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HomeMy WebLinkAboutCUP 07-02 (Xiang Li, Business Owner; Shah Family Trust) CITY OF PALM DESERT DEPARTMENT OF COMMUNITY DEVELOPMENT STAFF REPORT REQUEST: Appeal of the Planning Commission's decision to revoke an existing Conditional Use Permit (CUP) for a massage therapy establishment in a 685 square foot office suite located at 74-350 Alessandro Drive, Suite B-4. SUBMITTED BY: Kevin Swartz Assistant Planner BUSINESS Xiang Li OWNER: 113 West Garvey Avenue, #177 Monterey Park, CA 91759 PROPERTY Shah Family Trust OWNER: 40530 Morningstar Rd Rancho Mirage, CA 92270 CASE NO: CUP 07-02 DATE: August 27, 2009 CONTENTS: Application to Appeal Letter submitted by Tony M. Lu, dated June 26, 2009 Planning Commission Resolution No. 2505 Planning Commission Minutes dated June 16, 2009 Recommendation: By Minute Motion, that the City Council reaffirm the Planning Commission's decision to revoke existing CUP 07-02 for a massage establishment in an office suite located at 74-350 Alessandro Drive, Suite B-4. Executive Summary: Approval of the staff recommendation would reaffirm the Planning Commission's decision to revoke the CUP due to violations of the Palm Desert Municipal Code. CUP 07-02 allowed a massage establishment in a 685 square foot office suite. The business was shut down by the Police Department, and while staff was in the process of scheduling a revocation public hearing, the business owner, Xiang Li, sold the massage Staff Report CUP 07-02 August 27, 2009 Page 2 of 4 business and business name to another operator. This was discovered by the Planning Department when an application for a Certificate of Use was submitted. Revocation of the CUP would prohibit the new business owner, or any other massage business, from opening at the same location for at least one year. The property owner appealed the Planning Commission's decision. Background: Massage establishments require both a CUP and a business license. Part of the business license process includes a background check. The Police Department shut the original massage operation down, because the applicant was operating the massage establishment in violation of P.D.M.C. 5.87.160(D). The applicant also had a conviction for "disqualifying conduct", as defined by P.D.M.C. 5.90.010. As the establishment was being shut down by the City, the applicant sold the name and business of the massage establishment, Tranquility Massage, to another party. The other party currently runs a massage establishment within the city of Palm Desert and wanted two massage establishment locations. The new owner of the name Tranquility Massage proposes to continue the business at the same location. At the June 16, 2009 meeting, the Planning Commission held a public hearing and revoked CUP 07-02 based on evidence presented during the public hearing. The property owner, who leases the suite in which the closed business was located, is appealing the Planning Commission's decision based on the fact that he has a new tenant and they purchased the rights to the name. By revoking CUP 07-02, neither the new owner of the business named Tranquility Massage, nor any other massage business, can open at this location and the property owner has a vacant suite. In July 2008, the City denied Mr. Xiang Li a business license permit to operate a massage establishment located at 74-350 Alessandro Drive, Suite B-4, because Ms. Chunmei (Or Chun Mei) Qiao was operating the massage establishment while her background did not comply with P.D.M.C. 5.87.160(D). Ms. Qiao also had a conviction for "disqualifying conduct", as defined by P.D.M.C. 5.90.010. The "disqualifying conduct" was a conviction of California Penal Code § 647(B) for agreeing to or engaging in any act of illegal conduct. Additionally, Ms. Qiao had been charged with numerous violations of Los Angeles Municipal Code § 103.205, related to the operation of massage establishments, and was convicted of unlawful engagement of a massage business. After the application was denied, Mr. Li removed Ms. Qiao's name from the application and added Jessica Duncan, then resubmitted the application. Ms. Qiao continued to communicate with City staff regarding the application, indicating that she was still an important part of the business. On December 18, 2008, the City conducted an inspection and found staff present and conducting business, even after the license to operate was deemed inactive. P.D.M.C. G:�Planning\Kevin Swartz\Word\CUP's\CUP 07-02 revoca[ion\OS-27 CC Staff Report final.doc Staff Report CUP 07-02 August 27, 2009 Page 3 of 4 5.87.030 prohibits operating a massage establishment without a license, and P.D.M.C. 5.87.030 requires existing applications to be renewed prior to their expiration or they will be inactivated. The findings to justify the revocation of CUP 07-02 can be found in Planning Commission Resolution No. 2505. Following the revocation of a CUP, no new application can be filed within a one year period from the date of revocation for the same or substantially the same conditional use on the same site. Discussion: On June 16, 2009, the Planning Commission revoked CUP 07-02 on a 3-1 vote (Commissioner Campbell voted no; Chair Tanner was absent). The property owner is appealing the decision, because he has a potential tenant who purchased the rights to the name for Tranquility Massage, and who is ready to lease the vacant space. The property owner contends that the new business owner did not commit the acts for which the CUP was revoked, and that the CUP should therefore be allowed to remain in effect for the new business owner. The revocation of the CUP is unrelated to the transfer of the business name from one party to another. A CUP runs with the land, and is strictly a land use issue. The previous tenant violated the Palm Desert Municipal Code and the Conditions of Approval for CUP 07-02. Any time that a Condition of Approval is not met or is broken, a CUP can be revoked. A Condition of Approval states, "Applicant must obtain all clearances, permits or licenses as required by the City's Municipal Code including, but not limited to, Ordinance No. 870 Massage Establishment, before the Conditional Use Permit is deemed valid." With massage establishments, when a CUP is granted, an applicant must receive a business license. During this process, the Police Department ran a background check and discovered violations. The Planning Commission has expressed concerns about the number of independent or "stand alone" massage establishments in Palm Desert. Under separate cover on this same agenda, the City Council will be asked to consider a formal recommendation from the