AGENDA ITEM NO. 9.4

CITY OF ELK GROVE CITY COUNCIL STAFF REPORT

AGENDA TITLE: A public hearing to consider adopting a

Resolution of the City Council of the City of Elk Grove, approving a Letter of Public Convenience and Necessity for a Type 20 alcohol license for Walgreens, located at 7299 Laguna Boulevard

MEETING DATE: July 14, 2010 PREPARED BY: Adam Petersen, Associate Planner DEPARTMENT HEAD: Taro Echiburú, Interim Planning Director

PROJECT INFORMATION

Location: 7299 Laguna Boulevard Planner: Adam Petersen, Associate Planner Applicant: Walgreens Co., Attn.: Dan Perlin 104 Wilmot Road, 2nd

Deerfield, IL 60015 Floor, MS 1420

Property Owner: Hoo Gee Nursery, Inc. My Sui Hoo 17888 Cochrane Road Morgan Hill, CA 95037 RECOMMENDED ACTION

:

Staff recommends the City Council of the City of Elk Grove review the information in this report and consider adopting a resolution approving a Letter of Public Convenience and Necessity for a Type 20 alcohol license for the Walgreens drug store, located at 7299 Laguna Boulevard. A map showing the location of this Walgreens store is provided in Figure 1 on the next page.

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Elk Grove City Council July 14, 2010 Page 2 of 5

Figure 1: Project Location and Information

Walgreens

BACKGROUND INFORMATION

:

The project, which is the subject of the requested Letter of Public Convenience and Necessity, is the Walgreens drug store located at the northwest corner of Laguna Boulevard and Bruceville Road. The applicant is requesting a Letter of Public Convenience and Necessity (PCN Letter) to allow Walgreens to acquire a Type 20 (Off-Sale Beer and Wine) alcohol license from the Department of Alcoholic Beverage Control (ABC).

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Elk Grove City Council July 14, 2010 Page 3 of 5 ABC requires an applicant to obtain a PCN Letter from the affected jurisdiction when the establishment is located within a “high crime” Police Beat or when the census tract is deemed “overconcentrated” by ABC’s standards. Walgreens is located both in a census tract which is “overconcentrated” and in a “high crime” Police Beat as defined by ABC:

• According to ABC, one license is allowed in this census tract, but five licenses exist as of the publication of this report (this store would be the sixth).

• Crime statistics for the Elk Grove Police Department Beat that includes this location are discussed later in this report.

PCN LETTER JUSTIFICATION

As part of the request for a PCN Letter, an applicant must explain how the alcohol license will serve the public’s convenience and necessity. In response, the Applicant notes that alcoholic beverage products were sold in Walgreens stores until the 1990s, when alcohol sales were removed by the company from some of its stores. The company now proposes to reintroduce these sales in many of its stores, given the technological ability to better manage the sales of these types of products. Providing alcoholic beverage sales in this store, according to the applicant, would be consistent with the company’s prior and ongoing practice in California and elsewhere. Walgreens also notes that reintroducing beer and wine sales is “directly responding to customer demand,” and would allow customers to “buy a range of products at one location rather than having to travel, park, and pay at a variety of different stores.” (The applicant’s complete justification statement is included as Attachment 3 to this staff report).

ANALYSIS

Chapter 4.54 of the Elk Grove Municipal Code establishes a protocol for the issuance and review of Letters of Public Convenience and Necessity. A variety of City departments and other agencies (including the Elk Grove Police Department and the Elk Grove Community Enhancement division) are required to review PCN Letter applications in order to determine current and past problems at the Applicant’s proposed store location. Issues examined by these departments and agencies include:

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Elk Grove City Council July 14, 2010 Page 4 of 5

• Criminal activity, • Building code violations, and • Complaints to the City and/or ABC.

None of the reporting agencies noted any issues with the existing Walgreens store (which does not currently sell alcohol). The location of the store for which the PCN Letter is requested is zoned Shopping Center (SC). This zoning district allows alcohol sales as a permitted use, which means that in this instance the City Council cannot impose conditions on the sale of alcohol other than the basic requirements of state law (which would be enforced by the State of California) and of the Elk Grove Zoning Code (sign area, lighting, and other standards common to all retail stores). Census tract 96.13 is the location of the project. ABC considers this census tract to be “overconcentrated” with alcohol sales outlets. ABC makes this determination when the number of liquor licenses issued exceeds the number of licenses permitted in a census tract. If the Council chooses to issue a PCN, it will allow for six licenses in a census tract that ABC states should have only one license. ABC determines an area to be “high crime” when the number of crimes committed in a Police Beat exceeds 120 percent of the average number of crimes committed citywide. The City of Elk Grove Police Department, has reviewed the project, which is located in the Department’s “Beat 2.” In 2009 Beat 2 experienced 1,455 crimes, which is 516 crimes more than the 120% average. Further, the Police Department noted that there were five crimes –three larcencies and two robberies – reported at this location in 2009.

