobacco Paraphernalia Establishment; (16) Massage Establishment; (17) Service, Personal; (18) Service, Instructional; and (19) Gym. (d) Conditional Use Criteria. With regard to a conditional use authorization application for a Formula Retail use, the Planning Commission shall consider, in addition to the criteria set

58 Memo Pg.27 forth in Section 303, the criteria below and the Performance-Based Design Guidelines adopted by the Planning Commission to implement the criteria below. (1) The existing concentrations of Formula Retail uses within the district and within the vicinity of the proposed project. To determine the existing concentration, the Planning Commission shall consider the percentage of the total linear street frontage within a 300-foot radius or a quarter of a mile radius, at the Planning Department's discretion, from the subject property that is occupied by Formula Retail and non-formula Retail businesses. The Department's review shall include all parcels that are wholly or partially located within the 300- foot radius or quarter-mile radius. If the subject property is a corner parcel, the 300-foot radius or quarter mile radius shall include all corner parcels at the subject intersection. For each property, the Planning Department shall divide the total linear frontage of the lot facing a public-right of way by the number of storefronts, and then calculate the percentage of the total linear frontage for Formula Retail and non-formula Retail. Half percentage points shall be rounded up. For the Upper Market Street Neighborhood Commercial District only, if the application would bring the formula retail concentration within a 300-foot radius to a concentration of 20% or above, Planning Department staff shall recommend disapproval of the application to the Planning Commission. If the application would not bring the formula retail concentration within the 300-foot radius to a concentration of 20% or above, Planning Department staff shall assess the application according to all the other criteria listed in this Subsection 303.1(d), and recommend approval or disapproval to the Planning Commission, according to its discretion and professional judgment. In either case, the Planning Commission may approve or reject the application, considering all the criteria listed in this Subsection 303.1(d). (2) The availability of other similar retail uses within the district and within the vicinity of the proposed project. (3) The compatibility of the proposed Formula Retail use with the existing architectural and aesthetic character of the district. (4) The existing retail vacancy rates within the district and within the vicinity of the proposed project. (5) The existing mix of Citywide-serving retail uses and daily needs-serving retail uses within the district and within the vicinity of the proposed project.

59 Memo Pg.28 (6) Additional relevant data and analysis set forth in the Performance-Based Design Guidelines adopted by the Planning Commission. (7) For Formula Retail uses of 20,000 gross square feet or more, except for General or Specialty Grocery stores as defined in Articles 2, 7 and 8 of this Code, the contents of an economic impact study prepared pursuant to Section 303(i) of this Code. (8) Notwithstanding anything to the contrary contained in Planning Code Article 6 limiting the Planning Department's and Planning Commission's discretion to review signs, the Planning Department and Planning Commission may review and exercise discretion to require changes in the time, place and manner of the proposed signage for the proposed Formula Retail use, applying the Performance-Based Design Guidelines. (e) Conditional Use Authorization Required. A Conditional Use Authorization shall be required for a Formula Retail use in the following zoning districts unless explicitly exempted: (1) All Neighborhood Commercial Districts in Article 7; (2) All Mixed Use-General Districts in Section 840; (3) All Urban Mixed Use Districts in Section 843; (4) All Residential-Commercial Districts as defined in Section 206.3; (5) Japantown Special Use District as defined in Section ; (6) Chinatown Community Business District as defined in Section 810.1; (7) Chinatown Residential/Neighborhood Commercial District as defined in 812.1; (8) Western SoMa Planning Area Special Use District as defined in 823; (9) Residential Transit-Oriented Districts as defined in and 206.5; (10) Limited Conforming Use/Non-Conforming Use in RH-RM-RTO and RED Districts; (11) Third Street Formula Retail Restricted Use District, as defined in Section 786; (12) The C-3-G District with frontage on Market Street, between 6th Street and the intersection of Market Street, 12th Street and Franklin Street.

60 Memo Pg.29 (f) Formula Retail Uses Not Permitted. Formula Retail uses are not permitted in the following zoning districts: (1) Hayes-Gough Neighborhood Commercial Transit District; (2) North Beach Neighborhood Commercial District; (3) Chinatown Visitor Retail District; (4) Upper Fillmore District does not permit Formula Retail uses that are also Restaurant or Limited-Restaurant uses as defined in Sections and ; (5) Broadway Neighborhood Commercial District does not permit Formula Retail uses that are also Restaurant or Limited-Restaurant uses as defined in Sections and ; (6) Mission Street Formula Retail Restaurant Subdistrict does not permit Formula Retail uses that are also Restaurant or Limited-Restaurant uses as defined in Sections and ; (7) Geary Boulevard Formula Retail Pet Supply Store and Formula Retail Eating and Drinking Subdistrict does not permit Formula Retail uses that are also either a Retail Pet Supply Store or an Eating and Drinking use as set forth in Section 781.4; (8) Taraval Street Restaurant Subdistrict does not permit Formula Retail uses that are also Restaurant or Limited-Restaurant uses as defined in Sections and ; (9) Chinatown Mixed Use Districts do not permit Formula Retail uses that are also Restaurant or Limited-Restaurant uses as defined in Sections and (g) Neighborhood Notification and Design Review. Any application for a Formula Retail use as defined in this section shall be subject to the notification and review procedures of Subsections 312(d) and (e) of this Code. A conditional use hearing on an application for a Formula Retail use may not be held less than 30 calendar days after the date of mailed notice. (h) Determination of Formula Retail Use. In those areas in which Formula Retail uses are prohibited or subject to the provisions of Subsections 303.1(d) or (e), any application for an entitlement or determination determined by the City to be for a Formula Retail use that does not identify the use as a Formula Retail use is incomplete and cannot be processed until the omission is corrected. Any entitlement approved or determination made that is determined by

