SAN PABLO -- The city passed a moratorium on new "cash-for-gold" businesses earlier this month, but it has no intention of stopping there. City leaders are also trying to eliminate existing cash-for-gold shops by denying them required permits, a stance that has drawn outcry from members of the business community.
"The city manager and staff continue to refer to these legitimate businesses as 'pawn brokers,' which in my feeling is a loaded term with connotations of 'Louie The Leg Breaker,'" wrote Dennis Hill, a local property owner and developer, in an email last week. "That is not the case at all ... The sale (of gold) to one of these businesses has nothing to do with pawning."
Earlier this year, at least nine cash-for-gold type businesses were operating in the 2.5-square-mile city, said city planner Tina Gallegos. Since then, one closed and four others told city officials they would cease accepting gold for cash.
Hill, who is joined by the remaining merchants, says the city has unfairly cracked down on legitimate businesses, which have popped up around the region as gold prices, before a recent dip, hovered around historic highs.
City Manager Matt Rodriguez disagrees, saying that cash-for-gold businesses will not be granted permits during the moratorium and that those already in operation are violating the law.
"... businesses which had pre-existing operations independent of their 'cash-for-gold' trade (ie. jewelry retail stores) need only cease conducting transactions related to their 'cash-for-gold' trade," Rodriguez wrote in an April 15 letter to Hill. "Furthermore ... those recent businesses which are exclusively 'cash-for-gold' operations must also cease unlawful operations."
Concerned about a rise in burglaries and robberies, the City Council passed a 45-day moratorium April 1 on issuing any new permits for businesses that give customers cash in exchange for gold jewelry and other valuables. Since then, merchants have banded together to address the council and urge them not to put them out of business.
But the City Council has given no indication that it will soften its stance.
Rodriguez said the council will consider extending the moratorium May 6 "while staff continues to develop a new regulating ordinance."
"There will be an opportunity for all affected property owners and business owners to address their concerns and provide testimony" at the May 6 meeting, Rodriguez said.
Business owners say they will be forced into nearby cities that have no restrictions on cash-for-gold exchanges or simply may be put out of business.
City staff issued a report to the council in April concluding the high concentration of cash-for-gold businesses, which often advertise with sign wavers on the sidewalks, contributed to "visual clutter" in the city and may be a factor in the recent rise in burglaries and robberies.
San Pablo police Chief Walt Schuld said the businesses are convenient for thieves because their bounty can be melted down and made untraceable in exchange for quick cash, and he noted that none of the current operators are complying with his department's request that they provide regular reports of receipts and payouts.
"The evidence is pretty compelling" that the proliferation of cash-for-gold shops correlates with rising jewelry thefts, Schuld said.
Hill said one of his tenants has been operating a cash-for-gold operation for a decade without incident until the city began slapping him with permit and regulation requirements.
"Then staff gets the council to adopt an 'emergency' moratorium, which makes his business illegal overnight, and the city expects him to stop doing business until a new ordinance is written in 2014," Hill said. "Does not seem fair."