City of Hermosa Beach - File #: REPORT 24-0074

File #:

REPORT 24-0074 Version: 1

Name:

Type:

Action Item

Status:

Municipal Matter

File created:

2/13/2024

In control:

City Council

On agenda:

2/27/2024

Final action:

Title:

ADOPT RESOLUTIONS ESTABLISHING OPERATIONAL AND DESIGN GUIDELINES FOR ON-STREET COMMERCIAL ENCROACHMENT AREAS CITYWIDE AND ESTABLISHING FEES FOR COMMERCIAL ENCROACHMENT PERMITS AND ANNUAL PERMIT REAPPLICATION (Environmental Programs Manager Doug Krauss)

Attachments:

Staff Report Text

Honorable Mayor and Members of the Hermosa Beach City Council

Regular Meeting of February 27, 2024

Title

ADOPT RESOLUTIONS ESTABLISHING OPERATIONAL AND DESIGN GUIDELINES FOR ON-STREET COMMERCIAL ENCROACHMENT AREAS CITYWIDE AND ESTABLISHING

FEES FOR COMMERCIAL ENCROACHMENT PERMITS AND ANNUAL PERMIT REAPPLICATION

(Environmental Programs Manager Doug Krauss)

Body

Recommended Action:

Recommendation

Staff recommends City Council:

1. Adopt a resolution establishing operational and design guidelines for on-street commercial encroachment areas citywide and the determination that the project is Categorically Exempt under the California Environmental Quality Act (CEQA) (Attachment 1);

2. Adopt a resolution establishing fees for commercial encroachment permits and annual permit reapplication (Attachment 2); and

3. Approve an appropriation of $5,000 from the General Fund for on-street dining deck bicycle rack installation.

Body

Executive Summary:

At its December 14, 2021 meeting, City Council provided staff with direction to develop long-term versions of the temporary outdoor dining and downtown lane reconfiguration programs that were created in response to the COVID-19 pandemic. Council subsequently extended the temporary program through May 1, 2023 with direction to staff to bring the elements of the program to Council before that date.

Some of the final elements necessary to establish the long-term program were approved by Council at meetings in April and June of 2023. They include an ordinance amending Chapter 12.16 (Encroachments) of the Hermosa Beach Municipal Code (HBMC); a resolution revising existing operational and design guidelines for Pier Plaza and other off-street commercial encroachments; a resolution for new quarterly encroachment fees; a resolution establishing the downtown bike lanes and lane reconfigurations as permanent; and accompanying California Environmental Quality Act (CEQA) determinations. As the final vital element of the overall, long-term outdoor dining program, staff recommends Council approve guidelines for on-street commercial encroachment areas (“dining decks”) and new fees for commercial encroachment permits.

Background:

The City has long supported outdoor dining on private and public property to supplement indoor operations. With the onset of the COVID-19 pandemic and related health orders, businesses were limited from operating indoors. Recognizing the hardship, City Council approved a program, allowing expanded outdoor dining and other commercial activity, which subsequently led to approval of implementing lane reconfigurations and bike lanes in the downtown area to support expanded outdoor dining programs. The City also suspended zoning and parking requirements to allow outdoor dining on private property and established a temporary encroachment permit program to allow new encroachments into sidewalks, public streets, and Pier Plaza. Both the private property programs and encroachment program included a basic set of guidelines pertaining to hours of operation, permitted uses, maintenance, etc., collectively referred to hereafter as the Outdoor Permit Program.

The City issued over 60 permits during the temporary Outdoor Permit Program in a variety of commercial locations citywide including extended encroachments on Pier Plaza and encroachments into other public right-of-way areas. The program included encroachment into on-street parking spaces, which had previously not been allowed in Hermosa Beach. Initially, as a temporary measure, City Council allowed the uses without requiring any encroachment area rents or reimbursement of lost parking meter revenue. In June 2021, Council approved extension of the pilot program through December 31, 2021 and authorized implementation of a reapplication process for outdoor encroachment areas that included renewal of permissions from neighboring businesses and requirement of deposits to pay for removal of the decks should the City need to do so.

