Pacific Grove City Council
May 6, 2026

CITY COUNCIL

REGULAR MEETING AGENDA
Wednesday, May 6, 2026, 6:00 P.M.

Council Chamber – City Hall – 300 Forest Avenue, Pacific Grove, CA The Council will not begin consideration of any item on this agenda later than 10:00 p.m. unless such consideration is approved. Any items on this agenda not considered this evening will be continued to a future meeting.

Copies of the agenda packet are available for review at the Pacific Grove Library, in the Finance Department, and electronically at www.cityofpacificgrove.org/agendas. The most effective method of communication with the City Council is by sending an email to [email protected]. In order to allow the City Council adequate time to review communication related to an agenda item, it is recommended that the communication be sent no later than 9:00 AM on the day prior to the City Council meeting. Public comments received through this email address by noon on the day of the meeting will be posted with the corresponding agenda item.

Under the Brown Act, public comment for matters on the agenda must relate to that agenda item and public comments for matters not on the agenda must relate to the subject matter jurisdiction of this legislative body. This is a warning that if a member of the public attending this meeting remotely or in-person violates the Brown Act by failing to comply with these requirements of the Brown Act, then the Mayor or Chair may request that speaker be muted. If a member of the public attending this meeting in-person engages in disruptive behavior that disturbs the orderly conduct of the meeting, they may be removed from the meeting after a warning, pursuant to Council Policy 000-17.

PACIFIC GROVE COUNCIL MEETINGS ARE CONDUCTED IN PERSON AT CITY HALL COUNCIL CHAMBER AND VIRTUALLY.

PLEASE NOTE THE MEETING WILL PROCEED AS NORMAL EVEN IF THERE ARE TECHNICAL DIFFICULTIES ACCESSING ZOOM.

THE CITY WILL DO ITS BEST TO RESOLVE ANY TECHNICAL ISSUES AS QUICKLY AS POSSIBLE.

THE PUBLIC MAY ALSO VIEW THE MEETING ON PENINSULA CHANNEL 25.

JOIN THE ZOOM WEBINAR TO PARTICIPATE LIVE AT:
https://www.cityofpacificgrove.org/Zoom_CC
Please click here for directions to dial into the meeting audio.

AGENDA

CALL TO ORDER
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PLEDGE OF ALLEGIANCE: Mayor Smith

1. APPROVAL OF AGENDA

2. PRESENTATIONS

3. COUNCIL AND STAFF ANNOUNCEMENTS (City-Related Items Only) A. Report on Closed Session by City Attorney
B. Other

4. GENERAL PUBLIC COMMENT
General Public Comment must deal with matters subject to the jurisdiction of the City and the Council that are not on the Regular Agenda. This is the appropriate place to comment as to items on the Consent Agenda, only if you do not wish to have the item pulled for individual consideration by the Council. Comments from the public will be limited to three minutes and will not receive Council action. Comments regarding items on the Regular Agenda shall be heard prior to Council’s consideration of such items at the time such items are called.

Whenever possible, written correspondence should be submitted to the Council in advance of the meeting, to provide adequate time for its consideration.

A. Written General Public Comment

CONSENT AGENDA
The Consent Agenda deals with routine and non-controversial matters, and may include action on resolutions, ordinances, or other public hearings for which testimony is not anticipated. The vote on the Consent Agenda shall apply to each item that has not been removed. Any member of Council, staff, or the public may remove an item from the Consent Agenda for individual consideration. When items are pulled for discussion, they will be automatically placed at the end of their respective section within the Regular Agenda. One motion shall be made to adopt all non-removed items on the Consent Agenda.

5. APPROVAL OF CITY COUNCIL MEETING MINUTES
Items pulled from this section will be placed under 11. Unfinished and Ongoing Business A. Minutes of the April 15, 2026 Special and Regular Meetings PG 8 Reference: Sandra Kandell, City Clerk
Recommended Action: Approve the minutes.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

6. RESOLUTIONS
Items pulled from this section will be placed under 11. Unfinished and Ongoing Business or 12. New Business PGCC 5-6-26
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A. Resolution of Intention to Levy the Annual Assessment for the Downtown Business PG 16 Improvement District (BID)
Reference: Lori Frati, Finance Manager
Recommended Action:

Approve the attached Resolution of Intention to Levy an Assessment for the Downtown Business Improvement District for Fiscal Year 2026-27

1. Hold a public hearing on May 20, 2026 to hear protests and determine whether to levy the assessment.

2. CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. Resolution of Intention to Levy the Annual Assessment for the Hospitality Improvement PG 20 District (HID)
Reference: Lori Frati, Finance Manager
Recommended Action:

Approve the attached Resolution of Intention to Levy an Assessment for the Hospitality Improvement District for Fiscal Year 2026-27.

1. Hold a public hearing on May 20, 2026 to hear protests and determine whether to levy the assessment.

2. CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

7. ORDINANCES
Items pulled from this section will be placed under 10. Public Hearings A. Second Reading of Ordinance Adopting Amendments to the R-3, C-1, C-2, and R-3-M Zoning Regulations
Reference: Jon Biggs, Community Development Director PG 24 Recommended Action: Hold second reading and adopt an Ordinance Amending Chapters

23.24, 23.32, and 23.52 of Title 23, Zoning, of the Pacific Grove Municipal Code.

CEQA: Environmental Impact Report
B. Second Reading of an Ordinance Approving Concession Lease Agreement with Fortunate Fork, LLC
Reference: Nicholas Cina, Management Analyst PG 89
Recommended Action: Hold second reading and adopt an ordinance approving a concession lease agreement with Fortunate Fork, LLC.

CEQA: Categorical Exemption, CEQA Guidelines Section 15301, Class I, Existing Facilities

8. REPORTS – INFORMATION ONLY
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9. REPORTS – REQUIRING ACTION
Items pulled from this section will be placed under 11. Unfinished and Ongoing Business or 12. New Business A. Appointments to the Museum Board PG 125
Reference: Nick Smith, Mayor
Recommended Action:

Approve appointments to the Museum Board.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. Regional Surface Transportation Program Allocation Funding Agreement PG 135 Reference: Daniel Gho, Public Works Director/Deputy City Manager Recommended Action:

Authorize an agreement with the Transportation Agency for Monterey County (TAMC) for appropriation of $123,590.57 of Fair Share Regional Surface Transportation Program funds.

1. 2. Alternatively, discuss and take other action related to this item.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
C. Renewal of Microsoft Enterprise Software License Agreement PG 144 Reference: Mohammed Khasimi, Chief Information Officer
Recommended Action:

Authorize a 3-year renewal agreement with Dell / Microsoft for Microsoft Enterprise Software Licensing through Riverside County Master Agreement, in the amount of approximately $26,000 annually.

1. 2. Alternatively, discuss and take other action related to this item.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
D. Emission-Reducing Replacement of City Owned Natural Gas Water Heaters, Funded by PG&E Government/K-12 Program Incentive
Reference: George Fuerst, Environmental Program Manager PG 182 Recommended Action:

1. Authorize the City Manager, or designee, to enter into an agreement with Willdan, an authorized implementer of PG&E Programs, for the replacement of natural gas storage tank water heaters with emission-reducing heat pump water heaters or on-demand natural gas water heaters.

2. Alternatively, take other action related to this item.

CEQA: Categorical Exemption, CEQA Guidelines Section 15302, Class 2, Replacement or PGCC 5-6-26
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CEQA: Categorical Exemption, CEQA Guidelines Section 15302, Class 2, Replacement or Reconstruction of Existing Structures and Facilities
E. Extension with Topes Tree Service Inc. for Tree Maintenance Services in Public Right of PG 194 Way
Reference: Daniel Gho, Public Works Director/Deputy City Manager Recommended Action:

Authorize Fiscal Year 2026/27 extension with Topes Tree Service Inc. to provide Tree Maintenance Services for trees in the public right-of-way and on City-owned properties in an amount not to exceed $250,000.

1. 2. Alternatively, take other action related to this item.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
F. Assembly Bill 2254 / Coastal Monarchs Protection Act PG 196 Reference: Lori McDonnell, Councilmember
Recommended Action:

Submit letter in support of Assembly Bill 2254
CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

10. MEETING MINUTES OF COMMISSIONS, BOARDS, AND COMMITTEES Items pulled from this section will be placed under 12. New Business A. Task Force on Diversity, Equity and Inclusion Meeting Minutes: 1/12, 2/9, and 3/9/2026 Reference: Sandra Kandell, City Clerk/DEI Coordinator PG 207 Recommended Action: Receive the minutes.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

REGULAR AGENDA

11. PUBLIC HEARINGS
For public hearings involving a quasi-judicial determination by the Council, the proponent of an item may be given 10 minutes to speak and others in support of the proponent’s position may be given three minutes each. A designated spokesperson for opposition to the item may be given 10 minutes to speak and all others in opposition may be given three minutes each. Very brief rebuttal and surrebuttal may be allowed in the sole discretion of the Council. In public hearings not involving a quasi-judicial determination by the Council, all persons may be given three minutes to speak on the matter.

A. Consider an Appeal of the Planning Commission’s approval of Coastal Development Permit 26-0011, Crespi Pond Vegetation Management Project (portion of APN 007-011-006) and Adoption of an Initial Study/Mitigated Negative Declaration.

Reference: Joseph Sidor, Contract Planner
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Reference: Joseph Sidor, Contract Planner PG 214
Recommended Action: Staff recommends the City Council deny the appeal, adopt the Initial Study/Mitigated Negative Declaration pursuant to CEQA Guidelines Section 15074, approve a 5-Year Coastal Development Permit (CDP 26-0011) subject to the findings and conditions of approval, and adopt the associated Mitigation Monitoring and Reporting Plan.

CEQA: Initial Study, Mitigated Negative Declaration

12. UNFINISHED AND ONGOING BUSINESS
A. Process for Submitting Applications to Fill Vacant Council Seat PG 510 Reference: Sandra Kandell, City Clerk
Recommended Action:

Direct the City Clerk to post the application on the City Council’s webpage and make available upon request.

1. Direct the City Manager to advise potential applicants to submit applications to the City Clerk commencing May 7, 2026 and closing on a specific date directed by the City Council.

2. Direct the City Manager to return to the City Council at a date specific for a review of the applications and the appointment of an applicant to the position of City Councilmember and the appointed applicant to be sworn in by the City Clerk.

3. 4. Direct staff to take alternative action within this subject matter.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. Consider Draft City Council Policy 000-XXX Vacancy in Elective Office and Appointment.

Reference: Sandra Kandell, City Clerk PG 514
Recommended Action: Adopt a Resolution approving the Vacancy in Elective Office and Appointment City Council policy.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

13. NEW BUSINESS
A. Receive Presentation and Consider Approving ReGen Monterey's Technical Advisory Committee's Subgroup Recommendation on the 2030 Collection Franchise Planning Process.

Reference: George Fuerst, Environmental Program Manager PG 520 Recommended Action:

Adopt a Resolution initiating a Competitive Request for Proposal Process for future Solid Waste, Recycling, and Organic Collection Services; and Adopt related Process Integrity Policy.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines PGCC 5-6-26
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CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. Installation of a 4-way Stop at the Intersection of Congress, Central and Lighthouse Avenue Reference: Daniel Gho, Public Works Director/Deputy City Manager PG 639 Recommended Action:

Receive report and authorize staff to install a 4-way stop at the intersection of Lighthouse, Congress and Central Avenue and all associated actions consistent with installation of a 4-way stop.

1. 2. Alternatively, discuss and take other action related to this item.

CEQA: Categorical Exemption, CEQA Guidelines Section 15301, Class I, Existing Facilities

14. FULL PRESENTATIONS

15. CLOSED SESSION

ADJOURNMENT
NOTICE OF ADA COMPLIANCE: Pursuant to Title II of the Americans with Disabilities Act (Codified At 42 United States Code Section 12101 and 28 Code of Federal Regulations Part 35), and Section 504 of the Rehabilitation Act of 1973, the City of Pacific Grove does not discriminate on the basis of race, color, religion, national origin, ancestry, sex, disability, age or sexual orientation in the provision of any services, programs, or activities. The City of Pacific Grove does not discriminate against persons with disabilities. City Hall is an accessible facility. A limited number of assisted listening devices will be available at this meeting. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting or provide the requested agenda format.

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Agenda No. 5 A

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Sandra Kandell, City Clerk/DEI Coordinator
MEETING DATE: May 06, 2026
SUBJECT: Minutes of the April 15, 2026 Special and Regular Meetings CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

RECOMMENDATION
Approve the minutes.

Attachments
Draft Minutes 4-15-26
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CITY OF PACIFIC GROVE

CITY COUNCIL

SPECIAL MEETING
Wednesday, April 15, 2026, 4:30 P.M.

Council Chamber – City Hall – 300 Forest Avenue, Pacific Grove, CA APPEARING REMOTELY:

Councilmember Chaps Poduri
3550 Ridge Line Drive
San Bernardino, CA 92407
Join the Zoom Meeting to participate live at:
https://www.cityofpacificgrove.org/Zoom_Closed

CALL TO ORDER
Mayor Smith called the meeting to order at 4:30 p.m. Present in Chamber: Mayor Smith, Mayor Pro Tem Amelio, Councilmembers Garfield, and McDonnell. Absent: Councilmembers Poduri and Rau.

APPROVAL OF THE AGENDA
Action: Upon motion by Councilmember McDonnell and seconded by Mayor Pro Tem Amelio, the Council voted 4-0-2, Councilmembers Poduri and Rau absent, to approve the Closed Session Meeting Agenda.

SPECIAL CLOSED SESSION MEETING

PUBLIC COMMENT ON SPECIAL CLOSED SESSION MEETING MATTERS No public comment received.

A. Closed Session Conference with Labor Negotiators (Government Code Section 54957.6) City Negotiators: Matthew Mogensen, City Manager, Fred Marsh, Administrative Services Director, Che Johnson, Esq. Liebert Cassidy Whitmore and Leticia Livian, Human Resources Director
Employee Organization: General Employees Association, Management Employees Association, Unrepresented Management, Confidential Employees, and Unrepresented Department Heads

ADJOURNMENT
Council adjourned the special closed session meeting at approximately 4:50 p.m.

Respectfully Submitted,
Sandra Kandell
City Clerk
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CITY OF PACIFIC GROVE

CITY COUNCIL

SPECIAL STUDY SESSION MEETING
Wednesday, April 15, 2026, 5:00 P.M.

Council Chamber – City Hall – 300 Forest Avenue, Pacific Grove, CA APPEARING REMOTELY:

Councilmember Chaps Poduri
3550 Ridge Line Drive
San Bernardino, CA 92407
YOU MAY VIEW THE MEETING LIVE VIA ZOOM AT:
https://www.cityofpacificgrove.org/Zoom_CC

CALL TO ORDER
Mayor Smith called the meeting to order at 6:00 p.m. Present in Chamber: Mayor Smith, Mayor Pro Tem Amelio, Councilmembers Garfield, and McDonnell. Absent: Councilmembers Poduri and Rau.

APPROVAL OF THE AGENDA
Action: Upon motion by Mayor Pro Tem Amelio and seconded by Councilmember Garfield, the Council voted 4-0-2, Councilmembers Poduri and Rau absent, to approve the Study Session Meeting Agenda.

1. NEW BUSINESS
A. Coral Street Pump Station Pacific Grove
Public comment received from Lila Seldin, Rudolph Estrada, Jacolyn Harmer, Trinh Retterer, Debbie Rappa, Layla Sandell, Peter, Soe Aung, Mark Page, Warren, Karl Lindstrom, and Jessica Denecour.

Action: Council received the presentation.

CEQA: Initial Study, Mitigated Negative Declaration

ADJOURNMENT
Council adjourned the special study session meeting at 5:50 p.m.

Respectfully Submitted,
Sandra Kandell
City Clerk
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CITY COUNCIL

REGULAR MEETING
Wednesday, April 15, 2026, 6:00 P.M.

Council Chamber – City Hall – 300 Forest Avenue, Pacific Grove, CA APPEARING REMOTELY:

Councilmember Chaps Poduri
3550 Ridge Line Drive
San Bernardino, CA 92407
JOIN THE ZOOM WEBINAR TO PARTICIPATE LIVE AT:
https://www.cityofpacificgrove.org/Zoom_CC

CALL TO ORDER
Mayor Smith called the meeting to order at 6:00 p.m. Present in Chamber: Mayor Smith, Mayor Pro Tem Amelio, Councilmembers Garfield, and McDonnell. Absent: Councilmembers Poduri and Rau.

Councilmember Poduri arrived remotely at approximately 6:10 p.m.

PLEDGE OF ALLEGIANCE
Mayor Pro Tem Amelio led the pledge of allegiance.

1. APPROVAL OF AGENDA
Action: Upon motion by Mayor Pro Tem Amelio and seconded by Councilmember McDonnell, the Council voted 4-0-2, Councilmembers Poduri and Rau absent, to approve the Regular Meeting Agenda.

2. PRESENTATIONS
A. Mayor's Proclamation: Arbor Day
Action: Council received the presentation.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

3. COUNCIL AND STAFF ANNOUNCEMENTS (City-Related Items Only) A. Report on Closed Session.

Closed Session Conference with Labor Negotiators (Government Code Section 54957.6) City Negotiators: Matthew Mogensen, City Manager, Fred Marsh, Administrative Services Director, Che Johnson, Esq. Liebert Cassidy Whitmore and Leticia Livian, Human Resources Director
Employee Organization: General Employees Association, Management Employees Association, Unrepresented Management, Confidential Employees, and Unrepresented Department Heads
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4 direction, but no reportable action was taken.

B. Council and staff made general announcements.

4. GENERAL PUBLIC COMMENT
General public comment received from Jane Haines, Christie Italiano-Thomas, Colleen Ingram, and Karl Lindstrom.

A. Written General Public Comment

CONSENT AGENDA
Action: Upon motion by Mayor Pro Tem Amelio and seconded by Councilmember McDonnell, the Council voted 4-0-2, Councilmembers Poduri and Rau absent, to approve the Consent Agenda.

5. APPROVAL OF CITY COUNCIL MEETING MINUTES
A. Minutes of the April 1, 2026 Special and Regular Meetings Action: Approved the minutes.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

6. RESOLUTIONS

7. ORDINANCES

8. REPORTS – INFORMATION ONLY
A. Check Register and Core Fund Summary – March 2026
Action: Received the Check Register and Core Fund summary.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B . Monterey-Salinas Transit Minutes for March 9, 2026
Action: Received the minutes.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

9. REPORTS – REQUIRING ACTION
A. Amendment to 4-Leaf Contract for Traffic Engineering Services Action: Authorized the execution of an amendment with 4-Leaf, Inc., increasing the contract total by an additional $80,000, for Traffic Engineering services for Fiscal Year 2025/26.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
B. Cultural Calendar
Action: Approved a recommendation from the Task Force for Diversity, Equity and Inclusion (DEI) to adopt a cultural calendar for the City of Pacific Grove; and directed staff to create a cultural calendar landing page on the City’s website to serve as a community resource.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378
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5 C. AB 481 Presentation
Action: Accepted the AB481 presentation that was publicly shared with the community on March 16, 2026.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

10. MEETING MINUTES OF COMMISSIONS, BOARDS, AND COMMITTEES A. Historic Resources Committee Meeting Minutes: 9/24/25, 10/22/25, 11/19/25, 12/17/25, 1/28/26, and 2/25/26
Action: Received the minutes.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

REGULAR AGENDA

11. PUBLIC HEARINGS
A. Proposed Amendments to the R-3, C-1, C-2, and R-3-M Zoning Regulations No public comment received.

Action: Upon motion by Mayor Pro Tem Amelio and seconded by Mayor Smith, Council voted to

1. Consider the Addendum to the Certified Environmental Impact Report (EIR);

2. Introduce and hold first reading of an Ordinance Amending Chapters 23.24, 23.32, and

23.52 of Title 23, Zoning, of the Pacific Grove Municipal Code;

3. Direct that publication of the ordinance will be satisfied by publication of a summary approved by the City Attorney.

Motion carried 5-0-1, with the following roll call vote:

AYES: Mayor Smith, Mayor Pro Tem Amelio, Councilmembers Garfield, McDonnell, and Poduri.

NOES: None.

ABSENT: Councilmember Rau.

CEQA: Environmental Impact Report
B. Ordinance Approving Concession Lease Agreement with Fortunate Fork, LLC Public comment received from Paul Dyson.

Action: Upon motion by Mayor Pro Tem Amelio and seconded by Councilmember McDonnell, Council voted to introduce and hold first reading of an ordinance to approve a concession lease agreement with Fortunate Fork, LLC and authorize publication of a summary approved by the City Attorney.

Motion carried 5-0-1, with the following roll call vote:

AYES: Mayor Smith, Mayor Pro Tem Amelio, Councilmembers Garfield, McDonnell, and Poduri.

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6 NOES: None.

ABSENT: Councilmember Rau.

CEQA: Categorical Exemption, CEQA Guidelines Section 15301, Class I, Existing Facilities

12. UNFINISHED AND ONGOING BUSINESS
A. Amend Council Policy 000-25 Regarding Code of Conduct for Council, Boards, and Commissions
Public comment received from Karl Lindstrom, Colleen Ingram, and Inge Lorentzen Daumer.

Action: Upon motion by Mayor Smith and seconded by Mayor Pro Tem Amelio, to adopt Resolution No. 27-007 amending City Council Policy 000-25 regarding the Code of Conduct for Council, Boards, and Commissions, a friendly amendment was requested by Councilmember McDonnell.

Action: Councilmember McDonnell requested a friendly amendment to the original motion to remove Section 5 as it pertains to censure, which was denied by the original maker of the motion.

Action: Upon a substitute motion by Councilmember Garfield to accept the policy amendments as is temporarily and instruct staff and the City Attorney to clarify subjective language and find solutions that handle censure, the motion died for lack of a second.

Action: Upon motion by Mayor Smith and seconded by Mayor Pro Tem Amelio, the Council voted to adopt Resolution No. 27-007 amending City Council Policy 000-25 regarding the Code of Conduct for Council, Boards, and Commissions.

Motion carried 4-1-1 with the following roll call vote:

AYES: Mayor Smith, Mayor Pro Tem Amelio, Councilmembers Garfield, and Poduri.

NOES: Councilmember McDonnell.

ABSENT: Councilmember Rau.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

13. NEW BUSINESS
A. Process for Submitting Applications to Fill Vacant Council Seat No public comment received.

Action: Upon motion by Mayor Smith and seconded by Councilmember Garfield, Council voted to meet May 6, 2026, to set the process for appointment to the vacancy.

Motion carried 5-0-1, with the following roll call vote:

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7 AYES: Mayor Smith, Mayor Pro Tem Amelio, Councilmembers Garfield, McDonnell, and Poduri.

NOES: None.

ABSENT: Councilmember Rau.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

14. FULL PRESENTATIONS
A. Update Regarding Montage Health's Community Work
Action: Council received the presentation.

CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

15. CLOSED SESSION

ADJOURNMENT
Council adjourned the regular meeting at 7:15 p.m.

Respectfully Submitted,
Sandra Kandell
City Clerk
Approved by Mayor: _____________________________________________Date________________ Attest by City Manager: ___________________________________________Date________________ DRAFT PGCC 5-6-26
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Agenda No. 6 A

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Lori Frati, Finance Manager
MEETING DATE: May 06, 2026
SUBJECT: Resolution of Intention to Levy the Annual Assessment for the Downtown Business Improvement District (BID)
CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

RECOMMENDATION
Approve the attached Resolution of Intention to Levy an Assessment for the Downtown Business Improvement District for Fiscal Year 2026-27

1. Hold a public hearing on May 20, 2026 to hear protests and determine whether to levy the assessment.

2. DISCUSSION
In 2000, the City established the Downtown Pacific Grove Business Improvement District (BID), appointed an advisory board, and levied assessments for the District. The assessments may be used only for the promotion, marketing and advertising of professional and retail businesses located in the district, and for general maintenance to benefit those businesses. All businesses located in the BID are assessed an amount equal to 35% of their business license tax. The assessment is collected together with the business license tax payment, each year in July. Since 2000, the BID and assessments have been reauthorized annually, without exception.

Pursuant to State law and the City Council Resolution forming the BID, an Annual Report is required that reports on District revenues and expenditures for the prior fiscal year, proposes a budget, and requests the levy of an assessment for FY 2026-27. The annual report will be included in the May 20, 2026 agenda report. No changes to BID boundaries are recommended for Fiscal Year 2026-27.

At the public hearing on May 20, 2026, the Council will have the opportunity to hear and evaluate any protests received and determine whether to levy the assessment. The Council will also have the opportunity to appoint an advisory board.

OPTIONS

1. Decline to adopt the Resolution.

2. Provide alternate direction.

FINANCIAL IMPACT:

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FINANCIAL IMPACT:

The assessed funds may only be used for BID purposes, including a 1% administrative fee to partially reimburse the City for costs incurred for administration of the BID.. These revenues may not be used for any other City purpose.

FOCUSED PRIORITY AREA: Not Applicable.

Attachments
Resolution Intent to Levy Assessment
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RESOLUTION NO. 26-xxx

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFIC GROVE STATING THE CITY’S INTENTION TO LEVY AN ASSESSMENT FOR THE PACIFIC GROVE BUSINESS IMPROVEMENT DISTRICT FOR FISCAL YEAR 2026-27

FINDINGS

1. In 2000 the City of Pacific Grove established the Downtown Pacific Grove Business Improvement District (BID); and

2. The BID has been approved for continuation each year since it was first established, and has proved to be of benefit to the City in terms of promoting the downtown professional and retail business economy; and

3. The Pacific Grove Chamber of Commerce has requested continuation of the Downtown BID for the 2026-27 fiscal year; and

4. The action proposed by this Resolution does not constitute a “Project” as that term is defined under California Environmental Quality Act (CEQA), CEQA Guideline section 15378.

NOW, THEREFORE, THE COUNCIL OF THE CITY OF PACIFIC GROVE DOES RESOLVE AS FOLLOWS:

1. The City Council finds each recital set forth above to be true and correct, and by this reference incorporates each as an integral part of this Resolution.

2. The City intends to levy and collect assessments for Fiscal Year 2026-27 within the Downtown Pacific Grove Improvement District (BID), as described in Section 6.50.010 of the Pacific Grove Municipal Code. The proposed assessment would be collected by the City from the business owners when the business license tax is paid in 2026-27. Excepting catalog sales establishments, each and every business in the district will pay an assessment equal to 35% of its business license tax for fiscal year 2026-27.

3. On May 20, 2026, the City Council will receive an annual report prepared by the BID’s Advisory Board, which contains details of expenditures in 2025-26 and a description of the anticipated costs, revenue, number of licenses, and activities to be provided in Fiscal Year 2026-27. These activities include, but are not limited to, promotion, marketing, and advertising of businesses in the district, support for special events, and general maintenance to benefit businesses within the BID.

4. Copies of the report will be on file with the City Clerk and are also available at the offices of the Pacific Grove Chamber of Commerce.

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5. There is no change to the boundaries of the district as established and set forth in Section

6.5.020 of the Pacific Grove Municipal Code.

6. The Council sets the public hearing to consider the levy of the proposed Fiscal Year 2026-27 assessment for the BID for May 20, 2026 at 6:00 pm, or as soon thereafter as the item may be called, at the Pacific Grove City Hall, 300 Forest Avenue, Pacific Grove, California to be conducted under public hearing Zoom Meeting protocols.

7. At the public hearing, the City Council shall hear and consider all protests against the Fiscal Year 2026-27 levy of assessments for the BID. The rules and procedures used to receive and consider protests will comply with Streets and Highways Code sections 36524, 36525 and 36534. Following the hearing, the Council may adopt a resolution approving the levy.

8. The City Clerk is hereby directed to give a summary notice of the public hearing by causing this resolution of intention to be published once in a newspaper of general circulation not less than seven days before the public hearing.

PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF PACIFIC GROVE this 6th day of May 2026, by the following vote:

AYES:

NOES:

ABSENT:

APPROVED:
____________________________________
NICK SMITH, Mayor
ATTEST:
____________________________________
SANDRA KANDELL, City Clerk
APPROVED AS TO FORM:
________________________________
ALEX LORCA, City Attorney
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Agenda No. 6 B

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Lori Frati, Finance Manager
MEETING DATE: May 06, 2026
SUBJECT: Resolution of Intention to Levy the Annual Assessment for the Hospitality Improvement District (HID)
CEQA: Does not constitute a Project per California Environmental Quality Act Guidelines Section 15378

RECOMMENDATION
Approve the attached Resolution of Intention to Levy an Assessment for the Hospitality Improvement District for Fiscal Year 2026-27.

1. Hold a public hearing on May 20, 2026 to hear protests and determine whether to levy the assessment.

2. DISCUSSION
In 2007, the City established the Hospitality Improvement District (HID), appointed an advisory board, and established an assessment for the District. On November 18, 2018, City Council passed Resolution No. 18-047, amending the Hospitality Improvement District assessment be set at $2.00 per room night for full-service lodging establishments and $1.00 per room night for all others, effective January 1, 2019. (Resolution 12-014 defines full service accommodations as “…generally mid-price, upscale or luxury hotels with a restaurant, lounge facilities and meeting space as well as minimum service levels, often including bell service and room service. These hotels report food and beverage revenue”). HID assessment revenues are exclusively used for the support and benefit of the hospitality economy of Pacific Grove.

Pursuant to State law and City Council Resolution 07-044, which formed the HID, an Annual Report is required that reports on District revenues and expenditures, proposes a budget for Fiscal Year (FY) 2026-27, and requests the levy of an assessment for FY 2026-27. The annual report prepared by the HID will be included in the May 20, 2026 agenda report. No changes to HID boundaries are recommended for FY 2026-27.

