TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Christopher Burton, Secretary
SUBJECT: See Below DATE: September 8, 2026
CO
UNCIL DISTRICT: 3
SUBJ
ECT: CP26-007 & ER26-061 - Conditional Use Permit and Determination of Public Convenience or Necessity for Certain Real Property Located at 184 South Market Street, Suite 120 (Sakura Market)
RECO
MMENDATION
The P
lanning Commission voted 10-0-1 to recommend the City Council take the following actions:
A
dopt a resolution approving, subject to conditions, a Conditional Use Permit and Determination of Public Convenience or Necessity to allow the off-sale of alcohol (Type 21 – full range of alcoholic beverages) at an existing approximately 7,382-square-foot specialty supermarket (Sakura Market) on an approximately 0.9-gross-acre site.
SUM
MARY AND OUTCOME
I
f the City Council approves the actions listed above as recommended by the Planning Commission, the applicant will be able to sell a full range of alcoholic beverages for off- site consumption at the subject specialty supermarket.
BA
CKGROUND
O
n August 26, 2026, the Planning Commission held a Public Hearing to consider the CEQA exemption, Conditional Use Permit, and Determination of Public Convenience or Necessity for the application filed by Sakura Marketplace LLC (Applicant) and 170 South Market LLC (Owner). At the request of a member of the public, who ultimately spoke in support, the project was moved from the Consent Calendar to the Public Hearing portion of the agenda. During the public hearing, Commissioner Oliverio made a motion to approve the staff recommendation, and Commissioner Bickford seconded the motion. The motion passed unanimously with a vote of 10-0-1; Commissioner Bhandal was absent.
COUNCIL AGENDA: 9/29/26
FILE: 26-1 006
ITEM: 10.1(a)
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: CP26-007 & ER26-061- Conditional Use Permit and Determination of Public Convenience or Necessity for Certain Real Property Located at 184 South Market Street, Suite 120 (Sakura Market)
ANALYSIS
Analysis of the proposed CEQA clearance, Conditional Use Permit and Determination of Public Convenience or Necessity is contained in the attached Planning Commission Staff Report dated August 26, 2026 (Attachment).
EVALUATION AND FOLLOW-UP
The City Council is the final decision-making body for this Conditional Use Permit and Determination of Public Convenience and Necessity.
If the City Council accepts the Planning Commission’s recommendation to approve the Conditional Use Permit and Determination of Public Convenience or Necessity, then the market can sell a full range of alcoholic beverages for off-premises consumption.
If the City Council denies the Planning Commission’s recommendation, then the market cannot sell a full range of alcoholic beverages for off-premises consumption.
COORDINATION
The preparation of this memorandum has been coordinated with the City Attorney’s Office.
PUBLIC OUTREACH
Staff followed City Council Policy 6-30: Public Outreach Policy 1 to inform the public of
the proposed project. On-site signs have been posted on the project frontage since June 20, 2026. A notice of the public hearing was distributed to the owners and tenants of all properties located within 500 feet of the project site and posted on the City website. The staff report and draft Resolution were posted on the Planning Commission Agenda for the August 26, 2026, Planning Commission meeting. Staff has been available to respond to questions from the public and no comments have been received to date. This memorandum will be posted on the City Council Agenda website for the September 29, 2026 City Council meeting.
1 https://www.sanjoseca.gov/home/showpublisheddocument/12813/636669915135130000
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: CP26-007 & ER26-061- Conditional Use Permit and Determination of Public Convenience or Necessity for Certain Real Property Located at 184 South Market Street, Suite 120 (Sakura Market)
BOARD, COMMISSION, COMMITTEE RECOMMENDATION AND INPUT
The pr
oject was heard during the Public Hearing agenda of the August 26, 2026 Planning Commission meeting, after being pulled from the consent calendar, which proceeded as follows:
S
taff Presentation
Planning staff provided an oral presentation of the proposed project, including an overview of the project, the Police Department’s neutral position, and the required findings for a Conditional Use Permit for off-sale of alcohol and Determination of Public Convenience or Necessity.
