TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Carrie Tai, AICP, Community Development Director
Erik Zandvliet, T.E., City Traffic Engineer
SUBJECT:Title
Discussion of Restaurant Dining Occupancy Limits and Continuation of Temporary Encroachment Permits for Street Dining and Business Uses and Outdoor Facilities Permits for Outdoor Uses on Private Property Issued Under COVID-19 Emergency Orders (Community Development Director Tai).
(Estimated Time: 30 Mins.)
DISCUSS AND PROVIDE DIRECTION
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council discuss and provide direction on restaurant dining occupancy limits and continuation of temporary encroachment permits for street dining and business uses and outdoor facilities permits for outdoor uses on private property issued under COVID-19 Emergency Orders.
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FISCAL IMPLICATIONS:
The City is currently foregoing an estimated $54,932 in revenue each month due to the use of 62 parking spaces for private outdoor dining/business use, which is comprised of $48,360 in unrecovered parking meter fees and $6,572 in unrealized parking citation revenue. Staff time in support of outdoor dining/business use has not been charged.
The City is also foregoing up to $32,271 in revenue each month by not charging a long-term encroachment fee for the commercial use of public property, currently set by resolution at $3.00 per square foot per month. On March 1, 2022, the City Council suspended this fee for the temporary encroachment areas.
While there is no readily available data to quantify this, an increase in restaurant occupancy would be expected to increase local sales tax revenue from participating restaurants in proportion to the percentage increase in occupancy. Continued restaurant activity would generate additional patrons, incrementally increasing demand (and related costs) for public services, such as more frequent refuse pick-up, public infrastructure maintenance, and public safety resources.
BACKGROUND:
In March 2020, the State, Los Angeles County, and the City each declared a State of Emergency due to the COVID-19 pandemic. Los Angeles County Department of Public Health (LACDPH) issued orders restricting many indoor uses, causing businesses to look for opportunities to operate outdoors. On June 10, 2020, the City Manager issued Emergency Order No. 10, allowing staff to issue temporary encroachment permits for street dining and business uses in the public right-of-way (PROW), as well as Outdoor Facilities Permits for outdoor uses on private property, referred to collectively in this report as the COVID-19 Outdoor Dining/Business Use Program (“COVID-19 Program”).
As described in Emergency Order No. 10, the main purpose of the COVID-19 Program is to allow restaurants and businesses to “temporarily expand their existing footprints into the public right of way, public property, and private property to accommodate social distancing requirements required by state and county protocols to limit the spread of COVID-19.” These outdoor encroachments are subject to existing Municipal Code provisions and/or Use Permit conditions with the intent to replace, but not exceed, seating or indoor areas restricted from use due to social distancing and other protocols issued by the LACDPH.
Since March 2020, the COVID-19 regulations for indoor restaurant occupancy shifted numerous times. Throughout this time, the City worked with the restaurants to adjust the size of some temporary encroachment areas in the PROW to more equitably distribute the available seating area between the restaurants participating in the COVID-19 Program. Some examples of this were a full street closure on Manhattan Avenue between Manhattan Beach Boulevard and Center Place for two weeks in February 2021, as well as an allowance for restaurants to expand their decks in front of adjacent non-restaurant businesses.
By June 2021, the State and LACDPH had lifted all indoor restaurant capacity limits and reduced social distancing protocols for most everyday activities. Many restauranteurs indicated that many customers were still uneasy about dining indoors and that keeping outdoor dining areas allowed restaurants the flexibility to accommodate customer preferences and comfort levels. Pursuant to City Council direction on December 21, 2021, the City Manager issued Emergency Order No. 28, which allows the COVID-19 Program to continue operating through the end of the Governor’s State of Emergency. The State of Emergency remains in place as of today.
On February 15, 2022, the City Council requested a discussion on the occupancy limits for restaurants using outdoor dining allowed under the COVID-19 Emergency Orders. On March 1, 2022, the City Council discussed the possibility of increasing the dining occupancy limits for those restaurants with street encroachment areas and Outdoor Facility Permits. The City Council continued the discussion to April 19, 2022 to allow time to survey the affected restaurants and gather additional occupancy and use fee information from other cities with outdoor dining.
On April 19, 2022, the City Council discussed the results of a survey to local restaurants regarding their opinion on expanded dining capacity and fees for the use of the PROW. Most restaurant owners indicated interest in additional dining capacity, but were evenly split whether they would be willing to pay for additional outdoor dining capacity. After hearing public testimony, the City Council directed staff to 1) to pursue an increase in dining occupancy allowances for restaurants during the state of emergency; 2) take steps necessary to facilitate such temporary increases; and 3) return to the City Council at the September 20, 2022 City Council meeting to review and consider further continuation of the temporary outdoor business use/dining program and dining occupancy limits, both in the PROW and on private property, if the State of Emergency is still in effect. On May 12, 2022, the City Manager signed Emergency Order No. 29, which removed dining occupancy limits for outdoor seating areas in the COVID-19 Program.
