Honorable Mayor and Members of the City Council. Submitted by: Wendy Cosin, Interim Director, Planning and Development

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1 Office of the City Manager ACTION CALENDAR September 20, 2011 To: From: Honorable Mayor and Members of the City Council Phil Kamlarz, City Manager Submitted by: Wendy Cosin, Interim Director, Planning and Development Subject: ZAB Appeal: 2801 Adeline Street RECOMMENDATION Adopt a Resolution setting a public hearing in order to do one of the following: (1) overturn the Zoning Adjustment Board s (ZAB) decision to approve Use Permit No to allow retail sales of beer and wine for off-site consumption at an existing retail pharmacy, and deny the Use Permit based on the plain meaning of BMC Section 23E B.2.c; or (2) continue the hearing and adopt a Resolution initiating an amendment for the Planning Commission s consideration which would revise Section 23E B.2.c by specifying additional circumstances under which a Use Permit for alcohol sales or service may be approved where the applicant has prior violations. FISCAL IMPACTS OF RECOMMENDATION None. CURRENT SITUATION AND ITS EFFECTS On April 14, 2011, the ZAB held a public hearing and approved the application by a vote (Yes: Allen, Alvarez-Cohen, Kopelson, Mikiten, Shumer, Williams; No: Groves, Romo; Recused: Matthews; Abstain/Absent: None). On April 26, 2011, staff issued the notice of the ZAB decision. On May 9, 2011, Berry Cisco Gardner, Jr. filed an appeal with the City Clerk. As discussed below, while the appeal is without merit, the ZAB s approval was inconsistent with the Zoning Ordinance due to alcohol-related violations by the applicant, and staff is recommending that Council hold a public hearing in order to resolve this issue. BACKGROUND The applicant, Walgreen Company of Deerfield, Illinois, requests a Use Permit to allow retail sales of beer and wine for off-site consumption at an existing retail pharmacy located at 2801 Adeline Street. According to the attached applicant s statement, the main reasons for the current request are to remain competitive with its competition (including such companies as Target, Wal-Mart, Costco and CVS, who typically sell alcoholic beverages) and to give existing customers the added benefit of being able to purchase beer and wine as opposed to having to travel to some other possibly more distant or inconvenient location. Walgreen s also applied for beer and wine sales at two 2180 Milvia Street, Berkeley, CA Tel: (510) TDD: (510) Fax: (510) manager@cityofberkeley.info Website:

2 ZAB Appeal: 2801 Adeline Street ACTION CALENDAR September 20, 2011 other Berkeley stores, 1050 Gilman Street and 2187 Shattuck Avenue. On March 10, 2011, the ZAB denied the application for 2187 Shattuck (due to the proximity of Berkeley High School), and on April 14, 2011, the ZAB approved the application for 1050 Gilman; those decisions were not appealed. The applicant proposes to devote approximately 78 linear (or running ) feet of shelving to alcoholic beverages, including refrigerator space. This would constitute approximately 0.7 percent of the store s total inventory. 1 The applicant has committed not to sell beer by the individual can or bottle, wine in single-serving bottles (except in packs with at least three such bottles), spirits, fortified wines, caffeine-infused beer, malt liquor with alcohol content in excess of 5.9 percent, or any other product considered conducive to alcohol abuse. Wines would range in price from $2.99 up to $100 in certain stores; Walgreen s anticipates its average wine price in California stores to be about $9. Refer to the attached ZAB report for further background. As discussed in the attached ZAB report, staff recommended that the ZAB deny the application because, in staff s opinion, one of the required findings of Public Convenience and Necessity (PCN) under BMC Section 23E B.2, which were also required for this Use Permit, could not be made. Under PCN finding (c), a Use Permit may only be approved if: The applicant has not operated a licensed establishment that has been the subject of verified complaints or violations regarding alcohol, public safety or nuisance statutes or regulations, however, the Board may grant a Use Permit when there is record of only one complaint or violation against an applicant for on-sale restaurant service. In such cases, the Board shall take into consideration the circumstances of the complaint or violation and the concern of local neighborhood groups. According to the California Department of Alcoholic Beverage Control (ABC), there are 18 alcohol licenses in Walgreen s name with violations, mainly involving sale to minors, and all located in other cities. ABC s website does not provide the dates of these violations, and all of these licenses have been canceled (and in many cases replaced with new licenses). As noted above, the allowance in the above finding for one complaint or violation only applies to on-sale restaurant service, and the finding does not provide any exceptions based on the date or location of the violations. Therefore, staff recommended to the ZAB that they not make this finding. Furthermore, because the ZAB had recently denied Walgreen s application for beer and wine sales at its Downtown store due to the proximity of Berkeley High School, Staff also recommended denial of this application based on possible impacts on students at Berkeley Technology Academy (a.k.a. B-Tech ) at 2701 Martin Luther King, Jr. Way, a separate school from Berkeley High which is located about the same distance from the Adeline store as the Downtown Walgreen s is from Berkeley High. 1 Based on 11,130 total linear feet of shelving. Page 2

