(1) Introduce and adopt Urgency Ordinance No. 273 establishing a forty-five (45) day interim moratorium on the establishment or expansion of beauty establishments within the City of Canyon Lake; (2) direct the City Manager to provide a status report on the research and drafting of permanent regulations at the next regular meeting of the City Council; and (3) direct the City Clerk to place an extension of the moratorium on the agenda for the next regular meeting of the City Council.

This Addendum supplements the Staff Report dated March 11, 2026 and is prepared in connection with the Special Meeting of the City Council called for March 17, 2026 to consider an Urgency Ordinance establishing a moratorium on Beauty Establishments.

At the regular City Council meeting held on March 11, 2026, four (4) members of the City Council were present. Councilmember Dale Welty was excused absent due to illness. At the meeting, Councilmember Welty transmitted written correspondence to the City Council indicating his support for adoption of the proposed moratorium ordinance.

As noted in the original Staff Report, adoption of an urgency ordinance pursuant to Government Code section 65858 requires an affirmative vote of at least four-fifths (4/5) of the City Council, in this case, a minimum of four (4) affirmative votes. Following discussion, the City Council considered a motion to introduce and adopt the Urgency Ordinance with amendments made at the meeting. The motion received three (3) affirmative votes, from Councilmember Terry, Mayor Pro Tem Castillo, and Mayor Smith, and one (1) negative vote from Councilmember Steeber. Because the motion did not receive the required four (4) affirmative votes, the ordinance was not adopted at the March 11, 2026 meeting.

During the course of discussion, the City Council raised significant questions regarding the potential effect of the proposed moratorium on currently operating beauty establishments, in particular, whether the ordinance as originally drafted would prohibit existing businesses from adding stylists, service stations, chairs, or booths within their current physical footprint without expanding into additional floor area. Members of the public and business community present at the meeting expressed similar concerns. The amended version of the ordinance attached to this Addendum addresses the rights of existing beauty establishments to continue and reasonably operate their businesses during the moratorium period, without impeding the City's stated objective of studying and regulating the establishment of new beauty establishments and the physical expansion of existing ones.

Following the March 11, 2026 meeting, the City Council called a Special Meeting for Tuesday, March 17, 2026 to consider the amended ordinance.

A summary of the amendments includes:

 

1.  Addressing Relocation: The amended ordinance provides that a relocating beauty establishment may move to an equal or modestly larger space (up to 10% larger) and remain exempt from the moratorium, provided it does not leave behind an operational vacancy that another beauty establishment can immediately occupy. Relocations to spaces more than 10% larger than the original premises are treated as expansions and are prohibited during the moratorium period.

 

2.  Explicit Exemptions for Existing Businesses: An existing beauty establishment, such as a hair salon that wishes to add stylists, chairs, or stations may do so freely during the moratorium period, as long as it does so within its existing physical footprint and without expanding into additional floor area. The moratorium, as amended, is focused on preventing the physical growth and proliferation of beauty establishments in the City's commercial areas, not on regulating the day-to-day operational decisions of businesses already lawfully operating within their permitted premises.
 

A few common factual scenarios are addressed below to illustrate the operation of the amended moratorium:

Scenario 1: New Nail Salon Seeks to Open in a Vacant Storefront

Facts: A new business owner executes a lease for a vacant retail suite in Canyon Lake Towne Center that was most recently occupied by a clothing boutique. The owner intends to open a nail salon.

Result: PROHIBITED. The opening of a new beauty establishment at a premises not previously operating as a beauty establishment constitutes “establishment” under Section 3(B). No permit, zoning clearance, or business license authorizing the new nail salon may be issued during the moratorium period. The City may not accept a complete application for such a use.

Scenario 2: Existing Hair Salon Wants to Add Three Styling Chairs

Facts: A hair salon currently operating in a 900-square-foot suite wishes to add three additional styling chairs within its existing space. No construction or floor area changes are involved.

Result: PERMITTED. Under Section 5(E)(4), an increase in the number of service stations, chairs, or similar functional units of service capacity is expressly not prohibited by the moratorium, provided the gross floor area of the premises does not increase.

Scenario 3: Existing Hair Salon Wants to Absorb Adjacent Vacant Suite

Facts: A hair salon operating in a 600-square-foot suite wishes to remove the dividing wall and incorporate an adjacent 300-square-foot vacant suite, increasing its total floor area to 900 square feet.

Result: PROHIBITED. Any increase in the gross floor area of a premises devoted to beauty establishment services constitutes “expansion” under Section 3(C)(1), regardless of whether the additional space was vacant. No permit authorizing the expansion may be processed or issued during the moratorium period.

Scenario 4: Existing Nail Salon Wants to Begin Offering Eyelash Extension Services

Facts: A nail salon currently offering only manicure and pedicure services wishes to begin offering eyelash extension services. The owner plans to dedicate one existing station to the new service type without any construction or floor area change.

Result: PERMITTED. Under Section 5(E)(5), the addition of one or more categories of beauty establishment services not previously offered at the premises is expressly not prohibited by the moratorium, provided no floor area increase is involved. The nail salon may add eyelash extension services within its existing footprint.

Scenario 5: Existing Hair Salon Relocates to a Larger Suite

Facts: A hair salon currently operating in a 700-square-foot suite wishes to relocate to a 900-square-foot suite elsewhere in Canyon Lake Towne Center. The new suite represents approximately 129% of the current floor area devoted to beauty services.

Result: PROHIBITED. Under Section 3(C)(2), the relocation of a beauty establishment to a premises where the gross floor area devoted to beauty services exceeds 110% of the floor area at the original premises constitutes “expansion.” Because 900 square feet exceeds 110% of 700 square feet (which would be 770 square feet), the proposed relocation is a prohibited expansion. The City may not issue permits authorizing the relocation.

Scenario 6: Existing Hair Salon Relocates to a Comparable Suite and Closes Original Location

Facts: A hair salon currently operating in a 700-square-foot suite wishes to relocate to a 750-square-foot suite in a different part of the Canyon Lake Towne Center. The operator will vacate and permanently close the original location upon opening in the new space. The new suite represents approximately 107% of the current floor area.

Result: PERMITTED. Under Section 5(D), this relocation qualifies for the exemption because (1) 750 square feet does not exceed 110% of 700 square feet (which would be 770 square feet), and (2) the operator permanently ceases all operations at the original premises on or before commencing operations at the new premises. The City may process permits for the relocation. Note, however, that no new beauty establishment may subsequently open in the vacated original suite during the moratorium period.

Scenario 7: Change of Ownership of an Existing Hair Salon

Facts: The owner of a hair salon in the Canyon Lake Towne Center decides to sell the business to a new operator. The new operator intends to continue operating a hair salon in the same premises, with no floor area changes.

Result: PERMITTED. Under Section 5(E)(3), a change in ownership, tenancy, or operation of an existing beauty establishment is not prohibited by the moratorium, provided the gross square footage of the premises devoted to beauty establishment services remains the same. A straightforward change of ownership, standing alone, is not regulated by the moratorium.