Approval of Nic Nak Liquors Based on Historical Relevance?

The appeal of the Nic Nak Liquor Store is agendized for the City Council on May 4, 2010 at 6:30 pm (see page 8 of 12 City Council Meeting Agenda May 4, 2010). This is a critical meeting that could significantly change City policy on allowing non-conforming liquor sales to be approved in the City of Oakland and perpetuate the proliferation of liquor stores.

The City of Oakland Planning Staff are recommending the City Council approve the Nic Nak Liquor Store using the unique rationale of "historical relevance" (Planning Staff Recommendation).  Legally, the approval of the Nic Nak hinges on whether the City can make the findings for a Major Variance and a Major Conditional Use Permit. Perhaps the most crucial are the findings for a Major Variance.

The City of Oakland website that provides information to the public and potential applicants states that: A Variance is a permission to depart from the development standards, or setbacks, of the zoning district. Variances provide the discretion and flexibility to resolve difficulties or hardships that may be inappropriate where special or extraordinary circumstances occur on the property. These circumstances do not mean economic hardship; rather, they refer to topographic or physical attributes of the site that do not allow for the development standards of the Zoning District to be applied.

The Planning Staff originally found the City could not make the finding for a Major Variance or a Major Conditional Use Permit for alcohol beverage sales for Nic Nak, particularly since liquor stores should not be located closer than 1,000 feet to each other to avoid clustering and to prevent the attendant detrimental affects of concentrating liquor stores.The original Planning report recommending denial of liquor sales at 6400 Shattuck stated that:

The proposed Variance to the 1,000 foot separation standard in a neighborhood could set a precedent for other alcohol sales applications in the area...Allowing alcohol sales to cluster closer than the 1,000 foot radius could be detrimental to the vitality of an emerging commercial and mixed node...Staff recommends denial of the Major Variance and Conditional Use Permit for Alcoholic Beverage Sales. The findings required by the Oakland Planning Code are not fulfilled in this case. Granting the request would cause an adverse precedent. The liquor store lost its legal status 5 years ago and community demand has been well-served by other Alcoholic Beverage Sales locations. A neighboring market already provides beer and wine services to the immediate Shattuck neighborhood. Several other liquor stores provide services near the edge of the 1,000 foot radius from this store; and this additional venue for liquor is not necessary. The potential for adverse secondary effects, such as loitering and littering, would likely increase with another operator in the future.

At the original Planning Commission meeting in 2009, the applicant, Ashrious Pannell, and some of his supporters claimed that those opposing the liquor sales were racist, and wanted to drive out African American-owned businesses to promote gentrification. Mr. Pannell even threatened to sue the City and claimed that City Planner David Valeska had been disrespectful to him. Among his supporters have been the Uhuru Group, the Black Chamber of Commerce and Geoffrey Pete of the Black Oakland Caucus who often advocates for African American-owned businesses. The Planning Commission, led by Commissioner Doug Boxer and outgoing Commissioner Anne E. Mudge, directed the City Planning Staff to abandon its recommendation for denial and develop new findings for their approval. The revised Planning Commission findings stated that:

Historical relevance of the 6400 Shattuck Avenue property constitutes a unique physical circumstance. The facility and activity cannot be moved while retaining these historical associations, including neighborhood, social and leadership activities.

The idea of "historical relevance" was created by the Planning Commission to justify a Major Variance and Conditional Use Permit since there was no other rational basis to approve the liquor sales. In fact, the applicants provided no evidence as to any unique or extraordinary physical or topographic attribute of their site that precluded them from meeting the intent of the Oakland Planning Code. Oakland Planning Manager, Scott Miller, and City Planner, Dave Valeska, acknowledged the idea of "historical relevance" had never been used before by the City of Oakland in approving any project and they were not aware of "historical relevance" being used in other jurisdictions as a basis for approving a variance. 

The matter was then appealed by the East Lorin Neighborhood Association and a large number of neighbors in a lengthy appeal that essentially tore apart the Planning Commission's weak findings for approval in unyielding detail (for you policy and legal wonks we highly recommend you read the 37 page appeal attached to the Planning recommendation Planning Staff Recommendation).