At its December 14, 2021 meeting, Council approved an extension of the programs through May 31, 2022. At its January 25, 2022 meeting, Council discussed implementing new fees for the temporary outdoor dining encroachments and approved a fee of $1.50 per square foot per month to begin March 1, 2022.

Council, subsequently, extended the program in both May and November of 2022 with a final extension to May 1, 2023 and directed staff to bring the permanent program for consideration. At the April 25, 2023 meeting, Council approved a resolution establishing the lane reconfigurations and downtown bike lanes and provided feedback and direction on a number of other key program elements, including fees and encroachment area sizing. At its June 13, 2023 meeting, staff brought back program elements for Council’s approval. They included revisions to HBMC Chapter 12.16 governing encroachments, a resolution establishing guidelines for Pier Plaza and other off-street encroachments, and a resolution establishing a new fee schedule for the encroachments.

Fall of 2023, City staff distributed the new guidelines and new application materials to all off-street commercial encroachment permit holders with a 60-day deadline to submit the application package, including new plans for the proposed encroachment areas. City staff mailed, emailed, and hand-delivered these materials to the affected businesses and followed up with calls and site visits to ensure businesses understood the program, the process, and their obligations. Staff received applications from almost all the original 35 encroachment permit holders. Businesses that did not submit applications cited a variety of reasons including closure, financial challenges, and revised business strategies.

As directed by Council, staff developed the elements necessary to establish a permanent version of an Outdoor Dining and Downtown Lane Reconfiguration Program. Elements already completed include:

1. An ordinance amending HBMC Chapter 12.16 to establish basic guidelines for a permanent outdoor dining and retail program.

2. A resolution establishing a new fee schedule for encroachments citywide.

3. A resolution permanently establishing the downtown lane reconfigurations and bike lanes.

4. A resolution amending operational and design guidelines for Pier Plaza.

5. A CEQA determination for the program elements.

The final elements of the program are proposed resolutions for the operational and design standards guidelines for on-street dining decks (Attachment 1) and new fees for commercial encroachment permits and annual renewals (Attachment 2).

Past Council Actions

Meeting Date	Description
June 9, 2020	Approved Ordinance 20-1410U allowing temporary permit program for outdoor dining in response to pandemic.
July 14, 2020	Directed staff to proceed with development of lane closure plans.
June 22, 2021	Approved extension of the outdoor permit program through December 31, 2021.
July 13, 2021	Approved Resolution authorizing extension of lane reconfigurations.
October 26, 2021	Approved development and implementation of permanent versions of these programs.
December 14, 2021	Approved development of permanent programs, and extension of temporary programs through May 2022
January 25, 2022	Discussion and approval of new fees for temporary encroachments
February 8, 2022	Approved reinstatement of existing fees for permanent encroachment areas
May 24, 2022	Approved extension of programs through January 2023
June 14, 2022	Approved additional refinements to the outdoor dining programs
November 3, 2022	Approved extension of temporary programs through May 1, 2023
January 24, 2023	Consideration market rate appraisal, temporary rooftop dining, and changes to Pier Plaza temporary encroachments
March 28, 2023	Considered a draft ordinance related to permanent outdoor dining and retail
April 25, 2023	Considered program elements, provided feedback for revisions, and approved a Resolution establishing lane reconfigurations, bike lanes and street closures.
June 13, 2023	Introduced an Ordinance amending Chapter 12.16 of the Hermosa Beach Municipal Code related to Commercial Encroachments and adopted a Resolution establishing design and operational guidelines for off-street encroachments, and a Resolution establishing a fee schedule for encroachment fees.
July 11, 2023	Adopted an Ordinance amending Chapter 12.16 of the Hermosa Beach Municipal Code related to Commercial Encroachments

Discussion:

On-Street Deck Design and Operational Guidelines

Finalizing the off-street guidelines and implementing the new application process for the program allowed staff additional time to refine the many elements necessary for the on-street dining guidelines. The guidelines for on-street dining are inherently more complex than those for off-street due to a variety of issues unique to the on-street decks, especially traffic safety.

