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HomeMy WebLinkAboutItem 6c. Appeal (APPL-0608-2024) of PC decision to approve a CUP (USE-0266-2024) for Embark SLO, a cannabis retail storefront at 2400 Broad StCity of San Luis Obispo, Council Memorandum City of San Luis Obispo Council Agenda Correspondence DATE: January 16, 2025 TO: Mayor and Council FROM: Timmi Tway, Community Development Director Prepared by: Ivana Gomez, Cannabis Business Coordinator VIA: Whitney McDonald, City Manager SUBJECT: ITEM 6C - REVIEW OF AN APPEAL OF THE PLANNING COMMISSION'S DECISION TO APPROVE A CONDITIONAL USE PERMIT TO ESTABLISH A CANNABIS RETAIL STOREFRONT, EMBARC SLO, AT 2400 BROAD STREET (USE-0266-2024, APPL-0608-2024) This Staff Correspondence is to communicate that the applicant for the Conditional Use Permit to establish a cannabis retail storefront at 2400 Broad Street, which is the subject of the appeal hearing scheduled for January 21, submitted written correspondence on January 14, 2025, to request a continuance of the appeal hearing originally scheduled for January 21, 2025. The applicant has cited medical reasons for their inability to attend the hearing as scheduled. Initial notification of the scheduled hearing was provided to the applicant on October 7, 2024. City staff has communicated this request to the appellant, who has acknowledged the applicant's situation and agreed to continue the appeal hearing to a future date. Therefore, staff recommends that the City Council continue the item to a date uncertain. Staff will work with all parties involved to determine a suitable date and will coordinate with the City Clerk's office to reschedule the hearing accordingly. Given the Council’s impacted schedule, the hearing is anticipated to be rescheduled in the summer of 2025. Page 445 of 488 Page 446 of 488 Item 6c Department: Community Development Cost Center: 4001 For Agenda of: 1/21/2025 Placement: Public Hearing Estimated Time: 60 minutes FROM: Timmi Tway, Community Development Director Prepared By: Ivana Gomez, Cannabis Business Coordinator SUBJECT: REVIEW OF AN APPEAL OF THE PLANNING COMMISSION'S DECISION TO APPROVE A CONDITIONAL USE PERMIT TO ESTABLISH A CANNABIS RETAIL STOREFRONT, EMBARC SLO, AT 2400 BROAD STREET (USE-0266-2024, APPL-0608-2024). RECOMMENDATION At the request of the Applicant, and with agreement from the Appellant, continue this item to a date uncertain. The item will be re-noticed when a new hearing date is determined. POLICY CONTEXT Consistent with Chapter 1.20 and Chapter 17.126 of the City of San Luis Obispo Municipal Code (“SLOMC”), the appellant has submitted an appeal of the Planning Commission’s decision, which is subject to review by the City Council. The City Council may review all aspects of the decision, not just the issues raised in the appeal, and can approve or deny the appeal, or impose new conditions on the approval, if deemed necessary. However, any changes or conditions must be based on the a dopted Municipal Code or other applicable laws. REPORT-IN-BRIEF The City of San Luis Obispo currently hosts two commercial cannabis operations , both retail storefronts. Per SLOMC § 17.86.080(E)(10)(b)(ii), retail storefronts are limited to three citywide. During the most recent application period (July 1, 2023 – August 15, 2023), the City received two applications for the remaining retail storefront permit slot. These applications were scored based on the City’s Cannabis Business Operator Permit Scoring Guidelines and the merit criteria adopted by the City Council. On February 23, 2024, following a competitive application process to obtain a Commercial Cannabis Operator Permit (“Operator Permit”) to establish a cannabis retail storefront, Embarc SLO (“Applicant”) was granted a “contingent” Operator Permit, which is subject to successful background screening of all owners, principals, and property owners as well as the City Police Department’s approval of the applicant’s proposed Security Plan. Embarc SLO was granted a final Operator Permit by the Director of Community Development on September 17, 2024, following successful background screening. *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. Page 447 of 488 Item 6c 2 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. In addition, an applicant that is granted an Operator Permit must also apply for and receive a Conditional Use Permit (“CUP”) to establish a cannabis retail storefront. On May 15, 2024, Embarc SLO applied for a CUP (USE-0266-2024) to establish a cannabis retail storefront at 2400 Broad Street. As a cannabis retail storefront, Embarc SLO would sell cannabis goods to the public on site. The City Planning Commission held a public hearing on September 11, 2024, to review the applicant’s request for a CUP. Upon consideration of all evidence, including the application, staff’s evaluation and recommendation, and public testimony, the Planning Commission conditionally approved the project, subject to modified findings and conditions of approval. On September 23, 2024, Jeffrey D. Pyle (“Appellant”) filed a timely appeal (APPL -0608- 2024) of the Planning Commission’s approval (Attachment B). The appellant identified several appeal issues, including the project’s consistency with the City’s adopted Zoning Regulations and potential impacts related to neighborhood compatibility, which are discussed in this report. Pursuant to SLOMC § 9.10.070(D), the Operator Permit (though “final” upon successful background screening) remains inactive until the operator obtains a valid use permit pursuant to Chapter 17.86, all other applicable City permits and state licenses and begins continuously operating the commercial cannabis activity. If the City Council adopts the Draft Resolution denying the appeal and upholding the Planning Commission’s decision to approve the CUP, the applicant will be eligible to obtain a Type 10 storefront retailer license from the California Department of Cannabis Control (“DCC”). The recommendation presented in this report is to adopt a Draft Resolution denying the appeal and upholding the Planning Commission’s decision to approve the CUP to establish a cannabis retail storefront at 2400 Broad Street (Attachment A). DISCUSSION Background On May 15, 2018, the City Council adopted Ordinance No. 1647 (2018 Series), amending the Municipal Code to establish regulations for commercial cannabis activity, including adoption of Chapter 9.10 (Cannabis Regulations) and Section § 17.86.080 (Cannabis Zoning Regulations), formerly Chapter 17.99. On September 18, 2018, the City Council adopted Ordinance No. 1653 (2018 Series), amending the City’s Zoning Regulations and Zoning Map to designate seven areas of the City as Cannabis Business Overlay Zones (“CBZ Overlay Zones”) where cannabis businesses may be located. Then, on May 16, 2023, the City Council adopted Ordinance No. 1727 (2023 Series), amending the Zoning Map to expand the CBZ Overlay to include recently annexed areas of the City, including the Fiero Lane-Clarion Court and East Airport Areas12. 