Cotati Reconsidering Restrictions on Franchises

After passing restrictions on fast food establishments in 2007, the city of Cotati is considering softening the rules, saying the change could go a long way toward reducing vacancies.

Assistant City Manager Micah Hinkle says the city’s restriction on so-called “formula businesses,” defined as any franchise with 150 or more retail locations, has made marketing Cotati shopping centers difficult and kept vacancies much higher than in surrounding towns.

“If you look at successful shopping centers, there is a mix of local, regional and national retailers,” Hinkle said. “The vacancies is a universal problem (in Cotati) and it was brought to us by the leasing agents and property owners.”

Hinkle and other city staff justify the move by quoting a retail vacancy rate as being between 40 percent at some shopping centers and 70 percent at others, such as the Grapevine. But that figure was arrived at by counting how many stores are vacant compared to the total number in any given shopping center.

But according to Cass Hutchinson, a realtor with Keegan & Coppin, Cotati's retail vacancy rate is 15 percent, slightly higher than surrounding cities, but still a far cry from the astoronomically-high figures quoted by the city.

"You can't calculate it based on units, because one property may be smaller and another larger," Hutchinson explains. "You have to calculate it based on overall square footage."

Cotati does not outright ban national franchises like McDonalds and Subway, but limits their number to eight. Now city staff recommend eliminating the cap, along with the 60-foot distance requirement between "formula based" restaurants and evaluating each applicant on a case-by-case basis.

“We are not promoting a specific franchise, we are just seeking more flexibility,” Hinkle said.

A ban on chains from downtown Cotati would remain in effect.

What do you think? Should Cotati relax its regulates against national franchises? 

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