Pursuant to the City Council’s direction on April 19, 2022, staff has prepared this report to assist in the discussion related to the possible continuation of the COVID-19 Program and dining occupancy limits for restaurants with temporary encroachment permits.
DISCUSSION:
On July 15, 2022, the Federal Secretary of Health and Human Services agency extended the declaration of a public health emergency for COVID-19 that has existed since January 27, 2020, until at least October 13, 2022, and said that he would give states at least 60 days notice prior to terminating the declaration. The declaration must be renewed every 90 days to remain in place or may be terminated sooner. At present, the declaration will be effective for at least 60 days, since the agency has not indicated an end to the public health emergency. On June 17, 2022, at a state level, the Governor rolled back several pandemic related emergency policies, but did not terminate the State of Emergency in California.
Currently, there are 26 outdoor dining/business use encroachment areas in the PROW totaling approximately 10,757 square feet and occupying 57 parking spaces. In addition, the City has also issued sidewalk business/dining permits to seven businesses under a permit program predating the pandemic; these permits are not impacted by the Emergency Order expiration dates but are subject to the any dining occupancy limits or waivers. There are also approximately 11 Outdoor Facilities Permits for expanded temporary outdoor dining on private property.
Enforcement and Violations
Violations of COVID-19 Program requirements are considered a misdemeanor and are punishable by an administrative fine up to $1,000 per violation and multiple day business closures, pursuant to the enabling Emergency Orders, Manhattan Beach Municipal Code Chapters 1.04 and 1.06, and any other enforcement provisions. Prior to the waiver of dining occupancy limits, City staff inspected and monitored compliance of occupancy limits by verifying the total number of active indoor and outdoor diners, as compared to the restaurants’ maximum occupancy limits. Ten restaurants were issued 21 administrative citations for exceeding their occupancy limits on a repeated basis. After occupancy limits were lifted in April 2022, staff has continued to monitor for compliance of other requirements, but no violations related to the COVID-19 program have been found.
The City has received reports of increased activity in areas with outdoor dining. Observations include restaurant staff traversing sidewalks to serve outdoor dining areas. Similarly, the City received reports of incremental increases in ambient noise, lighting, placement of restaurant-related apparatus (propane tanks, heat lamps, furniture, etc.) outdoors.
Public Parking
In general, increases in overall dining occupancy would be expected to increase parking demand. Based on approximately 10,757 square feet of additional restaurant areas created by outdoor dining spaces in the public right-of-way, the Municipal Code would require 215 additional parking spaces (1 parking space per 50 square feet of seating area). This is not including the 57 parking spaces in the public right-of-way that the outdoor dining areas currently occupy. As indicated by field operations reports, parking occupancy in the City has returned to pre-pandemic levels and patterns. Public parking supply reaches capacity on most weekends, particularly during special events and holidays. Assembly Bill 61, effective as of January 1, 2022, requires that cities reduce parking spaces for existing uses to accommodate outdoor dining used to mitigate for COVID-19.
Public Resources
The City also receives requests for additional refuse services to handle the additional waste generated by an increase in dining activity. An incremental increase in public safety incidents is expected, as evidenced by several minor vehicle collisions within the encroachment areas which required police response and collision reporting.
Equity
It could be inferred that the City is granting special privileges for restaurants to exceed their normal business operation, while retail and service businesses are not offered that same accommodation to recover from their COVID-19-related losses. Additionally, some restaurants do not have the same ability to expand their capacity due to limitations in available public encroachment areas.
Holiday Special Events
Several special events are planned in the Downtown and North Manhattan Beach business districts before the end of the calendar year. These events were held in 2021 with the current street encroachment areas in place, albeit with reduced attendance. City staff has been discussing the 2022 special event schedule, and preliminary indications are that the street encroachment areas can remain in place with minor adjustments to the event conditions.
POLICY ALTERNATIVES:
Staff presents the following alternatives. As a note, there is no indication of an end date for the State of Emergency in California.
ALTERNATIVE 1:
No action. Continue to allow the COVID-19 Program. Also, restaurants would be able to operate 100% indoor seating along with any other seating capacity created through the COVID-19 Program.
ALTERNATIVE 2:
Discuss and provide direction on a possible expiration date for the COVID-19 Program, as well as changes in any occupancy limits.
PUBLIC OUTREACH:
City staff has informed the Chamber of Commerce, Downtown Business and Professional Association, North Manhattan Beach Business Improvement District, and the Downtown Residents Association of this agenda item. The City Council meeting agenda has also been noticed in conformance with public meeting requirements.
ENVIRONMENTAL REVIEW:
The COVID-19 Program was reviewed for compliance with the California Environmental Quality Act (CEQA) and has been determined that the activity is statutorily exempt from CEQA pursuant to Section 15269(c) of the State CEQA Guidelines as it constitutes a specific action to mitigate an emergency. Thus, no environmental review would be necessary. However, this would not apply outside of a State of Emergency.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENT:
1. Outdoor Street Dining/Business Use Encroachment Area Chronology