ITEM:		PUBLIC HEARING
11.	CONSIDER APPEAL OF DETERMINATION OF WATER NEEDS FOR TEA ZONE & FRUIT BAR AT 460 ALVARADO STREET, MONTEREY (APN: 001-572-005-000)
Meeting Date:			March 19, 2018	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Stephanie Locke	Cost Estimate:	N/A
General Counsel Review: Yes
Committee Recommendation: N/A
CEQA Compliance: This action does not constitute a project as defined by the California Environmental Quality Act Guidelines section 15378.

SUMMARY: At its February 22, 2018 meeting, the Board appealed staff’s determination that a Tea Zone & Fruit Bar business on Alvarado Street in Monterey should be classified as a Non-Residential Group II use Exhibit 11-A. Rule 71, Board Member Policy Review and/or Appeal, allows the Board to set a matter for hearing as an appeal, which will be heard and determined in the same manner as other appeals taken pursuant to Rule 70 Exhibit 11-B. Upon hearing of the appeal, the Board of Directors shall consider the record and such additional evidence as may be offered, and shall find whether, in its opinion, error was made. The Board of Directors may affirm, reverse, or modify the action appealed as it deems just and equitable, and may exercise all rights of any other officer or commission.

Tea Zone & Juice Bar is a business operating in the South Bay with five stores in San Jose, Mountain View and Santa Cruz. It is primarily a beverage business, offering teas, milk teas, flavored snow bubble drinks, fruit and fruit/yogurt smoothies, specialty coffees, puddings, icys, flavored Italian sodas, waffles, taiyaki (fish shaped sandwiches), fried foods, ice cream, and macarons. Not every store has the same menu, and the proposed store in Monterey would have a reduced food menu according to the business’s representative.

On December 16, 2017, District staff met with Mr. Anthony Davi (property owner), Jess Flowers and Thu Anh (representing the business) to discuss the proposed project and staff’s preliminary determination that the business was a Non-Residential Group II use and the proposed Site was Group I. During that meeting, it was represented to staff that this business should be considered in the Non-Residential Group I category because there would be minimal dishwashing as items are served in “to-go” cups, minimal water use for cleaning, and that the space available to rent is 50% larger than needed for the business.

District Rule 24-B, Non-Residential Calculation of Water Use Capacity, provides the methodology for determining Water Use Capacity. Each Non-Residential use is assigned a factor that when multiplied by a specified measurement shown on Table 2 Exhibit 11-C (i.e., square-footage, number of rooms/seats, etc.) results in an estimate of the approximate annual Water Use Capacity in Acre-Feet. Water Use Capacity is determined using the Non-Residential Water Use Factor that is closest to the type of proposed use (“identical or similar to”). Uses in the Non-Residential Group II generally are businesses that prepare and sell food and/or beverages primarily for take-out and that use disposable packaging/tableware. Table II lists examples such as bakery, pizza, coffee house, ice cream shop, catering, deli, sandwich shop, bar, etc. Uses in the Non-Residential Group I are typically low water uses such as retail, offices, churches, clinics, etc. At the Tea Zone & Fruit Bar, water is used for tea/coffee, ice making (used in many drinks), preparation of fresh fruit and boba, cleaning (counters, mixers, containers, fruit cutter, utensils, coffee/tea makers, floors, tables, etc.), and hand washing and toilet flushing. The District requires the use of Non-Residential Best Management Practices to the extent possible (Rule 142).

After researching the Tea Zone & Fruit Bar website and Facebook pages and other internet sites such as Yelp, and after visiting a Tea Zone & Fruit Bar in San Jose, staff found that this business was similar to others in the Group II category. Similar local juice and beverage businesses such as Jamba Juice (Monterey), The Press Club (Seaside), and Juice & Java (Pacific Grove) have Group II Water Permits.

Since the staff decision in December 2017, the applicant has proposed some modifications to their business practices. They have indicated they will not sell ice cream and that they will not install an ice machine at the Monterey location, but will transport ice from the Santa Cruz store as many of the Tea Zone & Juice Bar products contain ice. District staff questioned the water used for ice making as this water use was not previously discussed. These representations by the business operator, however, cannot bind the applicant or any other successor occupant of the structure.

District Counsel is concerned that if the Appeal is approved, any other Group II use can occupy this structure without obtaining a Water Permit. Staff is concerned, if the Appeal is approved, that the District will be compelled to consider and approve similar Group II uses as Group I uses.

RECOMMENDATION: Staff recommends the Board hear the appeal, make a determination whether the proposed business was placed in the proper Non-Residential Water Use Factor category, and provide staff direction as to findings in support of the Board determination for approval at the next board meeting.

EXHIBITS

11-A December 23, 2017, Letter of Determination

11-B District Rule 70,

11-C District Rule 24, Table 2, Non-Residential Water Use Factors

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