3 ZAB Appeal: 2801 Adeline Street ACTION CALENDAR September 20, 2011 The ZAB considered these issues and the applicant s testimony, and decided that the above PCN finding could be made because 15 years had passed since Walgreen s last ABC violation, and none of the violations had occurred in Berkeley, although the Zoning Ordinance does not provide any such exceptions. Staff has since determined that five of the violations listed on ABC s website occurred between 1997 and 2000, less than 15 years ago. The other 17 violations occurred between 1990 and Regarding B-Tech, the ZAB found that conditions of approval (see below), particularly number 7, would help prevent any negative effects on students. Furthermore, in their discussion of the issue, some ZAB members stated that, because of B-Tech s lower population and the lower commercial density of the neighborhood, students do not tend to concentrate around the Walgreen s store as much as Berkeley High students do around the Downtown store. ZAB members also mentioned that the school district had opposed alcohol sales at the Downtown store but not this store. Other than standard conditions applicable to all Use Permits, the ZAB-approved conditions are as follows: 1. This permit is for the sale of beer and wine only. 2. Alcoholic beverage sales shall be displayed in not more than 78 feet of linear display space, nor more than 2% of the display space, nor more than 2% of the gross retail floor area. 3. No sign(s) visible from the public right-of-way advertising alcoholic beverages shall be allowed. No alcoholic beverages shall be visible from the public right-ofway. 4. The applicant shall install and maintain additional control and security measures in the area where alcoholic beverages will be displayed subject to review and approval of the Berkeley Police Department. 5. The applicant and all sellers shall complete a course in Responsible Beverage Sales and Service (RBSS) available through the ABC within 12 months of license granting and/or date of employment. 6. Employees shall not sell alcohol to patrons who appear to be inebriated or otherwise unable to behave in an orderly manner upon consuming alcohol. 7. The applicant shall regularly monitor the area under the applicant s control in an effort to prevent the loitering of persons about the premises and the solicitation of purchases for minors. 8. The applicant shall request that the California Department of Alcoholic Beverage Control (ABC) place the following conditions on the applicant s alcohol license: Page 3

4 ZAB Appeal: 2801 Adeline Street ACTION CALENDAR September 20, 2011 No single-serve products shall be sold, offered, or displayed. Beer shall be sold only in six-pack or larger packaging. Sales shall not include beer with alcohol content over 5.9%, fortified wines, or caffeine infused beer. Wine shall be sold only in 750ml bottles or equivalent multi-serve packaging. There shall be no exterior advertising or sign of any kind or type, including advertising directed to the exterior from within, promoting or indicating the availability of alcoholic beverages. Interior displays of alcoholic beverages or signs that are clearly visible to the exterior shall constitute a violation of this condition. [See discussion of this condition in the following section of this report.] 9. Applicant shall not sell alcohol after 8:00 p.m. Monday through Saturday and 6:00 p.m. on Sunday; provided, however, if the Berkeley Bowl located at 2020 Oregon Street elects to sell beer and wine beyond these hours, then applicant shall have the right to extend its hours for the sale of beer and wine so as to be the same as the hours that Berkeley Bowl sells beer and wine at its 2020 Oregon Street location. The ZAB also made the other required PCN findings, which are summarized as follows (see Attachment 1, Exhibit A, Finding 3 for full text): A. The establishment will further relevant General Plan policies and Zoning District purposes. B. The economic benefits associated with the establishment will not be achieved without the sale of beer and wine. D. The sale of beer and wine will not have a negative effect on Berkeley Technology Academy, as discussed above. E. The Police Department has reported that the proposal is not expected to add crime in the area. RATIONALE FOR RECOMMENDATION The issues raised in the appellant s letter, and staff s responses, are as follows. For the sake of brevity, the appeal issues are not re-stated in their entirety; refer to the attached appeal letter for full text. Issue 1: Response 1: The proposed alcohol sales would create stress for the general population of seniors and citizens living in the area and neighborhood. The appellant does not specify the nature of the stress that might be created by the proposed alcohol sales, or how such stress might be created. The ZAB found that the proposed alcohol sales would not be detrimental to the health, safety, peace, morals, comfort, or general welfare of persons residing or working in the area or neighborhood because special conditions are included as part of this approval that will Page 4

5 ZAB Appeal: 2801 Adeline Street ACTION CALENDAR September 20, 2011 mitigate potential impacts of alcohol sales to the extent feasible. The conditions of approval included in the Use Permit would help prevent negative impacts on nearby seniors as well as the general population of the surrounding neighborhood. Issue 2: Response 2: Issue 3: The proposed alcohol sales would disturb the general safety of residents by creating more foot traffic in the area and [a] place across the street in front of the senior citizen building for people to hang out and consume their beer and wine. Staff assumes that the senior citizen building referred to by the appellant is Harriet Tubman Terrace at 2870 Adeline Street, which is the appellant s address. This building is restricted to persons aged 62 years and older, and is located approximately 600 feet (0.12 miles) from the Walgreen s entrance. It is not clear whether the appellant s concern is that alcohol might be consumed in front of Harriet Tubman Terrace, or in front of Walgreen s. The former case is highly unlikely due to the relatively large distance from Walgreen s and the conditions of approval (number 8 in particular), which prohibit the type of alcohol that is typically consumed in public (e.g., malt liquor, single-serving wine bottles, etc.). The latter case is also unlikely due to Condition 7, which specifically addresses this concern by requiring that the applicant regularly monitor the area under the applicant s control in an effort to prevent the loitering of persons about the premises and the solicitation of purchases for minors. The proposed alcohol sales would disturb the peace and safety and affect the moral fiber of South Berkeley and West Berkeley by increasing the sales of beer in the area. Response 3: See Response 1. Issue 4: Response 4: Issue 5: The proposed alcohol sales will attract youth from Berkeley Technology Academy who are under legal drinking age to seek ways to get customers to purchase alcoholic beverage[s] for their consumption. As noted earlier, the ZAB found that the conditions of approval, particularly number 7, would help prevent any negative effects on B- Tech students. The ZAB also distinguished this project from the Downtown store and its proximity to Berkeley High School based on distance, intervening neighborhood character, and the number of students. B-Tech staff did not express any concerns about the proposal, despite several inquiries by Planning staff to discuss the proposal with B-Tech staff. The proposed alcohol sales has the potential to have [a] negative impact on the lives of our neighborhoods and negative[ly] effect the Page 5

