Carmel-by-the-Sea City Council
August 1, 2023

The City continues to encourage affordable housing in mixeduse development. No development participated in this program. Modify to improve the incentive.

Program 3-2.1.b
Preserve and Increase Second Floor Residential Uses. Prohibit the conversion of existing second-floor residential floor space to commercial use. Require newly constructed floor space at the second floor to be used as residential units.

The City continues to preserve existing second floor residential uses and encourages the conversion of second floor commercial space to residential use. This was a successful program that resulted in protection of existing units and construction of new units.

Continue
Program 3-2.1.c Incentives for Mixed Use Affordable Housing. Explore options to further incentivize upper-story housing opportunities, such as the potential of allowing a third story when devoted to affordable housing subject to appropriate design standards, including the City’s 30-foot height limit.

The City continues to look for ways to increase affordable housing opportunities. No development participated in this program. Staff will make a concerted outreach effort to better publicize this program.

Continue.

Program 3-2.1.d
Multi-Family Residential Development Review. Monitor multi-family residential development applications to assess whether the CUP requirement (CUP for MFDs at densities 22 du/ac +) is posing an unreasonable development constraint. If it is determined that the CUP requirement is negatively affecting the cost and supply of housing, the City will initiate Zoning Code and LCP amendments to revise permit requirements for residential projects with densities greater than 22 du/ac to ensure permits are granted based on objective criteria.

The City monitored the review process for multi-family residential development and found that the Use Permit requirement for multi-family projects at densities between 23 and 33 dwelling units per acre was not a deterrent to development. The primary constraint to increased density remains a lack of water resources. However, the City remains open to eliminating the Use Permit requirement for all densities greater than 22 dwelling units per acre. While the monitoring of multi-family residential development applications did not reveal an unreasonable development constraint, the elimination of the Use Permit requirement would result in cost savings for applicants who would no longer have to pay the Use Permit application fee. Additionally, the application processing time would be reduced by eliminating one of the permit entitlements.

Modify to remove the
CUP requirement for
densities up to 33
du/ac and look at the
CUP requirements in
general that can be
removed.

Attachment 5
Appendix D – Review of Previous Housing Element D-5 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Program
Number
Programs/Actions
[The text provided in this column is a synopsis only; for complete program language please refer to the 2015 Housing Element] Achievements/Effectiveness
Continue/
Modify/
Delete
Goal G3-3: Provide adequate sites for the development of a wide range of housing types for all citizens.Program 3-3.1.a Adequate Sites. The City will encourage and facilitate the development of new dwelling units consistent with the RHNA need by continuing to work with housing providers such as the Carmel Foundation. The City will also encourage development of new affordable units through incentives and concessions outlined in Programs 3-5.4.a, 3-5.4.b, 3-5.5.a, 3-5.5.b, and 3-5.5.c of this Housing Element.

The City encouraged the construction of new dwelling units tomeet the City's RHNA requirements and promoted incentives and concessions to facilitate new construction. A lack of water resources continues to be the largest constraint to developing high-density housing.The Carmel Foundation manages 50 affordable senior housing units in Carmel. While the City has a long-standing relationship with the Foundation, they do not accept government funding, and the operating costs of the housing units result in an annual deficit. Identification of additional funding sources and housing providers should be considered while maintaining a strong relationship with the Foundation.City staff regularly promotes the incentives available for developing new affordable units when meeting with prospective developers and processing new development applications. The primary constraint to increased density remains a lack of water resources.

Modify. The City will
craft a policy
requiring minimum
densities.

Program 3-3.1.b
Surplus Sites. investigate the feasibility of utilizing surplus sites for housing development and partnering with housing providers to develop housing for lower-income households and/or senior housing on appropriate surplus sites.

The City continues to evaluate the feasibility of constructing new housing on surplus land, specifically the Sunset Center parking lot. No development partners emerged during this housing element cycle; however, discussions remain ongoing.

Modify to identify
underutilized publicly
owned sites including
Flanders Mansion,
Sunset Center
parking lots, Post
Office parking lot and
Vista Lobos.

Attachment 5
Appendix D – Review of Previous Housing Element D-6 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Program
Number
Programs/Actions
[The text provided in this column is a synopsis only; for complete program language please refer to the 2015 Housing Element] Achievements/Effectiveness
Continue/
Modify/
Delete
Program 3-3.1.c
Development on Small Sites. The City will continue incentives and provisions that facilitate development on small sites including reduced parking requirements for affordable housing projects (0.5 parking spaces per unit), density bonuses that allow for development up to 88 du/ac, flexible or in some cases no required setbacks in the R-4 zone, and lot mergers. The City will review its Lot Merger Program to determine if any refinements should be made, including a requirement that mergers be approved by the Planning Commission rather than the Director. The City may also consider incentives for commercial lot mergers when lowerincome units are provided, and eliminating any provisions of this program that have the unintended effect of restricting housing opportunities.

During the planning period, the City maintained reduced parking requirements for affordable housing projects and the density bonus provisions allowing high-density housing development of up to 88 dwelling units per acre. A lack of water resources continues to be the largest constraint to developing high-density housing.The City continued to promote incentives associated with lot mergers in the single-family district, including additional floor area for the primary dwelling and accessory dwelling units, additional site coverage, and an additional accessory structure. Lot merger applications continue to be approved by the Community Planning & Building Director. No development participated in the density bonus or setback incentive in the commercial or multi-family districts. The City did not pursue a lot merger incentive program for the commercial districts. Density bonus regulations continue to provide the greatest incentive.Most lot merger applications were for single building sites comprised of multiple legal lots of record. Merging these sites did result in the granting of incentives. New State ADU laws exceed the ADU incentive the City currently offers and should be reevaluated.

Modify to continue lot
merger approval by
Director, simplify
parking requirement
reductions,
reevaluate the
density bonus and
setback incentives.

Program 3-3.2
Address Infrastructure Constraints. Work cooperatively with the Monterey Peninsula Water Management District (MPWMD) and other regional agencies to address infrastructure limitations (e.g. sewer, water, roads) that affect the ability to serve new housing development. Grant water allocation priority to those projects that assist the City in meeting its During the planning period, the City continued to work with regional agencies such as the Monterey Peninsula Water Management District (MPWMD) and the Carmel Area Wastewater District (CAWD) to ensure adequate infrastructure is in place to accommodate new housing and maintenance of existing residential units. Additionally, the City focused on stormwater drainage improvements to reduce flooding. The Modify to further
incentivize water
allocation for lower
income units.

Attachment 5
Appendix D – Review of Previous Housing Element D-7 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Program
Number
Programs/Actions
[The text provided in this column is a synopsis only; for complete program language please refer to the 2015 Housing Element] Achievements/Effectiveness
Continue/
Modify/
Delete
share of the regional housing need for lower- and moderate-income households.

City’s Public Works Department continues to improve City infrastructure related to road maintenance and storm drains. The City continued prioritizing water allocation for lower-income units; however, no development applications were received for lower-income housing.Lack of water resources continues to be a significant constraint to housing development. The City will establish a formal policy to prioritize water allocations to affordable housing projects.

Goal G3-4: Protect the stability of residential neighborhoods by promoting year-round occupancy and neighborhood enhancementProgram 3-4.1.a Permanent Housing. Continue to implement the ordinance adopted in 1988 prohibiting short-term, transient rentals and timeshares of residential dwellings in the R-1 District.

The City continued to enforce the prohibition of short-term rentals in the single-family residential district. The City continues to use Host Compliance as part of the ongoing enforcement. On average, 27 violation letters were mailed annually during the planning period. A significant percentage of single-family homes continue to remain vacant for part of the year due to second home ownership.During the planning period, the City enforced the provisions of the Timeshare Ordinance and made minor updates to the Ordinance to increase clarity. One enforcement action was taken against a timeshare company during the planning period.

Modify to explore
methods to raise
funds from vacant
units to an affordable
housing fund,
property tax
reduction or ADU
incentive program.

Program 3-4.1.b
Conversion of R-1 Motels. Continue to allow conversion of R-1 motel units into permanent residences with the transfer of vacated rooms to the commercial district.

During the planning period, the City allowed the conversion of R-1 motels to permanent residences. Specifically, the Happy Landing Inn was converted to a permanent residence during the planning period. Additionally, a change in ownership of the Carmel Resort Inn resulted in a development application to downsize the footprint of the hotel property and construct 8 new single-family dwellings. Two of the 8 homes have been approved by the Planning Commission.

Modify to better
incentivize the
program to
encourage MFD.

Attachment 5
Appendix D – Review of Previous Housing Element D-8 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Program
Number
Programs/Actions
[The text provided in this column is a synopsis only; for complete program language please refer to the 2015 Housing Element] Achievements/Effectiveness
Continue/
Modify/
Delete
Program 3-4.2.a
Neighborhood Compatibility. Continue to enforce height, coverage and floor area standards to ensure that new construction and remodels do not present excess visual mass or bulk to public view or to adjoining properties.

Continue to enforce design standards which ensure that buildings relate to a human scale and that they avoid use of oversize design elements that make them appear dominating or monumental. Continue to require that projects not meeting adopted design guidelines be reviewed by the Planning Commission.

The City continues to review new construction for compatibility with the existing neighborhood. In 2021, the City received 26 new Track 2 Design Study planning applications for singlefamily units which required Planning Commission hearings. Delete Program 3-4.2.b
Support Community Organizations. Continue to support neighborhood organizations that promote neighborhood involvement, safety and improvement. When appropriate, develop partnerships with these organizations to promote neighborhood enhancement programs, conduct outreach, and solicit community input.

The City continues to support and partner with neighborhood organizations such as the Carmel Residents Association andthe Carmel Foundation and the more recently formed Carmel Cares.

Modify to further
support outreach and
education.

Program 3-4.3.a
Neighborhood Preservation Educational Programs. Continue to use education programs to improve public understanding of the City’s rich cultural and design heritage as a means of encouraging compatible housing design within existing neighborhoods, and provide zoning flexibility and incentives to facilitate rehabilitation of historic resources.

The City continues to implement the Historic Preservation Ordinance and the review of properties for historical significance upon submittal of a planning application. In 2021, the City reviewed 75 residential properties for historical significance and property improvements. The City uses the Historic Building Code to facilitate residential rehabilitation.

Continue.

Goal G3-5: Preserve and increase the supply of housing for lower- and moderate-income households, senior citizens and other special needs groups. Prohibit discrimination in the sale or rental of housing.Program 3-5.1 Reasonable Accommodation Procedures. Continue to implement Policy C11-01, which describes procedures to provide reasonable accommodation for persons with disabilities in compliance with the provisions of SB 520. Information on reasonable accommodation procedures shall be provided at City Hall and on the City’s website.

The City continues to promote the reasonable accommodation process to residents on a project specific basis. A number of inquiries were received throughout the planning period; however, few applications were received. All applications were approved. The City is currently evaluating the application fee to ensure it does not discourage the use of the policy.

Modify to reduce
permit fee.

Program 3-5.2
Shared Housing Information. Distribute informational materials from the Monterey County Housing Authority to the Carmel Foundation and display information at City Hall and other public buildings and posted on the City’s website.

The City continues to provide information related to shared housing information at City Hall and on the City’s website.

Modify to clarify
intent and enhance
education and
outreach.

Attachment 5
Appendix D – Review of Previous Housing Element D-9 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Program
Number
Programs/Actions
[The text provided in this column is a synopsis only; for complete program language please refer to the 2015 Housing Element] Achievements/Effectiveness
Continue/
Modify/
Delete
Program 3-5.3a
Condominium Conversions. Continue to implement condominium conversion policy, which restricts the conversion of apartments to condominiums to preserve the lower-cost rental housing options, typical of apartments, within the City. Apartments cannot be converted to condominiums unless a new apartment is being created to offset the conversion.

The City continues to implement the Condominium Conversion Ordinance to actively preserve and protect existing apartments.No formal applications for condominium conversions were submitted during the planning period and the Ordinance appears to be effective in halting conversions.

Continue
Program 3-5.3.b
Section 8 Rental Assistance. Continue to facilitate use of the Section 8 program in the community by distributing information for the program at City Hall and the Library.

The City continues to provide information regarding Section 8 rental assistance at City Hall, on the City’s website, and through the library.

Continue
Program 3-5.3.c
Subordinate Units. The City's Municipal Code allows construction of new subordinate units as a permitted use on lots of 8,000 square feet or greater to provide additional rental housing in the R-1 District to lower-income households. To further encourage the creation of subordinate units, the City will investigate potential amendments such as permitting subordinate units on smaller lots. In addition, the City will implement incentives which may include waiver/reduction of certain fees, priority processing, and reduced parking and setback requirements. The City will provide informational materials on incentives and technical assistance to property owners. The informational materials will be available at City Hall and on the City’s website.

