HomeMy WebLinkAboutStaff Report 2602-6009CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, April 20, 2026
Council Chambers & Hybrid
5:30 PM
Agenda Item
8.FIRST READ: Adopt an Entertainment Zone Ordinance to Establish an Entertainment Zone
on California Avenue as Recommended by the Economic Development Ad Hoc
Committee; CEQA status – Categorically Exempt.
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Manager
Meeting Date: April 20, 2026
Report #:2602-6009
TITLE
FIRST READ: Adopt an Entertainment Zone Ordinance to Establish an Entertainment Zone on
California Avenue as Recommended by the Economic Development Ad Hoc Committee; CEQA
status – Categorically Exempt.
RECOMMENDATION
The Ad Hoc Economic Development Committee and staff recommends that the City Council
adopt an Entertainment Zone Ordinance to Establish an Entertainment Zone on California
Avenue.
BACKGROUND AND ANALYSIS
During the March 18 Ad Hoc Economic Development Committee meeting1, the committee
reviewed the recommendation presented by staff and unanimously voted the following
motion2:
Recommend the City Council adopt an ordinance adding Chapter 9.05 to the Palo Alto Municipal
Code to establish and regulate an entertainment zone pursuant to Senate Bill 969 to allow for
the sale of certain alcoholic beverages by licensed establishments for consumption outside in
the public right of way on the car-free portion of California Avenue subject to a special event
permit including Romona Street, and direct staff to implement the following changes:
1. Allow for ongoing activation of entertainment zone by allowing for ongoing permits from
business owners
1 March 18th Economic Development Agenda:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=19967
2 March 18th Economic Development Committee Action Minutes:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=19968&compileOutputType
=1
2. Provide staff the flexibility to expand the entertainment zone to the closed portion of
Ramona Street after outreach of Ramona Street merchants
3. Modify the special event permit if necessary to effectuate this direction
The Economic Development Staff Report 2602-5984 5 provides additional context. The
proposed recommendations are intended to support the Council’s priority to enhance business
vibrancy efforts.
This report implements a portion of the Committee’s recommendation to advance the
Entertainment Zone Ordinance on Car-Free California Avenue. Staff will return to the full City
Council to consider expanding permissive use to the downtown area, specifically Car-Free
Ramona Street, as well as any needed modifications to permitting requirements. This approach
supports California Avenue merchants in time for the World Cup and upcoming Cal Ave
activations, while allowing additional outreach regarding Car-Free Ramona Street and further
review of the Special Event permit.
Due to the unanimous vote, the first reading of the ordinance has been provided on the
consent calendar for approval. If approved on consent, the second reading would be taking
place May 4, 2026, on the City Council’s consent calendar. The ordinance will become effective
30-days after the second reading, which means the entertainment zone may commence in early
June.
FISCAL/RESOURCE IMPACT
Establishment of an Entertainment Zone requires the one-time administrative costs associated
with ordinance and administrative guideline development. Staff will recommend that ongoing
costs to support Entertainment Zone operation be recovered through permitting fees to the
extent necessary. No additional funding is needed at this time.
STAKEHOLDER ENGAGEMENT
Economic Development staff met with representatives from the California Department of
Alcoholic Beverage Control, County of Santa Clara Department of Public Health and the City of
San Jose Office of Economic Development to gain a comprehensive understanding of how an
entertainment zone operates. Staff met multiple times with California Avenue merchants to
ensure the Zone supports California Avenue merchants. The proposed hours, boundary, and
additional recommended requirements reflect coordination with the merchants. In addition,
internal coordination took place with the Police Department to assess operational, and
enforcement considerations specific to Palo Alto. Additional outreach with the Ramona Street
stakeholders is forthcoming.
5 Economic Development Staff Report 2602-5984:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86868&dbid=0&repo=PaloAlto
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
NOT YET APPROVED
1
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Creating New PAMC Chapter 9.05 (Entertainment
Zones) and Establishing an Entertainment Zone on a Portion of California Avenue
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. In 2025, the State of California authorized cities to create entertainment zones with the
passage of SB 969 (2025), as codified in various sections of the Business and Professions
Code (BPC).