1 City of San Luis Obispo Zoning Map 2 The term “CBZ Overlay” is also referred to as “CAN Overlay” in SLOMC § 17.86.080(E)(5)(b). Both terms are interchangeable and refer to the same zoning designation. Page 448 of 488 Item 6c 3 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. CBZ Overlay Zones are indicated on the City’s Zoning Map and establish locations in the City where cannabis businesses may operate. Areas where CBZ Overlay Zones have been established include the following: 1) Mid-Higuera Overlay Area, 2) South Broad Overlay Area (see Figure 1), 3) Duncan McMillan Overlay Area, 4) Sacramento Industrial Overlay Area, 5) Higuera Commerce Park Overlay Area, 6) Margarita Overlay Area, 7) Airport Overlay Area, 8) East Airport Area, and 9) Fiero Lane – Clarion Court Overlay Area. Figure 1: City of SLO Zoning Map and Legend – South Broad CBZ Overlay as Adopted by Ordinance No. 1727 (2023 Series). Allowed uses are further controlled by zoning and required buffers within adopted overlay zones. Table 2-1 (Uses Allowed by Zone) within SLOMC Section § 17.10.020 shows the permit requirements per zoning district (see Figure 2). Retail storefronts are permitted in Retail Commercial (C-R) and Service Commercial (C-S) Zones located in CBZ Overlay Zones with approval of a CUP. Page 449 of 488 Item 6c 4 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. Within CBZ Overlay Zones, cannabis retail storefronts must be located at least one thousand (1,000) feet from preschools, elementary schools, junior high schools, high schools, and public parks or playgrounds, six hundred (600) feet from licensed daycare centers, and three hundred (300) feet from residentially zoned areas (SLOMC § 17.86.080). Cannabis retail storefronts are also required to be located at least one thousand (1,000) feet from other cannabis retail storefronts. Youth centers do not require a buffer. Figure 2: Table 2-1 (Uses Allowed by Zone) Commercial Cannabis Operator Permit Qualification In addition to land use compatibility and compliance with adopted Zoning Regulations, cannabis businesses are evaluated for consistency with the City’s Cannabis Regulations (SLOMC Chapter 9.10). Pursuant to Chapter 9.10, all commercial cannabis activity requires qualification through the Commercial Cannabis Operator Permit selection process, a Use Permit, and a state license for a specific location. The City of San Luis Obispo currently hosts two commercial cannabis operations - Megan’s Organic Market (280 Higuera St) and SLOCAL Roots (3535 S Higuera St) - both of which are retail storefronts. Per SLOMC § 17.86.080(E)(10)(b)(ii), retail storefronts are limited to three citywide. During the most recent application period (July 1, 2023 - August 15, 2023), the City received two competitive applications for the remaining retail storefront permit slot. These applications were scored based on the City’s Cannabis Business Operator Permit Scoring Guidelines and the merit criteria adopted by the City Council3. 3 Cannabis Business Operator Permit Scoring Guidelines Page 450 of 488 Item 6c 5 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. On February 23, 2024, following this evaluation process, the applicant was granted a contingent Operator Permit, subject to the successful background screening of all owners, principals, and property owners as well as the City Police Department’s approval of the proposed Security Plan. Embarc SLO was granted a final Operator Permit by the Director of Community Development on September 17, 2024, following successful background screening. Previous Council or Advisory Body Action On May 15, 2024, Embarc SLO applied for a CUP (USE-0266-2024) to establish a cannabis retail storefront at 2400 Broad Street, as provided by SLOMC §§ 17.10.020(A) and 17.86.080(E)(1)(a). On September 11, 2024, the Planning Commission reviewed the applicant’s request for a CUP to establish a retail storefront4. After considering all evidence, including the application, staff’s evaluation and recommendation, and public testimony 5, the Planning Commission conditionally approved the project, subject to modified findings and conditions of approval, including a requirement to provide a total of four vehicle parking spaces instead of the required two. On a vote of 6-0-1 (6 in favor, 0 opposed, 1 absent), the Planning Commission found the CUP application consistent with the General Plan and Zoning Regulations6. Pursuant to SLOMC § 9.10.070(D), an Operator Permit (though “final” upon successful background screening) remains inactive until the operator obtains a valid use permit pursuant to Chapter 17.86, all other applicable City permits, and state licenses and begins continuously operating the commercial cannabis activity. If the City Council adopts the Draft Resolution denying the appeal and upholding the Planning Commission’s decision to approve the CUP, the applicant is eligible to obtain a Type 10 storefront retailer license from the California Department of Cannabis Control (“DCC”). Project Description The project is located in a Retail Commercial Zone with Special Focus Overlay (C-R-SF), as well as within the South Broad CBZ Overlay Zone. The building is located on an approximately 8,000 square foot parcel on the intersection of Broad Street and Woodbridge Street. As shown in the Project Plans (Attachment C), the applicant has proposed to convert an existing vacant retail building (formerly Hanger Clinic) into a cannabis retail storefront business with:  2,480 total square feet of commercial building space;  1,028 square feet of retail space;  397 square feet of secure storage space;  331 square feet of employee break room space;  113 square feet of office space; 4 09/11/2024 PC Staff Report 5 Agenda Correspondence for the September 11, 2024, Planning Commission Hearing. 6 PC Resolution No. PC-1090-2024 Page 451 of 488 Item 6c 6 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined.  