6 ZAB Appeal: 2801 Adeline Street ACTION CALENDAR September 20, 2011 property in our neighborhoods and the peace, morals and general welfare of all of Berkeley citizens. Response 5: See Response 1. Issue 6: Response 6: The general welfare of all citizens in Berkeley should be examined by all businesses and special needs of all citizens should be taken into consideration when proposed businesses want to sell alcoholic beverage[s] in neighborhoods. See Response 1. The ZAB considered the general welfare in making its decision to approve the proposed alcohol sales, and concluded that the proposed sales will benefit the surrounding neighborhood by providing added convenience for those residents who consume alcohol, and possible negative impacts will be avoided through the required conditions of approval and the small scale of the proposed use. Although the appeal itself is without merit, the ZAB s decision was inconsistent with BMC Section 23E B.2.c, because the applicant has operated a licensed establishment that has been the subject of verified complaints or violations regarding alcohol, public safety or nuisance statutes or regulations, and this section does not provide any exceptions other than for on-sale restaurant service, which does not apply in this case. The ZAB s reliance on the time elapsed since Walgreen s violations occurred, and the fact that none of the violations occurred in Berkeley, has no basis in the Zoning Ordinance. Therefore, staff recommends that the Council set the matter for a public hearing in order to do one of the following: (1) overturn the ZAB s decision and deny the Use Permit based on the plain meaning of BMC Section 23E B.2.c; or (2) continue the hearing and adopt a Resolution initiating an amendment for the Planning Commission s consideration which would revise Section 23E B.2.c by specifying additional circumstances under which a Use Permit for alcohol sales or service may be approved where the applicant has prior violations. After Council approval of a Zoning Ordinance amendment, the Council could potentially approve the Use Permit at the continued hearing, pursuant a modified PCN finding. If Council decides to reject the appeal and approve the Use Permit without initiating an amendment for the Planning Commission s consideration, staff still recommends that the Council hold a public hearing in order to modify Condition 8 (regarding additional conditions on the ABC license; see above) in order to specify that issuance of the Use Permit is contingent upon ABC s acceptance of the additional conditions regarding alcohol sales. This would ensure that alcohol sales are conducted in accordance with the applicant s stated operating restrictions. Because cities are not permitted to regulate alcohol sales, these restrictions must be enforced through the ABC license rather than the Use Permit. Page 6

7 ZAB Appeal: 2801 Adeline Street ACTION CALENDAR September 20, 2011 ALTERNATIVE ACTIONS CONSIDERED Pursuant to BMC Section 23B B, the Council may (1) affirm the ZAB decision and dismiss the appeal, (2) set the matter for a public hearing, (3) remand the matter to the ZAB. Staff is not recommending option 3 because this matter requires policy direction (including a possible zoning amendment) from the Planning Commission and the Council. Action Deadline: Pursuant to BMC Section 23B C, if none of the three actions described above has been taken by the Council within 30 days from the date the appeal first appears on the Council agenda (not including Council recess), then the decision of the Board shall be deemed affirmed and the appeal shall be deemed denied. CONTACT PERSONS Debra Sanderson, Land Use Planning Manager, Planning & Development Department, (510) Aaron Sage, AICP, Senior Planner, Planning & Development Department, (510) Attachments: 1: Resolution 2: Appeal Letter dated May 9, : ZAB Staff Report, dated April 14, : Index to Administrative Record 5: Administrative Record Page 7

8 RESOLUTION NO. ##,###-N.S. SETTING A PUBLIC HEARING TO CONSIDER THE ZONING ADJUSTMENTS BOARD S APPROVAL OF USE PERMIT NO TO ALLOW RETAIL SALES OF BEER AND WINE FOR OFF-SITE CONSUMPTION AT 2801 ADELINE STREET IN THE SOUTH AREA COMMERCIAL (C-SA) ZONING DISTRICT WHEREAS, on April 14, 2010, Walgreen Co. ( applicant ) filed an application for a Use Permit to allow retail sales of beer and wine for off-site consumption at an existing retail pharmacy at 2801 Adeline Street ( project ); and WHEREAS, on October 8, 2010, staff deemed the application complete; and WHEREAS, on February 3 and 14, 2011, staff mailed and posted Notices of Public Hearing for the project in accordance with BMC Section 23B ; and WHEREAS, on March 10 and April 14, 2011, the Zoning Adjustments Board (ZAB) held a public hearing in accordance with BMC Section 23B , and on April 14, 2011, the ZAB approved the project subject to findings and conditions (Exhibit A); and WHEREAS, the ZAB s approval was inconsistent with Section 23E B.2.c of the Zoning Ordinance, because the applicant has operated [multiple] licensed establishment[s] that [have] been the subject of verified complaints or violations regarding alcohol, public safety or nuisance statutes or regulations, and the ZAB s reliance on the time elapsed since these violations occurred, and the fact that none of the violations occurred in Berkeley, was not adequate to make the required finding; and WHEREAS, on April 26, 2011, staff issued the notice of the ZAB decision; and WHEREAS, on May 9, 2011, Berry Cisco Gardner, Jr. filed an appeal of the ZAB decision with the City Clerk; and WHEREAS, on September 20, 2011, the Council considered the record of the proceedings before the ZAB, and the staff report and correspondence presented to the Council, and, in the opinion of this Council, the facts stated in, or ascertainable from this information, warrant further hearing. NOW THEREFORE, BE IT RESOLVED by the Council of the City of Berkeley that the Council hereby sets the matter for a public hearing.