The City has a long history of permitting Subordinate Units (now called Accessory Dwelling Units). The City reviewed the subordinate unit regulations during the planning period and adopted updated regulations to facilitate new dwelling units. The amended regulations were approved by the California Coastal Commission and incorporated into the City’s Local Coastal Plan.The City is currently working on additional amendments to the regulations in accordance with State law. During the planning period 2021, the City received 18 new applications for Accessory Dwelling Units (ADUs) and continues to issue building permits ADUs. This program was effective and will be modified to further ;encourage ADUs and Junior ADUs.

Modify to reflect
State Laws governing
ADUs and combine
regulations for
Subordinate Units
and Guest Houses to
clarify regulations.

Allow the use of
ADUs at existing
hotels as a means of
employee housing.

Program 3-5.3.d
Monitor Affordable Housing Stock. Continue to monitor affordable housing projects and work with the owners to preserve affordability through identification of funding sources and/or opportunities for partnerships with other housing providers. Annually monitor the affordable housing stock in the coastal zone to ensure the affordable housing with the coastal zone is being protected and provided as required by Government Code Section 65590. The City will track data on the new construction, demolition, conversion and replacements housing units for low- and moderate-income households within the coastal zone including the following:
• The number of new housing units approved for construction within the coastal zone;
The City continued to monitor the existing affordable housing stock in partnership with the Carmel Foundation. Other than the defunct Del Dono I and II projects, no new affordable housing units were approved in the Coastal Zone during the planning period. Additionally, no existing affordable units were demolished or converted.

Modify to update the
City database to
better track
affordable housing
and facilitate
monitoring.

Attachment 5
Appendix D – Review of Previous Housing Element D-10 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Program
Number
Programs/Actions
[The text provided in this column is a synopsis only; for complete program language please refer to the 2015 Housing Element] Achievements/Effectiveness
Continue/
Modify/
Delete
• The number of housing units for persons and families of low- and moderate-income required to be provided in new housing developments either within or within three miles of the coastal zone; • The number of existing residential dwelling units occupied by low- and moderate-income households required either within or three miles of the coastal zone that have been authorized to be demolished or converted; and • The number of residential dwelling units for low- and moderate-income persons and families that have been required for replacement (of those units being demolished or converted) within or three miles of the coastal zone
Program 3-5.4.a Density Bonus. Review and revise applicable density bonus ordinances to comply with State law.

The City adopted a new density bonus ordinance in conformance with State requirements. No development took advantage of the density bonus ordinance during the planning period possibly because the regulations are confusing and difficult to apply.

Modify to clarify
regulations.

Program 3-5.4.b
Housing for Extremely-Low Income Households. Encourage the development of housing units for households earning 30 percent or less of the Median Family Income (MFI) for Monterey County. Specific emphasis shall be placed on the provision of family housing and non-traditional housing types such as single-room-occupancy units and transitional housing. Encourage development of housing for extremely-low-income households through a variety of activities such as targeted outreach to forprofit and non-profit housing developers on at least an annual basis, providing in-kind technical assistance, fee deferrals, expedited/priority processing, identifying grant and funding opportunities, applying for or supporting applications for funding on an ongoing basis, reviewing and prioritizing local funding for developments that include housing for ELI households and/or offering additional incentives to supplement the density bonus provisions in State law.

The City continued to work with developers and promote the construction of affordable housing. Projects that included affordable housing units received expedited review. These included Del Dono I and Del Dono II. However, no applications for lower-income households were submitted during the planning period.During the planning period, the construction of Accessory Dwelling Units (ADUs) provided housing opportunities for extremely-low income households.Group Residential facilities are permitted with the approval of a Use Permit in the R-4 district. Group Residential is defined as Shared living quarters without separate kitchens or bathrooms for each room or unit, including boardinghouses, dormitories, and private residential clubs, but excluding guesthouses.

Continue
Attachment 5
Appendix D – Review of Previous Housing Element D-11 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Program
Number
Programs/Actions
[The text provided in this column is a synopsis only; for complete program language please refer to the 2015 Housing Element] Achievements/Effectiveness
Continue/
Modify/
Delete
Program 3-5.5.a
Reduced Entitlement and Development Fees. Continue to reduce the amount of fees required for projects that provide affordable housing to the extent feasible.

The City continued to waive parking requirements for apartments in the Central Commercial (CC) District. The City also provides reduced parking in-lieu fees for constructing new residential units in other commercial zones. Fee studies are conducted every 3 years. Fees are based on staff processing time. Other than the parking in-lieu fee (which has not been collected in years), the city does not impose impact fees.

Continue.

Program 3-5.5.b
Reduced Parking Requirements. Continue to offer reduced parking requirements for affordable housing developments. In addition, investigate the feasibility and effectiveness of further reducing existing in-lieu fees and amending the existing shared parking program to include housing units in affordable housing projects.

The City continued to offer reduced parking standards for affordable housing and senior housing units. The City also waived on-site parking requirements and payment of parking in-lieu fees for new apartments in the Central Commercial (CC) zoning district. Additionally, the City passed an Ordinance fixing the parking in-lieu fee at the 2003 rate until further notice. The regulations can be confusing and the City will work to better clarify the program.

Modify.

Program 3-5.5.c Expedited Processing Procedures. Continue to offer expedited review procedures for residential projects that include affordable housing units.

The City continues to expedite the review of projects that include an affordable housing component. Specifically, the City expedited the review of two housing projects, Del Dono I and Del Dono II, which included 16 residential units with 2 deedrestricted moderate-income units. Unfortunately, a lack of construction funding halted the project's construction, and the properties are now under new ownership. A revised housing proposal that includes 12 apartments is under review and does not currently include any affordable housing and therefore does not qualify for expedited processing. The expedited regulations can be confusing and the City will work to better clarify the program.

Modify to clarify and
refine expedited
processing
procedures.

Program 3-5.6.a
Energy Conservation and Green Building. Continue to review applications for new construction and substantial alterations taking into consideration solar orientation and access to sunlight. Additionally, continue to require compliance with current state building standards for energy efficiency in all new homes.

The City continues to promote energy conservation through the building plan check review process. The City will continue to implement the energy conservation requirements set forth in the Building Code and look for opportunities to promote energy conservation at City Hall and on the City website.

Modify to enhance
outreach efforts.

Attachment 5
Appendix D – Review of Previous Housing Element D-12 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Program
Number
Programs/Actions
[The text provided in this column is a synopsis only; for complete program language please refer to the 2015 Housing Element] Achievements/Effectiveness
Continue/
Modify/
Delete
Program 3-5.6.b
Water Conservation. Enforce the Water Management Program and provide information to the community on water conservation retrofits and best practices. In addition, provide information on and promote water conservation education and retrofit rebates provided by the Monterey Peninsula Water Management District.

The City continues to promote water conservation in coordination with the Monterey Peninsula Water Management District. The City will continue these efforts and look for opportunities to further promote water conservation measures.

Modify to enhance
outreach efforts.

Program 3-5.7
Fair Housing Services. The California Department of Fair Employment and Housing and the Conflict Resolution and Mediation Center of Monterey County provide fair housing services and information. These agencies advise persons in need of information on housing and employment, mediate landlord/tenant disputes and research complaints about discriminatory housing practices. The City shall coordinate with these agencies to provide printed information about fair housing services at City Hall, on the City’s website, and in other public buildings. The City shall also refer inquiries related to fair housing to these agencies.

The City provides fair housing information to provide to the public at City Hall and on the City website and will continue to maintain and update the information. The City will continue to maintain, update and look for opportunities to expand the information available to the public.

Modify to enhance
outreach efforts.

Program 3-5.8
Zoning for Transitional and Supportive Housing. In compliance with SB 2, the City will continue to allow transitional/supportive housing as a residential use, subject only to those requirements of other residential dwellings of the same type in the same zone.

The City did not receive any inquiries regarding transitional or supportive housing during this planning period.

Continue and update
the Municipal Code.

SOURCE: City of Carmel-by-the-Sea
Attachment 5
Appendix D – Review of Previous Housing Element D-13 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Production of Housing
The 2015 Housing Element identified a Regional Housing Needs Allocation of 31 housing units in City of Carmel-by-the-Sea between January 1, 2015 and June 30, 2023. The RHNA was divided into the following income categories:
ƒ 7 units affordable to extremely low- and very low-income households; ƒ 5 units affordable to low-income households;
ƒ 6 units affordable to moderate-income households; and ƒ 13 units affordable to above moderate-income households.

Table D-2 provides a summary of housing units produced in the city from 2015-2023. During the 2015–2023 planning period, 18 new units were added to the City’s housing stock, achieving approximately 58 percent of the City’s RHNA. This indicates that residential growth was slower than anticipated, which may be in part due to the COVID pandemic, the cost of land, and the overall lack of support for new housing development in the community. All units produced were affordable to households with above-moderate incomes.

Table D-2 Housing Units Produced, 2015-2023
Affordability New Construction
Need
Housing Units
Produced Percent Achieved
Very Low 7 0 0.0%
Low 5 0 0.0%
Moderate 6 0 0.0%
Above Moderate 13 18 100.0%
Total 31 18 58%
SOURCE: HCD Annual Progress Report Dashboard (as of May 19, 2023).

NOTE: This table should be updated prior to finalization to account for units through January 1, 2024.

Preservation of “At Risk” Units
The California Housing Partnership Preservation Database is the state’s most comprehensive source of information on subsidized affordable housing at risk of losing its affordable status and converting to market-rate housing.1
According to the database, there are no federal or state assisted units in Carmel-by-the-Sea. Currently, there are no affordable housing units at risk of conversion to market rate.
1 This database does not include all deed-restricted affordable units in the state, so there may be at-risk assisted units in a jurisdiction that are not captured.

Attachment 5 Attachment 2
Appendix D – Review of Previous Housing Element D-14 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Rehabilitation of Existing Units
The 2015 Housing Element identified an objective of rehabilitating a total of 16 affordable units and 784 above-moderate-income units in the 2015–2023 planning period. The City issued over 250 building permits on average each year that permitted reroofs, water heater upgrades and replacement, electrical upgrades, window repairs and replacements, remodels.

D.4 Summary
Like many communities, the City of City of Carmel-by-the-Sea experienced strong development of single-family homes, Accessory Dwelling Units and conversion of second-floor commercial space to residential units during the 2015–2023 planning period. Of the 31 units it identified in the City’s RHNA the City permitted 18 units, approximately 58 percent of the total, all of them for above moderate-income households; however, some of these units are ADUs which represent housing opportunities for lower-income housing.

The goals, objectives, and policies identified in the 2015 Housing Element were appropriate for the 2015-2023 timeframe because they complied with the program requirements mandated by State law at the time. The 6th Cycle Housing Element will be revised to address new state mandates and to put City of Carmel-by-the-Sea on track to fully meets its housing obligations.

Attachment 5 Attachment 2
List of Contacted Organizations E

APPENDIX
Attachment 5 Attachment 2
Attachment 5 Attachment 2
Table of Contents
APPENDIX E LIST OF CONTACTED ORGANIZATIONS ....................................................E-1 E.1 Introduction ........................................................................................................................... E-1 E.2 List of Contacted Organizations ......................................................................................... E-1 E.3 City Contact List .................................................................................................................... E-3 E.4 Tribal Consultation................................................................................................................ E-3 E.5 Service Organizations ........................................................................................................... E-5 E.6 Additional Outreach .............................................................................................................. E-7 Attachment 5 Attachment 2
Attachment 5 Attachment 2
Appendix E- List of Contacted Organizations E-1 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Appendix E
List of Contacted Organizations
E.1 Introduction
This appendix provides the names of organizations, tribal units, and other stakeholders that were contacted during the preparation of Carmel-by-the-Sea’s 6th Cycle Housing Element. In addition to these contacts, the City created a dedicated website called: “HOME Carmel-by-the-Sea” which can be found at https://homecarmelbythesea.com. This website provides a portal to all of the housing element related public engagement activities that were available to members of the public during the update process. This includes information on housing element basics, site surveys, stakeholder surveys, and materials from community workshops.

E.2 List of Contacted Organizations
This section provides contact information for organizations and agencies in the Monterey Bay Area that were contacted during housing element preparation.

Association of Monterey Bay Area Governments
24580 Silver Cloud Court
Monterey, CA 93940
T: (831) 883-3750
Association of Monterey Bay Area Governments (ambag.org) Monterey Peninsula Water Management District
5 Harris Court, Building G
Monterey, CA 93940
T: (831) 658-5601
Monterey Peninsula Water Management District (mpwmd.net) Carmel Area Wastewater District
3945 Rio Rd.

