HomeMy WebLinkAboutAttch 2 League of CA CitiesLIQUOR QUO!R STORES, BARS &
NIGHTCLUBS:
Conditional Use Permits and Best Practices for
Regulating Alcohol Sales
League of California Cities Annual Conference
September 22, 2011
Prepared By
meyers nave
Attorneys Steve Mattas and Jason Rosenberg
Introduction
Alcohol sales at liquor stores, bars and nightclubs create social and economic challenges
for California's communities. Neighborhoods where bars, restaurants, liquor stores and retail
outlets that sell alcohol are close together or concentrated suffer more frequent incidences of
violence, social dislocation, medical emergencies and property crimes.1 However, direct
regulation of alcohol outlets by local governments is limited by California's existing regulatory
framework.
Upon the ratification of the Twenty -First Amendment, states became empowered to
regulate alcohol sales, consumption, production and transportation. California gave exclusive
jurisdiction to the state over manufacture, sale, purchase, possession and transportation of
alcoholic beverages. In California, this regulatory authority is vested in the Department of
Alcoholic Beverage Control ("Department"), which has the dual responsibility for both the
issuance of liquor licenses and the regulation of existing licensees. The Department issues two
broad categories of alcohol licenses. On -sale licenses are issued for businesses that sell alcohol
for consumption on the premises, such as bars and restaurants. Off -sale licenses are issued for
businesses that sell alcohol for consumption off the site, such as grocery stores, liquor stores, and
corner markets. Additionally, one -day licenses are issued for the sale of alcohol at special
events.
Because local authority to regulate alcohol sales and related activity is largely preempted
by the Department, the challenge that cities face is how to properly regulate the ancillary aspects
of alcohol sales without regulating in areas of exclusive state authority. Cities' land use and
povvcrs function as the effective tools in exercising local control ever alcchcl sakes and its
secondary effects.2
1 Pacific Institute for Research and Evaluation. Accessed online at
http:llresources.prev.orgldocuments/AlcoholViolenceGruenewald.pdf (visited July 25, 2011).
2 Special Thanks to Stacy L. Saetta of Monterey County Counsel's Office for her advice and recommendations
concerning best practices for comprehensive ordinance adoption.
IL State Regulation of Alcohol Sales
Limited Local Authority and State Preemption
In 1955, the California Constitution was amended to establish a uniform framework for
licensing alcoholic beverage sales throughout the state. The Constitution provides that "[t]he
State of California... shall have the exclusive right and power to license and regulate the
manufacture, sale, purchase, possession and transportation of alcoholic beverages within the
State.s3 The sale of alcohol is also regulated by the Alcoholic Beverage Control Act (Bus. &
Prof. Code §§ 23000-25762). Accordingly, the Department was established to oversee the
licensing process and it was given both the power to issue and revoke liquor licenses.4 The
Department has specific criteria upon which it is permitted to issue and revoke Iicenses, and
cities' ability to participate in the Department's license regulation is limited. Nevertheless, cities
may participate in the Department's licensing in a limited fashion, but also impose regulations
pursuant to valid police power and/or land use authority. Local government regulation beyond
those areas that have been specifically authorized by state law is preempted.
State License Issuance
Article XX, §22, of the California Constitution grants the Department the exclusive
power to license the sale of alcoholic beverages in California. Section 22 grants the Department
the power, in its di 'rotiori to deny) suspendor revokeany specialcoholic
beverage license if it shall determine for good cause that the granting or
continuance of such license would be contrary to public welfare or morals, or that
a person seeking or holding a license has violated any law prohibiting conduct
3 Cal. Const., art XX k22.
4 Stroh v. Midway Restaurant, (1986) 180 Cal. App. 3d 1040, 1047.
involving moral turpitude. It shall be unlawful for any person other than a licensee
of said department to manufacture, import or sell alcoholic beverages in this State.
[Emphasis added.]
The Legislature gave the Department the responsibility to "ensure a strict, honest,
impartial, and uniform administration and enforcement of the liquor laws throughout the State."5
In delegating regulatory authority to the Department, the Legislature also provided guidance for
overseeing the licensing process. When issuing licenses, the Department may only grant a
license if it determines that the license will not be contrary to the `public welfare or morals."
