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Principal Planner Andrew Miner presented the staff report.
Councilmember Moylan confirmed that the goal (as staff stated) is to preserve these small commercial parcels from being assembled into larger ones. The concern is that this will erode the City’s commercial area and there will not be places for service businesses. Principal Planner Miner stated there are businesses, such as machine and assembly shops, which are not addressed by the current code, but they do exist and are very much Sunnyvale businesses. Councilmember Moylan confirmed with Principal Planner Miner that the intent is to include those types of businesses as they are an expansion of the definition of Service Commercial (C-4) as well.
Councilmember Moylan stated this proposal has generated a lot of opposition, and even the Planning Commission mentioned the proposal appeared to be attempting to fix something that was not broken. Councilmember Moylan asked for an explanation of how much loss of C-4 has already occurred, and what prompted staff to identify that something is in fact broken. Principal Planner Miner stated staff is trying to avoid reaching a point where things are not working and having to fix it after the fact. In past years, businesses were taking up all available spaces, even retail centers, and that is when this proposal was generated. At that time, there was concern the smaller businesses could be absorbed by the start-up companies that could pay higher prices and the City would lose inventory for smaller business uses. The smaller types of businesses are always vulnerable to spikes in the market; therefore, the City is trying to create something that protects these businesses and maintains the characteristics of a smaller property.
Councilmember Moylan questioned if staff’s position is that some type of measure must be taken before the next economic boom in which these types of businesses could erode away, even though they are not currently eroding. Principal Planner Miner stated this study was sort of a partnership between staff’s recommendation and Council’s concurrence that this was something Council wanted to study.
Councilmember Moylan questioned if it was accurate to state that with the new proposal, there would not be a case where a business would have to stop what they are doing, because most of them would fit the new revised C-4 zoning, and a few would be legal, non-conforming. Principal Planner Miner stated approximately 93 percent of the businesses would conform to the new zoning and those that did not could maintain the business (or sell their business) as long as the current use is not discontinued for more than a year, even if the business does not conform to the new or old C-4 zoning district. Councilmember Moylan confirmed that no business would have to shut down should this rezoning be approved.
Mayor Lee stated he cannot remember when an item was unanimously turned down by the Planning Commission, and yet staff is recommending it for approval. Principal Planner Miner stated staff pursued this because conducting the study received unanimous approval by City Council and staff felt it was appropriate to complete the study that Council requested.
Mayor Lee inquired why staff is bringing the study to Council when the Planning Commission suggested staff return at a future date for the commission to consider making changes to the zoning code for C-4 zoning. Principal Planner Miner stated he is not aware of the intent of the Planning Commission to look at this issue in the future.
Councilmember Hamilton inquired where other C-4 zoning is located within the City, and Principal Planner Miner stated C-4 zoning exists between Mary and Pastoria Avenues. Principal Planner Miner stated the apartments east of Sunnyvale Road on Evelyn are also zoned C-4/PD and staff would recommend including that area when they return to Council with their land-use element. Councilmember Hamilton confirmed the staff recommendation is to not allow residential use as a part of the C-4 zoning.
Councilmember Hamilton confirmed that there is on-going pressure on the City to change from industrial to residential use.
Councilmember Chu disclosed he received a phone call from someone representing one of the owners in the area who suggested that Councilmember Chu not vote for this item.
Councilmember Chu inquired that of the approximately 90 parcels in this area, was there a significant number of tenants or owners who implied they did not want this area rezoned. Principal Planner Miner stated there have been numerous property owners who were very concerned about this and felt rezoning would limit their options. Principal Planner Miner stated prior to the outreach meeting with the property owners, staff was not considering changing the zoning; however it was from that meeting that staff identified these are the businesses the City is trying to protect. Staff identified that the code should be expanded to allow the businesses to maintain what they have and still meet Code. The letters and comments received did not indicate that they realized this change was being worked on by staff in order to protect these uses. Principal Planner Miner stated that most of the owners were reacting to the old C-4 zoning and how it would impact them.