Carmel, CA 93922
T: (831) 624-1248
Carmel Area WasteWater District (cawd.org)
Carmel Chamber of Commerce
Ocean Ave. between Junipero and Mission
Inside Carmel Plaza 3rd Floor
Carmel, CA 93921
(831) 624-3877
Carmel Chamber of Commerce
Attachment 5 Attachment 2
Appendix E – List of Contacted Organizations E-2 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Carmel Foundation
8th and Lincoln St.

Carmel, CA93923
T: (831) 624-1588
www.carmelfoudation.org
Landwatch Monterey County
306 Capitol Street #101
Salinas, CA 93901
T: (831) 759-2824
Monterey County - LandWatch
ƒ Esperanza Carmel, Christopher Mitchell;
ƒ Carmel Realty, Bill Mitchell;
ƒ Pine Inn, Richard Gunner & Dave Tipton;
ƒ 3 Garages, Judie Profeta;
ƒ First Church of Christ, Kent Wadsworth;
ƒ Café Carmel, Greg Kraft;
ƒ Wells Fargo, Brian Buhowsky;
ƒ CBG, Montag Ivestor;
ƒ Carmel Foundation, Holly Zoller;
ƒ Carmel Presbyterian, Bob Spencer;
ƒ Yafa Property, Sandy Freschi;
ƒ Levett Properties, Denny Levett & Jeanne Cox Levett;
ƒ Doud Arcade, John Plastini;
ƒ Linggi Building / Flaherty's, Alan Buchwald;
ƒ Eric Miller Architects;
ƒ Silcon Constructors;
ƒ Carmel Plaza;
ƒ Carmel Residents Association;
ƒ Carmel Preservation Association;
ƒ Carmel Heritage Society;
ƒ Monterey Bay AIA;
Attachment 5 Attachment 2
Appendix E – List of Contacted Organizations E-3 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 ƒ Builders Exchange; and
ƒ Beesley Realty.

E.3 City Contact List
This section provides contact information for City officials that were contacted during housing element preparation.
ƒ Brandon Swanson, Director of Community Planning & Building; ƒ Marnie Waffle, ACIP, Principal Planner;
ƒ Katherine Wallace, Associate Planner;
ƒ Chip Rehrig, City Manager;
ƒ Robert Harary, Public Works Director;
ƒ Gaudenz Panzholder, Fire Chief; and
ƒ Ashlee Wright, Library and Community Activities Director.

E.4 Tribal Consultation
This section provides contact information for all tribal consultation during housing element preparation.

Irene Zwierlein, Chairperson
Amah Mutsun Tribal Band of Mission San Juan Bautista
3030 Soda Bay Road
Lakeport, CA, 95453
Valentin Lopez, Chairperson
Amah Mutsun Tribal Band
P.O. Box 5272
Galt, CA 95632
Tony Cerda, Chairperson
Costanoan Rumsen Carmel Tribe
244 E. 1st Street
Pomona, CA, 91766
Rudolph Rosales (Ulax Huchumas)
Indigenous Peoples Consultant
Esselen Nation
P.O. Box 647
Monterey, CA 93942
Attachment 5 Attachment 2
Appendix E – List of Contacted Organizations E-4 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Susan Morley, Cultural Resources
Esselen Tribe of Monterey County
3059 Bostick Avenue
Marina, CA 93933
Tom Little Bear Nason, Chairman
Esselen Tribe of Monterey County
P. O. Box 95
Carmel Valley, CA, 93924
Ann Marie Sayers, Chairperson
Indian Canyon Mutsun Band of Costanoan
P.O. Box 28
Hollister, CA, 95024
Kanyon Sayers-Roods, MLD Contact
Indian Canyon Mutsun Band of Costanoan
1615 Pearson Court
San Jose, CA, 95122
Isaac Bojorquez, Chairman
Kakoon Ta Ruk Band of Ohlone-Costanoan Indians of the Big Sur Rancheria PO Box 8355
Woodland, CA, 95776
Christanne Arias, Vice Chairperson
Ohlone/Costanoan-Esselen Nation
519 Viejo Gabriel
Soledad, CA, 93960
Louise Miranda-Ramirez, Chairperson
Ohlone/Costanoan-Esselen Nation
P.O. Box 1301
Monterey, CA, 93942
Dee Dee Ybarra, Chairperson
Rumsen Am:a Tur:ataj Ohlone
14671 Farmington Street
Hesperia, CA, 92345
Attachment 5 Attachment 2
Appendix E – List of Contacted Organizations E-5 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 Kenneth Woodrow, Chairperson
Wuksache Indian Tribe/Eshom Valley Band
1179 Rock Haven Ct.

Salinas, CA, 93906
E.5 Service Organizations
Housing Authority of the County of Monterey
123 Rico Street
Salinas, CA 93907
(831) 775-5000
Monterey County Department of Social Services
1000 South Main Street
Salinas, CA 93901
(831) 755-4448
Catholic Charities Dioceses of Monterey
922 Hilby Avenue, Suite C.

Seaside, CA 93955
Monterey Peninsula (831) 393-3110
Salinas Valley (831) 422-0602
United Way Monterey County
232 Monterey Street
Suite 200
Salinas, CA 93901
(831) 372-8026
CHISPA, Inc.
295 Main St. #100
Salinas, CA 93901
(831) 757-6251
Mid-Peninsula Housing Coalition
303 Vintage Park Drive
Suite 250
Foster City, CA 94404
(650) 356-2900
[email protected]
Habitat for Humanity Monterey Bay
108 Magnolia Street
Santa Cruz, CA 95062
(831) 469-4663
www.habitatmontereybay.com
Attachment 5 Attachment 2
Appendix E – List of Contacted Organizations E-6 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 ECHO Fair Housing Services
580 Pacific Street
Monterey, CA 93940
(831) 566-0824
https://www.echofairhousing.org/fair-housing-services.html Central Coast Center for Independent Living
318 Cayuga Street
Suite 208
Salinas, CA 93901
(831) 757-2968
https://www.cccil.org/
Center for Community Advocacy
22 West Gabilan Street
Salinas, CA 93901
(831) 753-2324
https://cca-viva.org/
The Salvation Army Good Samaritan Center
1491 Contra Costa
Seaside, California 93955
(831) 899-4911
https://montereypeninsula.salvationarmy.org/
Hope Services
1144 Fremont Blvd.,
Suite D
Seaside, CA 93955
(831) 393-1575
https://www.hopeservices.org/
Coalition of Homeless Service Providers
1942 Fremont Boulevard
Seaside, CA 93955
(831) 883-3080
https://chsp.org/
Monterey County Stand Down for Homeless Veterans
https://www.montereystanddown.org/
Diocese of Monterey
425 Church Street
Monterey, CA 93940
(831) 373-4345
https://dioceseofmonterey.org/
Attachment 5 Attachment 2
Appendix E – List of Contacted Organizations E-7 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 E.6 Additional Outreach
ƒ Website Housing Opportunities Made Easier (H.O.M.E.) for Carmel-by-the-Sea in operation April 2023. The website is presented in English with surveys in English and in Spanish.

Information continues to be posted on this website;
ƒ Housing Element Website Information Published: April 2023, May 2023, June 2023; ƒ E-Notification informing the public to, “Visit our Dedicated Housing Element Website” was sent in April 2023;
ƒ Housing Element Introduction and Overview Ad Hoc Housing Committee meeting on November 17, 2022;
ƒ March 28, 2023 a Housing Ad Hoc Committee Meeting of the Housing Element was conducted.

The meeting provided an overview of the housing feasibility study and constraints that limit housing production;
ƒ April 6, 2023 Housing Ad Hoc Committee Meeting addressed 5th cycle accomplishments and goals programs and policies;
ƒ May 24, 2023 Housing Ad Hoc Committee Meeting discussed the importance of equity, housing needs assessment information, potential 6th cycle programs and provided some strategies for sites and ways to provide feedback throughout this process; ƒ July 11, 2023 City Council meeting to provide strategic direction on public comment received; ƒ Advertisement in the local newspaper about the housing element to spark interest in the community to become involved;
ƒ City staff have spoken with property owners interested in the housing element process and about their interests in potentially redeveloping private property; ƒ June 15, 2023 a Joint City Council and Planning Commission Housing Element Workshop was held to discuss the draft Housing Element and the 30-day public comment period and to provide an opportunity for the public to give verbal feedback/comments on the draft Housing Element;
ƒ July 11, 2023, a Special meeting of the City Council to provide strategic direction related to public comment received; and
ƒ The City has implemented other methods of involvement for community members, including:
the “Housing” email Listserv, announcements listed in the “Friday Letter” and “Carmel Pine Cone”, and a survey from community members.

Attachment 5 Attachment 2
Appendix E – List of Contacted Organizations E-8 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update Public Review Draft June 2023 This side intentionally left blank.

Attachment 5 Attachment 2
ECONorthwest Feasibility Study F

APPENDIX
Attachment 5 Attachment 2
Attachment 5 Attachment 2
ECONorthwest | Portland | Seattle | Los Angeles | Eugene | Bend | Boise | econw.com 1 DATE: January 27, 2023
TO: Brandon Swanson, City of Carmel-by-the-Sea
FROM: Chris Blakney, ECONorthwest
SUBJECT: Housing Element Analysis for the City of Carmel-by-the-Sea Introduction
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RHNA6 (2023-2031) 113 74 44 118 349
Sixth Cycle Income and Rent Ranges (County of Monterey) Income Levels $0 -
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Figure 2: Carmel-by-the-Sea Zoning Map on Original Plat Source: City of Carmel-by-the-Sea (see https://planningsites.org/CarmelPlanning/) EV H A T8
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Attachment 5 Attachment 2
ECONorthwest 6
Low density retail in commercial district Example of interior courtyard Ulrika Plaza at 5th and Dolores Example of City-owned ROW site Sunset Center North Lot Example of underutilized parking Attachment 5 Attachment 2
ECONorthwest 7
Market Overview

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Attachment 5 Attachment 2
ECONorthwest 8
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Figure 5: Share of Housing Units that are Second Homes
Source: U.S. Census American Community Survey (2016-2020 estimates); Table B2500410 Nation Carmel
Total housing units 138,432,751 3,731
For seasonal, recreational, or occasional use 5,303,302 1,479 Share of housing units that are second homes 3.8% 39.6% E
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Attachment 5 Attachment 2
ECONorthwest 9
Renter Market
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Figure 6: Tenure (Rent vs. Own) by Units in Structure in Structure Source: U.S. Census American Community Survey (ACS) (2016-2020 estimates)11 Note: Tenure refers to whether a unit is occupied by someone who owns the unit (owner-occupied) or rents the unit (renteroccupied).

Unit Type Owner-Occupied Renter-Occupied Total
Single-family Detached 993 694 1,687
Single-family Attached 0 19 19
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Small Multifamily (5-19 units) 0 162 162
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Total 993 916 1,909
Tenure Split 52.0% 48.0%
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ECONorthwest 10
Figure 7: Annual Contract Rent
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Attachment 5 Attachment 2
ECONorthwest 11
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Total: 916 

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ECONorthwest 12
Figure 9: Commute Patterns, Where Employees in Carmel Live (2019) Source: U.S. Census Bureau Longitudinal Employer-Household Dynamics Data. (See https://data.census.gov/) Attachment 5
ECONorthwest 13
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Attachment 5 Attachment 2
ECONorthwest 15
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Attachment 5 Attachment 2
ECONorthwest 16

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Attachment 5 Attachment 2
ECONorthwest 17
Figure 10: Zoning Map; Carmel-by-the-SeaSource: City of Carmel-by-the-Sea



























Attachment 5
ECONorthwest 18
Figure 11: Commercial Core Study Area DefinitionSource: ECONorthwest











Attachment 5
ECONorthwest 19
Historic Resource Properties

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Attachment 5 Attachment 2
ECONorthwest 20
Figure 12: Historic Resource PropertiesSource: City of Carmel-by-the-Sea.






