REPORT TO MAYOR AND CITY COUNCIL

REPORT TO MAYOR AND CITY COUNCIL AGENDA ITEM TO: THE HONORABLE MAYOR AND CITY COUNCIL DATE: July 20, 2010 SUBJECT: Appeal of Planning Commission Denial of a Letter of Public Convenience or Necessity for Walgreens Type-20 Liquor License Report in Brief The applicant Seth Merewitz, Attorney at Law, representing Walgreens submitted an application for a letter of Public Convenience or Necessity (PCN) for Planning Commission review at the June 17, 2010 meeting. The Planning Commission denied the PCN, supporting both the Community Development and Police Department s denial, which was based on an overconcentration of existing liquor licenses within the subject census tract (See Attachment B Notice of Appeal) Staff recommends that the City Council conduct a hearing on Walgreen s appeal and, deny the issuance of a letter of Public Convenience or Necessity (PCN) for the issuance of a Type-20 liquor license for the off-sale of beer and wine at Walgreens, 10 W. Main Street. Background Any person dissatisfied with any decision by the Planning Commission may appeal to the City Council at any time within fourteen (14) days after the Planning Commission action. The Planning Commission rendered its decision on June 17, 2010, and the applicant appealed the Planning Commission decision on June 30, 2010. The applicant submitted a request for a determination of Public Convenience or Necessity (PCN) from the City of Woodland to allow the addition of a Type-20 beer and wine alcohol license for offsite consumption. In certain over-concentrated areas, the Department of Alcohol and Beverage Control (ABC) will not grant a new liquor license unless the local jurisdiction first determines that Public Convenience or Necessity would be served by the additional license. Public Convenience or Necessity is an additional tool for local governments that directly ties them into the state liquor licensing process. Currently, state law limits the issuance of new licenses in geographical regions defined as areas of undue concentration of retail alcohol outlets. For the purpose of this review, undue concentration is defined in two specific ways: the first being areas

SUBJECT: Appeal of Planning Commission Denial of a Letter of Public Convenience or Necessity for Walgreens Type-20 Liquor License PAGE: ITEM: 2 that have experienced high levels of crime within a reporting district, or, by ratio (X number of licenses per X number of people within a given census tract). Per ABC, a total of six (6) licenses are permitted in the census tract and there are currently eight (8) existing licenses within the census tract where Walgreens is located. The review criteria for granting a PCN requires the applicant to demonstrate and justify why the granting of an additional liquor license would serve a segment of the population which is not currently being served and thereby provide a public convenience or necessity. The applicant has stated that the addition of alcohol sales to their business would serve customers who are interested in a one-stop shopping experience where the customer can buy a range of products at one location rather than having to travel, park and pay at a variety of different stores. The applicant has also stated that similar markets (CVS, Rite Aid, and Target) in and around the area offer alcohol sales and that the Type 20 beer and wine license is necessary to stay competitive with similar retailers. On April 19, 2010 this application was denied by the Community Development and Police Departments. The denial was based on evidence that suggests that the new license will not offer a service to the area that is not already being provided; and that no public convenience would be served by the issuance of the additional liquor license. Staff would agree that the additional license would serve the market s existing customers, but that is not part of the review criteria. Staff found that there are numerous other retailers in the area that currently provide alcohol sales. While staff is sympathetic towards the applicant s desire to grow as a neighborhood one-stop shopping market, the fact remains that the City has an overconcentration of alcohol licenses in and around the proposed location. This overconcentration can be seen in Attachment 3 which clearly shows an overconcentration of existing alcohol licenses in census tracts 109.02, 110.01, 108 and 111. On April 29, 2010 the applicant submitted an application to appeal staff s decision to deny the PCN to the Planning Commission. The applicant stated the appeal was based on Walgreens desire to be on an equal playing field with their competitors that also sell beer, wine and liquor such as CVS, Costco, Target, and Wal-Mart. On June 17, 2010 the Planning Commission denied the applicant s appeal citing a lack of supporting evidence to justify the need for an additional license in an already over concentrated area (See Attachment A Planning Commission Memo) Discussion In reviewing all applications for public convenience or necessity, the Community Development Director and Police Chief, or their designees, shall consider the following factors: 1. The type of proposed use by the license: The applicant proposes to add a Type-20 beer and wine liquor license for off-site consumption to the existing general market use.