Councilmember Chu confirmed that all recommended areas are currently zoned Industrial and Service (M-S).
Public hearing opened 8:07 p.m.
Robert Hirsch stated he has two buildings in the affected area and feels it is a downgrade proposal. Hirsch stated what would really be helpful would be to have multi-use buildings with apartments above the buildings. Hirsch stated that what is being proposed will hurt small businesses as it will limit the number of things small businesses can do. Hirsch stated that eventually small businesses will no longer be able to compete and will have to close down. Hirsch stated that the rent on professional buildings is about $2.00 per square foot, as opposed to C-4 at approximately 40 cents per square foot. Hirsch stated he spoke to many business owners and he has 89 petition signatures.
Councilmember Moylan stated the requested action is to expand the definition of a C-4 zone as a means to protect smaller type businesses, such as Hirsch’s machine shop. Councilmember Moylan stated, should that action prevail, Hirsch could keep and expand his business, and competitors could not squeeze him out of business. Councilmember Moylan inquired as to why this proposal would hurt Hirsch’s business, when in fact staff is attempting to save his business. Hirsch stated his business is on its way out and it is his hope that he will be able to obtain enough rent to allow for the improvements that he will need to make in order for the building to be safe. Hirsch stated C-4 zoning will not garner enough rent to allow for improvements to these buildings.
Councilmember Moylan confirmed with Hirsch that Hirsch wants to have the right to convert his use to another use. Councilmember Moylan inquired if it is Hirsch’s assertion that all the C-4 areas have businesses that are on their way out and Hirsch stated the businesses that are competing with low-cost regions over time will not be able to survive.
Councilmember Moylan explained to Hirsch that staff completed this study because Council ranked the study high in an effort to assist these businesses. Councilmember Moylan confirmed that Hirsch is in favor of multi-use projects.
Councilmember Howe explained that he was one of the Councilmembers that brought this issue forward as a means to protect smaller businesses. At the time, there were a number of small businesses that were being taken out by large businesses along Maude Avenue and the idea behind the study issue was how to protect these types of smaller businesses that are still needed within the community. Councilmember Howe confirmed that Hirsch believes a zoning change would downgrade the businesses economically faster than without any zoning change. Councilmember Howe confirmed with staff that M-S zoning allows for professional offices and if the area were zoned C-4, a professional office could move into the area with a use permit as long as the business is less than 10,000 square feet per parcel. Councilmember Howe confirmed that a professional office located within M-S zoning would not require a use permit and can have a floor area ratio (FAR) up to 35 percent without any restrictions on office use (if over 35 percent FAR, it would require a use permit).
Councilmember Howe inquired as to what type of professional office business would Hirsch want to open, and Hirsch stated possibly a classic car office. Councilmember Howe asked staff if under M-S (as zoned today), could Hirsch sell automobiles and Principal Planner Miner stated Hirsch would not be able to sell cars under M-S nor C-4, only auto brokers would be allowed. If Hirsch were a car broker, the business would be allowed in both zoning areas. Hirsch stated the issue is that C-4 is clearly downgraded zoning and every owner he spoke to wants the zoning left as it is currently.
Councilmember Hamilton stated if housing was built as part of a multi-use project, and should professional offices eventually locate in the area, then the housing would not be needed. Hirsch stated the City needs affordable housing regardless, and if not used for workers, it would be great for the community. Councilmember Hamilton explained that currently housing is allowed in a C-4 zone and not in an M-S zone. Hirsch stated he had not thought about the multi-use idea in detail.
Colleen Medeiros stated she is an owner of one of the properties in this area and requested that Council accept the Planning Commission’s recommendation and leave the zoning as
M-S. Medeiros stated the businesses will be able to sell for a higher rate with the current zoning.
Jim Kuehne, owner of Kuehne Construction, requested Council leave the zoning as it currently is zoned.
