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A "Cash for Gold" operation, with advertising flags and temporary signage, is seen in San Pablo on April 2, 2013.

SAN PABLO -- The city on Monday softened its hard line against "cash-for-gold" businesses in response to growing outcry from business and property owners who said they had been unfairly singled out and shut down when the city imposed a moratorium on their permits in April.

The council voted 4-0 Monday to extend the moratorium on new cash-for-gold businesses with the added provision that the four previously operating businesses could reopen and their permit applications would be unfrozen.

"I'm thankful the city has reconsidered its position," said Dennis Hill, a local property owner and developer who counts cash-for-gold businesses as his tenants. "I'm glad four businesses can resume operations and have their permits heard fairly."

Monday's vote is the latest chapter in the city's ongoing struggle with the proliferation of cash-for-gold shops, which give people cash in exchange for gold in any form before melting it down and reselling it. Gold prices have hovered near historic highs per ounce in recent years.

By early 2013, 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.

Police Chief Walt Schuld and City Manager Matt Rodriguez have said they were concerned that the businesses were linked to a rise in burglaries and other thefts in the city because thieves knew they could get quick cash for jewelry and other trinkets. Concerned with the rise in burglaries and robberies, the City Council passed a 45-day moratorium April 1.


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But four shops remained, some of them having been jewelers in the city for decades who expanded their work to cash-for-gold services when the economy hit a rough patch in recent years. The merchants banded together to address the council and write letters to city staff urging them not to put them out of business.

On Monday, the normally staid council chamber was packed with public speakers who pleaded with the city to allow them to go back to work. Several speakers said they had lost their jobs because of the city's moratorium, which not only precluded new businesses but froze permits and mandated the closure of existing businesses.

City staff asked the council for an extension of the moratorium until April 2014 to allow additional time for new guidelines to be developed but included a policy option that would allow the four businesses to obtain use permits through the Planning Commission and reopen.

Rodriguez said the four businesses have "acted in good faith" and agreed to work closely with the police department to ensure they are not trafficking in stolen wares.

"In the end, a few manageable cash-for-gold operators will exist to operate their businesses without disruption after they obtain proper use permits," Rodriguez wrote in an email Tuesday. " ... This sends a message that the city supports local business owners who operate their gold establishments cooperatively and responsibly in conjunction with our police department."

Rodriguez's position softened since last month, when he told local business owners they must "cease conducting transactions related to their 'cash-for-gold' trade" to comply with the city's moratorium.

Gallegos said the moratorium extension will give the city until next April to craft and approve new regulations under the city's new zoning code update for "compatibility with the new General Plan adopted in 2011."

Contact Robert Rogers at 510-262-2726 or rrogers@bayareanewsgroup.com and follow Twitter.com/roberthrogers.