DATE:
March 19, 2024
TO:
Mayor and Council Members
FROM:
Rachel Molina, City Manager
BY:
Nathan R. Freeman, Director of Development Services
Ryan Leonard, Principal Planner
SUBJECT:
Urgency Ordinance-Single Price Overstock/Discount Stores Moratorium
RECOMMENDED ACTION
It is recommended that the City Council waive further reading and adopt Urgency Ordinance 2024-03 pursuant to California Government Code Section 65858 extending a moratorium for a period of ten (10) months and fifteen (15) days on the establishment or expansion of single price overstock/discount stores, or store as appropriate (SPODS).
BACKGROUND
Pursuant to State law, Government Code Section 65858, a city may enact an interim zoning ordinance on an urgency basis (“Urgency Ordinance”) for the protection of public safety, health, and welfare by prohibiting any use(s) that a city is intending to study within a reasonable period of time.
On February 6, 2024, the City Council adopted Urgency Ordinance No. 2024-02 establishing a 45-day moratorium on the establishment or expansion of SPODS in the City. Pursuant to State law, the adopted Urgency Ordinance is valid for 45 days and will expire on March 22, 2024, unless extended by the City Council. After holding a public hearing, the City Council may extend the Urgency Ordinance for up to an additional 10 months and 15 days, for a total period of one year. As with the initial adoption of the Urgency Ordinance, a four-fifths (4/5) vote is required to extend the Urgency Ordinance.
An extension of the Urgency Ordinance will allow staff the necessary time to draft a Development Code Amendment, to regulate the establishment or expansion of new SPODS, and present it to the Planning Commission for review and then the City Council for final review and approval.
ISSUES/ANALYSIS
As noted in staff’s previous report, dated February 6, 2024, SPODS are generally defined as a retail store that is less than 15,000 square feet and sells individual items generally obtained through outlet, close-out, discontinued, liquidation, or overstock, primarily at a single discount price or in the low and very low price ranges (e.g., $10.00, or less). Moreover, a SPODS typically dedicates less than fifteen percent (15%) of shelf space to fresh or frozen foods and produce and sells at retail an assortment of physical goods, products or merchandise directly to the consumer, including food or beverage for off-premises consumption, personal grooming and health products, household goods, and other consumer products.
Additionally, SPODS may have a profound impact on the public health, safety, general welfare, and quality of life of surrounding communities and tend to proliferate in low-income neighborhoods. SPODS typically have lower quality items, items that cost much more per ounce over time, and limited access to fresh foods for vulnerable neighborhoods. Furthermore, SPODS generally employ fewer people at lower wages than grocery stores and tend to depend on taxpayers to subsidize their employees’ health insurance. Also, SPODS contribute to resident fear of safety by being a source of trash, loitering, or graffiti, and theft in and around them due to their lack of security.
The City’s current zoning code does not specifically identify SPODS as permitted by right or as a conditional use, so no specific regulations to curb threats to public health, safety, or welfare exist. As developable land becomes scarcer in the City, there is concern that the proliferation of SPODS, without further regulation, could have adverse impacts on the community. SPODS tend to operate in minimally developed spaces, discourage the upgrading of the existing area and its future economic vibrancy, and are inconsistent with the goal of upgrading commercial areas. Should SPODS continue to be permitted to locate within the commercial areas of the City, without further regulation, such developments would constitute a current and immediate threat to the public health, safety, and welfare in that such a development will start an irrevocable downward shift in the economic and aesthetic value of the area and thus act as a bar to the goals of the City.
Currently, the City has seventeen (17) single price overstock discount stores within the community:
Number
Company
Location
1 Dollar Tree
Main St / Eighth Ave
2 Family Dollar
Main St / Hickory Ave
3 Dollar Tree
Main St / I Ave
4 Dollar Tree
Main St / Escondido Ave
5 Button’s Discount Store
Main St / G Ave
6 99 Cents Only
Main St / G Ave
7 99 Cents Only
Main St / Topaz Ave
8 Dollar General
I Avenue / Danbury Ave
9 M&M $.99+ Store
Main St / Eleventh Ave
10 760 Discount Tools
Hesperia Rd / Mesa St
11 Elite Tools and More
Main St / Eighth Ave
12 Second Time Around Bin Store
Hesperia Rd / Sequoia St
13 High Desert Thunder Deals
Main St / Eighth Ave
14 99 Cent Discount Store
Main St / C Ave
15 99 Cent and Plus
Bear Valley Rd / Hesperia Rd (PENDING)
16 H&R Discount
Main St / Eighth Ave
17 Cash Deal and More
Main St / Seventh Ave
Staff intends to study the issues associated with SPODS to determine which locations are most appropriate to mitigate any potential adverse impacts on the City. This includes reviewing land use definitions for SPODS to determine if revisions are needed, evaluating all land use districts where SPODS are permitted for suitability, and study development standards and best practices from other jurisdictions to determine if they would be appropriate City-wide.
Staff believes that continued approval of entitlements, building permits, or other approvals for new SPODS, without further regulations or studies, poses a current and immediate threat to public health, safety, and general welfare. Further regulations, via a Development Code Amendment, are needed for the purpose of protecting neighborhoods from negative secondary effects created by the concentration or clustering of such businesses. The regulations will help to avoid and reduce over-concentration and to maintain cleanliness for the health and safety of residents within the City’s neighborhoods.
As previously noted, per Government Code Section 65858, a municipality may adopt an interim ordinance prohibiting any uses that may be in conflict with a contemplated general plan, specific plan, or zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study within a reasonable time, for the immediate preservation of the general health, safety, or welfare, provided the ordinance contains a declaration of the facts constituting the urgency, and is passed by not less than a four-fifths (4/5) vote of the City Council.
As such, staff recommends that the City Council waive further reading and adopt Urgency Ordinance 2024-03 pursuant to California Government Code Section 65858 extending the moratorium for a period of ten (10) months and fifteen (15) days, or until such time as a permanent development code is in full force and effect, on the establishment or expansion of SPODS.
ENVIRONMENTAL REVIEW
The City, as the Lead Agency, has determined that the proposed interim ordinance is exempt from further review under the California Environmental Quality Act (California Public Resources Code 21000, et seq., "CEQA"). Section 15378 of the CEQA Guidelines provides that an activity is a project subject to CEQA when action that has the potential for resulting in physical change to the environment, either directly or indirectly. Section 15061(b)(3) of the CEQA Guidelines provides that CEQA only applies to projects that have the potential for causing a significant effect on the environment and where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. The City has determined that there is no possibility that the proposed ordinance may have a potential for resulting in physical change to the environment, or that if it does have the potential, there is no possibility that the activity in question may have a significant effect on the environment.
FISCAL IMPACT
There are no fiscal impacts identified with this action.
ALTERNATIVE(S)
Provide alternative direction to staff.
ATTACHMENT(S)
Urgency Ordinance 2024-03
City of Hesperia STAFF REPORT City of Hesperia STAFF REPORT City of Hesperia
STAFF REPORT
City of Hesperia
STAFF REPORT
Staff Report to the Mayor and Council Members
Urgency Ordinance - Single Price Overstock/Discount Stores Moratorium March 19, 2024