At the public hearing on May 20, 2026, the Council will have the opportunity to hear and evaluate any protests received and determine whether to levy the assessment. The Council will also have the opportunity to appoint an advisory board.

OPTIONS
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1. Decline to adopt the Resolution.

2. Provide alternate direction.

FINANCIAL IMPACT:

The City acts as the administrative pass-through to See Monterey and HID. Assessment revenues may only be used for HID purposes, including a 1% administrative fee to partially reimburse the City for costs incurred for administration of the HID.

FOCUSED PRIORITY AREA: Not Applicable.

Attachments
HID Resolution Intent to Levy Assessment
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RESOLUTION NO. 26-xxx

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFIC GROVE STATING THE CITY’S INTENTION TO LEVY AN ASSESSMENT FOR THE PACIFIC GROVE HOSPITALITY IMPROVEMENT DISTRICT FOR FISCAL YEAR 2026-27

FINDINGS

1. In 2007 the City of Pacific Grove established the Pacific Grove Hospitality Improvement District (HID); and

2. The HID has been approved for continuation each year since it was first established, and has proved to be of benefit to the Community in terms of promoting tourism and the hospitality economy; and

3. The Pacific Grove Chamber of Commerce has requested continuation of the HID for the 2026- 27 fiscal year; and

4. The Action proposed by this Resolution does not constitute a “Project” as that term is defined under California Environmental Quality Act (CEQA), CEQA Guideline section 15378.

NOW THEREFORE, THE COUNCIL OF THE CITY OF PACIFIC GROVE DOES RESOLVE AS FOLLOWS:

1. The City Council finds each recital set forth above to be true and correct, and by this reference incorporates each as an integral part of this Resolution.

2. It is the intention of the City to levy and collect assessments for the Fiscal Year 2026-27 within the Pacific Grove Hospitality Improvement District (HID), as described in Section 6.54 of the Pacific Grove Municipal Code. The proposed assessment, equal to $2.00 per room night for fullservice establishments and $1.00 per room night for other establishments, will be collected by the City from lodging establishment owners when Transient Occupancy Taxes are paid.

3. On May 20, 2026, the City Council will receive an annual report prepared by the HID’s Advisory Board, which contains detail of expenditures in 2025-26 and a description of the anticipated costs, revenue, number of licenses, and activities to be provided in Fiscal Year 2026-

27. Copies of the report will be on file with the City Clerk and available at the offices of the Pacific Grove Chamber of Commerce.

4. There is no change to the boundaries of the district as established and set forth in Section

6.54.030 of the Pacific Grove Municipal Code.

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5. The Council hereby sets the public hearing to consider the levy of the proposed Fiscal Year 2026-27 assessment for the HID for May 20, 2026, at 6:00 pm, or as soon thereafter as the item may be called, at the Pacific Grove City Hall, 300 Forest Avenue, Pacific Grove, California.

6. At the public hearing, the City Council shall hear and consider any and all protests against the Fiscal Year 2026-27 levy of assessments for the HID. The rules and procedures used in receiving and considering protests will comply with those set forth in Streets and Highways Code sections 36524, 36525 and 36534. Following the hearing, the Council may adopt a resolution approving the levy.

7. The City Clerk is hereby directed to give a summary notice of the public hearing by causing this resolution of intention to be published once in a newspaper of general circulation not less than seven days before the public hearing.

PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF PACIFIC GROVE this 6th day of May 2026, by the following vote:

AYES:

NOES:

ABSENT:

APPROVED:
____________________________________
Nick Smith, Mayor
ATTEST:
___________________________________
SANDRA KANDELL, City Clerk
APPROVED AS TO FORM:
________________________________
ALEX LORCA, City Attorney
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Agenda No. 7 A

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Jon Biggs, Community Development Director
MEETING DATE: May 06, 2026
SUBJECT: Second Reading of Ordinance Adopting Amendments to the R-3, C-1, C-2, and R-3-M Zoning Regulations
CEQA: Environmental Impact Report

RECOMMENDATION
Hold second reading and adopt an Ordinance Amending Chapters 23.24, 23.32, and 23.52 of Title 23, Zoning, of the Pacific Grove Municipal Code.

DISCUSSION
No substantive changes were made between the first and second readings of this ordinance. The City Clerk caused a summary of the ordinance to be published on April 23, 2026.

BACKGROUND
The City, its consultant team, and the citizens of Pacific Grove have been working on the Pacific Grove General Plan 6th Cycle, 2023-2031 Housing Element Update (HE) for several years. In November of 2025, the Planning Commission held a public hearing on the HE and voted to adopt a resolution recommending approval of:

A resolution of the City Council certifying the Final EIR, A resolution of the City Council approving the “Project", which includes amending the text, policies, figures, and maps of the Pacific Grove General Plan to adopt the 2023-2031 Housing Element; amending the Land Use and Health and Safety Elements and the Land Use Map; adopting the CEQA Findings of Fact, including a Statement of Overriding Considerations; and adopting the Mitigation Monitoring and Reporting Program (MMRP), and An ordinance of the City Council adopting amendments to Title 23, Zoning, of the Pacific Grove Municipal Code and the Zoning Map.

In December of 2025, the City Council agreed with the recommendation of the Planning Commission and certified the Program EIR prepared for the project, approved the Housing Element along with the other amendments to the City’s General Plan, and adopted amendments to the Zoning Code (Title 23 Zoning of the Pacific Grove Municipal Code) and amendments to the Land Use and Zoning maps.

Following approval of the Project by the City Council in December of 2025, the consultant team and staff submitted the approved housing element, rezonings and up-zonings to the State of California Department of Housing and Community Development (HCD) for certification review. In February of 2026, HCD informed the City that the rezonings do not meet all the statutory requirements pursuant to PGCC 5-6-26
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2026, HCD informed the City that the rezonings do not meet all the statutory requirements pursuant to Government Code section 65583.2, subdivision (h). Specifically, HCD noted that the C-1, C-2, and R-3 zones do not meet minimum density requirements and that revisions to rezoning will be necessary to comply with State Housing Element Law.

In order to address HCD’s concerns and achieve certification of the Housing Element, amendments to the City’s zoning regulations are proposed. The amendments include:

Addition of a minimum density requirement of 20 units per acre for multiple dwellings to Chapter

23.24 R-3 Districts of Title 23 Zoning of the Pacific Grove Municipal Code.

Addition of a minimum density requirement of 20 units per acre to Chapter 23.31 Commercial and Industrial Zoning Districts of Title 23 Zoning of the Pacific Grove Municipal Code.

One additional amendment to the zoning code being brought forward is the proposed restoration of inadvertently deleted words to Chapter 23.52 R-3-M Districts of Title 23 of the Pacific Grove Municipal Code.

Included with this agenda report are the following attachments:

Planning Commission Resolution of Recommendation to City Council Draft Addendum to the Final EIR
Draft Ordinance Amending Title 23, Zoning of the Pacific Grove Municipal Code Draft Amendments to Zoning Code Sections (tracked version) Draft Amendments to Zoning Code Sections (clean version) February 2026 Letter from HCD
Diagram of the R-3, C-1, and C-2 Zone District Locations in the City Public Comment
Following is a more detailed discussion of the key elements of the Project.

DISCUSSION
Environmental Review
An Environmental Impact Report (EIR) and a Mitigation and Monitoring and Reporting Plan (MMRP) were prepared for the Housing Element Update, including the Zoning Ordinance and General Plan Amendments, in accordance to Article 6, CCR Title 14, California Environmental Quality Act (CEQA) Guidelines and circulated to the State Clearinghouse (SCH#2024010897). On December 17, 2025, the City Council certified the final EIR and MMRP (Resolution No. 25 - 029). The proposed zoning amendments are consistent with the analysis and conclusions of the previously certified Final EIR.

Under CEQA, a lead agency shall prepare an addendum to a previously certified EIR if some changes or additions are necessary to the EIR but none of the conditions described in State CEQA Guidelines section 15162 calling for preparation for a subsequent EIR have occurred. (State CEQA Guidelines, §15164(a).) State CEQA Guidelines section 15162 provides that when an IS/MND has been certified for a project, a subsequent EIR shall be prepared for that project if the lead agency determines one or more of the following have occurred:
(1) Substantial changes are proposed in the project which will require major revisions of the previous IS/MND… due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; (2) Substantial changes occur with respect to the circumstances under which the project is undertaken which will require major revisions of the previous IS/MND… due to the involvement of new significant environmental effects or a substantial increase in the severity of previously PGCC 5-6-26
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identified significant effects; or
(3) New information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the previous IS/MND was certified as complete … shows any of the following:
(A) The project will have one or more significant effects not discussed in the previous IS/MND;
(B) Significant effects previously examined will be substantially more severe than shown in the previous IS/MND;
(C) Mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects of the project, but the project proponents decline to adopt the mitigation measure or alternative; or (D) Mitigation measures or alternatives which are considerably different from those analyzed in the previous IS/MND would substantially reduce one or more significant effects on the environment, but the project proponents decline to adopt the mitigation measure or alternative.

Based on the analysis presented in the Addendum, none of the above have occurred and there is no substantial evidence in light of the whole record that the proposed modifications to the project would result in new significant environmental effects or a substantial increase in the severity of a previously identified significant effect relative to the previously approved Housing Element Update Project EIR.

Additionally, there is no new information not previously known that shows new significant environmental effects or an increase in the severity of previously identified significant effects. For these reasons, preparation of a supplemental or subsequent EIR is not required and an addendum is appropriate.

The EIR prepared for the Housing Element Update project can be reviewed and considered at the following link: Housing Element EIR
An addendum needs not be circulated for public review and can be attached to the EIR pursuant to State CEQA Guidelines, §15164(c).

Proposed Ordinance Amendments
In order to address HCD’s concerns and achieve certification of its Housing Element, an amendment to the rezoning is proposed. The amendment includes:

Addition of a minimum density requirement of 20 units per acre for multiple dwellings to Chapter

23.24 R-3 Districts of Title 23 Zoning of the Pacific Grove Municipal Code. The minimum density requirement of 20 units per acre has been included in a new subsection found at 23.24.052 Minimum density multiple dwellings
Addition of a minimum density requirement of 20 units per acre to Chapter 23.31 Commercial and Industrial Zoning Districts of Title 23 Zoning of the Pacific Grove Municipal Code. The minimum density requirement of 20 units per acre has been included in the table at subsection

23.31.040 Commercial and industrial zoning districts development standards.

One additional amendment to the zoning code being brought forward is the proposed restoration of inadvertently deleted of words to Chapter 23.52 R-3-M Districts of Title 23 of the Pacific Grove Municipal Code. The restored words are underlined in the following:

23.52.030 (b) A minimum setback of 20 feet shall be required for all structures in a R-3-M development which abut R-1, R-H, or R-2 property, including streets abutting same. The setback shall be 10 feet for commercial or other R-3-M developments or districts. Eave projections may extend up to three feet into any required yard, but in no case may be closer than three feet to any property line.

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any required yard, but in no case may be closer than three feet to any property line.

The amendments to the R-3, C-1, and C-2 zone districts have been reviewed with HCD staff who indicated during the meeting that they addressed the issues raised by HCD in its February 2026 letter. (Note that HCD has requested, and staff has provided, a schedule to achieve these code amendments so that it can track the City’s progress towards achieving a certified housing element) Analysis
The addition of minimum densities is intended to ensure that appropriate standards have been established to accommodate growth, or in this case, the Regional Housing Needs Allocation (RHNA) of 1,125 units that have been assigned to Pacific Grove as part of this Housing Element Update. As HCD has indicated, they are a component of State housing laws, and the City is being required to include them in its rezoning so that certification of the City’s Housing Element can be obtained. The zoning amendments approved by the City Council in December 2025 did include minimum density requirements for the C-D and C-FH zone districts, which reflects a trend to include standards that promote housing development that help achieve the RHNA.

As for the restoration of words to subsection 23.52.030 (b), the change to this subsection in December of 2025 was an artifact from earlier rezoning drafts that were inadvertently left in the draft rezoning ordinance and without the restored words the sentence has little meaning; thus, it is appropriate to restore the words.

RECOMMENDATION
At a special meeting on March 26, 2026, the Planning Commission recommended that the City Council consider the Addendum to the Certified EIR and introduce the Ordinance Amending Chapters 23.24,

23.32, and 23.52 of Title 23, Zoning, of the Pacific Grove Municipal Code.

A resolution reflecting this recommendation was adopted by the Planning Commission and is included with this agenda report as attachment number one (1).

ATTACHMENTS

1. Planning Commission Resolution of Recommendation to City Council

2. Draft Addendum to the Final EIR

3. Draft Ordinance Amending Title 23, Zoning of the Pacific Grove Municipal Code

4. Draft Amendments to Zoning Code Sections (tracked version)

5. Draft Amendments to Zoning Code Sections (clean version)

6. February 2026 Letter from HCD

OPTIONS

1. Agree with the recommendation of the Planning Commission.

2. Decline to agree with the Planning Commission recommendation.

Refer the proposed zoning ordinance amendments to staff to address concerns raised by the City Council.

3. FINANCIAL IMPACT:

Processing the proposed changes to the zoning regulations is funded through the General Fund budget allocation for the Housing Element Update.

FOCUSED PRIORITY AREA: Community Development
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Attachments

1. Planning Commission Resolution of Recommendation to City Council

2. Draft Addendum to the Final EIR

3. Draft Ordinance Amending Title 23, Zoning of the Pacific Grove Municipal Code

4. Draft Amendments to Zoning Code Sections (tracked version)

5. Draft Amendments to Zoning Code Sections (clean version)

6. February 2026 Letter from HCD

7. Diagram of the R-3, C-1, and C-2 Zone District Locations in the City

8. Public Comment
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Docusign Envelope ID: 93AE2C39-DFD1-444F-9742-8142FDB515D9 RESOLUTION 26 - 001

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF PACIFIC

GROVE RECOMMENDING THE CITY COUNCIL CONSIDER THE ADDENDUM TO

THE FINAL ENVIRONMENTAL IMPACT REPORT CERTIFIED FOR THE HOUSING ELEMENT UPDATE PROJECT AND AMEND CHAPTERS 23.24 (R-3 DISTRICTS), 23.31 (COMMERCIAL AND INDUSTRIAL ZONING DISTRICTS) AND

23.52 (R-3-M DISTRICTS) TITLE 23 ZONING OF THE PACIFIC GROVE MUNICIPAL CODE

RECITALS
Whereas, Government Code Section 65300, et seq., requires each city to adopt a comprehensive, long-term General Plan for the physical development of each city; and Whereas, on October 5, 1994, the City Council of the City of Pacific Grove ("City") adopted a city-wide General Plan ("General Plan11) pursuant to California Planning, Zoning and Development law; and
Whereas, there is a statutory recognition that the availability of housing is a matter of statewide importance and that cooperation between government and the private sector is critical to attainment of the State's housing goals; and
Whereas, California Government Code Section 65588(b) requires the City to periodically prepare an update to the Housing Element of its General Plan; and Whereas, on August 17, 2022, the City Council by motion and unanimous vote (7 - 0) at a public hearing, authorized and directed City staff to initiate a focused general plan update to meet the minimum requirements in connection with the 2023-2031 6th Cycle Housing Element Update; and
Whereas, beginning in April 2022, the City conducted more than 19 public meetings before either the Planning Commission or the City Council to provide information, obtain public comment, seek direction from elected and appointed officials, and consider the Housing Element Update project; and
Whereas, amendments to the City's Zoning Ordinance and Zoning Map are required to implement Housing Element Programs including upzoning sites in the Downtown Commercial and Forest Hill Commercial Districts and rezoning sites in the Dennett, Sinex, and Grove Acre District, the City has considered the proposed Zoning amendments through two dedicated study sessions of the Planning Commission; and
Whereas, the City determined that an Environmental Impact Report (EIR) should be prepared for the proposed project, in accordance with the requirements of the California Environmental Quality Act (CEQA) including Section 15168 of the CEQA Guidelines and subsequently issued a Notice of Preparation on January 29, 2024 and conducted a Scoping Meeting on February 15, 2024 in accordance with Public Resources Code Sections 21092 and 21083.9 respectively; and
Whereas, the draft 2023-2031 Housing Element of the General Plan and revisions thereto (the "Housing Element") was made available for public review and comment and PGCC 5-6-26
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Docusign Envelope ID: 93AE2C39-DFD1-444F-9742-8142FDB515D9 provided to the State Department of Housing and Community Development (HCD) in accordance with all applicable statutory requirements; and Whereas, proposed amendments to Title 23, Zoning of the Pacific Grove Municipal Code and Zoning Map were necessary to implement the Housing Element and associated amendments to the Land Use Element and Land Use Map; and Whereas, on July 10, 2025, the City received a letter of conditional approval from HCD indicating the revised 2023-2031 Housing Element is in substantial compliance with state Housing Element Law following re-adoption of the changes and submittal of the final document to HCD; and
Whereas, the Draft Environmental Impact Report ("Draft EIR") was circulated for a 46- day public review comment period from June 30, 2025 to August 15, 2025; and Whereas, on November 3, 2025, the City released its Responses to Comments document, which consists of all written comment letters received on the Draft EIR, written responses to all written comment letters received on the Draft EIR, revisions to the Draft EIR, and the Mitigation Monitoring and Reporting Program; and
Whereas, the "Final EIR" consists of the Draft EIR and its appendices, and the Responses to Comments document; and
Whereas, on November 13, 2025, the Planning Commission held a duly noticed public hearing and adopted Planning Commission Resolution No. 25-001 recommending that the City Council certify the Final EIR, adopt amendments to the City's General Plan, Land Use Map, Zoning Ordinance and Zoning Map, and make CEQA Findings of Fact and adopt a Statement of Overriding Considerations, and adopt the Mitigation Monitoring and Reporting Program; and Whereas, on December 17, 2025, the City Council of the City of Pacific Grove reviewed and considered and found that the Final EIR is an accurate and objective statement that has been completed in full compliance with CEQA and the CEQA Guidelines and it reflects the independent judgment and analysis of the City. The City Council declared that no evidence of new significant impacts or any new infonnation of "substantial importance" as defined by CEQA Guidelines Section 15088.5, was received by the City after circulation of the Draft EIR that would require recirculation. Therefore, the City Council certified the Final EIR based on the entirety of the record of proceedings; and
Whereas, At its meeting of December 17, 2025, the City Council adopted a resolution repealing the 2015-2023 Housing Element in its entirety and replaced it with the 2023-203 l Housing Element and also adopted amendments to the Pacific Grove General Plan Land Use Element and the Health and Safety Element of the General Plan; and Whereas, At its meeting of December 17, 2025 the City Council introduced an ordinance amending Title 23, Zoning of the Pacific Grove Municipal Code; and Whereas, At its meeting of January 21, 2026 the City Council held a second reading and adopted an ordinance amending Title 23, Zoning of the Pacific Grove Municipal Code; and Whereas, City staff forwarded the adopted ordinance to the California Department of Housing and Community Development (HCD) for review and certification of conformance with the requirements of California Government Code Sections 65580 et. seq.; and PGCC 5-6-26
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Docusign Envelope ID: 93AE2C39-DFD1-444F-9742-8142FDB515D9 Whereas, In a letter dated February 27, 2026 HCD notified the City that the changes to Title 23, Zoning of the Pacific Grove Municipal Code do not meet all the statutory requirements pursuant to Government Code section 65583.2, subdivision (h) and that revisions to the rezoning to include minimum density requirements for the C-1, C-2 and R-3 are required to comply with State Housing Element Law; and
Whereas, City staff collaborated with HCD to revise the rezoning documents to meet the statutory requirements; and
Whereas, staff identified a minor amendment to Section 23.52.030 of R-3-M zoning regulations in which four words were inadvertently deleted in the December 2025 amendments to Title 23, Zoning of the Pacific Grove Municipal Code and the deletion of these words was unintended and needs to be rescinded; and
Whereas, pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15164(a), the City prepared an Addendum to the previously certified EIR. Only minor technical changes or additions are necessary and none of the conditions described in CEQA Guidelines Section 15162 calling for the preparation of a subsequent EIR or negative declaration have occurred. The City Council's prior certification of the EIR remains valid, and this amendment remains consistent with that certification, and both the EIR and Addendum are incorporated herein by reference; and
Whereas, pursuant to Government Code Section 65350, et seq., and Title 23 of the Pacific Grove Municipal Code (PGMC), the City may amend Title 23, Zoning of the Pacific Grove Municipal Code provided the City follows certain procedures, including that the Planning Commission hold a noticed public hearing and make a written recommendation to the City Council on the proposed amendment to the Zoning Code; and Whereas, on March 26, 2026, the Planning Commission held a duly noticed public hearing to consider and make recommendations to the City Council regarding the proposed amendments to Title 23, Zoning of the Pacific Grove Municipal Code; and Whereas, pursuant to Government Code Sections 65090, 65091, 65353, and 65854, on March 16, 2026, at least 10 days before the public hearing date, notice of the hearing before the Planning Commission was published in the Monterey Herald, posted at City Hall, posted on the City's Community Development Department and Housing Element webpages, and emailed to a list of interested parties.

NOW, THEREFORE, BE IT RESOLVED, pursuant to PGMC Section 23.84.060, Findings, in consideration of the proposed amendments, the Planning Commission considered the entirety of the record, including the final Environmental Impact Report, the draft amendment documents, the agenda report, written and oral testimony, and administrative record as a whole and, on that basis, the Planning Commission of the City of Pacific Grove finds that:

A. Title 23, Zoning Code Amendments

1. The proposed amendments are consistent with the General Plan and, if applicable, the certified local coastal program; and

2. The proposed amendments would not be detrimental to the public interest, health, safety, convenience, or welfare of the city; and
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Docusign Envelope ID: 93AE2C39-DFD1-444F-9742-8142FDB515D9

3. The proposed amendments are internally consistent with other applicable provisions of the Zoning Ordinance; and

4. The sites are physically suitable (including ability to meet requested zoning regulations, access, provision of utilities, compatibility with adjoining land uses, and absence of physical constraints) for the requested zoning designations and anticipated land uses.

NOW, THEREFORE, BE IT FURTHER RESOLVED BY THE PLANNING
COMMISSION OF THE CITY OF PACIFIC GROVE:

1. The Planning Commission determines that each of the Recitals and Findings set forth above are true and correct, and by this reference incorporates those Recitals and Findings as an integral part of this Resolution. All Exhibits and Attachments hereto are hereby incorporated by reference.

2. The Planning Commission considered the Addendum and the Final Environmental Impact Report (EIR).

3. The Planning Commission hereby recommends that the City Council adopt an ordinance amending the Zoning Code (Title 23 of the Pacific Grove Municipal Code) in support of implementation of the 6
th Cycle Housing Element, all of which are attached to the Planning Commission Agenda Report for its Special Meeting of March 26, 2026, and hereby incorporated by reference.

4. The Planning Commission hereby recommends that the City Council direct a Notice of Determination to be filed and posted with the County Clerk and the State Clearinghouse within five working days of the approval of these amendments.

5. This Resolution shall become effective immediately following passage and adoption thereof.

PASSED AND ADOPTED BY THE PLANNING COMMISSION OF THE CITY OF PACIFIC GROVE THIS 26th DAY OF MARCH, 2026, BY THE FOLLOWING VOTE:

A YES: KUBICA, LOH, MYERS, STERBICK, & SWEIGERT
NOES: NONE
ABSENT: DAVISON & MOURLAM
ABSTAIN: NONE
APPROVED:
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CITY OF PACIFIC GROVE
Pacific Grove Housing Element Update, Zoning Ordinance
Amendments, and General Plan Amendments
An Addendum to the Final Environmental Impact Report
Certified by the Pacific Grove City Council on December 17, 2025 Prepared by:

Jon Biggs, Community Development Director
300 FOREST AVE.

PACIFIC GROVE, CA 93950
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1.0 INTRODUCTION
City of Pacific Grove Community Development Department Pacific Grove Housing Element Update March 2026 Addendum to the Housing Element Update Project EIR SCH # 2024010897
Planning Commission Special Meeting – March 26, 2026
City Council Regular Meeting – April 15, 2026
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Table Of Contents
City of Pacific Grove Community Development Department Pacific Grove Housing Element Update March 2026 Addendum to the Housing Element Update Project EIR

1.0 INTRODUCTION............................................................................................................................................. 1

1.1 Supplemental or Subsequent Initial Study Not Required..............................................................................1

2.0 ANALYSIS........................................................................................................................................................2

2.1 Project Description........................................................................................................................................2

2.2 Support for Addendum to EIR...................................................................................................................... 3

2.3 Conclusion.....................................................................................................................................................4 PGCC 5-6-26
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1 City of Pacific Grove Community Development Department Pacific Grove Housing Element Update March 2026 Addendum to the Housing Element Update Project EIR

1.0 INTRODUCTION
This document is an Addendum to the Final Environmental Impact Report (EIR) prepared for the City of Pacific Grove Housing Element Update (6th Cycle, 2023-2031) Project (Project), State Clearinghouse No. 2024010897, and has been prepared pursuant to the California Environmental Quality Act (CEQA; Pub.

Resources Code, §21000 et seq.). The project was approved and the EIR certified by the Pacific Grove City Council in December of 2025. Along with project approval and EIR certification, the Pacific Grove City Council adopted a Mitigation Monitoring and Reporting Program (MMRP) as required by CEQA.

The approved project includes amendments to the Pacific Grove General Plan Housing Element, Land Use Element, Health and Safety Element, plus amendments to the General Plan Land Use Map, and Zoning Ordinance plus Zoning Map Amendments.

The purpose of the project is to create a housing element that addresses the City's fair share of the regional housing needs and meet specific state statutory requirements plus reflect the vision and priorities of the local community. In October 2022, the Association of Monterey Bay Area Governments (AMBAG) adopted a RHNA plan, allocating 1,125 units for Pacific Grove, of which 599 units must be affordable to low-income or very low-income households. The California Department of Housing and Community Development (HCD) requires local jurisdictions to identify sufficient housing sites to cover the jurisdiction’s 6th Cycle RHNA. HCD also recommends that jurisdictions provide additional buffer capacity above the RHNA. The “No Net Loss” law (Government Code Section 65863) requires maintenance of sufficient sites to meet the RHNA for all income levels throughout the planning period. When accounting for pending and approved projects, estimated development of accessory dwelling units, and a 20 percent buffer to facilitate compliance with the “No Net Loss” law, the City must demonstrate its ability to allow for the development of 999 housing units
The City has prepared this Addendum to Housing Element Project EIR to address direction from the State of California Department of Housing and Community Development (HCD) to include minimum density requirements for the C-1, C-2, and R-3 zone districts and, of its own initiative, to restore the inadvertent deletion of words in the R-3-M Zone District.

In accordance with CEQA, this Addendum describes the previously approved Project and provides an explanation of the decision not to prepare a subsequent EIR pursuant to Section 15152 of the State of California CEQA Guidelines.

For the reasons presented below, the proposed addition of minimum densities to the C-1, C-2, and R-3 plus the restoration of words inadvertently deleted in the R-3-M zoning district regulations in a prior zoning code amendment will not result in new significant environmental effects or a substantial increase in the severity of previously identified significant effects and, therefore, the modifications to the previously approved Project does not trigger the need for further environmental analysis in a subsequent or supplemental EIR under the requirements of CEQA and the State CEQA Guidelines (Cal. Code Regs., tit. 14, §15000 et seq.).

1.1 SUPPLEMENTAL OR SUBSEQUENT INITIAL STUDY NOT REQUIRED Under CEQA, a lead agency shall prepare an addendum to a previously certified EIR if some changes or additions are necessary to the EIR but none of the conditions described in State CEQA Guidelines section 15162 calling for preparation for a subsequent EIR have occurred. (State CEQA Guidelines, §15164(a).) State CEQA Guidelines section 15162 provides that when an IS/MND has been certified for a project, a subsequent EIR shall be prepared for that project if the lead agency determines one or more of the following have occurred:
(1) Substantial changes are proposed in the project which will require major revisions of the previous IS/MND… due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; PGCC 5-6-26
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2 City of Pacific Grove Community Development Department Pacific Grove Housing Element Update March 2026 Addendum to the Housing Element Update Project EIR (2) Substantial changes occur with respect to the circumstances under which the project is undertaken which will require major revisions of the previous IS/MND… due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; or
(3) New information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the previous IS/MND was certified as complete … shows any of the following:
(A) The project will have one or more significant effects not discussed in the previous IS/MND…; (B) Significant effects previously examined will be substantially more severe than shown in the previous IS/MND;
(C) Mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects of the project, but the project proponents decline to adopt the mitigation measure or alternative; or (D) Mitigation measures or alternatives which are considerably different from those analyzed in the previous IS/MND would substantially reduce one or more significant effects on the environment, but the project proponents decline to adopt the mitigation measure or alternative.

As explained below in Section 2.0, there is no substantial evidence in light of the whole record that the proposed revisions to the Project would result in new significant environmental effects or a substantial increase in the severity of a previously identified significant effect. Additionally, there is no new information not previously known that shows new significant environmental effects or an increase in the severity of previously identified significant effects. For these reasons, preparation of an addendum is appropriate under these circumstances.

An addendum need not be circulated for public review and can be attached to the EIR pursuant to State CEQA Guidelines, §15164(c).

2.0 ANALYSIS
This section describes the previously approved Housing Element Update Project and the proposed modifications to the zoning regulations. Following the project description, the section provides support for the decision to prepare an addendum to the certified EIR for the Project.

2.1 PROJECT DESCRIPTION
The approved project is the City of Pacific Grove Housing Element Update, Zoning Ordinance Amendments, General Plan Amendments and amendments to the General Plan Land Use and Zoning maps.

