CC 2024-02-13_10b Formula Business
Amendments to Title 16 of the Arroyo Grande Municipal Code regarding the Definition of Formula Business
2/13/2024
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Summary of Action
Introduction of a proposed ordinance amending Title 16 of the AGMC regarding the definition of a Formula Business and finding that this action is exempt from review under CEQA.
2/13/2024
Introducing the ordinance will allow for adoption at a future City Council meeting following this noticed public hearing.
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Background
March 2005 – City Council directs staff to research alternatives
April 2005 – City Council study session
Proliferation of formula businesses
Detract from character of architecturally distinct district
Cause start-up independent retail businesses to be priced out
August 2005 – City Council approves ordinance
Prohibited formula business in VCD and VMU/HCO
Included definition of formula business
2/13/2024
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VCD & VMU/HCO
2/13/2024
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Background
“Formula business”. Shall mean a business, limited to retail trade uses and restaurants, that is required by contractual or other arrangement to maintain standardized services and the
same or similar name, tradename, or trademark which causes it to be substantially identical to six (6) or more other establishments, regardless of ownership or location, and which satisfies
one of the following two criteria:
It has exterior design or architecture, signs, décor or similar features in a style which is distinctive to and standardized among the chain or group;
It is a fast food restaurant.
2/13/2024
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Background
Includes retail trade and restaurant uses
Excludes offices, hotels, or inns
Allows opportunity for local start up stores or restaurants
Fast food restaurants – more than 6 – prohibited
Sit down restaurants and retail – more than 6 – prohibited unless:
Exterior design or architecture, signs, décor, or similar features in a style which is distinctive to and standardized among the chain or group.
2/13/2024
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Background
2023 – New application for ice cream shop
Five other store locations – did not meet formula business definition
May 23, 2023 City Council
Expressed concerns about formula businesses in the Village
Directed staff to review the definition and return with study session
2/13/2024
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Background
October 10, 2023 – City Council Study Session
City Council directed staff to return with an amendment to the definition:
Increase the six (6) establishment threshold; and
Definition should apply to all business types; and
Removal of the two criteria in the definition.
2/13/2024
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Background
January 16, 2024 – Planning Commission
Recommended approval of the ordinance amendment as proposed and forwarding to City Council for adoption.
2/13/2024
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Analysis
Definition of Formula Businesses:
Inclusive of both retail and restaurants, AND
Is required by contractual or other arrangement to maintain standardized services and the same or similar name, tradename, or trademark which causes it to be substantially identical
to six (6) or more other establishments, regardless of ownership or location.
In addition, must meet one of the following:
It as exterior design or architecture, signs, décor, or similar features in a style which is distinctive to and standardized among the chain or group, or
It is a fast food restaurant
2/13/2024
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Proposed Revisions
Expansion to All Businesses
Currently limited to retail and restaurants
Would remove categories and apply to all businesses
Qualifying Criteria
Removes “a” and “b” criteria from definition
Closes the “loophole” that would allow some formula businesses
Number of Locations
Increases allowed number of establishments from 6 to 10
Maintains identify of Village without stifling economic development
2/13/2024
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Proposed Revisions
“Formula business”. Shall mean a business, limited to retail trade uses and restaurants, that is required by contractual or other arrangement to maintain standardized services and the
same or similar name, tradename, or trademark which causes it to be substantially identical to six (6) ten (10) or more other establishments at the time of application submittal, regardless
of ownership or location., and which satisfies one of the following two criteria:
It has exterior design or architecture, signs, décor or similar features in a style which is distinctive to and standardized among the chain or group;
It is a fast food restaurant.
2/13/2024
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Legally Non-Conforming
2/13/2024
Expansion to all businesses creates legal non-conforming businesses
Non-Conforming uses would be discontinued if:
Use is changed to a conforming use
Use discontinued for a contiguous period of 180 days or more
Non-Conforming uses can continue through:
Change of ownership, tenancy, or management if the building, land use, or activity is substantially unchanged.
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General Plan Consistency
2/13/2024
Supported by General Plan policies
Economic Development Policy ED-2, 3-4, and 5-4 support small-town character and maintaining Village as a vibrant downtown core
Land Use Element Policy LU6 supports maintaining the Village core as a “symbolic, function and unique business center of the City”.
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Alternatives
Introduce the attached Ordinance; or
Modify as appropriate and introduce the modified Ordinance; or
Do not introduce the Ordinance and provide direction on specific revisions; or
Provide other direction to staff.
2/13/2024
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Recommendation
Introduce, ready by title only, and waive further reading of an Ordinance amending Section 16.04.070 of the AGMC regarding the definition of Formula Business;
Find the Ordinance exempt from CEQA because the Ordinance has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment.
2/13/2024
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