CITY OF ELK GROVE CITY COUNCIL STAFF REPORT

CITY OF ELK GROVE CITY COUNCIL STAFF REPORT AGENDA ITEM NO. 9.2 AGENDA TITLE: A public hearing to consider a Determination of Public Convenience or Necessity for offsale of beer, wine, and liquor for Smart & Final (EG-15-002) (CEQA Exemption) MEETING DATE: March 25, 2015 PREPARED BY: DEPARTMENT HEAD: Nate Anderson, Project Planner Darren Wilson, P.E. Planning Director PROJECT DESCRIPTION: Location: 8787 Elk Grove Blvd; APN: 125-0070-040 Planner: Nate Anderson, Associate Planner Applicant: Smart & Final Stores, LLC Dee Ann Catlin (Representative) Property Owner: Wong Family Investors, L.P. Gary Wong (Representative) RECOMMENDED ACTION: Staff recommends the City Council adopt a resolution: 1. Finding the Smart & Final PCN Project (EG-15-002) exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the State CEQA Guidelines; and 2. Approving a Determination of Public Convenience or Necessity for a Type 21 alcohol license for the Smart & Final PCN Project. 1

Elk Grove City Council March 25, 2015 Page 2 of 7 BACKGROUND INFORMATION: The Smart & Final PCN Project (Project) consists of a Determination of Public Convenience or Necessity (PCN) to allow Smart & Final (Applicant) to acquire a Type 21 (Off-Sale General) alcohol license from the State Department of Alcoholic Beverage Control (ABC). The Type 21 license allows for the sale and off-site consumption of beer, wine, and liquor. ABC requires an Applicant to obtain a PCN from the affected jurisdiction when the establishment is located within a high crime area and/or when the census tract is deemed over-concentrated by ABC s standards. Smart & Final is not located a high crime area as based on Elk Grove Police Department statistics. However, it is within an over-concentrated census tract, as defined by ABC. Smart & Final is in the process of opening within a developed shopping center at the northwest corner of Elk Grove Boulevard and Williamson Drive see Figure 1. This tenant will occupy the former tenant space of the Bel Air Supermarket that closed in 2013. The former Bel Air at this location did have a Type 21 liquor license for the sale of alcohol beverage products. This license was subsequently cancelled by ABC. Figure 1 Project Location Map Project Site 2

Elk Grove City Council March 25, 2015 Page 3 of 7 ANALYSIS: Smart & Final is a full service grocery store that offers an array of departments. There are hundreds of Smart & Final stores in operation throughout the western United States, most of which operate with a full selection of alcoholic beverages being sold in conjunction with food and other non-alcoholic beverages for sale. According to the Applicant, the shelving space dedicated to alcoholic display is proposed to cover approximately 325 square feet of the 21,526 square foot sales area of the tenant space (approximately 1.5 percent). Since the area dedicated to alcohol sales is less than the City's standard that would trigger a conditional use permit (less than 50% of the shelving or gross floor area devoted to the public display and sale of alcoholic beverages), the City Council cannot impose conditions on the sale of alcohol other than the basic requirements of State law (which would be enforced by the State of California) and of the Elk Grove Zoning Code (sign area, lighting, and other standards common to all retail stores). Chapter 4.54 of the Municipal Code Chapter 4.54 of the Elk Grove Municipal Code establishes a protocol for the issuance and review of Determination of Public Convenience or Necessity. The protocol includes the review of the Police Department, Planning Department, Code Enforcement Department, Business Licensing, and Building Department. In addition, the City Council is required to consider the following factors in making a Determination of Public Convenience or Necessity: 1. Proximity and number of other retail outlets selling alcohol; 2. Proximity of the retail outlets to schools, playgrounds, and other facilities serving young people; 3. Proximity of the retail outlet to residential neighborhoods; and 4. Whether the retail outlet provides: (a) a wide range of desirable goods and services; or (b) a unique type of goods or services. 3