61 Memo Pg.30 the City to have been, at the time of application, for a Formula Retail use that did not identify the use as a Formula Retail use is subject to revocation at any time. If the City determines that an entitlement or determination, or an application for the same, is for a Formula Retail use, the applicant or holder of the entitlement bears the burden of proving to the City that the proposed or existing use is not a Formula Retail use. (i) Performance-Based Design Guidelines. All new, enlarged, intensified or nonintensified Formula Retail uses or establishments must comply with the Commission's adopted Performance-Based Design Guidelines for Formula Retail, as directed by the Planning Department and Planning Commission. (j) Change of Use. Changes of Formula Retail establishments are generally described below, except that a change of a Formula Retail use that is also a nonconforming use pursuant to Section 182 is prohibited. In all other instances, changes of Formula Retail establishments from one use category to another, including a change from one use to another within the subcategories of uses set forth in Planning Code Section and Section , require a new Conditional Use authorization as a new Formula Retail use. Changes of Formula Retail owner or operator within the same use category that are determined to be an enlargement or intensification of use pursuant to Subsection 178(c) are required to obtain Conditional Use authorization and shall meet the Commission's adopted Performance-Based Design Guidelines for Formula Retail. In cases determined not to be an enlargement or intensification of use, the Performance-Based Design Guidelines for Formula Retail may be applied and approved administratively by the Planning Department, unless the applicant requests a Conditional Use Hearing at the Planning Commission. The applicant shall also pay an administrative fee to compensate Planning Department and City staff for its time reviewing the project under this Subsection, as set forth in Section 360 of this Code. (k) Accessory Uses. Conditional use authorization shall be required for all accessory uses within those use categories subject to Formula Retail controls as defined in this Section 303.1, except for the following: (1) Single automated teller machines falling within the definition of Limited Financial Services that are located at the street front that meet the Commission's adopted Performance- Based Design Guidelines for automated teller machines; (2) Automated teller machines located within another use that are not visible from the street;

62 Memo Pg.31 (3) Vending machines that do not exceed 15 feet of street frontage or occupy more than 200 square feet of area facing a public right of way. (Added by Ord , File No , App. 11/26/2014, Eff. 12/26/2014; amended by Ord , File No , App. 2/20/2015, Eff. 3/22/2015) Nantucket FORMULA BUSINESS A type of retail sales establishment, restaurant, tavern, bar, or take-out food establishment which is under common ownership or control or is a franchise, and is one of 10 or more other businesses or establishments worldwide maintaining two or more of the following features: [Added ATM by Art. 42, AG approval ; amended ATM by Art. 31, AG approval ] Standardized menu or standardized array of merchandise with 50% or more of in-stock merchandise from a single distributor bearing uniform markings. Trademark or service mark, defined as a word, phrase, symbol or design, or a combination or words, phrases, symbols or designs, that identifies and distinguishes the source of the goods from one party from those of others, on products or as part of store design, such as cups, napkins, bags, boxes, wrappers, straws, store signs or advertising devices. Standardized color scheme used throughout the interior or exterior of the establishment, including, but not limited to, graphics, awnings, signage, and the like visible from the exterior of the structure. Standardized interior decor, including, but not limited to, style of furniture, wall coverings, permanent fixtures, displays, window treatments. Standardized uniform, including but not limited to aprons, pants, shirts, smocks ordresses, hat, and pins (other than name tags) Overlay Districts Flood Hazard FHD, Public Well Recharge PWR, Multifamily (MF), Neighborhood Employee Housing (NEHOD), Country Overlay District (COD) and Town Overlay District (TOD), Harbor Overlay District (HOD), Multi- Family Overlay District (MFOD), and Village Height Overlay District (VHOD).

63 Memo Pg.32 Formula Business Exclusion District (FBED). [Added ATM by Art. 42, AG approval ] The Formula Business Exclusion District (FBED) is located and bounded as shown on the map entitled Article 42: Proposed Formula Business Exclusion District prepared by the GIS Department, dated March Statement of purpose. The purpose and intent of the Formula Business Exclusion District (FBED) is to address the adverse impact of nationwide, standardized businesses on Nantucket's historic downtown area. The proliferation of formula businesses will have a negative impact on the island's economy, historical relevance, and unique character and economic vitality. These uses are therefore prohibited in order to maintain a unique retail and dining experience. Formula businesses frustrate this goal by detracting from the overall historic island experience and threatening its tourist economy.