Planning Commissioners Selected

Last time we covered the resident bill of rights and the pet issues that were discussed at the last City Council meeting. This time we’ll discuss the Planning Commission.

THE VOTE

There were 3 openings on the Planning Commission. We had 8 applicants, but one withdrew and two couldn’t make it, so we interviewed 5. Dave Carter, Mark Armando, and Jolene Fuentes were selected. Mark will serve the remaining 2 years left for Jerry Verplanke who resigned in December.

DOES ANYONE KNOW ANYTHING?

Type 20 Licenses: During the questioning I was amazed at how little information the existing two Commissioners used in making their decisions. For example, they recently approved adding two more stores selling beer and wine (December). Compared to other cities, we have a high number of stores selling beer and wine and we also have a comparatively high level of crime. Social science research has shown conclusively that high access to alcohol is associated with high crime rates. So adding stores selling alcohol and beer has a significant impact on our quality of life.

I asked if they knew how many licenses had been issued in the City, and what the maximum number of licenses were.

Mark Armando had no idea. Jolene Fuentes also had no idea and she thought we might have “10 to 20” licenses left to distribute. After the meeting I even asked the staff and no one had any idea.

The fact is that we have issued 44 off-sale licenses and the maximum number of licenses allowed by the State is 1 per 2,500 residents (Click here). At 82,000+ residents, that entitles us to 33 licenses so we are already above the limit according to the statute, thanks to a liberal policy supported by the Commission and the Council. In addition, the total number of off-sale and on-sales licenses combined is limited to 1 per 1250 residents, which means we are limited to 66 total licenses yet we have 163 active off-sale and on-sale licenses.

Why does that matter?

It matters because many of the retailers we want to come to the City sell beer and wine, and they may not come to the City if they can’t get a beer and wine license, because selling alcohol is highly profitable. Hence, licenses have value, and scarcity can be a problem. Since we have exhausted our available licenses, our ability to attract Trader Joes or Mother’s Market, or a similar store may be restricted. Moreover, while the City Council can make an exception, on-sale licenses are regulated by the State, not the City, and we are already in excess. Obviously since we are in excess the State also can make exceptions, however, this could change overnight and we would be stuck with no new licenses to be able to distribute.

You might go ahead and issue another license knowing this information, but not knowing this information seems to me to be a serious breach of the fiduciary duty of being a Planning Commissioner.

New Hotel: The Planning Commission also gave approval to a new hotel with 102 guest rooms (January) to be built in the Gateway Center (see photo). In a similar fashion, Ms. Fuentes didn’t have any idea how many hotel rooms a city the size of Lake Forest should have. In fact, she didn’t appear to know that such figures existed. In fact, they do. Generally speaking, for a hotel to do sufficient business and for a city of our size to have sufficient room for visitors, the industry standard is about 130 rooms per 10,000 people. At 82,000 people that’s 1,066 rooms.

According to one local industry expert, Lake Forest has 10 hotels and 1,131 rooms. That’s an appropriate number of rooms for a City of 92,742 people. Right now, without adding any rooms, we are +6% in excess. If we add another 102 rooms to the existing 1,131 rooms, we’d have 16% excess capacity.

Why does that matter?

Taxes on hotels are our third largest revenue source. In addition, the sales tax from hotel guests buying gas, purchasing food, and spending in our retail stores adds considerably to our sales tax revenue.

Does an increase from 6% above capacity to 16% above capacity endanger the economic health of our existing hotels? What is their current occupancy rate, and what type of an occupancy rate does a hotel need to remain open? Will a new hotel cannibalize from the existing hotels?

Will a hotel built at the edge of the City produce as much sales tax for the City as a hotel embedded within the City?

These are legitimate questions that should be asked, but without even knowing what the industry standards are, the questions cannot be answered.

Would it make a difference?

Would adding a hotel at the periphery cause a drop in occupancy for other hotels, and would this be enough to cause one or more of them to close? Do these "at risk" hotels generate more overall sales tax for the City because they are inside the City, instead of on the periphery?

SUMMARY

What exactly is the Planning Commission doing if they don’t know the answers to these questions? Even worse, they don’t even know that these are legitimate questions to be asked. Nor does the staff seem to be of any assistance in this regard. In my own career in private industry, as a management consultant, I helped multi-billion dollar companies decide whether or not to open a new bank branch, build a new factory, sell off unrelated assets, expand into new territories, etc. In doing this there are some fundamental questions you begin with, but our Planning Commission seems more concerned with giving the go ahead to anyone who wants to do just about anything. While that's appropriate for projects that fall within a land owner's rights, when land owners ask for variances or exceptions to the rule, it should be the role of the Planning Commission to ask the broader questions. In my opinion the Planning Commission must balance the decisions in cases like this with the interests of the land owner and the interests of the City and the residents. And it starts by knowing what questions to ask.

ABOUT THE AUTHOR

Dr. Jim Gardner is on the City Council for Lake Forest. You can check him out on LinkedIn and/or Facebook and you can share your thoughts about the City at Lake Forest Town Square on Facebook. His comments are not meant to reflect official City Policy.

Dr. Gardner has office hours every Tuesday from 4 pm to 6 pm at the City Hall. In addition, he holds a Town Hall meeting every quarter. The next meeting will be in February at the Foothill Ranch Public Library.