9 Exhibit A - Finding and Conditions Page 1 of Adeline Street Use Permit # CEQA FINDINGS E x h i b i t A F i n d i n g s f o r A p p r o v a l APRIL 14, The project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA, Public Resources Code 21000, et seq.) pursuant to Section of the CEQA Guidelines ( New Construction or Conversion of Small Structures ). GENERAL DETRIMENT FINDING 2. Pursuant to Berkeley Municipal Code Section 23B , the Zoning Adjustments Board finds that the proposed retail sales of beer and wine for off-site consumption at an existing retail pharmacy, under the circumstances of the particular case existing at the time at which the application is granted, would not be detrimental to the health, safety, peace, morals, comfort, or general welfare of persons residing or working in the area or neighborhood of such proposed use or be detrimental or injurious to property and improvements of the adjacent properties, the surrounding area or neighborhood, or to the general welfare of the City, because special conditions are included as part of this approval that will mitigate potential impacts of alcohol sales to the extent feasible. ALCOHOLIC BEVERAGE SALES FINDINGS 3. Pursuant to BMC Section 23E B.2, the Zoning Adjustments Board finds that the request to establish alcoholic beverage sales at this location is permissible because it meets the findings of Public Convenience or Necessity, as follows: A. The proposed establishment of off-sale beer and wine will further the General Plan Policy LU-27, to encourage uses that satisfy the needs of all age groups and attract a range of users where this use could serve and attract older residents and visitors who are over the legal drinking age. C-SA District Purpose D states: Encourage the location of a wide variety of community-oriented goods and services in South Berkeley. B. Applicant has demonstrated that retail trends have blurred the distinction between, on the one hand, supermarkets with pharmacy departments and large box retail establishments with both grocery and pharmacy departments, and, on the other hand, general retail pharmacy stores. The economic benefits associated with the establishment, therefore, will not be achieved without the sale of beer and wine. Applicant has demonstrated that the sale of beer and wine responds to the

10 Exhibit A - Finding and Conditions Page 2 of 5 FINDINGS AND CONDITIONS 2801 ADELINE STREET Page 2 of 5 April 14, 2011 demands of its customers and will enable applicant to retain customers by providing them with the convenience of one-stop shopping. C. The applicant has no record of complaints or violations regarding alcohol, public safety or regulations within the City of Berkeley. Applicant, a national publicly traded company that at one time was one of the largest retailers of alcoholic beverages in the United States, stopped selling alcoholic beverages in the mid s, and in connection therewith, surrendered its liquor licenses in California. While some of the surrendered licenses reveal that applicant was charged with certain violations of liquor laws, these violations occurred 15 years or more ago, and, therefore, are not an indicator of applicant s ability to comply with liquor laws today. Moreover, the Board finds that these prior violations are mitigated by the Special Conditions of this permit. D. Although the establishment is within 1,000 feet of Berkeley Technology Academy, the sale of beer and wine will not have a negative effect on the school because of the Special Conditions set forth below. E. The Berkeley Police Department has reported that the proposed sale of beer and wine at the applicant s location is not expected to add crime in the area. STANDARD CONDITIONS OF APPROVAL 1. Conditions Shall be Printed on Plans The conditions of this Permit shall be printed on the first sheet of each plan set submitted for a building permit pursuant to this Use Permit, under the title Use Permit Conditions. The second sheet may also be used if the first sheet is not of sufficient size to list all of the conditions. The sheet(s) containing the conditions shall be of the same size as those sheets containing the construction drawings; 8-1/2 by 11 sheets are not acceptable. 2. Applicant Responsible for Compliance with Conditions The applicant shall ensure compliance with all of the following conditions, including submittal to the project planner of required approval signatures at the times specified. Failure to comply with any condition may result in construction being stopped, issuance of a citation, and/or modification or revocation of the Use Permit. 3. Uses Approved Deemed to Exclude Other Uses (Section 23B ) A. This Permit authorizes only those uses and activities actually proposed in the application and exclude other uses and activities. File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Exhibit A_ZAB_FC_2801 Adeline.docx