Planning Commission that a moratorium be declared on issuance of CUPs for independent massage establishments such as this one. For the reasons described therein (i.e. concern for a balance of business types in the community, additional policing and resources required for massage establishments, etc.), Planning Commission thought it would be inappropriate and an inconsistent policy decision to continue the subject CUP while the moratorium is studied and when the criteria for revocation has been clearly established. G:�Planning�Kevin Swartz\Word\CUP's\CUP 07-02 revoca[ion\OS-27 CC S[af'f Report final.doc Staff Report CUP 07-02 August 27, 2009 Page 4 of 4 Conclusion: The Planning Commission and staff believe that the revocation of CUP 07-02 is appropriate because of the history of enforcement issues with Tranquility Massage; the perceived excessive number of massage establishments existing within the community; and the need to further study appropriate conditions and regulations for limiting the impact that this independent massage establishment has on its neighbors and on public resources. The property owner is apparently appealing the decision financial considerations and other concerns that don't pertain to the existing CUP. The applicant of CUP 07-02 violated the Palm Desert Municipal Code and the conditions of approval. Staff recommends that the Council uphold the decision of the Planning Commission. Submitted By: Department Head: •, , �,9 Kevin Swar z Lauri Aylaian Assistant Planner Director, Community Development CITY COIINCII,A(�ON pp ova . APPROVED DENTED - RECEIVED OTHER n M. Wohlmuth MEET G DA AYES� � � NOFS: ABSENh ABSTAINt VERIFIED BY: � - Original on File with City Cl k's Office G:�Planning\Kevin Swartz\Word\CUP's\CUP 07-03 revocation�appeal to CC.doc .;i�+��`�.i'-�c.Sc�d7,�C:� � CITY OF PALM DESERT, C pR NIA �D�J11M 29 �Pt II� 3�� .---�--�. � � APPLICATION TO APPEAL DECISION OF THE June 16, 2009 (Name of Determining Body) Case No. coP 07-02 Date of Decision: June 1 6, 2009 Name of Appellant chun xua Deng Phone 626-500-7229 Address 72655 Hwy 111 , #B7, Palm Desert, CA 92260 Description of A�plicat�on or Matter Co.nsidered: Rev�cation of CUP at 74-350 Alessanc�ro Ave. Reason for Appeal(atfach additional sheets if necessary): See attached. "-? v�' (Sign e of Appellant) F�R OFFICIAL USE ONLY Date Appeal Filed: ����- �j Fee Received: �C�. C�� Treasurer's Receipt No. �� /.J�`r' Received by: _�.�_1°� (.�I f�-F�!'� Date of Consideration by City Council or City Official: � Action Taken: Date: Rachelle D. Klassen, City Clerk COPY TO�L.�1 H:�rklassen�WPdataIWPDOCS�FORMSIappl toappeal.wpd tiAT��Q� �1� � 1-1Q Rev6l29/02 n[, l/—/ Lau� Offices of �`� " ' ' �-�;;l r� 5��0�r i C c F'�,LM UES�RT, Ca Tony M. LLl ZOQ9 JUN 29 AM i l: I '� 3333 S.Brea Canyon Rd.,Suite#213 J Phone: (909)468-4650 Diamond Bar,CA 91765 Fax: (909)468-5020 E-MAIL:TonymluC�3yahoo.com Licensed in California&Nevada June 26, 2009 VIA CERTIFIED MAIL City Clerk City of Palm Desert 73-510 Fred Waring Drive Palm Desert, California 92260 Re: Application to Appeal Appellant: Chun Hua Deng Case No.: CUP 07-02 Date of Decision: June 16, 2009 To Whom It May Concern: Our office represents Ms. Chun Hua Deng with respect to the above-appeal. Enclosed are: 1. Check in the amount of$210. 2. Application to Appeal. 3. Attachment to Application to Appeal (3 pages). Please kindly advise our office concerning the format and requirements for the appeal before the City Council. In the meantime,please contact our office if you have any questions. Thank you. V ery truly yours, LAW OFF TONY M. LU Ton . Lu TML: ey Enclosures: as noted Case No. CUP 07-02—CITY OF PALM DESERT ' � ` ��' � �� , `� :,� � ;_;�;;� F'�L{�-i U�.Ser� T, C�� Reasons for this Appeal: 200� ��� 29 API I I: 3;.,> 1. On May 11, 2009, the Applicant and her daughter proceeded to the City and spoke to Claudia Jaime and Jenny concerning the renewal of the Conditional Use Permit ("CUP"), and to obtain a Business License at the existing location. The Applicant informed Claudia and Jenny that she was contemplating on purchasing the business called Tranquility Massage, and to enter into a Lease Agreement with the Landlord. 2. Whereupon, Claudia checked with her manager and then informed Applicant that given that the Applicant had a good history with the City in that the Applicant had been operating Health System, located at 72655 Hwy 111, #B7, the renewal process and the application process would be no problem that that it would be done very soon. Claudia then asked the Applicant to provide the Lease Agreement, Purchase Agreement, a statement from the Landlord, application, and the appropriate application fee. Claudia then indicated that it would take about 1 �2 weeks. 3. On about May 13, 2009, the Applicant purchased Tranquility Massage from Xiang Li, and tendered $14,000. On the same day, the Applicant entered into a one-year Lease Agreement with Dr. Suresh Shah, owner of the subject premises. The Applicant paid the first month's rent of$1,445. The Applicant has paid all rents since the commencement of the Lease. 4. On May 14, 2009, the Applicant provided the Purchase Agreement, Lease Agreement, a letter from the Landlord, the required applications, and the required application fees to Claudia. Claudia informed the Applicant that the letter from the Landlord had to be notarized. The Applicant informed the Landlord on the same day about this requirement. 5. On the evening of May 23, 2009, the Applicant's contractors began preparing the Tenant Improvement Plan and made immediately-needed repairs to the bathroom, tiles, and the plumbing system. 6. On the morning of May 24, 2009, the Applicant paid James Yang (contractor) $4,000 as the first installment of the repair and Tenant Improvement fees. The agreement was for $9,800. Then, the Contractor proceeded to the City in order to submit the Tenant Improvement Plan. The Applicant and her daughter then proceeded to the Landlord in order to obtain the notarized statement from the Landlord acknowledging that he had known the Applicant and that he was aware the Applicant would be operating a massage facility. The Contractor was informed that the City would not approve the Plan. The Applicant and the her daughter then met with and spoke to Tony Bagato, Principal Planner. The Applicant was informed for the first time that the previous owner had been cited in December 2008 and February 2009, and that the City was considering revoking the CUP based upon the couple of citations issued against the previous owner, and that the CUP would be recommended for revocation before the Planning Commission, and that no CUP be issued to this location for one year. 7. In the afternoon of May 24, 2009, the Applicant met with Claudia who expressed that she had not been made aware of the City's intent to revoke the CUP. Claudia indicated that she would speak to Planning. 