Carp board plans to extend moratorium on ‘commercial formulas’

Carpinteria City Council will today consider extending a temporary moratorium on issuing certificates of occupancy and/or business licenses to new chain stores, restaurants or motels seeking to locate in the city, at the exception of Casitas Plaza and Shepard Place stores.

The board will meet at 5:30 p.m. in the board room, 5775 Carpinteria Ave.

Staff recommends that Council adopt an ordinance extending the temporary moratorium already in place. At least four out of five council members must approve the motion for it to pass.

At its Feb. 14 meeting, the board asked staff to prepare a report on how cities regulate chain stores and restaurants, also known as “formula businesses,” that have services, decor, methods of operation and other standardized characteristics that make them virtually identical. to businesses elsewhere.

At its May 9 meeting, the board was informed that a proliferation of such businesses can have deleterious effects on the health, safety and well-being of a community.

“Cities have found it common for formula companies to arrive in an area en masse, crowding out independent businesses and causing speculative rent increases that result in the wholesale transformation of a business district almost overnight,” said wrote the staff in a report for tonight. Meet.

“The loss of independently owned or operated stores can also have long-term economic consequences for communities,” staff said.

“Local economies dominated by formula companies also tend to be solely profit-based and uninterested in meeting community needs over time, as opposed to a business model that fills a local niche and /or is complementary to existing businesses in similar categories.”

Perhaps more concerning, staff say, is that formula companies often invest locally generated profits outside of the community and quickly disappear when the economy contracts or their business strategy changes, leaving behind vacant buildings with higher rent expectations.

Council members responded by directing staff to return with an emergency ordinance to establish a temporary moratorium on forming formula businesses across the city while city staff and council study and consider regulations. permanent on formula companies.

Staff returned at the next meeting, May 23, with options for a temporary moratorium. Council voted to approve it on June 27 after reviewing additional public testimony and sample language from other municipalities’ formula business regulations. The only exceptions were the Casitas Plaza and Shepard Place stores.

The temporary moratorium applies to any business enterprise operating as a retail, restaurant/food service and/or hotel or motel establishment that has more than seven locations nationwide and has two or more characteristics common to most or all of its locations. .

The board also determined that the following types of businesses, under the moratorium, should not be treated as formula businesses: offices, professional services, banks or credit unions, grocery stores, non-profit businesses, pharmacies , gas stations and theatres/performing arts. the spaces.

The temporary moratorium does not prohibit the relocation of an existing formula business already operating in Carpinteria to another location in the city.

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