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PC Min - 01/08/2013CITY OF CAMPBELL PLANNING COMMISSION MINUTES 7:30 P.M. TUESDAY JANUARY 8, 2013 CITY HALL COUNCIL CHAMBERS The Planning Commission meeting of January 8, 2013, was called to order at 7:30 p.m., in the Council Chambers, 70 North First Street, Campbell, California by Chair Reynolds and the following proceedings were had, to wit: ROLL CALL Commissioners Present: Commissioners Absent: Staff Present: APPROVAL OF MINUTES Chair: Vice Chair: Commissioner: Commissioner: Commissioner: Commissioner: Commissioner: Interim Community Development Director: Associate Planner: City Attorney: Recording Secretary: Philip C. Reynolds, Jr. Paul Resnikoff Brian Brennan Pam Finch John Razumich Bob Roseberry Elizabeth Gibbons Paul Kermoyan Steve Prosser William Seligmann Corinne Shinn Motion: Upon motion by Commissioner Brennan, seconded by Commissioner Finch, the Planning Commission minutes of the meeting of December 11, 2012, were approved. (6-0-1; Commissioner Gibbons was absent) Campbell Planning Commission Minutes for January 8, 2013 Page 2 COMMUNICATIONS 1. Desk item for Item 1. 2. Desk item for Item 2. 3. Item from Applicant for Item 1. 4. Director's Report (left out of packets). AGENDA MODIFICATIONS OR POSTPONEMENTS There were no agenda modifications or postponements. ORAL REQUESTS There were no oral requests. *** PUBLIC HEARINGS Chair Reynolds read Agenda Item No. 1 into the record as follows: 1. PLN2012-156 Public Hearing to consider the application of Heritage Realty Heritage Group, LLC, for a second Extension of Approval (PLN2012-156) Realty Group of a previously-approved Planned Development Permit (PLN2007-144) to allow the construction of five townhome units on properties located at 258 & 268 Union Avenue in a P-D (Planned Development) Zoning District. A Mitigated Negative Declaration was previously adopted for this project. Tentative City Council Meeting Date: February 5, 2013. Project Planner: Steve Prosser, Associate Planner Mr. Steve Prosser, Associate Planner, presented the staff report as follows: • Described the project site as being south of Apricot on the east side of Union Avenue. It consists of two contiguous properties currently developed with single family residences. • Reported that the Planned Development was originally approved in 2008. • Advised that a Zone Change was processed at that time that changed the previous R-3 and C-PD zoning designations to PD zoning. A Tentative Subdivision Map was approved to allow five residential and one common lot and a Planned Development Permit to allow five new attached townhome units. • Reported that the Planning Commission recommended denial of the project. Because the same property owner also owns the adjacent lot located at the corner of Apricot and Union, the Commission felt that property should have become a part of this development. However, Council determined the project as proposed was feasible and approved it. • Reminded that by 2010, the economic downturn had left much of proposed development stagnant or suspended. In 2010, the applicant requested atwo-year Extension of Approval, which came to the Planning Commission for review. The Planning Commission recommended Council approval of this extension. At that Campbell Planning Commission Minutes for January 8, 2013 Page 3 time it was determined that agood-faith effort had been made by the applicant to progress the project including the submittal of the final map application to Public Works as well as construction drawings to E3uilding. The City Council extended the approval for two years through 2012. • Said that the Zoning remains PD (Planned Development). • Advised that the State of California automatically extended the approval duration for Tentative Subdivision maps whereby this map now expires on June 3, 2015. However, the mandated extension of maps does not also extend development entitlements. • Said that the applicant submitted an application to extend their entitlements prior to the project's expiration date. The project is unconstructed and is here now in January 2013 for reconsideration. • Explained that to extend the Planned Development Permit, the Planning Commission must make the finding that agood-faith effort has been made to progress the project. However, there has been no further activity since the first extension was granted. The argument that the continued economic downtown is a factor cannot be supported due to the fact that other projects that were delayed at the same time have since been revitalized and are under construction. • Described this site as 16,000 square feet. Other similarly sized projects include a four single-family detached project on Virginia that is almost to completion. • Added that other development underway includes new single-family on vacant properties, larger projects such as 21 residential units on Gale and very large project such as Merrill Gardens. There are pending apartment projects and the Riverside project consisting of 106 condos at 651 W. Hamilton Avenue. Staff has just received a new application for another four unit small-lot single-family development on Kennedy, which is on a site of similar size to this one. This demonstrates that there is active backing of construction by financial institutions. • Reminded that there has been a lack of progress on this development so staff is recommending that the Commission adopt a resolution denying this Extension of Approval. While staff supports development on this site, perhaps this is not the right project. Director Paul Kermoyan: • Said that the staff recommendation against this Extension of Approval is not against the developer. • Added that condos are the first to go down in value in a downturn and the last to go back up. Apartments and single-family detached units are what are going forward right now. • Assured that viable development is possible on this property but it may be that a different type of project is more possible to achieve at this time. Chair Reynolds opened the Public Hearing for Agenda Item No. 1. Jeff Mar, Heritage Realty Group, Applicant: • Reminded that the Zone Change is approved and the Tentative Subdivision is approved to 2015. He is here to seek an Extension for the Planned Development Permit. Campbell Planning Commission Minutes for January 8, 2013 Page 4 • Advised that a material board is circulating. • Said that the site is three blocks south of Pruneyard on the same side of street as the new park that just opened. • Described the surrounding uses as C-PD, R-3 and multi-family residential units. • Added that there are three structures on the site currently. Two lots will be merged with one structure to be located on the northern portion and parking on the southern side. There will be one curb cut site access from Union Avenue. • Said that a letter was submitted by nearby neighbors citing traffic and safety concerns. He said that reducing entrances (curb cut) to one onto Union Avenue helps reduce impacts as does containing all visitor parking on site in marked visitor parking spaces. Right now there is no street parking along Union so visitors to the current homes must park on side streets including Apricot Avenue. • Said that as to the financial situation, the stats bear out that residential detached market has been pretty good. The single-family market topped out in the second part of 2007 and bottomed out in 2009. In the fourth quarter of 2012, the average price is $740,000. • Added that as for the condo market, the top average price