06 ATTACHMENT 5 - Laserfiche WebLink

Mr. Jonathan Lowell, City Attorney 12/31/2012 Page 2 Masons' "in -house caterer," but a separate business with its own paid staff. Further, neither the catering business nor the banquet and party facility business can properly be considered an incidental use related to the Mason's primary fratemal organization activities. Because of these misrepresentations to the City, because the uses are not allowable uses under the zoning ordinance, and because the City failed to follow proper procedures in approving the businesses, and in doing so violated my clients' due process rights, my clients request that the City issue a cease and desist order against the Masons continuing the illegal businesses at this site. If the Masons want to use this residentially -zoned site, they must comply with the zoning ordinance's requirements. If they wish to conduct a commercial operation, they should do so on an appropriately - zoned site. The "Use Variance" for the Catering Business was Improper. In seeking a "use variance" for the catering business, the Masons made several misrepresentations. Just in themselves, these misrepresentations justify revoking any approval that may have been granted. Beyond that, the improper procedures used and the changed circumstances since the approval require the City to revoke the improperly granted permission for these businesses to operate in a residential zone. The first misrepresentation was that the catering business was associated with the Masons themselves. This was and is untrue. The catering business rents out the building used by the Masons. However, it is not an "in- house" business. It is an independent business entity with its own business license. Further, it is not even directly associated with the Masons themselves. Instead, it leases its space from the owner of the lot and building, which is not the Masons but a separate, although totally controlled, holding company, Pleasanton Masonic Center. As reported on both the Masons' and the holding company's tax returns, the Masons themselves rent the building from the holding company. Contrary to the representations in their 2005 letter, the Masons do not even appear to receive the revenue from the catering business. The Masons' Form 990 Federal tax returns for the past few years show no revenue from the catering business. Instead, that revenue shows up as rental income on the holding company's 2005, 2006, and 2009 tax returns. (The holding company did not file tax retums for 2007, 2008, 2010, or 2011.) The second misrepresentation is that the catering business amounts to an incidental activity of the Masons, and therefore qualifies to operate under the Mason's conditional use permit. The Masons are currently qualified as a 501(c)(10) tax- exempt fraternal beneficial society, although they are actually not incorporated. However, the catering business is associated not with the Masons, but with the holding company. The holding company was incorporated as a tax - exempt 501(c)(2) holding company, but it lost its tax - exempt status in 2010 and at this point its status as a qualified nonprofit corporation has been suspended by the State of California. Having lost both its tax exemption and its status as a nonprofit corporation, the holding company should not be involved in operating businesses in a residentially -zoned area'. Additionally, the "use variance" for these businesses was improperly granted by the City. The Masons hold a properly- granted use permit, dating back to 1977. That use permit, when issued, had attached to it required findings, including that the use, "will not be detrimental to the public health, safety or welfare, or materially injurious to the properties or improvements in the vicinity. "3 (PMC §18.124.070(8).) The municipal 2 Indeed, as a 501(c)(2) property holding company, the Pleasanton Masonic Center should not be involved in Dmi active use of the property. 3 It should be noted that the staff report for the 1977use permit application explicitly noted the risk of impacts on adjoining properties and placed conditions on the use permit requiring activities to be