A contact free screening lobby with polycarbonate windows and electronic access control;  A covered and gated loading/unloading area with an electronic swinging gate;  A customer parking area with eight vehicle parking spaces (including an ADA space) and four bicycle parking spaces, and;  Hours of operations from 7:00AM to 9:00PM Monday through Sunday; Deliveries of inventory from 9:00AM to 5:00PM Monday through Friday, by appointment only. Figure 3: Embarc SLO Front Elevation as Proposed in Application (Broad Street). Public Engagement Planning Commission Hearing Prior to the Planning Commission hearing held on September 27, 2024, to review the applicant’s (Embarc SLO) application for a CUP to establish a retail storefront at 2400 Broad, the project was noticed in compliance with the City’s notification requirements for public hearings. Newspaper legal advertisements were posted in The Tribune at least ten (10) days prior to the hearing. Additionally, postcards were sent to both owners and occupants of properties within 300 feet of the project site at least ten (10) days prior to the hearing. City Council Hearing Prior to the City Council hearing scheduled for January 21, 2025, to review an appeal of the Planning Commission’s decision on September 11, 2024, to approve a CUP to establish a retail storefront at 2400 Broad, the project was noticed in compliance with the City’s notification requirements for public hearings. Newspaper legal advertisements were Page 452 of 488 Item 6c 7 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. posted in The Tribune at least ten (10) days prior to the hearing and postcards were sent to both owners and occupants of properties within 300 feet of the project site at least ten (10) days prior to the hearing. APPEAL On September 23, 2024, Jeffrey D. Pyle filed a timely appeal (APPL -0608-2024) of the Planning Commission’s decision to approve the project, sta ting concerns regarding the project’s consistency with Zoning Regulations and potential impacts related to neighborhood compatibility. The Appeal Form and Statement (Attachment B) present several issues, which are summarized and discussed below. Appeal Issue No. 1 “The cannabis dispensary will be located less than 150 feet from residential homes which can be expected to house small children, thus potentially limiting children’s safe use of their own front yard to play. The property corner of the closest historic residence is a mere 65 feet from the proposed dispensary.” Staff Response The City’s Zoning Regulations require commercial cannabis facilities to be located in areas demarcated with CBZ Overlay Zoning and as allowed in the underlying zone for each commercial cannabis activity (SLOMC § 17.86.080(E)(5)(b), SLOMC § 17.10.020 Table 2-1). Additionally, within CBZ Overlay Zones, cannabis retail storefronts are required to be at least 300 feet away from residentially zoned areas. The project site is located in the South Broad CBZ Overlay in the Retail Commercial Zone with Special Focus Overlay (C-R-SF). 1. Residentially Zoned Areas Within the CBZ Overlay Zone. As described in the “Background” section, the purpose of Ordinance No. 1653 (2018 Series) and Ordinance No. 1727 (2023 Series) is to establish locations in the City where cannabis businesses may be allowed. As adopted, the Zoning Map and regulations do not require a buffer from all residential uses. Rather, cannabis retail storefronts require a buffer of 300 feet from residentially zoned properties within the CBZ Overlay Zones. The nearest residentially zoned property within the South Broad CBZ Overlay Zone is the Medium-High Density Residential (R-3) Zone which begins at the cul-de-sac of Francis Avenue and extends to Orcutt Road. The nearest point of the property line of this R-3 zoned area is located at least 700 feet from the nearest point of the property line of the project, consistent with the City Zoning Map (see Figure 4). Page 453 of 488 Item 6c 8 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. Figure 4: Zoning Map Image Showing Distance from Project Site (highlighted) to Nearest Residentially Zoned Area (R-3-S-PD) within the South Broad CBZ Overlay Zone. Staff recognize and acknowledge that SLOMC § 17.86.080(E)(4)(e) as currently written does not explicitly specify that the buffer from residentially zoned areas is specific to residentially zoned areas that are within the CBZ Overlay Zones. However, the 05/01/2018 Council Agenda Report to establish the City’s Cannabis Regulations, including the adoption of specific buffer requirements, clearly states that the legislative intent of the residential zone buffer was to apply the buffer within a CBZ Overlay Zone only. Page 4 of the report states, “Where buffers extend into an overlay zone area, there is typically another barrier such as a major roadway, the railroad tracks, topographical changes, or other features that provide the same effect as a buffer. As a result, buffers are only intended to be evaluated as part of a land use application when there is an activity within an overlay zone that requires a buffer.” This is further stated in the 09/04/2018 Page 454 of 488 Item 6c 9 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. Council Agenda Report to establish the CBZ Overlay Zones. Page 3 of the report states, “While there is no buffer from residential uses in state law, the City has established a 300 - foot buffer between residentially zoned land and retail stores. However, this buffer only applies from residential zoning that occurs within that same overlay zone. There are two locations where this occurs, one is in the Broad Street Corridor CBZ, and the other is in the Airport Area CBZ.” While state law does not require buffers from residential zones, the City has established a 300-foot buffer from residentially zoned properties, if any, that are within the applicable CBZ Overlay Zone to promote compatibility with surrounding uses. The Council Agenda Reports from May 1, 2018, and September 4, 2018, clarify that this approach accounts for local conditions, including barriers such as major roadways and railroads. Applyin g the residential buffer outside the CBZ Overlay Zones would be inconsistent with the legislative intent outlined in these reports, the established zoning framework, and historical application thereof. 2. Residential Uses Within the CBZ Overlay Zone. It is important to note the distinction between a property that is zoned for residential use and one that is used for residential purposes. While residential zoning is regulated by the City’s Zoning Map, residential use pertains to how a property is utilized, regardless of its zoning designation. The City’s zoning regulations require a buffer only from residentially zoned area within the CBZ Overlay Zones, not from properties with a residential use. This approach ensures that zoning regulations focus on maintaining compatibility within areas specifically designated for residential living, while allowing flexibility for mixed -use or commercially zoned properties. There are properties within the South Broad CBZ Overlay Zone with residential uses located approximately 65 feet from the project site as stated in the appeal (see Figure 5). These residential uses are associated with properties zoned for commercial or other non- residential purposes, as defined by the City’s Zoning Map. Specifically, the nearby residential uses are zoned Service Commercial (C-S) and Retail Commercial (C-R). The zoning code does not establish buffer requirements