Elk Grove City Council March 25, 2015 Page 4 of 7 As mentioned, a variety of City departments and other agencies (including the Police Department and Code Enforcement Department) are required to review PCN applications in order to determine current and past problems at the Applicant s proposed store location. None of the reporting agencies noted any issues with Smart & Final s location. There are currently four active alcohol licenses in the same census tract (Census Tract 93.08) that have either a Type 20 (Off-Sale Beer and Wine) or Type 21 (Off-Sale General) alcohol license for the sale of alcohol beverage for off-site consumption see Figure 2. The nearest retail sale location to Smart & Final is Lucky Liquor, located approximately 1,000 feet to the west. The other three active retail sites (Elk Grove Discount Wine & Liquor, CVS Pharmacy Store, and Walgreens) are each located more than one-half mile from the project site. Figure 2 Census Tract 93.08 Off-Sale License Locations 4

Elk Grove City Council March 25, 2015 Page 5 of 7 The nearest school and playground facilities are at Joseph Kerr Middle School (8865 Elk Grove Florin Rd.), which is located approximately 800 feet to the east of the project site, and Jessie Baker Elementary (8850 Southside Ave.), which is located approximately 800 feet south of the project site. The nearest residential neighborhood is located to the rear of the building approximately 100 feet to the north. High Crime Area ABC determines an area to be high crime when the number of crimes committed in a census tract exceeds 120% of the average number of crimes committed citywide. The Police Department has reviewed the project, and noted that the project is in sub-sector 5101. Total crimes in sub-sector 5101 were 171 in 2013 (the most recent statistical data which has been compiled), while 120% of the average number of crimes in the City was 205. Therefore, subsector 5101 did not exceed the 120% of average and this area is not considered to be within a high crime tract. The crime statistics provided by the Police Department are provided in Attachment 2. The Police Department indicated that the addition of a Type 21 license at this location will most likely result in a re-distribution of existing sales in the area rather than an influx of new customers who would normally shop outside of the area. Customers who already intended to purchase alcohol in association with other purchases are most likely to simply make that purchase at the store carrying all or most of their desired goods within their usual shopping area. By including the sale of alcohol beverages with the existing inventory, Smart & Final will be providing a one-stop shop store for customers. Due to the nature of sales associated with a Type 21 license and the likelihood of a redistribution (rather than an increase) associated with alcohol related crimes, as well as a credible and cooperative applicant, the Police Department does not have a public safety related objection to the issuance of a PCN. 5

Elk Grove City Council March 25, 2015 Page 6 of 7 Alcohol Sales License Overconcentration As mentioned, the project is located in Census Tract 93.08, which ABC considers to have an overconcentration of off-sale liquor licenses. ABC makes the overconcentrated determination when the number of liquor licenses issued exceeds the number of licenses which should be permitted in a census tract per ABC s standards. According to ABC, only two licenses are allowed in this census tract before it is considered to be overconcentrated. However, a total of four off-sale licenses exist in the census tract, and the proposed addition would increase the total number to five off-sale licenses. Applicant's PCN Determination Justification As part of the request for a PCN, an Applicant must explain how the alcohol license will serve the public s convenience and necessity. In response, the Applicant notes that the sale of alcoholic beverages would offer customers the convenience of purchasing alcohol beverage products along with other food products in a one-stop shop atmosphere without the need to travel elsewhere to purchase alcohol beverage products (Attachment 3). ENVIRONMENTAL ANALYSIS The California Environmental Quality Act (Section 21000, et seq., of the California Public Resources Code - hereafter CEQA) requires analysis of agency approvals of discretionary projects. A project, under CEQA, is defined as the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The proposed project is a project under CEQA. Staff has reviewed the project to determine the required level of review under CEQA. The proposed project is exempt from CEQA under State CEQA Guidelines Section 15301 (Existing Facilities) of Division 6 of Chapter 3, Title 14 of the California Code of Regulations. A Categorical Exemption Section 15301 (Existing Facilities) exempts projects that involve negligible or no expansion of an existing use. This Project consists of the sale of alcoholic beverages within an existing grocery store within an established commercial center. The Project does not propose to physically 6

Elk Grove City Council March 25, 2015 Page 7 of 7 expand the existing facility. Based on staff s review of the Project, no special circumstances exist that would create a reasonable possibility that granting a PCN to sell alcohol from their existing store s location will have a significant effect on the environment. Therefore, the proposed Project qualifies for the exemption under CEQA Guidelines Section 15301 and no further environmental review is required. FISCAL IMPACT: No identifiable direct material or negative financial impact to the City s General Fund is expected. ATTACHMENTS: 1. Resolution 2. Elk Grove Police Department Letter dated February 2, 2015 3. Smart & Final Justification Letter 7

