Agenda Report
Fullerton City Council
MEETING DATE: MARCH 15, 2022
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: JEFFREY W. COLLIER, ACTING CITY MANAGER
PREPARED BY: MEG MCWADE, PUBLIC WORKS DIRECTOR
GREG PFOST, INTERIM DIRECTOR OF COMMUNITY DEVELOPMENT
KELLEE FRITZAL, INTERIM DEPUTY DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT SUBJECT: TEMPORARY OUTDOOR DINING PROGRAM
SUMMARY
Consideration of Temporary Outdoor Dining Program termination which City Council designated to sunset on March 21, 2022. Should City Council terminate the Temporary Outdoor Dining Program, businesses would have until June 13, 2022 to cease outdoor operations and remove the temporary structures. Staff also requests direction on the Walk on Wilshire Street Closure Outdoor Dining project.
RECOMMENDATION
Ratify Temporary Outdoor Dining program termination effective March 21, 2022.
Authorize City Manager, or designee, to work with businesses through June 13, 2022 to cease outdoor operations and remove temporary structures.
Provide direction related to the Walk on Wilshire (WOW) Street Closure per the following options:
Eliminate the temporary outdoor dining program on WOW effective June 13, 2022, with area restored to prior condition by that date thereby reopening Wilshire to traffic or
Extend the temporary closure of Wilshire on an interim basis thereby continuing to allow temporary outdoor dining on WOW for an additional 12-month period while the City evaluates adding a temporary bike lane at an initial cost of $25,000. This option requires a commitment from at least three businesses to initiate applying for an Encroachment Agreement and related permits per the City’s established permanent outdoor dining / retail program Or
Move to permanently close Wilshire to traffic which would necessitate unknown capital improvements and will require future City Council action on the design of the closure and budget appropriation to permanently close Wilshire.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Public Safety
Infrastructure and City Assets.
FISCAL IMPACT
The City has extended outdoor dining currently with no fees. Terminating the Temporary Outdoor Dining Program enables all businesses interested in a permanent outdoor dining or retail program to participate in an equitable application process for an Encroachment Agreement or amended Conditional Use Permit which promotes a safe outdoor experience for all Fullerton residents and visitors.
Continuing the Walk On Wilshire street closure / outdoor dining project will incur improvement costs to provide better access for bicyclists in the street closure area. For the interim closure, these one-time costs range up to $25,000 with some work completed in-house. The long-term permanent closure option could require significant investments based on selected design for the project, once developed. The City has not identified funding for improvements for the WOW project at this time. The City’s operational budget has absorbed ongoing operational costs for maintenance of plant material and damage / vandalism for the current WOW Project
DISCUSSION
Background
Prior to the COVID-19 pandemic, the Fullerton Municipal Code permitted outdoor dining as an extension to a business’ operations / floor area through the issuance of an Encroachment Agreement (with specific mitigating measures) and encroachment permit with associated fees for the use of public property. For private property, the City “grandfathered” Conditional Use Permits (CUP) for long-established businesses. Those businesses operated existing outdoor dining areas without amending their CUP, while the City required newer businesses to have an amended CUP.
When the State restricted indoor dining during the COVID-19 pandemic, many municipalities, including the City of Fullerton, temporarily relaxed outdoor dining regulations and standards to allow businesses to continue to operate, primarily by allowing outdoor dining and retail operations to conduct business on either private property or public rights-of-way. During the term of the program since 2020, the City of Fullerton issued more than 70 temporary permits for outdoor dining on both public and private property.
These relaxed standards had both positive and negative effects on businesses and City operations. After consideration of these impacts in September 2021, City Council extended the temporary outdoor dining program through March 21, 2022 as California continued the State of Emergency related to the pandemic.
Future Outdoor Dining
As the State moves away from the pandemic emergency, Staff recommends the City return to the established pre-pandemic approval process and related fees for Outdoor Dining on public property. The allowance for 90 days (June 13, 2022) to remove the outdoor dining areas will also provide an opportunity for businesses to go through the City’s approval process, should the business wish to activate on a permanent basis. There are various types of temporary outdoor dining areas which the City has activated:
Public property such as City parking lots and alleys
Private property – such as utilization of privately owned parking lots Walk On Wilshire (WOW) Street Closure Project.
The following sections discuss the distinct programs within each area.
Public Property: Of the 16 temporary outdoor dining permits issued on public property, nine businesses currently operate on public property shown in Attachment 3. Of these, six operate in public parking lots, two in alleys and one on a back sidewalk. Should businesses elect to pursue standard outdoor dining permits, they will need to comply with the established pre-pandemic program guidelines including providing site plans, complying with any building and public works requirements and paying the ongoing lease fees, in addition to any application processing fees. The City established lease fees in 2012 and as noted in the following excerpt from the policy:
“4. Lease Rate
The monthly lease rates are listed below and are subject to change.
No Liquor: $0.30/s.f. (or $3.60/s.f. annually)
Beer/Wine only: $0.60s.f. (or $7.20/s.f. annually)
Full Liquor: $0.90/s.f. (or $10.80/s.f./ annually)
Applicants have the option of monthly or annual billing of lease fees, option must be selected at the time of application.
Monthly/annual lease rates are to be waived for restaurants with outdoor dining on public property of less than 100 s.f. and without alcohol service. However, an encroachment agreement, subject to the applicable application fee is a requirement in order to secure indemnification and other liability safeguards for the City.” Staff provided the following table for informational purposes as to potential monthly lease rates – based on potential use types and areas. The City will charge actual leases based on the approved site plan per business.