was $556,000 in the second quarter of 2006 while the bottom was the fourth quarter of 2011 when the average price fell to $379,000. For the fourth quarter of 2012, the average rose to $432,000. • Reminded that they originally came to the Planning Commission in 2006/2007 which represented the top of the market. • Reiterated that the tough part of the project is the financing. Speculative condos are kind of a dirty word in lending right now. While the bottom of the condo market was about 12 months ago, there is still a ways to go to come back and narrow the gap between the top and bottom of market. • Said that this project is asingle-family attached project, which is the highest and best use of the site. • Assured that they believe in the product today and want to move forward. • Added that they would likely be working with a smaller local lender such as Legacy rather than with a major lender like BofA. Legacy wants to see a few more quarters in positive growth in condo values. Commissioner Resnikoff asked Mr. Jeff Mar if given the Campbell home price comparison they had considered detached homes or inclusion of the third lot. Mr. Jeff Mar: • Said that he thinks their project is appropriate for this neighborhood. • Added that they would need a second entrance point if they were to include the third parcel. Using cluster housing, they would just not be able to get the same synergy with the project using all three lots. • Said that as proposed what you will see will appear like atwo-story structure. It will look like a big house. There would be different massing as seen from Union if these were detached single family. • Assured that the market for condos is coming back. This is a great project that will serve young families and empty nesters. It will be closer to condo pricing and represents transition housing for people who can't afford detached single family. Campbell Planning Commission Minutes for January 8, 2013 Page 5 Commissioner Resnikoff asked if there are any future plans to develop the third lot. Mr. Jeff Mar said that they just put on a new roof a couple of years ago. That home was in the best condition of the three homes on the three lots. It is on a corner lot that faces onto Apricot. Commissioner Resnikoff asked if they plan to leave that house as it is. Mr. Jeff Mar replied correct. Commissioner Resnikoff asked what if they are not able to secure the necessary financing. Will they then look at another type of development or just abandon the project. Mr. Jeff Mar: • Said that there is still a ways to go as it is just the beginning of the upward cycle. • Added that since the last approval was secured for this project, they have invested quite a few dollars in revising plans to meet new Code requirements including the Storm Water Management modifications requested by the Public Works Department. Commissioner Resnikoff asked if they have approached other lenders in addition to USB (formerly Legacy). He pointed out that their letter states that this spec project is not their typical project. Mr. Jeff Mar: • Said that while they typically don't, they are doing local lending. • Stated that this project would ultimately be funded by a small local bank, be built local and bought by locals. • Advised that they have retained a mortgage broker. There is lots of interest. They have relationships with lenders. • Said that 12 months from now they will not have this same problem with lending. • Reiterated that they would likely not be working with the bigger lenders such as BofA or Chase. Commissioner Brennan asked if there have been any other "good faith" efforts to progress this project on top of the revised plans and preparation of the Storm Water Management Plan. Mr. Jeff Mar: • Said that they are excited about the market coming back. • Pointed out that there are not a lot of similar projects pending. • Reminded that this location is close to Light Rail. • Added that building codes have changed and this project will be a state of the art project. Campbell Planning Commission Minutes for January 8, 2013 Page 6 • Advised that storm water must be treated on site before dumping onto the street. There is a greening of the building process. It will be a more energy-efficient project. • Assured that Campbell will not lose with this project. • Added that the original homes currently on site would be retained should this project not be built. • Said that they would like to see the extension be concurrent with the Tentative Subdivision Map expiration date of June 3, 2015. Commissioner Finch: • Advised Mr. Jeff Mar that she is a realtor. • Stated that she is excited about a project like this in Campbell as there are not enough of these to go around. There is a lack of inventory so these will be snatched up. • Added that the design is appealing. Mr. Jeff Mar agreed that the price point would be desirable. Commissioner Finch asked Mr. Jeff Mar why there has been such a delay and what is the construction time frame. Mr. Jeff Mar advised that the construction time frame is 12 months. Commissioner Finch asked Mr. Jeff Mar if these units are condo or PUD ownership. Mr. Jeff Mar replied owned units. Commissioner Razumich: • Said that he understands the situation as he works with a small commercial developer. • Said that this is a tough decision. Does the Commission talk about the project it has? Does it talk about the market? • Pointed out that Robson has a small home project underway. • Asked Mr. Jeff Marto identify some of his company's projects in the last five years. • Questioned why getting this project going has been such a challenge. While he hears the issue of financing troubles it seems the market has come back. How have they done this in the past? How do they plan to do it in the future? Mr. Jeff Mar: • Said that they have been located in Campbell fora long time. They have constructed projects ranging from single family to office to apartments. • Stated that there are older residences currently on this property. It is a good idea to redevelop the land with more units. • Assured that the economy is the only reason this project hasn't moved forward. • Added that they see this project moving forward in the next 12 to 18 months. Campbell Planning Commission Minutes for January 8, 2013 Page 7 Commission Razumich asked Mr. Jeff Mar if he has done residential projects in Campbell. Mr. Jeff Mar replied not yet in Campbell or the South Bay. Commissioner Razumich asked about this Extension in relation to the Map Extension. Director Paul Kermoyan said that the Map Extension is a separate issue from the entitlement Extension for the PD Permit. Planner Steve Prosser: • Reminded that there are desk items this evening relating to this project. This includes correspondence from one neighbor who asked for a continuance and a petition signed by owners of six residences who are in opposition to this project. • Said that the applicant submitted an original set of plans that were routed to all departments for review. Upon review, each department offers revision requests. From that the City generated a comments letter requiring updates to plans. • Added that the applicant's response was a reactive process rather than proactive good faith attempt to progress the project. Commissioner Resnikoff asked if the writer of the second letter, a neighbor who could not attend this evening's meeting, has other issues. Planner Steve Prosser replied that he has the same types of concerns as the others. Commissioner Brennan said that it appears that even if this Extension