from residential uses, regardless of whether they are within or outside of the CBZ because the intent of the buffer requirement is to protect residentially zoned neighborhoods from potential land use conflicts. Page 455 of 488 Item 6c 10 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. Figure 5: Zoning Map Image Showing Distance from Project Site to Nearest Residential Use (Zoned Service Commercial with Special Focus Overlay (C-S-SF)) within the South Broad CBZ Overlay Zone. 3. Residentially Zoned Areas Outside of the CBZ Overlay Zone The nearest residentially zoned property outside of the South Broad CBZ Overlay Zone is located roughly 100 feet away at 2413 Broad Street in the Medium-Density Residential (R-2) Zone and situated across Broad Street from the proposed project site (see Figure 6). This property is separated from the project by Broad Street, a major arterial roadway, which provides a significant physical and visual buffer. Again, the Zoning Map and regulations do not establish a buffer requirement for properties in residential zones outside of the CBZ Overlay Zone, as the intent of the zoning regulations is to ensure compatibility within designated cannabis zones. The separation provided by Broad Street further mitigates any potential concerns, as it minimizes the interaction between the proposed cannabis retail use and the residentially zoned property. Page 456 of 488 Item 6c 11 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. Figure 6: Zoning Map Image Showing Distance from Project Site (highlighted) to Nearest Residentially Zoned Area (R-2) Outside of the South Broad CBZ Overlay Zone. 4. Historic Properties Additionally, the City does not establish a buffer requirement from commercial cannabis activity to historic properties. The Planning Commission evaluated the project on September 11, 2024, and found it to be consistent with the purpose, intent, and provisions of the City’s Zoning Regulations, including the CBZ Overlay Zones adopted by Ordinance 1727. Appeal Issue No. 2 “Businesses that necessitate armed security guards are not compatible neighbors to residential homes.” Page 457 of 488 Item 6c 12 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. Staff Response As discussed in the Planning Commission hearing, the applicant has proposed a Security Plan that meets the City Police Department’s requirements for commercial cannabis activity. SLOMC § 9.10.250(B) states that all commercial cannabis activity must have a Security Plan approved by the Chief of Police, or designee, prior to issuance of a Commercial Cannabis Operator Permit. Additionally, SLOMC § 17.86.080(E)(4)(b)(i) requires applicants for a Use Permit to conduct commercial cannabis activity to submit a Security Plan to the approval of the Chief of Police, including but not limited to on -site security measures both physical and operational. The Security Plan was reviewed and approved by the City Police Department during the evaluation of the Operator Permit application, as well as during the evaluation of the Conditional Use Permit application. The plan includes on-site security guards, controlled access to the retail area, a secured delivery bay, and real-time accessible video cameras for the City Police Department. Appeal Issue No. 3 “Children and families regularly use the Bike Boulevard and new pedestrian signal at Broad & Woodbridge to access Meadow Park, churches, schools, grocery stores and other amenities. The Bike Boulevard and pedestrian signal is valuable infrastructure that makes the Woodbridge neighborhood an attractive place to live and raise a family.” Staff Response There is no buffer requirement for cannabis retail storefronts from City -designated Bike Boulevards, common bike paths, or from pedestrian signals such as the HAWK signal at the corner of Woodbridge Street and Broad Street. The appellant stated in their appeal that it is reasonable to expect an increase in residents using the pedestrian signal with the development of new townhomes in the South Broad Street area. The HAWK signal at the corner of Broad Street and Woodbridge Street is intended to allow pedestrians and bicyclists cross Broad Street more safely. The establishment of a cannabis retail storefront would necessitate tenant improvements only and would not interfere with the intended use of the HAWK signal at any point. The HAWK signal would provide residents access to the project site and continue to be a resource for residents to s afely access other facilities in the City. Appeal Issue No. 4 “Although some surrounding properties are zoned commercial, it does not change the reality that an increasing number of families will be living within 300 feet from this cannabis dispensary for decades to come.” Staff Response As stated in staff’s response to Appeal Issue No. 1, the City does not require a buffer from residential homes. Rather, cannabis retail storefronts require a buffer of 300 feet from residentially zoned areas within the CBZ Overlay Zones. The nearest residentially zoned area within the South Broad CBZ Overlay Zone is the Medium -High Density Residential (R-3) Zone which extends from Francis Ave to Orcutt Road and is located at least 700 feet from the property line of the project. Additionally, the City does not require a cannabis retail storefront to be located at a particular distance from commercially zoned areas including Retail Commercial (C-R) Zones, Service Commercial (C-S) Zones, and Page 458 of 488 Item 6c 13 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. Neighborhood Commercial (C-N) Zones. Table 2-1 (Uses Allowed by Zone) of the City Zoning Regulations establishes the permit requirements by zoning district. Specifically, cannabis retail storefronts are permitted in the C -R and C-S Zones with approval of a CUP. Appeal Issue No. 5 “Approving a cannabis dispensary at this location will permanently change the character of this historic neighborhood.” Staff Response There are three historic properties on Woodbridge Street that the City recognizes as residences that contribute to the historical character of the City7. As mentioned in staff’s response to Appeal Issue No. 1, the City’s adopted Zoning Regulations and Zoning Map do not establish a buffer requirement for cannabis retail storefronts from historic properties or districts. The appellant has stated in their appeal that approval of the project would potentially render these historic properties no longer desirable for residential purposes and alter the historic character, however, the appellant has provided no evidence or factual basis to support the claim that the establishment of a cannabis retail storefront would render the surrounding properties undesirable for residential use or impact the historic significance of these three historic properties. Additionally, the