8. On May 29, 2009, the Applicant's daughter met with Claudia and Jenny and sought advice and further clarification. She was informed to appear at the Planning Commission hearing on June 16, 2009. 9. At the Planning Commission hearing on June 16, 2009, the Building Inspector testified that the City had had no problems or issues with the Applicant at Health System. 10. The Landlord has expressed great support at the June 16, 2009 Planning Commission hearing. 11. The store remains closed and the Applicant continues to incur rental obligations under the Lease Agreement. 12. The Contractor has left the job site and has refused to make any refund on the $4,000. 13. The Applicant has also paid $400 to the Southern California Edison as a non-refundable security deposit for t 14. The City has failed to comply with Palm Desert Municipal Code § 25.72.130(C) by failing to provide any notice of this event to the present or past Landlord, who, if had known about the citations or the underlying events, would have and must have disclosed this matter to the Application to her detriment. � W � � W � ^ _ � � Q W �. � ti N � � � D �� �e,�... � ��=�'q. � o �; �J � � � ;'�..� m..�$ � � >_.,i�� € . Q � _ -�-_� _ �f � + ��,� � � • �.... , ,':'� � � N ` W; ��. � ��--° , n ;� `""�;�5 �e� � k;? € f a? �J � f'i i p �� � ;i i � -� I 1 e f T � l J `J �"'� -- ; �Y,j � W r+ ;-t -C �� � ; ' 3 j`G `G O j �� 3• : O C7 O � ! =.'`i � � N 7�' � .� ; �'� (D (D � � � � i �. Q- � i � � � w rr�� _ � � � p i — ''. �p lt1 �� ; � ���� i : �� � � � . �� o � � E f . N � � t • � i O � ' � �� : � �m � NO A y � I o �m I � mN i � � -- -- � . � � ; ....�.. � -_� . � �..... � I C") , ` ._.. C C Z N . p e� 3Z��-fl• , oZ/�'�i ON^^S9 ��+ ' Z.�or00 CO� �p N '� � N� � D T y� P- � , � ��� � �� g PLANNING COMMISSION RESOLUTION NO. 2505 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF PALM DESERT,CALIFORNIA,REVOKING EXISTING CONDITIONAL USE PERMIT CUP 07- 02 ALLOWING A MASSAGE THERAPY ESTABLISHMENT IN A 685 SQUARE FOOT OFFICE SUITE LOCATED AT 74350 ALESSANDRO DRIVE, SUITE B-4. CASE NO. CUP 07-02 WHEREAS,the Planning Commission of the City of Palm Desert, California,did on February 6, 2007, approve Conditional Use Permit 07-02 for a massage therapy establishment located at 74- 350 Alessandro Drive, Suite B-4; WHEREAS, a business known as "Tranquility Massage " applied for and was denied a massage establishment permit for operations at the premises; and WHEREAS, on June 16,2009,the Planning Commission of the City of Palm Desert,California, did hold a duly noticed public hearing to consider the revocation of CUP 07-02 for failure to comply with conditions of approval, and Palm Desert Municipal Code; and WHEREAS, at said public hearing, upon hearing and considering all testimony, documentary evidence, and arguments, if any, about which the persons desiring to be heard said, the Planning Commission did find the following facts and reasons to exist to justify the revocation of CUP 07-02: 1. Conditions of Approval of CUP 07-02 require that: Applicant must obtain all clearance, permits, or licenses as required by the City's Municipal Code including, but not limited to, Ordinance No. 870 Massage Establishment, before the conditional use permit is deemed valid. 2. Palm Desert Municipal Code§25.72.130 provides that the conditional use permit may be revoked if the permittee: "(1) Has failed to comply with any applicable provision of the Palm Desert Municipal Code, including, but not limited to, the City's building, zoning, and health regulations; (2) Has failed to comply with any condition imposed by the . Conditional Use Permit." 3. On April 28, 2008, a notice of denial of massage establishment permit to operate at the premises was issued to Xiang Li. The permit was denied because Ms. Chunmei Qiao was operating the massage establishment had been convicted of "disqualifying conduct"as per sections 5.87.160(D)and 5.90.010 of the Palm Desert Municipal Code (PDMC). 4. On December 18, 2008, the City conducted an inspection at Tranquility Massage and found staff present and conducting business, even though the license to operate was inactive. PDMC 5.87.030 prohibits operating a massage establishment without a license and PDMC 5.87.030 requires existing applications to be renewed prior to their expiration or they will be inactivated. `Z � , . PLANNING COMMISSION�icSOLUTION NO. 2505 ( � � 5. On March 11, 2009,the City conducted another inspection at Tranquility Massage and again found staff present and conducting business,even though the license to operate was inactive. 6. Therefore. Tranquility Massage has operated, and continues to operate� at the premises in violation of the conditions of approval and the PDMC code sections listed above. NOW, THEREFORE, BE IT RESOLVED, by the Planning Commission of the City of Palm Desert� California, as follows: 1. That the above recitations are true and correct and constitute the findings of the Planning Commission in this case. 2. That Conditional Use Permit 07-02 is hereby revoked. ' PASSED, APPROVED AND ADOPTED at a regular meeting of the Palm Desert Planning Commission held on 16�' day of June, 2009, by the following vote to wit: AYES: DELUNA, SCHMIDT, LIMONT NOES: CAMPBELL ABSENT: TANNER ABSTAIN: NONE . CONNOR LIMONT, Vice C air ATTEST: � � �� �- LAURI AYLAIAN, Secretary Palm Desert Planning Commission APPROVED AS TO FORM: ��/ � � DAVI J.� WIN, City Attorney 2 ` MINUTES < <� PALM DESERT PLANNING COMMISSION JUNE 16 2009 It was moved by Commissioner DeLuna, seconded by Commissioner Schmidt, adopting the findings and Planning Commission Resolution No. 2504, revoking Case No. CUP 05-02. Motion carried 4-0 (Chairperson Tanner was absent). r...