11 Exhibit A - Finding and Conditions Page 3 of ADELINE STREET FINDINGS AND CONDITIONS April 14, 2011 Page 3 of 5 B. Except as expressly specified herein, this Permit terminates all other uses at the location subject to it. The existing retail / pharmacy store entitlements are unaffected by this approval. 4. Modification of Permits (Section 23B ) No change in the use for which this Permit is approved is permitted unless the Permit is modified by the Zoning Adjustments Board, in conformance with Section 23B A. 5. Plans and Representations Become Conditions (Section 23B ) Except as expressly specified herein, the site plan, floor plans, building elevations and any additional information or representations submitted by the applicant during the Staff review and public hearing process leading to the approval of this Permit, whether oral or written, which indicated the proposed structure or manner of operation are deemed conditions of approval. 6. Subject to all City and Other Regulations (Section 23B ) The approved use and/or construction are subject to, and shall comply with, all applicable City Ordinances and laws and regulations of other governmental agencies. 7. Exercised Permit for Use Survives Vacancy of Property (Section 23B ) Once a Permit for a use is exercised and the use is established, that use is legally recognized, even if the property becomes vacant, except as set forth in Standard Condition #8 below. 8. Exercise and Lapse of Permits (Section 23B ) A. A permit for the use of a building or a property is exercised when, if required, a valid City business license has been issued, and the permitted use has commenced on the property. B. A permit for the construction of a building or structure is deemed exercised when a valid City building permit, if required, is issued, and construction has lawfully commenced. C. A permit may be declared lapsed and of no further force and effect if it is not exercised within one year of its issuance, except that permits for construction or alteration of structures or buildings may not be declared lapsed if the permittee has (1) applied for a building permit or (2) made substantial good faith efforts to obtain a building permit and begin construction, even if a building permit has not been issued and/or construction has not begun. File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Exhibit A_ZAB_FC_2801 Adeline.docx

12 Exhibit A - Finding and Conditions Page 4 of 5 FINDINGS AND CONDITIONS 2801 ADELINE STREET Page 4 of 5 April 14, Indemnification Agreement The applicant shall hold the City of Berkeley and its officers harmless in the event of any legal action related to the granting of this Permit, shall cooperate with the City in defense of such action, and shall indemnify the City for any award of damages or attorneys fees that may result. ADDITIONAL CONDITIONS OF APPROVAL Pursuant to BMC Section 23B D, the Zoning Adjustments Board attaches the following conditions to this Permit: 1. This permit is for the sale of beer and wine only. 2. Alcoholic beverage sales shall be displayed in not more than 78 feet of linear display space, nor more than 2% of the display space, nor more than 2% of the gross retail floor area. 3. No sign(s) visible from the public right-of-way advertising alcoholic beverages shall be allowed. No alcoholic beverages shall be visible from the public right-of-way. 4. The applicant shall install and maintain additional control and security measures in the area where alcoholic beverages will be displayed subject to review and approval of the Berkeley Police Department. 5. The applicant and all sellers shall complete a course in Responsible Beverage Sales and Service (RBSS) available through the ABC within 30 days of license granting and/or date of employment. 6. Employees shall not sell alcohol to patrons who appear to be inebriated or otherwise unable to behave in an orderly manner upon consuming alcohol. 7. The applicant shall regularly monitor the area under the applicant s control in an effort to prevent the loitering of persons about the premises and the solicitation of purchases for minors. 8. The applicant shall request that the California Department of Alcoholic Beverage Control (ABC) place the following conditions on the applicant s alcohol license: No single-serve products shall be sold, offered, or displayed. Beer shall be sold only in six-pack or larger packaging. Sales shall not include beer with alcohol content over 5.9%, fortified wines, or caffeine infused beer. Wine shall be sold only in 750ml bottles or equivalent multi-serve packaging. There shall be no exterior advertising or sign of any kind or type, including advertising directed to the exterior from within, promoting or indicating the availability of alcoholic beverages. Interior displays of alcoholic beverages or signs that are clearly visible to the exterior shall constitute a violation of this condition. File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Exhibit A_ZAB_FC_2801 Adeline.docx

13 Exhibit A - Finding and Conditions Page 5 of ADELINE STREET FINDINGS AND CONDITIONS April 14, 2011 Page 5 of 5 9. Applicant shall not sell alcohol after 8:00 p.m. Monday through Saturday and 6:00 p.m. on Sunday; provided, however, if the Berkeley Bowl located at 2020 Oregon Street elects to sell beer and wine beyond these hours, then applicant shall have the right to extend its hours for the sale of beer and wine so as to be the same as the hours that Berkeley Bowl sells beer and wine at its 2020 Oregon Street location. File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Exhibit A_ZAB_FC_2801 Adeline.docx

14 Attachment 2 - Appeal Letter Page 1 of 2

15 Attachment 2 - Appeal Letter Page 2 of 2

16 Attachment 3 - ZAB Staff Report Page 1 of 13 Z O N I N G A D J U S T M E N T S B O A R D S t a f f R e p o r t FOR BOARD ACTION APRIL 14, Adeline Street Use Permit # to allow retail sales of beer and wine for off-site consumption at an existing retail pharmacy (Walgreen s) I. Application Basics A. Land Use Designations: General Plan: Avenue Commercial Zoning: C-SA, South Area Commercial B. Zoning Permits Required: Use Permit to allow retail sales of alcoholic beverages, under BMC Section 23E A C. CEQA Determination: Categorically exempt pursuant to Section of the CEQA Guidelines ( Existing Facilities ). D. Parties Involved: Applicant Walgreen Co. 104 Wilmot Rd., 2 nd floor, Deerfield, IL, Attorney for Applicant Haas & Najarian, LLP, Attn: Rob Nicholas 58 Maiden Lane, 2 nd floor, San Francisco, CA Property Owner 2801 Adeline, LLC, c/o Harold Brandel 1933 Francisco Street, Berkeley, CA Milvia Street, Berkeley, CA Tel: TDD: Fax: zab@ci.berkeley.ca.us

17 Attachment 3 - ZAB Staff Report Page 2 of ADELINE STREET ZONING ADJUSTMENTS BOARD Page 2 of 13 April 14, 2011 Figure 1: Vicinity/Alcohol Map LeConte Elementary School Berkeley Technology Academy SITE Roxie Deli File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Att 3_ZAB_SR_2801 Adeline.docx