Regarding the use of "historical relevance" as a basis to approve alcohol sales, the appellants stated that:

The proposed use of Alcohol Beverage Sales is in direct conflict with the Oakland Planning Code in that it is located within 1,000 feet of an existing liquor store. The stated intention of the Oakland Planning Code Section 17.114.010 as it relates to non-conforming uses, such as Nic Nak liquors, is that: "The purpose of these regulations is to control, ameliorate, or terminate uses which do not conform to the zoning regulations. These regulations shall apply to all nonconforming uses." The Planning Commission's approval of Alcohol Beverage Sales that allows and legitimizes a nonconforming use which had a lapsed Deemed Approved Status for at least five years is contrary to the stated intentions and purpose of the Oakland Planning Code relating to nonconforming uses. Moreover, the use of a highly unusual, and unorthodox planning theory, never before used in the history of the City, that equates "historical relevance" to a unique or extraordinary physical constraint as a fundamental basis for approving a Major Variance stands existing planning law, theory and practice as well as the Oakland Planning Code on its head. This is a clear and substantial misapplication of the Oakland Planning Code wherein approval of Major Variances are limited to unusual or extraordinary physical site constraints such as topography, irregular lot configurations, or natural obstacles such as rock outcroppings. Using a theory of "historical relevance" that appears to be based in Section 106 of the National Historic Preservation Act as a rationale to approve a Major Variance is an abuse of authority and discretion by the Planning Commission. 

In its current recommendation to approve alcohol sales at the next City Council meeting on May 4, 2010, the recommendation now fashions a different basis for "historical relevance" that focuses on race and states that:

Regarding "historical relevance", which is discussed at length below, this is a suitable characteristic for evaluating  projects under the Land Use and Transportation Element of the Oakland General Plan...

Regarding "historical relevance" as a Variance basis, staff notes sections of the Oakland General Plan Land Use and Transportation Element that mention historically relevant issues, particularly for African American residents such as the owners of 6400 Shattuck Avenue:

Page 1, "Many African Americans arrived...Oakland's ethnic, racial and cultural diversity cuts across all economic strata and through neighborhoods from the hillsides to the working waterfront..."

Page 5, "...the character of established neighborhoods will be maintained and enhanced...clean and attractive neighborhoods rich in character and diversity, each with its own distinctive identity...the places that make Oakland work are many, because the physical side of the City is as varied as its culture and economy. The story of the City's past and its future is captured in an appreciation of the types of places that make Oakland work..."

"A Brief History of Oakland," includes p. 18 a reference to "Oakland's Established African American Community" and to single businesses as important to vitality.

Page 73, Policy D12.1. "Build on and promote Oakland's education resources, historic importance as an entertainment venue, existing cultural diversity..."

Page 113, Policy N9.8, "Locations that create a sense of history and community within the City should be identified and preserved where feasible..."

Page 144, "The classifications used in the Land Use Diagram...take into account the existing and historical patterns of development in Oakland..."

Over the past 4 decades, some African American owned community businesses have left North Oakland. 6400 Shattuck Avenue business remains, a remnant of an historical pattern of development in Oakland. The above examples of citations frame the public testimony of October 7, 2009 and earlier hearings, that 6400 Shattuck Avenue has been part of the City's diversity, economy and cultural identity, particularly for the neighborhood, for four decades. "Historical relevance" is a suitable basis for considering a Variance of this type.

We are surprised and not quite sure how the City Planning Department and the City Administrator, Dan Lindheim, make the leap from general policy support for ethnic, racial and cultural diversity to approving a Major Variance for a non-conforming liquor store that has been out of business for at least five years when variances, by the City's own policies, speak to special or extraordinary circumstance that relate to topographic or physical attributes of a site. By positing a race-based rationale for approval, the City is explicitly acknowledging the elephant that has been in the room, but few have been willing to acknowledge.

In essence, the City Planning Staff are saying the City Council's adopted policy, under the deemed approve status for non-conforming liquor stores, which is to eliminate non-conforming liquor stores that cease to be in continuous operation for 90 days or more, is to be ignored or set aside since the Nic Nak Liquor Store is historically an African American-owned business with self-proclaimed "historic ties" to the community. This is the City's kernel of "historical relevance".

Unfortunately, the use of "historical relevance" seems to be a rather thinly veiled rationale for approving alcohol sales, sales that otherwise fail to meet the most fundamental requirements of the Oakland Planning Code, only because the alcohol sales are proposed by an African American-owned business. This approach seems to put the City on even shakier grounds for a  lawsuit should it approve the liquor sales. Nowhere in the required findings for Major Variances do the regulations speak to, discuss, or posit a theory for "historical relevance" as it relates to African American-owned businesses or any other type of businesses. The only policies actually noted by the Planning Staff are Policy D12.1 which discusses building on and promoting existing cultural diversity and Policy N9.8 which suggests that locations that create a sense of history and community within the City should be identified and preserved where feasible. Policy D12.1 does not address how this is to be done by approving liquor stores and Policy N9.8 addresses locations, not specific land uses such as liquor sales. In fact, there are plenty of cases in Oakland wherein liquor stores have destroyed neighborhoods and have destroyed a sense of community through alcohol addiction, increased violence, graffiti, loitering, drug dealing, prostitution and other negative behaviors.

