City Council
Report
City Council Meeting: May 10, 2022
Agenda Item: 7.B
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To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Introduction and First Reading of Ordinance Extending Santa Monica Municipal Code Chapter 6.40, Santa Monica Outdoors Pilot Program; Introduction and Adoption of Emergency Interim Zoning Ordinance Changes to Support Santa Monica's Economic Recovery; and Adoption of Resolution Related to Fee Waivers and Reductions
Recommended Action
Staff recommends that the City Council:
1. Introduce for first reading an ordinance to amend Santa Monica Municipal Code Chapter 6.40 Santa Monica Outdoors Pilot Program by extending the term of the pilot program through September 30, 2022.
2. Adopt a resolution to authorize the extension of fee waivers or, if applicable, reductions, through September 30, 2022 for monthly outdoor dining license fees, monthly licensing fees for businesses with permits under Santa Monica Municipal Code Chapter 6.40, outdoor fitness fees in City Parks and the Beach, and certain temporary use permits.
3. Introduce and adopt an Emergency Interim Zoning Ordinance amending and extending interim zoning regulations established by Emergency Interim Zoning Ordinance Number 2674 (CCS) and extended by Emergency Interim Zoning Ordinance 2678 authorizing temporary use of private outdoor space for commercial activity and extending certain zoning changes necessary for continued emergency response and economic recovery.
Summary
As a response to the COVID-19 pandemic, the City established a temporary outdoor use permit program allowing businesses to utilize public and private outdoor spaces for dining, physical fitness and other business uses. All permit and license fees were waived, including for those businesses that, prior to COVID, had entered into outdoor dining license agreements in the Santa Monica Sidewalk Dining program pursuant to 2 of 9
Santa Monica Municipal Code (“SMMC”) Section 9.31.200. These fee waivers are due to expire on June 30, 2022.
Staff had anticipated that a permanent parklet program with guidelines and a fee schedule would be in place by June 30, 2022. Staff has engaged a consultant to evaluate a permanent parklet program that will also include a fee structure. Staff expects to return to Council on June 28, 2022 with a new program that would be adopted by ordinance and anticipated to go into effect by late summer.
Staff recommends that Council extend the Santa Monica Outdoors Pilot Program and related fee waivers through September 30, 2022. Staff also recommends that the temporary zoning changes allowing the temporary use of private outdoor space for commercial activity and certain changes necessary for continued emergency response and economic recovery established by emergency IZO 2678 be extended through December 31, 2022. These extensions are needed to allow businesses to continue utilizing the public right-of-way and private outdoor space while staff finalizes a permanent outdoor program for both public and private spaces.
Discussion
The COVID-19 pandemic resulted in sudden closures and reduction in services throughout the Santa Monica business community. To enable commerce in accordance with Health Officer orders, expanded temporary use of outdoor space for business purposes was established through emergency orders. The types of uses included:
outdoor commercial use on private property, on the sidewalk, in a parklet in the street adjacent to a sidewalk, or group exercise on private property or in the City’s designated parks and open space. To facilitate these uses prior to the emergency order expirations, City Council adopted an ordinance establishing the Santa Monica Outdoors Pilot Program (“Pilot Program”) as SMMC Chapter 6.40 on June 8, 2021 and adopted a resolution to waive certain fees for outdoor dining licenses and commercial fitness operators . (See Attachment B.) An Emergency Interim Zoning Ordinance (“IZO”) was also adopted on June 8, 2021 (and extended on July 27, 2021) to extend currently allowed temporary use of private outdoor space for commercial activity that would 3 of 9
otherwise end 30 days after the expiration of the County’s COVID-19 Health Officer Order, and further provided for flexibility in various zoning regulations to facilitate emergency response and further economic recovery. The extended IZO is set to expire on June 30, 2022.
On December 14, 2021, Council extended these fee waivers through June 30, 2022 for both monthly outdoor dining license fees under SMMC 9.31.200—the outdoor dining program predating COVID—and licensing fees for the Pilot Program that were otherwise set to commence on January 1, 2022. (Attachment A.) Under the current Fee Resolution, on July 1, 2022, businesses that have either permits under the Pilot Program or outdoor dining licensing agreements under SMMC 9.31.200 would have to start paying monthly permit/licensing fees. Fees are typically charged for a business, property owner, or individual exclusively using the public right-of-way. In addition, quarterly use charges for businesses with Fitness Trainer Permits are set to resume on June 30, 2022.