Transitioning the temporary program to a long-term program required careful analysis of each of the many program elements. The proposed guidelines reflect the evolving nature of on-street dining programs throughout the region and lack of design requirements for decks in the public right-of-way at the State and Federal level. The relative newness of these programs hampered staff’s ability to gather definitive information on long-term safety and construction best management practices.

To arrive at the proposed guidelines, staff from every department worked together and consulted other agencies, third-party engineering and safety experts, and the local business community. Staff’s efforts included close interaction with the Hermosa Beach Chamber of Commerce and Visitors Bureau to survey local businesses and host two recent meetings of current and prospective deck operators to elicit specific feedback on the proposed guidelines. Meeting notes are provided as Attachment 3.

The new guidelines would be implemented via a one-year initial term with annual renewals to follow. Every on-street dining deck operator would be required to submit plans and an application for a new encroachment permit. Staff from multiple departments would review the applications to determine the suitability and safety of the proposed deck design and to confirm that the applicant has no outstanding code violations that would prohibit a new permit.

Below is a summary of key program elements that informed the proposed guidelines.

1. Traffic Safety-staff consulted closely with traffic engineers and staff from other agencies to discern a coherent traffic safety rationale that balances safety with cost and practicality. Although only two minor collisions occurred with the existing temporary decks since the program’s inception in 2020, staff prioritized traffic safety for the long-term on-street encroachment program.

Dining decks in the current temporary program benefit from a number of conditions that provide important safety advantages. The bike lanes along Pier and Hermosa Avenues provide important buffer zones to allow drivers an opportunity to correct and avoid collisions with the decks while driving. Additionally, City Council recently approved changing speed limits along Pier and Hermosa Avenues from 25 miles per hour to 20 miles per hour, further enhancing the safety in these areas. Lastly, the water-filled barriers that currently surround all on-street decks have been shown to be an acceptable and efficient method of adding collision protection to the dining areas.

For these reasons, staff supports allowing existing deck operators to continue with only minimal traffic safety modifications, including installation of traffic delineators and additional site-specific assessment to be completed by the City’s on-call traffic engineer. Staff would continue to monitor traffic safety concerns, review any future design guidance from relevant State and Federal agencies, and solicit general feedback on the program to assess any adjustments that should be made.

Several local agencies are exploring the concept of widening sidewalks in their downtown areas to offer increased sidewalk dining and eliminate the use of on-street dining areas. Staff is considering sidewalk expansion as a long-term strategy, along with other long-term changes and improvements, subject to future Coastal Commission approvals, capital cost requirements, and operational considerations.

2. Operation and design-the rules governing deck design for the temporary program were relatively minimal at the program’s onset. Most of the initial decks were built by a small handful of contractors and thus had a consistent design and construction type. As the program grew, a variety of designs and requests for amenities from deck operators emerged.

The proposed guidelines provide a much more thorough set of requirements and prohibitions that balance design freedom with operational safety and practicality. These guidelines were informed by extensive research of other agencies’ programs as well as direct feedback from local businesses. The proposed guidelines address a wide variety of concerns. Some of the key proposed standards include:

• The prohibition of fixed and solid roofs. Instead, the guidelines would allow umbrellas and “shade sails” to provide shade for patrons.

• Electrical service to the decks would be limited to one outlet.

• Decks must comply with the Americans for Disabilities Act.

• Open flames would not be allowed. However, propane and electric heaters would be allowed, with certain restrictions.

• Deck walls must not exceed 42 inches in height from the street, with a few exceptions for additions such as plants, etc.

• Speakers would be allowed on the deck for the purpose of ambient background music. This would require an amplified sound permit and would require adherence to all noise and nuisance regulations.

• Drainage along the curb for stormwater must meet certain minimum sizes and adequate design must be verified. Although this was required of the existing temporary decks, staff would enforce the requirement more diligently and uniformly and ensure the drainage path is maintained and does not deteriorate over time.

• Staff proposes encouraging installation of bicycle racks on existing decks and require it of all new decks. The recommendation includes economic development incentives of potentially reduced encroachment fees, through City subsidies, for participating businesses and the purchase and installation of the by racks by City staff.

The proposed modifications must include assurances that the existing structures are structurally sound and that any elements in conflict with the new guidelines are corrected. All existing and new deck business owners must submit plans for full plan review and site inspections.