The “Housing Element Update” encompasses the 6th Cycle Housing Element. The “Zoning Ordinance Amendments” covers rezonings and up-zonings determined to be necessary as a result of the Housing Element Update, additional rezonings proposed by the City, and the inclusion of objective design standards.

The “General Plan Amendments” encompass updates to the Health and Safety Element and Land Use Element of the General Plan.

Following approval of the Project by the City Council in December of 2025, the consultant team and staff submitted the approved housing element, rezonings and up-zonings to HCD for certification review. In February of 2026, HCD informed the City that the rezonings do not meet all the statutory requirements pursuant to Government Code section 65583.2, subdivision (h). Specifically, HCD noted that the C-1, C-2, and R-3 zones do not meet minimum density requirements and that revisions to rezoning will be necessary to comply with State Housing Element Law.

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3 City of Pacific Grove Community Development Department Pacific Grove Housing Element Update March 2026 Addendum to the Housing Element Update Project EIR In order to address HCD’s concerns and achieve certification of its Housing Element, an amendment to the rezoning is proposed. The zoning amendments includes:
 Addition of a minimum density requirement of 20 units per acre for multiple dwellings to Chapter

23.24 R-3 Districts of Title 23 Zoning of the Pacific Grove Municipal Code.  Addition of a minimum density requirement of 20 units per acre to Chapter 23.31 Commercial and Industrial Zoning Districts of Title 23 Zoning of the Pacific Grove Municipal Code.

One additional amendment to the zoning code being brought forward by the City is the proposed restoration of inadvertently deleted of words to Chapter 23.52 R-3-M Districts of Title 23 of the Pacific Grove Municipal Code.

The proposed rezoning amendments would not result in new significant environmental effects or a substantial increase in the severity of previously identified significant effects beyond those previously identified in the EIR.

2.2 SUPPORT FOR ADDENDUM TO EIR
The Project in and of itself does not develop housing. It is a plan to provide for the possibility of housing, supported by consistent zoning standards. It is assumed that not all housing would realistically be built, based on previous development history in Pacific Grove, as housing development is mainly accomplished by the private sector and depends upon factors the City does not control, including financial resources, market trends, and other factors. However, for the purposes of this CEQA analysis, the program-level EIR analyzed all the possible potential growth facilitated by the Project.

The EIR analyzed a net increase of 2,335 new housing units and 292,578 commercial square feet. As described in Section 2.6.1, Housing Element Update, the Site Inventory represents a “realistic” buildout, primarily assuming site residential buildout of up to 70 percent of the maximum allowable density. In contrast, the growth projections provided in Table ES-1 and analyzed throughout this EIR assume a residential buildout of up to 100 percent of the maximum density. Growth projections analyzed in the EIR reflect varying levels of commercial buildout based on recent market and redevelopment trends in the city and region. This approach allowed for more conservative and comprehensive analysis. As such, the EIR used these figures to calculate and determine potential environmental impacts. In addition, because the EIR assumed a residential buildout of up to 100 percent of the maximum density, it evaluated additional housing units facilitated by Housing Element programs beyond those needed to meet the RHNA.

The EIR identified a maximum buildout for the project, which is a conservative assumption developed for the analysis of the environmental impacts. Overall, maximum growth is dependent on multiple factors, including local economic conditions, market demand, and other financing considerations. As discussed in Chapter 2 of the EIR, Project Description, in a maximum growth scenario, the Project is anticipated to facilitate development of up to approximately 2,335 new housing units.

It was the analysis of the maximum allowed buildout in the EIR that identified potential impacts of the Project, some of which were mitigated to a less than significant level, while some impacts were found to be significant and unavoidable for which the City Council adopted findings of overriding consideration.

Since the addition of minimum densities to the R-3, C-1, and C-2 zone districts does not increase the buildout potential in the City, their impacts will not exceed those identified in the EIR and the inclusion of minimum densities in the C-D and C-FH (30 units per acre) in the original Project did not modify the full buildout analysis. Thus, the addition of minimum densities in the R-3, C-1, and C-2 zone districts will PGCC 5-6-26
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4 City of Pacific Grove Community Development Department Pacific Grove Housing Element Update March 2026 Addendum to the Housing Element Update Project EIR not result in an increase in buildout potential or a need to evaluate impacts beyond those of the EIR certified by the City Council.

In addition, the restoration of some words inadvertently deleted in the R-3-M zone district does not have the potential to increase the severity of significant effects identified in the certified EIR; thus, this addendum to that EIR is appropriate.

2.3 CONCLUSION
Based on the analysis presented above, there is no substantial evidence in light of the whole record that the proposed modifications to the project would result in new significant environmental effects or a substantial increase in the severity of a previously identified significant effect relative to the previously approved Housing Element Update Project EIR. Additionally, there is no new information not previously known that shows new significant environmental effects or an increase in the severity of previously identified significant effects. For these reasons, preparation of a supplemental or subsequent EIR is not required and an addendum is appropriate.

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ORDINANCE NO. 26-___

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PACIFIC GROVE AMENDING CHAPTERS 23.24 (R-3 DISTRICTS), 23.31 (COMMERCIAL AND INDUSTRIAL ZONING DISTRICTS) AND 23.52 (R-3-M DISTRICTS) OF TITLE 23 (ZONING) OF THE PACIFIC GROVE MUNICIPAL CODE
Whereas, on August 17, 2022, the City Council by motion and unanimous vote (7 - 0) authorized and directed City staff to initiate a focused general plan update to meet the minimum requirements in connection with the 2023-2031 6th Cycle Housing Element Update which included proposed amendments to the City’s Zoning Ordinance and Zoning Map; and Whereas, the Zoning Ordinance and Zoning Map amendments were prepared in accordance with applicable statutory requirements taking into account public comment and consistency with the City’s General Plan and related City policies; and Whereas, on November 13, 2025, the Planning Commission held a duly noticed public hearing and adopted Planning Commission Resolution No. 25-001 recommending that the City Council certify the Final EIR, adopt amendments to the City’s General Plan, Land Use Map, Zoning Ordinance and Zoning Map, and make CEQA Findings of Fact and adopt a Statement of Overriding Considerations, and adopt the Mitigation Monitoring and Reporting Program; and Whereas, the Final Environmental Impact Report (EIR) prepared for the project which included the Zoning Ordinance and Zoning Map amendments was certified by the City Council of the City of Pacific Grove on December 17, 2025, as set forth in City Council Resolution No. 25 - 029; and
Whereas, pursuant to Government Code Sections 65090, 65091, 65355, and 65856, on December 6, 2025, at least 10 days before the public hearing date, notice of the hearing before the City Council was published in the Monterey Herald, posted at City Hall, mailed to affected owners of the subject real property and property owners within 300’ of the subject real property, posted onsite at each affected property, posted on the City’s Community Development Department and Housing Element webpages, and emailed to a list of interested parties; and Whereas, the ordinances were introduced at a special meeting of the City Council on December 17, 2025; and
Whereas, the City Clerk caused a summary of the ordinances to be published in the Monterey County Weekly on December 25, 2025; and
Whereas, the City Council held a second reading of the ordinances at a regular meeting of the Council held on January 21, 2026, and adopted the amendments as set forth in Ordinances 26 - 002 and 26 - 003; and
Whereas, City staff forwarded the adopted ordinances to the California Department of Housing and Community Development (HCD) for review and certification of conformance with the requirements of California Government Code Sections 65580 et. seq.; and Whereas, In a letter dated February 27, 2026 HCD notified the City that the changes to Title 23, Zoning of the Pacific Grove Municipal Code do not meet all the statutory requirements pursuant to Government Code section 65583.2, subdivision (h) and that revisions to the rezoning PGCC 5-6-26
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to include minimum density requirements for the C-1, C-2 and R-3 are required to comply with Stat Housing Element Law; and
Whereas, City staff collaborated with HCD to revise the rezoning documents to meet the statutory requirements; and
Whereas, staff identified a minor amendment to Section 23.52.030 of R-3-M zoning regulations in which four words were inadvertently deleted in the December 2025 amendments to Title 23, Zoning of the Pacific Grove Municipal Code and the deletion of these words was unintended and needs to be rescinded; and
Whereas, on March 26, 2026, the Planning Commission held a duly noticed public hearing and adopted Resolution No. 26 – ___ recommending that the City Council adopt the amendments to Chapters 23.24 (R-3 Districts), 23.31 (Commercial and Industrial Zoning Districts), and 23.52 (R-3-M Districts) of Title 23 (Zoning Ordinance) of the Pacific Grove Municipal Code; and Whereas, pursuant to Government Code Sections 65090, 65091, 65355, and 65856, on _______, 2026, at least 10 days before the public hearing date, notice of the hearing before the City Council was published in the Monterey County Weekly, emailed to a list of interested parties, and posted at City Hall; and
Whereas, pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15164(a), the City prepared an Addendum to the previously certified EIR. Only minor technical changes or additions are necessary and none of the conditions described in CEQA Guidelines Section 15162 calling for the preparation of a subsequent EIR or negative declaration have occurred. The City Council’s prior certification of the EIR remains valid, and this amendment remains consistent with that certification, and both the EIR and Addendum are incorporated herein by reference; and
Whereas, the proposed amendments to Chapters 23.24, 23.31, and 23.52 were introduced at a regular meeting of the City Council on _________, 2026; and Whereas, the City Clerk caused a summary of the ordinance to be published in the Monterey County Weekly on ____________, 2026; and
Whereas, the City Council held a second reading of the ordinance at a regular meeting of the Council held on ____________, 2026, and adopted the amendments to Chapters 23.24, 23.31, and 23.52 as set forth Ordinance 26 - ___; and
Whereas, all other legal prerequisites to the adoption of this Ordinance have occurred.

NOW, THEREFORE, THE COUNCIL OF THE CITY OF PACIFIC GROVE DOES ORDAIN AS FOLLOWS:

SECTION 1. FINDINGS.

The Pacific Grove City Council considered an Addendum along with the Environmental Impact Report, Planning Commission resolution, agenda reports, written and oral testimony, and administrative record as a whole, and hereby finds as follows:

A. The foregoing recitals are true and correct and are incorporated herein by reference each as an integral part of this Ordinance. All Attachments hereto are hereby incorporated by reference.

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B. The proposed amendments to the Zoning Ordinance are consistent with the General Plan and, if applicable, the certified local coastal program.

C. The proposed amendments to the Zoning Ordinance would not be detrimental to the public interest, health, safety, convenience, or welfare of the city.

D. The proposed amendments are internally consistent with other applicable provisions of the Zoning Ordinance.

SECTION 2. ZONING ORDINANCE AMENDMENTS.

Chapters 23.24 (R-3 Districts), 23.31 (Commercial and Industrial Zoning Districts), and 23.52 (R3-M Districts) of Title 23 (Zoning) of the Pacific Grove Municipal Code are hereby amended as set forth in Attachment A.

SECTION 3. SEVERABILITY.

If any section, subsection, phrase or clause of this ordinance is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this and each section, subsection, phrase or clause thereof irrespective of the fact that any one or more sections, subsections, phrase or clauses be declared unconstitutional on their face or as applied.

SECTION 4. PUBLICATION.

The City Clerk is hereby directed to certify the passage of this Ordinance by the City Council of the City of Pacific Grove, California and cause the same to be published in accordance with State law.

SECTION 5. EFFECTIVE DATE
This Ordinance shall be in full force and effective thirty (30) days after its adoption and shall be published and posted as required by law.
*****

PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF PACIFIC GROVE THIS ____ day of __________, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:
____________________________
NICK SMITH, Mayor
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ATTEST:
_________________________________
SANDRA KANDELL, City Clerk
APPROVED AS TO FORM:
_________________________________
ALEX J. LORCA, City Attorney
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ATTACHMENT A
ZONING ORDINANCE TEXT AMENDMENTS – CHAPTERS 23.24, 23.31, AND 23.52 (to be inserted)
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Pacific Grove Municipal Code
Title 23 ZONING

Title 23
ZONING1
Chapters:

23.04 Purpose and Effect of Zoning Regulations

23.08 Definitions

23.12 Districts

23.16 R-1 District and R-1-B Combined Districts

23.20 R-2 District and R-2-B-3 Combined District

23.24 R-3 Districts

23.26 R-3-P.G.R. District

23.28 R-4 District

23.29 Condominium and Community Housing Conversions

23.30 M-H Districts

23.31 Commercial and Industrial Zoning Districts

23.32 C-1-T Zone Condominiums

23.33 Repealed

23.34 Limited Downtown Commercial (C-D)(C-1-T) Uses

23.36 Repealed

23.40 Repealed

23.42 O District

23.43 Initiative Restriction of Use of George Washington Park

23.44 U Districts

23.45 Initiative Ordinance Enacting Regulations for Multiple Unit Developments Involving Condominiums, Planned Unit Developments and Timeshares

23.52 R-3-M Districts

23.56 R-H District

23.57 R-3-P.G.B. District

23.58 Repealed

23.60 Planned Unit Development – PUD

23.64 General Provisions and Exceptions

23.68 Nonconforming Uses and Buildings

23.70 Community Development Permit Review Authorities and Procedures

23.72 Permit Application Filing and Processing

23.73 Permit Implementation, Time Limits, and Extensions

23.74 Appeals and Call-Ups

23.76 Historic Preservation

23.77 Environmental Impact Reports

23.78 Sale of Residential Buildings

23.79 Density Bonus and Affordable Housing Regulations

23.80 Accessory Dwelling Units

23.81 Reasonable Accommodation for Persons with Disabilities

23.82 Interpretations of Permitted Use Lists

23.84 Legislative Amendments

23.86 Public Meeting and Hearing Procedures

23.88 Enforcement

23.90 Local Coastal Program Implementation Plan

23.92 Cannabis Businesses
1 For statutory provisions, see California Government Code § 65800 et seq.

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Pacific Grove Municipal Code
Chapter 23.24 R-3 DISTRICTS

Chapter 23.24
R-3 DISTRICTS
Sections:

23.24.010 Generally.

23.24.020 Uses permitted.

23.24.030 Building height limit.

23.24.040 Building site area required.

23.24.050 Allowed building coverage.

23.24.051 Allowed site coverage.

23.24.052 Minimum density multiple dwellings.

23.24.060 Yards required.

23.24.070 Garbage areas.

23.24.010 Generally.

The regulations found in this chapter shall apply to all R-3 districts and shall be subject to the provisions of Chapter 23.64 PGMC. [Ord. 20-016 § 2, 2020; Ord. 382 N.S., 1962; Ord. 210 N.S. § 11-133(1)(a), 1952].

23.24.020 Uses permitted.

The following uses shall be permitted in the R-3 district:
(a) Single- or two-family dwellings;
(b) Second units as permitted by Chapter 23.80 PGMC;
(c) Low-barrier navigation centers;
(d) Transitional and supportive housing.
(e) Employee housing.
(f) Multiple dwellings, apartment houses and dwelling groups; (g) Rooming or boarding houses, subject to first securing a use permit (except for employee housing); (h) Accessory uses and buildings normally incidental to any in this section; (i) Single-Room Occupancies (SROs) subject to first securing a use permit; (j) State-licensed residential care facilities for seven or more persons, subject to first securing a use permit.
[Ord. 20-016 § 2, 2020; Ord. 16-005 § 4, 2016; Ord. 03-08 §§ 4, 5, 2003; Ord. 811 N.S., 1974; Ord. 795 N.S., 1974; Ord. 720 N.S. §§ 9, 10, 1972; Ord. 532 N.S. § 5, 1966; Ord. 453 N.S., 1964; Ord. 382 N.S., 1962; Ord. 210 N.S. § 11-133(1)(a), 1952].

23.24.030 Building height limit.

The maximum height of main buildings shall be 30 feet. [Ord. 20-016 § 2, 2020; Ord. 00-18 § 6, 2000; Ord. 1141 N.S. § 3, 1979; Ord. 720 N.S. § 3, 1972; Ord. 210 N.S. § 11-133(1)(b), 1952].

23.24.040 Building site area required.

For each building, or group of buildings, a minimum of 4,000 square feet and minimum width of 40 feet shall be required on interior lots. A minimum of 6,000 square feet and a minimum width of 60 feet shall be required on corner lots. In the subdivisions designated as additions to Pacific Grove Retreat and in the PGCC 5-6-26
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Pacific Grove Municipal Code
Chapter 23.24 R-3 DISTRICTS

Pacific Grove Retreat, where the lot sizes, as legally subdivided, are 30 by 60 feet, the minimum lot size shall be 3,600 square feet, with the lot lines along the lines of said subdivisions. Nothing contained herein shall authorize such smaller minimum lot sizes for any future subdivisions.

For each family unit in any building or group of buildings, a minimum of 1,500 square feet of land area shall be required. [Ord. 20-016 § 2, 2020; Ord. 1260 N.S. § 2, 1981; Ord. 720 N.S. § 1, 1972; Ord. 210 N.S. § 11-133(1)(c), 1952].

23.24.050 Allowed building coverage.

Maximum building coverage on all sites is 50 percent. [Ord. 12-003 § 5, 2012; Ord. 1193 N.S. § 2, 1980; Ord. 720 N.S. § 8, 1972; Ord. 593 N.S., 1968; Ord. 210 N.S. § 11-133(1)(d), 1952].

23.24.051 Allowed site coverage.

Maximum site coverage on all sites is 60 percent. [Ord. 12-003 § 5, 2012].

24.24.052 Minimum density multiple dwellings.

For multiple dwellings, apartment houses, and dwelling groups, the minimum density shall be 20 units per acre, rounded up to the nearest whole unit.

23.24.060 Yards required.
(a) Front Yards. The minimum required front yard shall be 12 feet. Driveways shall not occupy more than 40 percent of the street frontage, and on a corner lot, the combined coverage on all frontages shall not exceed 25 percent of the total street frontage. Fifty percent of the front yard area shall be landscaped.

Such areas shall not be surfaced, covered, enclosed or treated in such a manner as to make it impossible or impractical to establish and maintain landscaping and gardening thereon. The area must be rectangular or composed of a series of rectangles not less than 10 feet in width. (b) Side Yards. Side yards shall be 10 percent of lot width with a minimum requirement of three feet and a maximum of 10 feet; provided, however, on corner lots, the side yard abutting the street shall be 20 percent of the width of the lot, but need not exceed 10 feet. (c) Rear Yards. Rear yards, excluding allowable horizontal projections described in PGMC 23.64.150, shall have the following minimums:
(1) One-story building: five feet.
(2) Two-story building: eight feet.
(3) Three-story building: 10 feet.
(4) Where a rear yard fronts on a street, the minimum rear yard shall be 12 feet. (d) Special Yards and Distances Between Buildings.
(1) Distance between any buildings, which shall be free from the encroachment of overhanging eaves, shall be a minimum of eight feet. For buildings of three stories, the minimum shall be increased to 10 feet and for buildings of four stories or more the minimums shall be increased to 12 feet.
(2) Side yards providing access to single-row dwelling group: minimum 12 feet. (3) Inner court providing access to double-row dwelling group: minimum 20 feet. (e) Open Yard. Open yard required shall be 200 square feet per unit for all construction of five units or more.

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Pacific Grove Municipal Code
Chapter 23.24 R-3 DISTRICTS

(f) Decks, Porches and Parking Spaces. Decks and open porches over three feet above grade may project or extend four feet over a required yard area, but not closer than three feet to the property line and no closer to other buildings than the minimums set forth in subsection (d) of this section. Parking spaces in excess of the required space for each family unit may project into the rear yard area set forth in subsection (c) of this section. [Ord. 720 N.S. § 6, 1972; Ord. 593 N.S., 1968; Ord. 532 N.S. § 6, 1966; Ord. 478 N.S., 1964; Ord. 382 N.S., 1962; Ord. 210 N.S. § 11-133(1)(e), 1952].

23.24.070 Garbage areas.

Where there are three or more units, garbage areas for holding of garbage or refuse shall be constructed with a concrete floor and curb. The area shall be enclosed by a view-obscuring wall or fence designed in harmony with the building design. The enclosure shall be not less than five feet in height and equipped with a self-closing gate or door. Trash area shall have access to a driveway or public way. [Ord. 720 N.S. § 14, 1972].

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Pacific Grove Municipal Code
Chapter 23.31 COMMERCIAL

AND INDUSTRIAL

ZONING DISTRICTS

Chapter 23.31

COMMERCIAL AND INDUSTRIAL ZONING DISTRICTS
Sections:

23.31.010 Purpose.

23.31.020 Commercial and industrial zoning districts.

23.31.025 C-V-ATC zoning district – American Tin Cannery zoning.

23.31.030 Commercial and industrial zoning districts allowable land uses and permit requirements.

23.31.040 Commercial and industrial zoning districts development standards.

23.31.010 Purpose.

This chapter lists the commercial and industrial zoning districts as established by PGMC 23.12.010 and establishes the development standards and types of land uses permitted in each commercial and industrial zoning district. [Ord. 13-003 § 2, 2013].

23.31.020 Commercial and industrial zoning districts.
(a) Light Commercial (C-1). The C-1 zoning district provides for neighborhood scale and locally oriented retail, service, office uses, as well as residential uses. (b) Light Commercial and Hotel (C-1-T). The C-1-T zoning district was enacted by citizen initiative, and the standards of the district are included in the applicable sections of this chapter without modification from the initiative.
(1) Intent of District. The intent of the C-1-T district as described by the initiative is as follows:
(A) It is the intent of the people of the city of Pacific Grove in enacting the ordinance codified in this chapter to establish a zone district in the city’s downtown area where hotel use is permitted, as are all other uses listed in the C-1 district of this code, as said district may be from time to time amended by the council. The people have determined that the area of downtown defined by subsection (b)(2) of this section is appropriate for hotel development. Further, except as modified by this chapter, all provisions of the motel/hotel regulation ballot measure enacted by the people at the June 3, 1986, special municipal election, as set out at Chapter 23.52 PGMC, shall remain unchanged and in full force and effect.
(B) It is also the intent of the people of the city of Pacific Grove in enacting the ordinance codified in this chapter to provide for an exception to the strict regulations governing condominium development at Chapter 23.45 PGMC, said section enacted by the people at an election held in the city on November 2, 1982. The people have determined that the area of the downtown defined in subsection (b)(2) of this section is appropriate for condominium development in a manner less restrictive than defined by regulations set out in Chapter 23.45 PGMC. Further, except as modified by this chapter, the provisions of Chapter 23.45 PGMC shall remain unchanged and in full force and effect.
(2) Boundaries of District. The C-1-T district shall be that area defined by the block bounded by Lighthouse Avenue, Grand Avenue, Central Avenue and Fountain Avenue. (3) Amendment. No provision of the C-1-T zoning district shall be repealed or amended except by a vote of the people.
(c) Downtown Commercial (C-D). The C-D zoning district is intended to provide for a range of uses including retail, restaurants, services, entertainment, and upper floor residential, and other compatible uses which enhance the vitality and character of the city’s historic commercial core.

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Pacific Grove Municipal Code
Chapter 23.31 COMMERCIAL

AND INDUSTRIAL

ZONING DISTRICTS

(d) Forest Hill Commercial (C-FH). The C-FH zoning district serves as an entrance to the city, offering a variety of commercial and service uses, as well as residential uses, while respecting nearby residential uses.
(e) Heavy Commercial (C-2). The C-2 zoning district is applied to areas of the city that are appropriate for limited residential uses, service commercial and light manufacturing uses, which may involve outdoor storage or activity areas.
(f) Visitor Commercial (C-V). The C-V zoning district is applied to areas of the city appropriate for retail sales, commercial services, and institutional uses oriented to tourism. (g) Restricted Industrial (I). The I zoning district is applied to areas of the city that are appropriate for limited commercial uses, service commercial and light manufacturing uses, which may involve outdoor storage or activity areas. [Ord. 13-003 § 2, 2013].

23.31.025 C-V-ATC zoning district – American Tin Cannery zoning. (a) Boundaries of District. The C-V-ATC zoning district shall apply to the American Tin Cannery site that is comprised of Assessor’s Parcel Numbers 006-231-001, 006-234-004, and 006-234-005 and that segment of Sloat Avenue that is continuous to the American Tin Cannery site. (b) Uses Permitted. Notwithstanding any other provision of the Pacific Grove Municipal Code, the following uses shall be permitted in the C-V-ATC zoning district:
(1) Hotels and any accessory uses, such as restaurants, bars and lounges, meeting and event facilities, spa and fitness facilities, parking, and buildings, spaces, and structures incidental to such uses, subject to first securing a use permit.
(2) All uses that are permitted in the C-V zoning district and additional uses permitted by subsequent amendment to the zoning ordinance.
(c) Development Standards. Development standards in the C-V-ATC zoning district, including floor area coverage, density, setbacks and height limits shall be in accordance with the applicable standards set forth in the local Coastal Program Land Use Plan, as updated or amended, or if no such standards are provided in the local coastal Program Land Use Plan, as updated or amended, in accordance with the standards set forth in the use permit or other required permit for a use allowed in the C-V-ATC zoning district.
(d) Except as modified by this section, all provisions of the motel/hotel regulation ballot measure enacted by the people at the June 3, 1986, special election, as set out at Chapter 23.52 PGMC, shall remain unchanged and in full force and effect. [Ord. 16-009A § 1, 2016].

23.31.030 Commercial and industrial zoning districts allowable land uses and permit requirements.

Key to Zoning District Symbols
C-1 Light Commercial C-FH Forest Hill
Commercial
I Restricted Industrial
C-1-T Light Commercial
and Hotel
C-2 Heavy Commercial
C-D Downtown
Commercial
C-V Visitor Commercial
P = Permitted use; counter review and determination required (see PGMC 23.70.020) UP = Use permit required (see PGMC

23.70.080)
AUP = Administrative use permit required (see PGMC 23.70.030) -- = Use not allowed PGCC 5-6-26
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Pacific Grove Municipal Code
Chapter 23.31 COMMERCIAL

AND INDUSTRIAL

ZONING DISTRICTS

Table 23.31.030 Commercial and Industrial Zoning Districts Allowable Land Uses and Permit Requirements Use
Specific
Use
Regulation
s (PGMC) C-1
1 C-1-
T
1 C-D1 C-FH1 C-2 C-V1
I
Industry, Manufacturing and Processing
Contract
construction – no
outdoor storage
P
2 P2
-- P
2 P3,4 P2 P3
Contract
construction –
outdoor storage
-- -- -- -- P
3,4 UP UP
Construction, largescale equipment
sales and rental
-- -- -- -- P
3,4 UP UP
Industrial, light UP UP -- UP AUP3,4 UP AUP3,4
Recycling facility UP UP -- UP UP UP UP
Research and
development facility
AUP2 AUP2 AUP2 AUP2 AUP3
AUP2
AUP3
Storage – selfstorage facility-- -- -- -- AUP3
AUP2
AUP3
Warehousing,
wholesaling and
distribution
-- -- -- -- P
3 P2 P3
Recreation, Education and Public Assembly
Commercial
recreation facility –
indoor (≤ 10,000 sf)

7.08, 7.12,

23.64.035
P
2 P2 P2 P2 P3 P2 P3
Commercial
recreation facility –
outdoor
AUP2
AUP2-- -- AUP3
AUP2
AUP3
Community garden AUP5 AUP5 AUP5 AUP5 AUP5 AUP5--
Health/fitness
studio (≤ 10,000 sf)
P
2 P2 P2 P2 P3 P2 P3
Meeting facility,
public or private (≤
10,000 sf)
P
2 P2 P2 P2 P3 P P3
Park, playground
(public)
P
2 P2 P2 P2 P3 P2 P3
Public or quasipublic facility (≤
10,000 sf)
P
2 P2 P2 P2 P3 P2 P3
School, specialty (≤
10,000 sf)
P
2 P2 P2 P2 P3 P2
--
Theater or
auditorium (≤
10,000 sf)
P
2 P2 P2 P2 P3 P2 P3
Residential
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Use
Specific
Use
Regulation
s (PGMC) C-1
1 C-1-
T
1 C-D1 C-FH1 C-2 C-V1
I
Accessory building
or structure

P P P P P -- UP
Condominium UP UP6 UP UP UP -- UP
Duplex P P P P P -- UP
Dwelling group UP UP UP UP UP -- UP
Emergency
shelters9
-- -- P P P -- P
9 Employee housing
for 6 or fewer
persons12

P P P P P UP
Home business 23.16 P P P P P -- UP
Large family day
care home

UP UP UP UP UP -- --
Low barrier
navigation centers
P
9 P9 P9
-- P
9 Mixed-use
(residential above
or behind
commercial)
P
2 P2 P2 P2 P3
-- --
Mobile home park -- -- -- -- UP -- UP
Multifamily dwelling
7 or fewer units 23.28.020 P P P P P -- UP
8 or more units 23.28.020 P UP P P UP -- UP
Residential care
Housing 6 or fewer
persons
P
10 P10 P10 P10 P10
--
10 UP10
Housing 7 or more
persons

UP UP UP UP UP -- UP
Rooming and
boarding house14

UP UP UP UP UP -- UP
Second unit 23.80 P P P P P -- UP
Single-family
dwelling

P P P P P -- UP
Single-Room
Occupancy

P P P P P -- UP
Transitional or
supportive housing

P P P P
11 P11
-- UP11
Retail Sales
Automobile/vehicle
sales and rental
AUP2 AUP2 AUP2 AUP2 AUP3 AUP2 AUP3
Automobile/vehicle
service station
AUP2 AUP2-- AUP2 AUP3 AUP2 AUP3
Bar/tavern/nightclub -- -- -- -- -- -- --
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Use
Specific
Use
Regulation
s (PGMC) C-1
1 C-1-
T
1 C-D1 C-FH1 C-2 C-V1
I
Brew pub with food
service

23.64.290
AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
--
Farmers market UP UP UP UP UP UP --
Flea market UP UP UP UP UP UP --
Micro-brewery 23.64.290 -- -- -- UP UP UP UP
Pub or sports bar
with food service

23.64.290
AUP2 AUP2 AUP2 AUP2 AUP3 AUP2
--
Restaurant, general and formula general
w/ no alcohol sales 23.64.134 P
2 P2 P2 P2 P3 P2
--
w/ alcohol sales 23.64.134,

23.64.290 AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
--
Restaurant, specialty (not formula)
w/ no alcohol sales 23.64.134;
if formula,
see also

23.64.115
P
2 P2 P2 P2 P3 P2
--
w/ beer and wine
sales only

23.64.134,

23.64.290;
if formula,
see also

23.64.115
AUP2 AUP2 AUP2 AUP2 AUP3 AUP2--
Restaurant, fast
food (not formula) –
w/ no alcohol sales

23.64.134;
if formula,
see also

23.64.115
AUP2 AUP2 AUP2 AUP2 AUP3 AUP2
--
Restaurant, drivein/drive-through (not
formula) – w/ no
alcohol sales

23.64.134;
if formula,
see also

23.64.115
-- -- -- UP -- -- --
Retail – general,
except the
following:

P
2 P2 P2 P2 P3 P2 UP
Adult-oriented sales UP7 UP7-- UP7-- -- --
Alcoholic beverage
sales
UP UP UP UP UP AUP2--
Auction houses P -- -- P P P P
Automobile rental P -- -- P P P P
Bail bonds P -- -- P P P P
Blood, plasma,
tissue donation

P -- -- P P P P
Body piercing/tattoo
parlor

P -- -- P P P P
Check cashing
stores
-- -- -- P P P P
Dollar/99 cent
stores
-- -- -- P P P P
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Chapter 23.31 COMMERCIAL

AND INDUSTRIAL

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Use
Specific
Use
Regulation
s (PGMC) C-1
1 C-1-
T
1 C-D1 C-FH1 C-2 C-V1
I
Electric cigarette/evaporP -- -- P P P P
Gold and silver
exchange stores

P -- -- P P P P
Kennels or pet
boarding**

P -- -- P P P P
Pawn shops P -- -- P P P P
Recreational
vehicle sales

P -- -- P P P P
Meeting halls or
places of assembly

P -- -- P P P P
Tire sales and
repair

P -- -- P P P P
Businesses from
which minors
excluded by law or
owner

UP UP UP UP UP UP --
Floor area over
10,000 sf
AUP2 AUP2 AUP2 AUP2 AUP3 AUP2 AUP3
Operating between
12:00 a.m. and 7:00
a.m.