ENVIRONMENTAL ANALYSIS

Section 15061(b)(3) of the California Environmental Quality Act (CEQA) states that an activity is covered by the general rule that CEQA only applies to projects, which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA review. Granting this Letter of Public Convenience and Necessity will not bring about any physical change to the environment and therefore will not have any potential for causing a significant effect on the environment.

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Elk Grove City Council July 14, 2010 Page 5 of 5

FISCAL IMPACT

No identifiable direct material or negative financial impact to the City’s General Fund is expected.

ATTACHMENTS

1. Resolution 2. Police – Crime Statistics 3. Applicant’s letter 4. Department of Alcoholic Beverage Control Licensing Requirements

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ATTACHMENT 1

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ELK GROVE APPROVING A LETTER OF PUBLIC CONVENIENCE AND NECESSITY FOR A

TYPE 20 (OFF-SALE BEER AND WINE) ALCOHOL LICENSE FOR WALGREENS LOCATED AT 7299 LAGUNA BOULEVARD PROJECT NO. EG-10-030

ASSESSOR PARCEL NUMBER 116-1380-001

WHEREAS, the Planning Division of the City of Elk Grove received an application on July 14, 2010, requesting a Letter of Public Convenience and Necessity for Walgreens to obtain a Type 20 (Off-Sale Beer and Wine) alcohol license from the Department of Alcoholic Beverage Control in order to sell beer and wine from an existing store location; and WHEREAS, the proposed project is located on real property in the incorporated portions of the City of Elk Grove more particularly described as Assessor Parcel Number 116-1380-001; and WHEREAS, Chapter 4.54, Article 5 of the Elk Grove Municipal Code establishes the City Council as the appropriate authority to hear and decide on all Letter of Public Convenience and Necessity requests; and WHEREAS, the project is exempt from California Environmental Quality Act (CEQA) review under §15061(b)(3) of the CEQA Guidelines because a Letter of Public Convenience will not with reasonable certainty have a possible effect on the environment; and WHEREAS, the City Council held a duly noticed public hearing as required by law to consider all of the information presented by staff, information presented by the project proponent, and public testimony presented in writing and at the meeting.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Elk Grove hereby approves the Letter of Public Convenience and Necessity for Walgreens located at 7299 Laguna Boulevard based on the following findings:

California Environmental Quality Act (CEQA)

Finding:

The project is exempt from CEQA review.

Evidence:

Pursuant to §15061(b)(3) of the CEQA Guidelines, an activity is covered by the general rule that CEQA only applies to projects that have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA review. Granting this Letter of Public Convenience and Necessity will not bring about any physical change to the environment and therefore will not have any potential for causing a significant effect on the environment.

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Public Convenience and Necessity Finding:

Public Convenience and Necessity is met by the issuance of a Type 20 (Off-Sale Beer and Wine) alcohol license for Walgreens.

Evidence:

According to the Elk Grove Police Department, the Community Enhancement Department, the Building Department, the City Attorney, and the Sacramento County Environmental Health and Safety Department, no existing violations against the property or Applicant have occurred that would discourage the issuance of a Type 20 alcohol license for Walgreens. The public convenience would be served by responding directly to customer demand for wine and beer sales. Further, a one-stop shopping experience meets the public convenience by allowing consumers to purchase a range of products which includes beer and wine.

PASSED AND ADOPTED by the City Council of the City of Elk Grove this 14th

day of July 2010.

SOPHIA SCHERMAN, MAYOR of the

CITY OF ELK GROVE ATTEST: APPROVED AS TO FORM: JASON LINDGREN, INTERIM CITY CLERK SUSAN COCHRAN, CITY ATTORNEY

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ELK GROVE POLICE DEPARTMENT

CRIME SUMMARY BY BEAT & ARREST TOTAL FOR 2009

Beat 1 Beat 2 Beat 3 Beat 4 Beat 5 Total

City-wide

Criminal Homicide 1 1 1 1 1 5

Forcible Rape 2 6 4 2 1 15

Robbery 7 57 28 35 25 152

Aggravated Assault 23 81 67 44 80 295

Burglary 81 278 199 158 147 863

Larceny-theft 169 906 449 246 380 2150

Motor Vehicle Theft 32 126 110 65 100 433Total 315 1455 858 551 734 3913

2009Arrests 2358Average per reporting district 783

120% of average 939All information is from our records management system. Information is subject to change as incidents are investigated/reclassified.

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FACT SHEET: Reintroducing Beer and Wine Sales at Walgreens

Overview

Directly responding to customer demand, Walgreens will bring back a modest selection of beer and winefor sale in stores throughout the country. Our customers want more of a one-stop shopping experiencewhere they can buy a range of products at one location rather than having to travel, park and pay at avariety of different stores. Given our convenient locations and reputation as a trusted retailer, Walgreensis an attractive alternative for the sale of wine and beer.

Walgreens has extensive experience managing the sale of regulated products with strict controls, like ourmedications. We also have a strong history of serving our communities as a responsible retailer and welook forward to upholding that commitment with the reintroduction of beer and wine.