Apparently, the City staff has poured over the General Plan and this is the only policy language they can find that remotely relates to "historical relevance"? The use of vague policy and general plan language by the City to suggest that African Americans should be specifically afforded a privilege under the Oakland Planning Code not granted to others is highly problematic and opens the City to challenges under the Equal Protection Clause. As a matter of hierarchy, the General Plan sets our general policy guidelines. The Oakland Planning Code then implements those policies through specific regulations such as the criteria for Major Variances. The criteria for Major Variances relate to special or extraordinary circumstances related to topography or physical site constraints not cultural diversity.

Under the Equal Protection Clause of the Fourteenth Amendment, the Supreme Court has established a three tiered approach for evaluating suspect classifications established by government (Strict Scrutiny). When government establishes and uses a classification that is based on race, national origin or religion it comes under strict scrutiny by the courts. This means the government must show that the challenged classification serves a compelling state interest and that the classification is necessary to serve that interest. Additionally the law or policy must be narrowly tailored to achieve that goal or interest and be the least restrictive means for achieving that interest. Here, it seems that the City is saying they want to specifically promote and retain African American-owned businesses by granting a Major
Variance and a Major Conditional Use Permit to an African American-owned liquor store using race-based policy and general plan language in a way that gives preference only to African Americans, even though the land use is a liquor outlet and the City has other compelling public policies based on the general health, welfare and safety of residents that direct the City to eliminate non-conforming liquor outlets should they cease continuous operations for 90 days or more. We are not aware the City of Oakland has any other general plan policies that would support approval in similar circumstances if the applicants were Latino, Chinese, Korean, Persian, Yemeni, Christian, Muslim, Hindu or any other race, national origin or religious classification.

The use of "historical relevance" seems to be a sheer fabrication on the part of the Planning Commission and could set a significant precedent. Some have questioned whether the Pannell's have cashed in political chits among politically powerful and connected Oaklanders and have maneuvered behind the scenes to influence the City's recommendation for approval. Certainly, those discussions and agreements would be subject to discovery under the penalty of perjury if the matter is taken to court and could make for some interesting news stories highlighting backroom deals.

If the City believes there is a compelling public interest in promoting African American-owned businesses or any other specific classification of businesses within its jurisdiction, it should develop policies and programs to do so that can be debated upfront in public hearings by the entire community and that can withstand judicial scrutiny, rather than trying to create new policies adhoc by shoe-horning a liquor store for approval because it happens to be owned by an African American family.

While race, national origin, or religion should never be a basis for making land use decisions, in this case the City can still provide support for the ethnic, racial and cultural diversity found in the Nic Nak being an historically African American-owned business by upholding the approval for the convenience sales, while supporting its existing policies on deemed approved non-conforming liquor stores by denying the liquor sales. For the past year the Pannell's have shown they can operate the Nic Nak successfully without liquor sales. In fact they, have never provided any financial data showing otherwise.

By approving the liquor sales at 6400 Shattuck under the current proposed findings, the City Council will be carving out a specific race-based exclusion for African American-owned liquor stores. If the Council explicitly negates the specific race-based exclusion and determines that "historical relevance" can apply to anyone regardless of race, national origin, religion or any other classification, the City Council then creates a new precedent and exclusion that can be used by anyone for any non-conforming use, not just non-conforming liquor stores; thereby gutting the policy of eliminating non-conforming land uses and bringing them into conformance with the current Oakland Planning Code and subverting the deemed approved status for non-conforming liquor stores.

Residents are not opposed to an African American-owned business. That has never been the case, despite the protestations of the Pannell's and their supporters to the contrary. Resident are opposed to additional liquor sales in a community rife with the effects of over 18 liquor stores within a mile radius of Nic Nak. Neighbors would like to see this site developed to its full potential with higher density, pedestrian-oriented uses that serve the community. Not land uses that are detriment to the community.

This case really highlights whether the City Council is serious about upholding its existing policies on limiting and controlling liquor sales to maintain and improve the quality of life for all residents or whether City Council prefers to confer a special privilege to an African American-owned business to sell liquor in conflict with the Oakland Planning Code, not afforded others.

It begs the question:  If the Nic Nak were owned by any other applicant than an African American, would the City of Oakland be affording him or her the same privilege as the Pannell's and bending over backwards to fabricate policy rationales to do so? Policies that appear to be based solely or primarily on race, national origin or gender are inherently suspect by the courts unless there is a demonstrated compelling interest, it is narrowly tailored and is implemented by the least restrictive means possible. In this day and age, is race really a basis for making land use decisions? Does the City really want to go down this path? Legal challenges over Measure Y show that residents who are frustrated over legally suspect City Council decisions are willing to take matters to court. Nic Nak could be next.

It's time for the City Council to step up and "do the right thing".