UP UP UP UP UP UP UP
Outdoor storage or
displays
AUP AUP AUP AUP AUP1 AUP AUP1
Retail – restricted UP UP -- UP UP UP UP
Wine bar 23.64.290 AUP2 AUP2 AUP2 AUP2 AUP3 AUP2 AUP3
Wine tasting room 23.64.290 AUP2 AUP2 AUP2 AUP2 AUP3 AUP2 AUP3 Services
Animal
keeping/training
facilities or
veterinary service
AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
AUP3
Automobile/vehicle
repair AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
AUP3
Bank or financial
service, except the
following:

P
2 P2 P2 P2 P3 P2 P3
Floor area over
10,000 sf at street
level
AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
AUP3
w/ drive-through UP UP -- UP UP UP UP
Business support
service
P
2 P2 P2 P2 P3 P2 P3
Car wash and
detailing
AUP2 AUP2-- AUP2 AUP3 AUP2 AUP3
Catering and events 23.64.290
AUP2 AUP2 AUP2
AUP2 UP UP UP
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Use
Specific
Use
Regulation
s (PGMC) C-1
1 C-1-
T
1 C-D1 C-FH1 C-2 C-V1
I
Equipment/applianc
e rental and repair AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
AUP3
Laundry or dry
cleaning service
AUP2
AUP2
AUP2 AUP2 AUP3 AUP2 AUP3
Lodging
Bed and breakfast
inn –w/ beer and
wine sales only

23.64.290
AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
AUP3
Hotel or motel 23.64.290 -- UP8-- -- -- -- --
Medical service
Ambulance service UP UP -- UP UP UP UP
Clinic or lab P
2 P2 P2 P2 P3 P2 P3
Medical office P
2 P2 P2 P2 P3 P2 P3
Hospital UP UP -- -- UP UP UP
Mortuary or funeral
home

UP UP -- UP UP UP UP
Office, business or
professional
P
2 P2 P2 P2 P3 UP UP
Personal service 7.06 P
2 P2 P2 P2 P3 P2 UP
Personal service –
restricted

UP UP UP UP UP UP UP
Printing or creative
service
P
2 P2 P2 P2 P3 P2 P3
Transportation and Infrastructure
Parking facility UP UP UP UP UP UP UP
Public utility UP UP UP UP UP UP UP
Radio or television
station

UP UP UP UP UP UP UP
Taxi service 7.16 UP UP UP UP UP UP UP
Transit center UP UP UP UP UP UP UP
Wireless
telecommunication
facility

UP UP UP UP UP UP UP
Temporary wireless
telecommunications
facility

CRD CRD CRD CRD CRD CRD CRD
Wireless eligible
facilities request

AUP AUP AUP AUP AUP AUP AUP
End Notes:

1. No merchandise, tools, machinery, equipment, or materials shall be stored or displayed outside of a building, except as specifically permitted for retail uses under an administrative use permit. Temporary administrative use permits, good for not over 30 days, may be granted, pursuant to PGMC 23.70.030(b)(7), for temporary outdoor sales events of new merchandise by merchants holding use permits or otherwise qualified to operate within the applicable district; provided, that such outdoor sales are operated in PGCC 5-6-26
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conjunction with their established retail operations, and for Christmas tree sales, or other sales on private property, connected with festivals or holidays.

2. The permit type specified in this table applies to any new or enlarged commercial use which totals 10,000 square feet or less of interior floor space. An administrative use permit is required for any new or enlarged commercial use which results in either the use of more than one structure on a building site or a total of more than 10,000 square feet of interior floor space. A use permit is required where any new or enlarged commercial use exceeds 25,000 square feet in interior floor space.

3. A use permit is required for any new building or addition which adds more than 25,000 square feet of interior floor space or which results in a building having more than 40 feet in height.

4. Such uses may be granted subject to a use permit, when conducted within a building or enclosed by a fence, subject to architectural approval by the appropriate review authority for design and landscaping pursuant to Chapter 23.70 PGMC; and provided, that said fence and landscaping shall be of sufficient height and screening capacity to prevent the view thereof from any adjacent street or sidewalk.

5. Community gardens on vacant lots may be permitted by administrative use permit, pursuant to PGMC 23.70.030(b)(7), and shall be reviewable every six months and subject to such conditions as the administrative use permit may prescribe. The application shall be accompanied by a written agreement by the owner to grant the city a lien for any cost incurred by the city in restoring such property to its condition prior to such use, in the event the owner fails to make such restoration after such use ceases.

6. Condominium use shall be allowed, subject to first securing a use permit in each case, and subject to the building height, site coverage, and yard requirements of this chapter. The provisions of Chapter 23.45 PGMC shall not apply to development of condominiums in the C-1-T district. The council shall, by ordinance, establish standards, conditions and other regulations to govern the development of condominiums in the C-1-T district. Until and unless such standards, conditions and other regulations are in place, no application for such development shall be accepted or processed. Such standards, conditions and regulations established by the council shall be in addition to and harmonious with state law governing condominium development. See also PGMC

23.31.020(b)(1)(B).

7. Adult-oriented sales may comprise no more than 25 percent of floor area or stock-in-trade of a general retail business, must be located in the rear of the general retail business, and must not be visible from the exterior of the general retail business.

8. Hotel uses shall be allowed, subject to first securing a use permit in each case, and subject to the building height, site coverage, and yard requirements of this chapter. All other regulations and conditions of approval shall be as provided by use permit approved pursuant to this title. Said regulations and conditions shall include, without limitation, provisions for architectural review, land area per unit, neighborhood compatibility, landscaping, parking, traffic and accessory buildings. Required parking, if any, may be located on or off site, the location to be designated by the use permit. See also PGMC 23.31.020(b)(1)(A).

9. Outside the coastal zone only. In addition to the requirements of PGMC 23.31.040, emergency shelters shall be subject to the following standards:
a. Maximum of 25 beds.
b. Off-street parking shall be provided at a rate of one space per each staff person on duty. c. On-site management shall be provided at all times the shelter is open. A management and security plan shall be prepared in consultation with the city manager or his or her designee which shall describe hours of operation; staffing; house rules and occupant screening procedures; on- or off-site services to be provided; security measures to ensure the safety of the occupants of the shelter and surrounding areas; and communications protocols to ensure effective coordination between shelter management, adjacent property owners and residents, and public safety personnel. d. No emergency shelter shall be established closer than 300 feet from another emergency shelter, measured from the nearest property line.
e. Waiting and intake areas shall be screened from view from the public right-of-way.

10. Permitted subject to the same standards as apply to other residential dwellings of the same type in the same zone.

11. Transitional and supportive housing developments shall be subject to the parking requirements of PGMC 23.64.190, with the exception of developments located within a one-half (0.5) mile distance of a transit stop where no off-street parking shall be required.

12. Rooming houses or boarding houses accommodating employee housing shall be subject to Employee Housing Act. See permitted uses and standards under employee housing.
**When not associated with a veterinary clinic.
[Ord. 20-001 § 2 (Exh. A), 2020; Ord. 16-005 § 6, 2016; Ord. 15-013 § 4, 2015; Ord. 13-003 § 2, 2013].

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Chapter 23.31 COMMERCIAL

AND INDUSTRIAL

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23.31.040 Commercial and industrial zoning districts development standards.

Table 23.31.040 Commercial and Industrial Zoning Districts Development Standards C-1
7 C-1-T C-D7 C-FH1,7 C-27 C-V I
Building Placement Requirements
Setbacks1,2,3,4
Front, min.
(max.)6
0’ 0' 0' 0'
(20')
0' 0' 0'
Side (min.),
except:
0’ 0' 0' 0' 0' 0' 0'
Residential/
Mixed-use
10’ 0’ 5’ 10' 0’ 0’ 0’
Adjacent to
residential
zone
5’ 5' 5' 5' 5' 10' 10'
Rear (min.),
except:
0’ 0' 0' 10' 0' 0' 0'
Adjacent to
residential
zone
5’ 5' 5' 10' 5' 10' 10'
Building Form Requirements
Building height
(max.)4
45’ 40' with max.
site coverage
of 75%; 30'
with max. site
coverage of
90%
40' 35' 40' 40' with
max. site
coverage
of 75%;
30' with
max. site
coverage
of 90%
40'
Site coverage
(max.)
90% 75 – 90%,
depending on
building height
100% 75% 90% 75 – 90%,
depending
on building
height
90%
Stepbacks for portion of building above 25 feet
Front, min 8’5 0’ 0’ 8’ 0’ -- --
Side, min 0’ 0’ 0’ 0’ 0’ -- --
Rear, min6 30’ 0’ 10’ 30’ 0’ -- --
Density Requirements
Dwelling units
per net acre
Min. 20 units
per acre,
rounded up to
the nearest
whole unit.

Max 30 units
per acre.

For Coastal
Zones – Max.
allowed by
the general
plan
residential
land use
category
nearest to the
site, up to 30
units per net
acre.

Max. allowed
by the general
plan
residential
land use
category
nearest to the
site, up to 30
units per net
acre.

Max. of 45
units per acre;
with a
minimum
density
requirement of
30 units per
acre.

Max. of 45
units per
acre; with a
minimum
density
requirement
of 30 units
per acre.

Min. 20 units
per acre,
rounded up
to the
nearest
whole unit.

Max. 30 units
per acre.

For Coastal
Zones –
Max. allowed
by the
general plan
residential
land use
category
nearest to
the site, up
N/A Max.
allowed by
the GP
residential
land use
category
nearest to
the site,
up to 30
units per
net acre.6
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to 30 units
per net acre.

Floor area ratio Max. allowed by the general plan
Lot Requirements
Lot area for new
parcels (min.)
2,000 sf
Other Requirements
Landscaping See PGMC 23.64.195
Parking See PGMC 23.64.190
Signs For C-D district see Chapter 20.05 PGMC. For all other districts see Chapter 20.04 PGMC End Notes:

1. For mixed-use residential/commercial development where residential ground-floor street frontage is allowed and constructed, the setback standards in PGMC 23.31.50 shall apply.

2. Cornices, eaves, and other horizontal projections may be allowed, consistent with PGMC 23.64.150 and 23.64.160.

3. Along Central, Lighthouse, and Forest Avenues, commercial ground-floor street frontage standards in PGMC 23.31.050 also apply.

4. Chimneys and other vertical projections may be allowed, consistent with PGMC 23.64.120.

5. In C-1 and C-FH districts, front stepbacks requirements shall not apply for up to 30 feet of a building’s width.

6. Rear stepback requirements shall not apply within 70 feet of front property line, while rear setback requirements shall continue to apply.

7. Pursuant to Government Code Section 65583.2(h)(2) for mixed-use development projects on sites within C-1, C-2, C-D and C-FH districts, identified in the 6th Cycle Housing Element Site Inventory for lower-income households, a minimum of 50 percent of the total floor area shall be residential.

The 6th Cycle Housing Element can be found on the City’s website:
https://www.cityofpacificgrove.gov/our_city/departments/community_development/housing/housing_element.php Sites within the C-1, C-2, C-FH and C-D that are identified for lower-income housing units include the following:

Site No. Address APN(s)
8 601 Lighthouse Ave. 006294017000, 006294015000
9 525, 531 Lighthouse Ave. 006284015000, 006284001000, 006284002000 18 95 Central Ave. 6238005000
20 2749 Forest Hill Blvd. 007651013000, 007651017000
21 1146, 1152 Forest Ave. 7651022000, 7651014000
22 1125, 1129, 1133, 1137 Forest Ave. 006713031000, 006713032000, 006713027000, 006713026000 26 1157 Forest Ave. 6713023000
27 1193 Forest Ave. 6713019000
29 1124, 1140 Forest Ave. 7641009000, 7641008000
30 1160 Forest Ave. 7651019000
31 1180 Forest Ave. 7611031000
33 1219 Forest Ave. 6725023000
48 2184 Sunset Dr. 7091025000
49 17 Mile Dr. 7091026000
55 801 Sunset Dr. 7101036000
[Ord. 17-009 § 3, 2017; Ord. 13-003 § 2, 2013].

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Chapter 23.52 R-3-M DISTRICTS

Chapter 23.52
R-3-M DISTRICTS
Sections:

23.52.010 Regulations generally.

23.52.020 Uses permitted.

23.52.030 Regulations for R-3-M uses.

23.52.035 Special regulations for motels and hotels built prior to 1986.

23.52.040 Statement of intent.

23.52.050 Other provisions.

23.52.060 Amendment.

23.52.010 Regulations generally.

Effective the date of the adoption of the ordinance codified in this section by the city council or by the voters of the city of Pacific Grove, the regulations of the ordinance codified in this section shall apply in the R-3-M district in lieu of any ordinance or resolution to the contrary:
(a) The R-3-M district is defined as those areas so designated on the official zoning map of the city of Pacific Grove referred to in PGMC 23.12.020. Said districts may be classified by the city council to R-1, R-H, or R-2, where already developed as such, but no new R-3-M districts shall be created. (b) Motel and hotel uses shall be restricted to the R-3-M district, including any uses accessory or ancillary to a motel. The ordinance codified in this section shall also apply to any use described in PGMC

23.52.020 proposed for the construction or expansion in any R-3-M district, including uses accessory or ancillary to such use. [Ord. 1536 N.S. § 2, 1986].

23.52.020 Uses permitted.

The following uses are permitted in the R-3-M districts:
(a) Any use permitted in the R-3 district, subject to obtaining a use permit for any use for which such is required in an R-3 district;
(b) Motels, subject to first securing a use permit in each case; (c) Hotels, subject to first securing a use permit in each case; (d) Adult communities, retirement homes and rest homes, subject to first securing a use permit in each case. [Ord. 575 N.S., 1967; Ord. 453 N.S., 1964; Ord. 263 N.S., 1955; Ord. 210 N.S. § 11-139(1)(a), 1952].

23.52.030 Regulations for R-3-M uses.
(a) A minimum of 2,500 square feet of land shall be required for each family unit and each motel or hotel unit. For other uses described in PGMC 23.52.020(d), the planning commission and/or city council shall determine the amount of land area per occupied unit by judging its similarity to a family unit or motel unit in actual use and impact. For example, a rest home affording separate apartments and parking facilities would be judged a family unit; a hotel which offers amenities identical or substantially similar to a motel would be judged a motel. In no event shall less than 2,000 square feet per occupied unit be allowed, for any PGMC 23.52.020(d) use.
(b) A minimum setback of 20 feet shall be required for all structures in a R-3-M development which abut R-1, R-H, or R-2 property, including streets abutting same. The setback shall be 10 feet for commercial or other R-3-M developments or districts. Eave projections may extend up to three feet into any required yard, but in no case may be closer than three feet to any property line.

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(c) The height of the structures shall not exceed 25 feet nor two stories above grade. The height shall be one story above grade and not more than 18 feet where the R-3-M property, or any portion thereof, is within 200 feet of any portion of any property zoned R-1, R-H, or R-2. (d) The architectural review board, the planning commission and/or the city council shall require the configuration and layout of structures so as to assure that residential areas are not impacted by guest activities such as registration, parking, food and beverage services. Said bodies shall require a design which blends with the residential neighborhood and minimizes the nonresidential impact and use.

Appropriate landscaping shall be required throughout the site. Setback areas shall be landscaped and shall not be used for automobile parking, or storage of any kind. Access to the site, where feasible, shall be from a street and/or driveway which does not abut said residential areas. (e) Wood-burning fireplaces and wood-burning heaters shall be limited to the rate of six per acre, and any additional fireplaces shall be limited to natural gas fireplace inserts. (f) Any use permit for new construction or other activity resulting in an increase in the number of units or the amount of floor space shall expire one year from its issuance unless construction of the project for which the permit was issued is substantially complete.
(g) Uses which do not conform hereto as of the date of publication of the notice of intention to circulate the petition for the ordinance codified in this section may continue if legally installed prior thereto. Any expansion or alteration of such existing nonconforming use shall require complete compliance herewith for the entire use. The conversion of sliding doors to swinging doors, and similar changes, are not considered an expansion or alteration.
(h) Variances and/or exceptions hereto shall not be granted, except upon strict compliance with state and local law governing such. No variance or exception shall be granted on the basis of failure of opposition thereto.
(i) Any R-3-M district property shall be deemed to be upon a street which abuts or abutting to R-1, R-H, or R-2 property, whenever any part of the R-3-M property is within 20 feet of the abutting street or the R-1, R-H or R-2 property. [Amended by vote of the people on November 8, 2011, general election; Res. 11- 061 § 4, 2011; Res. 11-060 § 4.1, 2011; Ord. 1536 N.S. § 3, 1986].

23.52.035 Special regulations for motels and hotels built prior to 1986.

This section modifies the development standards in PGMC 23.52.030 for R-3-M motels and hotels built prior to the adoption of Ordinance No. 1536, in order to enable and encourage hoteliers to upgrade and modernize their businesses to stay competitive. Where this section differs from PGMC 23.52.030, the provisions of this section shall take precedence. Where this section is silent on a provision that is in PGMC 23.52.030, the provision in PGMC 23.52.030 shall apply. (a) Motels and hotels built prior to 1986 are categorized into groups and are allowed additional guest units over the number of permitted guest units, as of the effective date of this section, as follows:

New Guest Units Allowed for Motels and Hotels Built Prior to 1986 Address
Permitted Guest Units as of
Effective Date of This Section
Additional Guest Units Allowed
over Permitted Guest Units in
Column to Left
Group A1
569 Asilomar Avenue 16 3
1095 Lighthouse Avenue 10 2
800 Asilomar Avenue 54 11
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Address
Permitted Guest Units as of
Effective Date of This Section
Additional Guest Units Allowed
over Permitted Guest Units in
Column to Left
221 Asilomar Avenue 18 1
1073 Lighthouse Avenue 27 5
701 – 709 Asilomar Avenue 28 6
775 Asilomar Avenue 18 4
1100 Lighthouse Avenue 38 8
1101 Lighthouse Avenue 33 7
Group B2
1111 Lighthouse Avenue 49 10
740 – 750 Crocker Avenue 49 3
650 Dennett Street 31 6
1150 Lighthouse Avenue 66 6
1140 Lighthouse Avenue 37 3
133 Asilomar Avenue 19 4
Group C3
635 Ocean View Boulevard 60 0
625 Ocean View Boulevard 52 0
1038 Lighthouse Avenue 24 0
1 Group A – Motels and hotels where the number of permitted guest units, as of the effective date of this section, is less than 170 percent of the 1:2,500 density ratio in PGMC 23.52.030(a). Motels and hotels in Group A may construct additional guest units or ancillary facilities by conversion of existing buildings or by new construction. 2 Group B – Motels and hotels where the number of permitted guest units, as of the effective date of this section, is greater than 170 percent, but less than 250 percent, of the 1:2,500 density ratio in PGMC 23.52.030(a). Motels and hotels in Group B may construct additional guest units or ancillary facilities by conversion of existing buildings only. 3 Group C – Motels and hotels where the number of permitted guest units, as of the effective date of this section, is greater than 250 percent of the 1:2,500 density ratio in PGMC 23.52.030(a). Motels and hotels in Group C may not construct any additional guest units.
(b) For motels and hotels in Group A, each new guest unit shall be a maximum size of 360 square feet.

Since new guest units in Group B motels and hotels must be created by conversion of existing buildings, they may conceivably be greater than 360 square feet in size. No existing guest unit that is less than 360 square feet, as of the effective date of this section, may be enlarged to exceed 360 square feet in size.

No existing guest unit that is 360 square feet or more in size, as of the effective date of this section, shall be enlarged.
(c) Motels and hotels in Group A may use up to three of the additional guest units allowed to instead create a new ancillary facility (e.g., meeting space, dining room, fitness facility), with a maximum size of 1,080 square feet (or 360 square feet for each additional guest unit substituted). Motels and hotels in Groups B and C may create new ancillary facilities only through conversion of existing buildings and are not limited in size.
(d) For motels and hotels in Group A, the setback requirements of PGMC 23.52.030(b) shall also apply to new guest units or new ancillary facilities that abut any public street or any single-family residence.

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(e) For motels and hotels in Group A, building height is two stories and not more than 25 feet for new guest units that are at least 50 feet from any property zoned R-1, R-H, or R-2, any public street, and any single-family residence. Building height is one story and not more than 18 feet for new guest units that are at least 20 feet from any property zoned R-1, R-H, or R-2, any public street, and any single-family residence. For property lines of Group A motels and hotels that do not abut any property zoned R-1, R-H, or R-2, a public street, nor single-family residence, building height for new guest units may be two stories and up to 25 feet within 10 feet of the property line. New ancillary facilities in Group A motels and hotels may be one story, with a maximum building height of 18 feet. (f) For motels and hotels in Groups A and B, the following additional requirements apply to new construction or conversion of existing buildings:
(1) A use permit approval is required. As part of this review, the planning commission may impose specific standards pertaining to building design (e.g., building mass, bulk, height, and wall articulation), outdoor lighting, driveway locations, parking areas, landscaping, signs, street dedication, and related public improvements, upon finding that such requirements are necessary to meet the intent of the R-3-M district.
(2) No outdoor living areas are allowed within setbacks abutting residential zones or residential uses.

This includes balconies, decks, open porches, patios, or similar outdoor guest activity areas. (3) Existing landscaping requirements in PGMC 23.52.030 are expanded to require that within setback areas adjacent to the new development or building conversion, especially abutting residential zones and residential uses, plantings include numerous trees, shrubs and plants that will reduce visual and noise impacts of the motel or hotel use on adjacent properties. (4) New guest units do not have to be built at one time, but may be developed in phases. (5) All other R-3-M standards shall apply including, but not limited to, parking and building coverage.

New guest units and ancillary facilities must have available water. (g) For motels and hotels in Groups A, B and C, a nonconforming building damaged or destroyed by catastrophic event or demolished under any other circumstance may be rebuilt to the condition or configuration of the building that existed immediately prior to the event or demolition, as long as the reconstruction is carried out in a manner consistent with PGMC 23.68.040. While reconstruction to preexisting conditions is allowed, elimination of nonconformities is encouraged. Reconstructed one-story buildings may be built to a maximum height of 18 feet, regardless of the pre-existing building height. (h) For motels and hotels in Groups A, B and C, exterior remodeling within the existing footprint of a nonconforming building may retain existing nonconformities as long as the remodel does not:
(1) Extend or expand an existing nonconformity;
(2) Add any new nonconformity; or
(3) Adversely affect the privacy of adjacent residential-zoned property or residential uses. (i) No other reconstruction or remodeling may take place, beyond what is allowed in this section for motels and hotels in Groups A, B and C, without bringing the entire property into conformance with PGMC 23.52.030. [Added by vote of the people on November 8, 2011, general election; Res. 11-061 § 4, 2011; Res. 11-060 § 4.2, 2011].

23.52.040 Statement of intent.

It is the intention of the ordinance codified in this section to preserve the essential residential character of the city, and the residential appearance of the city, and to prevent the adverse impacts of such from developments in the R-3-M districts. [Ord. 1536 N.S. § 4, 1986].

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23.52.050 Other provisions.

Regulations found in this chapter are subject to the provisions of Chapter 23.24 PGMC, unless there is a conflict, in which event the regulations found in this chapter shall prevail. [Ord. 1536 N.S. § 5, 1986].

23.52.060 Amendment.

PGMC 23.52.010, 23.52.030, 23.52.035 and 23.52.040 shall not be repealed or amended except by a vote of the people. [Amended by vote of the people on November 8, 2011, general election; Res. 11-061 § 4, 2011; Res. 11-060 § 4.3, 2011; Ord. 1536 N.S. § 6, 1986].

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Title 23 ZONING

Title 23
ZONING1
Chapters:

23.04 Purpose and Effect of Zoning Regulations

23.08 Definitions

23.12 Districts

23.16 R-1 District and R-1-B Combined Districts

23.20 R-2 District and R-2-B-3 Combined District

23.24 R-3 Districts

23.26 R-3-P.G.R. District

23.28 R-4 District

23.29 Condominium and Community Housing Conversions

23.30 M-H Districts

23.31 Commercial and Industrial Zoning Districts

23.32 C-1-T Zone Condominiums

23.33 Repealed

23.34 Limited Downtown Commercial (C-D)(C-1-T) Uses

23.36 Repealed

23.40 Repealed

23.42 O District

23.43 Initiative Restriction of Use of George Washington Park

23.44 U Districts

23.45 Initiative Ordinance Enacting Regulations for Multiple Unit Developments Involving Condominiums, Planned Unit Developments and Timeshares

23.52 R-3-M Districts

23.56 R-H District

23.57 R-3-P.G.B. District

23.58 Repealed

23.60 Planned Unit Development – PUD

23.64 General Provisions and Exceptions

23.68 Nonconforming Uses and Buildings

23.70 Community Development Permit Review Authorities and Procedures

23.72 Permit Application Filing and Processing

23.73 Permit Implementation, Time Limits, and Extensions

23.74 Appeals and Call-Ups

23.76 Historic Preservation

23.77 Environmental Impact Reports

23.78 Sale of Residential Buildings

23.79 Density Bonus and Affordable Housing Regulations

23.80 Accessory Dwelling Units

23.81 Reasonable Accommodation for Persons with Disabilities

23.82 Interpretations of Permitted Use Lists

23.84 Legislative Amendments

23.86 Public Meeting and Hearing Procedures

23.88 Enforcement

23.90 Local Coastal Program Implementation Plan

23.92 Cannabis Businesses
1 For statutory provisions, see California Government Code § 65800 et seq.

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Chapter 23.24 R-3 DISTRICTS

Chapter 23.24
R-3 DISTRICTS
Sections:

23.24.010 Generally.

23.24.020 Uses permitted.

23.24.030 Building height limit.

23.24.040 Building site area required.

23.24.050 Allowed building coverage.

23.24.051 Allowed site coverage.

23.24.052 Minimum density multiple dwellings.

23.24.060 Yards required.

23.24.070 Garbage areas.

23.24.010 Generally.

The regulations found in this chapter shall apply to all R-3 districts and shall be subject to the provisions of Chapter 23.64 PGMC. [Ord. 20-016 § 2, 2020; Ord. 382 N.S., 1962; Ord. 210 N.S. § 11-133(1)(a), 1952].

23.24.020 Uses permitted.

The following uses shall be permitted in the R-3 district:
(a) Single- or two-family dwellings;
(b) Second units as permitted by Chapter 23.80 PGMC;
(c) Low-barrier navigation centers;
(d) Transitional and supportive housing.
(e) Employee housing.
(f) Multiple dwellings, apartment houses and dwelling groups; (g) Rooming or boarding houses, subject to first securing a use permit (except for employee housing); (h) Accessory uses and buildings normally incidental to any in this section; (i) Single-Room Occupancies (SROs) subject to first securing a use permit; (j) State-licensed residential care facilities for seven or more persons, subject to first securing a use permit.
[Ord. 20-016 § 2, 2020; Ord. 16-005 § 4, 2016; Ord. 03-08 §§ 4, 5, 2003; Ord. 811 N.S., 1974; Ord. 795 N.S., 1974; Ord. 720 N.S. §§ 9, 10, 1972; Ord. 532 N.S. § 5, 1966; Ord. 453 N.S., 1964; Ord. 382 N.S., 1962; Ord. 210 N.S. § 11-133(1)(a), 1952].

