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Exhibit CC 10-04-2016 Item No. 111 Lauren Sapudar From:Darrel Lum <> Sent:Sunday, October 02, 2016 9:07 PM To:City Council; City Clerk; City Clerk; Barry Chang; Savita Vaidhyanathan; Darcy Paul; Rod Sinks; Gilbert Wong Cc:Ned and Rusty Britt Subject:City of Cupertino City Council Meeting October 4, 2016, Agenda Item #11 Attachments:Municipal Code Amendment.pdf Altho we have voiced our concerns at the Planning Commiission level and the City Council's deliberation for the First Reading of the Ordinance amending the Municipal Code, yet Considering the increasing cost of projects, "Why is there a $100,000 maximum penalty for violation of the conditions of approval when in a $100 million project, $100,000 represents only .1%, i.e., the cost of doing business?" Considering the increasing cost of projects, "Why is there a $100,000 maximum for art, i.e., the cost of doing business?" The amount of penalties and the cost of art should be increased. There is still no definition of retail in the Municipal Code, rather it is stated that it's somewhere defined in the CG. Why is economically feasible removed, especially "The housing developer's financial ability to build the project shall not be a factor." Attached is our comments presented to the Planning Commission on April 26,2016 and copy of which was distributed to all of you for your meeting September 20, 2016. Darrel Lum Resident of Cupertino Member of Concerned Citizens of Cupertino 1 Planning Staff April 26, 2016 Meeting Planning Commission April 26, 2016 Meeting Agenda Item #3, still unclear as to the depth of the proposed changes, Municipal Code Amendment, especially: Process to Initiate Complaint of Alleged Violation Complaint by resident to whom? Complaint by/thru City City: Planning Staff, Planning Commission, individual Planning Commissioner, applicable or designated Commission staff or member, City Council, individual Councilmember, applicable or designated City Council staff or member, City Manager, Director of Community Development, applicable Director, applicable Commissioner, code enforcement? Specific Form? Dated? Confidentiality of complainant? to avoid retaliation Response as to validity of complaint Access to status of Valid Complaint in its Processing What violation generates an administrative citation? Other types of Violations? Types of Violations Zoning Building permit Municipal code Conditions of approval Should be available to public Require Conditions of Approval to be accessible to the public without the necessity of submitting a public information request Development Agreement Should be readily available to public Require Development Agreements to be accessible to the public without the necessity of submitting a public information request Environmental Impact Report (EIR) or CEQA Mandated Mitigation Measures to be formatted in an easily-read list to be publicly accessible without a public information request Specific Plan > presently available General Plan > presently available Comment: Is a violation of the above considered an administrative violation. Planning Commission when decision maker Other applicable commissions when decision maker Art Park & Recreation etc City Council 2 Comment: Is an action contrary to final decision-making body considered an administrative violation? 1.10.030 Administrative citation Comment: Change of code seems to be applicable only to Administrative Violations for ??? Change of code should be specific; see previous and supplement as necessary 1.10.050 Time period within which to correct or remedy violations Specify time frame Deadline for specific progress points 1.10.055 Recording of Notice of Violation Date of registering complaint or when municipal official notes violation? 1.10.060 Administrative citation fines B. The fine assessed in conjunction with the issuance of an administrative citation shall be in accord with the California Government Code Section 53069.4 and is set as follows: 1. First citation -$100. 2. Second citation for the same violation within the same twelve month period - $200 3. Third or any subsequent citation for the same violation within the same twelve month period - $500 Planning department citation fees Specific fines/penalties City Council citation fees Specific fines/penalties Avoid City of Palo Alto difficulties with Edgewood Plaza, see below. 