 





 





Attachment 5
ECONorthwest 21
Figure 13: Omitted Properties do to Existing UseSource: ECONorthwest

























































 
  
































Attachment 5
ECONorthwest 22
Figure 14: RHNA5 Sites in the Commercial CoreSource: Carmel-by-the-Sea Fifth Cycle Housing Element, Digitized by ECONorthwest













Attachment 5
ECONorthwest 23
Figure 15: Sites with Adjacent OwnershipsSource: ECONorthwest















Attachment 5
ECONorthwest 24
Land-to-Improvement Ratio

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Attachment 5 Attachment 2
ECONorthwest 25
Figure 16: Land-to-Improvement RatioSource: ECONorthwest using Monterey County Assessor’s Data









 







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Attachment 5
ECONorthwest 26
Figure 17: Total Value Per-Square-FootSource: ECONorthwest using Monterey County Assessor’s Data




















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Attachment 5
ECONorthwest 27
Figure 18: Candidate Site List Source: ECONorthwest












Attachment 5
ECONorthwest 28
Figure 19: Data Table of Candidate Sites
Source: City of Carmel-by-the Sea Planning Department
Site
ID APN Zoning Lot Size Acres Max units @ 22 DUA21
Max Units @
44 DUA22
Max Units @
88 DUA23
#1 10143001000 A-2 90,084 1.02 22 45 90
#2
10138003000 SC 7,913

0.37 8 17 33
10138021000 SC 7,949
#3
10104001000 R-4 32,136

1.28 28 57 113
10104004000 R-4 21,576
#4 10145008000 RC 7,878 0.18 3 8 16
#5 10212010000 R-1 7,637 0.18 3 8 16
#6
10095013000 RC 15,313

0.53 11 24 47
10095012000 RC 8,027
#7
10098005000 SC 4,871
10098004000 SC 4,676 0.33 7 15 30
10098006000 SC 4,901
#8
10212027000 R-1 4,014
10212004000 R-1 4,004 0.28 6 13 25
10212026000 R-1 3,994
#10
10144015000 R-1 4,155

0.18 3 8 16
10144016000 R-1 3,738
#11 10133004000
(Example) CC 6,398 0.14 3 7 13
#12
10141006000 CC 12,520

0.38 8 17 34
10141011000 CC 4,377
#13
10145012000 SC 3,632
10145024000 SC 4,030 0.30 6 14 27
10145023000 SC 4,118
#14 10142001000 SC 8,009 0.18 3 8 16
#15
10149012000 A-3 7,435

0.62 13 28 55
10149010000 A-3 7,964
10149011000 A-3 7,985
10149001000 A-3 3,615
#16
10084030000 R-1 26,874

1.10 24 49 97
10084023000 R-1 5,822
10084024000 R-1 6,016
10084022000 R-1 4,496
10084003000 R-1 3,856
#17 10097007000 8,534 .020 4 9 18
TOTAL: 7.27 acres 152 units 327 units 646 units
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Attachment 5 Attachment 2
ECONorthwest 29
Site 1: Sunset Center Lots Site

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Attachment 5 Attachment 2
ECONorthwest 30
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Attachment 5 Attachment 2
ECONorthwest 31
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ECONorthwest 32
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Attachment 5 Attachment 2
ECONorthwest 33
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ECONorthwest 34
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Attachment 5 Attachment 2

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
August 1, 2023

ORDERS OF BUSINESS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Brandon Swanson, Community Planning & Building Director APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Receive a report on non-compliant outdoor seating and amenities at restaurants and wine tasting shops that still remain after the City’s Proclamation of a Local Emergency was rescinded, and provide direction to staff on how it should be addressed RECOMMENDATION:

Receive a report on non-compliant outdoor seating and amenities at restaurants and wine tasting shops that still remain after the City’s Proclamation of a Local Emergency was rescinded, and provide direction to staff on how it should be addressed.

BACKGROUND/SUMMARY:

Executive Summary:

Staff is seeking direction on how to address non-conforming outdoor seating and amenities that were authorized during the pandemic under the City’s Proclamation of a Local Emergency. Per Council direction, they were allowed to remain after the Proclamation was rescinded so that staff could provide Council additional information prior to making a policy decision. This report details the amount of outdoor seating remaining at both restaurants and wine tasting, as well as outdoor amenities. This report also provides options for how the Council may choose to proceed.

Discussion:

Background
At the start of the Covid-19 Pandemic in March of 2020, the City adopted a Proclamation of Local Emergency (“Proclamation”). Among other things, the Proclamation gave the City Administrator authority to create rules for the protection of public health and safety. This authority led to the construction of parklets on public property, and the allowance for new or additional non-conforming outdoor seating on private property for both restaurants and wine tasting shops. Three years later, on March 7 th
, 2023, the City
Council rescinded the Proclamation. By this time, all of the parklets on public property had been removed for several months, but much of the non-conforming outdoor seating on private property still remained. As part of the presentation to Council in March, 2023, staff provided options for how to address the non- conforming outdoor seating, which was effectively considered a code violation the very next day. For restaurants, the code violation could be fixed by applying for and receiving an amendment to an existing Use Permit that increased the number of allowed outdoor seats. For wine tasting shops however, which are not allowed to have any seating outside, the Municipal Code, Wine Tasting Policy, and Local Coastal Program would have to be amended in order to legitimize those seats before a Use Permit could be granted.

Ultimately, Council directed staff to set a grace period lasting until December 31, 2023, in which no code enforcement action would be taken. During that grace period, staff was asked to return with a more detailed report on the amount of non-compliant seats and other amenities that had been installed. The purpose of this additional information was to give Council an idea of how many businesses had been benefitting from the additional unpermitted seating, and the amount of staff work to needed to process the necessary Use Permits and regulatory updates if that was the Council’s desire.

Survey
The following is a synopsis of the information that was gathered during a walking survey of all food and drink serving businesses in the Village:

Outdoor Seating:

Attempted to survey every business that sells food or drink - 79 total businesses were surveyed.

These included restaurants, wine tasting shops, markets, coffee shops, bakeries.

Of the 79 businesses surveyed, 56 had some outdoor seating (70%).

Nearly all businesses had more outdoor seating that was allowed by permit.

Seating numbers for all the businesses with outdoor seats ranged from 2 to 80.

Total outdoor seating across all businesses surveyed is approximately 1304 seats, as opposed to records showing only 433 permitted outdoor seats. (It should be noted that the difference between existing and permitted is likely smaller, since some older Use Permits could not be located at the time of this survey)
Of the 45 food service businesses with outdoors seats (excluding wine shops), only 11 are not currently permitted to have ANY outdoor seating. This seems to indicate that the increase in outdoor seats is predominantly from expanding existing permitted outdoor seating. 15 wine shops were surveyed and 11 had outdoor seating (73%).

Seat numbers for wine shops specifically, ranged from 2 to 15 with an average of 7.6 seats.

Outdoor seating for wine shops totals approximately 84, of which zero (0) are permitted.

Outdoor Amenities:

Temporary outdoor heaters are allowed without a permit. The small outdoor spaces and the abundance of wood siding and roofs creates fire safety concerns at most locations and requires consistent enforcement. Of all the business with outdoor seating, 29 used outdoor heaters (52%).

Outdoor lighting may be permitted in accordance with the Zoning and Building Codes, including with review by the Planning Commission. Of all the businesses with outdoor seating, 18 (32%) had unpermitted/non-compliant lighting.

Broadcasting speakers are not permitted outdoors for any of these uses, per the City’s Health and Safety Code. Of all the businesses with outdoor seating, 18 (32%) had unpermitted sound equipment.

The City’s Zoning Code limits the size and number of outdoor signs. Of all the businesses with outdoor seating, 9 (16%) had unpermitted/non-compliant signage.

Regulatory and Policy Considerations
Since they are treated as two separate use classifications, the considerations for wine tasting shops and restaurants are different. The considerations for outdoor amenities are also unique unto themselves. The following three sections are meant to provide some important considerations for each topic:

Restaurants:

Restaurants (includes full-line and specialty) are one of the few uses that are currently allowed to conduct business outside of a “completely enclosed building” (Link: CMC Section 17.14.070).

In all cases, the total number and location of seating for restaurants (indoors and outdoors) is controlled by a discretionary Use Permit, issued by the Planning Commission.

Restaurants are currently allowed to apply for a Use Permit to add or increase outdoor seating (Cost = Approximately $3,200). In other words, no code amendments are needed for restaurants to be able to apply for additional outdoor seating. However, approval is not guaranteed.

If all of the restaurants that currently have non-conforming seating chose to apply for a Use Permit, the total number of applications considered by the Planning Commission would be approximately 45. When outdoor seating is considered by the Planning Commission, factors for approval or denial include: Accessibility, Visibility from ROW, Existing easements, Proximity to other businesses or residences, etc. Water is not a factor in the creation of new outdoor restaurant seating, as long as the additional seating does not exceed 50% of the total approved indoor seating. For example, if a restaurant has 100 indoor seats, they may add 50 more seats outside without any additional water, for a TOTAL of 150 seats (Link: Rule 24.B.1.i – Monterey Peninsula Water Management District Rules and Regulations).

Wine Tasting Shops:

Wine tasting shops are not currently allowed to conduct business outside of a “completely enclosed building (Link: CMC Section 17.14.070).

The City’s adopted Wine Tasting Policy (2015) (Attachment 1) provides additional regulations for how wine tasting shops are operated. Although it does not speak specifically to outdoor seating, since the Municipal Code prohibits it, the Policy does say that: “In order to avoid the appearance of a bar, the wine tasting service and seating area should generally be limited to no more than 30% of the floor area of the retail space. The remaining area should primarily consist of wine-related retail display.”
The adopted Wine Tasting Policy also provides a definition of a Wine Tasting Shop as: “…a standalone establishment with a Duplicate Type 02 ABC license, in which the primary purpose [is] to encourage patrons to purchase wine for off-site consumption. Establishments should not operate as a wine bar, where the primary purpose would be for patrons to consume wine on premise other than for the purpose of wine tasting.” Given this definition, adding seats for additional consumption of wine could be considered inconsistent with the adopted Policy, and may require an amendment.

In order for wine tasting shops to be allowed to continue seating guests outside, the City’s Wine Tasting Policy, Municipal Code and Local Coastal Program (requires Costal Commission approval) would need to be amended. It is still unclear if the City’s General Plan would need to be amended as well, since this would only impact private property.

The City also has a storied history with the regulation of alcohol in general. Planning staff has written a white paper on the matter (Attachment 2), which was previously sent to Council, but is being included again given its relevance to the discussion about outdoor wine tasting.

Outdoor Amenities:

With consideration given during the pandemic for additional outdoor seating, leniency was also granted for many of the outdoor amenities that were put in place to serve those guests.

Temporary outdoor heaters do not require a permit, however they must be placed and maintained in conformance with the Fire and Building Code. Repeat violations are a very common occurrence.

Stricter penalties for improper placement could result in fewer recurring violations.

Outdoor lighting may be permitted in accordance with the Zoning and Building Codes, including with review by the Planning Commission for conformance with the City’s lighting guidelines. Nearly 1/3 of the lighting installed for the additional outdoor seating is non-compliant.

Broadcasting speakers are not permitted outdoors for any of these uses, per the City’s Health and Safety Code (Link: CMC 8.56.085).

The City’s Zoning Code limits the size and number of outdoor signs (Link: CMC 17.40.030). In most cases, only one sign is allowed. Strict enforcement of this policy can create a fair advertising environment for all businesses.

Council Direction and Next Steps
Based on the information provided above, Council is being asked to provide direction on how to proceed with addressing the non-conforming outdoor seating and amenities remaining in the Village. Since there are three unique categories of non-conformities, the direction sought for each one is detailed below, along with suggestions for how to proceed:

Restaurants:

Direction needed:

If a restaurant intends to apply for a Use Permit, should they be allowed to keep their additional un-permitted outdoor seating while they are in the process of obtaining that Use Permit from the City?
If yes, how long should they have to submit a complete application before the outdoor seating is required to be removed?
If no, how soon should all of the unpermitted outdoor seating be removed from a restaurant?
If a restaurant does not intend to apply for a Use Permit for additional outdoor seating, how soon should all of the unpermitted outdoor seating be removed? Staff Suggestion:

Allow restaurants to temporarily keep any additional outdoor seating that they intend to apply for under a Use Permit.

If a complete application (including fees) is not received by December 1 st
, 2023, then all
unpermitted seating will need to be removed immediately.

For those restaurants not intending to apply for a Use Permit, all unpermitted outdoor seating must be completely removed by December 31st, 2023 or a date sooner as directed by Council.

Wine Tasting Shops:

Direction needed:

Should the City embark on amending the Wine Tasting Policy, Zoning Code, and Local Coastal Program to make it permissible for wine tasting shops to operate outdoors? If yes, where should this effort fall in the list of other City Council Strategic Priorities? NOTE: If Council chooses to amend regulations, outdoor wine tasting would still be unpermitted until those new regulations are in place. Therefore, they would still need to cease operations, unless Council adopted an interim ordinance.

If no, how soon should all wine tasting shops remove outdoor seating from their premises?
Staff Suggestion:

Do not undertake regulatory updates to allow outdoor wine tasting at this time due to the volume of other City initiatives in process.

Require all unpermitted outdoor wine tasting to be completely removed by the date set previously by council of December 31st, 2023, or sooner.

Outdoor Amenities:

Direction needed:

Should strict enforcement of the following amenities begin immediately? Heaters (allowed, but in compliance with Building and Fire Code) Lighting (allowed, but in compliance with Lighting Standards) Signage (allowed, but in compliance with Sign regulations) If no, how long of a grace period should be granted?
Should the City update the Municipal Code to allow for outdoor speakers? If yes, where should this effort fall in the list of other City Council Strategic Priorities? NOTE: If Council chooses to amend regulations, outdoor speakers would still be unpermitted until those new regulations are in place. Therefore, they would need to be removed immediately, unless Council adopted an interim ordinance.