building proposed for the project is not a historic property, so the establishment of the business and related tenant improvements will not directly affect the character of any historic structure. Appeal Issue No. 6 “The stated purpose of the SLO Municipal Code is to “minimize the potential impacts on people.” The appellant included reference to SLOMC Section § 17.86.080(A) which states, “The purpose of this section is to protect the public health, safety, and welfare, enact strong and effective regulatory and enforcement controls in compliance with state of California law, protect neighborhood character, and minimize potential for negative impacts on people, communities, and the environment within the city of San Luis Obispo by establishing land use requirements and development standards for cannabis activities.” Staff Response SLOMC § 17.86.080 establishes land use requirements and development standards for cannabis activities to protect public health, safety, and welfare, comply with state law, preserve neighborhood character, and minimize negative impacts within the City of San Luis Obispo. This section of the Zoning Regulations requires commercial cannabis operators to obtain both a Commercial Cannabis Operator Permit from the City pursuant to Chapter 9.10 (Cannabis Regulations) and a CUP from the City pursuant to this section to conduct commercial cannabis activity at a specific location. The applicant has obtained both a 7 City of San Luis Obispo Historic Properties Lists Page 459 of 488 Item 6c 14 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. Commercial Cannabis Operator Permit and a CUP to establish a cannabis retail storefront in accordance with the City’s adopted regulations. Additionally, the project location is within a CBZ Overlay Zone designated for commercial cannabis activity and is within a Retail Commercial (C-R) Zone, which permits cannabis retail storefronts. Based on this evaluation, the project satisfies the land use and development standards for commercial cannabis activity set forth in the Zoning Regulations. SLOMC § 17.86.080 also outlines the operational limitations on commercial cannabis activity, including hours of operation, development standards, and application requirements. The applicant submitted a Use Permit application that is consistent with the provisions of the City Municipal Code, as well as an Operations Plan as required by SLOMC § 17.86.080(E)(4)(b), that has satisfied the requirements of this section. The Planning Commission evaluated the project on September 11, 2024, and found it to be consistent with the purpose, intent, and provisions of the City’s Zoning Regulations, as conditioned. Appeal Issue No. 7 “We believe it to be the duty of the City of San Luis Obispo to reject the proposed cannabis dispensary based on the above information, even if our below i nterpretation of the Municipal Code is mistaken. However, we believe that the following evidence will show that the proposed dispensary is in violation of City code, and we ask you to carefully consider the following points. Potential Code Violations: The SLO Municipal Code prohibits cannabis dispensaries from existing within 300 feet of properties zoned residential. By our measurements, the City’s own Municipal code would be broken by locating a cannabis dispensary at the proposed location.” The appellant included reference to SLOMC § 17.86.080(E)(4)(e) which states, “Applications for retail storefronts shall include a vicinity map showing at least one thousand feet of surrounding area and the distances to the following uses: any preschool, elementary school, junior high school, high school, public park or playground , six hundred feet from any licensed daycare center, and three hundred feet from a residentially zoned area. Youth centers do not require a buffer. Distance shall be measured from t he nearest point of the property line of the site that contains the commercial cannabis activity to the nearest point of the property line of the enumerated use using a direct straight -line measurement.” The appellant has also referred to “an unnamed, publicly accessible park located on Emily Street for “The Village at Broad Street” approximately 500 feet from the project site. Staff Response 1. Residentially Zoned Areas. The City’s Zoning Map establishes the CBZ Overlay Zones where commercial cannabis activity may be allowed and includes a “300’ Buffer Area of Residential Zones within the South Broad CBZ.” The only residentially zoned properties within the CBZ Overlay are the Medium-High Density Residential (R-3) zoned properties between Broad Street and the Southern Pacific Railroad extending from Francis Avenue to Orcutt Road. As Page 460 of 488 Item 6c 15 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. described in Appeal Issues No. 1 and 4, these properties are located at least 700 feet from the project site. 2. Public Parks and Playgrounds The City’s Zoning Regulations require cannabis retail storefronts to be located at least 1,000 feet from public parks and playgrounds within CBZ Overlay Zones. The City’s adopted General Plan establishes the City’s public parks and playgrounds which are further categorized as Community Parks, Mini Parks, and Neighborhood Parks. Community Parks in the vicinity include Meadow Park (2333 Meadow St) and Sinsheimer Park (2755 Augusta St). Mini Parks include Stoneridge Park (535 Bluerock Dr), and Neighborhood Parks include Johnson Park (2875 Augusta). Additionally, under the definitions set forth in SLOMC Chapter 17.158 (General Definitions), which applies to general (non-land use) terms used in Title 17 (Zoning Regulations), Section 17.158.036 defines a 'public place' as land or buildings owned by the city or others that are accessible to the general public. The referenced play structure is intended to be used by residents of the Village at Broad housing and is not considered to be a public park or playground under the City’s General Plan and does not meet the definition of a public place per the Municipal Code. Public parks or playgrounds in the South Broad Area include Sinsheimer Park, Johnson Park, Meadow Park and Stoneridge Park, which are all located outside of the CBZ Overlay Zone as well as at least 1,000 feet away from the project site (see Figure 7). Figure 7: Zoning Map Image Showing Nearby Public Parks Outside of the South Broad CBZ, at least a 1,000-foot Distance from Project Site. Page 461 of 488 Item 6c 16 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. Pursuant to SLOMC § 17.86.080(E)(4)(e), the applicant submitted a vicinity map showing that the project site is adequate distance from schools, public parks and playgrounds, licensed daycare centers, and residentially zoned areas with in the CBZ Overlay Zone. (Attachment D). The project was reviewed by the Planning Division