Pu
blic Hearing
Chair Cantrell opened the public comment portion of the agenda.
One member of the public spoke via Zoom in support, stating that there was no reason to deny or restrict the off-sale of alcohol at this downtown specialty supermarket. He stated that allowing customers to purchase alcoholic beverages for off-site consumption while shopping for groceries at the market would provide greater convenience to downtown shoppers and contribute positively to the local economy.
A
pplicant Presentation
The applicant’s representative, Lili Damaso from Liquor License Brokers.com, provided an introduction of Sakura Market and stated that the off-sale of alcohol would be incidental to the market, as it would occupy only a small portion of the sales floor. She emphasized that there is currently only one active Type 20 establishment within a 1,000-foot radius of the site and that, if approved, Sakura Market would be the only active Type 21 establishment within this radius. She also stated that the proposed off- sale alcohol hours would align with the market’s operating hours, which are 10:00 a.m. to 9:00 p.m. daily. She concluded that offering alcoholic beverages for off-site consumption would provide added convenience to market customers. Therefore, she respectfully requested that the Commission recommend approval of the project to the City Council.
Co
mmissioner Discussion
There was no discussion between commissioners. Commissioner Oliverio made a motion to approve the staff recommendation. Commissioner Bickford seconded the motion. The motion passed unanimously with a vote of 10-0-1 (Commissioner Bhandal absent).
HONORABLE MAYOR AND CITY COUNCIL
September 8, 2026
Subject: CP26-007 & ER26-061- Conditional Use Permit and Determination of Public Convenience or Necessity for Certain Real Property Located at 184 South Market Street, Suite 120 (Sakura Market)
CEQA
If approved, the project would be exempt from the California Environmental Quality Act (CEQA) under Section 15301 for Existing Facilities, since the project does not involve any structural modifications or expansion to the footprint of the existing building.
If denied, the project would be exempt per Section 15270 for projects which are denied.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
CHRISTOPHER BURTON
Secretary, Planning Commission
For questions on the permit appeal, please contact John Tu, Division Manager, Planning, Building, and Code Enforcement at [email protected] or (408) 535- 6818.
ATTACHMENT:
Planning Commission Staff Report August 26, 2026
PLANNING COMMISSION AGENDA: 08-26-26
ITEM: 4.d.
TO: PLANNING COMMISSION FROM: Christopher Burton, Director of the Planning, Building, and
Code Enforcement Department
SUBJECT: File Nos. CP26-007 & ER26-061 DATE: August 26, 2026 ______________
COUNCIL DISTRICT: 3
Type of Permit Conditional Use Permit
Demolition N/A
Proposed Land Uses Alcohol, off-sale (ABC Type 21-Full Range of Alcoholic Beverages)
New Residential Units N/A
New Square Footage N/A
Tree Removals N/A
Additional Policy Review Items Determination of Public Convenience or Necessity Project Planner Angela Wang
CEQA Clearance Exemption per CEQA Guidelines Section 15301(a) for Existing Facilities
CEQA Planner Angela Wang
RECOMMENDATION
Staff recommends that the Planning Commission make a recommendation to the City Council to:
1. Consider the exemption in accordance with the California Environmental Quality Act (CEQA) Guidelines Section 15301(a) for Existing Facilities; and
2. Adopt a resolution approving, subject to conditions, a Conditional Use Permit and Determination of Public Convenience or Necessity to allow the off-sale of alcohol (Type 21 – full range of alcoholic beverages) at an existing approximately 7,382-square-foot specialty supermarket (Sakura Market) on an approximately 0.9-gross-acre site.