Staff Suggestion:

Begin strict enforcement of non-compliant outdoor amenities immediately, with a requirement for corrective action within five (5) business days of notice.

Do not undertake regulatory updates to allow outdoor speakers at this time due to the volume of other City initiatives in process.

ENVIRONMENTAL REVIEW:

Not Applicable. As a report and request for direction only, this action will not result in a direct or indirect physical change in the environment. Nothing is being approved by the City Council at this point. Therefore, the action does not qualify as a “project” as defined in section 15378 of the CEQA Guidelines, and is not subject to environmental review.

FISCAL IMPACT:

Direction from Council on how to address outdoor seating and amenities has no additional fiscal impacts on the City. Any staff time associated with this work would be part of the adopted City Budget.

PRIOR CITY COUNCIL ACTION:

ATTACHMENTS:

Attachment 1) City's Adopted Wine Tasting Policy
Attachment 2) Alcohol Whitepaper
City of Carmel-by-the-Sea
Wine Tasting Policy
(3/3/2015)
Purpose
To establish guidelines for the review and approval of wine tasting facilities in the Central Commercial and Service Commercials Districts in the downtown.

Policy
The General Plan encourages a balanced mix of uses that serve the needs of both local and nonlocal populations. The Planning Commission recognizes the demand for establishing wine tasting facilities but also recognizes that their proliferation could impact the balanced mix of uses that the General Plan encourages.

Definition
A wine tasting room is a stand-alone establishment with a Duplicate Type 02 ABC license, in which the primary purpose to encourage patrons to purchase wine for off-site consumption.

Establishments should not operate as a wine bar, where the primary purpose would be for patrons to consume wine on premise other than for the purpose of wine tasting. It is recognized that tasting rooms host occasional promotions and special events to encourage sales and marketing of wine for the education and development of current and potential customers.

The following standards are recommended and shall be considered by the Planning Commission in its review of wine tasting permits:

1. Wines originating from Monterey County Vineyards and Wineries and locating their offsite tasting rooms in Carmel are desired and strongly encouraged. The tasting room should have a Duplicate Type 02 ABC license of a primary Type 02 ABC licensed winery located within Monterey County. All wines stored, displayed, and offered for sale and tasting should have been produced in a Type 02 Bonded Winery located in Monterey County with the vast majority (i.e. 75% or more) from grapes grown in Monterey County.

2. No more than three wine tasting Use Permits for new locations shall be issued within any 12-month period. To encourage diversity in the Commercial District, retail wine tasting shops located north of Ocean Avenue are strongly encouraged.

3. A wine tasting room may be permitted a limited number of special events specified through the Use Permit for the purpose of marketing and educating current and potential customers on wine.

4. In order to avoid the appearance of a bar, the wine tasting service and seating area should generally be limited to no more than 30% of the floor area of the retail space. The remaining area should primarily consist of wine-related retail display.

5. In general, the size of the retail and wine tasting area combined (office and storage excluded) should be no larger than 1,000 square feet.

Attachment 1

6. Tasting should only involve traditional wine based products such as still wines, sparkling wines or Port-type products, no other alcoholic beverages should be permitted to be tasted or purchased.

7. The maximum serving size should be 2 ounces per serving. Customers should not be permitted to drink bottles of purchased wine in the store and no wine tasting should take place on public property.

8. Light snacks such as cheese, crackers, and bread may be served; however, meals are not permitted.

9. In order to encourage diversity and maintain a balanced mix of uses, no more than five establishments offering tasting should be permitted within any standard two-block area as depicted in Figure 1.* For smaller blocks including Blocks 70, 71, 72, and 73; or for other blocks in which these boundaries do not apply, the Planning Commission shall consider proposals on a case by case basis that meet the intent of this density limitation.

10. Night time hours should generally be limited to no later than 9:00 p.m.

11. Wine tasting associated with other uses such as retail food, art galleries, clothing stores, and the like is discouraged.
*For the purposes of this policy a “standard two-block area” would include all commercial spaces on both sides of a street located between the next two cross streets. The cross streets at the end of the blocks are also included up to the mid-point of each block.

Figure 1: Example of Standard Two-block Area (max 5 wine tasting establishments) Dolores Street
7th Ave
Ocean Ave
Attachment 1
Addendum (8/10/16)
Wine Tasting Room Events
Routine Events: These are normal business activities that are strictly for the purpose of promoting wines sales. These events generally do not involve a large number of attendees, live music, or any activities outside of the building. Wine tasting rooms are allowed e a maximum of 2 routine events per month and a total of 24 routine events per year. Routine events include activities such as wine club events, library tastings, and pairing functions, such as wine and chocolate, wine and cheese, or pairings with other food products that are not classified as full meals.

Special Events: Special events are permitted live music and can be held for general social functions that may or may not be for the purpose of promoting wine sales. Pursuant to Municipal Code Section 9.16.030, the business is allowed a maximum of 4 special events per year, subject to written authorization from the Community Planning and Building Director upon review of each specific request.
* A Live Music Use Permit is required for regular live music (CMC 9.16) Attachment 1

COMMUNITY PLANNING & BUILDING DEPARTMENT

CITY OF CARMEL-BY-THE-SEA
TO: Brandon Swanson, Community Planning and Building Director FROM: Katherine Wallace, Associate Planner
DATE: August 10, 2022
SUBJECT: History and Policies on Alcohol in Carmel-by-the-Sea

SUMMARY
At the turn of the twentieth century, the Carmel Development Company envisioned the village as “a place where liquor, even in the privacy of the home, could never be found.”1 Today, Carmel-by-the-Sea has nearly twenty wine tasting rooms, three permitted bars, two liquor stores, and numerous dining establishments with liquor licenses. The following background describes the history of restrictive liquor deeds in Carmel, Prohibition-era policies and the legal challenges that followed, the rise of wine tasting shops, and the designation of Carmel’s three permitted bars. This paper also describes the impact of the Covid-19 pandemic on outdoor drinking and hours of operation, and provides the current municipal code regulations as it relates to drinking places, restaurants with bars, and wine tasting shops. The background content is followed by preliminary staff recommendations for consideration. In 1957, the Monterey Peninsula Herald reported on liquor regulations in Carmel-by-the-Sea, noting, “the subject of liquor is broad, controversial, and occasionally bewildering.” This holds true today.

TIMELINE
Late 1880s: Honore Escolle and Santiago Duckworth convey more than 500 lots free of restrictive liquor clauses, and 134 lots with restrictive liquor clauses in what is now Carmel-by-the-Sea. 1902: The Carmel Development Company begins selling remaining lots with restrictive liquor clauses as standard deed language.
1920-1933: Nationwide Prohibition in effect.
1933: Carmelites vote 449 to 259 in favor of permitting the sale of 3.2% beer and light wine (declared by Congress as non-intoxicants and thus not in violation of the property deeds). 1934-1936: California Superior Court case Carmel Development Company vs. Espindola’s results in the undoing of Carmel as a dry city.
1955: CA Department of Alcoholic Beverage Control established (replacing State Board of Equalization). 1956-1957: Liquor licenses for Hearthstone Bar and Pink Elephant liquor chain contested but upheld. 2003: Planning Commission grants first wine tasting shop use permit to Galante Family Winery. 2011: With ten tasting shops in operation, the Wine Tasting Policy is adopted. 2014: Moratorium on new wine tasting establishments.
2015: Wine Tasting Policy revised, with an addendum approved in 2016; Planning Commission formally identifies Carmel’s three legal drinking places (bars) permitted in the municipal code as Sade's, A.W.

Shucks, and Barmel.

1 Superior Court of the State of California, County of Monterey. Carmel Development Company vs. in Inc.; Isabel A.

Leidig. Case No. 15,304. Defendant’s Brief (June 5, 1936).

Attachment 2

2020-present: Covid-era exceptions made for outdoor drinking and hours of operation under the City’s Proclamation of a Local Emergency.

BACKGROUND
Restrictive Liquor Deeds
In the late nineteenth century, landowner Honore Escolle conveyed 324 acres of what is now Carmel-bythe-Sea to Santiago J. Duckworth. The land was sold without any deed restrictions against the use and sale of liquor. Duckworth envisioned the area as a Catholic summer retreat and hired W.C. Little and Davenport Bromfield to survey and map “Carmel City.” Beginning in 1888, Duckworth began to sell individual lots. Escolle and Duckworth together sold more than 500 lots free of restrictive liquor clauses, 90 of which were located in the business district. However, 134 other lots sold by Escolle and Duckworth did have a liquor restriction clause in their deeds. The grantors had come to recognize “the selling quality of ‘dry territory’” and began to include restrictive clauses in their later conveyances to attract temperanceminded buyers.

In 1902, the Carmel Development Company was incorporated by partners Frank H. Powers and J. F.

Devendorf. Powers and Devendorf amassed unsold properties from Escolle and Duckworth, filed a map of Carmel-by-the-Sea with the County Recorder, and began selling lots to the public.2 Whereas Escolle and Duckworth were financially motivated to restrict the use and sale of liquor to attract buyers, the founders of the Carmel Development Company felt a moral responsibility to keep liquor and its associated ills out of the community. The Carmel Development Company incorporated restrictive liquor clauses as part of its standard deed language. If a grantee was found in breach of the clause, the Carmel Development Company reserved the right to access and repossess the property.

The standard deed language read: “[Grantees] will not sell, exchange or give away intoxicating liquor of any kind thereon and will not use or employ, nor directly or indirectly suffer, allow or permit any other person or persons whatever to use or employ said land or premises hereby sold, or any improvements which are now or maybe hereafter placed thereon, or any part thereof, for the purpose of selling, exchanging, bartering, delivering or giving away any spirituous of malt intoxicating liquors, wine or cider, and in case of breach of this covenant [the whole of the estate] shall immediately revert to and become the property of [the grantor, which] expressly reserves to itself, its successors and assigns, the right to enter upon said land and premises, and to take absolute possession thereof of any and all improvements thereon for and upon the breach of the aforesaid conditions.”3

While many residents were temperance minded, other Carmelites did imbibe. Specifically, the artists and writers of the c.1906 to 1915 era who held abalone feasts with red wine on the beach.4

2 Powers and Devendorf acquired all unsold lots from Escolle and Duckworth in 1900 before incorporating in 1902. 3 Restrictive liquor clause included as standard language in Carmel Development Company deeds. 4 “A Little Slip Here and There, and Carmel, a Dry Town, Became Wet; Mrs. Dummage Remembers When.” Monterey Peninsula Herald (March 30, 1951). These feasts are known to have occurred at Point Lobos and Carmel Beach.

Attachment 2

Prohibition and the post-Prohibition Era
The liquor restrictions were ubiquitous, but Carmel was not bone-dry.5 The most notable exemption was the 1923 Palace Drug Company deed, which allowed for lawful possession of intoxicating liquors for the purpose of sale.6 The Palace Drug Company, located on the north block face of Ocean Avenue between San Carlos and Dolores (now, Carmel Drug Store), sold liquor for medicinal use. At the time of the deed conveyance, Carmel was subject to national prohibition disallowing non-medicinal liquor consumption.

The 18th Amendment, passed by Congress in 1917 and ratified in 1919, prohibited the manufacture, sale, or transportation of intoxicating liquors. 7 While Carmel appears to have largely complied, there are accounts of Canadian liquor smuggled from British Columbia to the Central Coast during prohibition. The book, Rumrunners: Liquor Smugglers on America’s Coasts, 1920-1933, describes a smuggler syndicate that “landed shipments of liquor at isolated spots near Pebble Beach, Pacific Grove, and Carmel-by-the-Sea.”8 Nationwide prohibition was in effect from 1920 to 1933. In December 1933, federal prohibition was repealed with the ratification of the 21st Amendment. However, because the 21st Amendment allowed prohibition to be maintained at state and local levels, Carmel was faced with how to handle liquor on a local level.9 To complicate the matter of local vs. state control over liquor regulation, in California, powers of taxation and regulation of the manufacture, distribution, and sale of alcoholic beverages were given to the California State Board of Equalization in 1933. Alcohol could now be transported and held in possession in Carmel (with the Council powerless to say otherwise), but the city could continue to prohibit sales of alcohol if it wished. Many Carmelites - particularly members of the business community - wanted alcohol legally sold in town. An opinion ad run in the Pine Cone questioned how Carmel “could deprive its business people of the revenue which beer will give them, and to force that revenue ‘over the hill’” to Monterey, where Carmel shoppers go for beer and are likely “apt to heed the ‘specials’ and sales talks of 5 Deeds were conveyed by the Carmel Development Company to the school district, the water company, and Del Monte Properties company containing no liquor restrictions; several residential and business lots also were free of restrictions. Some exceptions were made for people who wanted to imbibe in the privacy of their own homes.

