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06 ATTACHMENT 5
City of Pleasanton
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06 ATTACHMENT 5
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CITY CLERK
CITY CLERK - TYPE
AGENDA REPORT
DOCUMENT DATE
9/20/2016
DESTRUCT DATE
15Y
DOCUMENT NO
06
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\CITY CLERK\AGENDA PACKETS\2016\092016
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Mr. Jonathan Lowell, City Attorney <br />12/31/2012 <br />Page 2 <br />Masons' "in -house caterer," but a separate business with its own paid staff. Further, <br />neither the catering business nor the banquet and party facility business can properly be <br />considered an incidental use related to the Mason's primary fraternal organization <br />activities. Because of these misrepresentations to the City, because the uses are not <br />allowable uses under the zoning ordinance, and because the City failed to follow proper <br />procedures in approving the businesses, and in doing so violated my clients' due <br />process rights, my clients request that the City issue a cease and desist order against <br />the Masons continuing the illegal businesses at this site. If the Masons want to use this <br />residentially -zoned site, they must comply with the zoning ordinance's requirements. If <br />they wish to conduct a commercial operation, they should do so on an appropriately - <br />zoned site. <br />The "Use Variance" for the Catering Business was Improper. <br />In seeking a "use variance" for the catering business, the Masons made several <br />misrepresentations. Just in themselves, these misrepresentations justify revoking any <br />approval that may have been granted. Beyond that, the improper procedures used and <br />the changed circumstances since the approval require the City to revoke the improperly <br />granted permission for these businesses to operate in a residential zone. <br />The first misrepresentation was that the catering business was associated with <br />the Masons themselves. This was and is untrue. The catering business rents out the <br />building used by the Masons. However, it is not an "in- house" business. It is an <br />independent business entity with its own business license. Further, it is not even <br />directly associated with the Masons themselves. Instead, it leases its space from the <br />owner of the lot and building, which is not the Masons but a separate, although totally <br />controlled, holding company, Pleasanton Masonic Center. As reported on both the <br />Masons' and the holding company's tax returns, the Masons themselves rent the <br />building from the holding company. Contrary to the representations in their 2005 letter, <br />the Masons do not even appear to receive the revenue from the catering business. The <br />Masons' Form 990 Federal tax returns for the past few years show no revenue from the <br />catering business. Instead, that revenue shows up as rental income on the holding <br />company's 2005, 2006, and 2009 tax returns. (The holding company did not file tax <br />returns for 2007, 2008, 2010, or 2011.) <br />The second misrepresentation is that the catering business amounts to an <br />incidental activity of the Masons, and therefore qualifies to operate under the Mason's <br />conditional use permit. The Masons are currently qualified as a 501(c)(10) tax - exempt <br />fratemal beneficial society, although they are actually not incorporated. However, the <br />catering business is associated not with the Masons, but with the holding company. <br />The holding company was incorporated as a tax - exempt 501(c)(2) holding company, but <br />it lost its tax - exempt status in 2010 and at this point its status as a qualified nonprofit <br />corporation has been suspended by the State of California. Having lost both its tax <br />exemption and its status as a nonprofit corporation, the holding company should not be <br />involved in operating businesses in a residentially -zoned area'. <br />Additionally, the "use variance" for these businesses was improperly granted by <br />the City. The Masons hold a properly- granted use permit, dating back to 1977. That <br />use permit, when issued, had attached to it required findings, including that the use, "will <br />not be detrimental to the public health, safety or welfare, or materially injurious to the <br />properties or improvements in the vicinity. "3 (PMC §18.124.070(B).) The municipal <br />2 Indeed, as a 501(c)(2) property holding company, the Pleasanton Masonic Center should not be <br />involved in Ely active use of the property. <br />J It should be noted that the staff report for the 1977use permit application explicitly noted the risk of <br />impacts on adjoining properties and placed conditions on the use permit requiring activities to be <br />
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