18 Attachment 3 - ZAB Staff Report Page 3 of 13 ZONING ADJUSTMENTS BOARD 2801 ADELINE STREET April 14, 2011 Page 3 of 13 Figure 2: Floor Plan BEER AND WINE SALES PARKING LOT / STORE ENTRANCE File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Att 3_ZAB_SR_2801 Adeline.docx

19 Attachment 3 - ZAB Staff Report Page 4 of ADELINE STREET ZONING ADJUSTMENTS BOARD Page 4 of 13 April 14, 2011 Table 1: Land Use Information Location Existing Use Zoning District General Plan Designation Subject Property Retail pharmacy C-SA Avenue Commercial Surrounding Properties North Public parking lot C-SA Avenue Commercial South Berkeley Bowl market East West Medical supply retailer, single- and multi-family residences, used car lot Offices Table 2: Project Chronology Date April 14, 2010 October 8, 2010 Action Application submitted Application deemed complete December 7, 2010 PSA deadline 1 February 3 and 14, 2011 Public hearing notices mailed/posted February 17, 2011 March 10, 2011 April 14, 2011 Item continued to March 10 at applicant s request ZAB hearing continued to next meeting to consider revised findings and conditions that could support approval ZAB hearing 1. Project must be approved or denied within 60 days after being determined to be exempt from CEQA, or 60 days after adoption of a negative declaration, or 180 days after adoption of an EIR (Govt. Code Section 65950). II. Project Setting A. Neighborhood/Area Description: The site is located in South Berkeley and occupies the entire block bounded by Adeline, Stuart and Oregon Streets, and Shattuck Avenue. The site is located in a significant neighborhood-serving commercial node, which includes the Berkeley Bowl food market (across from the site), Sconehenge bakery/restaurant, Any Mountain sporting goods, Kirala restaurant, McKevitt Nissan-Volvo, and several other retail and service-oriented businesses. There are also a number of multi-family residential uses in the vicinity, including senior housing and a nursing home, and the surrounding area is generally devoted to lower-density residential uses. File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Att 3_ZAB_SR_2801 Adeline.docx

20 Attachment 3 - ZAB Staff Report Page 5 of 13 ZONING ADJUSTMENTS BOARD 2801 ADELINE STREET April 14, 2011 Page 5 of 13 The site is located within 1,000 feet 1 of the Roxie Deli at 2999 Shattuck Avenue, 2 which sells alcoholic beverages under the same type of license from the California Department of Alcoholic Beverage Control (ABC) as the proposed alcohol sales. Therefore, findings of Public Convenience or Necessity are required for the proposed sales, unless the deli is considered a food service establishment with incidental service of beer and/or wine. 3 This issue is addressed further, below. The project site is also located within 1,000 feet of Berkeley Technology Academy, the secondary continuation school at 2701 Martin Luther King, Jr. Way, and LeConte Elementary School at 2241 Russell Street. The nearest alcohol retailers are Berkeley Bowl, Black & White Liquor Store at 3027 Adeline Street (about 1,200 feet from the site), and Lee s Market at 2700 Martin Luther King, Jr. Way (about 1,300 feet from the site). B. Site Conditions and Background: The site is developed with a large single-story commercial building in which Walgreen s is the sole tenant. The site also has a parking lot with 37 spaces. Walgreen s is a retail pharmacy selling prescription and over-the-counter medicines, general merchandise, sundries, hardware and grocery items. The store is open from 8 a.m. to 10 p.m., seven days per week. The store opened in III. Project Description The applicant, Walgreen Company of Deerfield, Illinois, requests a Use Permit to allow retail sales of beer and wine for off-site consumption at an existing retail pharmacy. According to the attached statement from the applicant, the main reasons for the current request are to remain competitive with its competition (including such companies as Target, Wal-Mart, Costco and CVS, who typically sell alcoholic beverages) and to give existing customers the added benefit of being able to purchase beer and wine as opposed to having to travel to some other possibly more distant or inconvenient location. Walgreen s has also applied for beer and wine sales at two other Berkeley stores, 1050 Gilman Street and 2187 Shattuck Avenue. On March 10, 2011 the ZAB denied the application at 2187 Shattuck. 1 The Police Department generated a map which showed the Roxie Deli to be slightly more than 1,000 feet from the site. However, this map was based on a point located at the intersection of Adeline and Stuart Streets, the extreme northwest corner of the site. The Planning Department s map, which shows the site to be less than 1,000 feet from the Roxie Deli, is based on a point at the center of the subject property, and therefore the area within 1,000 feet of the site extends further to the southeast and includes the Roxie Deli. The City s Information Technology Department has confirmed this information. Based on the language of 23E B.2, ( within a one thousand (1,000) foot radius of the site of the proposed use ), all ABC licenses within 1,000 feet of any point on the site must be considered in determining whether the PCN findings are required. 2 Administrative Use Permit 794, issued on January 7, 2985, for operation of a convenience food/deli store with sale of beer and wine for off-site consumption. 3 See BMC Section 23E B.2. File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Att 3_ZAB_SR_2801 Adeline.docx