is granted the applicant will need to wait for the financing to proceed. He asked staff what they should or could have done to demonstrate good faith efforts to progress the project. Planner Steve Prosser said the final map should have been scheduled for approval. It should have been prepared by an engineer and made ready for recordation. Those steps would allow construction to begin once financing is secured. Director Paul Kermoyan: • Added that another step could have been to complete construction drawings. • Advised that LID Storm Water requirements have been in effect since January 2012. They have to do it. • Said that they need to make their changes and be ready to go when financing is secured. • Stated that the Department prides itself on processing quickly to help get a project to development. • Opined that this project will have some difficulties. Commissioner Roseberry asked when the comment letter was issued to this applicant. Planner Steve Prosser replied prior to July 30, 2012. Campbell Planning Commission Minutes for January 8, 2013 Page 8 Commissioner Resnikoff asked staff whether a typical model of good faith efforts would include approaching several different lenders. Director Paul Kermoyan said that staff doesn't typically see that. Staff sees the activity itself such as working to record the final map in order to be ready to break ground once financing is secured. Ms. Stephanie Politzer, Resident on Central Park Drive: • Asked for clarification as to where this project is going to be. Planner Steve Prosser advised that it is two parcels located just south of Apricot Avenue. Ms. Stephanie Politzer said that she thinks it will look nice and she would support that project. Chair Reynolds closed the Public Hearing for Agenda Item No. 1. Commissioner Roseberry: • Said that he doesn't think any current members of the Planning Commission, except for him and Commissioner Gibbons, were on when this project was originally considered. • Said that it is fairly straight forward as the applicant waits to see if they can secure financing. There is still a shot at getting this project done. • Added that the first extension was reasonable although it is hard to judge financing efforts. • Stated that he didn't see this as an unreasonable request given the economic times. This project was well vetted out. It had been bigger when it began. They ended up with something that everyone was fairly satisfied with. • Pointed out that if the Commission says no to an extension, they will have to go back to another process with a similar project. That results in lost time. • Opined that this project is pretty decent and he thinks the extension should be given. • Added that two years is arbitrary. Perhaps a lesser amount of time could be considered. Commissioner Razumich: • Said that the good faith effort is demonstrated by the amount of time spent on the project. • Added that it is a well done project. • Said that it is tough to evaluate. We can talk about the market. • Opined that by reaching out to the right people lending is possible. • Pointed out that the Planning Commission originally put this project through the wringer. • Said that it would be nice to see something done there. It will be nice to give the applicant the time to move forward and to see progress on the project as well. Campbell Planning Commission Minutes for January 8, 2013 Page 9 Commissioner Resnikoff: • Said that he is concerned since the letter from the potential lender indicates that they typically do not back speculative projects. • Questioned the availability of funding. Is it that there are no funds available or simply no funds for this particular project concept? • Suggested perhaps cone-year extension but that would likely not be sufficient. • Pointed out that there appears to have been little activity on the project to demonstrate good faith efforts to progress it. • Said that should this extension be denied the project could come back. • Said that while he notes the neighbor issues raised those building height issues would be raised with any project on these parcels. • Cautioned that the next project could be worse. • Stated that the main question is whether this is a financing issue or a project design issue. Commissioner Roseberry: • Said it appears that there is a punitive tone with staff. • Questioned why anyone would be worse off if this applicant is given another year to begin this project. • Reminded that this project has been through the review process and has been commented on. There is no reason not to give the project an extension. • Suggested putting a "fuse" on it and at least give the applicant the opportunity to run with it. Commissioner Resnikoff said that the issue of worse off simply means that we are just another year down the road without a viable project underway. Commissioner Roseberry said that the project went through a process before and a lot of thought went into the review of the project. He said that he likes the amount of on- site parking to be provided and feels there is no reason not to extend this approval. Commissioner Resnikoff agreed that this is a nice looking project and assured that he is not against it but he questions if the same project that was brought forward in 2008 would normally still be brought forward in 2013. Commissioner Finch said she agrees with Commissioner Roseberry to set some sort of a time limit. This is it. Put up or shut up. Commissioner Brennan: • Said that the background is not there regarding viability of financing. • Added that the question is what is going to get something built there more quickly. • Pointed out that it is hard to invest further in the project with financing uncertainty. If no one is willing to invest than perhaps the optimism is not really there on the part of the applicant. It may be indicative of viability of the project. • Advised that he would vote with the staff recommendation to deny this extension. Campbell Planning Commission Minutes for January 8, 2013 Page 10 Commissioner Razumich: • Said that he is not satisfied that enough good faith effort has been made to secure financing for this project. • Added that it would help if there were letters from more than one potential lender indicating interest in the project. • Said that he believes the market has a ways to go. Commissioner Resnikoff asked if this could be made the final extension. Director Paul Kermoyan said that they could implement performance measures. City Attorney William Seligmann advised that the applicant can't be prohibited from applying for future extensions. He added that the Commission could put in conditional triggers or the approval would expire. Commissioner Razumich said he really does not see a good faith effort. He added that the applicant likely just wants the option to proceed in case it becomes possible. Chair Reynolds: • Acknowledged the neighbors' communications and thanked them for being a part of the process. • Clarified that the Commission is not here to judge the project but rather to make a decision on allowing an extension. • Agreed with others who felt that the Apricot parcel should have been included in the project. • Added that he also agrees that there has not been a lot of good faith effort recently but he does see that a lot of work has been done by staff, the developer, the Planning Commission and the City Council. • Said that it would be a shame to see all that effort was for naught. • Advised that he would support one more extension and he hopes the applicant is able to get his