Additionally, the Department is authorized to refuse issuing any retail license for premises
located within the immediate vicinity of churches and hospitals.° The Department is also
specifically authorized to refuse to issue a license for any premises located within 600 feet of
"schools and public playgrounds or nonprofit youth facilities, including, but not limited to,
facilities serving Girl Scouts, Boy Scouts, or Campfire Girls."7 However, this legislative
authorization gives the Department the authority, but not the mandate to issue licenses.
Therefore, the determination of whether an applicant is within the "immediate vicinity" of a
church or hospital lies within the discretion of the Department.
No `Undue Concentration"
State law, however, directs the Department to deny a license if, "issuance of that license
would tend to create a law enforcement problem, or if issuance would result in or add to an
undue concentration of licenses, except as provided in Section 23958.4.8 "Undue concentration"
is a key standard in evaluating state and local responsibilities in controlling the adverse
consequences of alcohol sales. An "undue concentration" exists when an "applicant's premises
are located in a crime reporting district that has a 20 percent or greater number of Reported
Crimes...than the average number of reported crimes as determined from all the crime Reporting
S Bus. & Prof. Code § 23049.
6 Bus & Prof. Code § 23789.
'Id.
Bus. & Prof. Code §23958.
Districts within the jurisdiction," or when the census tract in which the applicant's store is
located "exceeds the ratio of on sale retail licenses to population in the county in which the
applicant premises are located."9 A city may determine that there is an "undue concentration" of
off -sale beer and wine licenses in a given location and that the public convenience and necessity
would not be served by approval of the proposed license.
Licensee Cannot Conflict with Local Zoning Ordinance
In addition, under Bus & Prof Code §23790, The Department may not issue a liquor
sales license for premises located in an area where the teens of the license conflict with a valid
zoning ordinance, unless the following are met: (1) the premises were licensed before adoption
of the zoning ordinance, (2) the Iicense will be of the same type and classification as the prior
license, and (3) the licensed premises have operated continuously without substantial change in
mode or character of operation. Accordingly, a city ordinance denying a use permit for a cocktail
bar in a shopping center was upheld because it was supported by findings that the bar would
disrupt the peace, health, and general welfare of the people in the area, and more specifically
because of the proximity of the bar to surrounding residences.19 Similarly, a court upheld an
ordinance that grandfathered an existing restaurant with only a beer and wine license in a
residential zone while barring an expansion of the license to include the sale of distilled
liquors.' 1 Also, Bus & Prof Code § 23800 authorizes the Department to impose conditions
prepared by the Department or requested by a city or county on liquor licensees in certain
situations, including the transfer of a license. In fact, license applicants are required to provide a
zoning affidavit affirming that issuance of the license will not be contrary to applicable zoning
standards. Assuming the license is consistent with local zoning, in order to carry out its mandate
to protect the public welfare and morals, the Department is required to conduct a "thorough
9 Bus. & Prof Code §23958.4(a).
10 Floresta, Inc. v City Council of the City of San Leandro (1961) 190 Ca1.App.2d 599.
II Town Council of the Town of Los Gatos v State Board of Equalization (1956) 141 Ca1.App.2d 344.
investigation" to determine that the license will comply with all statutory criteria for the issuance
of a liquor license.12
Department Discretion
However, despite this seemingly clear mandate, the Department tends not to err on the
side of the community and issues licenses amidst opposition from local government and
community leaders. In such instances the Department's broad discretion can undermine a local
jurisdiction's ability to manage alcohol related social and police problems. In practice, it is also
difficult to overturn a decision of the Department. While the Department may delegate the
power to hear from all parties and decide a licensing question to an Administrative Law Judge,
the Department must render the final decision: whether it is to adopt the recommendation of the
Administrative Law Judge, or to render a decision notwithstanding the Administrative Law
Judge's recommendation.13
If a party seeks to challenge a decision by the Department regarding its decision on a
liquor license, the petitioner must bring its challenge before the Alcoholic Beverage Control
Appeals Board ("Appeals Board") to determine whether there is substantial evidence to
reasonably support the findings of the Department. However, the Appeals Board "will indulge
all legitimate inferences in support of the Department's determination."14 If, after reviewing the
Department's decision, the Appeals Board determines there is substantial evidence in the record
to support the Department's decision, the Appeals Board will uphold the Department's decision.