3. Aesthetics-input from City Council, business owners, and the community in general, gathered over the past three years, indicated a preference to allow businesses the flexibility to have unique design aesthetics with certain restrictions. Staff recommends that the City maintain the discretion to approve or deny proposed designs.

The City proposes an economic development grant program, using City funds, to incentivize businesses to re-paint decks and incorporate professional artists and designers in the process. The program would offer a discount of up to $600 on the encroachment permit fee to any business that re-paints or beautifies its dining deck walls. Applicants would be required to submit renderings of the new design and staff would review and determine eligibility for the discount. The City would work with the Chamber of Commerce to identify local artists most suitable for this work and help disseminate their information to businesses. The rebates would be first-come, first-served, with a total not-to-exceed permit fee waiver total of $10,000.

4. Liability-staff consulted with the City Attorney, the California Joint Powers Insurance Authority (JPIA), several traffic safety engineers and risk management experts, and staff from other agencies regarding liability related to deck design and recommended insurance levels. Following a review of best practices, and in the absence of formal design requirements from State and Federal agencies, staff developed a program based on the best practice research, as it applies to our unique roadway conditions.

After consultation with risk management experts, and with the goal of protecting the businesses and the City, staff recommends an increase in the amount of insurance required of deck operators. The recommended coverage of four million dollars aggregate and two million dollars per occurrence is consistent with current industry standards and best practices. The current requirements are only two million and one million dollars, respectively.

5. Administration-staff developed a new application for all commercial encroachment permits. The new application would be required of all existing encroachment permit holders. Staff also proposes a new method for allowing on-street encroachments to utilize the frontage of neighboring businesses. A business proposing to encroach upon another business’ frontage would be required to work with the City to notify the neighboring business, but not require permission as was done in the temporary program. The business must verify it notified the adjacent business and any concerns from the neighbor would result in a discussion between the parties with the City’s involvement as necessary to ensure a reasonable compromise. Businesses wishing to encroach on neighboring frontage or share decks must provide a customized signed affidavit customized.

There are currently 14 on-street dining decks, occupying 34 public parking spaces citywide (Attachment 4). Staff recommends that all existing decks submit new plans within 90 days of approval of the guidelines. After plan approval, businesses would be required to implement any deck revisions within 90 days.

Application, Plan Review, and Renewal Fees

City staff developed the proposed application, plan review, and renewal fees after a thorough multi-departmental workshopping of the plan review process, which was informed, in part, by the off-street commercial encroachment application and submittal process that began in Fall 2023. Staff utilized existing encroachment permit review fees and monitored staff time to determine what revisions should be made and how to best structure on-street encroachment application fees.

Staff recommends new fees be established for the following:

1. Standard off-street commercial encroachment permits (i.e., Pier Plaza);

2. Simple off-street commercial encroachment permits (i.e., retail displays and

sidewalk dining);

3. On-street dining encroachment permits (dining decks);

4. Annual renewal of permits for all commercial encroachments; and

5. Minor Alterations.

The permit review process involves many City departments and occasionally contracted on-call professionals. For initial applications for standard off-street and on-street encroachments, the City requires submittal of plans prepared by a licensed professional showing the entire encroachment area and its dimensions and structures, as well as any proposed changes to the encroachment area.

On-street encroachments have unique safety and design considerations associated with being located on the roadway surface adjacent passing vehicular traffic. Based on complexity, staff proposes a higher fee to reflect the more complicated review and approval process. Small off-street encroachment permit applicants are required to submit a sketch of their proposed encroachment and, because they do not involve any permanent structures or furniture, are subject to a much more streamlined review.

Per Hermosa Beach Municipal Code (HBMC) Chapter 12.16, all commercial encroachments, both on-street and off-street, are subject to annual renewals. The annual renewal fee reflects a simplified workload that assumes the encroachment area was not changed during the year. All permits and renewals require submittal of application forms, updated insurance documents, and re-inspection. Staff also proposes a fee to cover review of minor alterations to the encroachment area that could be covered by a simple site plan amendment or update. For reference, the current outdoor dining encroachment permit fee is $1,371.74.