23.24.030 Building height limit.

The maximum height of main buildings shall be 30 feet. [Ord. 20-016 § 2, 2020; Ord. 00-18 § 6, 2000; Ord. 1141 N.S. § 3, 1979; Ord. 720 N.S. § 3, 1972; Ord. 210 N.S. § 11-133(1)(b), 1952].

23.24.040 Building site area required.

For each building, or group of buildings, a minimum of 4,000 square feet and minimum width of 40 feet shall be required on interior lots. A minimum of 6,000 square feet and a minimum width of 60 feet shall be required on corner lots. In the subdivisions designated as additions to Pacific Grove Retreat and in the PGCC 5-6-26
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Pacific Grove Retreat, where the lot sizes, as legally subdivided, are 30 by 60 feet, the minimum lot size shall be 3,600 square feet, with the lot lines along the lines of said subdivisions. Nothing contained herein shall authorize such smaller minimum lot sizes for any future subdivisions.

For each family unit in any building or group of buildings, a minimum of 1,500 square feet of land area shall be required. [Ord. 20-016 § 2, 2020; Ord. 1260 N.S. § 2, 1981; Ord. 720 N.S. § 1, 1972; Ord. 210 N.S. § 11-133(1)(c), 1952].

23.24.050 Allowed building coverage.

Maximum building coverage on all sites is 50 percent. [Ord. 12-003 § 5, 2012; Ord. 1193 N.S. § 2, 1980; Ord. 720 N.S. § 8, 1972; Ord. 593 N.S., 1968; Ord. 210 N.S. § 11-133(1)(d), 1952].

23.24.051 Allowed site coverage.

Maximum site coverage on all sites is 60 percent. [Ord. 12-003 § 5, 2012].

24.24.052 Minimum density multiple dwellings.

For multiple dwellings, apartment houses, and dwelling groups, the minimum density shall be 20 units per acre, rounded up to the nearest whole unit.

23.24.060 Yards required.
(a) Front Yards. The minimum required front yard shall be 12 feet. Driveways shall not occupy more than 40 percent of the street frontage, and on a corner lot, the combined coverage on all frontages shall not exceed 25 percent of the total street frontage. Fifty percent of the front yard area shall be landscaped.

Such areas shall not be surfaced, covered, enclosed or treated in such a manner as to make it impossible or impractical to establish and maintain landscaping and gardening thereon. The area must be rectangular or composed of a series of rectangles not less than 10 feet in width. (b) Side Yards. Side yards shall be 10 percent of lot width with a minimum requirement of three feet and a maximum of 10 feet; provided, however, on corner lots, the side yard abutting the street shall be 20 percent of the width of the lot, but need not exceed 10 feet. (c) Rear Yards. Rear yards, excluding allowable horizontal projections described in PGMC 23.64.150, shall have the following minimums:
(1) One-story building: five feet.
(2) Two-story building: eight feet.
(3) Three-story building: 10 feet.
(4) Where a rear yard fronts on a street, the minimum rear yard shall be 12 feet. (d) Special Yards and Distances Between Buildings.
(1) Distance between any buildings, which shall be free from the encroachment of overhanging eaves, shall be a minimum of eight feet. For buildings of three stories, the minimum shall be increased to 10 feet and for buildings of four stories or more the minimums shall be increased to 12 feet.
(2) Side yards providing access to single-row dwelling group: minimum 12 feet. (3) Inner court providing access to double-row dwelling group: minimum 20 feet. (e) Open Yard. Open yard required shall be 200 square feet per unit for all construction of five units or more.

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(f) Decks, Porches and Parking Spaces. Decks and open porches over three feet above grade may project or extend four feet over a required yard area, but not closer than three feet to the property line and no closer to other buildings than the minimums set forth in subsection (d) of this section. Parking spaces in excess of the required space for each family unit may project into the rear yard area set forth in subsection (c) of this section. [Ord. 720 N.S. § 6, 1972; Ord. 593 N.S., 1968; Ord. 532 N.S. § 6, 1966; Ord. 478 N.S., 1964; Ord. 382 N.S., 1962; Ord. 210 N.S. § 11-133(1)(e), 1952].

23.24.070 Garbage areas.

Where there are three or more units, garbage areas for holding of garbage or refuse shall be constructed with a concrete floor and curb. The area shall be enclosed by a view-obscuring wall or fence designed in harmony with the building design. The enclosure shall be not less than five feet in height and equipped with a self-closing gate or door. Trash area shall have access to a driveway or public way. [Ord. 720 N.S. § 14, 1972].

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Chapter 23.31 COMMERCIAL

AND INDUSTRIAL

ZONING DISTRICTS

Chapter 23.31

COMMERCIAL AND INDUSTRIAL ZONING DISTRICTS
Sections:

23.31.010 Purpose.

23.31.020 Commercial and industrial zoning districts.

23.31.025 C-V-ATC zoning district – American Tin Cannery zoning.

23.31.030 Commercial and industrial zoning districts allowable land uses and permit requirements.

23.31.040 Commercial and industrial zoning districts development standards.

23.31.010 Purpose.

This chapter lists the commercial and industrial zoning districts as established by PGMC 23.12.010 and establishes the development standards and types of land uses permitted in each commercial and industrial zoning district. [Ord. 13-003 § 2, 2013].

23.31.020 Commercial and industrial zoning districts.
(a) Light Commercial (C-1). The C-1 zoning district provides for neighborhood scale and locally oriented retail, service, office uses, as well as residential uses. (b) Light Commercial and Hotel (C-1-T). The C-1-T zoning district was enacted by citizen initiative, and the standards of the district are included in the applicable sections of this chapter without modification from the initiative.
(1) Intent of District. The intent of the C-1-T district as described by the initiative is as follows:
(A) It is the intent of the people of the city of Pacific Grove in enacting the ordinance codified in this chapter to establish a zone district in the city’s downtown area where hotel use is permitted, as are all other uses listed in the C-1 district of this code, as said district may be from time to time amended by the council. The people have determined that the area of downtown defined by subsection (b)(2) of this section is appropriate for hotel development. Further, except as modified by this chapter, all provisions of the motel/hotel regulation ballot measure enacted by the people at the June 3, 1986, special municipal election, as set out at Chapter 23.52 PGMC, shall remain unchanged and in full force and effect.
(B) It is also the intent of the people of the city of Pacific Grove in enacting the ordinance codified in this chapter to provide for an exception to the strict regulations governing condominium development at Chapter 23.45 PGMC, said section enacted by the people at an election held in the city on November 2, 1982. The people have determined that the area of the downtown defined in subsection (b)(2) of this section is appropriate for condominium development in a manner less restrictive than defined by regulations set out in Chapter 23.45 PGMC. Further, except as modified by this chapter, the provisions of Chapter 23.45 PGMC shall remain unchanged and in full force and effect.
(2) Boundaries of District. The C-1-T district shall be that area defined by the block bounded by Lighthouse Avenue, Grand Avenue, Central Avenue and Fountain Avenue. (3) Amendment. No provision of the C-1-T zoning district shall be repealed or amended except by a vote of the people.
(c) Downtown Commercial (C-D). The C-D zoning district is intended to provide for a range of uses including retail, restaurants, services, entertainment, and upper floor residential, and other compatible uses which enhance the vitality and character of the city’s historic commercial core.

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(d) Forest Hill Commercial (C-FH). The C-FH zoning district serves as an entrance to the city, offering a variety of commercial and service uses, as well as residential uses, while respecting nearby residential uses.
(e) Heavy Commercial (C-2). The C-2 zoning district is applied to areas of the city that are appropriate for limited residential uses, service commercial and light manufacturing uses, which may involve outdoor storage or activity areas.
(f) Visitor Commercial (C-V). The C-V zoning district is applied to areas of the city appropriate for retail sales, commercial services, and institutional uses oriented to tourism. (g) Restricted Industrial (I). The I zoning district is applied to areas of the city that are appropriate for limited commercial uses, service commercial and light manufacturing uses, which may involve outdoor storage or activity areas. [Ord. 13-003 § 2, 2013].

23.31.025 C-V-ATC zoning district – American Tin Cannery zoning. (a) Boundaries of District. The C-V-ATC zoning district shall apply to the American Tin Cannery site that is comprised of Assessor’s Parcel Numbers 006-231-001, 006-234-004, and 006-234-005 and that segment of Sloat Avenue that is continuous to the American Tin Cannery site. (b) Uses Permitted. Notwithstanding any other provision of the Pacific Grove Municipal Code, the following uses shall be permitted in the C-V-ATC zoning district:
(1) Hotels and any accessory uses, such as restaurants, bars and lounges, meeting and event facilities, spa and fitness facilities, parking, and buildings, spaces, and structures incidental to such uses, subject to first securing a use permit.
(2) All uses that are permitted in the C-V zoning district and additional uses permitted by subsequent amendment to the zoning ordinance.
(c) Development Standards. Development standards in the C-V-ATC zoning district, including floor area coverage, density, setbacks and height limits shall be in accordance with the applicable standards set forth in the local Coastal Program Land Use Plan, as updated or amended, or if no such standards are provided in the local coastal Program Land Use Plan, as updated or amended, in accordance with the standards set forth in the use permit or other required permit for a use allowed in the C-V-ATC zoning district.
(d) Except as modified by this section, all provisions of the motel/hotel regulation ballot measure enacted by the people at the June 3, 1986, special election, as set out at Chapter 23.52 PGMC, shall remain unchanged and in full force and effect. [Ord. 16-009A § 1, 2016].

23.31.030 Commercial and industrial zoning districts allowable land uses and permit requirements.

Key to Zoning District Symbols
C-1 Light Commercial C-FH Forest Hill
Commercial
I Restricted Industrial
C-1-T Light Commercial
and Hotel
C-2 Heavy Commercial
C-D Downtown
Commercial
C-V Visitor Commercial
P = Permitted use; counter review and determination required (see PGMC 23.70.020) UP = Use permit required (see PGMC

23.70.080)
AUP = Administrative use permit required (see PGMC 23.70.030) -- = Use not allowed PGCC 5-6-26
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AND INDUSTRIAL

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Table 23.31.030 Commercial and Industrial Zoning Districts Allowable Land Uses and Permit Requirements Use
Specific
Use
Regulation
s (PGMC) C-1
1 C-1-
T
1 C-D1 C-FH1 C-2 C-V1
I
Industry, Manufacturing and Processing
Contract
construction – no
outdoor storage
P
2 P2
-- P
2 P3,4 P2 P3
Contract
construction –
outdoor storage
-- -- -- -- P
3,4 UP UP
Construction, largescale equipment
sales and rental
-- -- -- -- P
3,4 UP UP
Industrial, light UP UP -- UP AUP3,4 UP AUP3,4
Recycling facility UP UP -- UP UP UP UP
Research and
development facility
AUP2 AUP2 AUP2 AUP2 AUP3
AUP2
AUP3
Storage – selfstorage facility-- -- -- -- AUP3
AUP2
AUP3
Warehousing,
wholesaling and
distribution
-- -- -- -- P
3 P2 P3
Recreation, Education and Public Assembly
Commercial
recreation facility –
indoor (≤ 10,000 sf)

7.08, 7.12,

23.64.035
P
2 P2 P2 P2 P3 P2 P3
Commercial
recreation facility –
outdoor
AUP2
AUP2-- -- AUP3
AUP2
AUP3
Community garden AUP5 AUP5 AUP5 AUP5 AUP5 AUP5--
Health/fitness
studio (≤ 10,000 sf)
P
2 P2 P2 P2 P3 P2 P3
Meeting facility,
public or private (≤
10,000 sf)
P
2 P2 P2 P2 P3 P P3
Park, playground
(public)
P
2 P2 P2 P2 P3 P2 P3
Public or quasipublic facility (≤
10,000 sf)
P
2 P2 P2 P2 P3 P2 P3
School, specialty (≤
10,000 sf)
P
2 P2 P2 P2 P3 P2
--
Theater or
auditorium (≤
10,000 sf)
P
2 P2 P2 P2 P3 P2 P3
Residential
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AND INDUSTRIAL

ZONING DISTRICTS

Use
Specific
Use
Regulation
s (PGMC) C-1
1 C-1-
T
1 C-D1 C-FH1 C-2 C-V1
I
Accessory building
or structure

P P P P P -- UP
Condominium UP UP6 UP UP UP -- UP
Duplex P P P P P -- UP
Dwelling group UP UP UP UP UP -- UP
Emergency
shelters9
-- -- P P P -- P
9 Employee housing
for 6 or fewer
persons12

P P P P P UP
Home business 23.16 P P P P P -- UP
Large family day
care home

UP UP UP UP UP -- --
Low barrier
navigation centers
P
9 P9 P9
-- P
9 Mixed-use
(residential above
or behind
commercial)
P
2 P2 P2 P2 P3
-- --
Mobile home park -- -- -- -- UP -- UP
Multifamily dwelling
7 or fewer units 23.28.020 P P P P P -- UP
8 or more units 23.28.020 P UP P P UP -- UP
Residential care
Housing 6 or fewer
persons
P
10 P10 P10 P10 P10
--
10 UP10
Housing 7 or more
persons

UP UP UP UP UP -- UP
Rooming and
boarding house14

UP UP UP UP UP -- UP
Second unit 23.80 P P P P P -- UP
Single-family
dwelling

P P P P P -- UP
Single-Room
Occupancy

P P P P P -- UP
Transitional or
supportive housing

P P P P
11 P11
-- UP11
Retail Sales
Automobile/vehicle
sales and rental
AUP2 AUP2 AUP2 AUP2 AUP3 AUP2 AUP3
Automobile/vehicle
service station
AUP2 AUP2-- AUP2 AUP3 AUP2 AUP3
Bar/tavern/nightclub -- -- -- -- -- -- --
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Chapter 23.31 COMMERCIAL

AND INDUSTRIAL

ZONING DISTRICTS

Use
Specific
Use
Regulation
s (PGMC) C-1
1 C-1-
T
1 C-D1 C-FH1 C-2 C-V1
I
Brew pub with food
service

23.64.290
AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
--
Farmers market UP UP UP UP UP UP --
Flea market UP UP UP UP UP UP --
Micro-brewery 23.64.290 -- -- -- UP UP UP UP
Pub or sports bar
with food service

23.64.290
AUP2 AUP2 AUP2 AUP2 AUP3 AUP2
--
Restaurant, general and formula general
w/ no alcohol sales 23.64.134 P
2 P2 P2 P2 P3 P2
--
w/ alcohol sales 23.64.134,

23.64.290 AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
--
Restaurant, specialty (not formula)
w/ no alcohol sales 23.64.134;
if formula,
see also

23.64.115
P
2 P2 P2 P2 P3 P2
--
w/ beer and wine
sales only

23.64.134,

23.64.290;
if formula,
see also

23.64.115
AUP2 AUP2 AUP2 AUP2 AUP3 AUP2--
Restaurant, fast
food (not formula) –
w/ no alcohol sales

23.64.134;
if formula,
see also

23.64.115
AUP2 AUP2 AUP2 AUP2 AUP3 AUP2
--
Restaurant, drivein/drive-through (not
formula) – w/ no
alcohol sales

23.64.134;
if formula,
see also

23.64.115
-- -- -- UP -- -- --
Retail – general,
except the
following:

P
2 P2 P2 P2 P3 P2 UP
Adult-oriented sales UP7 UP7-- UP7-- -- --
Alcoholic beverage
sales
UP UP UP UP UP AUP2--
Auction houses P -- -- P P P P
Automobile rental P -- -- P P P P
Bail bonds P -- -- P P P P
Blood, plasma,
tissue donation

P -- -- P P P P
Body piercing/tattoo
parlor

P -- -- P P P P
Check cashing
stores
-- -- -- P P P P
Dollar/99 cent
stores
-- -- -- P P P P
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Chapter 23.31 COMMERCIAL

AND INDUSTRIAL

ZONING DISTRICTS

Use
Specific
Use
Regulation
s (PGMC) C-1
1 C-1-
T
1 C-D1 C-FH1 C-2 C-V1
I
Electric cigarette/evaporP -- -- P P P P
Gold and silver
exchange stores

P -- -- P P P P
Kennels or pet
boarding**

P -- -- P P P P
Pawn shops P -- -- P P P P
Recreational
vehicle sales

P -- -- P P P P
Meeting halls or
places of assembly

P -- -- P P P P
Tire sales and
repair

P -- -- P P P P
Businesses from
which minors
excluded by law or
owner

UP UP UP UP UP UP --
Floor area over
10,000 sf
AUP2 AUP2 AUP2 AUP2 AUP3 AUP2 AUP3
Operating between
12:00 a.m. and 7:00
a.m.

UP UP UP UP UP UP UP
Outdoor storage or
displays
AUP AUP AUP AUP AUP1 AUP AUP1
Retail – restricted UP UP -- UP UP UP UP
Wine bar 23.64.290 AUP2 AUP2 AUP2 AUP2 AUP3 AUP2 AUP3
Wine tasting room 23.64.290 AUP2 AUP2 AUP2 AUP2 AUP3 AUP2 AUP3 Services
Animal
keeping/training
facilities or
veterinary service
AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
AUP3
Automobile/vehicle
repair AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
AUP3
Bank or financial
service, except the
following:

P
2 P2 P2 P2 P3 P2 P3
Floor area over
10,000 sf at street
level
AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
AUP3
w/ drive-through UP UP -- UP UP UP UP
Business support
service
P
2 P2 P2 P2 P3 P2 P3
Car wash and
detailing
AUP2 AUP2-- AUP2 AUP3 AUP2 AUP3
Catering and events 23.64.290
AUP2 AUP2 AUP2
AUP2 UP UP UP
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AND INDUSTRIAL

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Use
Specific
Use
Regulation
s (PGMC) C-1
1 C-1-
T
1 C-D1 C-FH1 C-2 C-V1
I
Equipment/applianc
e rental and repair AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
AUP3
Laundry or dry
cleaning service
AUP2
AUP2
AUP2 AUP2 AUP3 AUP2 AUP3
Lodging
Bed and breakfast
inn –w/ beer and
wine sales only

23.64.290
AUP2 AUP2 AUP2
AUP2 AUP3
AUP2
AUP3
Hotel or motel 23.64.290 -- UP8-- -- -- -- --
Medical service
Ambulance service UP UP -- UP UP UP UP
Clinic or lab P
2 P2 P2 P2 P3 P2 P3
Medical office P
2 P2 P2 P2 P3 P2 P3
Hospital UP UP -- -- UP UP UP
Mortuary or funeral
home

UP UP -- UP UP UP UP
Office, business or
professional
P
2 P2 P2 P2 P3 UP UP
Personal service 7.06 P
2 P2 P2 P2 P3 P2 UP
Personal service –
restricted

UP UP UP UP UP UP UP
Printing or creative
service
P
2 P2 P2 P2 P3 P2 P3
Transportation and Infrastructure
Parking facility UP UP UP UP UP UP UP
Public utility UP UP UP UP UP UP UP
Radio or television
station

UP UP UP UP UP UP UP
Taxi service 7.16 UP UP UP UP UP UP UP
Transit center UP UP UP UP UP UP UP
Wireless
telecommunication
facility

UP UP UP UP UP UP UP
Temporary wireless
telecommunications
facility

CRD CRD CRD CRD CRD CRD CRD
Wireless eligible
facilities request

AUP AUP AUP AUP AUP AUP AUP
End Notes:

1. No merchandise, tools, machinery, equipment, or materials shall be stored or displayed outside of a building, except as specifically permitted for retail uses under an administrative use permit. Temporary administrative use permits, good for not over 30 days, may be granted, pursuant to PGMC 23.70.030(b)(7), for temporary outdoor sales events of new merchandise by merchants holding use permits or otherwise qualified to operate within the applicable district; provided, that such outdoor sales are operated in PGCC 5-6-26
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conjunction with their established retail operations, and for Christmas tree sales, or other sales on private property, connected with festivals or holidays.

2. The permit type specified in this table applies to any new or enlarged commercial use which totals 10,000 square feet or less of interior floor space. An administrative use permit is required for any new or enlarged commercial use which results in either the use of more than one structure on a building site or a total of more than 10,000 square feet of interior floor space. A use permit is required where any new or enlarged commercial use exceeds 25,000 square feet in interior floor space.

3. A use permit is required for any new building or addition which adds more than 25,000 square feet of interior floor space or which results in a building having more than 40 feet in height.

4. Such uses may be granted subject to a use permit, when conducted within a building or enclosed by a fence, subject to architectural approval by the appropriate review authority for design and landscaping pursuant to Chapter 23.70 PGMC; and provided, that said fence and landscaping shall be of sufficient height and screening capacity to prevent the view thereof from any adjacent street or sidewalk.

5. Community gardens on vacant lots may be permitted by administrative use permit, pursuant to PGMC 23.70.030(b)(7), and shall be reviewable every six months and subject to such conditions as the administrative use permit may prescribe. The application shall be accompanied by a written agreement by the owner to grant the city a lien for any cost incurred by the city in restoring such property to its condition prior to such use, in the event the owner fails to make such restoration after such use ceases.

6. Condominium use shall be allowed, subject to first securing a use permit in each case, and subject to the building height, site coverage, and yard requirements of this chapter. The provisions of Chapter 23.45 PGMC shall not apply to development of condominiums in the C-1-T district. The council shall, by ordinance, establish standards, conditions and other regulations to govern the development of condominiums in the C-1-T district. Until and unless such standards, conditions and other regulations are in place, no application for such development shall be accepted or processed. Such standards, conditions and regulations established by the council shall be in addition to and harmonious with state law governing condominium development. See also PGMC

23.31.020(b)(1)(B).

7. Adult-oriented sales may comprise no more than 25 percent of floor area or stock-in-trade of a general retail business, must be located in the rear of the general retail business, and must not be visible from the exterior of the general retail business.

8. Hotel uses shall be allowed, subject to first securing a use permit in each case, and subject to the building height, site coverage, and yard requirements of this chapter. All other regulations and conditions of approval shall be as provided by use permit approved pursuant to this title. Said regulations and conditions shall include, without limitation, provisions for architectural review, land area per unit, neighborhood compatibility, landscaping, parking, traffic and accessory buildings. Required parking, if any, may be located on or off site, the location to be designated by the use permit. See also PGMC 23.31.020(b)(1)(A).

9. Outside the coastal zone only. In addition to the requirements of PGMC 23.31.040, emergency shelters shall be subject to the following standards:
a. Maximum of 25 beds.
b. Off-street parking shall be provided at a rate of one space per each staff person on duty. c. On-site management shall be provided at all times the shelter is open. A management and security plan shall be prepared in consultation with the city manager or his or her designee which shall describe hours of operation; staffing; house rules and occupant screening procedures; on- or off-site services to be provided; security measures to ensure the safety of the occupants of the shelter and surrounding areas; and communications protocols to ensure effective coordination between shelter management, adjacent property owners and residents, and public safety personnel. d. No emergency shelter shall be established closer than 300 feet from another emergency shelter, measured from the nearest property line.
e. Waiting and intake areas shall be screened from view from the public right-of-way.

10. Permitted subject to the same standards as apply to other residential dwellings of the same type in the same zone.

11. Transitional and supportive housing developments shall be subject to the parking requirements of PGMC 23.64.190, with the exception of developments located within a one-half (0.5) mile distance of a transit stop where no off-street parking shall be required.

12. Rooming houses or boarding houses accommodating employee housing shall be subject to Employee Housing Act. See permitted uses and standards under employee housing.
**When not associated with a veterinary clinic.
[Ord. 20-001 § 2 (Exh. A), 2020; Ord. 16-005 § 6, 2016; Ord. 15-013 § 4, 2015; Ord. 13-003 § 2, 2013].

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23.31.040 Commercial and industrial zoning districts development standards.

Table 23.31.040 Commercial and Industrial Zoning Districts Development Standards C-1
7 C-1-T C-D7 C-FH1,7 C-27 C-V I
Building Placement Requirements
Setbacks1,2,3,4
Front, min.
(max.)6
0’ 0' 0' 0'
(20')
0' 0' 0'
Side (min.),
except:
0’ 0' 0' 0' 0' 0' 0'
Residential/
Mixed-use
10’ 0’ 5’ 10' 0’ 0’ 0’
Adjacent to
residential
zone
5’ 5' 5' 5' 5' 10' 10'
Rear (min.),
except:
0’ 0' 0' 10' 0' 0' 0'
Adjacent to
residential
zone
5’ 5' 5' 10' 5' 10' 10'
Building Form Requirements
Building height
(max.)4
45’ 40' with max.
site coverage
of 75%; 30'
with max. site
coverage of
90%
40' 35' 40' 40' with
max. site
coverage
of 75%;
30' with
max. site
coverage
of 90%
40'
Site coverage
(max.)
90% 75 – 90%,
depending on
building height
100% 75% 90% 75 – 90%,
depending
on building
height
90%
Stepbacks for portion of building above 25 feet
Front, min 8’5 0’ 0’ 8’ 0’ -- --
Side, min 0’ 0’ 0’ 0’ 0’ -- --
Rear, min6 30’ 0’ 10’ 30’ 0’ -- --
Density Requirements
Dwelling units
per net acre
Min. 20 units
per acre,
rounded up to
the nearest
whole unit.

Max 30 units
per acre.

For Coastal
Zones – Max.
allowed by
the general
plan
residential
land use
category
nearest to the
site, up to 30
units per net
acre.

Max. allowed
by the general
plan
residential
land use
category
nearest to the
site, up to 30
units per net
acre.

Max. of 45
units per acre;
with a
minimum
density
requirement of
30 units per
acre.

Max. of 45
units per
acre; with a
minimum
density
requirement
of 30 units
per acre.

Min. 20 units
per acre,
rounded up
to the
nearest
whole unit.

Max. 30 units
per acre.

For Coastal
Zones –
Max. allowed
by the
general plan
residential
land use
category
nearest to
the site, up
N/A Max.
allowed by
the GP
residential
land use
category
nearest to
the site,
up to 30
units per
net acre.6
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to 30 units
per net acre.

Floor area ratio Max. allowed by the general plan
Lot Requirements
Lot area for new
parcels (min.)
2,000 sf
Other Requirements
Landscaping See PGMC 23.64.195
Parking See PGMC 23.64.190
Signs For C-D district see Chapter 20.05 PGMC. For all other districts see Chapter 20.04 PGMC End Notes:

1. For mixed-use residential/commercial development where residential ground-floor street frontage is allowed and constructed, the setback standards in PGMC 23.31.50 shall apply.

2. Cornices, eaves, and other horizontal projections may be allowed, consistent with PGMC 23.64.150 and 23.64.160.

3. Along Central, Lighthouse, and Forest Avenues, commercial ground-floor street frontage standards in PGMC 23.31.050 also apply.

4. Chimneys and other vertical projections may be allowed, consistent with PGMC 23.64.120.

5. In C-1 and C-FH districts, front stepbacks requirements shall not apply for up to 30 feet of a building’s width.

6. Rear stepback requirements shall not apply within 70 feet of front property line, while rear setback requirements shall continue to apply.

7. Pursuant to Government Code Section 65583.2(h)(2) for mixed-use development projects on sites within C-1, C-2, C-D and C-FH districts, identified in the 6th Cycle Housing Element Site Inventory for lower-income households, a minimum of 50 percent of the total floor area shall be residential.

The 6th Cycle Housing Element can be found on the City’s website:
https://www.cityofpacificgrove.gov/our_city/departments/community_development/housing/housing_element.php Sites within the C-1, C-2, C-FH and C-D that are identified for lower-income housing units include the following:

Site No. Address APN(s)
8 601 Lighthouse Ave. 006294017000, 006294015000
9 525, 531 Lighthouse Ave. 006284015000, 006284001000, 006284002000 18 95 Central Ave. 6238005000
20 2749 Forest Hill Blvd. 007651013000, 007651017000
21 1146, 1152 Forest Ave. 7651022000, 7651014000
22 1125, 1129, 1133, 1137 Forest Ave. 006713031000, 006713032000, 006713027000, 006713026000 26 1157 Forest Ave. 6713023000
27 1193 Forest Ave. 6713019000
29 1124, 1140 Forest Ave. 7641009000, 7641008000
30 1160 Forest Ave. 7651019000
31 1180 Forest Ave. 7611031000
33 1219 Forest Ave. 6725023000
48 2184 Sunset Dr. 7091025000
49 17 Mile Dr. 7091026000
55 801 Sunset Dr. 7101036000
[Ord. 17-009 § 3, 2017; Ord. 13-003 § 2, 2013].

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Chapter 23.52
R-3-M DISTRICTS
Sections:

23.52.010 Regulations generally.

23.52.020 Uses permitted.

23.52.030 Regulations for R-3-M uses.

23.52.035 Special regulations for motels and hotels built prior to 1986.

23.52.040 Statement of intent.

23.52.050 Other provisions.

23.52.060 Amendment.

23.52.010 Regulations generally.

Effective the date of the adoption of the ordinance codified in this section by the city council or by the voters of the city of Pacific Grove, the regulations of the ordinance codified in this section shall apply in the R-3-M district in lieu of any ordinance or resolution to the contrary:
(a) The R-3-M district is defined as those areas so designated on the official zoning map of the city of Pacific Grove referred to in PGMC 23.12.020. Said districts may be classified by the city council to R-1, R-H, or R-2, where already developed as such, but no new R-3-M districts shall be created. (b) Motel and hotel uses shall be restricted to the R-3-M district, including any uses accessory or ancillary to a motel. The ordinance codified in this section shall also apply to any use described in PGMC

23.52.020 proposed for the construction or expansion in any R-3-M district, including uses accessory or ancillary to such use. [Ord. 1536 N.S. § 2, 1986].

