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HomeMy WebLinkAboutD-3 Staff Report - Regulating Alcohol SalesSCHEDULED ITEM D-3 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY VIA: SERGIO GONZALEZ, CITY MANAGER FROM: MATT MARQUEZ, ECONOMIC AND COMMUNITY DEVELOPMENT DIRECTOR DATE: JUNE 3, 2019 SUBJECT: REGULATING ALCOHOL SALES IN THE CITY OF AZUSA BACKGROUND The purpose of this report is to provide the City Council with information on alcohol licensing, including regulations related to licensing alcohol sales, and the associated review processes. Currently in the City of Azusa, there are 96 active licenses, 15 different types of licenses across 14 census tracts. A list of the licenses by type with a short description can be found below: Type Description Count 2 Winegrower 2 20 Off-Sale Beer and Wine 14 21 Off-Sale General 16 40 On-Sale Beer 1 41 On-Sale Beer and Wine for Bona Fide Public Eating Place 24 42 On-Sale Beer and Wine for Public Premises 1 47 On-Sale General for Bona Fide Public Eating Place 19 48 On-Sale General for Public Premises 4 50 On-Sale General for Club 2 51 Club 4 54 On-Sale General for Boat 1 58 Caterer's Permit 3 63 On-Sale Beer and Wine for Hospital 2 77 Event Permit 1 86 Instructional Tasting License 2 TOTAL: 96 APPROVED CITY COUNCIL 6/3/2019 Upon the ratification of the Twenty-First Amendment of the Constitution, states became empowered to regulate alcohol sales, consumption, production and transportation. California gave exclusive jurisdiction to a state agency over manufacturing, sale, purchase, possession and transportation of alcoholic beverages. This regulatory authority is vested in the Department of Alcoholic Beverage Control (“ABC”), 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. While ABC was established to oversee the licensing process and it was given both the power to issue and revoke licenses, cities may participate in the Department’s licensing in a limited fashion, but may impose regulations pursuant to local land use authority. ABC may only grant a license if it determines that a license will not be contrary to the public welfare or morals. The Department may also refuse to issue a license if proposed to be located within the immediate vicinity of churches and hospitals. The Department is also authorized to refuse to issue a license for any premises located within 600 feet of schools and public playgrounds or nonprofit youth facilities. Undue Concentration The Department, pursuant to state law, must deny a license if issuance of said license would tend to create a law enforcement problem or if issuance would result in or add to an undue concentration of licenses. 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 crime reporting districts within the city or when the census tract in which the applicant’s location is situated exceeds the ration of on sale retail licenses to population in the county in which the applicant premises are located. 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. In addition, ABC may not issue a liquor sales license for premises located in an area where the terms 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 license 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. ANALYSIS Number of Licenses by Census Tract As stated earlier in this report, there is a total of 96 active ABC Licenses in the City of Azusa. Types 20, 21, 41 and 47 seem to be most common. Census Tracts with the most licenses are 4006.02, 4042.01 and 4043.01 which include the Transition, Gold Line, Downtown, Downtown Expansion and University Districts. These census tracts also house the San Gabriel and Azusa Avenue Corridors. The matrix below provides additional details: LICENSE TYPE CENSUS TRACT NO. 2 20 21 40 41 42 47 48 50 51 54 58 63 77 86 4006.02 1 1 3 2 1 3 1 1 13 4006.03 2 1 2 1 6 4008.00 1 2 2 2 7 4040.00 5 2 7 4041.00 1 1 1 3 4042.01 1 1 3 3 1 1 10 4042.02 1 1 4043.01 1 5 5 2 1 1 1 16 4043.02 1 2 1 1 5 4044.01 1 2 2 1 1 2 9 4044.02 1 2 2 2 1 1 9 4045.01 3 1 2 6 4045.03 1 1 2 4045.04 1 1 2 TOTAL: 2 14 16 1 24 1 19 4 2 4 1 3 2 1 2 96 Permissibility The City’s regulations regarding alcohol sales are separate and independent from ABC. The City’s Municipal Code requires approval of a Use Permit (UP) by the Planning Commission for alcohol sales in most zoning districts, except for the DU-MU Zone, where a Minor Use Permit (MUP) is required. MUP’s are subject to approval by the Director of Economic & Community Development. To approve an application, the reviewing authority (Commission or Director) has to make Use Permit/Minor Use Permit findings as specified in Section 88.51.040.F of the Azusa Municipal Code (AMC). Those findings are listed below: 1. The proposed use is allowed within the applicable zoning district and complies with all other applicable provisions of this Development Code and the Municipal Code; 2. The proposed use is consistent with the general plan and any applicable specific plan; 3. The design, location, size, and operating characteristics of the proposed activity are compatible with the existing and future land uses in the vicinity; 4. The site is physically suitable for the type, density and intensity of use being proposed, including access, utilities, and the absence of physical constraints; and 5. Granting the permit would not be detrimental to the public interest, health, safety, convenience, or welfare, or materially injurious to persons, property, or improvements in the vicinity and zoning district in which the property is located. In addition, in determining whether to approve a use permit for alcoholic beverage