Additionally, in 1913 and again in 1917, the Pine Inn was conveyed by a deed which contained the standard liquor restriction but also contained a special provision permitting liquor to be served with meals with a table license.

However, it appears as though the Pine Inn did not serve liquor despite the provision and the Pine Inn was thereafter re-acquired by the plaintiff who then sold it again with the restriction in place. “Letter to Mr. Prince, Carmel Development Company Secretary, from Morrison, Hohfeld, Foerster, Shuman & Clark” (April 1, 1936), on file at the Henry Meade Williams Local History Department; Superior Court of the State of California, County of Monterey, Case No. 15,304, Carmel Development Company vs. Espindola’s, Inc., “Opinion and Decision” of Judge H.G. Jorgensen (September 1936).
6 Deed from Carmel Development Company to Palace Drug Company (April 11, 1923). The Carmel Development Company later claimed this applied to medicinal liquor use only. Because the deed was drafted during Prohibition, they thought it unnecessary to specify otherwise.
7 The 18th Amendment did not prohibit the consumption, private possession, or production of alcohol for one’s own consumption. The Volstead Act was enacted in 1919 to enforce the 18th Amendment. In March 1933, the Cullen-Harrison Act amended the Volstead Act, permitting the manufacturing and sale of low-alcohol beer and wine (up to 3.2%).
8 Anne Funderburg, Rumrunners: Liquor Smugglers on America’s Coasts, 1920-1933. McFarland & Company, Inc.

Publishers (2016), p.166. No additional information is provided specific to Carmel-by-the-Sea. 9 Carmel Pine Cone (February 20, 2015); “Sweet A-d-e-l-i-n-e! Beer May Be Sold Here After All,” Carmel Pine Cone (March 24, 1933), 12.

Attachment 2

the merchant, and buy other things at the same time.”10 If losing potential revenue to Monterey wasn’t reason enough, “doctors say beer is a wholesome body building beverage”!11 But not everyone wanted alcohol - even 3.2% beer and light wine - sold within Carmel’s boundaries. An anonymous editorial in the Pine Cone urged caution on the matter, noting, “We have been some thirty years without a sales place for liquors of any kind, doing very fairly…Perhaps the sale of 3.2 per cent beer in original packages at grocery stores and elsewhere, and served by hotels and restaurants with meals, would not create any problem of the kind. Again, perhaps it might. It’s a chancy decision.”12 Unsurprisingly, this issue swiftly became a hot-button political issue. How could Carmel determine the risk of legalizing 3.2% beer? Then-mayor John Catlin supported an experiment to test beer’s intoxicating strength. “Under terms of the experiment, Mayor Catlin would appoint six prominent residents of the village, possibly artists and writers (well known for their capacity) to try out the beer. Each would be given six bottles to partake within the limited space of an hour. If at the end of the hour, the participants of the experiment can tell their correct names, walk a straight line and refrain from singing in a high tenor voice Sweet A-d-e-l-i-n-e, Mayor Catlin is willing to be convinced that 3.2 per cent beer is non-intoxicant.”13 Research has not determined whether the experiment was ever carried out.

A vote was scheduled for May 1933 to determine whether 3.2% beer should be allowed for sale in Carmel.14 In April, a month prior to the vote, the Pine Cone reported “every wet and every dry voter in Carmel is already being solicited to cast votes for or against the sale of beer…house to house canvassing is reported.” 15 The Pine Cone article, “Beer Foams to Splash Legally as Carmel Goes Dripping Wet,” reported a win for the “wets”, with “449 votes for the sale of beer while the drys only had 259 ballots on their side.” Carmel, “known in temperance circles as a dry community” would now allow beer and light wine sold openly in local stores and restaurants, under state regulations.16 The article was sure to specify that “the clause in all Carmel property which prohibits the sale of liquor will have no effect on beer and light wines, both beverages having been declared by Congress as non-intoxicant. Under present federal regulation, the stronger liquors will be sold from drugstores under the prescriptions given out by 10 “Vote for Beer,” Carmel Pine Cone (May 12, 1933), 2. 11 Ibid.
12 “3.2 percent,” Carmel Pine Cone (March 31, 1933), 9. 13 “Can Carmel’s Elite Hold Their Liquor? Tests May Expose Them,” Carmel Pine Cone (April 14, 1933), 1. 14 “Beer Question to be Decided by Special Election May 15,” Carmel Pine Cone (April 14, 1933), 4; “Carmel to Vote on Single Beer Proposition May 15th,” Carmel Pine Cone (April 28, 1933), 12; “Beer Foams to Splash Legally as Carmel Goes Dripping Wet.” Carmel Pine Cone (May 19, 1933), 1-2. 15 “Beer Issue to Warm Political Hearts as Election Date Nears” Carmel Pine Cone (April 21, 1933), 1. 16 “State Will Control Licenses,” Carmel Pine Cone (April 28, 1933), 9. California state law in 1933 specified that licenses must be granted for alcohol sales in original, unbroken packages, for use off premises, at ten dollars a year; and to restaurants, coffee houses, hotels and cafes, to be drunk with meals served, at fifty dollars a year. Any bona fide applicant, unless he may have at some time been convicted of a felony, can get a license.

Attachment 2

physicians without violating the clause of the property deeds.”17 Restaurateurs reported the first day of legal beer - May 24, 1933 - resulted in “a large sale of the beverage.”18 With the beer and light wine issue settled, attention turned to liquor and the restraining clauses in the Carmel Development Company deeds which encompassed most, but not all properties in Carmel.19 The Palace Drug Store deed recorded in 1923, during Prohibition, did permit the sale of liquor, “it being understood in connection herewith that such possession, sale, exchange or otherwise disposing of intoxicating liquors shall be in strict accordance with the laws of United States of America, the State of California and the County of Monterey, as the same may now or hereafter exist.”20 Because liquor became legal on a federal level post-Prohibition, this language led to the undoing of Carmel as a dry city. As the deed specified strict accordance with the laws of the United States, the Carmel Development Company could no longer legally restrict the Palace Drug Store’s liquor sales to medicinal use only.

Other local businesses took note and wanted to join the lucrative liquor market as well. Espindola’s, a grocery store on Ocean Avenue (Block 71, Lot 2), took the issue to the California Superior Court in 1934-

36. Proceedings of the case revealed dozens of early deeds conveyed without restrictions by grantors Honore Escolle, S. J. Duckworth; Frank H. Powers and/or Jane G. Powers; and the Carmel Development Company. Judge H.G. Jorgensen found that the number of exceptions and properties without any restrictive liquor clauses - even if they never actually sold liquor - collectively invalidated the Carmel Development Company’s general plan of Carmel as a dry city. The defendants argued the plaintiff knew about infringements and took no enforcement actions, in effect condoning the activity. As plaintiff, the Carmel Development Company argued the liquor restrictions were for ”the moral uplift and social betterment of the community,” and any exceptions - specifically, the Palace Drug Company - were made inadvertently. Judge Jorgensen ruled in favor of the defendant, and wrote in his Opinion and Findings, “In consideration of all the facts it does seem that various deviations of the plaintiff require too much explaining...While the plaintiff undoubtedly had in mind that the National Prohibition Law and the 18th Amendment would take care of the situation, and the restrictions were unnecessary, and while it is true that it did not intend to permit the unlimited sale of liquor, nevertheless it certainly did intend to relinquish its own power to prevent the sale” and the general plan vision of Carmel as a bone dry town “must be considered to have been abandoned in the legal sense.”21 17 Ibid, 2.
18 “Beer Flows in Carmel for the First Time in its History,” Carmel Pine Cone (May 26, 1933), 1-2. Licenses to sell bottled beer were given to El Fumidor, Leidig’s, Ewig’s, Minges’, Dolores Grocery and Espindola’s. Licenses to sell beer with meals were given to The Chop House, Carmeleta, Curtis’ Candy store, Romy Lane and Whitney’s. 19 Though legally free to do so, unrestricted properties such as the school district and water company properties had never sold liquor and the Carmel Development Company never intended they would. There are assertions that the Pine Inn illegally sold wine despite its amended restrictive deed and the Carmel Development Company did not nothing about it. “A Little Slip Here and There, and Carmel, a Dry Town, Became Wet; Mrs. Dummage Remembers When.” Monterey Peninsula Herald (March 30, 1951).
20 Palace Drug Company Deed (April 11, 1923), on file at the Henry Meade Williams Local History Department. 21 Jorgensen, “Opinion and Decision.”
Attachment 2

Bars opened at once and grocery stores added liquor departments. 22 In 1955, the California State Constitution was amended to reassign regulation duties from the State Board of Equalization (first instituted in 1933) to the new Department of Alcoholic Beverage Control (ABC). Liquor licenses were issued by the ABC but Carmel’s land use and zoning laws restricted the location of licenses. City Ordinance 122 NS provided that liquor be sold only in the downtown area between 6th and 7th streets and Mission and Monte Verde, unless liquor sales were in conjunction with another business and subordinate to it (such as a grocery, restaurant, or drug store).23
Liquor license applications for the Hearthstone Bar and Restaurant and the Pink Elephant (a national liquor store chain) were hotly contested in 1956 and 1957. The proposed locations of these establishments would be within a block of one another, bordering Carmel’s residential area. When the Hearthstone Bar and Restaurant was permitted to transfer their on-sale (on-premises) liquor license from their original Ocean Avenue location to a new proposed location across from Devendorf Park, outraged community members appealed.24 Similarly, when the ABC granted the Pink Elephant an off-sale (take-away) liquor license at NW 6th and Torres (now, Surf and Sand), the community appealed. ABC held that the area in question was zoned as commercial and that to limit special control to liquor in “so-called buffer areas adjoining residential areas” was discriminatory and “the section of the ordinance in question steps beyond the field of zoning into the field of regulation,” in conflict with the ABC’s realm of power.25 In 1957, there were 23 licensed liquor outlets, all in the downtown business district.26 Residents felt the character of Carmel was under assault. “Crisis in Carmel” headlined the Monterey Peninsula Herald in March 1957; the author warned if the Pink Elephant and Hearthstone licenses were not overturned, then “the traditions of half a century will have been shattered and Carmel will be on the road to honky-tonk.”27 A town hall discussion titled “The status of beverage alcohol and its impact on civilization” was held February 1957 and lasted three hours.28 The ABC ultimately ruled Ordinance 122 NS invalid and upheld their decision.29
22 “A Little Slip Here and There, and Carmel, a Dry Town, Became Wet; Mrs. Dummage Remembers When.” Monterey Peninsula Herald (March 30, 1951).
23 “Carmel Liquor License Move is Approved,” Monterey Peninsula Herald (October 4, 1956). 24 The new location to a residential zone was permitted because the Hearthstone was primarily a restaurant, with liquor sales subordinate.
25 “Carmel Mayor Promises ‘Fight to End’ In the Case of Pink Elephant,” Monterey Peninsula Herald (February 16, 1956).
26 Carmel Protective Association, “Crisis in Carmel.” Monterey Peninsula Herald (March 8, 1957). The article does not specify the breakdown of uses (restaurants, bars, and/or liquor stores). 27 Carmel Protective Association, “Crisis in Carmel.” Monterey Peninsula Herald (March 8, 1957). 28 “Panel Presents Varied Views on Liquor Topic: Townhall Discussion in Carmel.” Monterey Peninsula Herald (February 13, 1957), 13.
29 “New Fight on Liquor in Carmel,” Monterey Peninsula Herald (January 18, 1957); “Carmel Liquor Hearing Monday at City Hall,” Monterey Peninsula Herald (February 7, 1957); “Liquor License Move Protested in Carmel,” Monterey Peninsula Herald (February 11, 1957); “Mayor Clarifies City Action on Liquor,” Monterey Peninsula Herald (February 15, 1957); “Opposition to Carmel Liquor License Mounts,” Monterey Peninsula Herald (March 15, 1957),

2. Attachment 2

Wine Tasting Shops
Wine Tasting Shop. Establishments primarily engaged in the retail sale of wine for off-site consumption and as an ancillary use includes the service of wine for on-site consumption (CMC 17.68.050).