23.52.020 Uses permitted.

The following uses are permitted in the R-3-M districts:
(a) Any use permitted in the R-3 district, subject to obtaining a use permit for any use for which such is required in an R-3 district;
(b) Motels, subject to first securing a use permit in each case; (c) Hotels, subject to first securing a use permit in each case; (d) Adult communities, retirement homes and rest homes, subject to first securing a use permit in each case. [Ord. 575 N.S., 1967; Ord. 453 N.S., 1964; Ord. 263 N.S., 1955; Ord. 210 N.S. § 11-139(1)(a), 1952].

23.52.030 Regulations for R-3-M uses.
(a) A minimum of 2,500 square feet of land shall be required for each family unit and each motel or hotel unit. For other uses described in PGMC 23.52.020(d), the planning commission and/or city council shall determine the amount of land area per occupied unit by judging its similarity to a family unit or motel unit in actual use and impact. For example, a rest home affording separate apartments and parking facilities would be judged a family unit; a hotel which offers amenities identical or substantially similar to a motel would be judged a motel. In no event shall less than 2,000 square feet per occupied unit be allowed, for any PGMC 23.52.020(d) use.
(b) A minimum setback of 20 feet shall be required for all structures in a R-3-M development which abut R-1, R-H, or R-2 property, including streets abutting same. The setback shall be 10 feet for commercial or other R-3-M developments or districts. Eave projections may extend up to three feet into any required yard, but in no case may be closer than three feet to any property line.

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(c) The height of the structures shall not exceed 25 feet nor two stories above grade. The height shall be one story above grade and not more than 18 feet where the R-3-M property, or any portion thereof, is within 200 feet of any portion of any property zoned R-1, R-H, or R-2. (d) The architectural review board, the planning commission and/or the city council shall require the configuration and layout of structures so as to assure that residential areas are not impacted by guest activities such as registration, parking, food and beverage services. Said bodies shall require a design which blends with the residential neighborhood and minimizes the nonresidential impact and use.

Appropriate landscaping shall be required throughout the site. Setback areas shall be landscaped and shall not be used for automobile parking, or storage of any kind. Access to the site, where feasible, shall be from a street and/or driveway which does not abut said residential areas. (e) Wood-burning fireplaces and wood-burning heaters shall be limited to the rate of six per acre, and any additional fireplaces shall be limited to natural gas fireplace inserts. (f) Any use permit for new construction or other activity resulting in an increase in the number of units or the amount of floor space shall expire one year from its issuance unless construction of the project for which the permit was issued is substantially complete.
(g) Uses which do not conform hereto as of the date of publication of the notice of intention to circulate the petition for the ordinance codified in this section may continue if legally installed prior thereto. Any expansion or alteration of such existing nonconforming use shall require complete compliance herewith for the entire use. The conversion of sliding doors to swinging doors, and similar changes, are not considered an expansion or alteration.
(h) Variances and/or exceptions hereto shall not be granted, except upon strict compliance with state and local law governing such. No variance or exception shall be granted on the basis of failure of opposition thereto.
(i) Any R-3-M district property shall be deemed to be upon a street which abuts or abutting to R-1, R-H, or R-2 property, whenever any part of the R-3-M property is within 20 feet of the abutting street or the R-1, R-H or R-2 property. [Amended by vote of the people on November 8, 2011, general election; Res. 11- 061 § 4, 2011; Res. 11-060 § 4.1, 2011; Ord. 1536 N.S. § 3, 1986].

23.52.035 Special regulations for motels and hotels built prior to 1986.

This section modifies the development standards in PGMC 23.52.030 for R-3-M motels and hotels built prior to the adoption of Ordinance No. 1536, in order to enable and encourage hoteliers to upgrade and modernize their businesses to stay competitive. Where this section differs from PGMC 23.52.030, the provisions of this section shall take precedence. Where this section is silent on a provision that is in PGMC 23.52.030, the provision in PGMC 23.52.030 shall apply. (a) Motels and hotels built prior to 1986 are categorized into groups and are allowed additional guest units over the number of permitted guest units, as of the effective date of this section, as follows:

New Guest Units Allowed for Motels and Hotels Built Prior to 1986 Address
Permitted Guest Units as of
Effective Date of This Section
Additional Guest Units Allowed
over Permitted Guest Units in
Column to Left
Group A1
569 Asilomar Avenue 16 3
1095 Lighthouse Avenue 10 2
800 Asilomar Avenue 54 11
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Address
Permitted Guest Units as of
Effective Date of This Section
Additional Guest Units Allowed
over Permitted Guest Units in
Column to Left
221 Asilomar Avenue 18 1
1073 Lighthouse Avenue 27 5
701 – 709 Asilomar Avenue 28 6
775 Asilomar Avenue 18 4
1100 Lighthouse Avenue 38 8
1101 Lighthouse Avenue 33 7
Group B2
1111 Lighthouse Avenue 49 10
740 – 750 Crocker Avenue 49 3
650 Dennett Street 31 6
1150 Lighthouse Avenue 66 6
1140 Lighthouse Avenue 37 3
133 Asilomar Avenue 19 4
Group C3
635 Ocean View Boulevard 60 0
625 Ocean View Boulevard 52 0
1038 Lighthouse Avenue 24 0
1 Group A – Motels and hotels where the number of permitted guest units, as of the effective date of this section, is less than 170 percent of the 1:2,500 density ratio in PGMC 23.52.030(a). Motels and hotels in Group A may construct additional guest units or ancillary facilities by conversion of existing buildings or by new construction. 2 Group B – Motels and hotels where the number of permitted guest units, as of the effective date of this section, is greater than 170 percent, but less than 250 percent, of the 1:2,500 density ratio in PGMC 23.52.030(a). Motels and hotels in Group B may construct additional guest units or ancillary facilities by conversion of existing buildings only. 3 Group C – Motels and hotels where the number of permitted guest units, as of the effective date of this section, is greater than 250 percent of the 1:2,500 density ratio in PGMC 23.52.030(a). Motels and hotels in Group C may not construct any additional guest units.
(b) For motels and hotels in Group A, each new guest unit shall be a maximum size of 360 square feet.

Since new guest units in Group B motels and hotels must be created by conversion of existing buildings, they may conceivably be greater than 360 square feet in size. No existing guest unit that is less than 360 square feet, as of the effective date of this section, may be enlarged to exceed 360 square feet in size.

No existing guest unit that is 360 square feet or more in size, as of the effective date of this section, shall be enlarged.
(c) Motels and hotels in Group A may use up to three of the additional guest units allowed to instead create a new ancillary facility (e.g., meeting space, dining room, fitness facility), with a maximum size of 1,080 square feet (or 360 square feet for each additional guest unit substituted). Motels and hotels in Groups B and C may create new ancillary facilities only through conversion of existing buildings and are not limited in size.
(d) For motels and hotels in Group A, the setback requirements of PGMC 23.52.030(b) shall also apply to new guest units or new ancillary facilities that abut any public street or any single-family residence.

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(e) For motels and hotels in Group A, building height is two stories and not more than 25 feet for new guest units that are at least 50 feet from any property zoned R-1, R-H, or R-2, any public street, and any single-family residence. Building height is one story and not more than 18 feet for new guest units that are at least 20 feet from any property zoned R-1, R-H, or R-2, any public street, and any single-family residence. For property lines of Group A motels and hotels that do not abut any property zoned R-1, R-H, or R-2, a public street, nor single-family residence, building height for new guest units may be two stories and up to 25 feet within 10 feet of the property line. New ancillary facilities in Group A motels and hotels may be one story, with a maximum building height of 18 feet. (f) For motels and hotels in Groups A and B, the following additional requirements apply to new construction or conversion of existing buildings:
(1) A use permit approval is required. As part of this review, the planning commission may impose specific standards pertaining to building design (e.g., building mass, bulk, height, and wall articulation), outdoor lighting, driveway locations, parking areas, landscaping, signs, street dedication, and related public improvements, upon finding that such requirements are necessary to meet the intent of the R-3-M district.
(2) No outdoor living areas are allowed within setbacks abutting residential zones or residential uses.

This includes balconies, decks, open porches, patios, or similar outdoor guest activity areas. (3) Existing landscaping requirements in PGMC 23.52.030 are expanded to require that within setback areas adjacent to the new development or building conversion, especially abutting residential zones and residential uses, plantings include numerous trees, shrubs and plants that will reduce visual and noise impacts of the motel or hotel use on adjacent properties. (4) New guest units do not have to be built at one time, but may be developed in phases. (5) All other R-3-M standards shall apply including, but not limited to, parking and building coverage.

New guest units and ancillary facilities must have available water. (g) For motels and hotels in Groups A, B and C, a nonconforming building damaged or destroyed by catastrophic event or demolished under any other circumstance may be rebuilt to the condition or configuration of the building that existed immediately prior to the event or demolition, as long as the reconstruction is carried out in a manner consistent with PGMC 23.68.040. While reconstruction to preexisting conditions is allowed, elimination of nonconformities is encouraged. Reconstructed one-story buildings may be built to a maximum height of 18 feet, regardless of the pre-existing building height. (h) For motels and hotels in Groups A, B and C, exterior remodeling within the existing footprint of a nonconforming building may retain existing nonconformities as long as the remodel does not:
(1) Extend or expand an existing nonconformity;
(2) Add any new nonconformity; or
(3) Adversely affect the privacy of adjacent residential-zoned property or residential uses. (i) No other reconstruction or remodeling may take place, beyond what is allowed in this section for motels and hotels in Groups A, B and C, without bringing the entire property into conformance with PGMC 23.52.030. [Added by vote of the people on November 8, 2011, general election; Res. 11-061 § 4, 2011; Res. 11-060 § 4.2, 2011].

23.52.040 Statement of intent.

It is the intention of the ordinance codified in this section to preserve the essential residential character of the city, and the residential appearance of the city, and to prevent the adverse impacts of such from developments in the R-3-M districts. [Ord. 1536 N.S. § 4, 1986].

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23.52.050 Other provisions.

Regulations found in this chapter are subject to the provisions of Chapter 23.24 PGMC, unless there is a conflict, in which event the regulations found in this chapter shall prevail. [Ord. 1536 N.S. § 5, 1986].

23.52.060 Amendment.

PGMC 23.52.010, 23.52.030, 23.52.035 and 23.52.040 shall not be repealed or amended except by a vote of the people. [Amended by vote of the people on November 8, 2011, general election; Res. 11-061 § 4, 2011; Res. 11-060 § 4.3, 2011; Ord. 1536 N.S. § 6, 1986].

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R-3 ----
C-1 ----
C-2 ----
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[NOTICE: This message originated outside of the City of Pacific Grove email system -- DO NOT CLICK on links or open attachments unless you are sure the content is safe.] Dear Members of the Pacific Grove Planning Commission,
Thank you for your continued work on the proposed amendments to the City’s zoning regulations. I appreciate the Commission’s commitment to thoughtful planning and welcome the opportunity to offer a perspective I hope you will find useful as deliberations continue.

I write to draw your attention to a gap in the current public comment process: prospective residents — those who hope to one day live in Pacific Grove but do not yet do so — have no practical avenue to participate. This matters because the proposed zoning amendments will directly shape housing availability and affordability in the city for years to come. The people most affected by limited housing supply are often the very people who have not yet been able to move here.

Zoning decisions are among the most consequential a city can make for housing outcomes. Restrictions that reduce density or limit new construction can, over time, raise the cost of housing and reduce the range of people who are able to call Pacific Grove home. Those prospective residents — workers, families, and others who would like to join this community — have a genuine stake in these decisions, yet the standard comment process relies on residency and physical presence in ways that exclude them entirely.

I respectfully encourage the Commission to consider the following:
∙ Accepting written public comment submitted via email or the City’s online portal from nonresidents who can demonstrate a connection to or interest in living in Pacific Grove. ∙ Actively publicizing the comment period through regional channels — such as Monterey County housing organizations, workforce networks, and local media — to reach people who are not yet residents but who are affected by Pacific Grove’s housing policies. ∙ Weighing, as part of its analysis, the downstream effects of the proposed amendments on housing availability and affordability for those not yet able to participate in the process.

I recognize that the Commission operates within established procedural frameworks, and I am not suggesting those be set aside. Rather, I hope the Commission will consider broadening its lens to include the voices and interests of future community members alongside those of current residents.

Thank you for your service to Pacific Grove and for taking this perspective into consideration. I would welcome the opportunity to discuss this further.

Respectfully,
Peter Nodzenski
Pacific Grove
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Agenda No. 7 B

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
TO: Honorable Mayor and Members of the City Council
FROM: Nicholas Cina, Management Analyst
MEETING DATE: May 06, 2026
SUBJECT: Second Reading of an Ordinance Approving Concession Lease Agreement with Fortunate Fork, LLC
CEQA: Categorical Exemption, CEQA Guidelines Section 15301, Class I, Existing Facilities

RECOMMENDATION
Hold second reading and adopt an ordinance approving a concession lease agreement with Fortunate Fork, LLC.

DISCUSSION
No substantive changes were made between the first and second readings of this ordinance. The City Clerk caused a summary of the ordinance to be published on April 23, 2026.

The City of Pacific Grove (“City”) owns property located at 79 Asilomar Blvd, Pacific Grove, CA commonly referred to as Point Pinos Grill (the “Premises”). The Premises include a restaurant, with a kitchen configured for walk-up ordering and dine-in service. The City operates the Premises through a lease agreement for operation of restaurant food and beverage services.

The City issued a Request for Proposal (RFP) on December 15, 2025. The RFP closed January 29, 2026 at 2:00 pm. On January 29, 2026, the City received sealed proposals from two entities. A panel of staff reviewed the proposals and interviewed each proposer. As a result of the selection process, the proposal submitted by Fortunate Fork, LLC was selected as the highest rated proposal for their unique qualifications and vision for the Premises. Since then, the City and Fortunate Fork, LLC have negotiated a proposed lease (the "Lease"), which is attached here as Attachment 1.

The Lease grants Fortunate Fork, LLC the exclusive use of Premises for the sale of food, beverages, and related services.The Lease provides that the use will be for food and beverage service including a restaurant facility, snack bar, banquet and dining rooms, outdoor patio, and vending machines. The term of the Lease is five (5) years with two option extensions for additional five-year terms at the tenant's option.

The rent for the Premises will be:
7% of Tenant’s monthly gross sales
Monthly Rent cap of $13,500
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Monthly Rent Cap grows 3% per year
Tenant is separately responsible for paying for utilities and services (including electric, cable, internet, and sewer). The Lease will be approved by Ordinance (Attachment 2). The proposed timeline for the Ordinance is a first reading of the Ordinance on April 15, 2026, and a second reading on May 6, 2026. The Lease of the Premises will not have a significant effect on the environment and is found to be exempt from the California Environmental Quality Act (CEQA) per Section 15301 of the CEQA Guidelines which allows for the leasing, licensing, repair, and maintenance of public or private structures.

OPTIONS

1. Approve ordinance

2. Provide alternate direction
FINANCIAL IMPACT:

Rent will be paid to the City by Fortunate Fork, LLC of 7% of monthly gross sales as specified in the Lease and as described above in this Agenda Report.

FOCUSED PRIORITY AREA: Not Applicable.

Attachments
Concession Lease Agreement
Draft Ordinance
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C I T Y O F P A C I F I C G R O V E

L E A S E

THE GROVE AT POINT PINOS
79 ASILOMAR BLVD, PACIFIC GROVE
CITY:

CITY OF PACIFIC GROVE
TENANT:

FORTUNATE FORK, LLC
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1. BASIC LEASE PROVISIONS.

1.1 EFFECTIVE DATE OF LEASE: The date the CITY signs the Lease

1.2 LANDLORD: City of Pacific Grove,
a California Municipal Corporation and charter city (CITY)

1.3 TENANT: Fortunate Fork, LLC, a California Limited Liability Corporation

1.4 PREMISES: The portion of the building located at 79 Asilomar, Pacific Grove, CA (“Building”), that includes a kitchen, a banquet room, a dining room, service window and indoor space adjacent thereto, and two public restrooms plus the outdoor patio adjacent to the Building.

1.5 COMMENCEMENT DATE The date TENANT is delivered possession of the Premises. The Commencement Date shall be confirmed using Exhibit E of this Agreement.

1.6 EXPIRATION DATE Five Years from the Effective Date of Lease.

1.7 PERCENTAGE RENT: 7% of TENANT’S gross sales.

1.8 UTILITIES TENANT shall arrange for and pay for all utilities (including but not limited to water, electricity, gas, sewer, telephone, and cable) furnished upon the Premises.

1.9 ADDRESS FOR CITY NOTICES: See section 18

1.10 ADDRESS FOR TENANT
NOTICE: See section 18

1.11 PERMITTED USE: Food and beverage service including a restaurant facility, snack bar, banquet and dining rooms, outdoor patio, and vending machines, subject to the provisions of this Lease and Applicable Law, and no other purpose.

1.12 SECURITY DEPOSIT: $11,000, payable to the CITY upon execution of the Lease.

1.13 PARKING: TENANT may use all unreserved parking spaces adjacent to the Premises. All parking shall be subject to Article 15 of this Lease.

1.14 LEASE ELEMENTS: This Lease is comprised of the Basic Lease Provisions contained here in Section 1, the provisions of this Lease, and the following Exhibits:

Exhibit A – Premises Diagram
Exhibit B – Rules and Regulations
Exhibit C – Ongoing Maintenance Schedule
Exhibit D – List of Lessor-owned Furnishings
Exhibit E – Confirmation of Term of Lease
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2. LEASE.

2.1 Agreement to Lease. CITY  hereby  leases  to  TENANT,  and  TENANT  leases  from  CITY,  the Premises on the following terms and conditions. CITY and TENANT understand this Lease is comprised of the Basic  Lease  Provisions  contained in  Article  1  above  and  Article  2 through  20  and  any  Exhibits attached hereto. The Exhibits attached hereto are incorporated herein by this reference.

2.2 Premises; Property; Common Areas. The Premises consists of the area specified in Section 1.4 of the Basic Lease Provisions and more particularly described in Exhibit A. TENANT shall have exclusive use of the Premises. The “Property” is that certain real property located at 79 Asilomar Boulevard, Pacific Grove, CA 93950 which is improved with the Building and associated walkways, drive aisles, and parking spaces, those landscaped areas that are not part of the Golf Course, and hallways used in common with other tenants  (“Common Areas”). TENANT shall have the non-exclusive  right to use the Common Areas in common with the adjacent golf course (“Golf Course”), subject to Article 15 with respect to parking spaces.

CITY reserves the right at any time and from time to time, to: (a) make alterations in or additions to the Common Areas; (b) temporarily close any of the Common Areas for alterations, additions, improvements, or maintenance purposes; (c) promulgate reasonable and nondiscriminatory rules and regulations governing the  use  of  the  Common  Areas;  (d)  utilize  from  time  to  time  any  portion  of  the  Common  Area  for promotional, entertainment and related matters; (e) renovate, upgrade or change the shape and size of the Common  Area;  and  (f)  add,  eliminate,  or  change  the  location  of  improvements  to  the  Common  Area including,  without  limitation,  buildings,  parking  areas,  cart  paths,  and  to  construct  structures  on  the Common  Area.  CITY  further  reserves  to  itself  the  right,  from  time  to  time,  to  grant  such  easements, dedications and rights in, on or over the Common Areas that CITY deems necessary or desirable, provided that  such  easements,  dedications  and  rights  do  not  unreasonably  interfere  with  TENANT’s  use  of  the Premises.

2.3 Permitted Use. TENANT may use the Premises only for the Permitted Use, and the Common Areas only in connection with the Permitted Use, as set forth in Section 1.11 above. No other persons shall use or occupy  the  Premises  without  CITY’s  prior  written  consent.  TENANT  shall  not  commit  or  permit  any unlawful act in or about the Premises or Common Areas or permit use of the Premises or Common Areas for any purpose or in any manner that (i) is unsafe, (ii) could constitute a nuisance, (iii) may annoy, obstruct, or interfere with the peaceful enjoyment of the public, (iv) keep or permit to be kept in or on the Premises or  Common  Areas  anything  that  is  prohibited  by  any  insurance  company  providing  coverage  for  the Premises, Building or Common Areas that will, in the reasonable opinion of CITY, increase the possibility of fire or other casualty or increase the then-existing premiums for or void the coverage of any insurance on the Premises, Building, or Common Areas or (v) does not comply with any Laws. TENANT shall not use any portion of the Property for auction, going-out-of business, or liquidation sales or special events of any kind without prior written consent from CITY.

2.3.1 CITY Events. CITY retains the right to book events at the Premises (for itself or third parties) as long as the events do not conflict with an event previously booked by TENANT. CITY shall coordinate the  scheduling  of its  event  booking through  TENANT.  TENANT  shall  maintain the master event booking calendar, which the CITY may reference. TENANT and CITY agree to use their best efforts to prevent the booking of conflicting events. The CITY's booking of events shall not unreasonably interfere with TENANT's use and TENANT shall remain the exclusive food and beverage services provider for the Premises and Property except as provided in Section 2.3.4.

2.3.2 Room Rental Fees. CITY may charge a room rental fee for events it books for third parties at the  Premises.  CITY  will  consult  with  TENANT  before  it  charges  a  room  rental  fee  to  receive guidance  from  TENANT  as  to  food  and  beverage  services  TENANT  may  wish  to  provide  in conjunction with the event that CITY desires to book. CITY will not seek to charge room rental fees PGCC 5-6-26
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2.3.3 Certain Events. CITY-booked events that do not include food and beverage services shall be limited to a total of only four such events per year. CITY will be responsible for security, premises liability, and post event cleanup for all such events.

2.3.4 Exclusive Rights. TENANT shall have the exclusive right to provide food and beverages to patrons of the Golf Course during the Term except that incidental food and beverage may be brought to the course as part of a CITY sponsored or CITY approved event including, but not limited to the annual  Employees  Golf  Tournament  or  charity  golf  tournaments  that  benefit  CITY  services  or programs. In no case shall the number of events for which food and beverage may be brought onto the course exceed four (4) per calendar year. All such events shall be approved by the Golf Course Superintendent (Superintendent) and CITY.

2.3.5 CITY Event Blackout Periods. CITY shall not book events Memorial Day weekend, July 4th weekend, Labor Day weekend, Thanksgiving week, or December 15th through January 1st.

2.4 Operations.

2.4.1 Hours of Operation. TENANT agrees to  open its  business to the  public within  seven  (7) calendar days of the Commencement Date and to operate continuously and uninterruptedly from no later than dawn until dusk every day of the year except that the business shall close on Christmas Day. Any shortening of these hours of operation shall require CITY’s prior written consent, which may be withheld or conditioned in CITY’s sole and absolute discretion. TENANT may extend these hours to the fullest extent allowable under applicable Laws (defined below). CITY understands that TENANT may  seek  necessary  use  permits  or  ordinance  changes in  order to  allow  TENANT to provide nighttime food and beverage service for special events, but CITY shall retain full discretion respecting any such change. TENANT’s hours of operation shall be posted on the exterior of the Premises or in the Common Areas in a reasonably prominent location approved by CITY and on any TENANT website that is primarily used for the restaurant.

2.4.2 Special Events and Golf Related Service. TENANT and CITY shall work together to book food and beverage service for golf related events. TENANT shall determine the appropriateness of the food and beverage service for all golf related events and special events, with due consideration given to reasonable advice or requests of the CITY for golf related events and special events and the Golf Course Superintendent for golf related events. TENANT shall maintain the master calendar for events in order to maximize the utility of the facility.

2.4.3 General Method of Operation. TENANT shall operate the business with such due diligence and efficiency as will reasonably produce the maximum return to TENANT. The business will be operated taking into account the Premises’ proximity to the Golf Course and the fact that the Golf Course  and  the  business  in  the  Premises  share  customers,  and  TENANT  will  give  reasonable consideration to the advice and requests of the Golf Course Superintendent.

2.4.4 Management. A manager of TENANT shall be present at all times TENANT’s business is open to the public.

2.4.5 Quality and Price Control. Food and beverage sold at the Premises shall be of high quality and sold at prices comparable to those prevailing for similar services and facilities at similar golf courses. TENANT shall provide CITY with notice of the initial menu concept and general price PGCC 5-6-26
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2.4.6 Compliance with Law. TENANT shall not use the Premises, Common Areas, or Property or permit anything to be done in or about the Premises, Common Areas, or Property which will in any way  conflict  with  any  law,  statute,  zoning  restriction,  ordinance  or  governmental  law  or  rule, regulation, or requirement, or regulations, of any duly constituted public authorities now in force or which  may  hereafter  be  enacted  or  promulgated,  or  any  orders,  permits,  licenses,  approvals, authorizations, or regulations promulgated under any of the foregoing (each individually a “Law” and collectively, “Laws”), or which will subject CITY to any liability for injury to any person or property  by  reason  of  any  business  operation  being  conducted  in  or  about  the  Premises.  Laws include any “Environmental Law” which means any Law relating to Hazardous Materials or other environmental conditions on, under, or about the Premises, the Building, or the Common Areas, or soil and ground water conditions, including, but not limited to, the Comprehensive Environmental Response, Compensation,  and Liability Act  of  1980  (CERCLA)  (42 U.S.C.  §  9601  et  seq.), the Resource  Conservation  and  Recovery  Act  (RCRA)  (42  U.S.C.  §  6901  et  seq.),  the  Hazardous Materials Transportation Act of 1975 (49 U.S.C. § 1801 et seq.), the California Carpenter-PresleyTanner  Hazardous  Substance  Account  Act  (Cal.  Health  &  Safety  Code  §  78000  et  seq.),  the Hazardous Materials  Release  Response  Plans  and  Inventory  Act  (Cal.  Health  &  Safety  Code  § 25500 et seq.), the California Hazardous Waste Control Law (Cal. Health & Safety Code § 25100 et seq.), the California Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code  §  25249.5  et  seq.), the California  Porter-Cologne Water  Quality Control  Act  (Cal.

Water Code § 13000 et seq.), any other Law or legal requirement concerning Hazardous Materials, and  any  amendments  or  successor  statutes  to  the  foregoing  and  all  Laws:  (a)  relating  to  the environment, human health, or natural resources; (b) regulating, controlling, or imposing liability or standards of conduct concerning any Hazardous Materials; or (c) requiring notification or disclosure of releases of Hazardous Materials or of the existence of any environmental conditions on or at the Premises, Common Areas, or Property, as any of the foregoing may be amended, supplemented, or supplanted from time to time.

2.4.7 Licenses, approvals and permits. TENANT shall obtain all permits, licenses, and approvals required  under  any  Law  for  the  lawful  conduct  of  TENANT’s  business,  for  lawful  use  of  the Premises, or to allow TENANT to meet the obligations under this Lease, prior to performing any act  requiring  such  permits,  licenses,  or  approvals.  TENANT  shall  obtain  and  maintain  a  liquor license. All permits and licenses shall be maintained in TENANT's name. TENANT shall pay, at TENANT’s sole cost and expense, all charges and fees associated with such permits, licenses, and any other approval required under any Law.

2.4.8 Restaurant Name. The restaurant name shall be "The Grove at Point Pinos." Any change to this  name  shall  require  CITY’s  prior  written  consent.  This  name  shall  attach  to  the  Premises, TENANT and CITY shall only have the right to use the name during the Term. The TENANT and CITY  shall  cease  using  any  website  or  merchandise  with  the  restaurant  name  on  it  upon  the Expiration Date or earlier termination of the Lease.

2.4.9 Health and Sanitation. TENANT shall insure that all its employees are neatly attired in clean  and  appropriate  uniforms  whenever  on  duty. Before  any  of  TENANT's  employees engage in the preparation, handling, serving, or storage of food, such employee shall meet all requirements under applicable Laws to engage in such activity.

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2.4.10 City Municipal Powers.   City  enters this  Lease in its  proprietary  capacity,  and  as  such nothing in this Lease shall be construed as restraining, impairing, or restricting the City in its regulatory capacity, or granting any rights upon the TENANT with respect to the use, occupancy, or operation of the Premises in a manner inconsistent with the Law.

2.5 Rules. TENANT  shall  use  the  Premises  and  Common  Areas  in  compliance  with  all  Rules  and Regulations in Exhibit B attached hereto and incorporated herein.

3. TERM.

3.1 Term. The term  of the lease  shall  be  five  (5)  years. The term  of this Lease  commences  on the Commencement Date and terminates on the Expiration Date as described in Sections 1.5 and 1.6, unless sooner terminated or extended as provided in this Lease (the “Initial Term”).

3.2 Option. At the end of the Initial Term, TENANT may exercise an option to extend the Lease for five (5) additional years (“Additional Term”). TENANT shall have the option to further extend the Lease for five (5) additional years at the end of the Additional Term. This provides TENANT a total of two options to extend the Lease five (5) years, for a total of ten years. Such exercise must be made in writing to CITY at least sixty (60) days prior to the Expiration Date. The exercise of TENANT’S option(s) shall constitute agreement  to  and  extension  of  the  terms  of  this  Lease.  Each  time  TENANT  exercises  an  option,  the Expiration Date contained in Section 1.6 will be extended five (5) years.