The proposed fees for these five categories are as follows:

Outdoor Dining Encroachment Permits	Fee
Application for standard off-street encroachment	$1,618.48
Application for simple off-street encroachment	$492.20
Application for on-street encroachment	$1,895.24
Annual Renewal	$397.70
Minor Alteration	$313.02

The proposed fees would be subject to annual consumer price index (CPI) adjustments, per the Master Fee Schedule. Any additional necessary permits (i.e., building or electrical permit) would require separate additional fees.

Next Steps

Should Council approve the proposed guidelines and fees, staff would immediately notify all affected businesses to begin the application submittal process. Each prospective on-street dining encroachment applicant would be required to submit professionally prepared plans, an application form, a maintenance covenant, proof of insurance, and a plan review fee. City staff would review the applications and plans. Review times may vary depending on the completeness of the application submittal and complexity of the review.

City staff met with California Coastal Commission staff and established that a five-year pilot program would be an effective approach to implement the program. The pilot program would include ongoing monitoring and assessment to document the project’s effect on parking and coastal access. The effort may also include testing a variety of programs and measures to ensure adequate coastal access is maintained during the pilot. Staff is currently working to develop acceptable measures to incorporate into the program that would satisfy the criteria for the Coastal Development Permit. If approved, staff would submit a Coastal Development Permit application for a pilot program.

General Plan Consistency:

The proposed program options match the model of “living streets,” also known as “complete streets,” which supports a key guiding principle of the General Plan Vision, of fostering a vibrant local economy. A living street combines safety and livability while supporting ground floor and outdoor economic activities. Living streets/complete streets principles center on designing streets that can be safely shared by both vehicular and non-vehicular traffic. A living street should also contribute to an engaging public realm and a vibrant local economy.

Relevant Goals and Policies are listed below:

Governance Element

Goal 6. A broad-based and long-term economic development strategy for Hermosa Beach that supports existing businesses while attracting new business and tourism.

Policies:

• 6.4 Business support. Support the Chamber of Commerce, retailers, tourist service businesses, artists, and other agencies to develop an aggressive marketing strategy with implementation procedures.

• 6.6 Pop-up shops. Develop plans and programs for underutilized spaces, such as vacant buildings, utility corridors, parkways, etc., for temporary retail, restaurant, and community promoting uses.

Mobility Element

Goal 1. Complete Streets (Living Streets) that serve the diverse functions of mobility, commerce, recreation, and community engagement for all users whether they travel by walking, bicycling, transit, or driving.

Policy:

• 1.1 Consider all modes. Require the planning, design, and construction of all new and existing transportation projects to consider the needs of all modes of travel to create safe, livable and inviting environments for all users of the system.

Goal 7. A transportation system that results in zero transportation-related fatalities and which minimizes injuries.

Policy:

• 7.1 Safe public rights-of-way. Encourage that all public rights-of-way are for all users at all times of day where users of all ages and ability feel comfortable participating in both motorized and non-motorized travel.

Fiscal Impact:

Staff requests appropriation of $5,000 from Prospective Expenditures for bicycle rack installation to be budgeted in the Public Works Administration Division. Public Works operations and maintenance staff would be responsible for the installation.

Request Item	Request Amount	FY 2023-24 Budget Dept. Account #
Bicycle Rack Installation	$5,000	001-4201-4201

The proposed quarterly encroachment fees for existing on-street dining decks are estimated to generate approximately $6,500 monthly in revenue until July 1, 2024 when the rate transitions from $1 per square foot to $2 per square foot. Staff is unable to predict final business participation levels and thus revenues could fluctuate.

Annual lost parking revenue is estimated to be approximately $260,000 from the 34 parking spaces currently occupied by on-street dining decks. Approximately $30,000 in funds for ongoing annual traffic and parking analysis will be appropriated in the FY 2024-25 Budget. The new proposed encroachment permit and renewal fees are estimated to provide a nominal increase in revenue compared to existing encroachment permit fee revenue. The increase in revenue represents cost recovery for the added staff time to review more complex encroachment permits for on-street outdoor dining.