Extension of the Santa Monica Outdoors Pilot Program and Fee Waivers for Outdoor Licenses
The proposed ordinance (Attachment C) and resolution (Attachment D) extends the Pilot Program and related fee waivers until September 30, 2022. Extending the Pilot Program until September 30th will allow businesses and their patrons additional time to enjoy the benefits of outdoor dining, fitness, and other activities during the summer months, providing for a smoother transition into longer-term operations, and support the economic recovery efforts of our local business community and neighborhood commercial districts. Many of our small businesses are still struggling to survive and work their way out of debt (e.g., deferred rent due to landlords, Federal disaster relief loan repayments). This extended Pilot Program with fee waivers would provide substantial support to our small businesses – over 105 participating in the Pilot Program. Extending the Pilot Program through September 30, 2022, would also provide 4 of 9
City staff and businesses sufficient time to transition businesses to the new parklet/sidewalk dining permit and license agreements.
Staff anticipates that a permanent parklet program with guidelines and a fee structure will be in place this summer, with fees effective October 1, 2022. To further inform this effort, staff has engaged a consultant to evaluate best practices from other cities for a permanent parklet program that will include preparation of a parklet manual and a proposed application fee and annual permit fee structure, striving to balance the City mandated requirement of cost-recovery associated with staff administrative time and lost parking revenue, with the expectation that fees will be affordable to many small businesses in order to support an equitable and inclusive economic recovery. These fees will be outlined in the proposed Fiscal Year 2022/2023 budget study session on May 24. On June 28, 2022, the recommended fees would be included as part of the budget that City Council will be asked to adopt and staff will also be presenting the proposed parklet program to Council that night with the goal of having the permanent program in place prior to the expiration of the Santa Monica Outdoors Pilot Program on September 30, 2022.
Once the parklet policy is adopted, staff will work with the Pilot Program participants who are interested in long-term outdoor operations under a permit or license agreement to start applying in July or August for the new parklet permits and/or outdoor dining license agreements so that by September 30th, they will transition to the longer-term program with confirmed costs.
Staff also recommends extending the waiver of the outdoor dining license fees under SMMC 9.31.200—the outdoor dining program predating COVID—through September 30, 2022. (See Attachment D.) Doing so will not only be consistent with the fee waivers offered for businesses with Pilot Program permits, but it will also provide staff sufficient time to transition interested businesses with a Pilot Program permit to an outdoor licensing agreement under SMMC 9.31.200.
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Extension of Outdoor Use of Private Property
Temporary Outdoor Use Permits originally authorized under the City’s emergency orders also approved the use of private property for outdoor commercial operations.
They have been a critical component of the City’s response to support businesses during the COVID-19 pandemic as well as to allow for certain zoning changes to support emergency response and economic recovery. Currently, 87 local businesses are using a Temporary Outdoor Use Permit issued pursuant to the IZO to conduct retail, restaurant, and fitness activities on private outdoor property—surface parking lots, courtyards, and other spaces on associated privately-owned commercial property—to help offset any pandemic-related indoor use restrictions or accommodate customer preference of being outdoors. This opportunity to use outdoor space on private property serves many businesses that are not eligible or not able to have a parklet in front of their business, particularly on commercial streets with higher traffic speeds such as Pico Boulevard and sections of Wilshire and Ocean Park Boulevards. Currently, outdoor dining is the primary activity of these private outdoor spaces. Similar to rules governing parklets for the Pilot Program, table service and alcohol sales are temporarily permitted within these spaces, and parking requirements are suspended. In developing the permanent outdoor program for private property, staff is evaluating the overall use of private outdoor space by businesses during the pandemic. Staff will continue to develop appropriate standards considering the size and location of outdoor spaces, parking and fire accessibility of the site, and noise when abutting residential districts.
To allow businesses to continue to operate on private property, staff recommends that Council adopt the proposed Emergency Interim Zoning Ordinance, which will extend this program through December 31, 2022 (Attachment E). On a separate review path from the parklet program, staff will return to Council in the fall with a proposed outdoor use program specific to privately-owned property requiring amendments to the Zoning Ordinance that would enable such program.
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Extension of Zoning and Land Use Related Changes
There are a range of zoning and land use related changes that were made throughout the pandemic to facilitate emergency response and to also support local businesses.
Changes that are recommended to continue through the IZO extension (Attachments D and E) include:
▪ Permitted Use in all Zoning Districts: Public Safety Facilities and Emergency Shelters.
Allowing these uses provides flexibility in establishing uses related to health and safety supportive of emergency response and the pandemic recovery. ▪ Drive-through facilities only for COVID-19 testing and vaccination purposes at hospitals, clinics, and pharmacies.
The Zoning Ordinance prohibits new drive-through facilities. This special exception is necessary as requests to establish testing and vaccination sites remain ongoing and some level of demand is anticipated to continue. Many of these facilities are established within tented parking spaces where tests or vaccinations are administered while patients remain in their vehicles.
▪ Temporary Use Permits for uses permitted pursuant to 9.31.370(b) of more than 45 days and not exceeding 180 days (6 months).