21 Attachment 3 - ZAB Staff Report Page 6 of ADELINE STREET ZONING ADJUSTMENTS BOARD Page 6 of 13 April 14, 2011 The applicant proposes to devote approximately 78 linear (or running ) feet of shelving to alcoholic beverages, including refrigerator space. This would constitute approximately 0.7 percent of the store s total inventory. 4 Alcoholic beverages would be located in two areas: approximately 60 linear feet of shelving devoted to room-temperature beer and wine would be located at the front end of Aisle 7, near the photo counter, and approximately 18 linear feet of shelving (two refrigerator cases) would be located in the cold beverage section on Aisle 9A. The applicant has committed not to sell the following types of alcohol: beer by the individual can or bottle, wine in single-serving bottles (except in packs with at least three such bottles), spirits, fortified wines, caffeine-infused beer, malt liquor with alcohol content in excess of 5.9 percent, or any other product considered conducive to alcohol abuse. Wines would range from $2.99 up to $100 in certain stores; Walgreen s anticipates its average wine price in California stores to be about $9. The proposed alcohol sales, if approved, would be conducted under a Type 20 license from ABC. The applicant has proposed the following policies and procedures to insure that beer and wine will be sold in a highly responsible and conscientious manner : Before being allowed to sell alcoholic beverages, employees must complete a Responsible Beverage Service Training program as required under BMC Section Each cash register clerk must acknowledge that he or she is following the company s alcohol policies and procedures as part of the daily log-in and log-out process. Cash register clerks will be automatically prompted to request identification and proof of age for any customer purchasing alcohol, and no alcohol will be sold to minors. For any sale of alcohol by an under-aged employee, the assistance of a manager or assistant manager will be required. No alcohol will be sold to intoxicated individuals. Greeters will be used as loss prevention specialists and will be on the lookout for minors engaging adults to purchase beer and wine for them. There will be no point of sale advertising for alcoholic beverages. 4 Based on 11,130 total linear feet of shelving. File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Att 3_ZAB_SR_2801 Adeline.docx

22 Attachment 3 - ZAB Staff Report Page 7 of 13 ZONING ADJUSTMENTS BOARD 2801 ADELINE STREET April 14, 2011 Page 7 of 13 The stores provide a natural deterrence to crime due to the presence of surveillance cameras, abundant lighting, store configuration, and the large number of employees and customers on the floor at all times of day. In addition, the applicant states that nuisances in and around the store, such as theft and loitering, will be limited due to existing closed circuit security cameras, a publicfacing monitor (reminding patrons they are being monitored), and abundant lighting of the store s exterior and parking lot. The applicant also states that Walgreen s has and will maintain a no loitering policy. Walgreen s will maintain signs at the front doors and will have management and/or store greeters to be on the look-out for loitering and to take the appropriate actions as needed to escort individuals off the premises. IV. Community Discussion A. Neighbor/Community Concerns: The public hearing notice for the February 17, 2011 meeting was issued on February 3, 2011, and a revised notice for the March 10, 2011 meeting was issued on February 14, The March 10, 2011 meeting was continued to a date certain; no additional public hearing notice is required. Staff received a number of s indicating opposition to the application, one in support, and one from the president of the LeConte Neighborhood Association indicating overall satisfaction with the proposal, provided that the hours of alcohol sales be limited to those of the nearby Berkeley Bowl store. Hour restrictions are proposed in the Findings and Conditions for approval (Attachment 1B) that mimic the hours of operation of Berkeley Bowl. B. Committee Review: No advisory committee review is required for this application. C. Police Department Review: As with all such applications, the Police Department reviewed the applicant s proposal, considered background crime data, and visited the site in order to determine potential impacts on crime and demand for police services. In the attached memo dated May 25, 2010, the Police Department reports that there was one alcohol related calls for police service at the site during the last 12 months. The memo also states: The Berkeley Police Department is not concerned that granting a Type 20 license adds another alcohol outlet to the area, particularly since Walgreens will not be selling single cans or bottles of beer, or malt liquor with alcohol content over 5.9% The policies and procedures outlined by Walgreens in the proposed plan exhibits [sic] a goal of responsible alcohol service of the limited beer and wines [sic] sales they intend to add to their store. The Berkeley Police File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Att 3_ZAB_SR_2801 Adeline.docx

23 Attachment 3 - ZAB Staff Report Page 8 of ADELINE STREET ZONING ADJUSTMENTS BOARD Page 8 of 13 April 14, 2011 Department supports the approval of granting Walgreens and Type 41 ABC license. The May 25 memo also recommended that the room-temperature alcohol be located closer to refrigerated alcohol or the photo counter in order to improve staff visibility and discourage theft, and the applicant has agreed to this. In a second memo dated June 22, 2010 (also attached), which staff requested to address two of the required PCN findings, including proximity to public schools, the Police Department states: Based on Walgreen s proposed policies and procedures, and the Police Department s recommended measures, the Police Department does not expect that the approval of a Type 20 license would add significant crime to the area. Walgreens proposes policies and procedures to govern the sales of alcoholic beverages at their Adeline site, including measures to prevent the sales of alcoholic beverages to minors. The Police Department is satisfied that these policies and procedures appear to address concerns relating to the presence of Berkeley High students in and around the Shattuck store site. A third memo, dated August 5, 2010, recommends measures that should be incorporated as conditions of approval for any Use Permit to ensure that the policies and procedures will be implemented. If they are not implemented, the Police Department believes there could be a resultant rise in crime and problematic behavior around the stores. In that third memo, the Police Department also referenced a report provided to them by Fried Wittman relating to crime patterns and alcohol outlets. A copy of that report was provided to Staff subsequent to the most recent ZAB hearing, and is available online at under this project address. The report provides correlations and inferences from crime data supplied by the City and the location and type of alcohol outlets throughout the city. Published in July 2010, the report is based on data from calendar year The analysis includes all reported crimes, arrests, whether the event involved alcohol or other drugs (AOD), and lists and maps data by address and alcohol license types, times of day, arrests versus reports, and other factors. In its summary, the report concludes in part, Although most alcohol outlets addresses report relatively few events, a small number of alcohol outlets account for large numbers of police events. Eight off-sales generated 478 Total Events & 116 AOD Events; Eight on-sales generated 658 Total Events & 131 AOD Events. File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Att 3_ZAB_SR_2801 Adeline.docx