3.3 Holdover. If TENANT remains in possession of any part of the Premises after the Expiration Date, CITY may, at CITY’s option in its sole and absolute discretion, (i) treat TENANT as a trespasser and pursue any remedy described in Section 13.2, or (ii) treat such holding over as a tenancy at will upon the same provisions as this Lease, including, but not limited to Section 9.1, except that, in either event, the Base Rent during  such  tenancy  at  will  shall  be  one  hundred  thirty  percent  (130%)  of  the  Base  Rent  in  effect immediately  prior  to  the  Expiration  Date  (a  “Hold Over TENANT”).  No  holding  over  by  TENANT, whether with or without consent of CITY, shall operate to extend this Lease. IN ORDER FOR TENANT

TO EXTEND THIS LEASE AT THE EXPIRATION OF THE TERM AND FOR TENANT NOT TO BE CONSIDERED A “HOLD OVER TENANT” WITH AN AUTOMATIC INCREASE IN BASE RENT BY 130%, TENANT MUST NOTIFY CITY OF ITS DESIRE TO EXTEND THE TERM OF THE LEASE IN WRITING AT LEAST SIXTY (60) DAYS PRIOR TO THE EXPIRATION OF THE TERM. IF TENANT NOTIFIES CITY THAT IT DESIRES TO EXTEND THE TERM, AND THE

CITY IS WILLING TO EXTEND THE TERM, CITY AND TENANT SHALL AGREE ON THE

TERMS AND CONDITIONS OF THE EXTENSION AND EXECUTE AN AMENDMENT TO THE LEASE.

4. RENT AND UTILITIES.

4.1 Rent. Commencing on the twenty-eighth (28th) day of each month after the Commencement Date, TENANT shall pay Percentage Rent, without deduction or offset whatsoever, in the amount set  forth in Section 1.7. Percentage Rent due shall be based upon the monthly accounting of gross sales pursuant to Section 7.4. Percentage Rent for any partial calendar month at the beginning or end of the Term shall equal the product of  (i) the number of days in such partial month, and  (ii) the quotient of the applicable Rent divided by the actual number of days in such calendar month. Percentage Rent and any other charges due under the Lease are collectively referred to as “Rent” in this Lease. Unless otherwise stated, any Rent is due within ten (10) days after CITY’s written demand therefor.

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4.1.1 Gross Sales Defined.  Gross  sales  shall include the  full  sale  price  of  each  beverage,  food product, ingredient, gift card, or item of merchandise sold at any time during the Term, including online sales; rental fees for any room in the Premises that are imposed at any time during the Term; catering charges or other specialty service charges imposed at any time during the Term, when any of such prices, fees, or charges pertain to sales ordered or fulfilled at or services provided in whole or in part at, related to, on or from the Premises (restaurant, banquet and meeting rooms, walk-up window,  online  sales,  or  portable  concession  stands  in  the  Common  Areas).  Gross  sales  shall exclude credit card service charges that are not included in the sale price to customers.

4.1.2. Rental Cap. The  dollar  amount  of  gross  sales  percentage  due  under this  section  shall  be capped  at  thirteen  thousand,  five  hundred  dollars  ($13,500)  per  month.  This  monthly  cap  shall increase by three percent (3%) annually, with the increase occurring on the yearly anniversary of the Effective Date identified in Section 1.1.

4.2 Utilities. During the Term, TENANT shall pay when due, directly to the utility suppliers, the cost of all separately-metered utilities furnished to the Premises, including, without limitation, electricity, gas, and  sewer.  TENANT  shall maintain  accounts  with the  utility  suppliers in  TENANT’s  name.  As  of the Effective  Date  all  utilities  furnished to the  Premises  are  separately  metered.  If  utilities  provided to the Premises are not separately metered in the future, CITY may determine in the exercise of its reasonable discretion TENANT’s “Proportionate Share” of such utilities furnished and TENANT shall pay CITY such “Proportionate Share” after CITY provides TENANT a statement requesting such payment. CITY shall not be  liable  to  TENANT  for  injury,  damage,  loss  of  TENANT’s  business  or  profits,  from  any  failure, interruption,  rationing  or  other  curtailment  in  the  supply  of  water,  electric,  gas,  or  other  utilities  from whatever cause.

4.3 Late Charges and Interest Rate. If CITY does not receive Rent or any other payment due from TENANT on or before 4:59p.m. of the fifth (5th) day after the date due, TENANT shall pay to CITY a late charge equal Five percent (5%) of such past due Rent or other payment (“Late Charge”). TENANT agrees that this Late Charge  represents a  fair and  reasonable estimate of the cost CITY will incur by  reason of TENANT’s late payment. Accepting any Late Charge shall not constitute a waiver by CITY of TENANT’s default with respect to any overdue amount nor prevent CITY from exercising any other rights or remedies available  to  CITY.  If  any  installment  of  Percentage  Rent  or  any  other  amount  payable  by  TENANT hereunder is not received by CITY by the date due, it shall bear interest at the Applicable Interest Rate until paid. All interest, and any late charges imposed pursuant to this Section, shall be considered additional Rent due from TENANT to CITY under the terms of this Lease. The “Applicable Interest Rate” is the lesser of Five Percent (5%) per annum or the maximum allowable interest under any usury Law. In the event of a Rent payment by check which is returned for insufficient funds, TENANT will also be charged a “Returned Check Charge” of $100.00 as additional Rent. CITY and TENANT recognize that the damage which CITY will suffer as a result of TENANT's failure to pay any Rent timely is difficult to ascertain and said Late Charge and interest are the best estimate of the damage that CITY will suffer in the event of late payment of Rent.

5. SECURITY DEPOSIT.

5.1 Security Deposit. Concurrently with TENANT’s execution and  delivery  of this Lease to CITY, TENANT shall deposit with CITY the Security Deposit as set forth in Section 1.12 above. The Security Deposit shall be held by CITY as security for the full and faithful performance by TENANT of all of the terms, covenants and conditions of this Lease to be performed by TENANT during the Term. In the event of  a  TENANT  Default  with  respect  to  any  of  its  obligations  under  this  Lease  and  in  the  event  CITY discovers after expiration or termination of the Lease that TENANT has  failed to clean the Premises or repair damage any TENANT Party (defined below) caused, CITY may (but shall not be required to) use, PGCC 5-6-26
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5.2 Failure to Obtain Loan.  TENANT  has  informed  CITY  that  it  intends  to  finance  the  Security Deposit and operations through a loan. If TENANT fails to obtain its desired loan, TENANT may terminate this agreement in writing. TENANT agrees to provide written termination within forty-eight (48) hours after determining it cannot  procure  sufficient  funds to  deliver the Security Deposit  on time,  or to  operate its business.

6. USAGE AND COMPLIANCE.

6.1 Hazardous Materials. TENANT agrees that neither TENANT nor the TENANT Parties (defined below) shall install, introduce, use, generate, transport, store, treat, dispose of, release or otherwise handle any  Hazardous  Materials  (as  defined  below)  in,  on,  under  or  about  the  Premises,  Common  Areas,  or Property without CITY’s prior written consent, which consent may be granted, denied, or conditioned upon delivery of a Hazardous Materials Disclosure Certificate and compliance with any other requirements of CITY, all in CITY’s absolute discretion, or transport any Hazardous Materials to or  from the Premises, Common Areas, or Property in violation of any applicable Environmental Laws. The term “Hazardous Material”  shall mean  any  and  all  substances, materials,  chemicals,  or wastes that  now  or  hereafter  are classified  or  considered to  be  hazardous  or toxic  under  any Environmental Law,  or that  are  or  become regulated by any governmental authority because of toxicity, infectiousness, radioactivity, explosiveness, ignitability, corrosiveness, or reactivity under any Environmental Law applicable to the Premises, Common Areas, or Property, and shall also include: (a) gasoline, diesel fuel, and any other petroleum hydrocarbons; (b)  asbestos  and  asbestos  containing  materials,  in  any  form,  whether  friable  or  non-friable;  (c) polychlorinated biphenyls (“PCB”); (d) radon gas; and (e) flammable liquids and explosives.. TENANT shall provide CITY with prompt written notice of any known or suspected environmental discharges or releases  of  Hazardous  Materials  that  are  reportable  to  governmental  authorities  under  any  applicable Environmental Laws, together with a copy of any report, statement, notice, registration, application, permit, license, claim, action or proceeding or other communication given to or received from any governmental authority or third party with respect to any such release. TENANT covenants and agrees that no asbestos, asbestos-containing materials, PCB compounds will be used in any alterations, additions or improvements to, any portion of the Premises. TENANT shall indemnify, protect, defend and hold harmless CITY from and against all loss, costs, damages, claims, proceedings, demands, liabilities, liens, penalties, taxes, fines and  expenses, including  reasonable  attorneys’  fees,  consultants’  fees, litigation  costs,  and investigation, removal, remediation, cleanup and monitoring costs, asserted against or incurred by CITY at any time by reason of or arising out of the presence of any Hazardous Materials in, on, under, about or emanating from the Premises, Common Areas, or Property resulting from or in connection with (i) the action, inaction, fault or  neglect  of  TENANT  or  any  TENANT  Party,  (ii)  the  use,  generation,  storage,  treatment,  handling, transportation, disposal or release of any Hazardous Material in, on, about or emanating from the Premises, Common  Areas,  or  Property  by  or  for  TENANT  or  any  TENANT  Party,  or  (iii)  the  violation  of  any PGCC 5-6-26
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6.2 Suitability of Premises. TENANT acknowledges that neither CITY nor any of its representatives has made any representation or warranty with respect to the Premises, or the fitness of the Premises or the furniture,  fixtures,  and improvements therein  as  of the Effective Date, with  respect to the  suitability  or fitness  of the  same  for the  conduct  of TENANT’s  business  or  for  any  other  purpose  or with  respect to compliance of any of the foregoing with any Law.

6.3 Sewer Damage. TENANT agrees not to discharge any harmful or dangerous chemicals into the sewer system, whether it be inside the Premises area or inside the main system leading from the Premises to the main sewer line. Should TENANT discharge any harmful chemicals into the sewer system, TENANT shall be fully responsible for the cost and repair of such damage. CITY reserves the right to select an expert of its choosing to inspect any damage at TENANT’s cost. TENANT shall not be responsible for the cost of the expert if it is determined such damage is not caused by TENANT. TENANT accepts responsibility for any damage if the following conditions exist: (i) the damage to the sewer system is determined to be due to the chemicals used in the operation of TENANT’s business; or (ii) the damage exists only in the designated portion of the sewer system connecting to the Premises.

6.4 TENANT’s Nondiscrimination Covenant. TENANT herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this Lease is made and accepted upon and subject to the following conditions:

That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, physical or mental disability or medical condition, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Premises herein leased nor shall the TENANT himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of TENANT or TENANT’S assignees or subtenants in the Premises herein leased.

6.5 Pest Control. TENANT, at TENANT’s sole cost, shall at all times keep the Premises free of pests (including without limitation rats, mice, spiders, mosquitoes, flies, termites, roaches, ants and other insects), including the obligation to maintain a pest control service contract with a licensed pest control operator and provide CITY with a copy of such pest control service contract. If TENANT fails to promptly and fully comply with this Section, CITY shall have the right, but not the obligation, to enter the Premises to perform such spraying or inspections at TENANT’s expense. Performance of such work by CITY shall not constitute a waiver of TENANT’s default in failing to do the same nor shall it entitle TENANT to any damage for any injury or inconvenience occasioned thereby nor to any abatement of Rent. TENANT shall reimburse CITY for any cost incurred by CITY pursuant to this Section upon demand therefor.

6.6 Recycling Program. TENANT,  at  TENANT’s  cost,  shall  participate  in  any  and  all  recycling programs in which CITY is obligated to participate by law or if TENANT is otherwise required to do so pursuant to any federal, state or local law, rule or regulation.

7. TAXES; RECORDS AND ACCOUNTING.

7.1 Taxes. TENANT shall be solely responsible for paying all of the following, collectively “Taxes”:
(i) taxes and assessments levied on trade fixtures, alterations, additions, improvements, partitions, cabling, wiring,  furniture,  equipment,  inventories  and  other  personal  property  located  and/or  installed  on  the Premises by or on behalf of TENANT; (ii) any and all property taxes levied on the TENANT’s possessory property interest; (iii) although not assessed as of the Effective Date, in the event later assessed due to a PGCC 5-6-26
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7.2 Notice: Payment of Taxes. A possessory property interest is created by this Lease, and may be subject to property taxation. TENANT acknowledges that this Section 7.2 constitutes notice under Revenue and Taxation Code Section 107.6 and that TENANT or the party in whom the possessory interest is vested shall be responsible for payment of such Taxes.

TENANT shall pay all Taxes prior to delinquency. To the extent any Taxes are not separately assessed or billed to TENANT by the taxing authority, CITY shall deliver to TENANT copies of the bill for such Taxes.

TENANT shall pay the bill amount directly to the taxing authority no later than ten (10) business days prior to the date on which such Taxes are due. Should TENANT fail to pay its Taxes, CITY may elect to do so on TENANT's behalf and, within five (5) days after CITY’s demand therefor, TENANT shall reimburse CITY for such Taxes and any penalties and fines, together with interest at the Applicable Interest Rate, from the date CITY tendered payment.

7.3 Records and Accounting. TENANT shall keep proper records and accounts of the Gross Sales and such records shall be kept in accordance with GAAP. Such records and accounts, including any sales tax reports that TENANT is required to furnish to any governmental authority, shall be open at all reasonable times  to  the  inspection  or  audit  of  CITY  or  CITY's  third  party  professional  auditor  or  authorized representative, upon at least five (5) business days’ prior notice and during business hours. TENANT shall maintain records and accounts in accordance with this Section for at least two (2) years after expiration of each period of twelve calendar months that commences on an anniversary of the Commencement Date and ends on the day immediately preceding the next anniversary of the Commencement Date (“Lease Year”).

TENANT  shall  reimburse  CITY  for  all  reasonable  and  documented  expenses  incurred  by  CITY  in performing  the  audit  or  inspection,  in  addition  to  all  additional  Percentage  Rent  found  to  be  owed  by TENANT following an audit or inspection under this Section.

CITY is a public entity subject to the California Public Records Act. Information provided to CITY pursuant to this Section 7.3 will be disclosed publicly as  required by law.  If CITY  receives a  request  for  records related  to  information  obtained  from  TENANT  pursuant  to  this  Section  7.3,  CITY  agrees  to  promptly provide TENANT with written notice of the request.  TENANT will then have the time specified in the CITY’s notice to determine whether it considers any of the information confidential proprietary information and  whether  it  will  take  legal  action  to  preclude  disclosure  of  the  requested  information.    TENANT understands CITY’s notice of a request for records under the California Public Records Act will require a prompt response from TENANT given the CITY’s legal obligation to respond to such a request within 10 days of its receipt.  Absent a timely response, CITY may release the requested records.  CITY shall have no monetary liability to TENANT for release of information pursuant to a request under the California Public Records Act or any subpoena. Likewise, CITY shall not be obligated to defend against any challenge related to a California Public Records Act request or a subpoena for records that TENANT asserts are confidential or not disclosable.  TENANT further agrees to be liable for and pay all judgments against the CITY, as well as attorney fees and costs, resulting from a challenge related to a records request or subpoena for records that TENANT asserts are confidential or not disclosable.

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7.4 Monthly Accounting. A monthly accounting of Gross Sales  shall be compiled and  furnished to CITY by the fourteenth (14th) of each month beginning after the Commencement Date, and attached to the payment of Percentage Rent as described in Section 4.1.

7.5 Annual Financial Statements. TENANT  shall  provide  to  CITY  annual  compiled  financial statements for TENANT’s business at the Premises. The annual financial statements shall be compiled by a Certified Public Accountant and are due to CITY within three (3) months after the end of each Lease Year.

If  an  annual  compiled  financial  statement  shows  an  amount  owing  by  TENANT that is  more than the Percentage  Rent  previously  paid  by  TENANT  for  such  Lease  Year,  TENANT  shall  pay  CITY  the deficiency. If such statement shows an amount owing by TENANT that is less than the Percentage Rent paid  by  TENANT  for the  Lease  Year, the  excess  shall  be  held  by CITY  and  credited  against the  next payment of Percentage Rent; however, if the Term has ended and TENANT was not in default at its end, CITY shall refund TENANT the excess.

8. INDEMNIFICATION AND EXCULPATION.

8.1 TENANT’s Assumption of Risk and Waiver. Except to the extent such matter is attributable to the gross negligence or willful misconduct of CITY or CITY’s agents, contractors, officers or employees, CITY  shall  not  be liable to TENANT,  or any  of TENANT’s Parties, as  hereinafter  defined,  for:  (i) any damage to property of TENANT, or of others, located in, on or about the Premises, (ii) the loss of or damage to any property of TENANT or of others by theft or otherwise,  (iii) any injury or damage to persons or property resulting from fire, explosion, personal injury, steam, gas, electricity, water, rain or leaks from any part of the Premises or from the pipes, appliance of plumbing works or from the roof, street or subsurface or from any other places or by dampness or by any other cause of whatsoever nature, (iv) any such damage caused by other persons in the Premises, occupants of any other portions of the Property, or the public, or caused by operations in construction of any private, public or quasi-public work, or (v) any interruption of utilities and services. CITY shall in no event be liable to TENANT for any consequential damages or for loss of business, revenue, income or profits and TENANT hereby waives any and all claims for any such damages. Notwithstanding anything to the contrary contained in this Section, all property of TENANT and TENANT Parties kept or stored on the Premises, whether leased or owned by any such parties, shall be so kept or stored at the sole risk of TENANT and TENANT shall hold CITY harmless from any claims arising out  of  damage to the  same, including  subrogation claims  by TENANT’s insurance carriers. “TENANT Parties” or “Tenant Party” includes TENANT, TENANT’s employees, members, partners, shareholders, agents, representatives, contractors, guests, customers, and invitees.

8.2 TENANT’s Indemnification. TENANT shall indemnify, defend, and hold harmless the CITY, its officers,  agents,  employees,  and  volunteers,  from  and  against  any  and  all  claims, liabilities,  and losses whatsoever (including damages to property and injuries to or death of persons, court costs, and reasonable attorneys’ fees) occurring or resulting to any and all persons, firms or corporations furnishing or supplying work, services, materials, or supplies in connection with the performance of this Lease, and from any and all claims, liabilities, and losses occurring or resulting to any person, firm, or corporation for damage, injury, or death arising out of or connected with (i) any default in the performance of any obligation on TENANT's part to be performed under the terms of this Lease, (ii) TENANT’s or TENANT Parties’ use of the Premises, Property, or Common Areas; (iii) the conduct of TENANT's business or any activity, work or thing done, permitted or suffered by TENANT or TENANT Parties in or about the Premises, Property, or Common Areas;  or  (iii) any  act,  error  or  omission  of  TENANT  or  TENANT  Parties  in  or  about  the  Premises, Property, Common Areas or any portion thereof except to the extent that such claims, liabilities, or losses described in (i), (ii), or (iii) result from, in whole or in part, the gross negligence or willful misconduct of the CITY.

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8.3 Survival. The  obligations  of TENANT  under this Article 8  shall  survive the expiration  or  other termination of this Lease with  respect to any claims or liability arising prior to such expiration or other termination.

9. INSURANCE.

9.1 TENANT’s Insurance Policies and Limits.  Without  limiting  TENANT’s  duty  to  indemnify, TENANT shall maintain in effect throughout the term of this Lease a policy or policies of insurance with the following minimum limits of liability:
(i) Commercial general liability insurance, no less broad than Insurance Services Office (ISO) CG 00 01, including but not limited to premises and operations, including coverage for Bodily Injury and Property  Damage,  Personal  Injury,  Contractual  Liability,  Broadform  Property  Damage,  Products  and Completed  Operations,  with  a  minimum  Limits:  $1,000,000  per  Occurrence;  $2,000,000  General Aggregate.  The  required  limits  may  be  provided  by  a  combination  of  General  Liability  Insurance  and Commercial Excess or Umbrella Liability Insurance.  If TENANT maintains higher limits than the specified minimum  limits, CITY  requires  and  shall  be  entitled  to  coverage  for  the  higher  limits  maintained  by TENANT.
(ii) Business  automobile  liability  insurance,  covering  all  motor  vehicles,  including  owned, leased, non-owned, and hired vehicles, used in providing services under this Lease, with a combined single limit for Bodily Injury and Property Damage of not less than $1,000,000 per occurrence. (iii) Workers’ Compensation Insurance, if TENANT employs others in the performance of this Lease, in accordance with California Labor Code section 3700 and with Employer’s Liability limits not less than $1,000,000 each person, $1,000,000 each accident and $1,000,000 each disease.

9.2. Other Insurance Requirements.
(i) Insurer.  All  insurance  required  by  this  Lease  shall  be  executed  by  an  admitted  insurer authorized to transact Insurance business in the State of California that is acceptable to the CITY with a rating of A- or better. Unless otherwise specified by this Lease, all such insurance shall be written on an occurrence  basis,  or, if the  policy is  not written  on  an  occurrence  basis,  such  policy with the  coverage required herein shall continue in effect for a period of three years following the date TENANT completes its performance of services under this Lease.
(ii) Notice. TENANT shall provide immediate written notice if (1) any of the required insurance policies is terminated; (2) the limits of any of the required policies are reduced; (3) or the deductible or selfinsured  retention is increased.  In the event of any cancellation or  reduction in coverage or limits of any insurance, TENANT shall forthwith obtain and submit proof of substitute insurance. Should TENANT fail to immediately  procure  other insurance,  as  specified, to  substitute  for  any  canceled  policy,  CITY  may procure such insurance at TENANT’s sole cost and expense. (iii) Additional  Insureds.  Commercial  general  liability  and  automobile  liability  policies  shall provide an endorsement naming the City of Pacific Grove, its officers, agents, and employees as Additional Insureds with  respect to liability arising  out  of the TENANT’s work, including  ongoing and completed operations,  and  shall  further  provide that  such insurance is  primary insurance to  any insurance  or  selfinsurance maintained by the City and that the insurance of the Additional Insureds shall not be called upon to  contribute  to  a  loss  covered  by  the  TENANT’s  insurance.  The  required  endorsement  form  for Commercial General Liability Additional Insured is ISO Form CG 20 10 11-85 or CG 20 10 10 01 in tandem with CG 20 37 10 01 (2000). The required endorsement form for Automobile Additional Insured PGCC 5-6-26
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9.3 CITY’s Insurance. During the Term, CITY shall maintain insurance or an insurance equivalent (including, but not limited to, that offered to a municipality through and by a joint powers authority, a self insurance pool of liability coverage authorized pursuant to California Government Code Section 6500, or similar collective) covering the Premises (excluding, however, TENANT’s furniture, equipment and other personal property) against damage by fire and standard extended coverage perils (including, if CITY elects, "all risk" coverage, earthquake/volcanic action, flood and/or surface water insurance) and with vandalism and malicious mischief endorsements, rental loss coverage, and such additional coverage as CITY deems appropriate. At CITY’s option, all such insurance may be carried under any blanket or umbrella policies that CITY has in force for other buildings and projects. In addition, at CITY’s option, CITY may elect to self-insure all or any part of such required insurance coverage. CITY may, but shall not be obligated to, carry any other form or forms of insurance as CITY may reasonably determine is advisable.

9.4 Waiver of Subrogation. CITY  and  TENANT  hereby mutually  waive their  respective  rights  of recovery against each other for any loss to the Premises or its contents resulting from actions on or with respect to the Premises covered (or required by this Lease to be covered) by any insurance policy required to be carried by such party under this Lease and each party agrees to apply to their insurers to obtain similar waivers  from  such insurers. Each  party  shall  obtain  any  special  endorsements  required  by  such  party’s insurer  to  evidence  compliance  with  the  aforementioned  waiver. TENANT  shall  provide  to  CITY  an endorsement that the issuer waives the right of subrogation against CITY, its officers, officials, employees, agents and volunteers.

10. CONDITION; MAINTENANCE AND REPAIRS.

10.1 Beginning Condition. On the Commencement Date, TENANT shall accept the Premises and all furniture, fixtures, improvements, and equipment therein, including those in Exhibit D, in their “AS IS” condition.  TENANT  acknowledges that it  has inspected the  Premises  and  agrees that the  Premises  are suitable  for  TENANT’s  intended  use  and  TENANT  agrees  that  it  is  not  relying  on  any  warranty  or representation made by CITY or its officers concerning the use of the Premises. CITY does not represent or warrant that the Premises conform to zoning, setback, parking, impervious ground cover ratio, or other requirements under any Law that may relate to TENANT’s intended use.

10.2 Maintenance During the Lease.

10.2.1 TENANT’s Maintenance Obligations. During the Term  of this Lease, TENANT, at its expense, shall keep and timely maintain the interior of the Premises, including, without limitation, PGCC 5-6-26
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10.2.2 Services. TENANT shall arrange and pay for its own security system, telecommunication systems, and any and all other services that TENANT desires. TENANT shall arrange and pay for its own daily janitorial service (including on weekends) and trash removal service. TENANT shall also arrange and pay for the types of services at the frequency stated in Exhibit C.

10.2.3 Maintenance and Repair of Equipment and Fixtures. TENANT shall maintain and repair the  equipment  and  fixtures  in  the  Premises,  whether  provided  initially  by  TENANT  or  CITY.

TENANT shall maintain these items in a clean, good, safe condition and repair at all times.

10.2.4 Repair/Replace Costs.
(a) If any CITY-owned fixture or equipment identified on Exhibit D (as it may be updated from  time  to  time  with  the  approval  of  TENANT  and  CITY)  fails  to  operate  properly, TENANT shall notify CITY and TENANT shall attempt to have such fixture or equipment repaired. The cost to repair such fixture or equipment shall be at TENANT’s sole expense.

All  items  on  Exhibit  D  shall  remain  the  property  of  CITY  at  the  expiration  or  sooner termination of the Lease.
(b) Before replacing any fixtures or equipment owned by CITY (including items on Exhibit D as it may be updated from time to time, and fixture and equipment purchased by CITY for the Premises in CITY’s sole and absolute discretion), TENANT shall obtain CITY's prior written  consent  for  the  proposed  replacement  item  and  brand  and  replace  the  item  at TENANT’s sole cost and expense. TENANT will retain ownership of equipment purchased at their expense, excepting, however, that if replacement of the CITY-owned item is due to TENANT or TENANT’s Party damaging the item, CITY shall maintain ownership of the item. If it notes any deficiencies in the repair or maintenance, CITY shall send written notice of the deficiency to TENANT. TENANT shall repair or maintain the noted item(s) within a reasonable time as stated in the notice. If TENANT fails to do so, CITY may perform the necessary maintenance or repairs and require reimbursement from TENANT.

10.2.5 Premises Décor and Improvements.
(a) In  accordance  with  Section  11.1, TENANT  shall  be  responsible,  at its  sole  cost  and expense, for performing, installing, constructing, or causing to be performed, installed, or constructed,  all  TENANT-proposed  painting,  decorations,  and  Alterations,  including  all approved TENANT-proposed fixtures, improvements and furnishings.

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10.2.6 CITY Maintenance Obligations.
(a) CITY shall repair and maintain in good condition the exterior walls of the Building and Premises; the structure and exterior of the chimney connected to the Premises, including any flu  or  fan;  the  roof,  foundation,  and  other  structural  components  of  the  Building;  the components of the electrical, plumbing, mechanical, life/safety, heating, ventilation and air conditioning  (“HVAC”)  systems; exterior  painting, exterior  doors and  door  surfaces; the patio portion of the Premises; and the Common Areas. Notwithstanding the foregoing, CITY shall not be responsible for repairing any damage caused by any act, omission, or negligence of  TENANT,  or  its  responsible  employees,  agents,  invitees,  licensees,  assignees,  or subtenants.
(b)  CITY  shall  provide  TENANT  with  written  notice  at  least  30  days  before  it  begins substantial repairs or modifications to the Golf Course, the Golf Pro Shop, or parking lot in the Common Areas, which would have the effect of impairing the TENANT's business.

10.3 Condition Upon Surrender.  Upon the  expiration  or termination  of this  Lease,  TENANT  shall surrender the Premises to CITY broom clean, and, subject to  reasonable wear and tear, in the condition which  TENANT  shall  have  been  required to  maintain the  Premises  under this  Lease  with the  heating, ventilation, plumbing, electrical, lighting, man doors, dock doors, levelers, shelters, seals and bumpers (if any),  windows  and  floors  serving  the  Premises  in  good  operating  condition.  TENANT  shall  repair  all damage to the Premises caused by the installation or  removal of its trade  fixtures and other property of TENANT. TENANT shall restore the Premises to the same condition or better as existed immediately prior to the installation of any item removed.

11. ALTERATIONS AND SIGNS

11.1 Alterations. TENANT shall not make any alterations or construct, install, or allow to be constructed or installed any physical additions, fixtures, or improvements in, about, or to the Premises (“Alterations”) without  the  prior  written  consent of  CITY.  TENANT’s  request  for  consent  shall  include  detailed specifications, floor plans and necessary permits (if applicable) for CITY’s review. TENANT must obtain such  consent  of  CITY  prior  to  applying  for  any  permit  or  approval.  If  CITY  consents  to  TENANT’s proposed Alterations, TENANT shall ensure that the Alterations and the installation or construction of the Alterations comply with all Laws and obtain any and all permits or approvals required for the Alterations under any Laws. All contractors must be licensed in the State of California. CITY may, at any time during the Term of this Lease, notify TENANT that it  requires TENANT to  remove any or all Alterations and restore the Premises to their prior condition at TENANT's sole cost and expense. Any approved Alterations (except  trade  fixtures)  shall  become  the  property  of  CITY  unless  CITY  notifies  TENANT  that  CITY requires TENANT to remove the Alterations at any time before the Expiration Date or sooner termination of  the  Lease.  If  TENANT  fails  to  perform  its  obligations  under  this  Article  11,  CITY  may  perform TENANT’s obligations, and TENANT shall pay CITY for all costs so incurred by CITY as additional Rent after receiving a statement from CITY indicating the amount due.