The sentiment of Carmel in crisis persisted throughout the twentieth century but dissipated in part due to the rise of wine tasting rooms in the early 2000s and the associated tourism boost. Tourism has always been foundational to Carmel’s identity, and it is unsurprising that merchants responded to the tastes of Carmel’s visitor population. On December 3, 2003, the Planning Commission granted the earliest recorded use permit for a wine tasting shop. UP 03-39 (Galante) allowed for the establishment of a liquor store (SIC 592) as a primary use with wine tasting (categorized as a drinking place, SIC 5813) as an ancillary use. The permit specified the following:

1. The use will sell locally produced wine products and related goods and provide a wine tasting area. No distilled spirits are authorized;

2. The business’s public hours shall be limited to 9:00 a.m. to 8:00 p.m. seven days a week;

3. No products or merchandise not associated with the liquor store/wine shop or wine tasting shall be permitted;

4. No more than 20% of the commercial floor area shall be allowed for wine tasting;

5. The wine tasting area shall not be operated as a bar. Approval of this permit does not authorize the selling of mixed alcoholic drinks or the serving of full-sized servings for consumption on site. All wine tasting and consumption shall be confined to the building interior; and

6. The proposed use shall maintain a reasonable noise. During the hearing, Planning Commissioner Cunningham inquired about the tasting aspect of the establishment, to which Mr. Jack Galante responded that very small samples would be provided to patrons who were purchasing wine and that it was not a drinking establishment.30
The following year, in February 2004, the Planning Commission approved Southern Latitude Wines on Lincoln Street as the town’s second wine tasting shop (no longer in business). The Carmel Pine Cone reported, “After receiving assurance that wine-sipping patrons would not be allowed to loiter in the courtyard with their glasses or stand around blocking the doorway to the shop, the commission unanimously approved the use permit.”31
Subsequent years saw local restaurateurs embrace and encourage wine tasting.32 It appears as though there were both dedicated wine tasting shops and other businesses (restaurants) that offered wine tasting privileges. Applications for dedicated wine tasting shops were evaluated based on whether or not they were consistent with past Planning Commission approvals. A staff report authored in 2010 for the Wrath Wines use permit states: “In previous decisions the Commission has typically included the following 30 UP 03-39 (Galante) was approved under a previous city code. CMC 17.06.036 allowed for drinking places and liquor stores as a conditional use and required adoption of general findings, and CMC 17.10.010 allowed for a secondary use to exceed 10% of the total floor area with approval of a use permit by the Planning Commission if specific findings could be made.
31 Carmel Pine Cone (February 12, 2004), 6A.
32 Carmel Pine Cone (December 8, 2006), 18A.

Attachment 2

restrictions to ensure that the business does not function as a drinking establishment: serving sizes shall be no greater than 2 ounces; the sale of alcohol is limited to wine; limited hours of operation (close by 10:00 p.m.); and limiting the area devoted to wine tasting.”33 On November 10, 2010, the Planning Commission appointed a subcommittee to evaluate the City’s requirements on processing requests to offer wine tasting and whether new requirements should be considered. The subcommittee found that the Commission had approved ten wine tasting use permits since 2003, and staff continued to receive frequent inquiries regarding potential new establishments.

Carmel’s first official Wine Tasting Policy was adopted at the June 23, 2011 Planning Commission hearing with the stated purpose “to establish guidelines for the review and approval of wine tasting facilities in the Central Commercial and Service Commercials Districts in the downtown.” 34 Even with the Wine Tasting Policy in effect, wine tasting shops proliferated. They functioned as wine tasting rooms rather than retail shops that offered ancillary wine tastings, as intended. Another issue with the 2011 Wine Tasting Policy was its failure to define a Monterey County wine. The 2011 Wine Tasting Policy stated a strong preference for tasting rooms featuring local wines; however, how to define a ‘Monterey County’ wine proved problematic. Did wine need to be made from grapes grown and produced locally? In 2014, Mr.

Jack Galante of Galante Family Winery spoke to the City Council on behalf of some dozen tasting rooms.

Galante expressed that the existing policies were confusing and that a moratorium should be enacted, saying, “It is time that the city set specific policies…having grapes grown in Monterey County is essential.”35 On April 1, 2014, Ordinance 2014-03 established a moratorium on the processing of use permits for new wine tasting establishments. Ordinance 2014-05, passed May 6, 2014, extended the moratorium for an additional ten months and 15 days.

Former Planning Director Mullane and staff spent the summer and fall 2014 coordinating Wine Tasting Subcommittee meetings and soliciting input from stakeholders, including Carmel Wine Walk-by-the-Sea, Carmel Residents Association, Monterey County Wine Growers Association, and the Carmel Chamber of Commerce. Wine Tasting Subcommittee Workshops held January 13 and 15 proposed changes to the existing policy, and Planning Staff drafted additional changes on January 27, 2015.

The updated Wine Tasting Policy was adopted by City Council March 3, 2015.36 Much of the previous (2011) policy was retained. Changes in the definition of “wine tasting room” included the following:
● Define wine tasting rooms as a “stand-alone establishment”; ● Reiterate that the purpose is for tasting not drinking; and ● Recognize that tasting rooms host occasional promotions and special events.

The primary changes in the review standards for Tasting Rooms included the following:
● Should have a Duplicate Type 02 ABC license;
● No more than three permits for new tasting rooms will be issued within any 12-month period; 33 Carmel Planning Department, Staff Report for Wrath Wines (2010). 34 Wine Tasting Policy (June 23, 2011). The Wine Tasting Policy does not appear to have been reviewed or adopted by the City Council.
35 The Carmel Pine Cone (April 4, 2014), 1A.
36 “Council agrees to more restrictions on tasting rooms.” Carmel Pine Cone (March 6, 2015), 6A.

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● Should be no larger than 1,000 square feet;
● Can serve light snacks but no full meals;
● Should be open no later than 9:00 pm; and
● Should not be combined with other uses such as food markets, art galleries, or clothing stores.

The Council debated over the language of “should” vs. “shall” and decided on “should.”37 Making the new policy mandatory via the use of “shall” was thought to invite discrimination lawsuits so the Council decided on strongly worded policy guidelines instead. The new policy limited new operations to standalone rooms operated by wineries located in Monterey County and which only serve wines made from at least 75% Monterey County grapes. The Planning Commission reviewed the newly adopted policy just a few months later, on May 11, 2015, to determine if any revisions were needed; they found none. An Addendum to the Wine Tasting Policy was authored August 10, 2016. The addendum distinguished routine vs. special events, defined both and outlined associated rules.

Note that while the Wine Tasting Policy almost exclusively uses the term, wine tasting “room,” the municipal code uses wine tasting “shop.” Per CMC 17,14,040.J.5, wine tasting shops must adhere to the city’s wine tasting policy, must maintain a 200-foot distance from another use selling distilled spirits intended for either on-site or off-site consumption; maintain a 100-foot minimum distance from an R-1 district; and are permitted in the CC and SC districts with the issuance of a conditional use permit. 37 “Council agrees to more restrictions on tasting rooms.” Carmel Pine Cone (March 6, 2015), 6A.

Attachment 2

Approved Wine Tasting Shops in Operation in Carmel-by-the Sea No. Name Use
Permit
No.

Hours ABC
License
Year
Approved
Primary/
Secondary

1. Galante Vineyards 03-39 9 AM-8 PM Type 02 2003 SIC 592 (Liquor)/SIC 5813 (Drinking Places)

2. Windy Oaks Estate 04-03 9 AM-8 PM Type 02 2004 SIC 592 (Liquor)/SIC 5813 (Drinking Places)

3. Vino Napoli 09-01 10 AM-10 PM Type 02 2009 445310 (Liquor Store)/ 722410 (Drinking Place)

4. Wrath Wines 10-22 10 AM-10 PM Type 02 2010 445310 (Liquor Store)/ 722410 (Drinking Place)

5. Caraccioli Cellars 10-13 10 AM-10 PM Type 02 2010 445310 (Liquor Store)/ 722410 (Drinking Place); 448140
(Clothing Store); 448140 (Book
Store)

6. Lepe Cellars 11-01 8 AM- 10 PM Type 02 2011 453920 (Art Gallery)/ 722410 (Drinking Place)

7. Scheid Vineyards 11-11 8 AM-10 PM Type 02 2011 Retail Sales 85% / Wine Tasting 15%

8. Shale Canyon
Wines
12-11 8 AM-10 PM Type 02 2012 Retail Sales 70% / Wine
Tasting 30%

9. De Tierra
Vineyards
12-17 10 AM-8 PM Type 02 2012 Retail Sales 70% / Wine
Tasting 30%

10. Albatross
Winery/Kori
Wines
13-
09/BL
18-336
10 AM-9 PM Type 02 2009 Retail Sales 63% / Wine
Tasting 37%

11. Dawn’s Dream
Winery
13-15 12 PM-7 PM Type 02 2013 Retail Sales 75% / Wine
Tasting 25%

12. Silvestri Vineyards 13-04 10 AM-10 PM Type 02 2013 Retail Sales 70% / Wine Tasting 30%

13. Su Vecino Court 14-09 12 PM-8 PM Type 02 2014 Retail Sales 75% / Wine Tasting 25%

14. Hahn Family
Wines
15-188 11 AM-9 PM Type 02 2015 Retail Sales 71% / Wine
Tasting 29%

15. Blair Estate 17-140 9 AM-8 PM Type 02 2017 Retail Sales 71% / Wine Tasting 29%

16. Albatross Ridge 17-264 9 AM-9 PM Type 02 2017 Retail Sales / Wine Tasting

17. Manzoni Cellars 17-442 9 AM-9 PM Type 02 2018 Retail Sales / 72.5% / Wine Tasting 27.5%

18. Talbott Vineyards 18-150 11 AM-8 PM Type 02 2018 Not specified

19. Carmel Ridge
Cellars
20-158 11 AM-8 PM IP 2020 445310 (Liquor Store)/ 722410 (Drinking Place)
Attachment 2

Wine Tasting Mixed with Other Uses
Surf N’ Sand 07-10 Not specified Type 21
& Type
42 2008 Full line market/wine and beer
Cheese Shop 06-10 10 AM- 7 PM Type 21
& Type
42 2006 445299 (Specialty Food
Stores); 445310 (Beer, Wine,
Liquor Store) / 442299
(Kitchenware); 4512 (Book
Sales); 453991 (Tobacco
Stores)
Nielsen’s Market Not
specified
Not
specified
Not
specified
Not
specified
Not
specified
Drinking Places
Drinking Places. Businesses serving beverages for consumption on the premises as a primary use and including on-sale service of alcohol including beer, wine, and mixed drinks (CMC 17.68.050) Drinking Places are required to maintain a minimum 200-foot distance from another use selling distilled spirits intended for either on-site or off-site consumption, and are allowed only in blocks numbered 70 through 77, inclusive. The number of permitted drinking places is capped at three total (CMC 17.14.040).38 Policy P1-22 of the General Plan requires the City to limit or reduce the number of drinking places; the numerical limit in the CMC implements this policy.39
The three permitted drinking places are presently Sade’s (Lincoln Street between Ocean and 7th), A.W.

Shucks (Ocean between San Carlos and Dolores), and Barmel (San Carlos between Ocean and 7th). The Planning Commission accepted the staff identification of these three drinking places at their September 23, 2015 meeting with a vote of 4-0 with one abstaining vote.

Sade’s was established in 1926 at Ocean and Dolores, later moving west on Ocean between Monte Verde and Lincoln (to the present location of Portabella). In 1994, Sade’s moved to its current location on the east block face of Lincoln Street between Ocean and 7th. 40 Sade’s use permit (UP 93-47) specifies hours of
operation of 11:00 am to 2:00 am. Sade’s is the only establishment in the City without a food service.

A.W. Shucks was established in 1993 on Ocean between Dolores and San Carlos, taking the place of Maxwell McFly’s, a bar that had been in use for many years. A.W. Shucks was permitted to add an ancillary food service through the approval of UP 93-45, which also specified “the applicant has agreed to reduce 38 The three drinking place limit is also specified in CMC 17.56.010 and 17.56.020, Restricted Commercial Uses. 39 Carmel-by-the-Sea General Plan, Land Use Element (adopted June 3, 2003) p.1-33. 40 Note that the 200-foot minimum distance requirement was in place at the time of Sade’s most recent location transfer; UP 93-47 measured the distance based on “shortest pedestrian route” rather than a radius measurement from lot lines.

Attachment 2

the hours of operation to 11:00am to 11:00pm, five days a week, and to retain the 2:00am closing hour only on weekends.”41 The majority of the floor space of the business is occupied by the bar.

Carmel’s third permitted drinking place is Barmel (UP 15-286), on San Carlos Street 2 NE of 7th Avenue.

Barmel took the place of a previous restaurant/bar called Ody’s Tavern.42 Barmel historically operated solely as a drinking place but expanded food service in 1997 with approval of UP 97-22. The Planning Commission confirmed Barmel was still appropriately categorized as a drinking place at their September 23, 2015 meeting; the Commission voted to extend the closing hour to 2:00 am.

