Council Halts Restaurant Conversions on Promenade

By Jorge Casuso

Jan. 8 -- The City Council Tuesday night placed a one-year halt on the conversion of restaurants to retail stores along the Third Street Promenade while a task force seeks ways to stem the exodus of eateries that are being quickly replaced by retail chains.

The council also directed staff to explore ways to encourage restaurants to occupy the front part of the often long and narrow spaces and discourage the consolidation of smaller spaces into large retail stores.

The motion to adopt a moratorium for one year, instead of the two recommended by staff, passed 5 to 2. Most of the council members agreed that one year would give a task force comprised of three council members, a planning commissioner, two Bayside District Board members and a property owner, time to hammer out a plan to save restaurants being rapidly displaced by skyrocketing rents.

"Everyone has recognized that we all do have a problem we can work to solve together," said Councilman Richard Bloom. "The two-year time frame takes a long-term look at what is really an immediate problem. We ought to really try and pull this process so it takes as quickly as possible."

"The problem with extending time is that we'll use it," said Councilman Herb Katz. "There's an urgency."

"This is about planning," said Council member Pam O'Connor. "This is a point in time when we need to step back and say, 'Things are happening faster than we thought. What do we have? What are we losing?"

The two opposing votes came from opposite ends of the political spectrum, with Mayor Michael Feinstein urging a stay of at least 18 months, while Councilman Robert Holbrook pushed for no more than a six-month halt.

"I think we're at the last resort," said Feinstein, who had urged the council to tackle the issue more than two years ago. "The situation has gotten worse. The market has not behaved well in the last couple of years. It's exacerbated the problem. We've already lost a lot of restaurants... We are creating an unrealistic timeline that is not conducive to public process and public input."

"Regulation should be our last resort," Holbrook countered. "A six-month moratorium puts a time limit. We need to get the job done and do it fast."

Councilman Kevin McKeown argued that it would take more than regulation to tackle a thorny problem that in large part stems from greed.

"Greed is a part of it," McKeown said. "What you do as an individual in the free market affects your neighbor, affects the Promenade. If we pass laws that counter greed, greed will find a new way."

"We need a new mechanism and we have to bring the property owners into it," McKeown said. "There's a science to this. It's just a science that's not being used."

Much of the debate centered on the makeup of the task force. Several council members urged the inclusion of a property owner, as well as a retailer and restaurant owner. In the end, the council will choose a Promenade landlord and the Bayside District will make two appointments, likely a retailer and a restaurant owner.

"We really need the input of people down there on the Promenade that have a real hands on," Holbrook said. "We don't need three council members. Which one of us is the economic expert?"

Feinstein pushed for three council members "so we don't have to redo everything when we get to the council level."