The following is a chronological list of ordinances pertaining to the off-sale of alcohol:

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1 COUNCIL AGENDA: 6/2/15 ITEM: 4.2 CITY OF SAN JOSE CAPITAL OF SILICON VALLEY TO: HONORABLE MAYOR AND CITY COUNCIL SUBJECT: SEE BELOW Memorandum FROM: Harry Freitas DATE: June 1,2015 Approved Date COUNCIL DISTRICT: 1 SUPPLEMENTAL SUBJECT: FILE NO. PDC PLANNED DEVELOPMENT REZONING REQUEST TO REZONE FROM THE CP COMMERCIAL PEDESTRIAN ZONING DISTRICT TO THE CP(PD) PLANNED DEVELOPMENT ZONING DISTRICT TO ALLOW A NEW GAS STATION AND A 3,200 SQUARE FOOT CONVENIENCE STORE; AND FILE NO. PD PLANNED DEVELOPMENT PERMIT TO ALLOW THE 1) DEMOLITION OF AN EXISTING GAS STATION AND TWO COMMERCIAL BUILDINGS; 2) CONSTRUCTION OF A NEW GAS STATION AND A 3,200 SQUARE FOOT CONVENIENCE STORE; AND 3) ALLOW THE OFF- SALE OF BEER AND WINE; AND FILE NO. ABC ALCOHOL BEVERAGE CONTROL (ABC) DETERMINATION OF A PUBLIC CONVENIENCE OR NECESSITY; ALL ON A 0.64 GROSS ACRE SITE LOCATED AT 1005 SARATOGA AVENUE. REASON FOR THE SUPPLEMENTAL On May 12, 2015, the City Council held a public hearing to consider the subject Rezoning, Development Permit, and Public or Necessity applications. As part of the discussion, the City Council asked for clarification about the permitting of the off-sale of alcohol with gas station and small format retail (convenience) store uses. This memo provides clarification on the City's Policy for the off-sale of alcohol, as well as the permitting history for such uses, as well as, summarizing the overriding benefits of the proposed project to support a determination on public convenience or necessity.

2 June 1, 2015 Page 2 ANALYSIS Off-sale Ordinance History The following is a chronological list of ordinances pertaining to the off-sale of alcohol: Ordinance No (Effective June ): This Ordinance prohibited the granting of any permits under Title 20 to allow both a gasoline service station and the retail sale of food, grocery items or alcoholic beverages to operate on the same location. Ordinance No (Effective May ): This Ordinance made the off-sale of alcohol subject to a Conditional Use Permit in commercial zoning districts. This Ordinance did not remove the prohibition of off-sale of alcohol at gasoline service stations. Ordinance No ^Effective February 1, 2006): This Ordinance adopted changes to Title 20 separating the off-sale of alcohol into two uses; one that permitted off-sale of alcohol of only beer and wine; and one for the off-sale of alcohol with a full range of alcohol beverages. This Ordinance removed the prohibitions from the 1985 Ordinance and allowed the off-sale of alcohol and retail sales at gasoline stations with a Conditional or Planned Development Permit. The Ordinance added a new chapter in Title 6 to set forth findings with which to make a Determination of Public or Necessity. Ordinance No (Effective February ): This Ordinance adopted changes to Title 6 by including provisions for the City Council, on appeal, to consider the greater public benefits in determining public convenience or necessity. The Ordinance also provided development permit requirements for conversion of gasoline services stations to other uses such as convenience stores. Ordinance No (Effective April 27, 2012): This Ordinance adopted changes to Title 6 modifying the general process for making a Determination of Public or Necessity. The changes allowed for the to forward a recommendation to City Council when they cannot make all the findings for a Determination of Public or Necessity instead of an automatic denial that required an appeal to the City Council.