�. B. Case No. CUP 07-02 — CITY OF PALM DESERT, Applicant Request for revocation of an existing conditional use permit which allowed a massage therapy establishment in a 685 square foot office suite located at 74-350 Alessandro Drive, Suite B-4. Business Owner: Xiang Li. Mr. Kevin Swartz stated that on April 16, 2008, Tranquility Massage was sold to Xiang Li by Jing Tao, the previous owner who was granted Conditional Use Permit 07-02 back on February 6, 2007. Mr. Li, the new owner, submitted an application for a permit back in July of 2008 and had his mother, Ms. Qiao, listed as an employee. During the background process in July done by the Police Department, Ms. Qiao was found to have a conviction for disqualifying conduct. Since Ms. Qiao was a large part of the business, the Police Department recommended denial. The application was denied and Mr. Li removed his mother, Ms. Qiao, added Ms. Jessica Duncan, and resubmitted the application. Throughout the application period, Ms. Qiao continued to communicate with City staff regarding the application, indicating that she was still a large part of the business. On December 18, 2008, the City conducted an inspection and found staff present and conducting business without an approved license. Mr. Swartz stated the findings for revocation of CUP 07-02 could be made since the owner has not complied with Palm Desert Municipal Code Sections 5.87.160 D, 5.90.010, and 5.87.030, which were all attached to the staff report. He explained that if the revocation was approved, no new application could be filed for a period of one year for the same use. Staff recommended that the Planning Commission revoke CUP 07-02. Commissioner Campbell asked if Ms. Qiao was terminated or if she was still in the facility. Mr. Swartz said they were no longer in the facility. Commissioner Campbell asked who was operating it. Mr. Swartz said no one at this time. Commissioner Campbell noted that they had a letter from Dr. Shah saying that someone else is in the facility right now, a new tenant with a business license. Ms. Aylaian stated that to her knowledge, they did not have a business license for this address. She believed they were licensed as a business at another location. They were not currently open 4 � MINUTES � i� . DESERT PLANNING COMMISSION JUNE 16 200q for business at this location. Commissioner Campbeli clarified they were talking about Alessandro Drive. Ms. Aylaian said yes. Referring to the letter from the Shah Family Trust, Commissioner Campbell indicated that it said that the previous owner was terminated from the lease and he has a new owner that has signed a lease for one year and the new tenant has a business license in Palm Desert. She is in the Palms to Pines mall, she's been there for five years, and hasn't had any problem with her Health massage center. Commissioner Campbell asked if everyone had a copy of the letter. The Commission answered affirrnatively. Ms. Aylaian explained that when massage establishments are opened in the city of Palm Desert, three things are required. They need to be licensed for land use (the conditional use permit), but they also need a business license. That business license is a different type of application, different review process, with different criteria required, so what they were looking at was the land use element for the conditional use permit. She believed that the people who proposed to move into this location do have a business license in another location where they do have a conditional use permit; however, this location also had a stand-alone massage establishment conditional use permit. They were closed and the City moved to revoke their conditional use permit based upon certain criteria and certain violations that Mr. Swartz pointed out in his report. Because this issue involves a stand-alone massage establishment that the Planning Commission expressed concerns about recently, and because later on the agenda they would be considering a moratorium on stand-alone massage establishments so that staff can further analyze the impact that they have on policing and enforcement in the community, and so they can further analyze what the balance of business types and diversity of business types are in the city as far as revenue streams. Staff thought it would be inappropriate to recommend keeping this stand alone CUP open and that it was better to use this opportunity to revoke the CUP and in the future if the moratorium is passed and the analysis is done on what is the appropriate number and type of massage establishments to have in the city, and they begin reviewing and issuing CUPs for them again, this issue could be addressed with other CUPs that might apply. So this really had nothing to do with the business that is proposing to move in, the revocation was based upon the violations that were against the business, Tranquility Massage, which was operating in the premises in violation of certain criteria spelled out in the Municipal Code for massage establishments. 5 MINUTES . PALM DESERT PLANNING GOMMISSION JUNE 16 200q Commissioner Campbell asked when the business was closed. Ms. Aylaian deferred the question to Code Officer Pedro Rodriguez. She thought it was earlier this year. Mr. Pedro Rodriguez, Senior Code Officer, said he had a tist of inspections they did at Tranquility Massage. He received information that they were not supposed to be operating sometime between January and the middle of February. He did an inspection of the facility on March 11 and he found no one there. It was 6:30 p.m. and one of the tenants next door stated that they had just left for the day, so obviously they were still operating. He did another inspection shortly thereafter and did find a Jessica Duncan working at the facility. She was issued a citation for not having a valid therapy license. About two weeks ago they were supposed to also be closed and he noticed the door was open and approached the people that were there. Dr. Shah, the new owner, had hired a contractor to do a tenant improvement and no building permits were on file for that, so he shut the job down and issued a stop work notice and that was the last that they had contact with them there. That was about three weeks ago. Vice Chair Limont asked for clarification about the citation and that they were definitely in violation of Palm Desert code. Mr. Pedro said that was correct. Every therapist should have a valid therapist license and this particular location did not have therapists on two or three different occasions that were licensed. The first time was just a warning; the other two they were cited, and after this last citation that was issued, about a month or two months ago, they could not obtain a license through the City, so they kind of just backed off and shut down and at that point they had already been told that their establishment was being revoked. Commissioner Campbell asked if Jessica Duncan had a license in another location, she needed to have a license for this Alessandro location as well. Mr. Rodriguez explained that Jessica Duncan was not connected to the other location that was trying to move into this place; she was connected only to Tranquility Massage. The person trying to move in now has a license at another location that is not transferable; they had to get a separate license for that location. It was another business. Mr. Bagato clarified that Mr. Shah bought the property