Report Prepared by: Valeria Renteria, Associate Planner, Development Services Department
Title
SUBJECT: Land Use Determination #25-02 - Finding of Public Convenience or Necessity for Vallarta Supermarket for Alcohol Sales for Off-Site Consumption at 851 West Olive Avenue
REPORT IN BRIEF
This report provides options for the City Council to consider making a Finding of Public Convenience or Necessity (PCN), as required by the Department of Alcoholic Beverage Control (ABC) to issue a Type 21 alcohol license (allowing the sale of beer, wine, and spirits for off-site consumption) for a new grocery store located at 851 West Olive Avenue.
RECOMMENDATION
City Council - Adopt a motion approving the Finding of Public Convenience or Necessity to allow Vallarta Supermarket, located at 851 West Olive Avenue to obtain a Type 21 license for off-site consumption allowing the sale of beer, wine, and spirits (Option #1 as shown in the “Council Action” section of this Administrative Report).
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, subject to modifications as conditioned by Council; or,
3. Deny the request completely; or,
4. Refer back to staff for reconsideration of specific items as requested by Council; or,
5. Continue item to a future City Council meeting (date and time to be specified in City Council motion).
AUTHORITY
Business and Professions Code Section 23958 and 23958.4.
CITY COUNCIL PRIORITIES
Not applicable.
DISCUSSION
State law mandates that ABC deny the issuance of a license to sell alcohol if the Census Tract in which the license will be issued is considered to have an “undue concentration” of existing alcohol licenses. The exception to this rule is that ABC may issue the license if the local jurisdiction makes a finding of “Public Convenience or Necessity” in support of the issuance of an additional license. However, the phrase “public convenience or necessity” is not defined in either the Alcoholic Beverage Control Act or in ABC’s Implementing Regulations, nor are specific guidelines provided. This determination must be made within 90 days of the date the local jurisdiction is notified of an application. See Attachment 1 - “Provisions for Undue Concentration” for more information regarding “undue concentration.”
Prior case law indicates that the Legislature’s intent for making a finding of public convenience or necessity was to apply different criteria than those used to determine “undue concentration.” Therefore “public convenience or necessity” means something other than the number and location of the licensed alcohol premises which are already covered by the factors used to determine undue concentration. The subject site is located within Census Tract 10.04. In checking with the State of California Alcoholic Beverage Control, this census tract is over concentrated with businesses selling alcohol as 3 licenses are allowed outright, but there are currently 4 active sites. The City Council will need to approve a Finding of Public Convenience or Necessity for this use.
The State’s ABC Mapping System is currently unable to generate a map identifying the 4 active licenses, but the number of active licenses were confirmed with ABC staff. Factors that may be used to determine a Finding of “public convenience or necessity” are found at Attachment 2. Staff, including the Police Department, have reviewed this request, and are recommending approval.
The City Council may also deny the Finding of Public Convenience or Necessity but should make one or more specific findings to support the denial. Such findings might be based on the fact that there are too many existing businesses within the area already serving alcohol, the number of crimes in the area, the proximity to residential uses, the type of business or operation, or other factors the City Council determines would make the issuance of an ABC license detrimental to the community. Guidance for making these findings can be taken from the “Provisions of Undue Concentration” found at Attachment 1.
Vallarta Supermarket at 851 West Olive Avenue
This new grocery store is requesting approval to sell beer, wine, and spirits for off-site consumption (Type 21 Alcoholic Beverage Control License) at 851 West Olive Avenue.
Vallarta Supermarket is part of the Market Place at Merced (formerly Merced Mall) remodel. The grocery store would be approximately 52,000 square feet and include fresh fruits and vegetables, a produce section, a bakery, a meat counter, hot food, etc. The floor plan at Attachment 6 highlights the two different locations alcohol would be stored and accessible to the public for purchase. Alcohol sales would be ancillary to the grocery store and occupy approximately 965 square feet of floor space or 1.8% of the floor area.
Sensitive Uses
The proximity of a business to residential uses, schools, churches, hospitals, or other “sensitive uses” may also be cause for ABC to deny the issuance of a license. The nearest residential uses (High to Medium Residential) are located about 800 feet north of the subject site, north of Loughborough Drive. The nearest sensitive use (besides residential properties) is Merced High School, which is located approximately 1,500 feet east from the subject site with the main entrance to the school being approximately 2,000 feet away from the subject site, north of West Olive Avenue.
Information of Fact
In order for the City Council to make their decision regarding a Finding of Public Convenience or Necessity, staff is providing information of fact for the City Council to consider. Based on the information provided in Attachment 5, staff is recommending approval of this request. Approval of this request would authorize the Director of Development Services to notify ABC of this determination.
According to the Merced Police Department, this general area had a moderate concentration of incidents between 07/01/2024 and 06/30/2025. Within this time period, there were 300 incidents within 500 feet of the subject site (Attachment 8). Typically, particular attention is given to incidents involving public drunkenness, the illegal sale of narcotics, disturbing the peace, and disorderly conduct are reviewed when considering the issuance of an alcohol license. Below is a breakdown of similar types of calls within 500 feet of the site during 07/01/2024 and 06/30/2025.
• Disturbances - 38 incidents
• Assaults - 3 incident
• Public Intoxication - 2 incidents
• Narcotics - 0 incidents
• Municipal Code Violations - 5 incident
The total call volume City-wide for the same time period was over 71,000 calls. The calls within 500 feet of the subject site equate approximately 0.42 % of the total call volume within the City of Merced for that time period. As previously mentioned, the number of incidents within the surrounding area is considered “Low” by Merced Police Department standards. The Police Department supports this request for a Finding of Public Convenience or Necessity.
Applicant’s Reason to Support Public Convenience or Necessity
Vallarta Supermarket has provided information regarding reasons for supporting a Finding of Public Convenience or Necessity. They cite several reasons to support the issuance of a Type 21 license including their dedication to being a good neighbor by keeping their site clean and providing security cameras onsite to help reduce criminal activity. More detailed information supporting this request can be found in the letter at Attachment 5.
Council Action:
Option #1
After considering all the facts provided and the factors that may be considered for determining public convenience or necessity, if the City Council finds the public convenience or necessity would be served by the issuance of an on-sale license to sell beer and wine, the City Council should authorize the Director of Development Service, or their designee, to draft a letter of support to ABC for the issuance of a Type 21 License based on the reasons described in Attachment 5.
Option #2
If the City Council determines public convenience or necessity would not be served by the issuance of a Type 21 license at this location, the City Council should direct the Director of Development Services, or their designee, to draft a letter opposing the issuance of this license. Specific reasons/findings for denial would need to be cited in the City Council motion.
IMPACT ON CITY RESOURCES
No appropriation of funds is needed.
ATTACHMENTS
1. Provisions of Undue Concentration
2. Factors in Determining Public Convenience or Necessity
3. Location Map
4. ABC License Type and Privileges
5. Letter from Applicant
6. Plans
7. City-Wide Incident Map
8. Incidents Within 500 Feet of Subject Site