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In December 2000, Coronado adopted a Formula Retail Ordinance. The ordinance notes that the unregulated proliferation of formula retail stores would frustrate the city's goal of maintaining a unique and diverse retail base, and limit opportunities for small, local retailers. The ordinance requires that formula retail businesses obtain a special use permit from the city. Approval hinges on demonstrating that the store will contribute to an appropriate balance of local, regional, or national-based businesses and appropriate balance of small, medium, and large-sized businesses. Formula businesses must be compatible with surrounding uses and occupy no more than 50 linear feet of street frontage.

A group of property owners challenged Coronado's formula retail ordinance shortly after it was enacted, but a California Appeals Court upheld the law in June 2003. In its decision, the court stated that the ordinance does not violate the US Constitution's commerce and equal protection clauses, and is a valid use of municipal authority under California state law.

AN ORDINANCE OF THE CITY OF CORONADO FOR THE AMENDMENT OF CHAPTERS 04 AND 55 OF TITLE 86 OF THE CORONADO MUNICIPAL CODE ADDRESSING THE DEFINITION AND REGULATION OF FORMULA RETAIL ESTABLISHMENTS

WHEREAS, the Strategic Plan identifies fiscal vitality, safety, and the vitality of the retail sector, as the City's high priority strategic issues;

WHEREAS, Coronado is a community with a very special environment, both natural and man-made. The qualities of the natural environment must be respected so that the uniqueness of Coronado can flourish without inappropriate changes;

WHEREAS, Coronado is one of a very precious few traditional towns still in existence much as the town was first designed, in which its housing, shops, work places, schools, parks and civic facilities co-exist in relative harmony. Its streets invite walking and bicycling and its eclectic architecture styles create a sense of timelessness that have contributed to a strong Sense of community - a village atmosphere;

WHEREAS, the City of Coronado established the Business Areas Advisory Committee (BAAC) in March 1991, appointing committee members that represented the perspectives of business operators, property owners, and the residents at large, and charging its members with preparing a plan for enhancing the economic and physical characteristics of the business areas of Coronado aimed at preserving and enhancing Coronado's village atmosphere;

WHEREAS, the Business Areas Advisory Committee, pursuant to a lengthy and inclusionary public participatory process, developed the Business Areas Development Plan (BADP), the purpose of which was to provide a coherent framework to foster a vibrant commercial sector in the City that is economically sound for merchants and property owners, well-balanced in its appeal to a mixed residential and visitor market, and aesthetically and environmentally suitable to the small-town, low-density residential character of the City of Coronado;

WHEREAS, the "community vision" for the commercial sector, as articulated in the Business Areas Development Plan, is for open and inviting retail storefronts that impart a sense of streetscape continuity to pedestrians that enhances the village atmosphere. Coronado's commercial sector should be a vibrant, vital, active and user-friendly business environment replete with attractive merchandising, entertainment and recreation opportunities offering residents and visitors alike a diverse and wholesome environment for commercial, cultural, civic and social pursuits;

WHEREAS, the Business Areas Advisory Committee cautioned that, notwithstanding the marketability of a retailer's goods or services or the visual attractiveness of the storefront, an over-abundance of certain kinds of businesses can be counterproductive and otherwise detract from the appeal of the streetscape;

WHEREAS, the City Council recognizes that retail uses are land uses most critical to the success of the commercial districts, which requires a strong and diverse retail base;

WHEREAS, it is therefore apparent to the City Council that the long-term health of the commercial zones would be advanced by a blend of smaller, medium, and larger sized businesses and by a blend of local, regional and national-based businesses, which provides diverse and unique retail businesses for residents and visitors;

WHEREAS, Coronado is both a resort town and a residential village, and the creation of a desirable living, working, and business environment that is responsive to residents will automatically provide destination of interest to visitors;

WHEREAS, it is anticipated that additional formula retail properties will in the foreseeable future find their way to the rental/lease market in the commercial districts;

WHEREAS, the addition of formula retail businesses in the commercial areas, if not monitored and regulated, will serve to frustrate the Business Areas Development Plan goal of a diverse retail base with a unique retailing personality comprised of a mix of businesses ranging from small to medium to large and from local to regional to national. Specifically the unregulated and unmonitored establishment of additional formula retail uses will unduly limit or eliminate business establishment opportunities for smaller or medium sized businesses, many of which tend to be non-traditional or unique, and unduly skew the mix of businesses towards national retailers in lieu of local or regional retailers, thereby decreasing the likelihood of a diversity of retail activity of the type contemplated by the Business Areas Development Plan; and