about a month ago. They were in the process of revoking it, and there was an owner of another location here in the city that was going to want to speak, they bought the business rights, although the business wasn't operating. That's why there was a little bit of confusion. They were trying to go into this location, but the revocation was already in the process when they applied for the business ficense. They were told that they weren't going to approve 6 � MINUTES � � � . DESERT PLANNING COMMISSION JUNE 16 200q the business license, they were actually trying to revoke the CUP because of the problems they had with the previous business and getting them licensed. They were supposed to be closed for a couple of months because they were unlicensed and they were operating illegally. So that was probably some of the confusion. Vice Chair Limont asked for confirmation that Mr. Bagato made them aware of that at the time of application. Mr. Bagato said that was correct, and Dr. Shah and his attorney were here and would want to speak. It was kind of a separate thing, but they were trying to move here because of the existing CUP, although staff told them we were trying to revoke it. Commissioner DeLuna noted that in effect, there were two separate issues. Ms. Aylaian clarified that there was only one before the Planning Commission, and that was whether or not the CUP should be revoked for Tranquility Massage based on their repeated violations. Vice Chair Limont oqened the public hearing and asked if anyone wished to speak in FAVOR of or in OPPOSITION to the proposed revocation. MR. TONY M. LU, 3333 S. Brea Canyon Road, #213 in Diamond Bar, CA, 91765, stated that he represents Ms. Deng, who is the new owner who recently purchased this business for about $15,000. Before she went through the transaction, she checked with the City to see if there would be any permitting issues. She was advised by Claudia, the City, that everything should be okay given that she had a different store called Health Systems on Highway 111 that has been in operation since 2007. She was informed that it should be pretty swift, pretty easy. Later on when she tried, she couldn't renew the CUP. She ran into problems saying that there have been several citations in the past, but this had already been after she had already spent $14,000 into this business and she has spent about $4,000 in tenant improvements. He said she is licensed to do massage therapy. Given that she has signed a year lease with Dr. Shah, she is on the hook. On the one hand, it is $20,000, that's what she spent, and on the other hand, there is another year left on the lease. She has never operated a business within this location; therefore, she would respectfully request that no further CUP be denied with respect to this location such that she could go in and conduct the business. And her position is important, like Dr. Shah. It was Mr. Lu's understanding that the center is presently only 50% occupied and he thought, although he wasn't speaking on Dr. Shah's behalf, that it would be in the landlord's interest to have a business establishment that is 7 � MINUTES� E . LM DESERT PLANNING COMMISSION JUNE 16 2009 going to bring business. The business that she has, called Health Systems, has been around for two years and never had any probiems whatsoever with the City. Commissioner DeLuna pointed out that Mr. Lu talked about $4,000 that Ms. Deng spent in tenant improvements. She asked if that was done with the proper permits. Mr. Lu said it wasn't really a T.I. His understanding was that she had to tear down certain items to be replaced, so she didn't really construct T.I. per se. She had to take out all the debris, existing walls and things that were being repaired. That was what the $4,000 was for. Given that she ran into the obstacle, she stopped doing any further work. Commissioner DeLuna asked if she amended her application for a license to run a business from that location. Mr. Lu answered not at the present time. Commissioner DeLuna asked if her personnel have been licensed at that location. Mr. Lu stated that she has never operated a business in that location. Commissioner DeLuna thanked him. Commissioner Schmidt asked for clarification that she is operating a business presently in the Palms to Pines shopping center. Mr. Lu didn't know the name of the shopping center, but it's located at 72-655 Highway 111, Suite B-7; that's a different location and has been operating since 2007. Commissioner Schmidt asked if she wished to move from that location to the new location. Mr. Lu said no, it would be a second location. Commissioner Schmidt thanked him. Commissioner Campbell clarified that she did sign a lease and purchased the business. 8 � MINUTES `� ( ALM DESERT PLANNING COMMISSION JUNE 16 200q Mr. Lu said that was correct; $14,000 for the business and $4,000 for miscellaneous repairs, a security deposit of $1,500 and her monthly rent he believed was $1,200. And she is current, despite the fact that she is not running the business, she is still paying rent because she didn't want to get into any contractual disputes. Commissioner Campbell asked for confirmation that Ms. Deng didn't know anything about the CUP until she came to the City. Mr. Lu said her understanding was that she was going to go in there to either renew it or apply for one under her name. She was informed by the City that given her track record at the different location, it would have been very easy. At this time she had no idea as to what may have gone wrong back then when the previous owner was operating the business. If she had known, she would not have entered into this agreement. MR. GREG SWAJIAN, 74-090 EI Paseo, stated that he is an attorney representing the Shah Family Trust, the owner of the real property. He said that in effect, as Ms. DeLuna mentioned, there are two issues going on here. Counsels and the new buyers have no connection whatsoever, including the personnel as he understood it, with the parties that received the letter in April of 2008, which was 14 months ago, or the various actions taken by Code Enforcement in order to protect and promote the city of Palm Desert. What they have is a new owner of the properry as of about May 5, 2008; the Shah Family Trust purchased the property from Jorge and Iliana Vasquez, so they were no longer the owners of the property. And then they have a lease that was entered into as discussed by Ms. Deng, who has been operating, he believed from the information he received today that it is located next to the Von's at Palms to Pines, apparently without any issues whatsoever, looking for a second location. This is not a new CUP. It was his understanding, and Counsel for the Dengs could correct him if he was incorrect because he didn't represent them, but they also purchased the name Tranquility, so the old entity or old owners are gone, the name would remain, and that's where the CUP is located. So they didn't have offending owners, employees, independent contractors; he didn't know the previous folk, neither did the Commission. 