Due to a lawsuit and the potential cost to fight it, San Juan Bautista officials are in the process of reinstating a ban against franchise businesses.
San Juan’s planning commission last week voted to rescind a city decision made earlier this year to eliminate the ban against formula businesses.
In December 2002, the city implemented the ban against formula businesses and since then has renewed the ordinance three times, even as chains such as Subway have expressed interest in opening a shop in the Mission City. The updated law had given more leeway to the city in allowing franchise businesses on the outskirts of the city, especially along Highway 156 and other entrance points.
Now with a planning commission recommendation last week to rescind the ordinance – on a recommendation from the city manager, due to the lawsuit – city council members next week are expected to follow through and confirm the decision, City Manager Roger Grimsley said.
“They’ll rescind it so we can save some money,” Grimsley said.
Grimsley estimated that the lawsuit challenging the lack of an environmental review related to the law change would cost about $150,000 to defend. He figures it would cost $80,000 to $90,000 toward the attorney along with more costs in staff time, he said.
Grimsley believes the group filing it – through the San Francisco-based law firm SSL – is comprised of a “handful of people” spurred by the pending approval of an Arco gas station at Highway 156 and The Alameda. San Juan Inn owner Frank Leal – who wants to develop the plot proposed for the station himself – and other supporters have opposed the Arco gas station. The Arco project is going through an environmental review that could be finished by the end of August.
Grimsley said the city with an annual general fund budget of $1.3 million can’t afford to defend the lawsuit, especially due to its water problems with high nitrate levels in local wells – which is expected to cost hundreds of thousands of dollars to address itself.
“Our revenues are very tight now and we can fight it and win,” Grimsley said. “But in the meantime, I have to solve the water issues.”
Grimsley had headed efforts to rescind the ordinance banning franchise, or formula, businesses. He openly acknowledged that he didn’t understand how certain franchise businesses have been allowed – such as a Valero gas station that opened in 2009 – while others have been subjected to the ban.
“A handful of people do not want franchise businesses in town,” Grimsley said of the people behind the lawsuit. “It was really centered off of this Arco station where they didn’t want that.”
Leal and another Arco gas station opponent, Ray Sanchez, could not be reached immediately for comment.
Look back for more.