ATTACHMENT 1 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ELK GROVE APPROVING A DETERMINATION OF PUBLIC CONVENIENCE OR NECESSITY FOR A TYPE 21 OFF-SALE GENERAL LICENSE FOR SMART & FINAL LOCATED AT 8787 ELK GROVE BOULEVARD ASSESSOR PARCEL NUMBER 125-0070-040 PROJECT NO. EG-15-002 (CEQA EXEMPTION) WHEREAS, the Planning Department of the City of Elk Grove received an application on January 16, 2015, requesting a Determination of Public Convenience or Necessity for Smart & Final to obtain a Type 21 (Off-Sale General) alcohol license from the Department of Alcoholic Beverage Control in order to sell beer, wine, and liquor from an existing store location; and WHEREAS, the proposed project is located on real property in the incorporated portions of the City of Elk Grove more particularly described as Assessor Parcel Number 125-0070-040; and WHEREAS, Chapter 4.54, Article 5 of the Elk Grove Municipal Code establishes the City Council as the appropriate authority to hear and decide on all Determination of Public Convenience or Necessity requests; and WHEREAS, the City Council held a duly noticed public hearing on March 25, 2015 as required by law to consider all of the information presented by staff, information presented by the project proponent, and public testimony presented in writing and at the meeting. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Elk Grove, hereby finds the proposed the Smart & Final PCN Project, EG-15-002, exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 of the State CEQA Guidelines based upon the following finding: California Environmental Quality Act (CEQA) Finding: The project is exempt from CEQA review. Evidence: A Categorical Exemption Section 15301 (Existing Facilities) exempts projects that involve negligible or no expansion of an existing use. This Project consists of the sale of alcoholic beverages within an existing grocery store within an established commercial center. The Project does not propose to physically expand the existing facility. Based on staff s review of the Project, no special circumstances exist that would create a reasonable possibility that granting a PCN to sell alcohol from their existing store s location will have a significant effect on the environment. Therefore, the proposed Project qualifies for the exemption under CEQA Guidelines Section 15301 and no further environmental review is required. 8

AND, BE IT RESOLVED that the City Council of the City of Elk Grove hereby approves the Determination of Public Convenience or Necessity for Smart & Final located at 8787 Elk Grove Boulevard based on the following findings: Public Convenience or Necessity Finding: The proposed use is compatible with neighborhood character. Evidence: The application was routed to the Elk Grove Police Department, the Code Enforcement Department, and the Building Department. No violations against the property or Applicant were identified that would discourage the issuance of a Type 21 alcohol license for Smart & Final. The Smart & Final store is located in a Shopping Center zone district and is surrounded by other commercially zoned properties and uses. Therefore, the sale of alcohol for off-site consumption at this location is compatible with the uses in the surrounding area. The nearest school and playground facilities are at Joseph Kerr Middle School (8865 Elk Grove Florin Rd.), which is located approximately 800 feet to the east of the project site, and Jessie Baker Elementary (8850 Southside Ave.), which is located approximately 800 feet south of the project site. However neither of these facilities is directly accessible from the Project site. Finding: The proposed use will be of benefit to the neighborhood. Evidence: As the sale of alcoholic beverages is ancillary to the sale of general grocery products, the PCN determination will increase convenience to local shoppers. By including the sale of alcoholic beverages with the existing inventory, Smart & Final will be providing a one-stop shop store. One-stop shopping results in increased efficiency for shoppers, and may result in fewer vehicle trips for local shoppers. The amount of alcohol sales at the store will be ancillary to the general grocery sales. Less than 1.5% of the store s floor area will be dedicated to alcoholic sales display area. PASSED AND ADOPTED by the City Council of the City of Elk Grove this 25 th day of March 2015. GARY DAVIS, MAYOR of the CITY OF ELK GROVE ATTEST: APPROVED AS TO FORM: JASON LINDGREN, CITY CLERK JONATHAN P. HOBBS, CITY ATTORNEY 9

