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CUP No. 2020-22 - The Observatory February 22, 2021 Page 3 4 0 1 Project Background The subject site currently contains two buildings, including a 48,000-square-foot medical office building and the subject 25,290-square-foot entertainment venue. The existing entertainment venue first received approval to be converted from a warehouse into a restaurant and commercial theatre for the Harlequin Dinner Theatre in 1973, with the approval of CUP No. 73-13. However, the approval was only granted for a period of 10 years and the CUP subsequently expired in 1983. In 1992, the building was remodeled to accommodate the Rhythm Café, a short-lived commercial theatre similar in operation to the Harlequin Dinner Theatre in the City of Santa Ana. The building remained vacant until 1994. In October 1994, CUP No. 1994-16 was approved to allow an indoor concert and dinner facility and Type 47 ABC license. At the time of the approval, the facility was proposed to operate as the Coach House. However, after receiving approval the facility began to operate as the Galaxy Concert Theatre. The venue operated as Galaxy Concert Theatre until October 2011 when the venue changed names to The Observatory. In May 2019, Live Nation took over the concert operations for the location. Project Analysis CUP requests are governed by Section 41-638 of the SAMC. CUPs may be granted when it can be shown that the proposed project will not adversely impact the community. If these findings can be made, then it is appropriate to grant the CUP. Conversely, the inability to make these findings would result in a denial. The purpose of regulating establishments that sell alcoholic beverages is to set forth operating practices and procedures and to minimize impacts to surrounding areas. Staff has reviewed the applicant’s request to expand the sale and consumption of sell beer, wine, and spirits and has determined that the proposed CUP will not be detrimental to the health, safety, and welfare of the community. The subject site is not located within immediate proximity to parks, playgrounds, schools, or religious institutions. In addition, the building is located approximately 1,800 feet away from the nearest multi-family residences in Costa Mesa and approximately 0.5-miles (2,640 feet) from the nearest single-family residences in Santa Ana. As a result, the granting of the CUP will not negatively impact any sensitive land uses that may be nearby. The sale of alcoholic beverages for on-premise consumption will allow the entertainment venue to remain economically viable and competitive with similar establishments that provide food and drink options. In addition, the on-site sale of alcohol to customers is intended to provide a service ancillary to the primary entertainment and restaurant use. Furthermore, the front patio is currently in use for consumption of food and non-alcoholic beverages and consumption of alcoholic beverages is permitted inside the premises. City Council 2 –3 2/22/2021