ATTACHMENT: Planning Commission Staff Report August 26, 2026
File No. CP26-007 & ER26-061
PROPERTY INFORMATION
Location Southwest corner of South 1st Street and Paseo de San Antonio Assessor Parcel No. 259-56-003
General Plan Downtown
Growth Area Downtown
Zoning Downtown Commercial
Historic Resource No
Annexation Date 3/26/1850, Original City
Council District 3
Acreage Tenant space (APN 259-56-003): +/-0.16 acres
Site: +/- 0.9 gross acres
Proposed Density N/A
PROJECT BACKGROUND
As shown on the attached Aerial Map (Exhibit A), the subject property is located on the southwest corner of South 1st Street and Paseo de San Antonio (184 South Market Street, STE 120; APN 259-56-003). It is an approximately 7,382-square-foot tenant space on the ground floor of an existing 13-story building, formerly the Fairmont Hotel and now San Jose State University’s Spartan Village on the Paseo (student housing), on an approximately 0.9- acre site in Downtown. This 13-story building contains a lobby for the Spartan Village facing the paseo, multiple commercial tenant spaces on the ground floor, and student housing on the upper floors. The Sakura Marketplace, a specialty supermarket (referred to as the "market" in this report), currently occupies the subject tenant space at the street corner.
The site is surrounded by two attached mixed-use buildings consisting of ground-floor commercial space and upper-floor residential/office to the east across South 1st Street, a hotel to the north, Plaza de Cesar Chavez (public park) to the west across South Market Street, and a hotel and a senior living building to the south. The site is within approximately 35 feet of the San Antonio Light Rail Station, and bus stops serving VTA Bus Routes Nos. 66, 68, and 568. The vehicular access to the site is from a driveway at South 1st Street, while the pedestrian access to the market is provided from the South 1st Street sidewalk and Paseo de San Antonio.
SURROUNDING USES
General Plan Zoning District Existing Use
West Open Space, Parklands
and Habitat Open Space Public Park (Plaza de
Cesar Charvez)
East Downtown Downtown Commercial Commercial and Multi- Family Residence
ATTACHMENT: Planning Commission Staff Report August 26, 2026
File No. CP26-007 & ER26-061
On April 21, 2026, Liliger Damaso with Liquor License Brokers on behalf of the applicant, Chingying Chen with Sakura Marketplace LLC, and the property owner, Stephanie Sheng with 170 South Market LLC, filed an application for a Conditional Use Permit and Determination of Public Convenience or Necessity to allow the off-sale of alcohol (Type 21 – full range of alcoholic beverages) at an existing approximately 7,328-square-foot specialty supermarket (Sakura Marketplace) located at the southwest corner of South 1st Street and Paseo de San Antonio in downtown. The supermarket offers a broad selection of imported Japanese grocery products, fresh produce, frozen foods, specialty snacks, beverages, household goods, and prepared foods. The supermarket also includes an ancillary bona fide restaurant featuring sushi, rice bowls, ramen, Japanese entrees, and other freshly prepared menu items with a beer and wine bar for on-site consumption in conjunction with bona fide meal service. The on- sale of beer and wine in conjunction with bona fide meal service is a permitted use and therefore does not require a Conditional Use Permit.
Alcoholic beverages for off-site consumption would take up approximately 107 square feet (3.2 percent) of the approximately 3,391-square-foot sales floor of the supermarket (see Exhibit C).
The supermarket is open from 10:00 a.m. to 9:00 p.m. daily, and the alcohol off-sale hours align with the store hours.
The subject site is located within Census Tract 5008.00. Based on the California ABC License Report and San José Police Department Memorandum dated May 15, 2026 (See Exhibit D), the number of off-sale locations authorized in this census tract is limited to two. The California ABC License Report and the Police Memo both show that there are eight active off-sale licenses within the census tract. The San José Police Department Memorandum also states that the project site is within a police beat that has a high crime rate (defined as 20 percent above the City average). Therefore, the site is considered unduly concentrated for off-sale establishments, and a Determination of Public Convenience or Necessity is required.