3 ^ June 1, 2015 Page 3 Current Municipal Code and Ordinance Policies The must make all of the findings under Title 20 of the San Jose Municipal Code in order to approve a Conditional Use Permit for an off-sale of alcohol use. The required findings are as follows: Title Required Findings Off-Sale of Alcohol Finding No. 1 If the off-sale of alcohol use is located closer than five hundred feet from any other such use (within or outside the city): a) The proposed off-sale of alcohol use would not result in a total of more than four establishments within a one thousand foot radius from the proposed location. Finding No. 2 If the use is closer than 500 feet from any other off-sale of alcohol use (within or outside the city) where the proposed location would result in a total of more than 4 establishments that provide alcoholic beverages for off-site consumption within a 1,000 foot radius from the proposed location, that the resulting excess concentration of such uses will not: a) Adversely affect the peace, health, safety, morals, or welfare of persons residing or working in the surrounding area; or b) Impair the utility or value of property of other persons located in the vicinity of the area; or c) Be detrimental to public health, safety or general welfare. Finding No. 3 For such use at a location closer than five hundred feet from any; - child care center, - public park, - social service agency, - residential care facility, - residential service facility, - elementary school, - secondary school, - college or university, - or one hundred fifty feet from any residentially zoned property: a) The building in which the proposed use is to be located is situated and oriented in such a manner that would not adversely affect such residential, child care center, public park, social service agency, residential care facility, residential service facility and/or school use. In addition, a Conditional Use Permit requires a Determination of Public or Necessity (PCN) when at least one of the following is true:

4 June 1,2015. Page 4 The premises of the proposed license are located in an area that has a 20 percent greater number of reported crimes than the average number of reported crimes for the City as a whole. The premises of the proposed license are located in a census tract where the ratio of existing retail off-sale licenses to population in the census tract exceeds the ratio in the County as a whole. If a subject project requires a Determination of Public or Necessity, the findings in the table below must be made by the in order to approve a PCN. Title Required Findings Determination of Public or Necessity Finding No. 1: The use is not within a: - Strong Neighborhood Initiative area, - neighborhood revitalization area, - other area designated by the city for targeted neighborhood enhancement services or programs, - within an area that the chief of police has determined that the use would be detrimental to the public health, safety, or welfare of persons located in the area; or would increase the severity of existing law enforcement or public nuisance problems in the area, Finding No. 2; The use would not lead to the grouping of more than 4 off-sale of alcoholic beverage uses within a 1,000 foot radius from the exterior of the building of the proposed use; Finding No. 3: The proposed use would not be located within 500 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. Finding No. 4: Alcoholic beverage sales would not represent a majority of the proposed use. Finding No. 5: Along with all of the four findings above, at least one of the following additional findings must be made: a. The census tract in which the proposed outlet for the off-premises sale of alcoholic beverages is located is unusually configured and the proposed outlet would act as a convenience to an underserved portion of the community without presenting a significant adverse impact on public health or safety; or b. The proposed use would enhance or facilitate the vitality of an existing commercial area without presenting a significant adverse impact on public health or safety; or c. The census tract in which the proposed use is located has a low population density in