Robert Lawrence stated he has concerns with changing the zoning to C-4. Councilmember Hamilton stated Council is looking at this zoning change because in other areas the current user of the site finds it is much easier to sell the site and go elsewhere. Council is trying to protect the businesses that want to stay in Sunnyvale. Lawrence stated the new ordinance is doing just the opposite, as it will no longer allow a use-by-right and use permits would be required. Councilmember Hamilton stated the reason for making this change is to allow businesses to have the use-by-right. Lawrence stated Attachment H identifies that his business is not a permitted use. Principal Planner Miner stated as long as the use is in place, they can maintain their business as they do currently. Lawrence stated the way the ordinance is written, his business would not be able to modify or change some part of the building without a use permit. Principal Planner Miner stated maintaining the existing site is a legal use and the business can expand or make improvements.
Councilmember Hamilton inquired if there is a limit on the size they can expand as the building is already 16,000 square feet. Principal Planner Miner stated the limitations would be that they would not be able to expand larger than 20,000 square feet, and of the 20,000 square feet, they could not have more than 10,000 square feet of office space.
Lawrence inquired if it is correct that should he want to make a change in the building, all that he would be required to do would be to obtain a building permit. Principal Planner Miner stated for the use that is existing, that is correct.
Bruce Perlitch stated he enjoys the zoning that he currently has in place. Perlitch stated the zoning he has allows him to expand his business. Perlitch questioned whether he would be able to buy the lot next to him and expand with the C-4 zoning, or would that need a use permit. Perlitch asked if it is Council’s desire to protect his business to the degree that he is not able to grow.
Werner Gans stated if the situation is not a problem, it is better to leave it as it is and perhaps spend some more time clarifying the issues and present this to the community again at a later date.
Public hearing closed 8:39 p.m.
Councilmember Hamilton inquired if providing employee housing as part of this project was considered. Principal Planner Miner stated the City does not have a mixed-use zone and it is really beyond the scope of this study to look at adding the residential component.
Mayor Lee confirmed that Alternatives 2 and 5 came out of the outreach meetings, but have not been discussed with the building owners.
Mayor Lee confirmed that two issues exist, one is zoning the parcels, and the other is the definition of C-4 zoning. Mayor Lee inquired as to what the Planning Commission said about the definition of C-4, and Principal Planner Miner stated the Planning Commission did not take any action and suggested it come back at a later date.
MOTION: Councilmember Howe moved, and Councilmember Swegles seconded, to approve Alternative 7: Council makes no changes to the Zoning Code
and sponsors a study issue that would deal with the intent of the original study issue with the addition of reviewing the history of West Maude Avenue.
Councilmember Hamilton offered a friendly amendment to Attachment H ( page 1, section d) in which Council would approve the staff recommendation to strike residential uses from being allowed as a permitted use in the C-4 zone.
Councilmember Howe offered that Council not approve C-4 at all and instead staff revise
C-4 zoning and return to the Planning Commission and Council for approval. Councilmember Hamilton stated she had no concerns with striking this section. Councilmember Howe confirmed the friendly amendment would strike residential use from C-4 zones regardless of what Council does with the rest of the zoning.
Friendly amendment accepted.
Restated MOTION: Councilmember Howe moved, and Councilmember Swegles seconded, to approve Alternative 7: Council makes no changes to the Zoning Code
and sponsor a study issue that would deal with the intent of the original study issue with the addition of reviewing the history of West Maude Avenue
and
approve the removal of residential uses from the City ordinance on Commercial Zoning Districts, section 19.20.020 (d).
Councilmember Moylan stated it is discouraging to hear from at least one business owner that the small businesses are doomed and are planning to convert their properties to another use in order to make more money when they sell. This action is exactly what Council was trying to stop; however, if the businesses themselves do not want this type of zoning protection, then Council should not impose it on them.
VOTE: 7-0
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