9 � MINUTES � i ALM DESERT PLANNINC GOMMI�SION JUNE 16 2nn� They were looking to continue to have the business here in Palm Desert and he thought one of the important issues, as he looked at the agenda and what was discussed, and he thought there was a slight perhaps play on words. One of the things they heard a few minutes ago was something about a stand-alone entity such as this massage partor. But if they look at what is coming up, it is calling for a one-year moratorium on the issuance of conditional use permits for independent massage establishments. That wasn't necessarily stand-alone and he thought that was a slight misstatement that he thought was important. Obviously they have a history, and a history here in Palm Desert, which he was sure was important for them all. Secondly, if they take this independent, and if they are looking to make a second entity, they are now going from an independent to much more of a use that certainly is an independent. They now have two entities owned by the same folks, so they would be monitored at two locations and again, there is some sort of history as counsel has presented to them. He thought that was important for allowing the CUP to continue and he thought it was not in support and not contrary and in fact regarding the next agenda item regarding the one-year moratorium. Rather than going on to the next agenda item, Vice Chair Limont asked Mr. Swajian to address this item and summarize his comments. Mr. Swajian said they have a new owner as of May. He apologized to Dave Erwin for misspelling his last name. Secondly, they have a new tenant and a tenant that has a history with the City of Palm Desert. They were just wishing to continue the CUP with Tranquility. They bought the name, and he thought it was pretty clear by everybody they heard, including Code Enforcement, that there is no connection with the old entity that was cited and continued to be in violation through the early part of 2009. They were here to clean it up. Dr. Shah owns a number of properties, as the Commissioners were well aware, on Fred Waring and Highway 111 here in Palm Desert. He has helped the real estate commercial business down here, perhaps more than any other person in Palm Desert. Dr. Shah believes in this area, continues to invest his work, his construction, including his architect Narendra Patel, who does top notch work. So there is not a chance that someone of this kind of high end developer that we have here in the desert is going to do anything contrary in the best interest of his building for property values, which also assists his neighbors. 10 MINUTES � . DESERT PLANNING COMMISSION JUNE 16 200q Vice Chair Limont thanked him and asked if he had anything further that would help with the decision making. Mr. Swajian said as counsel he would be happy to answer any questions regarding the property. He had the lease and the document on the transfer of the property, so everything was backed up from the documentation he had here, which was consistent with Suresh Shah's communication to them of the last day or so. Commissioner DeLuna asked for clarification that Mr. Swajian only represented Mr. Shah and not Tranquility. He spent a lot of time telling them about Tranquility, but they were actually not his client. She asked if that was correct. Mr. Swajian said that was absolutely correct. Commissioner DeLuna thanked him. Mr. Swajian asked if there were any other questions. There no further questions. Mr. Swajian thanked the Commission. Vice Chair Limont asked if there was anyone else wishing to speak in FAVOR of or in OPPOSITION to the proposed revocation. Before closing the public hearing, Mr. Erwin asked Mr. Rodriguez about any records he might have regarding the current applicant for this location. That issue had been brought up and he thought the Commission should hear everything about it. Ms. Aylaian repeated the question for Mr. Rodriguez, asking for any history on the applicant for this location, on Health Systems, who represented they have a clean record here in the city. Mr. Pedro Rodriguez, Senior Code Compliance Officer, stated that as of last September when they started doing their monthly massage therapy inspections, they hadn't had any violations at the Health Systems over at 72-655 B-7. Every time they have been there, the facility has been clean, sanitation has been adequate, licensed therapists, and they haven't had any violations there at all. Everything was in complete compliance and they do have records of their inspections there and there haven't been any violations. Vice Chair Limont said it was her understanding that at the time that the applicant came in to apply for a CUP, that they were told we were in the 11 � MINUTES �. � , PALM DESERT PLANNING COMMISSION JUNE 16 2009 process to revoke it. She asked if that was correct. Mr. Bagato's understanding was they went to the Finance Department and spoke to Claudia about a month ago and said that there is an existing conditional use permit and they would like to come in and take over the business. At the time, Claudia had not been part of the discussion staff had been having with the City Attorney about revoking a couple of locations. He thought from their discussion with the Finance Department that they believed they could move forward and basically kind of take over the old business and operate it as a second location. About two weeks later, they came to speak to Planning about approving the business license and that's when Planning staff informed them that they were in the process of revoking it because of the issues with the former business owner. And so initially they talked to one department and thought everything was okay. They were in discussion with Claudia's boss; however, Claudia was the technician in Finance that wasn't aware that Planning was in the process of revoking the permit. So that's where he thought some of the confusion came in. But when they came to Planning, they had already purchased the business and were trying to actually process the tenant improvements, when he denied the plans for the tenant improvements (T.I.) because they were revoking the CUP. Vice Chair Limont asked approximately when that occurred. Mr. Bagato said it was two or three weeks ago when