during the Departmental Review process and was verified to be in compliance with adopted Zoning Regulations. Appeal Issue No. 8 “Consider how the approval of this cannabis dispensary aligns with the City’s Mission and Planning Documents.” The appellant included reference to Section § 1.5 of the South Broad Street Area Plan8 which states, “The South Broad Street Area Plan implements the goals of the General Plan and community for this part of the City. It creates a long-range vision for the planning area and establishes standards that implement the vision. The vision for the South Broad Street area, based on extensive citizen input, is a safe, attractive, economically vital, and enjoyable neighborhood with a mix of complementary land use.” The appellant included reference to the City of San Luis Obispo Housing Element 2020 - 20289 Mission Statement which states, “Our mission is to identify and serve the needs of all people in a positive and courteous manner and to help ensure that San Luis Obispo remains a healthy, safe, attractive and enjoyable place to live, work or visit. We help plan the City's form and character, support community values, preserve the environment, promote the wise use of resources and protect public health and safety.” Lastly, the appellant included reference to the City of San Luis Obispo Mission Statement located on the City website10 which states, “Who are We? People Serving People: a team that puts high value on each citizen it serves.” Staff Response The proposed cannabis dispensary project aligns with the goals outlined in the S outh Broad Street Area Plan and the City’s Mission and Planning Documents by contributing to a safe, attractive, and economically viable neighborhood with complementary land use. Although this is a change in use rather than a redevelopment, the project includes several design and operational improvements that support neighborhood safety. The project proposes a controlled access area for product intake, an electronic swinging door to limit entry, and improvements to the building's exterior with fresh paint, updated trim, and new signage. Furthermore, the project supports economic vitality by establishing a regulated business that contributes to the local economy and provides services aligned with community demand. 8 South Broad Street Area Plan 9 City of San Luis Obispo Housing Element 2020-2028 10 City of San Luis Obispo Mission Statement Page 462 of 488 Item 6c 17 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. In addition, the City Council has previously considered relevant policies outlined in the City’s Planning Documents, and found the adopted regulations, including the CBZ Overlay Zones, to be consistent with the General Plan in 2018 at their time of adoption. Summary The appeal does not provide sufficient grounds to overturn the Planning Commission’s approval of the cannabis dispensary. The project complies with all relevant Zoning Regulations, including required buffers from residential zones, public parks, and schools, as verified through detailed review by City staff. Concerns about proximity to residential properties and potential neighborhood impacts are addressed through compliance with City-adopted buffers and security standards, including an approved Security Plan by the City Police Department. The project fulfills the standards of the Cannabis Business Zone (CBZ) Overlay, meeting City requirements for location, safety, and design as part of the South Broad Street Area Plan. CONCURRENCE The project has been reviewed by the Building Division, Engineering Division, Planning Division, Utilities Department, and Fire Department. As noted above, the Security Plan was reviewed and approved by the City Police Department. Any conditions of approval or informational notes from these departments and divisions have been included in the Planning Commission Resolution related to the project. The Planning Commission adopted PC Resolution No. PC-1090-2024 approving the Conditional Use Permit to establish the project. ENVIRONMENTAL REVIEW The project is categorically exempt from the preparation of environmental documentation under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section § 15301 (Existing Facilities). The project is consistent with General Plan policies for the land use designation and is consistent with the applicable zoning designation and regulations. The project consists of the operation of existing, private structures that involves negligible expansion of use beyond existing and historical uses as an orthoti c and prosthetic sales facility (Hanger Clinic), as described in CEQA Guidelines Section § 15301 (Existing Facilities). The project site is not on a list of hazardous waste sites and does not contain a significant historical resource. The property is less than one acre in size and is surrounded by urban uses that have no value as habitat for endangered, rare or threatened species as the site is located on an existing developed property and is almost entirely paved. The site is served by required utilities a nd public services. FISCAL IMPACT Budgeted: No Budget Year: 2024-25 Funding Identified: No Page 463 of 488 Item 6c 18 *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $ $ $ $ State Federal Fees Other: Total $ $ $ $ The processing of the appeal does not have a fiscal impact on the City, as the appellant has paid the required fee. The City factors anticipated Cannabis Operator Permit fee revenue into its annual budget. If the Conditional Use Permit is approved, the establishment of Embarc SLO is expected to generate additional permit fee revenue, as well as increased tax revenue from its operations. ALTERNATIVES 1. Continue consideration of the application to a future date. The City Council may continue its review of the project if additional time or information is needed to make a decision. If additional information is needed, direction should be provided to staff regarding what additional information is requested so that it can be presented at a subsequent hearing. 