UP 25090 (Sea Shack Candy Co.): Consideration of a Use Permit, UP 25090 (The Sea Shack), for the establishment of a new Specialty Food Store selling Scandinavian sweets at San Carlos between Ocean and 7th Avenue (Carmel Square, Unit #2) in the Central Commercial (CC) District.  APN: 010-141-005-000.

Proposed CEQA Action: Find the Project categorically exempt from environmental review pursuant to CEQA Guidelines Section 15301 and that none of the exceptions to the exemptions can be made in this case

The applicant is seeking approval of a Use Permit to allow for the establishment of a Specialty Food Store, “Sea Shack Candy Co.,” at San Carlos Street between Ocean and 7th Avenues (Carmel Square, Unit #2), selling Scandinavian sweets with a focus on pre-packaged candies from Sweden.  

Staff recommends that the Planning Commission adopt a resolution (Attachment 1):

1.      Finding that the establishment of retail candy store within an existing commercial space is Categorically Exempt from environmental review pursuant CEQA Guidelines Section 15301 – Existing Facilities; and  

2.      Approving a Use Permit application UP 25090 (Sea Shack Candy Co.) for the establishment of a Specialty Food Store selling Scandinavian sweets. The property is located at Carmel Square, Unit #2, San Carlos Street between Ocean and 7th Avenues, in the Central Commercial District, APN 010-141-005-000.

Unit #2 in Carmel Square is a 275 square foot commercial space, previously occupied by Le Coupe Susan De Nicolo Art Gallery (approved March 2, 2023). A retail gift boutique occupied the space before Le Coupe Gallery.

Sea Shack Candy Co. will be a retail candy store specializing in imported Scandinavian sweets, with a focus on pre-packaged candies from Sweden. The applicant’s business description (Attachment 2) highlights the following characteristics about the products and the proposed store aesthetic:

•  Vibrant, bright flavors with chewy and soft textures.
• High-quality – Candies will be sourced from Sweden containing premium ingredients.
• Healthier Ingredients – All products are non-GMO, free of high-fructose corn syrup, trans fats, and artificial dyes like Red 40.
• Customizable Experience – Customers can choose pre-packaged candy options or opt for a customizable self-serve mix-and-match bag.
• Bright, Colorful, Modern Space – Minor renovations will include new interior paint, new cabinetry for candy displays, and a new cash wrap station for point-of-sale checkout.

Sea Shack Candy Co. is proposed to be open seven days a week, with weekday hours of operation between 11:00AM and 7:00PM, and weekend hours of operation between 11:00AM and 9:00PM. Staffing will include one to two employees per shift, depending on demand. The specialty foods proposed are limited to candy products. The applicant proposes displaying specialty food items throughout the front area of the store (approximately 207 square feet), while the back area (approximately 67.50 square feet) will be reserved for storage and employee use. Unit #2 already features a small sink to ensure proper handwashing for employees. Customer restroom access is available via a private bathroom in the Carmel Square courtyard, with a key provided by employees. No exterior changes are proposed.

The primary use of the commercial space will be a Specialty Food Store. As a primary use, Specialty Food Stores require a Use Permit in the Central Commercial (CC) zoning district pursuant to Carmel-by-the-Sea Municipal Code (CMC) Section 17.14.030, Schedule II-B. No ancillary uses are proposed. The Specialty Food Store will not be a drive-in, fast food, or formula food establishment. The definitions of these terms are included in Attachment 3. The applicant is not proposing to prepare any candy on-site (such as fudge); all food items will be sold and wrapped for off-site consumption. There will be no cooking equipment for the on-site preparation of food and no on-site food service. Adequate trash storage is provided on-site. Staff finds the project meets all requirements for Specialty Food Stores. Detailed analysis is provided below.

Specialty Food Store:  According to CMC Section 17.68.050 (Commercial Use Classifications), a specialty food store is a “retail food market with no seating on the site that provides a specialized and limited range of food items sold primarily for home preparation and consumption.”

The following is a list of specialty food store standards – CMC Section 17.14.040.J.3.

1.      No specialty food store shall be permitted that is classified as a drive-in, fast food or formula food establishment as defined in the Code.

Analysis: The proposed specialty food store, as represented by the applicant, would not exhibit characteristics of a drive-in, formula food, or fast food establishment.

2.      All food sold for consumption off the premises shall be placed in covered containers or wrappings.

Analysis: All food items would be sold in sealed or individually packaged for off-site consumption.

3.      The use may be combined with liquor stores and beer in the CC and SC districts upon meeting the requirements of subsection (J)(4) of this section, Liquor.

Analysis: The use is not proposed to be combined with a liquor store. 

4.      Maximum number of food stores and/or restaurants within structures fronting Ocean Avenue: 15.

Analysis: The location is not on Ocean Avenue.