The courts will also review the Department's decisions under the same standard of review.15
However, such review is wholly discretionary with the court and the courts are under no
obligation to accept such cases. There is, therefore, no guarantee that the Department's decisions
'2 Bus. & Prof. Code §23958.
13 Bus. & Prof. Code §24210.
14 Dept. of Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Bd. (2004) 118 Ca1.App.4th 1429,
1437.
15 Bus. & Prof. Code § 23090.2.
will be subject to judicial review. As a result, this deferential standard of review protects the
Department's interpretations and decisions with regard to fulfilling its statutory mandate.
A local agency may also file accusations against license holders with the Department.
The Department then has discretion to decide whether to proceed with a formal accusation
against a license holder.''S The grounds for suspension or revocation are that the continuance of
the license would be contrary to public welfare or morals; the licensee failed to take reasonable
steps to correct objectionable conditions on the licensee's premises or immediately surrounding
area including public sidewalks and streets within 20 feet of premises; or the failure to abate
nuisances, such as disturbance of the peace, public drunkenness, drinking in public and
harassment to passersby, after notification by the city attorney.17 Reasonable steps are defined as
timely calls to law enforcement asking for assistance in abating nuisance conditions, asking
persons engaging in nuisance activities to cease such activities and the removal of items that
facilitate nuisances, such as furniture.18 Courts have ruled that the existence of a public
nuisance, regardless of fault by the license holder, may support the revocation of a license.1
Business and Professions Code section 24203 also provides that "accusations may be
filed with the Department by the legislative body... of any city... requesting the suspension or
revocation of a retail license. Upon the filing of the accusation, the Department shall provide for
a public hearing... and determine whether or not the license should be revoked or suspended."
Furthermore, if the local Iegislative body certifies that "the public safety, health, or welfare
requires immediate hearing of the accusation; the public hearing shall be held within 60 days
after the filing of the accusations with the Department."2° Using this provision allows the city to
directly file an accusation against a license holder and entitles the city to a hearing in front of the
1E Bus. & Prof. Code §24201.
17 Bus, & Prof. Code §24200.
ib
19 Yu v. Alcoholic Beverage Appeals Bd. (1992) 3 Cal.App.4th 286.
2° Bus. & Prof. Code §24203.
Department to determine whether or not to revoke or suspend a liquor license. The Department
does not have discretion to deny a hearing if it is requested by the City Counci1.21
This course of action, however, like the original license issuance decision also places It
great deal of discretion in the hands of the Department. Moreover, as with other Department
decisions, the Department's decision is difficult to overturn through a legal challenge. In order to
successfully proceed with an accusation against a license holder, a city will have to accumulate
substantial evidence that a license holder is creating a public nuisance or creating a law
enforcement problem as a result of its sale of liquor.
Miscellaneous Local Regulation
Lastly, cities retain limited authority to regulate the consumption of alcoholic
beverages.22 Regulation of mere possession of alcohol, however, is unconstitutional absent
specific legislative authorization.23 Penal Code Section §647(e), however, authorizes city
regulation of possession of open container on certain licensed premises, and Bus & P C §25620
authorizing city regulation of open container in city -owned public place. Cities also have limited
authority to regulate the concurrent sale of gasoline and beer or wine at a given location as
defined by statute.24
III. Nuisance Regulation
A city can exert a certain degree of control over alcohol outlets through its inherent
authority to regulate nuisances. A city can adopt an ordinance directed at the abatement of
potential nuisance activity around businesses that sell alcoholic beverages, even though such
adopted regulatiors flay in fact prohibit the sale of alcohol at p?rticular location,.25 The right to
21 Id.
22 People v Brewer (1991) 235 Cal.App.3d 909; People v Butler (1967) 252 Ca1.App.2d.Supp 1053.
23 People v Duran (1995) 43 Cai.App.4 h.Supp 1.
24 Bus. & Prof. Code §23790.5.
25 Korean Am. Legal Advocacy Found. v. City of Los Angeles (1994) 23 Ca1.App.4th 376.
control and abate nuisance and criminal activities by ordinance applies to all alcoholic beverage
establishments, including those in operation before an ordinance's effective date.
