San Jose council to decide on extended moratorium for new bail bonds shops September, September 14, 2009 By Tracy Seipel, San Jose Mercury News A continuing controversy over how to regulate where and when bail bonds shops can operate in San Jose has divided the City Council. But a proposal to extend a temporary moratorium on new bonds offices may have a better chance of passing now that its author has added a key amendment that — for now — satisfies both neighbors and bail bonds firms. Councilman Sam Liccardo, whose downtown district includes the bulk of the city's bail bonds outfits, is seeking to extend a 30-day moratorium the council approved in August to 22 months and 15 days — the maximum allowed under state law. The Planning Department wants the extra time so staffers can sound out all sides, including Santa Clara County officials, bail bonds businesses and residents, and devise new zoning rules for bail bonds companies. The council will vote on the matter Tuesday. Liccardo also is recommending that existing bail bonds businesses, particularly 18 that are located in residential neighborhoods in violation of city code, be allowed to relocate during the moratorium as long as they move to areas where current code allows them to operate. That had been a sticking point with several bail bonds companies. They feared that if the moratorium extension was passed, they would be prohibited from moving until the city decided where bail bonds businesses could be established. In some cases, it meant they would have no recourse if their landlords raised their rents in the interim. "If we had a really 100 percent moratorium, they would not be allowed to move. They would just close," Liccardo said. Dustin Derollo, a lobbyist for the city's largest bond firm, Bad Boys Bail Bonds, said his client is "comfortable" with the amendment to protect existing businesses during a moratorium. He said he and Bad Boys look forward to taking "part in a process that comes up with a policy that protects everyone's interests." Whatever the decision Tuesday, the battle between bail bonds companies and neighbors located only blocks away from the Santa Clara County Jail and courthouse will continue. That's because residents — especially those who live in the midst of at least 20 bail bonds firms along North First Street between Jackson Street and Interstate 880 — say they're fed up with the noise, loitering and activity they claim surrounds some of the bond establishments, especially after midnight. Bonds shops dispute that, but neighbors want the businesses, some of which have been operating 24/7 for years, to comply with city permitting codes that don't allow bail bonds businesses to stay open all night. Until now, those bail bonds operators have largely been able to ignore city code. When there weren't as many outfits, city code enforcement director Jamie Matthews said there were few — if any — problems with the neighbors. But he said the growing number of bail bonds firms, particularly around the North First Street corridor, has led to complaints. Liccardo acknowledges that he and some of his relatives own property in that area. According to state law, he would have to recuse himself if his property were located within 500 feet of a bail bonds office. But City Attorney Rick Doyle has confirmed the family's properties are outside that boundary and that there is no conflict of interest. If the recommendation passes Tuesday, San Jose Planning Director Joe Horwedel said the city will allow the current businesses to continue operating during the moratorium, even after midnight, as long as their customers are not creating problems. If the proposed ordinance does not pass, he said, the city's code enforcement department will immediately begin cracking down on the businesses based on neighbor complaints. Liccardo said simply enforcing the law as it stands would deprive the city of an opportunity to "take a break and look at how we can best balance the interests of the neighborhoods and those of the business community." Antonina Ettare, president of the Hyde Park Neighborhood Association, said she is satisfied with the proposed moratorium, even though a final decision may be almost two years away. "I know there is a process to fix the problems, and I'm OK with that," she said. "I just want a mixture of businesses in my neighborhood, and I don't want these businesses encroaching." But getting enough votes to pass the proposal may be tough. Unlike most other council issues that require only a majority of six votes to pass, Liccardo needs four-fifths of the council — or nine votes — because the proposal involves a temporary moratorium. The recommendation in favor of the moratorium has been signed by Mayor Chuck Reed and Councilwomen Madison Nguyen and Nancy Pyle. At least three council members — Pete Constant, Nora Campos and Ash Kalra — have been strongly opposed to a moratorium, saying it would impact operations at the Santa Clara County Jail. But Campos and Kalra may now be leaning toward the idea because of the amendment. "The key to a long-term solution is finding the right balance between the needs of the bail bonds businesses and the residents in the surrounding neighborhoods," Campos said in a statement Friday. "Tuesday's action will simply be the first step towards bridging the divide." Kalra said he'd sleep on the matter over the weekend but that the memo "takes a good step toward" addressing bondsmen's fears of being held hostage to their landlords. Constant, though, hasn't been swayed. "I'm glad he is amending the proposal — he's addressing an area that was a significant shortfall in the policy," Constant said. But, he added, "I don't believe a moratorium is the right approach. It really isn't getting to the heart of the issue we have now, which is how our zoning code is classified for bail bonds" operators. Constant, a former police officer, also noted that the North First Street area where many bond shops operate is close to the district attorney's office, the main jail and the public defender's office. "It's an area where you would expect to have those types of businesses." Reed disagreed with that notion, saying bail bonds shops shouldn't be located in residential neighborhoods. "There are lots of commercial spaces within five or 10 minutes from the main jail where they could be located," he said. Contact Tracy Seipel at 408-275-0140.