sales and the conditions to impose on the use, the Commission shall consider the following and make findings regarding each of these issues (Section 88.42.030.A of AMC): 1. The nature and use of real property within 500 feet of the use, and in particular, the location of similar nearby uses and the location of residences, parks, schools, and religious facilities; 2. Appropriate measures to provide proper maintenance of the building exterior, including keeping the premises free of junk, litter, and debris; 3. Lighting of exterior areas, including parking lots, to discourage loitering activities outside of the buildings; 4. Protection of persons residing on or using adjacent properties from noise, illegal activity, odors, and undue light and glare; 5. Provision of onsite security, both inside and outside the building, to satisfy any concerns raised by the police department; 6. Adequacy of off-street parking provided for the use; 7. Hours of operation; 8. Controls on occupancy limits inside the building and loitering outside of the building; 9. Prevention of adverse effect of the use on value of adjacent properties; and 10. Whether approval would result in an undue concentration of these uses, and whether public convenience or necessity would mitigate the issue of undue concentration Wholesale Alcohol Sales The land uses in the permitted uses table does not differentiate between wholesale and retail sales of alcohol. As such, staff addresses the license type (Type 41, 47 [Retail onsite consumption] vs. Type 1, 17 [Manufacturing and wholesaling]) in the Use Permit/Minor Use Permit review. Internal Review of Applications & Coordination with ABC When new businesses request to obtain a business license, or if an existing business inquires about serving alcohol, they are required to complete an Operational Statement wherein one of the questions asks if the establishment will be serving alcohol. The Operational Statement is required for any new business and Staff includes a copy of it in each project file and as an Exhibit to any corresponding Staff Reports. Upon reviewing these Statements and other related materials, City staff (including the City’s Police Department), will then determine if the proposed use would be permissible and if so, which type of entitlement review will be required. Once an applicant wishes to move forward, they will submit their application to staff and provide the following: a. Planning application, b. UP/MUP Supplemental application, c. Site & Floor Plan with Floor Plan indicating the bar/alcohol sales area, d. Operational Statement The City’s Planning Division has been working to establish a coordination procedure with ABC during the entitlement process, as one did not previously exist. Over the last few years Planning staff has established direct contact with the ABC Monrovia Office and began conducting a more detailed analysis of alcohol uses by coordinating with the Azusa Police Department and looking at existing alcohol licenses in the respective Census Tracts. Additionally, when notice from ABC regarding a license is sent to the City, the City Clerk’s Office receives said notice and forwards it to the following Departments/Divisions: • Office of City Council • Police Department • Planning Division • Building Division • Community Improvement (Business License) Division Planning, Building, and Community Improvement Division work together to verify if the proposed business is approved and obtained all the required documentation for the sale of alcohol or in the process thereof. If the business is selling alcohol without proper approvals, Community Improvement staff follows up with a site visit. Moratorium & Annual Priority Drawing Licenses to sell beer and wine are available year-round from the State if the applicant and the premises qualify. However, general licenses, which authorize the retail sale of distilled spirits are restricted in number and are authorized to be issued via inter-county transfer only once per year, based upon population vs. existing license ratios within each county. Where there are more applicants than licenses available, public drawings are held and “priority” rankings are assigned. Licenses applied for and issued via the priority system are subject to unique requirements and restrictions. The only other way to obtain a general license is to purchase an existing license from someone who has one already within the same county. This means that if an existing business relocates or goes under, the new business that takes their place is allowed to operate under the existing license approved for the site. On January 1, 1998, the State of California permanently established a moratorium on the issuance of off-sale beer and wine licenses (Type 20) in cities and counties where the ratio of Type 20 licenses exceed one for each 2,500 inhabitants. The moratorium section also prohibits an individual from transferring a Type 20 license from one county to another, however it does not prohibit the transfer of an existing Type 20 license from person to person or premises to premises as long as it is within the same County. The City of Azusa is listed as a moratorium City. This means any additional Type 20 license in the City must be the result of a transfer of an existing one within Los Angeles County. The total number of new licenses issued in the County cannot increase. CONCLUSION The State of California has the 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. If 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. RECOMMENDATION Staff recommends that the City