they came and spoke to him about the T.I., but they said they had met with Claudia about two weeks prior to speaking to him. Vice Chair Limont noted that the letter said the building was purchased on May 15, 2009. Mr. Bagato confirmed that Dr. Shah bought it in May and started renovations, like repainting it, back in May, but the business owner who signed the lease with Shah was about four weeks ago, before they came to Planning. So at this time, for this specific business, Vice Chair Limont said they did not have a CUP in place for this specific business. Mr. Bagato clarified that there is a CUP, that's what they were asking to revoke, but as he stated before, conditional use permits run with the land and so they wanted to come in and basically take over and apply for a new business license and work under the existing conditional use permit and work with the existing conditions, the hours and limitations. So when they met with Claudia, they thought they could just do that. So they weren't asking for a new CUP, they were asking that we not revoke it so they can start a new business under the existing one. When she mentioned earlier that they might be dealing with two separate issues, Commissioner DeLuna clarified that the only thing they were really dealing with tonight was whether or not to revoke the existing CUP. Any 12 MINUTES � . ALM DESERT PLANNING COMMISSION JUNE 16 200Q other issue would have to come in separately. She asked if that was correct. Mr. Bagato said technically no, because they were asking for them not to revoke it because of their business application that they are trying to process. So it is still one issue. They have an existing CUP that staff is recommending be revoked and they are asking that it not to be revoked so they can operate a business there as a new business owner. Commissioner Schmidt asked for the date of the application for business license on the new location. Mr. Bagato didn't have that paper work. Mr. Erwin interjected that they were using a lot of different terms here and thought clarification would be helpful. A conditional use permit is a land use permit that runs with the land. That's what Dr. Shah is concerned about. The operation of a massage business requires three things: the conditional use permit for the location, a massage establishment permit, which is run through the Business License Department; it is not a particular business license, it is a massage establishment permit; and then the massage therapist must also have individual permit. So they were kind of mixing the conditional use permit and massage establishment permit and talking like it's a business license. It's not. It's another one that has much more detail to it than a regular business license would. But there is also a business license in addition. Vice Chair Limont reiterated that they were just talking about the CUP that goes with the land, which exists now and they were being requested to revoke it this evening. Mr. Erwin concurred. To clarify terminology, as pointed out by Dr. Shah's attorney, Ms. Aylaian explained that they do use the term both independent and stand-alone. At a staff level those terms are used interchangeably. They were not referring to the ownership and whether or not an establishment is one of a chain, a franchise, or has other locations. They were referring to the fact, whether they called it stand alone or independent, that it only provides massage services. It is not part of a hotel and there are no other uses associated with it. So she apologized for any confusion that may have caused, both on this issue and later when they talked about the moratorium. The terminology, either stand alone or independent, just referred to the fact that there are no other secondary uses associated with that location. Commissioner Schmidt asked if there was a secondary use on that property. Ms. Aylaian said no. Commissioner Schmidt indicated this was either a stand-alone and/or independent massage. Ms. Aylaian said yes. If revoked, Vice Chair Limont asked if the new applicant would have to come before Planning Commission. Ms. Aylaian explained that if the CUP 13 � MINUTES �� � � , PALM DESERT PLANNINC GOMMISSION JUNE 16. 2009 was revoked, there could not be another application for a CUP for massage at this location for one year. Any recourse that the other business has would be a private issue between themselves and the landlord or themselves and the people they bought the business from. In response to Commissioner SchmidYs earlier question, Mr. Lu stated that his client went to speak to Claudia on Monday, May 12, whereupon she got the okay that it should be okay. On May 13, which was a Tuesday, she signed a lease. And on May 14, Wednesday, that's when she went back and tendered two checks to the City; one in the amount of $500 and the other in the amount of $60. So it was Monday, Tuesday, Wednesday from the 12th to the 14tn Commissioner Schmidt asked what the checks to the City were for. Mr. Lu said it was his understanding that it was for the business license. Commissioner Schmidt asked if it was for the massage establishment permit. Mr. Lu said he wasn't clear. He didn't think his client was really clear as to what she was paying for. She was asked to make out two checks and she did so on May 14. Mr. Bagato clarified that one was for the massage establishment application license as the City Attorney pointed out, and the other one was for the business license. Commissioner Schmidt asked if she is a licensed massage therapist. Mr. Lu said that was correct. Commissioner DeLuna asked for clarification. The second time Mr. Lu got up to speak he said that City employee Claudia said it was okay. The first time he spoke he just said there was just an indication that there was no reason not to proceed. That was a different perception and she wanted to be clear that no one in the Finance Department said it was okay. Based on his notes and his understanding, Claudia said it should not be a problem. In fact, that his client was going to get this permit pretty fast, pretty soon given her history. He believed those were her words. 14 � MINUTES � , PALM DESERT PLANNING COMMISSION JUNE 16. 