History

Walgreens has successfully merchandised and sold alcoholic beverages since Prohibition. Thoughprofitable, many managers found the category cumbersome and time consuming to maintain, so it wasdiscontinued in the majority of stores in the early 1990s. Now, with a scaled back offering and inventorytechnology advancements, we have the increased ability to safely and efficiently resume beer and winesales while maintaining our high standards for responsible retailing.

Product Assortment

Beer and wine will make up a small portion of each eligible store. Walgreens' modest selection of theseproducts will occupy less than two percent of the total shelf space-one product line among thousands ofother products you would expect in a drugstore.

- The proposed assortment has been refined to appeal to casual, moderate beer and wine drinkers asan additional Walgreens convenience.

The beer selection will consist of 6-packs, 12-packs, 18-packs and cases only. There will be no singleservings or any other variation that would be considered conducive to alcohol abuse

The selection will be value to mid-priced. Walgreens will also work with local beer and wine producersto customize our selection with local products. Local vendor participation will continue to grow in thefuture.

Operational Controls and Employee Training

Walgreens has taken great measures to assure that any beverage containing alcohol will be sold in aresponsible and appropriate manner. Detailed polices and procedures are already in place and will bestrictly enforced without exception.

Employees must undergo extensive training prior to beer and wine availability at each store.

Walgreens policy states that employees must request identification for any customer attempting tQpurchase alcohol who appears to be under the age of 40. Register prompts ensure compliance beforeproceeding with the transaction.

- Underage employees will not handle the selling or stocking of alcohol products.

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BEFORE THEDEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL

OF THE STATE OF CALIFORNIA

In the Matter of the Application of:

PETITION FOR CONDITIONALLICENSE

File: 20-486943WALGREEN CO.Dba: Walgreens

7299 Laguna BoulevardElk Grove, CA 95758-5059

For issuance of an Off-Sale Beer & Wine LicenseUnder the Alcoholic Beverage Control Act

WHEREAS, petitioner(s) has/have filed an application for the issuance of the above-ref erred-to license(s)for the above-mentioned premises; and,

WHEREAS, pursuant to Section 23958 of the Business and Professions Code, the Department may deny anapplication for a license where issuance would result in or add to an undue concentration of licenses; and,

WHEREAS, the proposed premises is located in Census Tract #0096. i 3 where there presently exists an undueconcentration oflicenses as defined by Section 23958.4 of the Business and Professions Code; and,

WHEREAS, the proposed premises is located in a crime reporting district that has a 20% greater number ofreported crimes, as defined in subdivision ( c) of Section 23958.4, than the average number of reported crimes asdetermined from all crime reporting districts with the jurisdiction of the local law enforcement agency; and,

WHEREAS, the petitioner( s) stipulate( s) that by reason of the aforementioned high crime and over concentrationof licenses, grounds exist for denial of the applied-for license; and,

WHEREAS, the proposed premises is within 600 feet from Two (2) consideration point(s): Treehouse LearningCenter and Light of the Valley, Lutheran High School; and,

WHEREAS, issuance of an unrestricted license without the below-described conditions may interfere with thepublic use of the above-mentioned consideration point(s); and,

WHEREAS, the issuance of an unrestricted license would be contrary to public welfare and morals;

NOW, THEREFORE, the undersigned petitioner(s) do/does hereby petition for a conditional license as

follows, to-wit:

i. Beer and/or malt beverages shall be sold in original factory packages of six-pack or greater, exceptmalt based coolers. At no time shall a single unit be sold individually, or in conjunction withanother brand/size container of beer and/or malt beverage to constitute a six-pack or largerquantity.

2. The sale of wine shall be in bottles no smaller than 750 mI., except for wine based coolers.

ABc-in (5194)

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Page 220-486943

3. Wine coolers, whether made with wine or malt products, shall not be sold in quantities less than afactory four-pack.

4. No alcoholic beverages shall be consumed on any property adjacent to the licensed premises under thecontrol of the licensee's premises.

5. Petitioner(s) shall not allow their patrons or the general public to loiter or congregate on the sidewalks orany property adjacent to their licensed premises.

6. The petitioner(s) shall be responsible for maintaining free oflitter the area adjacent to the premises overwhich they have control.

7. No alcoholic beverages shall be sold to any person while such person is in a motor vehicle.

This petition for conditional license is made pursuant to the provisions of Sections 23800 through 23805 ofthe Business and Professions Code and wil be carred forward in any transfer at the applicant-premises.

Petitioner(s) agree(s) to retain a copy of this petition on the premises at all times and wil be prepared toproduce it immediately upon the request of any peace offcer.

The petitioner(s) understand(s) that any violation of the foregoing condition(s) shall be grounds for thesuspension or revocation ofthe license(s).

DATED THIS DAY OF

Applicant/Petitioner Applicant/Petitioner

ABC-I 72 (5194)

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