5 June 1, 2015 Page 5 relation to other census tracts in the city, and the proposed outlet would not contribute to an over- concentration in the absolute numbers of outlets for the off-premises sale of alcoholic beverages in the area; or d. The proposed off-sale of alcoholic beverages is incidental and appurtenant to a larger retail use and provides for a more complete and convenient shopping experience. If the cannot make all the above findings, then the will forward a recommendation to the City Council and the City Council must find that the proposed use provides a significant and overriding public benefit in order to approve the PCN determination and the permit. Off-Sale of Alcohol Approvals for Small Format Retail () s and Gas Stations Since the 2006 repeal of the 1985 Ordinance prohibiting the off-sale of alcohol at gas stations, the City has approved 23 off-sale of alcohol permits for gas stations and/or convenience stores. The attached table provides a detailed description of said approved permits. Of these 23 permit approvals, three were approved by the City Council with a finding of overriding public benefit, two of which were gas station convenience stores where the overriding public benefit was based on location of the site at a busy commercial intersection and one was for a small market that also included the sale of grocery items. The other 20 permits were approved by the or at a Director's Hearing. The City Council's approval of one of these permits included the off-sale of alcohol along with the retail sale of fresh unprocessed meat and produce as an offsetting benefit. This particular offsetting benefit is one of many that the Council could consider and is not a codified required finding for a Conditional Use Permit or a Determination of Public or Necessity. Subject Planned Development Zonins. Planned Development Permit, and Determination of Public or Necessity As identified in the staff report to the, the subject Planned Development Zoning, Planned Development Permit, and Determination of Public or Necessity have the following overriding public benefits: The proposed off-sale will be incidental and appurtenant to a 3,200 square foot retail market and gas station and would further provide for a more convenient customer experience. The project site is at the border of four census tracts which intersect at the intersection of Williams and Saratoga Avenue. The three adjacent census tracts are not unduly concentrated with off-sale establishments and there are only two existing off-sale establishments within 1000 feet of the project site; these two businesses are on the same block more than 500 feet away from the project site. The proposed off-sale will provide

6 June 1, 2015 Page 6 a convenient service in an area with limited off-sale establishments within walking distance and in a location that is planned to be a future Urban Village in the General Plan. The proposed off-sale will facilitate the redevelopment of a 1960s gas station with no canopy or amenities (i.e., convenience store), with minimal landscaping and a significant amount of hard surface along the site perimeter, and replace it with new fuel pumps covered by a canopy and a convenience store along the Saratoga Avenue frontage with landscaping around the building to provide a landscape buffer to adjacent properties. The site improvements will also include increasing the sidewalk width, eliminating a curb cut, adding a pedestrian path from the sidewalk to the new convenience store, and an outdoor landscaped seating area accessible from the convenience store and adjacent farmers market site. By redeveloping and enhancing the site with both a neighborhood-serving convenience store and pedestrian-oriented amenities, the project would contribute to the revitalization and development of the area as a complete, walkable community as intended in the General Plan. The proposed use would provide the above-referenced benefits without countervailing law enforcement concerns anticipated, as the census tract in which the project site is located is not unduly concentrated in terms of the crime rate relative to the city average and the Police Department which evaluated the proposed use is neutral. Is/ HARRY FREITAS, DIRECTOR, Building and Code Enforcement For questions please contact Official, Steve McHarris, at Attachment: Table of approved off-sale of alcohol permits

7 Off-Sale of Alcohol at Gas Stations and/or Small Format Retail ( ) File No. Address Permit Issued Approving Body Type Project Description PDA Southwest Expressway 12/17/14 CP Snell Avenue 11/20/13 CP S. White 5/3/13 Director s Hearing PDA The Alameda 4/5/13 Director Hearing CP N. Capitol Avenue 3/15/13 CP Pearl Avenue 10/26/10 CP Monterey CP Tully 11/4/2009 CP South De Anza Boulevard 4/7/2010 9/9/2009 Planned Development Permit Amendment to allow the aftermidnight hours of operation and off-sale of alcohol uses for a relocated 7-Eleven store. Conditional Use Permit to allow construction of an approximately 311 square foot addition to an existing 2,219 square foot building and conversion of three existing service bays to retail use with offsale of alcohol (beer and wine) and late night use (24-hours) at an existing gas station. Conditional Use Permit to allow the demolition of an existing gas station and construction of a new gas station with a 3,040 square foot convenience store, and six fuel pump stations with canopy and associated site improvements, the off-sale of alcohol, and extended hours of operation. Planned Development Permit Amendment to allow the change of liquor license type from Type 20 (Off-sale Beer and Wine) to Type 21 (Off-sale General) at an existing retail store. Conditional Use Permit to allow 24-hour use and reinstate off-sale of alcohol use (beer and wine) with minor site improvements for a new convenience store (7-Eleven). Conditional Use Permit to demolish existing buildings and construct new gas station with canopy, and allow off-sale of alcohol, on a 1.28 gross acre site. Conditional Use Permit to construct 4,640 square feet for commercial uses with 24-hour operation and off-sale of alcoholic beverages on a 0.34 gross acre site Conditional Use Permit to demolish an existing gasoline service station and construct a 2,900-square- foot convenience store/sales building, canopy, fuel dispensers, underground fuel tanks, and related site improvements; and to allow 24-hour operation and offsale of alcoholic beverages on a 0.72 gross acre site Conditional Use Permit to allow the demolition of an existing 1,472 gas station building and to allow, the construction of a 3,200 square foot convenience, store one additional fuel dispenser and other site improvements and to allow off-sale of alcoholic beverages at an existing service station on a 0.51 gross acre site CP Senter 4/22/2009 Conditional Use Permit to allow demolition and reconstruction of a