WHEREAS, in light of the foregoing considerations, the City Council has determined that the public welfare of the City's residential, retail, business and tourist based community, as articulated by the principles upon which the Business Areas Development Plan is premised, will now be served and advanced by monitoring and regulating the establishment of formula retail stores in the commercial areas through the mechanism of special use permits issued by the City Council of the City of Coronado.

The City Council of the City of Coronado, California, DOES ORDAIN that the City of Coronado Municipal Code is amended as follows:

SECTION ONE: That Chapter 86.04, Subsection 86.04.682 is added to read as follows:

86.04.682 Retail, Formula. "Formula Retail" means a type of retail sales activity or retail sales establishment (other than a "formula fast food restaurant") which is required by contractual or other arrangement to maintain any of the following: standardized ("formula") array of services and/or merchandise, trademark, logo, service mark, symbol, decor, architecture, layout, uniform, or similar standardized feature.

SECTION TWO: That Chapter 86.55, Section 86.51.130 is amended to add "Formula Retail" to the list of uses that can be authorized with a "Major" Special Use Permit.

SECTION THREE: That Chapter 86.55, Section 86.55.370 is added to read as follows:

86.55.370 Formula Retail:

A. Purpose. The purpose of the standards in this Section is to regulate the location and operation of formula retail establishments in order to maintain the City's unique village character, the diversity and vitality of the community's commercial districts, and the quality of life of Coronado residents. It is presumed that establishing or preserving an appropriate and balanced mix of local, regional, and national-based businesses and small, medium or large-sized businesses will more effectively serve to achieve this purpose as a strategy to maintain the economic health of the community's businesses districts and the small-scale eclectic ambiance.

B. Regulations.

1. A formula retail establishment may be allowed in the Central Commercial, Limited Commercial and Hotel-Motel Zones with a Major Special Use Permit (MSUP);

2. The cumulative expansion of a formula retail establishment by 500 or more square feet of floor area shall require a Major Special Use Permit amendment or a Major SUP if the establishment does not already have a Major Special Use Permit;

3. A Formula Retail establishment (except for grocery stores, banks, saving and loans, Full Service Restaurants and theaters) shall not have a street level frontage of greater than 50 linear feet on any street or have its retail space occupy more than two stories;

4. A formula retail establishment shall fully comply with all applicable regulations of this Code including Environmental Design Review; and

5. Change of ownership of an existing formula retail establishment shall not, by itself, require obtaining a Major Special Use Permit or Major SUP amendment as applicable.

C. Required Findings for Approval.

1. The formula retail establishment will be compatible with existing surrounding uses, and has been designed and will be operated in a non-obtrusive manner to preserve the community's character and ambiance;

2. Approval of the formula retail establishment will be consistent with me policies and standards of the General Plan and the Local Coastal Program, and that the proposed intensity of uses on the site is appropriate given the uses permitted on the site and on adjoining sites by these documents;

3. Approval of the formula retail establishment will contribute to an appropriate balance of local, regional or national-based businesses in the community; and

3. Approval of the formula retail establishment will contribute to an appropriate balance of small, medium and large-sized businesses in the community.

D. Duration of Section 86.55.370 Effectiveness.

Section 86.55.370 shall be null and void, and effectively repealed upon adoption by the City of a Specific Plan for the Central Commercial, Limited Commercial, Hotel-Motel and R-4 Zones.

SECTION FOUR: Severability. If any section, subsection, sentence, clause, phrase or portion of this Ordinance or the application thereof to any person, firm, corporation or circumstance, is for any reason held to be invalid or unconstitutional by the decision of a court of competent jurisdiction, such decision shall not affect the validity of the remaining portion thereof. The City Council of the City of Coronado hereby declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portion thereof be declared invalid or unconstitutional.

SECTION FIVE: This ordinance was introduced on December 5, 2000.

SECTION SIX: Upon the introduction and adoption of this ordinance, the City Clerk is directed to publish this ordinance within 15 days following adoption.