Traditional Nuisance Abatement
Cities may also regulate alcohol outlets on an individual basis through the traditional
nuisance abatement authority by declaring a building or place where liquor is unlawfully sold a
public nuisance.26 The Unlawful Liquor Sale Abatement Law (Pen Code §§ 11200 —11207)
provides cities with the ability to declare and abate a nuisance when an establishment is selling
liquor unlawfully.27 Recently, the Second Appellate District upheld a permanent injunction
against a cafe that was found to be unlawfully selling alcohol to its patrons.28 The City of Los
Angeles sought and obtained an injunction against a cafe that was selling alcohol to visibly
intoxicated patrons based on a finding of nuisance under the Unlawful Liquor Sale Abatement
Law.29 In upholding the injunction, the Court of Appeal stated that Penal Code section 11200
has a broad reach which encompasses unlicensed liquor sales and unlawful sales, even if lawful
sales also occur on the premises.3° Thus, if a city finds that off -sale alcohol sales establishments
are violating laws, and they have a negative effect on the health, safety, and general welfare of
those living and working in the area, one available course of action is to declare the activity a
public nuisance. The city attorney may then maintain an action to abate and prevent the
nuisance.31 However, this approach is time intensive and must regulate problem alcohol outlets
on a case by case basis.
25 Pen C §11200.
27 Pen C § 11200-11207.
zs See People v. Schlimbach (2011) 193 Caf.App.4th ; i32.
29 Id.
3o Id at 1141-1144.
31 Pen C §§11200-11201,
The City of Oakland "Deemed Approved" Model
The City of Oakland ("Oakland") tested the limits of the state preemption issue by
instituting a "deemed approved" program for existing licensees. Oakland's program was created
as a means of imposing operating standards on legal nonconforming retail alcohol outlets
established prior to adoption of the Oakland's conditional use permit requirements. As part of its
program, Oakland adopted a comprehensive code enforcement scheme that the California Court
of Appeals has upheld as a permissible use of a city's police power and authority to regulate
nuisances and criminal activities in the areas surrounding alcoholic beverage retail sellers.32
Oakland's ordinance was challenged as to whether it could apply its deemed approved program
to licensees that had sold liquor prior to the adoption of the ordinance. Specifically, at issue was
whether the deemed approved ordinance violated Business and Professions Code section 23790,
which prohibits new zoning regulations barring the sale of liquor at a site from being applied to
"grandfathered" establishments. The court ruled that the regulations were not intended to control
the sale of alcoholic beverages, but instead were intended to eliminate nuisance and criminal
activities.33 Although the ordinance did not prohibit licensees from selling alcoholic beverages,
it did prevent licensees from creating nuisances and facilitating criminal activity at their stores
and in the surrounding areas.
The Oakland Ordinance establishes that the sale of alcoholic beverages in Oakland is
deemed to be an approved commercial activity, so long as the seller complies with the "Deemed
Approved Performance Standards." The performance standards require that the sale of liquor at
a site does not:
1. result in adverse effects to the health, peace, and safety of persons residing or working in
the surrounding areas;
2. jeopardize or endanger the public health or safety of persons working in or residing in the
32 City of Oakland v. Superior Court (1996) 45 Ca1.App.4th 740.
33 Id. at 765.
surrounding area;
3. result in repeated nuisance activities within the premises or close proximity of the
premises, including but not limited to illegal drug activity, public drunkenness, drinking
in public, harassment of passersby, gambling, prostitution, the sale of stolen goods,
public urination, thefts, assaults, littering, loitering, police detentions, arrests;
4. violate any city, state, or federal regulation, ordinance, or statute; or
5. have upkeep or operating characteristics that are incompatible with the surrounding area
or adversely affect the liability of appropriate development of abutting properties.34
If the sale of liquor causes a violation of one of the established performance standards,
then an administrative hearing is held to review the complaint. Complaints can come from the
police department or the general public. The administrative hearing officer then holds a hearing
to determine whether the standards have been violated, and at that point, may impose conditions
on the merchant in order to enforce the Deemed Approved standards. If the merchant violates
those conditions, the Deemed Approved status may be revoked. Once appeals of the
administrative hearing officer's decision to the city council are exhausted, the City may seek to
have the activity abated as a nuisance. The city may also refer the matter to the Department for
revocation of the liquor license. Lastly, to pay for the enforcement of the ordinance, Oakland
imposes a $600 fee on liquor licensees.