2. Deny the project. The City Council may uphold the appeal and adopt a resolution denying the project, based on findings of inconsistency with the California State Law, the City’s General Plan, Zoning Regulations, or other policy documents. Should Council elect to pursue this alternative, staff would need specific direction on the nature of findings to support the denial. ATTACHMENTS A - Draft Resolution denying the appeal and upholding the Planning Commission’s decision to approve the Conditional Use Permit to establish the third retail storefront (USE-0266-2024, APPL-0608-2024) B - Appeal Form and Statement (APPL-0608-2024) C - Project Plans (USE-0266-2024) D - Vicinity Map (USE-0266-2024) Page 464 of 488 R ______ *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. RESOLUTION NO. _____ (2025 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, DENYING AN APPEAL AND UPHOLDING THE PLANNING COMMISSION’S DECISION TO APPROVE A CONDITIONAL USE PERMIT TO ESTABLISH A CANNABIS RETAIL STOREFRONT AT 2400 BROAD STREET. THE PROJECT IS EXEMPT FROM ENVIRONMENTAL REVIEW UNDER SECTION § 15301 (EXISTING FACILITIES) OF THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) GUIDELINES AS REPRESENTED IN THE COUNCIL AGENDA REPORT AND ATTACHMENTS DATED JANUARY 21, 2025 (USE-0266- 2024, APPL-0608-2024) WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California on September 11, 2024, for the review of a Conditional Use Permit application to establish a cannabis retail storefront at 2400 Broad Street, pursuant to a proceeding instituted under USE-0266-2024; Embarc SLO, applicant; and WHEREAS, the Planning Commission of the City of San Luis Obispo granted a Conditional Use Permit (see Resolution No. PC-1090-24), after considering all evidence, including the testimony of interested parties and the evaluation and recommendations provided by staff, presented at said hearing; and WHEREAS, Jeffrey D. Pyle filed a timely appeal of the Planning Commission’s decision to approve the Conditional Use Permit USE-0266-2024 on September 23, 2024 (APPL-0608-2024); and WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, on January 21, 2025, for the purpose of considering the appeal of the Planning Commission’s decision to approve the Conditional Use Permit USE-0266-2024 (APPL-0608-2024), and has duly considered all evidence, including the record of the Planning Commission hearing; testimony of the applicant, appellant, and general public; and evaluation and recommendations by staff presented at said hearing; and WHEREAS, notices of said public hearings were made at the time and in the manner required by law; and NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of San Luis Obispo as follows: Page 465 of 488 Page 2 R _______ *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. SECTION 1. Findings. The City Council hereby denies the appeal and grants final approval for the project (USE-0266-2024, APPL-0608-2024), based on the following findings: 1. The project complies with the applicable provisions of the San Luis Obispo Municipal Code (SLOMC), specifically Chapter 9.10 (Cannabis Regulations) and Section § 17.86.080 (Zoning Regulations for Cannabis Activities).The applicant has been granted a Commercial Cannabis Operator Permit to conduct commercial cannabis activity, and upon approval of a Conditional Use Permit, will be eligible to obtain a Type 10 storefront retailer license from the California Department of Cannabis Control (DCC). The project, as proposed, meets all operational requirements set forth in Chapter 9.10, including reporting, inspection, and security measures, and the applicant is required to maintain ongoing compliance with these regulations. The proposed location is within a zone designated for cannabis retail storefront use, and the project complies with all applicable development standards including adherence to an Operations Plan, Security Plan, Waste Management Plan, and Odor, Noise and Light Management Plan. 2. The proposed use is consistent with the intent and requirements of the Cannabis Business Zone (CBZ) Overlay. This CBZ Overlay establishes specific land use controls to ensure cannabis businesses are appropriately sited and compatible with surrounding uses. The project complies with the Zoning Regulations, as cannabis retail storefronts are permitted within the Retail Commercial (C-R) Zone within the CBZ Overlay, subject to the approval of a Conditional Use Permit. The project also meets the required buff er distances from sensitive land uses within CBZ Overlay Zones, including schools, public parks, licensed childcare centers, and residentially zoned areas, thereby satisfying the location criteria established in the CBZ Overlay. 3. The project is consistent with buffer requirements from sensitive uses because it is more than 300 feet away from residentially zoned areas within the CBZ Overlay Zone, consistent with the legislative intent of the May 1, 2018, and September 4, 2018, Council Agenda Reports which clarify that buffers are intended to address sensitive uses within CBZ Overlay Zones, taking into account local barriers such as major roadways or railroads. 4. The proposed use is consistent with the General Retail (G-R) designation as described in the General Plan Land Use Element. The General Retail designation is intended to accommodate businesses providing goods and services to meet the needs of city residents and nearby county communities. A cannabis retail storefront operates similarly to other retail establishments, engaging in direct sales of goods to consumers, which aligns with the permitted uses in the General Retail zone. 5. The project is consistent with the goals of the Broad Street Area Special Focus Planning area because it will contribute to the visual improvement and economic revitalization of the surrounding area. Page 466 of 488 Page 3 R _______ *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. 6. The site is adequate for the project in terms of size, configuration, topography, location, and other applicable features, and has appropriate access to public streets with adequate capacity to accommodate the quantity and type of traffic expected to be generated by the use. 7. The project will not be detrimental to the health, safety and welfare of persons living or working at the site or in the vicinity because the cannabis retail storefront does not present a potential threat to the surrounding property and buildings. This project is subject to the Use Permit requirements, City regulations, and California Building Code requirements designed to address health, safety, and welfare concerns. 8. The applicant prepared a Security Plan that addresses both state -wide regulations of the Department of Cannabis Control and concerns of the City Police Department. 