 5.      See also subsection (J)(1) of this section, All Food and Beverage Sales.

Analysis: Subsection (J)(1), All Food and Beverage Sales, requires: Adequate facilities shall be provided on the site for the closed storage of trash and garbage generated by the use. The on-site storage shall be designed so that the area can be cleaned and the refuse removed without creating a public nuisance and without being placed on the sidewalks or other public ways.

Staff anticipates minimal trash and garbage will be generated from the use. The applicant shall be responsible for ensuring any trash and garbage generated by the use is disposed of in accordance with subsection (J)(1). The Carmel Square garbage storage area is located at the southeast corner of the property.

6.      A maximum of 12 seats may be provided indoors or outdoors on the site.

Analysis: Neither indoor nor outdoor seating is proposed.

7.      Cooking equipment shall be limited to indoor stoves and ovens.

 Analysis: Cooking or cooking equipment of any type is not proposed.

Use Permit Findings. In accordance with CMC Section 17.64.010.A, in its review of applications for use permits, the Planning Commission shall evaluate each proposed use in order to consider its impact on the City. No use permit shall be granted unless all of these general findings can be made:

1.      That the proposed use will not be in conflict with the City’s General Plan.

Supporting Evidence: The project is limited to utilizing an existing commercial space, zoned as commercial, for retail. There are no proposed changes to the exterior. It is consistent with General Plan (Land Use & Community Character Element) Policy P1-59 as it preserves the existing land use patterns, and Policies P1-80, P1-81 and P1-82 as signage shall comply with the standards in CMC Section 17.40.030, Commercial District Signage, and CMC Section 17.40.040, Commercial Interior Signs. Prior to installation of an exterior sign, the Applicant shall submit a sign application which shall be reviewed and approved by Staff.

2.      That the proposed use will comply with all zoning standards applicable to the use and zoning district.

Supporting Evidence: As demonstrated in the discussion above, the project is an allowed use within the CC zoning district with a use permit and complies with the standards of a Specialty Food Store.

3.      That granting the use permit will not set a precedent for the approval of similar uses whose incremental effect will be detrimental to the City, or will be in conflict with the General Plan.

Supporting Evidence: As demonstrated in the evidence provided under Findings 1 and 2, the project consists of utilizing existing commercial space, is consistent with the General Plan and is an allowed use withing the zoning district.

4.      That the proposed use will not make excessive demands on the provision of public services, including water supply, sewer capacity, energy supply, communication facilities, police protection, and fire protection.

Supporting Evidence: The project will utilize an existing sink and is limited to reuse of an existing commercial space. No excessive demands on services or infrastructure is anticipated.

5.      That the proposed use will not be injurious to public health, safety or welfare.

Supporting Evidence: The project is an allowed use (see Finding 2) and any tenant improvements will require issuance and final of a construction permit to ensure public health and safety.

6.      That the proposed use will be compatible with surrounding land uses and will not conflict with the purpose established for the district within which it will be located.

Supporting Evidence: See Findings 1 and 2.

7.      That the proposed use will not generate adverse impacts affecting health, safety, or welfare of neighboring properties or uses.

Supporting Evidence: See all findings and supporting evidence above.

Commercial Use Permit findings. In accordance with CMC Section 17.64.020, in addition to the general findings required for all use permits listed above (CMC Section 17.64.010.A), no use permit shall be granted for commercial or business uses unless all of these general findings can be made:

1.      That allowing the proposed use will not conflict with the City’s goal of achieving and maintaining a balanced mix of uses that serve the needs of both local and non-local populations.

Supporting Evidence: The proposed use meets the findings outlined in CMC Section 17.64.010. The proposed use is a conditionally permitted use in the Central Commercial (CC) zoning district and the additional zoning requirements for the use have been made in the affirmative.

2.      That proposed use will provide adequate ingress and egress to and from the proposed location.

Supporting Evidence: The use will be located within an existing business space and shall be required to comply with all applicable building and fire codes related to building occupancy.

3.      That the capacity of surrounding streets is adequate to serve the automobile and delivery truck traffic generated by the proposed use.

Supporting Evidence: The surrounding streets have adequate capacity for automobile and delivery truck traffic generated by the proposed use.

The project meets the findings outlined in CMC Section 17.64.010.

Staff recommends the project be found categorically exempt from the California Environmental Quality Act (CEQA), State CEQA guidelines, and local environmental regulations under Section 15301 (Class 1) – Existing Facilities. Class 1 exemptions include the operation, maintenance, permitting, and minor alterations to existing private structures involving negligible or no expansion of an existing or former use. The project consists of establishing a specialty food store within an existing commercial space. The proposed project does not present any unusual circumstances that would result in a potentially significant environmental impact and no exceptions to the exemption exist pursuant to section 15300.2 of the CEQA Guidelines.