Violations of the ordinance do not result in the forfeiture of the merchant's liquor license,
because only the Department has the constitutional authority to revoke a liquor license. A
violation, however, does prevent the merchant from selling liquor at the location where the
violation occurred. Furthermore, violations can be forwarded to the Department for possible
revocation.
34 City of Oakland Deemed Approved Alcoholic Beverage Sale Regulations, Title 17 Planning, § § 17.156 et seq.
IV. Regulation through Local Zoning Ordinance
The Department of Alcoholic Beverage Control may not issue an alcoholic beverage
retail license for any business located in a zone where the exercise of the rights conferred by that
license would be contrary to a valid local zoning ordinance.3$ When enacting a zoning
ordinance, a key distinction involves the status of the specific licensed premise as a "new" or
"pre-existing" outlet at the time a city enacts a new ordinance or regulation. A retailer whose
business is already in place receives far greater protection under state law than outlets that are
proposed following enactment of a valid zoning ordinance.36 Thus, a city that wants to restrict
alcohol outlets from locating near schools cannot impose the new restriction on an existing
outlet, but can prohibit a new outlet from locating in the restricted zone or selling a restricted
product.
Los Angeles' Ordinance
In an attempt to define the limitations local government may impose on alcohol -serving
establishments, courts have consistently held that local ordinances that do not directly affect the
sale of alcohol are not preempted by the powers granted to the Department. In 1994, in Korean
American Legal Advocacy Foundation v. City of Los Angeles,37 the California Court of Appeal
examined the extent to which the state had preempted the field of alcohol regulation. The case
was set against the backdrop of the 1992 Los Angeles riots and the effort to rebuild stores
destroyed during that period of civil unrest. Since 1985, the City of Los Angeles had required
business engaged in the sale of of site alcoholic beverages to obtain conditional use permits. In
1987, the city adopted a specific plan, which required conditional use approvals for
establishments dispensing alcohol in South Central Los Angeles, and provided that approval was
contingent on specified findings. Businesses in operation before the effective dates of either
ordinance enjoyed "deemed approved" conditional use status. In the aftermath of the riots, the
city adopted ordinances to facilitate rebuilding; with expedited procedures to process building
'S Bus. & Prof. Code § 23790; City of Oakland v Superior Court (1996) 45 Ca1.App.4th 740.
3 Bus. & Prof. Code § 23790
37 Korean American Legal Advocacy Foundation v. City of Los Angeles (1994) 23 Ca1.App.4th 376.
permits in conformity with existing code provisions. However, all conditional uses, including
conditional uses selling alcoholic beverages for off -site consumption, had to submit plans for
approval before rebuilding. Such approval could be made contingent on conditions (such as
graffiti removal, adequate lighting, trash removal, security guards and limited hours of operation)
imposed on the same basis as for new conditional uses. In addition to the plan approval process,
the city instituted "revocation hearings" to revoke or condition an owner's deemed approved
status or use permit in the event the business threatened to become, or had become, a nuisance or
law enforcement problem. The plaintiffs, many of whom had stores destroyed during the riots,
brought suit, challenging the validity of the ordinance imposing the plan approval process and
establishing revocation hearings. They alleged that Los Angeles' plan approval and revocation
processes were completely preempted by the state constitution, which specified that the state had
exclusive authority to regulate the sale of alcoholic beverages and exercised this exclusive
jurisdiction through the Alcoholic Beverage Control Act.38
In addressing the preemption challenge, the court examined the purpose of the ordinance
and noted that the conditions imposed by the city did not have the effect, either direct or indirect,
of regulating the "manufacture, sale, purchase, possession or transportation" of alcoholic
beverages.39 Rather, the conditions imposed under the plan approval process were aimed at
controlling or eradicating the negative secondary impacts often associated with establishments
that sell alcoholic beverages.40 Accordingly, the ordinance was deemed permissible as it was
aimed at land use and zoning - to abate or eradicate nuisance activities in a particular geographic
area by imposing conditions aimed at mitigating those effects - rather than the regulation of
alcohol. The validity of the ordinance was underscored by the fact it focused on the negative
conduct occurring in the immediate vicinity of businesses selling alcohol for off -site
consumption; "[t]hat the conditions imposed under the ordinance may have some indirect impact
on the sale of alcoholic beverages does not transmute the purpose and scope of the ordinance into
38Id. at 385.