Several businesses utilize public parking lots under the temporary program. These public parking lots are outside of Parking Districts 1 and 2 and, therefore, City Council has sole discretion to activate these for private purposes. Should any of the businesses opt to mobilize in the City’s parking lots, resulting in a loss of parking spaces, staff will return to City Council for consideration of the Encroachment Agreement.
Private Property: Of the 64 private property sites that obtained an extension for a temporary outdoor dining permit, 23 currently have active outdoor dining areas, predominantly in private parking lots. To provide for permanent outdoor dining areas on private property, the property owner will need to obtain approval of a Conditional Use Permit from the Planning Commission in compliance with the Fullerton Municipal Code. The proposed dining area would also need to comply with any applicable local, state and federal standards. The City receives no ongoing revenues from activation of the outdoor dining areas on private property other than the potential impact on sales tax.
Walk On Wilshire (WOW) Street Closure Project: The WOW Project temporarily closed Wilshire from Harbor Boulevard, easterly to approximately mid-block, and provided for businesses to activate in the closed street area. The City has received mixed support for the continued activation of this area and has various options to consider related to this project:
Eliminate the temporary outdoor dining program on WOW effective in 90 days (June 13, 2022), with area restored to prior condition by that date or
Extend the Closure on an interim basis and provide outdoor dining on WOW for a 12-month trial period - provided the City installs a temporary bike lane and receives a commitment from at least three businesses to obtain a Standard Outdoor Dining Agreement, which would most likely necessitate an investment by the company in a deck area or
Move to permanently close Wilshire – providing outdoor dining on WOW (businesses to obtain a Standard Outdoor Dining Agreement and pay associated fees) until the City can create a permanent design / program, which will require future City Council action and funding to activate the permanent bike route accessibility.
There has been discussion whether the City should provide for this as a permanent outdoor dining / open space area. Staff seeks direction as to City Council’s preferable option – elimination, interim closure option for a 12-month period or permanent closure. The City has received general support in concept from the activated businesses to continue the closure. However, should City Council wish to pursue the idea of an interim or permanent closure, Staff will request a firm commitment from the businesses and property owners adjacent to the area to activate the space under the City’s standard outdoor dining guidelines as well as their acceptance to pay the related lease fees. Staff anticipates the businesses may need to make investments in parklet type structures or other improvements that provide for at-grade accessibility and ongoing drainage for the street. Staff will return to City Council to provide the level of financial commitment from the potential lessees to determine if mobilizing the space is economically viable to offset any necessary capital investment and ongoing operational costs.
Since Wilshire is a designated bike route, the CIty will need to determine how to accommodate dining and biking movements for continuing closure. Staff presented several plans at Active Transportation Committee (ATC) meetings and received varying opinions from the Committee Members on whether to support the continued street closure at all. Ultimately, ATC voted to make a recommendation on how to implement a bike lane should City Council decide to pursue the closure option. ATC affirmed Option #4 at its March 9, 2022 meeting, which provides bike access in the center of the street and dining in the outer lanes. The following graphic shows ATC’s preferred option:
The City could implement the preferred option in various ways. ATC recommended Option #4C as the way to facilitate bicycle travel through the Walk on Wilshire Outdoor Dining area. Option #4C would close Wilshire with dedicated / separated bike lanes which would ultimately include signal modifications and other capital improvements.
Option #4C
If City Council opts to extend WOW for the 12-month period, the City would activate an interim bike lane solution. The more permanent closure has varying levels of investment dependent upon the ultimate design of the plaza area. The most-costly option would be permanent closure of the roadway to create an at-grade fully accessible pedestrian plaza involving significant and extensive demolition and reconstruction of the existing roadway facilities. The permanent closure project would require funding and development of a design. Once developed, the staff would present the design to City Council for consideration.
The City currently has no funds budgeted for this project. In-house staff can perform some of the work for an interim bike lane with the potential need for funding for materials and/or contractors. Should City Council wish to continue the closure, Staff will include a request for funds for the interim solution through the budget process and for a design consultant should City Council provide direction for permanent closure. Should City Council prioritize the project, the City will need to reduce either General Fund programs or street expenditures to accommodate the costs.
There are additional considerations as to whether to continue the WOW Project. The City provides and maintains landscaping, signs and barriers and spends approximately four to seven hours per week performing services for the WOW area, with a material replacement costs for damaged signs and barriers up to $1,000 per year. The businesses utilizing the space provide the furniture and clean their respective areas. However, they currently do not pay fees for the use of this space. The City would incur costs to make this area a permanent feature and continued ongoing maintenance costs. If businesses choose not to deploy, the City may activate a space, with costs not offset by lease revenues.
The temporary program has provided value to the businesses, City and patrons with the activation of temporary outdoor dining and retail spaces. The City originally created the temporary program to ensure the viability of Fullerton businesses during the pandemic. Continuing the temporary outdoor dining and retail spaces creates ongoing inequity as new or other businesses express interest in an outdoor dining or retail spaces program through the City’s permanent outdoor dining process. The City’s permanent outdoor dining process ensures equitable access to the process for all businesses and ensures compliance with Americans with Disability Act and other requirements through adherence with the Fullerton Municipal Code. The program ending will enable business to move from relaxed standards to the more clearly defined regulations of the City’s established permanent outdoor dining program.
Attachments:
Attachment 1 – Presentation
Attachment 2 – Outdoor Dining Guidelines Adopted August 21, 2012 Attachment 3 – Active Public Property Temporary Outdoor Dining Areas Temporary Outdoor Dining Program
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