Carmel has historically had restaurants with both small and large bar components. Restaurants are allowed to have a bar or bar room as an ancillary use, with a requirement that only 20% of the seating be used at the bar (CMC 17.14.040.I). Jack London’s Bar & Grill (no longer in operation) had a larger bar component than most restaurants and was permitted to stay open until 2:00 am, but the primary use was still as a restaurant. Brophy’s Tavern, NW of 4th and San Carlos (BL 15-434) has a bar-like appearance but operates under a restaurant designation. Brophy’s Tavern is a non-conforming use located in the Residential and Limited Commercial Zoning District where neither restaurants nor drinking places are permitted. Brophy’s allowed hours of operation are 8:00 am to 11:00 pm. Staff reconsidered the use designation in 2015 and recommended that Brophy’s restaurant designation be maintained because it is a non-conforming use close to residential areas.

Liquor Stores
Liquor. Establishments primarily engaged in selling packaged alcoholic beverages such as ale, beer, wine and liquor (CMC 17.68.050)
Surf and Sand Liquors (UP 14-08; UP 07-10) is a longtime family-owned local business; Ryan Sanchez, grandson of the original owner, presently runs the store. In 2008, a staff report described Surf and Sand as a retail store where “wine and other alcoholic beverages make up approximately 50% of the use.” A wine tasting bar within the store was approved in 2008 (UP 07-10). The store is located within 100 feet of the R-1 Zoning District. When Surf and Sand applied in 2013 to construct an expanded wine tasting area within their shop, the City acknowledged “this issue of proximity to the R-1 District was not identified by the City when the current use permit (UP 07-10) was approved in 2008” but the allowance “does not entitle a further expansion of the non-conformity.”43 The wine tasting room expansion was denied.

Carmel Liquors (BL 20-147) was established in 2020 on San Carlos between Ocean and 7th; it took the place of Lopez Liquors, established in 2011.

41 Presently, A.W. Shucks typically closes at 8:30pm and stays open until 9:00pm on Fridays and Saturdays. 42 In 1984 the Red Lion restaurant/bar was issued Use Permit B.A. 84-52, which permitted hours of operation from 11:00 a.m. to 2:00 a.m. In 1997 the City issued Use Permit UP 97-22 for the Village Pub restaurant, which permitted hours of operation from 8:00 a.m. to 12:00 a.m. Barmel took over UP 97-22. 43 Marc Wiener, Senior Planner, “Application Completeness Review” (March 7, 2013).

Attachment 2

Covid-19
During the Covid 19 pandemic, the city issued a Proclamation of Local Emergency. 44 As a safety precaution, indoor dining and drinking ceased, but restaurants, wine tasting rooms, and bars were allowed to serve outdoors in temporary “parklets.” The parklet spaces were allowed to stay open until 10:00pm.

Prior to the pandemic, wine tasting shops closed at 6:00pm. While the 10:00pm policy resulted in extended hours for wine tasting rooms, it limited the hours for bars, which could be open until 2:00am previously.

Closing times for restaurants, bars, and tasting room parklets were discussed at the March 2, 2021 City Council meeting. It was determined that restaurants should close at 10:00pm (last seating at 10:00pm), tasting rooms should close at 7:00pm, and bar parklets could stay open past 10:00pm if they wished.

Parker Logan, owner of Sade’s Cocktails, requested to seat guests through 12:30 and close at 1:00 am; the Outdoor Seating Ad Hoc Committee (comprising Mayor Dave Potter and Councilmember Bobby Richards) found this to be a reasonable request and it was ultimately approved by City Council.45 Current Municipal Code
CMC 17.14.030 prescribes the land use regulations for the commercial districts. Schedule II-B, listed in CMC 17.14.030 identifies the land use regulations for Eating and Drinking Establishments: Drinking Places (ex. bars), Full-Line Restaurants, and Specialty Restaurants (ex. Coffee Shops). Pursuant to Table II-B, Drinking Places and Full-Line Restaurants are Conditionally Permitted in the Central Commercial (CC) and Service Commercial (SC) Land Use Districts. Specialty Restaurants are Conditionally Permitted in the CC Zoning District only. The following, evaluates the land use regulations pertaining to Eating and Drinking Establishments individually and as a combination of uses.

Drinking Places, Liquor Stores, and Wine Tasting Shops are defined in CMC 17.68.050:

Drinking Places. Businesses serving beverages for consumption on the premises as a primary use and including on-sale service of alcohol including beer, wine, and mixed drinks.

Liquor. Establishments primarily engaged in selling packaged alcoholic beverages such as ale, beer, wine and liquor.

Wine Tasting Shop. Establishments primarily engaged in the retail sale of wine for off-site consumption and as an ancillary use includes the service of wine for on-site consumption.

CMC 17.14.040.I.2, Drinking Places
44 Chip Rerig, “Proclamation of Existence of a Local Emergency by the City Administrator” (March 12, 2020). 45 Chappellet-Lanier, Tajha, “A Bar by Any Other Name,” Monterey County NOW (March 1, 2021); Carmel-by-theSea City Council Meeting Minutes (March 2, 2021), p.5.

Attachment 2

a) Minimum distance from another use selling distilled spirits intended for either on-site or off-site consumption: 200 feet.
b) Allowable locations: blocks numbered 70 through 77 inclusive, as shown on the map of Carmelby-the-Sea. c) Maximum number: three. See also Chapter 17.56 CMC, Restricted Commercial Uses. d) See also subsection (I)(1) of this section, All Eating and Drinking Establishments.

CMC 17.14.040.I.3, Restaurant, Full Line
a) Any sale of alcoholic beverages shall be subordinate to this primary use. b) Drive-in, formula and fast food establishments are prohibited. c) Substantially all foods from the standard menu shall be available for purchase during the hours that alcoholic beverages are being served.
d) The applications, menus and plans indicate that the business will primarily be a restaurant – full line, and that no more than 20 percent of the total number of seats are at a bar or in a separate bar room.

If the use does not meet this standard, the standards in subsection (I)(2) of this section, Drinking Places, shall also apply to the use.
e) Customers shall be provided with individual menus while seated at a table or counter. f) The maximum seating capacity shall not exceed the standards in the State Uniform Building and Fire Codes, the number of seats approved by the Planning Commission through public review, or the number of seats in the previous business, whichever is less. The seating capacity shall be posted on the premises.
g) Outside seating may be allowed subject to Chapter 17.58 CMC, Design Review. h) Food sold for consumption off the premises shall be incidental to the primary use. Such food shall be placed in covered containers or wrappings, and all house-brand labeled food store goods such as vinegars, oils and salad dressings shall be prepackaged and sealed. i) Maximum number of food stores and/or restaurants located within structures fronting on Ocean Avenue: 15. See also Chapter 17.56 CMC, Restricted Commercial Uses. j) See also subsection (I)(1) of this section, All Eating and Drinking Establishments. k) Outdoor cooking devices are permitted on private property if designed and located to mitigate impacts to adjacent properties.

Attachment 2

CMC 17.14.040.I.4, Restaurant, Specialty
a) Minimum size: 400 square feet.
b) Minimum number of customer seats on site: 14 seats. The customer seating area must be open to patron use during all hours of operation and the use must be managed to encourage on-premises consumption of food products.
c) Sales of soup, salads and sandwiches may be allowed in an amount up to 10 percent of sales. d) The sale of alcohol is prohibited.
e) Drive-in, fast food, take-out or formula establishments are prohibited. f) The service counter must be located within the interior of the business premises and arranged so that customers must first pass by or through the seating area to reach the counter and patron queues will be contained within the building.
g) Outside seating may be allowed, subject to Chapter 17.58 CMC, Design Review. h) All products sold for consumption off the premises, other than frozen desserts, must be placed in covered containers or wrappings.
i) Cooking equipment is limited to indoor stoves and ovens. j) Maximum number of food stores and/or restaurants located within structures fronting on Ocean Avenue allowed: 15. See also Chapter 17.56 CMC, Restricted Commercial Uses. k) The operator of the use shall be responsible for the clean-up of all on-site and off-site litter generated by the use including twice-daily clean-up of all sidewalks and gutters within 50 feet of the storefront and twice-yearly steam cleaning of this area. A practical plan for monitoring and implementing this standard shall be submitted for review with the application for use permit, and will be adopted as a condition of approval of the use.
l) See also subsection (I)(1) of this section, All Eating and Drinking Establishments.

Combining Uses: A Drinking Place is defined as a business serving beverages for consumption on the premises as a primary use and including on-sale service of alcohol including beer, wine, and mixed drinks.

To hold one of the three licenses for a drinking place, a business must serve beverages as a primary use and any additional use, including the service of food, is ancillary. Establishing an ancillary food service Attachment 2

(other than light snacks; i.e. nuts, pretzels, peanuts, etc.) with a Drinking Place may be permitted only through approval of a Conditional Use Permit issued by the Planning Commission as:

1. Serving food (restaurant, full-line or specialty) is not expressly permitted as an ancillary use for the Drinking Place use (CMC 17.14.040.B.2).

2. Serving food (restaurant, full-line or specialty) requires a use permit.

Establishing an ancillary food service would only be allowed with a full-line restaurant as alcohol is not permitted to be sold under a specialty restaurant classification.

To contrast, a full-line restaurant may provide ancillary alcohol sales when no more than 20% of the restaurant seats are located at a bar or separate bar room. Pursuant CMC 17.14.040.I.3.d (Full Line Restaurants), The applications, menus and plans indicate that the business will primarily be a restaurant – full line, and that no more than 20 percent of the total number of seats are at a bar or in a separate bar room. If the use does not meet this standard, the standards in subsection (I)(2) of this section, Drinking Places, shall also apply to the use.

1. If a full-line restaurant provides less than 20% of its seats at a bar or in a bar room, the business is classified as a full-line restaurant with permitted ancillary alcohol sales.

2. If a full-line restaurant provides more than 20% of its seats at a bar or in a bar room, the code classifies the use as a drinking place as the primary use and the restaurant as ancillary. As a use permit is required for either use, the Planning Commission may authorize the ancillary use (the restaurant) to exceed 10% of the primary use.

FUTURE CONSIDERATIONS
Carmel-by-the-Sea has wrestled with its policies on alcohol from its very founding. Property deeds have included alcohol restrictions since the late 1800s through to the post-Prohibition era. The mid-twentieth century saw liquor licenses challenged, while the early twenty first century brought a boom in wine tasting rooms. City law has changed with the times and today, it may be prudent to once again re-evaluate Carmel’s approach to alcohol regulation.

When the Covid-19 emergency proclamation is rescinded, there will be increased urgency to clarify the City’s policies on wine tasting shops and bars. The Covid era has served as a pilot program of sorts for expanded outdoor drinking in Carmel. While the existing Zoning Code and General Plan effectively disallow outdoor drinking areas for bars and tasting shops, there may be cause to re-evaluate this in the future, both for private and public property.

Option 1: Maintain Status Quo. The City could maintain the status quo, though residents and business owners cite a number of problematic conditions. The 200-foot minimum distance between properties with liquor licenses significantly limits available locations both for new businesses and for existing businesses looking to relocate. The 200-foot minimum distance rule has not been consistently applied Attachment 2

with tasting room approvals, resulting in an inequitable regulatory landscape for bars compared to tasting rooms. Wine tasting shops operate in the capacity of wine bars, in direct conflict with the retail function described in their use permits. There are numerous local restaurants that include a bar as an ancillary use, yet revenue breakdowns are not submitted to the City as proof of primary vs. ancillary bar use. In some cases, restaurants and bars are barely differentiated beyond their closing times. Something else to consider is that use permits for the three legal drinking places (bars) run with the land. If a bar goes out of business, the property owner may or may not choose to continue the use. Sade’s UP 93-47 and A.W.

Shucks UP 93-45 both state “this use permit shall become void and of no further force of effect upon termination or discontinuance of the use for any period of time exceeding six months.” Option 2: Codify and Enforce Policies Already in Place. The Wine Tasting Policy could be codified and better enforced. The use permits for the wine tasting shops and drinking places could be reviewed by code compliance and enforced. This option would involve consistent application of existing laws across all uses and establishments and would be viewed by the community as a tightening of restrictions.

Option 3: Loosen Restrictions. The City may choose to remove the 200-foot minimum distance requirement between all establishments with liquor licenses. Alternatively, the distance requirement could be removed for bars and tasting rooms but retained for liquor stores. The three-bar limit could be officially discarded, maintained, or expanded. Options for outdoor drinking and dining could be expanded (for public and/or private property).

Option 4: Create new use categories. The City could create new use categories, such as specialty and fullservice drinking places. Wine tasting rooms could be re-categorized as specialty drinking places rather than primarily retail shops, and be permitted to serve in outdoor spaces (courtyards, passages, patios) within reason and subject to approval of ABC. The new use category approach would encompass potential future businesses, such as specialty beer or spirit tasting.

Whatever the approach, it is important that Carmel maintain a mix of uses per the General Plan and prioritize equitable policies for our business community.

Attachment 2