The Police Department is neutral to the off-sale of alcohol with a Type-21 license at the subject site.
PROJECT ANALYSIS SUMMARY
Below is a summary of the required analysis for the General Plan and Zoning Policies. For the comprehensive analysis, reference the attached Exhibit E: Draft Resolution.
Envision San José 2040 General Plan Conformance
The project is consistent with the Envision San José 2040 General Plan designation of Downtown as shown on the attached General Plan map (Exhibit F). This designation supports uses such as office, retail, service, residential, medical office, hospital, and entertainment uses. All development within this designation is intended to enhance the complete community in Downtown, support pedestrian and bicycle circulation, and increase transit ridership.
North Downtown Downtown Commercial Hotel
South Downtown Downtown Commercial Hotel & Multi-Family Residence for Seniors
ATTACHMENT: Planning Commission Staff Report August 26, 2026
File No. CP26-007 & ER26-061
The project is consistent with General Plan policies related to off-sale alcohol (LU-5.10), business growth and retention (IE-2.6), retention of commercial lands (LU-4.1), and promotion of neighborhood serving commercial uses (LU-5.1). The project would retain existing commercial lands, retain jobs, and create an additional revenue-generating opportunity associated with the existing supermarket. The market currently offers a broad selection of imported Japanese grocery products, fresh produce, frozen foods, specialty snacks, beverages, household goods, and prepared foods. As a result, the project would improve customer convenience by offering alcoholic beverages for off-site consumption.
Zoning Ordinance Conformance
The project is consistent with the DC Downtown Commercial Zoning District as shown on the Zoning District Map (Exhibit G), including allowed land uses, development standards, and parking standards. Pursuant to Table 20-140 in Section 20.70.100 of the San Jose Municipal Code, alcohol, off-sale -full range of alcoholic beverages, requires a Conditional Use Permit within the DC Zoning District. There are no proposed exterior modifications to the existing building or other site changes.
PROJECT FINDINGS SUMMARY
The Project meets all of the findings for the issuance of a Conditional Use Permit pursuant to Section 20.100.720 of the Zoning Code as analyzed in the attached Exhibit E: Draft Resolution. However, the project does not meet all of the findings related to Off-Sale Alcohol and issuance of a Determination of Public Convenience or Necessity for the Planning Commission to make for approval as detailed below.
Off-Sale Alcohol Findings
Pursuant to Section 20.80.900.C. where a Conditional Use Permit application requesting the off-premises sale of alcoholic beverages also would require a Determination of Public Convenience and Necessity under the provisions of Chapter 6.84 of Title 6 of this Code, and the Planning Commission cannot make the required findings under Section 6.84.030 of Chapter 6.84 of Title 6 of this Code, the Planning Commission shall make a report and recommendation to the City Council on said conditional use permit application. In this instance, the City Council shall be the initial and final decision-making body on said Conditional Use Permit application.
Analysis: The project site is located within Census Tract 5008.00. Based on the California ABC License Report and the attached Police Memo dated May 15, 2026, the number of off-sale locations allocated for this census tract is two. The California ABC License Report and the Police Memo both show that there are eight active off-sale licenses within the same census tract. The Police Memo states that the project site is within a police beat that has a high crime rate (defined as 20 percent above the City average). Therefore, the site is considered unduly concentrated for off-sale establishments, and a Determination of Public Convenience or Necessity is required. The Police Department is neutral to the off-sale of alcohol with a Type- 21 license at the subject site.
ATTACHMENT: Planning Commission Staff Report August 26, 2026
File No. CP26-007 & ER26-061
Determination of Public Convenience or Necessity Findings Pursuant to Section 6.84.030.C., the Planning Commission serves as the recommending body to the City Council for this project. As the project does not satisfy one of the required findings for approval, a determination of overriding public benefit or benefits requires a decision by the City Council.
