Councilman Jerry Thorne temporarily blocked the City Council's consideration last night of a proposed new rule that would significantly restrict more banks from moving into Pleasanton's downtown.
Thorne said he didn't have enough information on an ordinance amendment before the council, but questioned if it was the city government's right to single out banks from the downtown district while not addressing other businesses, such as a growing number of spas and salons.
The ordinance, earlier approved by a majority of member of the Planning Commission, was hurriedly drafted to prevent a bank from purchasing and moving into the Past Time Pool pub at 511 Main St., which is going out of business.
A bank would be a new use for the Past Time Pool building. Built in 1910, it originally housed the Gem Theatre and later became the Lincoln Theatre.
The board of directors of the Pleasanton Downtown Association, which has been concerned about too many non-retail businesses operating on Main Street, has urged the council to block more banks from opening there.
Thorne questioned the need for government intervention in determining which kinds of businesses should be allowed to operate in the city's downtown.
Citing complaints he's received about too many beauty shops and salon, he asked if they'll be next on the PDA's and City Council's list of targeted businesses to be restricted.
The proposed ordinance would not ban banks from the downtown, but it would require all financial institution, including finance companies, credit unions and savings and loan offices to first seek approval from city staff and then the Planning Commission, a process that could take six months. After paying all of the costs of seeking those approvals, the financial business could still be rejected.
The proposed ordinance specifically calls for financial institutions to be banned if a similar business if in the same block on either side of Main Street.
Those businesses already in downtown Pleasanton would be allowed to continue operating, but another similar-type business would have to seek the city's approval if it acquired an existing location unless the deal was completed within 180 days.
The proposed ordinance represents a reversal of a long-standing Pleasanton government position that considers financial institutions to be similar to traditional retail uses.
Historically, there was an interest in promoting financial institutions in the downtown area. From 1973 to 1995, the city required that banks, savings and loan offices and others financial institutions first locate a branch in the downtown area before locating elsewhere in the city.
Today, there are seven financial institutions on Main Street with six of them located on prominent corners.
"While these institutions have provided a specific type of benefit to the area, it is also beneficial to strive to continue to attract other types of retail throughout the entire downtown area," said Brian Dolan, Pleasanton's director of community development, in a report to the City Council Tuesday.
"As a result, staff is recommending consideration of an ordinance that acknowledges the importance of financial institutions while also trying to ensure that properties that have significant visibility and prominence, such as those along Main Street and those that are corner properties, are available for other types of uses.
Although the Past Time Pool building at Rose Avenue and Main Street is not located on the corner, its parking lot is, a small lot now closed off from public use that presumably would be part of the sales of the property.
Peter MacDonald, a downtown attorney who is active in the PDA, opposes the new ordinance.
In an email to the Planning Commission on Feb. 21, he warned that the immediate impact of this new ordinance will be "zoning blight."
"In this case, the bank prohibition will probably cause the Past Time Pool building to remain unrehabilitated, a typical example of the perfect driving out the good," MacDonald wrote.
"Higher vacancy rates are a frequent outcome of mandatory first floor retail ordinances," he explained. "But the government never helps make mortgage payments on those forced vacancy building."
"Anytime a potential business is subject to a conditional use permit requirement, it is bad news for the business," MacDonald added. "It adds an automatic six months to the time required to get open."
At Thorne's request and because of the interest of some officials to get the new ordinance on the books before the proposed bank's purchase of Past Time Pool is finalized, the new ordinance will be part of the full agenda at the City Council's April 3 meeting.