financing soon. Commissioner Roseberry suggested setting performance goals and/or milestones to give a tool going forward. Chair Reynolds asked if the Commission could condition the addition of the Apricot parcel to the project. City Attorney William Seligmann: • Replied no to Chair Reynolds. • Added that the Apricot property wasn't part of the prior approval and is not before the Commission now. It also hasn't been noticed. • Advised that if the Commission chooses to grant an exception staff has not yet prepared conditions of approval. • Stated that the proper action would be to continue this item to the next meeting so staff can prepare the appropriate conditions of approval to pass along from the Commission to the Council. Campbell Planning Commission Minutes for January 8, 2013 Page 11 Commissioner Resnikoff said he doesn't see good faith but is willing to put in performance measures as long as they don't go out for two years. He suggested asix- month milestone and if it is not met the extension would be void. City Attorney William Seligmann said that was possible as long as the required milestone is clear. Commissioner Resnikoff asked if staff or the Commission itself should determine the milestones. Director Paul Kermoyan said that the Creekside Project he is overseeing has definite performance measures. He can mirror those measures as a model for this project. He suggested continuing this item to January 22"d so that staff can take a shot at creating appropriate milestones. Chair Reynolds said that staff would monitor those milestones. Director Paul Kermoyan said if the Commission provides the duration of their proposed extension, be it one, two or three years, staff can draft the series of required milestones based on that timing. Commissioner Resnikoff suggested asix-month milestone to start. Commissioner Brennan said while he finds that idea intriguing he is not comfortable that the applicant has invested a lot of effort recently. He advised he is on the fence about supporting this request. Commissioner Roseberry said that it seems odd that this has to be continued to get to the approval stage. Director Paul Kermoyan said that in an effort to not confuse the Commission by offering both approval and denial findings and conditions, staff comes forward with its recommendation. If the Commission disagrees, staff returns with a revised action. Commissioner Resnikoff suggested that conditions trigger another extension. If they fail to meet an established milestone, the approval is gone. Director Paul Kermoyan: • Said that possible milestones could include construction drawings at six months; ready for permits at 12 months and perhaps the final map at another point, and so on. If not met, the decision is void. • Added that the milestones created should be objective rather than subjective. • Recognized the work already done by the applicant. Motion: Upon motion of Commissioner Roseberry, seconded by Commissioner Razumich, the Planning Commission continued consideration of an Extension of Approval (PLN2012-156) of a previously-approved Planned Development Permit (PLN2007-144) Campbell Planning Commission Minutes for January 8, 2013 Page 12 to allow the construction of five townhome units on properties located at 258 & 268 Union Avenue, to the next meeting on January 22, 2013, to allow staff time to craft milestones and conditions of approval. (6-0-1; Commissioner Gibbons was absent) *** Chair Reynolds read Agenda Item No. 2 into the record as follows: 2. PLN2012-236 Public Hearing to consider the City Initiated application for the Staff designation of up to 16 properties as Historic Resource Inventory Properties (PLN2012-236). The following properties are under consideration as Historic Resources: 422-428 E. Campbell Avenue, 866 E. Campbell Avenue, 464 W. Campbell Avenue, 167 Harrison Avenue, 1075 W. Latimer Avenue, 96 E. Rincon Avenue, 118 E. Rincon Avenue, 166 E. Rincon Avenue, 176 E. Rincon Avenue, 186 E. Rincon Avenue, 74 N. Second Street, 119 S. Second Street, 222 N. Third Street, 61 S. Fourth Street, 68 S. Fourth Street (aka 70 S. Fourth Street) and 96 S. Fourth Street. Staff is recommending that this project be deemed Categorically Exempt under CEQA. Tentative City Council Meeting Date: February 5, 2013. Project Planner: Steve Prosser, Associate Planner Director Paul Kermoyan: • Advised that with this item there are several instances of conflict of interest with Commissioners residing within noticing distance of some of the possible HRI properties. • Said that Commissioner Razumich would need to recuse from 422-428 E. Campbell Avenue and for 74 N. Second Street. • Added that Commissioner Resnikoff will need to recuse from 222 N. Third Street. • Suggested that the Commission consider a motion for all addresses for which there are no conflicts and these three with conflicts will be dealt with separately. Mr. Steve Prosser, Associate Planner, presented the staff report as follows: • Advised that in April 2011, the Historic Preservation Board held a joint Study Session with the City Council. A Work Item was established to evaluate proposed potential additions to the City's Historic Resource Inventory (HRI). • Explained that in 1984 the City developed its original HRI with the possibility of adding additional properties in the future. • Said that in early 2012, amulti-year process began looking at 75 properties. • Added that 15 properties were evaluated based on criteria. Three of those properties were recommended to Council and thereafter designated for addition to the HRI. Campbell Planning Commission Minutes for January 8, 2013 Page 13 • Stated that for Phase II of this project, 18 properties were evaluated. The HPB did outreach to the property owners. Of those 18 owners, two asked to be removed from consideration leaving 16 properties for consideration. • Reported that a desk item was distributed this evening including a letter received today from the owner of 464 W. Campbell Avenue who is asking her property to be removed from consideration for the HRI. • Informed that the City has a policy that any owner can remove their property from consideration so tonight staff distributed revised findings that eliminate 464 W. Campbell Avenue from consideration. • Assured that there has been extensive public outreach. On October 18th an event was held at the Historical Museum. The HPB conducted a public hearing and copied its report to all potential HRI property owners. Additionally, for tonight's hearing, staff reports were provided to each owner. Only one has requested removal from this process leaving 15 remaining properties for consideration. • Said that the Planning Commission's role is to consider HPB evaluations. • Added that a majority of these HRI properties are adjacent to the Downtown core. • Advised that the Planning Commission should determine if the HRI designation conforms to the provisions of the General Plan. Desire for evaluating and finding new additions to the HRI is included as a goal in the General Plan. • Informed that there had been a concern raised about one of the proposed properties in relation to another element of the General Plan but based on that property owner's request for voluntary removal that issue is now irrelevant. • Said that staff and the HPB recommend designation of 15 properties onto the HRI. • Concluded that if the Planning Commission adopts the proposed resolution, this item would be considered by the City Council at its meeting on February 5, 2013. Director Paul Kermoyan advised that three