SUBJECT: Appeal of Planning Commission Denial of a Letter of Public Convenience or Necessity for Walgreens Type-20 Liquor License PAGE: ITEM: 3 2. Whether the proposed use will be detrimental to the health, safety and welfare of the community: Approval of a Type-20 liquor license would not pose a significant threat to the health, safety and welfare of the general public. 3. Whether the use would enhance the economic viability of the area in which it is proposed to be located: The addition of alcoholic beverages to the existing market would provide customers with the opportunity for a one-stop-shop general retailer. With the addition of alcoholic beverages, it is likely that the city would see an increase in sales tax revenues generated by the additional sales. 4. The extent to which the proposed license would be compatible with existing uses in the area: The subject site is located in a General Commercial (C-2) Zone. General retailers such as Walgreens are considered a permitted use in said zone. Surrounding uses include restaurants, general retailers, service stations, and office uses all of which are appropriate uses within a (C-2) zone. 5. The number of licenses within a one-mile radius of the proposed licensed location: The City of Woodland Police Department reports a minimum of ten (10) liquor licenses within a onemile radius of the subject site. 6. The type of alcoholic-licensed premises within one-mile radius of the proposed licensed location and the extent to which the proposed license would cause a further overconcentration of that particular type of premises in the area: The following businesses hold an active liquor license within a one-mile radius of the subject site: License Type Business Name Street Address Type-20 USA Gasoline 3 Main Street Type-20 Chevron 5 W. Main Street Type-21 Romey s Liquor 3 Purity Plaza Type 21 Nugget Market 157 Main Street Type-21 CVS pharmacy 7 W. Main Street Type-20 Economy Food Store 7 W. Court Street Type-21 La Superior 34 W. Court Street Type-21 Mis Amigos Market 120 Main Street Type-20 Dollar Tree 632 Cottonwood Street Type-20 7 Eleven 301 Cottonwood Street 7. The background of the proposed licensee and the history, including the nature and extent of the problems on any premises where he or she has operated an alcohol licensed business in

SUBJECT: Appeal of Planning Commission Denial of a Letter of Public Convenience or Necessity for Walgreens Type-20 Liquor License PAGE: ITEM: 4 the past: The Police Department has not cited any major issues and/or problems with the subject site. According to the Community Development Department, Walgreens currently holds an active business license and has had no issues with code enforcement. 8. How close the proposed establishment will be to residential neighborhood, place of worship, or school: Walgreens is within one-mile of Harriet Lee Middle school, the Holy Rosary Academy and Woodland High School. The site is also less than a half-mile to a multi-family development as well as a single-family residential neighborhood. 9. Whether there is history of police or crime-related problems in the area proposed for license: The Police Department cites no issues with the subject property however they have responded to calls within adjacent shopping centers and residential neighborhoods. 10. Whether the proposed license would enhance recreational or entertainment opportunities in the area: Neither the Police or Community Development Departments believe that issuance of this type-20 liquor license would enhance recreation or entertainment opportunities in this area beyond that which is already provided. 11. Whether the proposed licensee will agree, in writing to comply with any or all of the conditions imposed on the license: The applicant/owner has stated that they will agree, in writing to conditions of approval that would allow for the off-sale of beer and wine at the subject site. As a result of the Community Development and Police Department s review of the factors above, the PCN was denied. The primary factors were the number of licenses as summarized in response to items #5 and #6. Fiscal Impact There is no impact to the City s budget as the applicant paid the $227 appeal fee with the application. Public Contact A legal notice was published in the Woodland Daily Democrat 10-days prior to the hearing, notice of hearing was sent to all property owners within 300-feet of the project site, and the item was posted on the City Council Agenda.

SUBJECT: Appeal of Planning Commission Denial of a Letter of Public Convenience or Necessity for Walgreens Type-20 Liquor License PAGE: ITEM: 5 Commission Recommendation In general, the discussion over the PCN by the Planning Commissioner was thorough and both sides of the issue were discussed. The Commission on a 3 to 2 vote believed that an overconcentration did exist, and the issuance of additional liquor license would not serve a public convenience or provide a necessity to the surrounding public. Two Commissioners did express interest is approving the PCN citing that without a Type-20 license, Walgreens would be at a competitive disadvantage with like retailers. One Commissioner suggested putting Walgreens on a waiting list for the next available liquor license. The Planning Commission did consider approving the PCN with conditions of approval that were prepared by the City of Woodland Police Department and discussed with the applicant and Walgreens prior to the Planning Commission meeting (See Attachment C Conditions of Approval). While this option was seriously considered, the Commission cited the need to uphold the standards that both the city and ABC provide when reviewing applications for liquor licenses and moved to deny the PCN with conditions of approval. Alternative Course or Action 1. Conduct a public hearing on the Walgreen s appeal and deny the applicant a letter of Public Convenience or Necessity (PCN) for the issuance of a Type-20 liquor license for the off-sale of beer and wine at Walgreens 10 W. Main Street. 2. Conduct a Public Hearing and approve a letter of Public Convenience or Necessity (PCN) with conditions of approval for the issuance of a Type-20 liquor license for the off-same of beer and wine at 10 W. Main Street. Recommendation for Action Staff recommends that the City Council approve Alternative No. 1. Prepared by: Jimmy A. Stillman Associate Planner Reviewed by: Cindy Norris Principal Planner Reviewed by: Paul Siegel Deputy Director

SUBJECT: Appeal of Planning Commission Denial of a Letter of Public Convenience or Necessity for Walgreens Type-20 Liquor License PAGE: ITEM: 6 Mark G. Deven City Manager Attachment A: - Planning Commission memo dated June 17, 2010 Attachment B: - Notice of Appeal received June 30, 2010 Attachment C: - Conditions of Approval dated May 25, 2010