1.10.070 Appeal of administrative citation Appeal of planning department citation Appeal of City Council citation Appeal by complaintee 3 1.10.130 Administrative penalty hearing before the City Council Planning department penalty hearing before the City Council City Council penalty hearing before the City Council 1.10.140 Administrative penalties imposed by the City Council What is difference between administrative violation subject to administrative citation subject to fines or administrative citation subject to penalty? What is the difference between administrative violation, violation of a Planning Department directive, violation of Planning Commission, and violation City Council approval other than a violation of a municipal entity. Planning department penalty imposed by the City Council City Council penalty imposed by the City Council B. The City Council may impose an administrative penalty in an amount not to exceed a maximum of $1,000 per day for each violation, except that the total administrative penalty shall not exceed $100,000…. C. If the responsible person fails to correct the violation(s), other enforcement actions may be pursued by the city. WHAT other enforcement actions? Comments: Maximum total administrative penalty of $100,000. There should NOT be a maximum total administrative penalty or maximum total penalty for any type of municipal violation. With cost of real estate in millions $ per acre and multi-million $ development cost or multi-billion $ development cost, the penalty may be considered the cost of doing business. Avoid City of Palo Alto difficulties with Edgewood Plaza and its developer! Demolition of Historical Structure see Palo Alto Times article “ Edgewood Plaza Work to Proceed Despite Violation” by Gennady Sheyner dated March 4, 2013. “By law, the City can issue a fine of about $10,000 for the illegal demolition, the fine can be raised significantly for a demolition of a historic structure. Breach of Agreement with City of Palo Alto see update report by City of Palo Alto, dated August 29, 2015 see City of Palo Alto letter to Property Owner of Edgewood Plaza dated September 1, 2015. see update report by City of Palo Alto, dated Friday, April 29, 2016 “A recent accounting of the fees assessed to the property owner for this violation was $193,250. 4 19.08.030 Definition of Retail Lacking in: Hyatt Hotel Project MainStreet Cupertino Development Office Building #1 Office Building #2 Condition of Approval #8 that “Prior to issuance of building permits, the applicant shall demonstrate the ground floor retail functionality for buildings proposed at heights over 45 feet in accordance with the City’s General Plan, to the satisfaction of the Director of Community Development. The ground floor retail shall be substantial and appropriate size to accommodate the functionality of retail use. The building frontages of all buildings facing the town square, including…the office shall have ground floor retail as illustrated by the plans in the approved exhibits.” Status of To Be Revised Covenant. Please provide. Condition of Approval dated 1/23/09 that “Any building(s) proposed at the northwest corner Stevens Creek and North Tantau Avenue shall have prominent architectural design enhancements to emphasize the importance of this corner as the eastern gateway entry to the City including:… 1. 2. 3. 4….” Has this Condition of Approval been modified? To? When? Please provide. Definition of Retail The 2000-2020 City of Cupertino General Plan is very specific. Figure 2D Maximum Building Heights, “60 feet if there is a retail component Policy 2-30 Vallco Park South “ Building Heights: Maximum of 60 feet if there is retail component and 45 feet if not.” Discuss the term “retail” instead of menus, other restaurants, square footage or sales tax/hotel tax. City acknowledged that it does not have a definition of retail. 5 City of Cupertino utilizes the term “retail” in connection with many municipal connotations: Ordinance Parking Municipal Code General Commercial Zoning Districts Table 19.60.030 1. Retail businesses 2. Full service restaurants (without separate bar facilities) 3. Specialty food stores 4. Eating establishments 19.60.050 Land Use Activity A. 3. The activity must involve direct retailing of goods or services to the general public. The retailing and servicing activity must comprise at least fifty percent of the floor space, including enclosed patio and atrium space, and must represent the primary emphasis of the business. Window displays shall reflect the retail emphasis. General Plan 2005 Building Heights 30 feet, 45 feet, 60 feet 60 feet if there is a retail component Source: Maximum Building Heights Figure 2-D Maximum Building Heights Community Design General Plan 2000-2020 City of Cupertino In the recent past, a Councilmember had to use the definition of retail from dictionary and another councilmember asked whether a vending machine constitutes retail. General Plan (Community Vision 2015 – 2040) Commercial real estate is commonly divided into 6 categories: 1. Office Buildings 2. Industrial 3. Retail/Restaurant 4. Multi-family 5. Land undeveloped land rural land infill land within urban area 6. Miscellaneous 6 hotel hospitality health Categories of Commercial Real Estate Category Examples Leisure Hotels, public houses, restaurants, cafes, sports facilities Retail Retail stores, shopping malls, shops Office Office buildings, serviced offices Healthcare Medical centres, hospitals, nursing homes Multifamily Apartments, multifamily housing buildings What Types of Business are considered Retail? Restaurants fall under “Food Services and Drinking Places,” according to the U.S. Census Bureau. What Type of Business is a Restaurant? …,the