members of the Historic Preservation Board are present this evening: Susan Blake, JoElle Hernandez and Todd Walters. Commissioner Resnikoff asked if the properties must be on the list of potentials to be added to the HRI. Planner Steve Prosser replied no. It's just a holding list. Commissioner Resnikoff asked if an owner opts out can they be added at a later date. He pointed out that the letter provided tonight indicates a deferral rather than a removal from consideration. City Attorney William Seligmann said that they don't want HRI designation now. They can request consideration at a later date. Commissioner Razumich asked if this HRI designation is part of a Mills Act 10-year agreement. Campbell Planning Commission Minutes for January 8, 2013 Page 14 Planner Steve Prosser: • Said that there are three levels of designation. There are inventory properties that are local. There are Landmark properties that are special significance in the City. The last is Historic District properties such as Alice Avenue. • Explained that one benefit of being listed on the HRI is they are then eligible for Mills Act designation. • Added that they would still have to apply for Mills Act designation and there are criteria for qualification for it. Director Paul Kermoyan: Said that the City has collected an informal inventory of properties that represent an important characteristic of this town and its history. • Said that HRI consideration is an incremental process to get properties added to the HRI list. • Added that there have been outreach efforts with the property owners. Some of the properties could go away. • Advised that there are benefits of HRI designation including eligibility for Mills Act tax advantages. Commissioner Brennan asked if a property owner could opt out if they so choose. Planner Steve Prosser reiterated that participation is voluntary. Commissioner Brennan asked what happens if someone should later appeal their inclusion on the HRI. He also asked why staff thinks people didn't respond to outreach attempts. Do owners perhaps think there are pros and/or cons to being listed? Do people just not care? Mr. Todd Walter, Member of Historic Preservation Board: • Said that outreach efforts included a mixture of attempts. • Reported that each member of HPB took a list and did personal outreach. • Added that he personally visited a number of homes and no one was there. Some units are rentals so letters had to be mailed to distant owners for whom there is likely nothing that is impacting them directly so they choose not to respond. • Agreed that the Mills Act opportunity can enhance being listed as an HRI property. Commissioner Resnikoff asked if discussions were done face to face with some of these owners or perhaps they may come back later and object to HRI designation. He asked if the mailings sent were sent registered mail. Mr. Todd Walter said that the mailings were not sent registered mail. A number of letters were sent. Door to door visits were attempted. Articles about this process were printed in the local papers. Lots of venues were incorporated to notify of this project. Chair Reynolds extended thanks to the members of the Historic Preservation Board for their efforts and work. Campbell Planning Commission Minutes for January 8, 2013 Page 15 Chair Reynolds opened the Public Hearing for Agenda Item No. 2. Ms. Stephanie Politzer, Resident on Central Park Drive: • Advised that she owns a property in Los Gatos that has a historic house located nearby. That fact made it more difficult for her to sell her property as her house is deemed to be in an historic district. • Asked if that problem could become possible here in Campbell for these property owners. Will this create historic districts for other properties located near these if they are designated on the HRI? • Cautioned that if so that would impact the whole neighborhood. Director Paul Kermoyan assured Ms. Stephanie Politzer that designating one property as historic will not have a negative effect on nearby properties. Planner Steve Prosser added that the mailings sent to these owners was sent in various formats as well as in different types of envelopes. Ms. Susan Blake, Member of Historic Preservation Board: • Described the outreach efforts saying that HPB members sent out personal letters under their own names and using their own return addresses. • Said that they also made phone calls, sent emails and went personally to visit properties. • Added that they also sponsored a social event at the Ainsley House and an open meeting in October that was held at the Museum. • Said that she is not sure why some did not respond. If they perceive no impact they probably prefer to just let it be. Commissioner Roseberry said that there is likely a negative impression on some people's part that such designation would limit them. Commissioner Resnikoff: • Said that he is fine with this process and the outreach efforts and opt out process. • Added that a good faith effort was undertaken by HPB to reach out to these owners except for perhaps a billboard or from a plane. • Pointed out that such public outreach efforts never achieve a 100 percent response. • Said he will be supportive and is prepared to make a motion. Commissioner Razumich said he reviewed all potential sites and finds this to be a great list. He added that this is a fantastic program and he will support those sites that he is allowed to vote upon. Chair Reynolds closed the Public Hearing for Agenda Item No. 2. Motion: Upon motion of Commissioner Resnikoff, seconded by Commissioner Brennan, the Planning Commission adopted Resolution No. 4087 recommending City Council remove 464 W. Campbell Planning Commission Minutes for January 8, 2013 Page 16 Campbell Avenue from consideration and to designate the following properties as Historic Resource Inventory Properties (PLN2012-236): 866 E. Campbell Avenue, 1075 W. Latimer Avenue, 96 E. Rincon Avenue, 118 E. Rincon Avenue, 166 E. Rincon Avenue, 176 E. Rincon Avenue, 186 E. Rincon Avenue, 119 S. Second Street, 61 S. Fourth Street, 68 S. Fourth Street (aka 70 S. Fourth Street) and 96 S. Fourth Street, by the following roll call vote: AYES: Brennan, Finch, Razumich, Resnikoff, Reynolds and Roseberry NOES: None ABSENT: Gibbons ABSTAIN: None Chair Reynolds said that Commissioner Resnikoff would now need to recuse himself from consideration of 222 N. Second Street. Commissioner Resnikoff left the dais and chambers. Chair Reynolds reopened the public hearing. There was no one wishing to speak so he reclosed the hearing. Motion: Upon motion of Commissioner Brennan, seconded by Commissioner Finch, the Planning Commission adopted Resolution No. 4088 recommending that City Council designate 222 N. Third Street as an Historic Resource Inventory property, by the following roll call vote: AYES: Brennan, Finch, Razumich, Reynolds and Roseberry NOES: None ABSENT: Gibbons ABSTAIN: Resnikoff Commissioner Resnikoff returned to the chambers and dais. Commissioner Razumich left the dais and chambers for the consideration of the next two properties. Chair Reynolds reopened the public hearing. There was no one wishing to speak so he reclosed the hearing. Motion: Upon motion of Commissioner Resnikoff, seconded by Commissioner Roseberry, the Planning Commission adopted Resolution No. 4089 recommending that the City Council designate 422-428 E. Campbell Avenue and 74 N. Second Street as Historic Resource Inventory properties, by the following roll call vote: AYES: Brennan, Finch, Resnikoff, Reynolds and Roseberry