ATTACHMENT 2 City of Elk Grove Police Department February 2, 2015 Nathan Anderson, Project Planner City of Elk Grove Planning Department 8401 Laguna Springs Way Elk Grove, CA 95758 Re: Response to PCN (Smart & Final Stores LLC, 8787 Elk Grove Boulevard) Dear Mr. Anderson: This letter is a response to the Statement of Justification for Public Convenience and Necessity (PCN) submitted by Smart & Final Stores LLC at 8787 Elk Grove Boulevard. I have reviewed the crime statistics for the area surrounding and including this location, per your request. The most recent statistical data that we have compiled is from calendar year 2013. The data reflects that the area encompassing the applicant s site represented an average crime area within the City. Elk Grove is separated into 26 subsectors for crime reporting purposes. The applicant is located is subsector 5101. Annually, we compile the crime statistics in the following eight areas: Homicide Robbery Burglary Motor Vehicle Theft Forcible Rape Larceny Arson Aggravated Assault As you can see from the chart attached, the 5101 subsector had 171 crimes reported in 2013. Of those, 98 were crimes related to larceny and 22 were related to burglary. According to our information, the census tract where the applicant is located has four active Off- Sale licensed retail establishments (Type 21 and Type 20). The California Department of Alcohol Beverage Control views more than four such licenses in this census tract as over population. In a letter dated October 27, 2014, the Elk Grove Police Department responded to the Department of Alcoholic Beverage Control regarding an Application for Alcoholic Beverage License by this applicant. The City protested the license transfer to this applicant unless a condition was included that beer, malt beverages, and wine coolers in containers of 16 oz. or less could not be sold by single containers, and must be sold in manufacturer pre-packaged multi-unit quantities. Assuming that the applicant accepts the above stated condition, the Elk Grove Police Department has determined there is no public safety reason to oppose the application. 10 REFER ALL CORRESPONDENCE TO: Elk Grove Police Department 8400 Laguna Palms Way Elk Grove, CA 95758

Page 2 of 2 You may contact me by email at EMontgomery@ElkGrovePD.org or via telephone at (916) 478-8130 or should you have further questions regarding this matter. Sincerely, Erin Montgomery Detective, POP Unit 11

12 ATTACHMENT 3

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Incorporated July 1, 2000 CITY OF ELK GROVE 8401 Laguna Palms Way Telephone: (916) 683-7111 Elk Grove, California 95758 Fax: (916) 627-4400 www.elkgrovecity.org City of Elk Grove City Council NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that on Wednesday, March 25, 2015 at the hour of 6:00 p.m., or as soon thereafter as the matter may be heard, the Elk Grove City Council will conduct a public hearing at City Hall in the Council Chambers, 8400 Laguna Palms Way, Elk Grove, California, to consider the following matter: SMART & FINAL (EG-15-002) DETERMINATION OF PUBLIC CONVENIENCE OR NECESSITY (PCN): The Applicant is requesting a Letter of Public Convenience or Necessity from the City Council for Smart & Final to obtain a Type 21 (Off-Sale General) alcohol license from the Department of Alcohol Beverage Control (ABC). The Type 21 license allows for the sale and off-site consumption of beer, wine, and liquor. OWNER: Wong Family Investors, L.P. Gary Wong (Representative) 2200 Douglas Blvd., Ste. 125B Roseville, CA 95661 APPLICANT: Smart & Final Stores, LLC Dee Ann Catlin (Representative) 600 Citadel Dr. Commerce, CA 90040 LOCATION/APN: 8787 Elk Grove Blvd/APN: 125-0070-040 ZONING: Shopping Center (SC) ENVIRONMENTAL The Project is exempt from CEQA review pursuant to Section 15301 (Existing Facilities) Information or questions regarding this item should be referred to Nate Anderson, (916) 478-2245; or to the Office of Development Services Planning, 8401 Laguna Palms Way, Elk Grove, CA, 95758. All interested persons are invited to present their views and comments on this matter. Written statements may be filed with the City Clerk at any time prior to the close of the hearing scheduled herein, and oral statements may be made at said hearing. If you challenge the subject matter in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice or in written correspondence delivered to the City Clerk, 8401 Laguna Palms Way, 1 st Floor, Elk Grove, CA, 95758, at or prior to the close of the public hearing. 14 Dated / Published: March 13, 2015 JASON LINDGREN CITY CLERK, CITY OF ELK GROVE ADA COMPLIANCE STATEMENT In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Office of the City Clerk at (916) 478-3635. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.