HomeMy WebLinkAboutBackground ReportBACKGROUND REPORT
As you will recall, Council had taken up the issue of potentially amending the
City's informal policy of prohibiting the sale of beer or malt beverages in less than
six-pack quantities, established some time after 1990. The City Attorney's Office
had suggested that the best course of action would be for the Council to adopt a
formal written policy in order to provide clear notice to the public of the policy and
to give guidance to the Planning Commission. Before deciding the matter, the
Council requested that the Planning Commission provide their input.
The Commission stated that they did not support the sale of beer in less than six-
pack quantities, particularly for businesses in close proximity to schools. They
also stated that the City needs to strengthen and formalize the existing informal
policy, providing a written standard for businesses selling alcohol for off -site
consumption. A representative for the Institute for Public Strategies (IPS) spoke
in support of the City strengthening their position on prohibiting the sales of beer
in less than six packs. They also stated that IPS had conducted a review of the
47 off -sale establishments in the City, and found that several businesses were in
violation of their Conditional Use Permits by selling less than six-pack quantities,
specifically prohibited by their Conditions of Approval.
At the City Council meeting of March 1, 2011, Council discussed allowing the
sale of beer in manufacturers' pre -packaged quantities of three 24-oz beer cans.
The Council discussed the prevalent issues with over -consumption of alcohol,
particularly among the homeless population; however, it was distinguished that
this issue was with large quantity malt liquor beverages rather than standard beer
products. There was acknowledgement from the Police Department that
homeless persons were unlikely to purchase multi -packs due to lack of cold
storage and due to a preference for high volume beverages (e.g., 32-oz, 40-oz,
etc). Council referred the matter back to staff in order to prepare formal and
informal language allowing the three -packs, as well as the pros and cons of such
language.
Pros of allowing sales of 3-packs of 24 oz cans
There are instances throughout local outlets where three -packs of beer are
already available. Many existing off -sale outlets (e.g., markets, liquor stores) are
non -conforming and do not have Conditional Use Permits. In these cases, there
is generally no regulation on the quantities of alcohol products that can be sold.
Although there have been some observed informal three -packs (not pre-
packaged by the manufacturer), most are of normally -distributed packaging
styles.
With regard to volume, although a 24-oz can is double the normal 12-oz can
volume, the overall volume of the three -pack would be the same as a standard
six-pack (72-oz). Therefore, there would be no change in quantity available. In
addition, allowing existing businesses with CUPs containing the no less than six-
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pack condition to sell the three -packs, would allow said businesses to compete
on par with their non -CUP competitors. This has been a point of contention with
newer businesses when obtaining CUPs.
Cons of allowing sales of 3-packs of 24 oz cans
Conversely, allowing newer businesses (especially larger or chain stores) to
compete with older non -conforming outlets could potentially lead to smaller
businesses being unable to contend with the typically lower prices of larger
stores. However, this would only pertain to the three -packs, not other items
prohibited by CUPs. There is also still a potential for over consumption in cases
where a group of homeless persons might share a three -pack although, again,
the preference is for larger single quantities (and for malt liquor rather than beer).
If the Council approves the sale of three -packs of 24-oz cans of beer, it was
intended to be applicable to all existing outlets with CUPs restricting such sales,
and also to new CUP applications. The amended condition would be considered
a de facto amendment by the Council to allow a more liberal application of the
previous condition.
As of the writing of this report, there are 96 retail alcohol outlets in the City. Of
these, 46 are off -sale outlets, 20 of which have a Conditional Use Permit. In
researching Conditions of Approval for these off -sale CUPs, 14 have a specific
condition restricting sales of beer to no less than six-pack quantities.
As part of this research, staff contacted ABC (Alcoholic Beverage Control) in
order to determine the effect on existing licensed outlets should the new
conditions be applied retroactively as proposed. Although no CUP modification
may be necessary with the City, ABC would require that the licensee request a
condition modification. This process would require a fee and would take two to
four months to process. ABC has stated that they cannot initiate a blanket
change of all licenses that would be affected by the City's change of policy.
In addition to discussion regarding three -packs of beer, the Council also
discussed wine coolers and other alcohol products. Although no direction was
given to address any other issues, staff is of the opinion that if a formal policy
direction is adopted, that all Conditions of Approval be included to provide clarity
to the process of permitting alcohol sales uses in the future. To this end, a list of
typical alcohol Conditions of Approval has been attached for your review
attachment no. 3). These conditions are generally included with all new CUPs for
alcohol, but have been amended to include the three -pack language (No. 2).
In researching the conditions, it was noticed that the standard condition relating
to the sale of "wine coolers" was not necessarily up to date. Wine coolers were
typically grouped with other wine products in the past; however, most "wine
coolers" do not contain wine at all, but rather are a form of malt beverage. These
beverages (e.g., Mike's Hard Lemonade', Smirnoff Ice', etc) are generally
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labeled as `premium malt beverages' or `flavored malt coolers', as well as
sometimes being referred to as 'wine coolers'. In an effort to modernize the
existing condition, an amended version (No. 4) is included with attachment no. 3.
Formal vs. informal Council policy
The Council may adopt a formal or informal policy regarding standard Conditions
of Approval for on and off -sale alcohol Conditional Use Permits. In the case of an
informal policy, staff would continue to apply the standard conditions to CUPs for
alcohol sales, as before, on a case by case basis. Changes to the conditions
could occur at various levels of review. A formal City Council policy sets forth the
City Council's policy on alcohol permits, and only the Council would have the
authority to change or waive any of the conditions. This is the primary difference
between the informal and formal — who can change or waive a condition. An
informal policy, which consists of the Conditions themselves and their
applicability, is included with this report as attachment no. 4.
An existing Council Policy (policy number 707) pertains to the alcohol license
review process with regard to the Department of Alcoholic Beverage Control
(ABC). As a Council Policy on the review of alcohol permits currently exists,
incorporation of a formal policy regarding the standards for Conditional Use
Permits into the same policy is most logical. Accordingly, a revised Council Policy
Number 707 is attached, which incorporates the formal policy discussed above.
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