NOES: None ABSENT: Gibbons ABSTAIN: Razumich Campbell Planning Commission Minutes for January 8, 2013 Page 17 Commissioner Razumich returned to the chambers and dais and Commissioner Brennan departed the dais and chambers for the next property. Chair Reynolds reopened the public hearing in consideration of 167 Harrison Avenue. There was no one wishing to speak so he reclosed the hearing. Motion: Upon motion of Commissioner Resnikoff, seconded by Commissioner Finch, the Planning Commission adopted Resolution No. 4090 recommending that the City Council designate 167 Harrison Avenue as an Historic Resource Inventory property, by the following roll call vote: AYES: Finch, Razumich, Resnikoff, Reynolds and Roseberry NOES: None ABSENT: Gibbons ABSTAIN: Brennan Chair Reynolds advised that this item would be considered by the City Council at its meeting of February 5, 2013. Commissioner Brennan returned to the chambers and dais at the conclusion of this item. *~~ Commissioner Razumich recused himself due to conflict of interest so he left the dais and chambers for the remainder of this meeting. Chair Reynolds read Agenda Item No. 3 into the record as follows: 3. PLN2012-205 Public Hearing to consider the application of Carol and Hamid Pouya, C & H Pouya for a Conditional Use Permit to establish a new wine bar (Tessora's Wine Bar and Shop) that includes outdoor seating, wine sales, live entertainment and late night operational hours (open to public to 12 a.m. on Friday and Saturdays with clean up to 1 a.m.) on property located at 234 E. Campbell Avenue in the C-3 (Central Business District) Zoning District. Staff is recommending that this project be deemed Categorically Exempt under CEQA. Planning Commission action final unless appealed in writing to the City Clerk within 10 calendar days. Project Planner: Steve Prosser, Associate Planner Mr. Steve Prosser, Associate Planner, presented the staff report as follows: • Advised that the applicant is seeking a Conditional Use Permit to establish a new wine bar at 234 E. Campbell Avenue, which is located on the southern portion of Campbell Avenue between First and Second Streets. • Added that the site was previously occupied by a home design business and is currently vacant. Campbell Planning Commission Minutes for January 8, 2013 Page 18 • Explained that this wine bar (Tessora's) is currently located at the Pruneyard Shopping Center. • Said that Tessora's secured a Conditional Use Permit in 2008 for a retail wine store with ancillary wine tastings. However, this use is more in tune with a wine bar. • Stated that in 2012, the owners discussed the opportunity of converting their Pruneyard location into a wine bar instead of retail wine business. However, there are restrictions on the number of allowed restaurants at Pruneyard that have already been maxed out and have precluded this business from entering that category of use. • Said that the owners then started to look for an alternate location in the Downtown. • Stated that this proposed location (234 E. Campbell Avenue) will allow them to have 49 indoor seats, a commercial kitchen and a 24-seat outdoor seating area. They will have a Type 42 ABC license that allows sales of beer and wine. Patrons of this establishment must be 21 years of age or more. Live entertainment would be allowed between 8 and 11 p.m. on Friday and Saturday and between 2 and 10 p.m. on Sunday. • Reported that business hours are proposed to 11 p.m. from Tuesday through Thursday; to midnight on Friday and Saturday, and to 10 p.m. on Sunday. Operational hours will be one hour before business hours at the start and end of each day. • Said that the outdoor seating will consist of six tables with four seats at each table. The seating inside will consist of 49 table and bar seats. The applicant is proposing a wood barrier to create an enclosed outdoor seating area. However, staff is recommending that instead of this proposed wooden barrier that the applicants utilize planters to define the outdoor seating area. • Said that the site is zoned C-3 (Central Commercial District) and the General Plan land use designation is Central Commercial. This proposed use is allowed with a Conditional Use Permit. Under the Downtown Campbell Alcohol Policy, this is an allowable use except for a conflict with hours of operation. While sections of the Alcohol Policy allow alcohol service until 11 p.m., there is also a provision to allow alcohol service up to midnight with issuance of a Conditional Use Permit. • Advised that staff has evaluated the intent of the Policy, which is to limit alcohol service up to midnight, and staff can support this request to midnight. • Added that per the Downtown Campbell Alcohol Policy, an establishment must have food service. This site will have a commercial kitchen that will offer food pairings with wine. The site will also offer small wine and beer tastings, by the glass and retail sales of bottles. • Reported that the Police Department reviewed this request and is supportive of the proposed hours and inclusion of live entertainment with the required issuance of a Live Entertainment Permit through the Police Department. Additionally, there will be no live entertainment allowed after 11 p.m. • Said that the required findings can be made in support of allowing alcohol sales. This use is compatible with the Downtown. It will not be detrimental to the health, safety and welfare of the community. • Said in evaluating the issue of over concentration, the fact is that this would be the only wine bar in the Downtown. However, if one considers all uses with alcohol sales, this will be the 15t" such business in the Downtown. Campbell Planning Commission Minutes for January 8, 2013 Page 19 • Added that the General Plan encourages a mixture of uses. Again as this will be the only wine bar, staff finds that does not represent an over concentration. The hours proposed will prevent the creation of a nuisance. This business should not increase demand for City services. Again the Police Department is supportive as long as alcohol sales cease by midnight. • Recommended the adoption of a resolution approving this Conditional Use Permit. • Reminded the Commission that a desk item was distributed recommending the elimination of one condition of approval per advice of the City Attorney. Staff has distributed the modified conditions for consideration by the Commission this evening. Commissioner Brennan said that it seems to him that the Downtown Campbell Alcohol Policy reads that wine bars should not exceed 11 p.m. That appears to be a very clear statement of intent. Director Paul Kermoyan: • Said that he recently spoke with former Director Kirk Heinrichs about the Policy. • Added that an interpretation needs to be made and the bigger picture considered. • Reiterated that any operations after midnight are the main concern. • Reminded that the Policy also states that service up to midnight is allowed with issuance of a Conditional Use Permit. • Advised that staff believes that it can recommend allowing wine service up to midnight but that final determination is up to the Planning Commission to deliberate on. • Informed that staff has also recommended that the outdoor dining area be flanked on its corners with pots to delineate the area and otherwise leave it open as compared to the hard line created by the proposed barriers. Again staff defers to the Commission on this issue. Commissioner Resnikoff said the fact that the Police Department had no concern, was that confidence because of