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Notice of the determination of the director of community development shall be provided to the Planning Commission, and any appeal of the decision shall be referred to the Planning Commission in accordance with the provisions of Chapter 18.44 of the PMC. In cases where an exception to the active ground floor use requirement is granted, the provisions of Chapter 18.120 of the PMC with respect to non-conforming uses shall not apply, and a new tenant shall be required to conform to the Active Ground Floor Use Overlay, unless another exception is granted by the director of community development based on the above criteria." Modifications to Draft Policies During DSP Review Process Although the policies related to the AGFUO cited above are the adopted versions, the policies were reviewed and revised throughout the DSP update process. There was considerable discussion among the Task Force and other stakeholders on the pros and cons of these policies, which ultimately sought to strike a balance between preserving ground floor spaces along Main Street for active uses, while providing some limited exceptions intended to avoid undue hardship to property owners. These included exceptions for tenant spaces subject to an extended vacancy of these spaces; to accommodate unique situations (such as multi-tenant or multi-uses within a single building or space); and to account for some specific challenges for certain Main Street properties, such as leasing purpose-built bank buildings for other uses. Attachment 2 to this report summarizes the comments and revisions related to AGFUO policies from the DSP Task Force, City Council, Commissions and Committees, and the public. DISCUSSION Although the City Council's request to discuss the active ground floor use policy was based on a requested exception for a mixed-occupancy use, this meeting provides an opportunity for discussion of all aspects of the active ground floor use policy. Exception for Spaces Containing Multiple (Active and Non-Active) Uses As previously noted, the Planning Commission recently deliberated on an appeal of the Director of Community Development's denial of an exception to the active ground floor use requirement. The Planning Commission meeting agenda report, public comments, and excerpted minutes are included as Attachments 3, 4 and 5, respectively. Planning Commission Discussion and Comments Subsequent to the Director of Community Development's determination regarding the exception and related appeal, the appellant had modified her business plan to meet the "25 percent" requirement identified in DSP Policy LU-P.18. However, although the revised business plan and updated floor plan were determined to meet the literal requirements of the policy, the Planning Commission had an extensive discussion regarding whether the policy as written would ensure the broader intent of the active ground floor use policy and DSP would be met. 4