8 CP CP CP CP CP CP North Capitol Avenue 4995 Almaden Expressway 2101 North 1st Street 3145 South Bascom Avenue 3295 South White 6095 Cahalan Avenue 10/22/2008 9/24/2008 9/10/2008 4/8/ /18/2007 6/11/2007 City Council (An Appeal) PDA The Alameda 6/4/2007 Director Hearing CP PD PCN File No. ABC06-014* CP Blossom Hill 350 East Taylor Street 696 Blossom Hill 5/16/2007 4/3/2007 City Council 2/12/2007 gasoline service station with existing 24-hour operation and off-sale of alcoholic beverages on a 0.55 gross acre site Conditional Use Permit to allow the demolition of an existing gas station / mini-mart, and the construction of a new 2,400 sq. ft. mini-mart, a 1,200 sq. ft. car wash, a new 3,200 sq. ft. gas station canopy and continued off-sale of alcohol on a 0.8 gross acre site. Conditional Use Permit to allow construction of a gasoline service station with 24-hour operation and off-sale of alcoholic beverages on a 0.55 gross acre site Conditional Use Permit and to allow the off-sale of alcoholic beverages in an existing mini mart located in a gasoline station and associated site improvements on a 0.49 gross acre site Conditional Use Permit to allow off-sale of alcohol at an existing gasoline service station on a 0.35 gross acres site Conditional Use Permit to allow off-sale of alcoholic beverages to an existing mini-mart located at a gasoline service station on a 0.63 gross acre site Conditional Use Permit to (1) convert 400 square feet of existing space from ancillary automotive use to retail use, (2) construct 328 square feet of new office/storage use, and (3) allow off-sale of alcoholic beverages on a 0.67 gross acre site Planned Development Permit Amendment to allow off-sale of alcoholic beverages at an existing retail store (CITY MINI MART) in a mixed-use commercial and residential development on a 1.44 gross acre site Conditional Use Permit to demolish an existing gasoline service station and construct a 2,945-square- foot sales building, canopy, fuel dispensers, underground fuel tanks, and related site improvements; and to allow off-sale of alcoholic beverages on a 0.69 gross acre site Planned Development Permit to allow off-sale of alcoholic beverages and a new sign at an existing retail store (TAYLOR STREET MARKET) on a 9.02 gross acre site Conditional Use Permit to allow off-sale of alcoholic beverages at an existing gasoline service station on a 0.50 gross acre site CP Poughkeepsie 11/17/2006 City Council Conditional Use Permit to allow off-sale of alcoholic beverages at

9 PCN File No. ABC06-012** CP PDA Blossom Hill 3720 North 1st Street 11/15/ /13/2006 Director s Hearing an existing gasoline service station on a 0.50 gross acre site Conditional Use Permit to allow off-sale of alcoholic beverages at an existing gasoline service station on a 0.49 gross acre site CODE CASE - Planned Development Permit Amendment to allow off-sale of alcoholic beverages at an existing retail store (FIRST MART) on a 1.91 gross acre site *Determination of Public convenience or Necessity (File No. ABC06-014) **Determination of Public convenience or Necessity (File No. ABC06-012)