The Carpinteria City Council today will consider extending a temporary moratorium on the issuance of certificates of occupancy and/or business licenses for new chain stores, restaurants or motels seeking to locate in the city, with the exception of Casitas Plaza and Shepard Place shops.

The council will meet at 5:30 p.m. in council chambers, 5775 Carpinteria Ave.

Staff is recommending the council adopt an ordinance extending the temporary moratorium already in place. At least four out of five councilmembers will have to approve the motion for it to pass.

At its Feb. 14 meeting, the council requested staff to prepare a report on how cities regulate chain stores and restaurants, also known as “formula businesses,” that have standardized services, decor, methods of operation and other features that make them virtually identical to businesses elsewhere.

During its May 9 meeting, the council received information that a proliferation of such businesses can have deleterious impacts on a community’s health, safety and welfare.

“Cities have found it common for formula businesses to arrive in an area enmasse, squeezing out independent businesses and causing a speculative run-up in rents that results in the wholesale transformation of a business district almost overnight,” staff wrote in a report for tonight’s meeting.

“The loss of independently owned/operated stores can also have long-term economic consequences for communities,” staff said.

“Local economies dominated by formula businesses also tend to be solely profit based and uninterested in meeting community needs over time, as opposed to a business model that fills a local niche and/or is complementary to existing businesses in similar categories.”

Perhaps of greater concern, staff said, is that formula businesses often invest locally generated profits outside of the community, and disappear quickly when the economy contracts or their corporate strategy shifts, leaving behind building vacancies with higher rent expectations.

Councilmembers responded by directing staff to return with an urgency ordinance to establish a temporary moratorium on the establishment of formula businesses throughout the city while city staff and the council study and consider permanent regulations on formula businesses.

Staff returned to the next meeting, May 23, with options for a temporary moratorium. The council voted to approve it on June 27 after considering additional public testimony and examples of language from other municipalities’ formula business regulations. The only exceptions were the Casitas Plaza and Shepard Place shops.

The temporary moratorium applies to any commercial business operating as a retail sales, restaurant/food service and/or hotel or motel establishment which have more than seven locations anywhere in the country, and have two or more features common to most or all of its locations.

The council also determined that the following business types, in the context of the moratorium, not be treated as formula businesses: office space, professional services, banks or credit unions, grocery stores, nonprofit businesses, pharmacies, gas stations and theaters/performing arts spaces. 

The temporary moratorium does not prohibit the relocation of an existing formula business already operating in Carpinteria to another location within the city.

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