B. In compliance with BPC section 25692, City staff have notified and received feedback from
the Palo Alto Police Department about (1) potential health and safety impacts that might
be generated by the entertainment zone and strategies to mitigate those impacts; and (2)
the zone’s proposed boundaries, days and hours of operation, types of alcoholic
beverages permitted, and approved nonglass and nonmetal containers.
C. The City Council now desires to adopt this ordinance to create new Chapter 9.05 in the
Palo Alto Municipal Code (PAMC) to implement entertainment zones in Palo Alto. This
ordinance will also establish one entertainment zone on the car-free section of California
Avenue.
SECTION 2. New Chapter 9.05 (Entertainment Zones) is hereby added to Title 9 (Public
Peace, Morals, and Safety) of the Palo Alto Municipal Code to read as follows:
9.05.010 Purpose
The purpose of this Chapter is to implement Senate Bill 969 (2025) as codified in various
sections of the Business and Professions Code through the establishment and regulation of
entertainment zones to allow the purchase of open container alcoholic beverages for
consumption outside in common spaces such as plazas, public streets, sidewalks or public
rights-of-way during certain hours.
9.05.020 Definitions.
The definitions set forth in this Section shall govern the application and interpretation of this
Chapter.
"ABC" means the California Department of Alcoholic Beverage Control.
"Entertainment Zone" has the meaning set forth in Section 23039.5 of the California Business
and Professions Code, as may be amended; and their locations are described under PAMC
Section 9.05.050.
154_20260304_ts24 2
"Entertainment Zone Event" means an event that occurs within the boundaries of an
Entertainment Zone in compliance with state law, local laws, and regulations, including this
Chapter 9.05, and subject to the requirements of a special event permit issued by the City.
9.05.030 Entertainment zone requirements.
(a) All persons and legal entities of any type (including businesses and non-profit
organizations) sponsoring an Entertainment Zone Event, or selling alcoholic beverages at an
Entertainment Zone Event shall comply with all applicable state and local laws and regulations,
including:
1. All applicable ABC license and permitting requirements;
2. Sections 23357, 23358, 23396 of the California Business and Professions Code, as may
be amended from time to time regulating licensed beer manufacturers, licensed
winegrowers, and on-sale licensees, respectively;
3. All other laws governing the sale and consumption of alcoholic beverages; and
4. All permit requirements for special events issued by the City.
(b) Open alcoholic beverages may only be consumed within an Entertainment Zone during
an Entertainment Zone Event, subject to any other restrictions imposed by state or local law,
regulations, and permits.
(c) All open alcoholic beverages consumed during an Entertainment Zone Event may only
be purchased from a premises located within the Entertainment Zone that is authorized under
California Business and Professions Code Section 23357, 23358, 23396, as may be amended, to
permit the consumers to leave the premises with open containers of alcoholic beverages for
consumption off the premises, or an organization that is authorized by an ABC special event
permit or license to make such sales within the Entertainment Zone.
(d) All types of beer, wine, spirits, and other alcoholic beverages that are allowed for sale
and consumption by the State of California are permitted within an Entertainment Zone,
subject to any further restrictions imposed by regulations, license, or permit conditions. This
subsection does not authorize any specific ABC licensee to sell or serve types of alcohol not
permitted by their license.
9.05.040 Entertainment zone hours.
Outdoor consumption of alcoholic beverages during an Entertainment Zone Event shall only
occur between the hours of 12 noon and 10 p.m., inclusive, and on Sundays from 10 a.m. to 10
p.m., inclusive, subject to more restrictive days or times imposed by state or local law,
regulations, or permits.
9.05.050 Entertainment zone locations.
(a) Car-Free California Avenue. All plazas, pedestrian malls, public streets, sidewalks and
public rights-of-way that are located on either side of California Avenue between El Camino
Real and Birch Street are hereby designated as the California Avenue Entertainment Zone under
Sections 23039.5 and 25690 of the California and Business and Professions Code.