39Id. at 385-87.
40Id. at 387.
a regulations merely seeking to control alcohol sales."41 Thus, provided that an ordinance
imposes land use and zoning regulations, and applies them properly, the zoning regulation
should be valid.
v. Recommended Practices
Any local zoning ordinance aimed at regulating retail alcohol outlets should
comprehensively seek to regulate, by including both conditional use permit ("CUP") and
Deemed Approved provisions. By including both of these provisions, the city will properly
distinguish between pre-existing and new alcohol outlets. Both of these provisions are also
flexible enough to vary according to each city's needs. The recommended approach for
regulating pre-existing alcohol outlets, both for on -sale and of sale outlets is the Oakland
Deemed Approved model, as described above. This provides a city with as much regulatory
control over existing outlets as is permissible under the state statutory framework. Further, this
approach has been upheld by courts as valid.
Findings and Statement of Purpose
The ordinance should contain specific findings that will give the proper justification for
any conditions and/or operating standards that are imposed. As is the case with other conditions
imposed on a property, the conditions imposed must be related to the goals of the ordinance.
The findings establish the need for the ordinance, listing the specific problems that are to be
alleviated. These should be adapted to local circumstances, including any local data regarding
alcohol problems and their link to retail alcohol sales. The purposes section can augment the
findings from the introductory section, such as focusing on the rationale for requiring CUPs for
new alcohol outlets. Carefully drafted findings and purpose sections are important to establish
the city's rationale and authority to take action.
42
Id.
Regulation of Retail Outlet Locations
The Department may not issue alcohol licenses for premises located in the immediate
vicinity of churches and hosp; tals.42 In addition to the state law restrictions concerning location
of outlets near those sensitive uses, a local ordinance can further restrict outlet locations through
a valid zoning ordinance. Zoning ordinance restrictions regarding the location of outlets could
restrict the outlets to certain zones, by defining the alcohol sales use and then restrict alcohol
outlets from a zone within the city's zoning ordinance, such as residential zones. Conversely, the
ordinance could restrict alcohol outlets only to certain commercial zones. In addition, the
adopted ordinance may want to require spacing requirements by imposing specific distances
from sensitive uses, such as playgrounds, schools, hospitals, high crime districts, etc. Lastly, the
ordinance could require distance requirements between outlets. For example, no more than four
alcohol retail outlets can be allowed within a 1.000 foot radius of each other. The location
requirements may also choose to focus on particular types of alcohol outlets. For example,
restaurants or grocery stores with relatively limited alcohol sales may be treated differently from
bars, nightclubs, or liquor stores.
Conditional Use Permit Provisions
An ordinance containing CUP provisions is an effective tool for local regulation of retail
alcohol outlets, When regulating new outlets, establishing specific CUP provisions is the most
effective method to impose local conditions and sanction those that do not comply with the
enacted conditions. Additionally, the CUP allows cities to take much swifter action than if a city
was forced to rely on the Department to take action. Lastly, the CUP provides individuals and
groups within the community a voice in the decision -making process with respect to how
proposed retail alcohol outlets would impact the community.
Any adopted CUP ordinance must be cognizant of the areas upon which state law has
exclusive jurisdiction which is, "the manufacture, sale, purchase, possession and transportation
of alcoholic beverages.s43 However, when acting within those restrictions, a city can properly
adopt and enforce operating restrictions that will meet the particular needs of its communities.
42 Bus. & Prof Code § 23789.
43 Cal Const. Art, XX, § 22.
Operational standards and conditions of approval can work in conjunction to comprehensively
regulate new outlets. Operational standards are mandatory requirements that apply to all outlets,
are typically general in nature, and can often be similar to the Deemed Approved operating
standards. For example, operating standards can have restrictions against public nuisance
activities and activities that violate state or local laws.
