1 STAFF REPORT
DATE: July 30, 2024
TO: Justin Hess, City Manager
FROM: Patrick Prescott, Community Development Director Joseph H. McDougall, City Attorney
BY: Jill Vander Borght, Senior Assistant City Attorney
SUBJECT: Approval of Funding f or Incentivizing the Transition of Legal Non- Conforming Firearms Retailer Businesses
RECOMMENDATION
1. Approve a monetary incentive of up to $150,000 per interested f irearms retailer business to assist with business transitions; and
2. Approve a budget amendment to the Fiscal Year 2024- 25 Adopted Budget appropriating up to $300,000 to implement the incentivization program; and
3. Authorize the Community Development Director to execute agreements, in a form approved by the City Attorney, with any interested retailers to transition away from firearms and ammunition sales.
BACKGROUND
On April 23, 2024, staff presented a report to Council explaining that, during outreach for the newly adopted firearms retail ordinances, some local retailers expressed openness to the possibility of exiting the firearms retail business by either transitioning their business or closing permanently with an incentive.
Council directed staff to explore incentivization including discussions with any interested parties, as well as determining a reasonable cost estimate for such a proposal. Staff has completed this work and seeks Council authority to proceed.
COMMUNITY
DEVELOPMENT
2 DISCUSSION
Staff met with four existing firearms retailer s who expressed interest in incentivization after the April 23, 2024, Council meeting. Since that time, two of the four did not renew their local license despite repeated warnings and offers of assistance and are no longer eligible to sell firearms in the City, reducing the number of current retailers in the City from 14 to 12. Staff would like to negotiate with the remaining two interested firearms retailers to relinquish their legal nonconforming status at a cost to the City of up to and no greater than $150,000 for each business. The money will assist retailers with past due rent or leasing fees , costs associated with terminating rental or lease agreements and agreements with vendors, offloading inventory, and reconcil ing other costs associated with transitioning or permanently closing operations.
ENVIRONMENTAL REVIEW
This activity has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment and, as such, is not a “project” subject to the requirements of the California Environmental Quality Act (CEQA) 14 Cal. Code Regs § 15378.
FISCAL IMPACT
The fiscal impact to the City would be as much as $300,000 based on providing incentivization of up to $150,000 per interested retailer. Currently, two out of the twelve eligible licensed firearm retailers operating in the City are interested in considering the incentivization offer. Staff is requesting City Council authority to amend the Fiscal Year 2024-25 Adopted Budget by appropriating up to $300 ,000 from account number 001.ND000.30010.0000.00000.000000 (General Fund, Non- Departmental, Unassigned Fund Balance) to expenditure account number 001.ND01A.62195.1000.00000.000000 (General Fund, Non- Departmental, Economic Development Agreements, Business Assistance Program). Funds will be used to assist firearms retailers in transitioning their business or closing permanently.
CONCLUSION
The City has a unique opportunity to assist a limited number of firearm retailers to comply with the evolving regulatory landscape. Staff will return to Council in the event additional businesses seek an incentive to transition away from selling firearms and ammunition.
ATTACHMENTS
None.