24 Attachment 3 - ZAB Staff Report Page 9 of 13 ZONING ADJUSTMENTS BOARD 2801 ADELINE STREET April 14, 2011 Page 9 of 13 V. Issues and Analysis A. Key Issues: 1. Proximity to Berkeley Technology Academy: As noted earlier, the site is located within 1,000 feet of Berkeley Technology Academy, more commonly known as B-Tech. Although proximity to public secondary schools does not trigger PCN findings under the City s Zoning Ordinance, it has generated substantial community concern in the past; on March 10, 2011 the ZAB denied the applicant s request for adding alcohol sales at its location on Shattuck in part due to concern about proximity to Berkeley High School. However, the School District has not expressed concern specifically about the project s proximity to B-Tech, and the ZAB appeared less concerned about the proximity in this case due to distance, lack of connectivity and natural draw between the school and the site, and the much lower number of students at B-Tech compared to Berkeley High School. Special Conditions to restrict the hours of alcohol sales are included in Attachment 1B for the ZAB s consideration. The applicant asserts that these conditions are inappropriate, as Berkeley Bowl does not have the same restrictions. 2. Public Convenience and Necessity: As noted earlier, because there is another establishment with the same type of ABC license within 1,000 feet of the Walgreen s site, this application is subject to findings of Public Convenience or Necessity (PCN) under the City s Zoning Ordinance. The Roxie Deli was approved in 1985 as a convenience food / deli store with sale of beer and wine for off-site consumption, i.e. a market selling a variety of products, including packaged food and incidental ready-to eat food and alcohol. The applicant argues that PCN findings are not required because the Roxie Deli is a de facto restaurant and is therefore meets the exception to PCN findings in BMC Section 23E B.2. It is true that the operation of the Roxie Deli appears to have changed over time to include more extensive food service, including on-site consumption, without zoning approval, while retaining an off-sale alcohol permit from the City and ABC. However, staff believes that the exception for making PCN findings when there is a local food service establishment with service of beer and/or wine does not apply here because the Roxie Deli does not provide service of alcohol as part of meals, but instead provides retail sales, which is the same type of activity proposed by Walgreens. As discussed in the following analysis, this application satisfies only some of the required findings: a. The proposed establishment will promote the City s economic health, contribute to General Plan or Area Plan policies or further District purposes. The proposed beer and wine sales would be subject to a 9.75 percent sales tax, of which one percent (of the total sales) would go to the City s general fund to File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Att 3_ZAB_SR_2801 Adeline.docx

25 Attachment 3 - ZAB Staff Report Page 10 of ADELINE STREET ZONING ADJUSTMENTS BOARD Page 10 of 13 April 14, 2011 provide public services. According to the applicant, beer and wine sales at the store would generate approximately $1,300 in additional City tax revenues per year. However, because much of the beer and wine that would be purchased at Walgreen s is currently purchased elsewhere in Berkeley, sales may be reduced at these other establishments and the above figure probably over-states the net income to the City. Any net increase in tax revenue from the proposal could be seen as promoting the City s economic health, provided that the proposal did not also generate costs for the City which offset that revenue, such as those resulting from increased crime, health problems related to alcoholism, and other effects that can occur with the increased availability of alcohol. A detailed analysis of these effects is beyond the scope of this report, but staff presents some factors for consideration by the ZAB. On one hand, the Police Department has stated that there would not likely be a significant increase in crime because there would be a limited type and quantity of alcohol sold, and the applicant has proposed certain policies and procedures. On the other hand, it is still possible that there could be a modest increase in abuse of alcohol by students at B-Tech, which could result in some diminution of economic benefit due to increased alcohol-related impacts to the health and welfare systems of the City. Special Conditions to restrict hours of alcohol sales are included in Attachment 1B to limit the availability of alcohol during times when students may be in proximity to the store. The applicant asserts that these conditions are inappropriate, as Berkeley Bowl does not have the same restrictions. In addition to economic health, the above finding requires an analysis of applicable planning and zoning policies. The General Plan, South Berkeley Area Plan, and C-SA Zoning District do not contain any specific policy guidance on the question of alcohol sales. However, the following policies relate generally to this issue: General Plan Policy LU-27 Avenue Commercial Areas: Maintain and improve Avenue Commercial areas, such as South Shattuck, as pedestrian-friendly, visually attractive areas of pedestrian scale and ensure that Avenue areas fully serve neighborhood needs as well as a broader spectrum of needs. [Action E:] Maintain and encourage a wide range of community and commercial services, including basic goods and services. [Action G:] Regulate the design and operation of commercial establishments to assure their compatibility with adjacent residential areas. South Berkeley Area Plan Community Resources Policy 3.3: Study the feasibility of regulating the sale and consumption of alcohol through alterations to the City of Berkeley Zoning Ordinance. File: \\cobnas1\planning$\landuse\projects by Address\Adeline\2801\UP \ARCHIVE\Council \Att 3_ZAB_SR_2801 Adeline.docx