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City clarifying pawn store regulations

Yorkton Council began the process to amend the City’s Bylaw to make it more friendly for pawn brokers and the sale of second hand goods.

Yorkton Council began the process to amend the City’s Bylaw to make it more friendly for pawn brokers and the sale of second hand goods.

Council unanimously passed a motion giving First Reading consent to establish land use regulations for pawn brokers and removing restrictions for the sale of second hand goods under the definition of a Retail Store.

Administration was also authorized to proceed with the Public Notice process.

The need to update the bylaw became evident when a local entrepreneur approached the City in January 2016 with the prospect of starting a new pawn brokerage.

“City staff reviewed the proposed business for compliance with City Bylaws – there are special requirements under Business License Bylaw and the applicant was advised accordingly. The applicant subsequently sought out properties for the business and entered into a tentative lease agreement at 50 Broadway St West,” detailed a report circulated to the regular meeting of Yorkton Council Monday.

“During the review, however, the Director of Planning, Building & Development failed to recognize that a pawn broker/shop is a prohibited use under Zoning Bylaw. This essentially means that existing pawn brokers may operate as legally non-conforming uses, but new pawn brokers cannot be allowed,” Michael Eger Director of Planning, Building & Development with the City told Council.

“This discovery jeopardizes the applicant’s ability to start the business at all, let alone within the timelines established in her agreement. In order for staff to issue the necessary permit and license, an amendment to the Zoning Bylaw would firstly be required. This process cannot be guaranteed to the applicant as a bylaw amendment is subject to Council’s review and approval.”

Under direction from Planning Services, the applicant has submitted an application to amend the Zoning Bylaw. Should the Bylaw be given 1st Reading, Planning Services will recommend consideration of a Discretionary Use application for a pawn broker at 50 Broadway Street West. If the Bylaw amendment does not proceed, the Discretionary Use application will be cancelled, detailed the Report.

At the same time, Planning Services would like to address a long-standing issue regarding the sale of second hand goods from retail stores. The Zoning Bylaw currently prohibits developments that offer second hand goods for resale. To get around this issue, recent applications for businesses such as Value Village have been approved as Retail Stores, as new products are sold in addition to selling second hand goods, said Eger.

“Other retail stores offering second hand goods have also cropped up, and demand for second hand goods seems to be growing,” he added.

As background to Council the report detailed; “Pawn brokers offer secured lending, whereby individuals provide personal goods as collateral on funds borrowed from the broker. If the individual pays back his/her debt as per the established terms, the goods are returned by the broker to the individual. If the debt is not repaid as required, the broker can sell the goods to recover their loss. If a person defaults on the terms of the loan, their credit score remains unaffected. Additionally, pawn brokers will often retail second hand goods to ensure an adequate and diverse inventory of goods.

“Because the goods used to secure the loan are not easily tracked, and because there is no effect on an individual’s credit score by defaulting on their loan terms, there is risk and temptation for borrowers to use stolen goods as collateral, with no intention to pay off the debt as required. To mitigate this problem, Pawn Brokers are specially-regulated and work closely with RCMP to monitor inventories.

“Due in part to their affiliation with stolen goods and, in part to the socio-economic nature of those individuals who seek out this form of non-conventional lending, pawn brokers have not been seen as an ideal commercial land use. As a result, they have been directed by zoning regulations to secondary commercial and industrial areas of many cities. Specifically, those municipalities typically allow pawn brokers as Permitted Uses in Industrial zoning districts, and as Discretionary Uses in Commercial zones. The proposed amendment, as well as the City’s draft Zoning Bylaw (which was initially produced before this circumstance brought specific attention to pawn brokers) will consider them in a similar fashion.”

Eger said it is unclear why the gap in the bylaw now exists.

“Current staff are not aware if the City intentionally prohibited new pawn brokers when the Zoning Bylaw was adopted in 2003, or if it was an oversight. Regardless, the negative perception of pawn brokers that has existed may be changing and it is likely time to reconsider this matter. Second hand goods have become more sought-after by consumers and TV shows such as “Pawn Stars” have helped to popularize the pawn trade,” he said.

In this regard, and in consideration of the Director’s error leading to the applicant’s tenuous lease situation, Administration is of the opinion that amendments should be considered to the current Zoning Bylaw, rather than waiting for adoption of the draft Zoning Bylaw, he added.

As such, Planning Services is prepared to support amendments to the Zoning Bylaw to allow for pawn brokers as a Discretionary (Council-approved) Use in C-1 City Centre Commercial, C-2 Arterial Commercial, CMI-1 Commercial-Industrial (Transitional) zones, and as a Permitted Use in MI-1 Light Industrial and MI-2 Heavy Industrial zones.

“The approval of a new pawn broker would also be subject to their separation of 175 metres from existing pawn brokers, public education facilities and (commercial) daycare centres,” added Eger.

As for second hand stores “The current definition of Retail Stores specifically states that this use class does not include the sale of second hand goods. However, the Bylaw does not otherwise define them or allow for this activity. Again, current staff are unsure if this was done intentionally, or if it was an oversight when the Zoning Bylaw was adopted,” said Eger.

“While negative perception may have once existed over second hand stores, their inventories are in demand by modern consumers as they offer unique fashion options and vintage collector items at affordable prices. Because of their similarity to, and often coexistence with, the retail sale of new goods, Planning Services is of the opinion that the Retail Store definition should be revised by removing text that prohibits the sale of second hand goods. Future second hand stores could then be treated the same as retail stores, as has been the practice in recent years.”

Planning Services will now initiate the public notice process including advertisement in the local newspaper, at City Hall and on the City website.

The application will also be referred to the Planning and Infrastructure Commission before it is brought back to Council, for their review and decision in conjunction with the Public Hearing.

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