Although related to operating standards, conditions of approval are more specific and
should be tailored to local issues. The conditions can be either standard or discretionary. If
standard, they apply to all new outlets automatically; if discretionary, the permitting agency
considers their applicability on a case -by -case basis and tailored to the specific application and
the surrounding neighborhood. Erring on the side of over inclusion is recommended; if it is
uncertain whether a given condition is relevant, it can be treated as discretionary and used only if
warranted for particular retail outlets. Some conditions to consider are as follows:
+
+
D
Soundwalls
Prohibited Products
Graffiti Removal
Chilled Alcoholic Beverages
Exterior Lighting
Hours of Operation
Trash Receptacles
Paper or Plastic Cups
Pay Telephones
Provisions Specific to On -Sale Outlets
• Size of alcohol signage
• Complaint Response — Community
Relations Program
+ Loitering
• Prohibited Activities (e.g. pooI tables)
s Security Cameras
Prohibited Vegetation
• Limitations on signs and advertising on
windows of doors in off -sale outlet
Although the regulatory framework for on -sale and off -sale alcohol outlets are the same,
on -sale outlets can present different issues than off -sale outlets. Because of this variation, cities
may want to consider specific regulation for on -sale outlets. For example, nightclubs present
operational issues that regulations tailored to liquor stores may not adequately cover. Operating
hours restrictions would presumably be different for nightclubs. Additionally, requiring security
and noise restrictions for nightclubs is also recommended.
Some cities have a cluster of on -sale outlets within one area that becomes a focal point
for entertainment and tourism. Whether a city desires this "entertainment zone" or not, when
such zones emerge, including additional provisions for those zones may help to minimize some
of the impacts from several inebriated customers streaming out of closing bars all at once.
Additionally, some potential conditions for Entertainment Zones could be restricting the number
of alcohol licenses within a defined zone and prohibition of transferring a permit from one zone
to another zone.
Other on -sale outlets that may present unique issues are restaurants. Cities may want to
consider whether or not to include "full service restaurants" as an outlet subject to the CUP
ordinance. Some cities, for example, exclude restaurants from their ordinances, provided that
they meet strict criteria in terms of food sales, hours of operation, kitchen facilities, among other
factors, to ensure that a restaurant does not transform into a more problematic mode of business.
Regardless of a city's desire to subject a full service restaurant to CUP ordinance regulations, the
ordinance's definitions should clearly define what constitutes a full service restaurant. Adopting
restaurant specific operational requirements can prevent businesses from opening under the guise
of a full service restaurant, but not actually operating as such, and in effect operate as a bar with
little regulatory oversight. Some options for regulating restaurants include: treating restaurants
similarly to other types of outlets; exempting them from the ordinance entirely; or developing
separate standards applicable to restaurants.
Additional Ordinance Considerations
Some jurisdictions also charge an annual business license renewal fee to any bar,
nightclub, restaurant; or grocery store permitted by the state to sell alcohol. The money generated
pays for police officer(s) assigned to moderate the excesses associated with the sale of alcohol. If
the exaction is imposed as a "fee," rather than a tax or an assessment, no election is required.
Businesses that will likely generate more police response would pay more than those that do not.
For example, large nightclubs with dance permits that stay open until 2:30 a.m. pay around
$1,700 per year, and small corner markets that sell beer and wine would pay close to $300 per
year.
VI. Conclusion
While the State has express authority over the licensing and regulation of alcohol sales,
local governments retain the right, under the police power, to regulate the impact of alcohol
availability on the public health, safety and welfare of the community. When the existence of
licensed alcoholic beverage establishments creates negative secondary impacts, local
governments must continue to address these impacts while not treading in the exclusive area of
the State's authority.
Although there are limited opportunities for cities to play a role in the state regulatory
process, cities can nonetheless use their Iand use and police powers to exert control over retail
alcohol outlets. When regulating pursuant to land use and/or police power authority, cities are
able to employ a strategic approach to managing alcohol sales and affiliated issues. Any adopted
ordinance should distinguish between pre-existing outlets and new outlets, with the deemed
approved program and conditional use permit requirements.
1677543.4
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