this specific applicant or would that opinion be the same for any wine bar in general. Director Paul Kermoyan said that the Police Department is not as concerned as a wine bar draws a different clientele. Spirits and full service alcohol establishments create different problems but wine service is not an issue. Commissioner Resnikoff asked if this business model is supportable. Director Paul Kermoyan replied that it should be just fine. Commissioner Resnikoff: • Pointed out that the applicant's letter indicated that live entertainment would not exceed four hours per day when actually the total is five hours on Saturday and Sunday. • Asked what exactly designates a full service restaurant. Is a certain percentage of that business' revenue? Campbell Planning Commission Minutes for January 8, 2013 Page 20 Planner Steve Prosser: • Replied that it is based on the character of a business. • Explained that a restaurant primarily has a business model that involves the preparation of food and alcohol service is ancillary to the dining experience. The patron comes and orders a meal. • Added that for a wine bar, wine tasting is the primary experience and only people over 21 are allowed on site. A wine bar is not required to have food to be a wine bar but a restaurant must have food to have alcohol service. Director Paul Kermoyan reiterated that this menu includes food that is to be paired with wines to be tasted. Commissioner Resnikoff asked about the separate outdoor seating and if the patio access proposed leaves adequate clearance to allow pedestrian passage along the sidewalk. Planner Steve Prosser said that this is a wider location and the area for seating is actually on private property and not on the public sidewalk. He assured that there is ample sidewalk area for pedestrians. Commissioner Resnikoff asked if consideration of over concentration just takes alcohol into account. What about provision of parking or the number of people that the Police Department feels can be kept safe in the Downtown? He asked if these issues should not be brought to the attention of Council for discussion. Director Paul Kermoyan advised that staff would participate in a Study Session with Council tentative set for February 19th. At that time they will look at the Downtown and how it is changing. Retailers are leaving and more food service is coming in. The dynamic is changing. The question is: Is that a good or a bad thing? We don't know. Commissioner Resnikoff indicated that there may now already be enough restaurants and bars in the Downtown but there appears to be no way to regulate that right now. Director Paul Kermoyan said not really. He added that there is still sufficient parking for existing and proposed uses in the Downtown. The City needs to plan and evaluate when saturation of the Downtown has been reached. Commissioner Resnikoff said that parking could be the chief issue in the future. Director Paul Kermoyan said that patrons are already being directed with signs to the available public parking lots. Chair Reynolds asked whether the Downtown Campbell Alcohol Policy is a living document that will have to be updated. He pointed out that the list of existing establishments has already changed. Is that to be updated? City Attorney William Seligmann replied that there are no current plans to change or update the Policy. It can be as the need arises. Campbell Planning Commission Minutes for January 8, 2013 Page 21 Director Paul Kermoyan said that Chaucho's has been renamed EI Guapo's. Chair Reynolds asked staff if it is possible to simply remove the one problematic sentence from that condition and retain the rest of that condition. City Attorney William Seligmann replied yes. Chair Reynolds opened the Public Hearing for Agenda Item No. 3. Hamid and Carol Pouya, Applicants and Owners, Tessora's: • Introduced themselves as the owners of Tessora's, which is currently located at the Pruneyard. Ms. Carol Pouya: • Explained that they have been operating at the Pruneyard now for about four-and- a-half years. They have a lease coming up. • Added that they have evolved from a retail space to a model of having wine and beer with good food to accompany it as well as live entertainment. • Opined that there are not a lot of places Downtown with quality live entertainment. • Said that they have established a model that has worked but they are very inhibited with what they have at the Pruneyard. They can't produce the food they'd like to produce. • Added that they want to grow and become a part of the community. They have a great little establishment. • Said that they propose the same hours as they have at the Pruneyard. • Reiterated that they want to bring their business to the Downtown and to expand their kitchen. Commissioner Finch: • Said that Tessora's is a great place. • Agreed that their music is of a different type. • Stated that the food served is excellent. The Pouyas' daughter does a great job with it and she is glad to see that they are expanding. • Added that this is great place for those who are a little older without the "kids" one finds at Katie Bloom's. • Asked what the size difference is between the two locations. Ms. Carol Pouya: • Advised that they currently have approximately 1,100 square feet and will have approximately 1,600 square feet at this new location. • Added that they are looking forward to having this outdoor seating. She said that they are proposing an enclosed outdoor seating area because of ABC requirements. Mr. Hamid Pouya asked the Commission and staff whether there is actually an ABC requirement for a fully enclosed outdoor seating area or is that not the case. He added Campbell Planning Commission Minutes for January 8, 2013 Page 22 that they had been told that their existing area at Pruneyard had to be defined. He concluded that if that is not so required they would be fine with that too. Director Paul Kermoyan advised that he had met recently with ABC staff and talked about the requirements for outdoor dining area enclosures. The response he received that this was not an ABC requirement. The liquor licensing calls for the service area to be "defined". Use of planters to delineate the outdoor dining space is a possible option. Chair Reynolds sought clarification that the proposed Type 42 liquor license is for both on and off-site service including the sales of bottles. Ms. Carol Pouya said their business does include retail sales. Chair Reynolds asked staff if the Police Department is okay with sales for off-site consumption. Director Paul Kermoyan explained that such proposals are distributed to the Police Department for comment. They receive plans and proposed operational descriptions. They indicated no concerns. Ms. Carol Pouya said that 99 percent of their current sales are wine bottles with very small percentage of beer sales. Mr. TJ Politzer, Resident on Central Park Drive: • Stated that he is here to encourage approval of this Use Permit. • Said that this is a thoughtful, well-run business currently in the Pruneyard. • Added that the entertainment they offer doesn't exist in the Downtown. They offer the opportunity to experience classic jazz, blues and folk music with artistry and craftsmanship. This entertainment aspect compliments the wine tasting aspect. Ms. Stephanie Politzer, Resident on Central Park Drive: • Agreed with the previous comments. • Said that the clients are a different clientele. They are not there to rock out or get drunk. • Added that the Pouyas are responsible owners. • Advised that she would go to