Extending the temporary use permit period up to 180 days provides flexibility for outdoor temporary uses supportive of economic recovery efforts and consistent with social distancing practices during the pandemic recovery along with the associated permit fee waivers through September 30, 2022.
▪ Off-site alcohol sales for restaurants, consistent with the State Alcoholic Beverage Control (ABC) requirements:
SB 389, which took effect on January 1, 2022, extended the authorization under the First Notice of Regulatory Relief issued by the California Department of 7 of 9
Alcoholic Beverage Control that expired on December 31, 2021 to allow the expansion of off-sale privileges for restaurants and breweries as a result of the Pandemic. This provision recognizes this expansion of alcoholic beverages “togo” as allowed by the State and allows such privileges for restaurants, breweries, etc. consistent with ABC requirements to continue through December 31, 2022.
The Notice of Regulatory Relief authorizing flexibility in retail sales of alcoholic beverages expired as of December 31, 2021. Staff proposes removing provisions in the interim zoning regulations allowing for flexibility in retail sales since that flexibility is no longer authorized by the State.
Extension of Fee Reduction or Waiver for Commercial Fitness Trainers The permitting of fitness and recreation training in City parks and the beach was also extended through updates to the existing Fitness Trainer Permit program, as authorized by SMMC 4.55.030. On June 8, 2021, Council adopted Resolution No. 11339, which, among other things, waived or reduced the quarterly use charges for businesses with Fitness Trainer Permits through June 30, 2022. (Attachment B.) Outdoor fitness classes in City parks and on the beach have maximized a fitness studio’s or an instructor’s ability to provide recreational training or wellness offerings to groups of people at a safe distance. Additionally, there has been an increase to group sizes at Barnard Way-Linear Park and Tongva Park as well as new locations added at Ken Genser Square, Airport Park parking lot, and Memorial Park, as authorized under SMMC 4.55.030. As of March 2022, a total of 22 commercial fitness trainers have obtained a permit to provide instruction in Santa Monica’s parks and beaches. Staff recommends extending the waiver and reduction of the quarterly use fees through September 30, 2022 in order to help support our fitness businesses and their economic recovery. (Attachment D.) The fee waivers or reductions for the Fitness Trainer Program are otherwise due to expire on June 30, 2022.
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Staff will analyze the Fitness Trainer Permit program and its current fee structure and will return to Council with a recommendation of new fees that, if approved, would begin October 1, 2022.
Past Council Actions
Meeting Date Description
12/14/21
(Attachment A)
Adoption of Fee Resolutions to Extend Santa Monica Outdoors Fee Waiver
06/08/21
(Attachment B)
Resolution Waiving Certain Fees on a Temporary Basis to Further Stimulate Economic Recovery, Establishing Fees for Santa Monica Outdoors Pilot Program, and Authorizing the Community
Development Director to Temporarily Close Portions of Main Street for the Santa Monica Outdoors Pilot Program.
Emergency Interim Zoning Ordinance 2674 (CCS) to extend temporary uses of private outdoor space for commercial activity and extend certain zoning changes necessary for continued emergency response and economic recovery (and as extended by IZO 2678 (CCS) on 07/27/21.
Financial Impacts and Budget Actions
The financial impact of extending the waiver of fees will result in an estimated $157,479 reduction in Outdoor Dining revenues and a $8,100 reduction in Beach & Park Fitness permit fee revenues for the first three months of FY 2022-23. However, the revenues for the remainder of the fiscal year that will be generated as a result of the proposed permanent Santa Monica Outdoors Program is still unknown. The temporary Santa Monica Outdoors programs were developed as a crisis response, so it is not certain how many of the Pilot Program businesses will opt to retain their outdoor operations, how much space businesses will want to utilize once fees are charged, or how many new permit applications will be received once the permanent programs are in place.
Additionally, staff anticipates returning to Council on June 28, 2022 with recommendations for a permanent parklet program, including a fee structure that will go into effect on October 1, 2022. Once the permanent Santa Monica Outdoor program is implemented and applications are processed, in early FY 2022-23, revenues can be projected, and necessary budget adjustments will be included in the FY 2022-23 9 of 9
Midyear Budget. Staff will set aside as much Economic Recovery funds as possible to fill any gaps in revenue that the City is not able to recover once the fees are in place.
Prepared By: Jennifer Taylor, Economic Development Adminstrator Approved Forwarded to Council
Attachments:
A. 2021.12.14 Council.Report
B. 2021.06.08 Council Report
C. Proposed Ordinance Extending Term of Pilot Program
D. Proposed Resolution Extending Certain Fee Waivers/Reductions E. Proposed Emergency Interim Zoning Ordinance
F. Written Comments
G. PowerPoint Presentation