11.2 Signs. TENANT shall have the right to install any directional, pricing, or other signs on the interior walls of the Premises. TENANT shall not have the right to place signs on the exterior of the Premises or in or on the Common Areas without CITY’s prior written consent. All signs must comply with applicable Laws. CITY may refuse consent to any proposed signage that is in CITY’s opinion too large, deceptive, PGCC 5-6-26
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TENANT shall repair all damage to the Premises resulting from the removal of signs installed by TENANT.

12. ENTRY BY CITY.

Upon reasonable prior written notice, CITY and its employees and agents shall have the right to enter the Premises to inspect the Premises, to show the Premises to prospective tenants or purchasers, post notices of non-responsibility on the Premises, to alter, improve or repair the Premises, or to perform any obligation of CITY or (if CITY so elects) any obligation of TENANT under this Lease. In exercising such entry rights, CITY shall endeavor to minimize, to the extent reasonably practicable, the interference with TENANT’s business, and shall provide TENANT with reasonable advance notice (oral or written) of such entry (except in emergency situations and for scheduled services). For each of the foregoing purposes, CITY shall at all times have and retain a key with which to unlock all of the doors in, upon and about the Premises, excluding TENANT’s vaults and safes (if any), and CITY shall have the means which CITY may deem proper to open said doors in an emergency in order to obtain entry to the Premises.

13. DEFAULT AND REMEDIES.

13.1 TENANT’s Default. The occurrence of any one (1) or more of the following events shall constitute a  “Default”  under  this  Lease  by  TENANT:
a) TENANT’s failure to pay any Rent by the date such amount is due where such failure continues for three  (3)  business  days  after  TENANTs  receipt  of  CITY’s  notice  that  Rent  was  not  received; b) TENANT fails more than twice within a 12‑month period to make any payment of Rent when due, in which case the third failure shall be a noncurable default, provided that in the first two instances in a 12-month period CITY has given TENANT the  required written notice described in 13.1(a) above;
c) The  abandonment  of  the  Premises  by  TENANT;
d) TENANT’s failure to observe and perform any other required provision of this Lease, where such failure  continues  for  thirty  (30)  days  after  written  notice  from  CITY; e) TENANT’s failure to maintain in effect any insurance policy required under Article 9 or failure of any insurance policy carried by TENANT to satisfy any of the terms and conditions of Article 9; f) TENANT’s  making  of  any  general  assignment  for  the  benefit  of  creditors; g) The filing by or against TENANT of a petition to have TENANT adjudged a bankruptcy or of a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of  a  petition  filed  against  TENANT,  the  same  is  dismissed  after  the  filing); h) The appointment of a trustee or receiver to take possession of substantially all of TENANT’s assets located at the Premises or of TENANT’s interest in this Lease, where possession is not restored to TENANT  within  thirty  (30)  days;
i) TENANT’s failure to operate the Premises for 7 or more consecutive days and failure to resume operation within three  calendar  days  of  notice  from CITY  regarding  such  non-operation,  absent PGCC 5-6-26
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13.2 CITY Remedies Upon TENANT Default. In the event of a TENANT Default, CITY, at its option, may  do  one  or  more  of  the  following:
a) Terminate this Lease, enter and take possession of the Premises in accordance with any applicable Laws  governing  such  repossession,  and  remove  TENANT  and  recover  all  damages  caused  by TENANT’s  breach;
b) With or without terminating the Lease, enter and take possession of the Premises in accordance with any  applicable  Laws  governing  such  repossession,  and  remove  TENANT; c) Continue the Lease in effect and recover Rent as it becomes due under California Civil Code Section 1951.4. Acts of maintenance or preservation, efforts to relet the Premises, or the appointment of a receiver  upon  CITY's  initiative  to  protect  its  interest  under  this Lease shall  not  of  themselves constitute  a  termination  of  TENANT's  right  to  possession; d) If CITY terminates the Lease, recover the worth at the time of award of the amount by which the unpaid Rent would have been earned after termination until the time of award exceeds the amount of such Rent loss that TENANT proves could have been reasonably avoided. For purposes of this provision, TENANT agrees that “Rent”  shall mean the  fair market  rental  value  of the  property; e) If CITY terminates the Lease, recover the worth at the time of award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of such Rent loss that TENANT proves could be reasonably avoided For purposes of this provision, TENANT agrees  that  “Rent”  shall  mean  the  fair  market  rental  value  of  the  property; f) To  appoint  a  receiver  to  take  possession  of  the  Premises,  collect  and  apply  Rent,  perform  any obligation  of  TENANT,  and  exercise  any  remedy  of  CITY  under  this  Lease; g) Bring  action  for  recovery  of  all  amounts  due  from  TENANT; h) Perform  any  obligation  of  TENANT  and  charge  TENANT  the  cost  incurred  to  perform  such obligation;
i) Pursue any other remedies available to CITY under this Lease, at law or in equity.

TENANT  acknowledges  that  its  default  of  any  provision  under  this  Lease  will  cause  CITY  to  incur additional costs and expenses, the exact amounts of which are extremely difficult or impractical to fix at the time  of  TENANT’s  amount  due.  TENANT  further  acknowledges  that  the  negotiated  rent,  being  a Percentage Rent of gross sales, makes it difficult or impractical to establish the amount of Rent owed under the  remainder of the Lease in the event this Lease is terminated. Therefore, if any default by TENANT results in CITY exercising the right to terminate this Lease,  TENANT acknowledges that damages related to Rent owed or lost from the time the Lease is terminated until the Expiration Date of this Lease shall be calculated based on the fair market rental value of the property. TENANT agrees that for the purposes of this agreement only,  the  fair  rental market value of the Lease is eleven thousand  ($11,000) per month.

TENANT further agrees that the anticipated fair market value of the Lease in future years is difficult or PGCC 5-6-26
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TENANT agrees that such calculation is reasonable and not punitive.

The  "worth  at the time  of  award"  of the  amounts  referred to in  clauses  (c),  (d),  and  (e)  above  shall  be computed by allowing interest at the Interest Rate. The "worth at the time of award" of the amount referred to in clause  (f) above shall be computed by discounting such amount at the discount  rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

13.3 Costs Upon Default and Litigation.  TENANT  shall  pay  to  CITY  as  additional  Rent  all  the expenses incurred by CITY in connection with any Default by TENANT hereunder or the exercise of any remedy by reason of any Default by TENANT hereunder, including court costs and reasonable attorneys’ fees and expenses.

13.4 CITY Default. If CITY fails to perform an obligation of CITY hereunder on or before (a) thirty (30) days after TENANT gives written notice that such obligation has not been performed when due, or (b) if such obligation cannot be reasonably performed in such thirty (30) day period, then such longer period as is reasonably required so long as CITY is diligently pursuing action to cure such obligation. Until such time, CITY shall not be deemed in Default, and TENANT shall have no remedy against CITY for such failure.

If CITY is deemed in Default, TENANT’s sole remedies are to (i) seek specific performance or injunctive relief,  (ii)  file  suit  against  CITY  seeking  damages  directly  resulting  from  such  default,  or  (iii)  seek  a declaratory judgment. TENANT waives and releases its rights, including its right to make repairs at CITY's expense,  under  California  Civil  Code  sections 1932(1),  1941,  and  1942  or  any  similar  Laws  now  or hereinafter in effect.

14. ABANDONED PROPERTY.

If TENANT leaves any personal property in or about the Premises after the Expiration Date or the earlier termination of this Lease, at CITY’s option, (i) such personal property shall become the sole property of CITY without any liability to account for the proceeds from CITY’s disposition, if any, of the property, or (ii) CITY may remove, store, destroy, sell, discard or otherwise dispose of the personal property. In such event, TENANT shall reimburse CITY for all expenses incurred by CITY in such disposition. TENANT hereby waives its rights under Sections 1980 to 1993.09 of the California Civil Code and agrees that CITY has no obligations to TENANT thereunder, including any obligation to pay TENANT any proceeds from any  sale  thereof  or  follow  the  noticing  process  described  therein,  with  respect  to  TENANT’s  personal property left at the Premises after the Expiration Date or earlier termination of this Lease. The provisions of this Section shall survive the Expiration Date or earlier termination of this Lease.

15. PARKING.

During the Term, TENANT shall be entitled to the non-exclusive use of the number and type of parking spaces specified in Section 1.13 of the Basic Lease Provisions within the parking areas of the Common Areas as designated by CITY  from time to time. CITY shall at all times have the  right to establish and modify the configuration of the parking areas of the Common Areas, including changing the type or number of parking spaces.  In addition, CITY may, in its discretion, designate any unreserved parking spaces as reserved  parking  for  other tenants  or CITY  staff members.  TENANT  shall  not  use  any  parking  spaces specifically assigned by CITY to other tenants, if any, or for such other uses such as visitor, handicapped or  other  special  purpose  parking. While TENANT is  entitled to  use the  above-described  parking  spots, TENANT acknowledges that it shares these parking spaces with the Golf Course and that CITY does not guarantee the availability of any parking.

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16. CASUALTY.

16.1 CITY’s Rights and Obligations. If the Premises is damaged by fire or other casualty not caused by the  negligence  or willful misconduct  of TENANT  (“Casualty”) to an extent  not exceeding twenty-five percent (25%) of the full replacement cost thereof, and CITY’s contractor estimates in writing delivered to the parties that the damage thereto is such that the Premises may be repaired, reconstructed or restored to substantially its condition immediately prior to such Casualty within one hundred twenty (120) days from the date of such Casualty, and CITY will receive insurance proceeds sufficient to cover the costs of such repairs,  reconstruction and  restoration  (including proceeds  from TENANT and/or TENANT’s insurance which TENANT is required to deliver to CITY pursuant to this Lease), then CITY shall commence and proceed diligently with the work of repair, reconstruction and restoration and this Lease shall continue in full force and effect. If, however, the Premises is damaged to an extent exceeding twenty-five percent (25%) of the full replacement cost thereof, or CITY’s contractor estimates that such work of repair, reconstruction and  restoration  will  require  longer  than  one  hundred  twenty  (120)  days  to  complete  from  the  date  of Casualty,  or CITY will  not  receive insurance  proceeds  (and/or  proceeds  from TENANT, as applicable) sufficient to cover the costs of such repairs, reconstruction and restoration, then CITY may elect to either:
(i) repair, reconstruct and restore the portion of the Premises damaged by such Casualty, in which case this Lease shall continue in full force and effect; or (ii) terminate this Lease effective as of the date which is thirty (30) days after TENANT’s receipt of CITY’s election to so terminate. Under any of the conditions of this Section, CITY shall give written notice to TENANT of its intention to repair or terminate within the later of sixty (60) days after the occurrence of such Casualty, or fifteen (15) days after CITY’s receipt of the estimate from CITY’s contractor or, as applicable, thirty (30) days after CITY receives approval from CITY’s Mortgagee to rebuild.

16.2 TENANT’s Termination Right. In the event of any damage or destruction which (i) is not caused by TENANT or any of the TENANT Parties, (ii) materially affects TENANT’s use and enjoyment of the Premises and (iii) TENANT’s possession and use of the Premises cannot be restored by CITY within one hundred twenty (120) days for reasons other than delays caused by TENANT or any of TENANT’s Parties, TENANT shall have the right to terminate this Lease upon written notice to CITY given within thirty (30) days after the expiration of said 120-day period. TENANT waives the provisions of Sections 1932(2) and 1933(4) of the California Civil Code, or any other similar Law now or hereinafter in effect.

17. CONDEMNATION.

If any legally constituted authority condemns the Premises or if a portion of the Premises greater than or equal to 25% is condemned or the portion to be condemned includes a majority of the kitchen area, this Lease shall terminate on the date the public authority takes possession and TENANT’s obligation to pay Percentage Rent shall cease on such date. All compensation awarded for such taking of the fee and leasehold shall belong to and be the property of CITY without any deduction therefrom for any present or future estate of  TENANT  and  TENANT  hereby  assigns to  CITY  all its  right, title,  and interest to  any  such  award.

However, TENANT shall have the right to recover from the condemning authority, but not from CITY, such compensation as may be awarded to TENANT for goodwill lost by TENANT's business conducted on the Premises,  for moving and  relocation expenses, and  for depreciation to and  removal of TENANT's trade fixtures or personal property on the Premises.

18. NOTICES. Notices required under this Agreement shall be delivered personally or by nationally recognized  overnight  courier  to  CITY  and  TENANT  at  the  addresses  listed  below,  unless  CITY  or TENANT receives proper notice that the other party wishes to change the address listed below.

FOR CITY: FOR TENANT:

Attn: City Manager Attn: Jerry Regester or Gail Grammatico PGCC 5-6-26
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300 Forest Avenue
Fortunate Fork LLC
4000 Rio Road, Suite 28
Pacific Grove, CA 93950 Carmel, CA 93923
Address Address
(831) 648-3101 831-269-9097 or 831-920-8217
Phone Phone

19. ASSIGNMENT AND SUBLETTING.

19.1 Consent Required. TENANT may not assign this Lease or sublet the Premises in whole or in part without CITY’s prior written consent. An assignment of this Lease or subletting of the Premises in whole or in part without CITY’s prior written consent is voidable by CITY in CITY’s sole and absolute discretion.

19.2 Change in Control Is An Assignment. If TENANT is a partnership or a limited liability company, any cumulative transfer of more than fifty percent (50%) of the partnership or the limited liability company membership  interests,  as  applicable,  shall  constitute  an  assignment  and  shall  require  CITY's  consent.

Without limiting the foregoing, it shall constitute an assignment requiring CITY's consent if: (a) TENANT is a limited partnership and there is a transfer of a general partner interest; or (b) if TENANT is a limited liability company and there is a transfer of any managing membership interest. If TENANT is a corporation, any change in a controlling interest of the voting stock of the corporation is an assignment requiring CITY’s consent.

19.3 Request for Consent. If TENANT seeks to assign this Lease or sublet any part of the Premises, then at least thirty (30) days prior to the proposed effective date of the proposed assignment or sublease, TENANT shall deliver to CITY written notice setting forth the terms and conditions of the assignment or sublease and the identity  of the  proposed assignee  or  subtenant. CITY will then  notify TENANT  of its election  to  do  one  of  the  following:  (i) request  additional  information  about  the  proposed  assignee  or subtenant to  evaluate the  proposal;  (ii)  consent to the  proposed  assignment  or  sublease  subject to  such reasonable conditions as CITY may impose in providing such consent; (iii) refuse such consent, in CITY’s reasonable discretion; or (iv) terminate this Lease as to all or such portion of the Premises which is proposed to be sublet or assigned and recapture all or such portion of the Premises for reletting by CITY.

19.4 TENANT Primarily Liable. If TENANT assigns this Lease or sublets any part of the Premises, TENANT will remain primarily liable for all of TENANT’s obligations under this Lease.

20. RELOCATION WAIVER
TENANT  fully  releases  and  discharges  CITY  from  all  and  any  manner  of  rights,  demands,  liabilities, obligations, claims, or cause of actions, in law or equity, of any kind or nature, known or unknown, now existing or hereinafter arising, which arise from or relate in any manner to the relocation of TENANT’s business operations, or the relocation of any person(s), business(es), or other occupant(s) located on within, on, or about, the Premises following the full or partial termination or expiration of TENANT's leasehold interest in the Premises (collectively, "Relocation Claims"), including waiver and release of any relocation rights  under  Government  Code  sections  7260  et  seq.  ("Relocation Assistance Law").  TENANT acknowledges and agrees that the release and waiver set forth in this Article 20 is material consideration for CITY’s agreement to this Lease, and that, but for this release and waiver, CITY would not have entered into this Lease. By releasing and forever discharging the Relocation Claims, TENANT expressly waives any rights under California Civil Code section 1542, which provides:

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21. GENERAL PROVISIONS.

21.1 Governing Law. This Lease shall be governed by, and construed pursuant to, the laws of the State of California. Venue for any litigation between the parties hereto concerning this Lease or the occupancy of the Premises shall be initiated in Monterey County, California.

21.2 City Consent. Unless the context or Law requires otherwise or this Lease explicitly states otherwise, the City Manager shall have the authority to approve any consent TENANT is required to obtain from CITY under this Lease.

21.3 No Presumption Against Drafter. There shall be no presumption against CITY on the basis that the CITY drafted the Lease, and the Parties agree that the Lease was jointly prepared by both Parties.

21.4 Independent Covenants.  TENANT's  covenants to  pay Rent  and  other  sums  due  hereunder  are independent  of  CITY's  covenants  hereunder  and  TENANT  shall  have  no  right  to  withhold  any  such payments on account of any alleged failure by CITY to perform or comply with any of CITY's covenants.

21.5 Calculation of Time for Performance; Extension for Performance Due on Non-Business Days.

Days will be counted by excluding the first day and including the last day. If the last day is a Saturday, Sunday,  or  legal  holiday  as  described  in California Government  Code  §§6700–6701,  then  it  will  be excluded. Any  act  required  by this Lease to  be  performed  by  a  certain  day will  be timely  performed if completed before 5 p.m. Pacific time on that date. If the day for performance of any obligation under this Lease is a Saturday, Sunday, or legal holiday, then the time for performance of that obligation is extended to  5  p.m. local time  on the  first  following  date that is  not a Saturday, Sunday,  or legal  holiday. Unless otherwise expressly  provided in this Lease, all  periods  of time  referenced in this Lease will include all calendar days. For purposes of this Lease, the term “business day” will mean any calendar day other than a Saturday, Sunday, or legal holiday as described in Government Code §§6700–6701. Section 13.1(i) is not subject to this provision, and timelines thereunder shall be calculated by calendar days regardless of the existence of a Saturday, Sunday, or legal holiday occurring during the relevant timeframe.

21.6 Successors and Assigns. Subject to the provisions of Article 19, above, and except as otherwise provided in this Lease, all of the covenants, conditions and provisions of this Lease shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, personal representatives and permitted successors and assigns; provided, however, no options or other rights which are expressly made personal to the  original TENANT  hereunder  or in any Exhibit attached  hereto  shall  be assignable to  or exercisable by anyone other than the original TENANT under this Lease.

21.7 No Merger. The voluntary or other surrender of this Lease by TENANT or a mutual termination thereof shall not work as a merger and shall, at the option of CITY, either (i) terminate all or any existing subleases, or (ii) operate as an assignment to CITY of TENANT’s interest under any or all such subleases.

21.8 Memorandum of Lease. CITY may elect to have either this Lease or a short form memorandum hereof  recorded  pursuant to the  requirements  of California Government Code  section 37393. TENANT shall cooperate with CITY in executing and acknowledging any such memorandum of lease.

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21.9 Waiver. Any waiver of any terms and conditions of this Lease must be in writing and signed by CITY and TENANT. A waiver of any of the terms and conditions of this Lease shall not be construed as a waiver of any other terms or conditions in this Lease. A failure to enforce a term of this Lease shall not be construed as a waiver of such term or condition.

21.10 Headings. The headings are for convenience only and shall not be used to interpret the terms of this Agreement.

21.11 Time of the Essence. Time is of the essence with respect to performance of every provision of this Lease in which time or performance is a factor.

21.12 Payments and Notices. All Rent and other sums payable by TENANT to CITY hereunder shall be paid to CITY at the address designated in the Basic Lease Provisions, or to such other persons and/or at such other places as CITY may hereafter designate in writing.

21.13 Prior Agreements; Amendments. This Lease, including the Summary and all Exhibits attached hereto, contains all of the covenants, provisions, agreements, conditions and understandings between CITY and TENANT concerning the Premises and any other matter covered or mentioned in this Lease, and no prior agreement or understanding, oral or written, express or implied, pertaining to the Premises or any such other matter shall be effective for any purpose. No provision of this Lease may be amended or added to except by an agreement in writing signed by the parties hereto or their respective successors in interest. The parties acknowledge that all prior agreements, representations and negotiations are deemed superseded by the execution of this Lease to the extent they are not expressly incorporated herein.

21.14 Accord and Satisfaction. No payment by TENANT or receipt by CITY of a lesser amount than the Rent  payment  herein  stipulated  shall  be  deemed to  be  other than  on account  of the Rent,  nor  shall any endorsement  or  statement  on  any  check  or  any letter  accompanying  any  check  or  payment  as  Rent  be deemed  an  accord  and  satisfaction,  and CITY may  accept  such  check  or  payment  without  prejudice to CITY’s  right  to  recover  the  balance  of  such  Rent  or  pursue  any  other  remedy  provided  in  this  Lease.

TENANT agrees that each of the foregoing covenants and agreements shall be applicable to any covenant or agreement either expressly contained in this Lease or imposed by any statute or at common law.

21.15 Force Majeure.  If  either  party  hereto  shall  be  delayed  or  hindered  in  or  prevented  from  the performance  of  any  act  required  hereunder  by  reason  of  strikes,  lock-outs,  labor  troubles,  inability  to procure materials,  failure  of  power,  governmental moratorium  or  other  governmental  action  or inaction (including, without limitation, failure, refusal or delay in issuing permits, approvals and/or authorizations), injunction  or  court  order,  riots,  insurrection,  war,  terrorism,  bioterrorism,  fire,  earthquake,  inclement weather including rain, flood or other natural disaster or other reason of a like nature not the fault of the party delaying in performing work or doing acts required under the terms of this Lease (but excluding delays due to financial inability) (herein collectively, “Force Majeure Delay(s)”), then performance of such act shall be excused for the period of such Force Majeure Delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. The provisions of this Section shall not apply to nor operate to excuse TENANT from the payment of Rent, or any other payments strictly in accordance with the terms of this Lease.

21.16 Signatures; Counterparts. TENANT shall sign this Lease prior to CITY executing this Lease. This Lease may be executed in any number of counterparts, each of which shall be deemed an original binding on the parties hereto. The exchange of copies of this Lease and of signature pages by electronic means, including PDF e-mail or shall constitute effective execution and delivery of this Lease as to the Parties and may be used in lieu of the original Lease for all purposes. Signatures of the Parties transmitted by electronic means, including PDF, shall be deemed to be their original signatures for all purposes. Neither Party shall PGCC 5-6-26
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21.17 Authority. Any individual  executing this Lease  on  behalf  of CITY  or TENANT  represents  and warrants hereby that he or she has the requisite authority to enter into this Lease on behalf of such party and bind the party to the terms and conditions of this Lease.

21.18 Joint and Several Liability. If more than one person or entity executes this Lease as TENANT: (a) each  of  them  is  and  shall  be  jointly  and  severally  liable  for  the  covenants,  conditions,  provisions  and agreements of this Lease to be kept, observed and performed by TENANT; and (b) the act or signature of, or notice from or to, any one or more of them with respect to this Lease shall be binding upon each and all of the persons and entities executing this Lease as TENANT with the same force and effect as if each and all of them had so acted or signed, or given or received such notice.

21.19 Waste. TENANT shall not commit, or allow to be committed, any waste, damage, or nuisance on the Premises.

21.20 Liens. TENANT shall keep the Premises  free and clear  from any liens arising out of any work performed, material furnished, or obligation incurred by TENANT.

21.21 Claims. TENANT shall notify CITY, in writing, by the end of the next non-holiday weekday, of any occurrences at the Premises which involve any injury to person or property including a full description of the facts, circumstances, nature and results of the occurrence; names and addresses of persons involved; photographs of any injuries or damage; and a map, diagram or plat of the place of the occurrence. TENANT will promptly provide CITY with copies of any claims for damage of any sort, including complaints in any court actions involving such claims. Likewise, if CITY is involved in any claims that affect the Premises or affect the TENANT's use of the Premises, CITY shall promptly notify TENANT in writing.

This space is left blank, intentionally.

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CITY OF PACIFIC GROVE TENANT
By: ____________________________
Matthew Mogensen, City Manager
____________________________
_______________
Date:
____________________________
By: ____________________________
____________
Approved as to Form
By: ____________________________
City Attorney
Date:
____________________________
Date: ____________________________
Approved as to
Fiscal Provisions1
By: ____________________________
(Signature of Secretary, Asst. Secretary,
CFO, or Asst. Treasurer)
By: ____________________________
Finance ____________________________
Date:
____________________________
Date: ____________________________
City Lease Number: ______________________________.
1 Approval by Finance necessary only if financial questions or issues raised in the City’s approval of agreement.

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EXHIBIT A

PROPERTY DESCRIPTION
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EXHIBIT B

RULES AND REGULATIONS

1. TENANT shall not obstruct any sidewalks, halls, passages, exits, entrances, elevators, escalators or stairways of the Building. The halls, passages, exits, and entrances are not for the general public, and CITY shall in all cases retain the right to control and prevent access thereto of all persons whose presence in the judgment of CITY would be prejudicial to the safety, character, reputation and interests of the Building and its tenants provided, that nothing herein contained shall be construed to prevent such access to persons with whom any tenant normally deals in the ordinary course of its business, unless such persons are engaged in illegal activities. TENANT and no employee, invitee, agent, licensee or contractor of TENANT shall go upon or be entitled to use any portion of the roof of the Building unless in connection with the chimney sweep work or otherwise authorized by the City.

2. CITY will furnish TENANT, free of charge, two keys to each door lock in the Premises. CITY may impose a reasonable charge for any additional keys. TENANT may not make or have made additional keys, and TENANT shall not alter any lock or install a new additional lock or bolt on any door or window of its Premises. TENANT, upon termination of its tenancy, shall deliver to CITY the keys of all doors which have been furnished to, or otherwise procured by TENANT, and, in the event of loss of any keys, shall pay CITY the cost of replacing the same or of changing the lock or locks opened by such lost key if CITY shall deem it necessary to make such change.

3. IT cables and equipment, telephone lines and security systems shall not be installed in the Premises except with the approval and under the direction of CITY.

4. CITY reserves the right to exclude from the Building between the hours of 7:00 p.m. and 6:00 a.m., or such other hours as may be established from time to time by CITY, and on legal holidays, any person unless that person is known to the person or employee in charge of the Building and has a pass or is properly identified. CITY shall not be liable  for  damages  for  any  error  with  regard to the  admission to  or  exclusion  from the  Building  of  any  person.

TENANT shall be responsible for all persons for whom it requests passes and shall be liable to CITY for all acts of such persons.

5. TENANT shall close and lock all doors of its Premises and entirely shut off all water faucets or other water apparatus, and, except with regard to TENANT’s computers and other equipment which reasonably require electricity on a 24-hour basis, all electricity, gas or air outlets before TENANT and its employees leave the Premises. TENANT shall be responsible for any damage or injuries sustained by other TENANTs or occupants of the Building or by CITY for noncompliance with this rule.

6. The bathrooms, toilets, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed.

7. TENANT shall not sell, or permit the sale at retail, of newspapers, magazines, periodicals, theater tickets, or any other goods or merchandise to the general public in or on the Premises.

8. TENANT shall not install any radio or television antenna, loudspeaker or other device on the roof or exterior walls of the Building. TENANT shall not interfere with radio or television broadcasting or reception from or in the Building or elsewhere.

9. Except as expressly  permitted in the Lease, TENANT  shall  not mark,  drive  nails,  screw  or  drill into the partitions, window mullions, woodwork or plaster, or in any way deface the Premises or any part thereof, except to install normal wall hangings. TENANT shall repair any damage resulting from noncompliance under this rule.

10. Canvassing, soliciting and distribution of handbills or any other written material, and peddling in and around the Project or the Buildings are expressly prohibited, and each TENANT shall cooperate to prevent same.

11. CITY  reserves the  right to exclude or expel  from the Buildings any person who, in CITY’s judgment, is intoxicated or under the influence of liquor or drugs or who is in violation of any of the Rules and Regulations of the Project.

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12. All garbage and refuse disposal shall be made in accordance with directions reasonably issued from time to time by CITY.

13. TENANT shall not use in any space any hand trucks except those equipped with rubber tires and side guards, or such other material-handling equipment as CITY may approve.

14. TENANT agrees that it shall comply with all fire and security regulations that may be issued from time to time  by  CITY,  and  TENANT  also  shall  provide  CITY  with  the  name  of  a  designated  responsible  employee  to represent TENANT in all matters pertaining to such fire or security regulations. TENANT shall cooperate fully with CITY in all matters concerning fire and other emergency procedures.

15. TENANT assumes any and all responsibility for protecting its Premises from theft, robbery and pilferage.

Such responsibility shall include keeping doors locked and other means of entry to the Premises closed.

16. CITY may waive any one or more of these Rules and Regulations for the benefit of TENANT or any other TENANT, but no such waiver by CITY shall be construed as a waiver of such Rules and Regulations in favor of TENANT or any other such TENANT, nor prevent CITY from thereafter enforcing any such Rules and Regulations against any and all of the TENANTs in the Building.

17. These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of any lease of premises in the Buildings.

18. CITY reserves the right to make such other and reasonable Rules and Regulations as, in its judgment, may from time to time be needed for safety, security, care and cleanliness of the Buildings and for the preservation of good order therein. TENANT agrees to abide by all such Rules and Regulations hereinabove stated and any additional rules and regulations which are adopted.

19. TENANT shall be responsible for the observance of all of the foregoing rules by TENANT’s employees, agents, clients, customers, invitees or guests.

20. TENANT shall not without CITY’s consent, which may be given or withheld in CITY’s sole and absolute discretion, receive, store, discharge, or transport firearms, ammunition, or weapons or explosives of any kind or nature at, on or from the Premises or the Buildings.

21. EXCEPT WITH THE PRIOR WRITTEN PERMISSION OF CITY, NO OVERNIGHT PARKING IS PERMITTED AT THE PREMISES. A DAILY FEE OF ($100) SHALL BE CHARGED AS RENT FOR EACH VIOLATION.

22. SMOKING IS NOT PERMITTED ON THE PREMISES OR COMMON AREAS EXCEPT IN SPECIFIC AREAS DESIGNATED BY CITY. A FEE OF ($50) SHALL BE CHARGED AS RENT FOR EACH VIOLATION.

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