restaurant is in the food service industry. Also the U.S Census has 2 separate categories: Retail sales Accommodation and food services sales 7 Use International (Canada, United States and Mexico), Federal (United States), State of California and Business Guidelines for Definition of Retail. International The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. for United States, Canada & Mexico 44-45 Retail 721110 Hotels (except Casino Hotels) and Motels This industry comprises establishments primarily engaged in providing short-term lodging in facilities known as hotels, motor hotels, resort hotels, and motels. The establishments in this industry may offer food and beverage services, recreational services, conference rooms and convention services, laundry services, parking, and other services. 722511 Full-Service Restaurants This U.S. industry comprises establishments primarily engaged in providing food services to patrons who order and are served while seated (i.e., waiter/waitress service) and pay after eating. These establishments may provide this type of food service to patrons in combination with selling alcoholic beverages, providing carryout services, or presenting live nontheatrical entertainment. Federal Department of Commerce Table 1 Estimated Monthly Sales for Retail and Food Services 10 Month Total 2014 Retail & food services total 4,322,042 in millions of dollars Retail 3,848,825 Food services 473,217 Internal Revenue Service/Department of the Treasury These codes for the Principal Business…by the type of activity they are engaged in to facilitate the administration of the Internal Revenue Code. These six-digit codes are based on the North America Industry Classification System (NAICS). Accommodation, Food Services, & Drinking Places 8 Accommodation 721100 Traveler accommodation (including hotels, motels, & bed & breakfast inns) Food Services & Drinking Places 722410 Drinking places (alcoholic beverages) 722511 Full-service restaurants 722513 Limited-service restaurants Retail Trade Building materials & garden equipment & supplies dealers 444130-444190 Clothing & Accessories Stores 448130-448190 Electronic & Appliance Stores 44342-443141 Food & Beverage Store 445310-445290 Furniture & Home Furnishing Stores 442110-442200 Gasoline Stations 447100 General Merchandise Stores 452000 Health & Personal Care Stores 446120-446190 Motor Vehicle & Parts Dealers 441300-441120 Sports Goods, Hobby, Book, & Music Stores 451211-451110 Miscellaneous Store Retailers 453920-453990 Nonstore Retailers 454112-454390 “Select the category that best describes your primary business activity. Then select the activity that best identifies the principal source of your sales or receipts. Source: Principal Business or Professional Activity Codes Internal Revenue Code Annual Retail Trade Survey 1992 through 2012 Accommodation and food services Sector 72 Accommodation Sector 721 Food services and drinking places Sector 722 9 State See Franchise Tax Board/Board of Equalization See Alcoholic Bureau of California (ABC) Business Bank of America Credit Card Rewards 1% cash back on retail purchases 2% cash back at restaurants In spite of the fact that there are international, federal and state definition of the term “retail”; the City of Cupertino is unable to define the term “retail” 10 Definition of Setback Area Existing definition of Setback Area, Required. “Required setback area” means open space, unoccupied and unobstructed from the ground upward, except as provided in this title, between the lot line and the setback line on the same parcel. 1. Setback Area, Required Front Yard…. “The Director of Community Development shall have the discretion to modify the provisions of this definition when it improves the design relationship of the proposed buildings to adjacent buildings or parcels.” Comment: Define Vending Machine Although there is a definition of Reverse Vending Machine in the existing Municipal Code, yet there is NO definition of vending machine in the existing Municipal Code. There is also no mention of whether a vending machine can be considered retail. Although it has been asserted that a business entity would not consider a vending machine as retail in its business plan, there is that possibility. Comment: Define Concession Difference between Concession, Density Bonus and Community Benefit Comment: Define Project; Define Development Difference between a Project versus Development Comment: Define Senior Resident Use of Federal or State of California guidelines? Fiscal Impact Report (FIR) Fiscal Impact Report of Project/Development on City, Schools, Police, Fire, Water and other public infrastructures To what degree is an applicant obligated to complete its project/development or is subject to a penalty its financial sponsor reneges upon its financial responsibility? Important is the example of Sunnyvale Town Center when its applicant’s financial resource withdrew its funding, subject to circumstances beyond the City’s influence, delaying the completion of Sunnyvale Town Center to 2016+.