City looks to update convenience store ordinance

Businesses currently prohibited from expanding

A restrictive ordinance that prevents convenience store owners from upgrading their businesses has prompted city officials to rethink the ‘90s-era decision.

According to Morgan Hill Economic Development Director Edith Ramirez, the city has received a number of requests from convenience store owners about expanding the footprint of their operations over the last year. However, according to an ordinance adopted by the city in 1996, the businesses—including those that operate with or without a gas station—cannot expand their sales floors beyond 300 square feet. In addition, a new convenience market is required to be located at least 1,000 feet from any other market.

“We’ve had to pass a couple of times on opportunities to reinvest in the downtown gas station areas on Monterey and Dunne,” she told the planning commission on April 9. “We’re seeing opportunities for reinvestments in these old corner gas stations, but they are prevented from being able to expand and be competitive. I’m not sure the restrictions that we have in place have had that in mind, and may have some unintended consequences.”

Ramirez added that convenience markets at gas stations have evolved, with customers expecting a car wash and a wider range of products.

“Convenience markets today are prettier; they’re bigger; they have more bells and whistles,” she said. “Our zoning code right now does not allow for that.”

Shashi Sharma, who owns the Chevron station on the corner of Monterey Road and Vineyard Boulevard, said he is trying to expand the sales area inside his market but is prohibited from doing so.

“There was a time when if you have only gas, you will survive,” he said. “But that time is gone.”

Now, customers expect to not only fill up their vehicle with gas in the morning, but also grab coffee and other food items, he added.. “That’s what customers buy from us, and that’s what they expect from us.”

John Horner, CEO of the Morgan Hill Chamber of Commerce, said he understood separation requirements for businesses selling alcohol, but questioned why the city regulates convenience stores over other establishments.

“Land use should not be a vehicle for managing legitimate competition among enterprises,” Horner said.

Planning Commissioner Juan Miguel Munoz Morris said the distance restriction was the most pressing issue of the ordinance that needed to be addressed.

“Why are we keeping these things 1,000 feet from each other?” he said. “Unless anybody can provide a good answer, which I haven’t heard any tonight, I don’t see a reason to keep that.”

Community Development Director Jennifer Carman said a proposed updated ordinance would likely be brought to the commission by June. After city council hearings, a new ordinance could be in effect within six months.

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