2009 Commissioner DeLuna thanked him. Commissioner Campbell asked if he had any idea when Dr. Shah purchased the property. Mr. Lu said that part he did not know. Mr. Bagato said May 15, 2009. Vice Chair Limont noted that the applicant applied for and gave the City checks for a business license and a massage permit while we were in the process of possibly revoking the CUP. She asked if there was just miscommunication there or if it was just because it was different departments. Ms. Aylaian suspected that was the issue. The departments are in separate buildings and they try to communicate well, but that doesn't always happen, or instantaneously. Vice Chair Limont reiterated that the applicant just went to the Finance Department and made out checks. Ms. Aylaian said that was her understanding. Based on the issue of the two checks, Commissioner DeLuna asked if the conditional use permit was denied or revoked, if Ms. Deng had recourse to try to receive a refund on the money that she spent for a license or permit. Mr. Bagato believed Claudia had already issued the refund; staff told them to refund it because of this. Commissioner DeLuna asked for confirmation that they were not out any money at this point. Mr. Bagato said not from the City's side. Vice Chair Limont closed the public hearing and asked if there were any further comments from Commissioners. Commissioner DeLuna understood that there was a bit of a complication, but they were still trying to deal with staff's request to revoke the CUP of a former business because of violations. She asked if that was correct. Ms. Aylaian said yes. In revoking that, Commissioner Schmidt said they totally got rid of any opportunity for the new licensed massage therapist to operate under that CUP. Ms. Aylaian said they preclude the opportunity for any businesses to operate as a massage establishment at that location for one year. Any subsequent massage use there would have to go through the public hearing process again after a year. Commissioner Campbell didn't think the new owner that signed the lease with Dr. Shah, and it seemed to be all in that period of time from May 12, 15 � MINUTES � , ALM DESERT PLANNING COMMISSION JUNE 16 2009 May 13, May 14 and May 15, that she should be penalized because of what happened in that same location and she didn't think the CUP should be revoked at this time. She didn't know and Dr. Shah didn't know anything about the history of what was going on. They heard also that the new tenant didn't have any problems whatsoever there in her present location to go ahead and move into a new location. She seemed to go ahead and was doing therapy and not just massage per se, but she is out of the money. She didn't know anything about the history of the location of what was going on. Everybody was out and she was coming in with a clean slate and the way business is now, they do want to go ahead and have everything leased as much as possible. The police would be in the facility like they do right now, probably monthly, and if there was anything that they find that's wrong, they can always revoke their license and the CUP. But she thought at this time it should not be revoked. Commissioner DeLuna said there was a reason they were considering a moratorium, and unfortunately, there were some things that have complicated this from being a clear cut issue. Nonetheless, she thought the issue before them tonight, not only on this issue, but subsequently, was establishing a moratorium on such stand alone or independent uses. Unfortunately, even though she agreed with what Commissioner Campbell had said, she didn't think it changed the purpose for the revocation of the CUP. Commissioner Schmidt asked if Mr. Erwin had some counsel for them. Mr. Erwin said they have before them the staff report and the factual circumstance, and the decision was left to the four of them. Vice Chair Limont agreed with her fellow Commissioners. She thought it was horribly unfortunate for the massage therapist; however, according to counsel, the CUP goes with the land and she thought that was the issue before the Commission this evening. This was not clear cut, it wasn't easy, and it wasn't just "we don't like stand alone massage parlors". That wasn't the direction they were trying to take here. But it was a serious situation, especially with this issue, so as much as she would like to say they could be separated out, she agreed with revoking the CUP. She asked if there was a motion. Action: Commissioner DeLuna moved that they support staff and revoke the CUP. Commissioner Schmidt seconded the motion. Motion carried 3-1 (Commissioner Campbell voted no, Chairperson Tanner absent). 16 � MINUTES . � , LM DESERT PLANNING COMMIS�ION JUNE 16 20�q It was moved by Commissioner DeLuna, seconded by Commissioner Schmidt, adopting the findings and Planning Commission Resolution No. 2505, revoking Case No. CUP 07-02. Motion carried 3-1 (Commissioner Campbell voted no, Chairperson Tanner absent). It was noted that the Planning Commission was the final action on a conditional use permit, but the decision was appealable to the City Council, and the applicant may appeal. C. Case No. ZOA 09-253 — CITY OF PALM DESERT, Applicant Request for a recommendation to the City Council to approve a clarification to Palm Desert Municipal Code Chapter 25.112, Exceptions Based on Unconstitutional Takings. Ms. Lauri Aylaian explained that the item before the Planning Commission was a clarification of existing language in the Zoning Ordinance. This language dealt with circumstances in which an applicant with a piece of property they would like to develop believes that a strict application of the Zoning Ordinance would result in an unconstitutional taking of their property. In other words, they believe that they would lose all economic value or economic benefit of the properiy if the Zoning Ordinance is strictly applied. In instances like that, they could apply for an exception to the Zoning Ordinance and they are required to put forth a certain amount of information that would demonstrate why they believe that an exception needs to be granted in order for them to be able to retain some beneficial use and economic use of their property. She further explained that this was passed in 2005, and had not yet been applied. Staff was going through a case now where they actually received an application for an exception, and as they were working on the case, they were working with legal counsel, and the attorneys recommended that this modification be made to clarify explicitly that the Planning Commission has the ability to condition any exceptions that they approve. Throughout the Zoning Ordinance, it is implicit that any request brought before the Planning Commission does offer them the opportunity to place conditions upon it. It is not administerial approval, it is discretionary. Our attorneys recommended that we in this case say it explicitly in 25.112 which deals with the exceptions based upon unconstitutional takings. Staff's recommendation was that language be inserted which clarifies that the Planning Commission, upon granting an exception pursuant to this 17