The below findings cannot be made:
B.3. The proposed use would not be located within five hundred feet of a school, day care center, public park, social services agency, or residential care or service facility, or within one hundred fifty feet of a residence.
Analysis: Finding B.3 for the Determination of Public Convenience or Necessity cannot be made by the Planning Commission for the off-sale of distilled spirits because the subject site is within 500 feet of a public park and within 150 feet of two buildings containing residences.
Since the project does not meet this finding, the City Council must evaluate whether overriding public benefits exist.
Although the project site is within a police beat that has a high crime rate, the Police Department is neutral to the off-sale of alcohol with a Type-21 license at the subject site. The Operations Plan includes provisions for trash and graffiti removal, security and safety, and employee training for alcohol sales. Therefore, off-sale of alcohol would not present a significant adverse impact on public health or safety.
The off-sale of alcohol would be incidental to the market. The inclusion of the off-sale of the full range of alcoholic beverages would reduce the number of additional trips customers would need to visit to fulfill their shopping needs.
While the project is located within an over-concentrated census tract, it would not result in a grouping of four or more off-sale establishments within a 1,000-foot-radius of the site.
Currently, there is only one active off-sale establishment (Type 20) within a 1,000-foot radius of the site. The other off-sale license (Typer 21) shown on the Off-Sale Radius Map (Exhibit H), is the Safeway store located at 100 South 2nd Street. However, this store has been closed, and the Type 21 license has been on hold. The subject market would be the only active off-sale establishment with a Type 21 license within a 1,000-foot radius of the site. Therefore, staff recommends that the City Council determine that the project would provide a significant and overriding public benefit.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)
Under the provisions of Section 15301 for Existing Facilities of the State Guidelines for Implementation of the California Environmental Quality Act (CEQA) as stated below, this Project is found to be exempt from the environmental review requirements of Title 21 of the San José Municipal Zoning Code, implementing the California Environmental Quality Act of 1970, as amended.
Class 1 Categorical Exemption consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency’s determination. The key consideration is whether the Project involves negligible or no expansion of an existing use. Examples include, ATTACHMENT: Planning Commission Staff Report August 26, 2026
File No. CP26-007 & ER26-061
but are not limited to:
a. Interior or exterior alterations involving such things as interior partitions, plumbing, and electrical conveyances.
Analysis: The Project does not include any exterior modifications or expansion of the existing commercial building's footprint. The Project does not include a change in use. The only proposed change is to allow the off-sale of alcohol within the existing market. Therefore, the Project is categorically exempt pursuant to CEQA Section 15301 for Existing Facilities.
PUBLIC OUTREACH
Staff followed Council Policy 6-30: Public Outreach Policy for Pending Land Use and Development Proposals to inform the public of the Project. On-site signs have been posted at the site frontage since June 20, 2026. A notice of the public hearing was distributed to the owners and tenants of all properties located within 500 feet of the Project site and posted on the City website. Staff has been available to respond to questions from the public and to date, no comments have been received.
Project Manager: Angela Wang, Planner III
Approved by: /s/ Manira Sandhir, Deputy Director for Christopher Burton, Planning Director
ATTACHMENTS:
Exhibit A: Aerial Map
Exhibit B: Operations Plan
Exhibit C: Floor Plan
Exhibit D: Police Memo
Exhibit E: Draft Resolution
Exhibit F: General Plan Map
Exhibit G: Zoning Map
Exhibit H: Off-Sale Radius Map
Exhibit I: Plan Set
Owner: Applicant: Applicant’s Representative:
Stephanie Sheng
170 South Market LLC
21791 Heber Way
Saratoga, CA 95070-9700
R001
Chingying Chen
Sakura Marketplace LLC
1650 Delta Ct
Hayward, CA 94544
Liliger Damaso
Liquor License Brokers
730 Washington Blvd.
Marina Del Rey, CA 90292
ATTACHMENT: Planning Commission Staff Report August 26, 2026