9. The cannabis retail storefront, as proposed, will comply with all the requirements of the State and City for the dispensing of cannabis, including dual licensure and participation in an authorized track and trace program. SECTION 2. Environmental Determination. The project is categorically exempt from the preparation of environmental documentation under the California Environmental Quality Act (CEQA). The project is consistent with General Plan policies for the land use designation and is consistent with the applicable zoning designation and regulations, as described in more detail in Section 1 above. The project consists of the operation of existing, private structures that involve negligible expansion of use beyond existing and historical uses, as described in CEQA Guidelines § 15301 (Existing Facilities). Additionally, the project site is not on a list of hazardous waste sites and does not contain a significant historical resource. The property is less than one acre in size and is surrounded by urban uses that have no value as habitat for e ndangered, rare, or threatened species as the site is located on an existing developed property. The site is served by required utilities and public services. SECTION 3. Action. The City Council hereby denies the appeal and grants final approval to the project (USE-0266-2024, APPL-0608-20247) with incorporation of the following conditions: 1. The proposed use shall operate consistent with the project description and other supporting documentation submitted with this application unless otherwise conditi oned herein, including, but not limited to the Operations Plan; Chapter 9.10 of the Municipal Code; and Section § 17.86.080 of the Municipal Code. This Use Permit shall be reviewed by the Community Development Director if any reasonable written complaint i s received from any citizen or from the Police Department or upon receipt of evidence that the use is not in compliance with conditions of approval or the Municipal Code. The Community Development Director may refer the complaint to the Planning Commission at his/her Page 467 of 488 Page 4 R _______ *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. discretion and conditions of approval may be added, deleted, or modified or the Use Permit may be revoked to ensure on-going compatibility between uses on the project site and other nearby uses. 2. The applicant shall obtain and maintain a Com mercial Cannabis Operator Permit from the City and any appropriate state licenses. 3. The applicant shall pay all applicable current and future state and local taxes and all applicable commercial cannabis fees and related penalties established by City Council, including but not limited to applications, administrative review, inspections, etc. 4. All owners, principals, property owners and employees must undergo background checks and be vetted in accordance with state law and local cannabis regulations. No employee with a disqualifying criminal record, as defined by state law, shall be employed at the cannabis retail storefront. 5. Minors under the age of 18 are prohibited from entering the cannabis retail storefront. Individuals aged 18 to 20 with a valid m edical cannabis identification card, in compliance with California state law, may enter the premises, while all other persons under 21 without a valid medical ID are prohibited, even if accompanied by a parent or guardian. 6. Outdoor storage of cannabis or cannabis products is prohibited. 7. The operator shall implement and maintain a ventilation and filtration system to prevent odors from escaping the premises. Odors must not be detectable outside the building or in adjacent properties. 8. Any parking lot lighting installed on the site by the applicant shall be night sky compliant. The Community Development Director may modify this requirement upon a determination that such lighting would not be conductive to the safety of the public or would not meet the requirements of the California Building Code, while maintaining consistency with the intent of the City’s Lighting and Night Sky Ordinance. 9. All business operations, including deliveries and waste collection, shall adhere to the City’s noise control regulations. Noise levels must be minimized to avoid disturbance to nearby residential and commercial areas. 10. The operator shall ensure full compliance with the most recent editions of the ADA Standards for Accessible Design and the California Building Code (CBC), implementing all required accessibility and safety measures in the design and operation of the cannabis retail storefront. Page 468 of 488 Page 5 R _______ *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. 11. The operator shall obtain a building permit from the City prior to commencing any physical work on the premises, ensuring that all construction activities are reviewed and approved in accordance with City regulations. 12. Prior to the issuance of a building permit, the applicant shall record a Community Benefits Agreement, reflecting the community and environmental commitments from the Commercial Cannabis Operator Permit application, which were evaluated in the scoring process, in a form approved by the City Attorney. 13. The operator shall provide a total of four bicycle parking spaces designated to the project location. Page 469 of 488 Page 6 R _______ *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. 14. The applicant shall defend, indemnify, and hold harmless the City and/or its agents, officers, and employees from any claim, action, or proceeding against the City and/or its agents, officers, or employees to attack, set aside, void, or annul the approval by the City of this project, and all actions relating thereto, including but not limited to environmental review (“Indemnified Claims”). The City shall promptly notify the applicant of any Indemnified Claim upon being presented with the Indemnified Claim, and City shall fully cooperate in the defense against an Indemnified Claim. Upon motion of Council Member _______________, seconded by Council Member _____________ and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was passed and adopted this ________ day of _________ 2025. __________________________ Mayor Erica A. Stewart ATTEST: ___________________ Teresa Purrington City Clerk APPROVED AS TO FORM: ___________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California on ___________________. __________________________ Teresa Purrington City Clerk Page 470 of 488 Page 7 R _______ *At the request of the Applicant, and with agreement from the Appellant, this item is being pulled from the agenda and continued to a date uncertain and will be re-noticed when a new hearing date is determined. Page 471 of 488 Page 472 of 488 Page 473 of 488 Page 474 of 488 Page 475 of 488 Page 476 of 488 Page 477 of 488 Page 478 of 488 Page 479 of 488 Page 480 of 488 Page 481 of 488 Page 482 of 488 Page 483 of 488 Page 484 of 488 Embarc San Luis Obispo 2400 Broad St, San Luis Obispo, CA 93401 Sensitive Use Map - Daycares High Street Early Head Start Childcare ~3,200 feet Lile Sprouts Infant & Toddler Center ~3,400 feet Page 485 of 488 Embarc San Luis Obispo 2400 Broad St, San Luis Obispo, CA 93401 Sensitive Use Map - Parks & Playgrounds South Hills Open Space ~1,800 feet Sinsheimer Park ~1,350 feet Meadow Park ~1,150 feet Page 486 of 488 Embarc San Luis Obispo 2400 Broad St, San Luis Obispo, CA 93401 Sensitive Use Map - Residential ~635 feet Page 487 of 488 Embarc San Luis Obispo 2400 Broad St, San Luis Obispo, CA 93401 Sensitive Use Map - Schools Hawthorne Elementary School ~1,700 feet Sinsheimer Elementary School ~2,800 feet Page 488 of 488