154_20260304_ts24 3
9.05.060 Entertainment zone implementation.
(a) Within 90 days of the establishment or modification of an Entertainment Zone, the
City’s Office of Economic Development, following consultation with the Police Department,
shall provide the following information to ABC, pursuant to Section 25690 of the California
Business and Professions Code:
1. A copy of the ordinance establishing or modifying the Entertainment Zone;
2. Information as may be necessary to identify the boundaries of the Entertainment
Zone;
3. The days and hours of operation of the Entertainment Zone;
4. The types of alcoholic beverages permitted within the Entertainment Zone; and
5. The approved nonglass and nonmetal containers in which alcoholic beverages may be
authorized.
(b) The City Manager or designee is authorized to promulgate regulations under this
Chapter 9.05. The regulations shall include the following requirements:
1. Establish a process or procedure to readily identify individuals purchasing or
consuming alcoholic beverages within the Entertainment Zone as being 21 years of age
or older;
2. Any person or organization seeking a special events permit shall comply with the
insurance requirements applicable to that permit; and
3. Any additional requirements not otherwise imposed by state or local law, including
but not limited to additional requirements for approved beverage containers, additional
restrictions on hours and/or location of operation for the Entertainment Zone Events,
and other time, place and manner restrictions.
(c) Upon adoption or revision of the regulations, the Office of Economic Development shall
transmit a copy of the regulations to ABC as applicable under ABC requirements.
(d) Any holder of an ABC license or permit that wishes to allow customers to leave the
premises with open containers of alcoholic beverages for consumption off the premises during
an Entertainment Zone Event shall provide the City a copy of the notice provided to ABC under
Section 23357, 23358, 23396, or any other applicable section of the California Business and
Professions Code, as applicable, at the same time such notice is provided to ABC.
(e) In compliance with Section 25692(b) of the California Business and Professions Code,
the City Manager or designee shall review the operation of the entertainment zone every two
years following the adoption of the entertainment zone to ensure that the entertainment zone
is being maintained in a manner that protects the health and safety of the general public. This
review shall be conducted in consultation with the Palo Alto Police Department and any reports
produced during the review shall be made available to the Department upon request.
SECTION 3. Section 9.04.010 of Chapter 9.04 (Alcoholic Beverages) of Title 9 (Public
Peace, Morals, and Safety) of the Palo Alto Municipal Code is hereby amended to add
subsection (c) to read as follows (new text in underline):
154_20260304_ts24 4
9.04.010 Streets, sidewalks, highways, alleys - Consumption of alcoholic beverages
prohibited.
(a) It shall be unlawful for any person to consume any alcoholic beverage upon any street,
sidewalk, highway or alley except as may be authorized by City Council.
(b) Notwithstanding subsection (a) of this section, alcoholic beverages may be consumed in a
city-owned or controlled right-of-way by patrons within legally permitted eating establishment
seating areas in accordance with, and subject to a conditional use permit issued pursuant to
§ 18.76.010 of this code.
(c) Notwithstanding subsection (a) of this section, alcoholic beverages may be consumed in a
city-owned or controlled right-of-way when duly permitted within an Entertainment Zone and
in full compliance with Chapter 9.05 (Entertainment Zones) and all applicable regulations, and
permit and license conditions.
SECTION 4. Severability. If any provision, clause, sentence or paragraph of this
ordinance, or the application to any person or circumstances, shall be held invalid, such
invalidity shall not affect the other provisions of this Ordinance which can be given effect
without the invalid provision or application and, to this end, the provisions of this Ordinance
are hereby declared to be severable.
SECTION 5. Effective Date. This ordinance shall be effective on the 31st day after
adoption.
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154_20260304_ts24 5
SECTION 6. CEQA. The City Council finds and determines that this Ordinance is
categorically exempt under CEQA regulation 15305 (minor alterations in land use limitations)
and 15323 (normal operations of facilities for public gatherings).
INTRODUCED:
PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Economic Development Manager
____________________________
Chief of Police