Tessora's before going to any liquor store or Safeway to buy a bottle of wine. • Said this is a very classy place. • Stated that she frequents businesses in the Downtown including Nashmarkt. • Said that this business is for her generation. It is a place to enjoy with her friends and family. Ms. Rita Archer, Resident of San Jose: • Wished the Commission a Happy New Year. • Encouraged their support of this establishment. • Agreed that the entertainment offered is at a different level. It is fun and energetic. Campbell Planning Commission Minutes for January 8, 2013 Page 23 • Advised that in the past she worked with Saddle Rack for 30 years. • Said that Carol and Hamid encourage their staff to know the beers and wines sold. Their staff asks you questions about your specific tastes. Their "wine-tenders" know vintage, labels and where the wines are made. This is different from a BevMo. • Cautioned that it would be a big mistake not to let Tessora's establish in the Downtown. Ms. Isis Johnson, Resident of Santa Clara: • Said that she comes from Santa Clara to enjoy Tessora's. • Added that she has known Carol for more than 25 years. • Stated that Carol is professional in how she runs her business. Tessora's serves as their own little "Cheers" or a home away from home. • Said that single ladies can sit at the wine bar because it's not a "bar". • Advised that she didn't drink wine until Tessora's opened and found out that not all wine is bitter. It was a new experience that has been fun. • Said that she strongly believes that Tessora's clientele will follow them from their Pruneyard location to their new Downtown location. Chair Reynolds closed the Public Hearing for Agenda Item No. 3. Chair Reynolds thanked the speakers for staying this late. Commissioner Resnikoff: • Said that this business would be good for the Downtown. It has a good reputation. • Said that he would like to hear input from the other Commissioners on the issue of an 11 p.m. versus midnight closing. • Added that although the Police Department had no concern he'd like to hear from the others. Commissioner Finch: • Said that Carol Pouya is a Sommelier. That is not typical. She has a true passion for wines. • Joked that for her 11 p.m. is late. • Stated that Tessora's offers a place to go to after something else for a drink of wine and to relax and enjoy. Commissioner Roseberry: • Said that he is the last one to criticize a wine bar. • Cautioned that as nice as these people seem, it is another bar in the Downtown. • Reminded that this approval goes with the property rather than the operator. • Stated that this sounds like a great place and could be a good fit. • Added that he is supportive. Chair Reynolds: • Stated that he would be very supportive. Campbell Planning Commission Minutes for January 8, 2013 Page 24 • Added that this is a beautiful project and his wife loves good wine so they will likely become patrons. • Said that this is a good project for the Downtown. Commissioner Brennan: • Said that support for this request is a no brainer. • Cautioned that he is not comfortable going to midnight with alcohol sales. • Pointed out that what is included in the Downtown Campbell Alcohol Policy is important, particularly to those who were actively involved in creating that policy. It was a collective effort. • Added that the Policy doesn't seem to leave room for interpretation. • Advised that he cannot support wine service to midnight although he loves everything else about this project up to 11 p.m. Chair Reynolds: • Said that within the Alcohol Policy, there is discussion about various closing times. • Reminded that the Police Department is very supportive of one set time for stopping alcohol service to assist with their enforcement efforts. • Added that in this case, this is a different type of establishment. Commissioner Brennan: • Said that part of the discussion about that should have been included in the Alcohol Policy. • Concluded that what they are guided by is what is actually documented on paper. Commissioner Roseberry said that he recalls several meetings ago grappling with closing time for another new restaurant in the Downtown. He stressed the need to be consistent. Director Paul Kermoyan said that the Gastro Pub wanted a 12:30 p.m. conclusion to alcohol sales and the Commission voted for midnight. There was no appeal of that decision filed. Commissioner Resnikoff: • Said that it was held to the Policy, which is where they are now. • Asked staff whether if the Commission were to approve wine service to 11 p.m. the applicants could appeal to Council for that extra hour. Commissioner Roseberry pointed out that the Policy already does read "no later than 12 a.m." Commissioner Finch said that per page 3 of the staff report this is not a stand alone bar because of the food service that it offers. Commissioner Brennan asked what exactly a stand alone bar is. Commissioner Roseberry said where you can't get food. Campbell Planning Commission Minutes for January 8, 2013 Page 25 Director Paul Kermoyan: • Advised that there are no clear definitions in the Policy so it is left to interpretation. • Agreed that the question can be asked when a business goes from being a bar to a restaurant. • Pointed out that there is a pretty decent menu here. • Added that if it were deemed to be a restaurant they could stay open to midnight and sell alcohol. Commissioner Resnikoff asked why they don't just act as a restaurant. Commissioner Roseberry said they would lose seating capacity. Commissioner Resnikoff said that if it were a restaurant they would pick up an hour but alcohol sales would have to represent 25 percent or less of sales. Commissioner Brennan said for verification purposes that it is okay not to utilize a hard boundary to delineate an outdoor seating area. Motion: Upon motion of Commissioner Roseberry, seconded by Commissioner Finch, the Planning Commission adopted Resolution No. 4091 approving a Conditional Use Permit to establish a new wine bar (Tessora's Wine Bar and Shop) that includes outdoor seating, wine sales, live entertainment and late night operational hours (open to public to 12 a.m. on Friday and Saturdays with clean up to 1 a.m.) on property located at 234 E. Campbell Avenue, with the modification to Condition 5-E to delete the last sentence regarding advertising, by the following roll call vote: AYES: Finch, Reynolds and Roseberry NOES: Brennan and Resnikoff ABSENT: Gibbons ABSTAIN: Razumich Chair Reynolds advised that this item is final unless appealed within 10 calendar days to the City Clerk. *** REPORT OF THE COMMUNITY DEVELOPMENT DIRECTOR Director Paul Kermoyan: • Said that he was distributing the program for the League of California Cities Planning Academy, which will be held in Pasadena between February 27th and March 1St • Explained that typically new Commissioners are invited to attend but there is no mandate that they do so. Campbell Planning Commission Minutes for January 8, 2013 Page 26 • Advised that this program refreshes Commissioners on knowledge and process. They offer workshops tailored to Planning Commissioners. • Said that he has funds to send up to two Commissioners to this event that will cover registration, flight, hotel and meals. The registration deadline is February Ern ADJOURNMENT The Planning Commission meeting adjourned at 10:18 p.m. to the next Regular Planning Commission Meeting of January 22, 2013. SUBMITTED BY: (~' Y Corinne Shi n, Recording Secretary APPROVED BY: ATTEST: Phili~C. Rey~S~lds, Jr., Paul Kerrr>Ip~i'an, Secretary