Council take the following action: 1) Receive and file staff’s report on the subject matter. FISCAL IMPACT There is no fiscal impact associated with the subject item. Prepared by: Reviewed and Approved: Matt Marquez Sergio Gonzalez Economic and Community Development Director City Manager Attachments: 1) Common ABC License Types and Their Basic Privileges ABC-616 (01-15) Department of Alcoholic Beverage Control COMMON ABC LICENSE TYPES AND THEIR BASIC PRIVILEGES State of California LICENSE TYPE D ESC R I PT I O N 01 BEER MANUFACTURER - (Large Brewery) Authorizes the sale of beer to any person holding a license authorizing the sale of beer, and to consumers for consumption on or off the manufacturer’s licensed premises. Without any additional licenses, may sell beer and wine, regardless of source, to consumers for consumption at a bona fide public eating place on the manufacturer’s licensed premises or at a bona fide eating place contiguous to the manufacturer’s licensed premises. May conduct beer tastings under specified conditions (Section 23357.3). Minors are allowed on the premises. 02 WINEGROWER - (Winery) Authorizes the sale of wine and brandy to any person holding a license authorizing the sale of wine and brandy, and to consumers for consumption off the premises where sold. Authorizes the sale of all wines and brandies, regardless of source, to consumers for consumption on the premises in a bona fide eating place that is located on the licensed premises or on premises owned by the licensee that are contiguous to the licensed premises and operated by and for the licensee. May possess wine and brandy for use in the preparation of food and beverage to be consumed at the bona fide eating place. May conduct winetastings under prescribed conditions (Section 23356.1; Rule 53). Minors are allowed on the premises. 20 OFF SALE BEER & WINE - (Package Store) Authorizes the sale of beer and wine for consumption off the premises where sold. Minors are allowed on the premises. 21 OFF SALE GENERAL - (Package Store) Authorizes the sale of beer, wine and distilled spirits for consumption off the premises where sold. Minors are allowed on the premises. 23 SMALL BEER MANUFACTURER - (Brew Pub or Micro-brewery) Authorizes the same privileges and restrictions as a Type 01. A brewpub is typically a very small brewery with a restaurant. A micro -brewery is a small-scale brewery operation that typically is dedicated solely to the production of specialty beers, although some do have a restaurant or pub on their manufacturing plant. 40 ON SALE BEER - (Bar, Tavern) Authorizes the sale of beer for consumption on or off the premises where sold. No wine or distilled spirits may be on the premises. Full meals are not required; however, sandwiches or snacks must be available. Minors are allowed on the premises. 41 ON SALE BEER & WINE – EATING PLACE - (Restaurant) Authorizes the sale of beer and wine for consumption on or off the premises where sold. Distilled spirits may not be on the premises (except brandy, rum, or liqueurs for use solely for cooking purposes). Must operate and maintain the licensed premises as a bona fide eating place. Must maintain suitable kitchen facilities, and must make actual and substantial sales of meals for consumption on the premises. Minors are allowed on the premises. 42 ON SALE BEER & WINE – PUBLIC PREMISES - (Bar, Tavern) Authorizes the sale of beer and wine for consumption on or off the premises where sold. No distilled spirits may be on the premises. Minors are not allowed to enter and remain (see Section 25663.5 for exception, musicians). Food service is not required. 47 ON SALE GENERAL – EATING PLACE - (Restaurant) Authorizes the sale of beer, wine and distilled spirits for consumption on the licenses premises. Authorizes the sale of beer and wine for consumption off the licenses premises. Must operate and maintain the licensed premises as a bona fide eating place. Must maintain suitable kitchen facilities, and must make actual and substantial sales of meals for consumption on the premises. Minors are allowed on the premises. 48 ON SALE GENERAL – PUBLIC PREMISES - (Bar, Night Club) Authorizes the sale of beer, wine and distilled spirits for consumption on the premises where sold. Authorizes the sale of beer and wine for consumption off the premises where sold. Minors are not allowed to enter and remain (see Section 25663.5 for exception, musicians). Food service is not required. 49 ON SALE GENERAL – SEASONAL - Authorizes the same privileges and restrictions as provided for a Type 47 license except it is issued for a specific season. Inclusive dates of operation are listed on the license certificate. ABC-616 (01-15) LICENSE TYPE D ESC R I PT I O N 51 CLUB - Authorizes the sale of beer, wine and distilled spirits, to members and guests only, for consumption on the premises where sold. No off-sale privileges. Food service is not required. Minors are allowed on the premises. 52 VETERAN’S CLUB - Authorizes the sale of beer, wine and distilled spirits, to members and guests only, for consumption on the premises where sold. Authorizes the sale of beer and wine, to members and guest only, for consumption off the licensed premises. Food service is not required. Minors are allowed on the premises. 57 SPECIAL ON SALE GENERAL - Generally issued to certain organizations who cannot qualify for club licenses. Authorizes the sale of beer, wine and distilled spirits, to members and guests only, for consumption on the premises where sold. Authorizes the sale of beer and wine, to members and guests only, for consumption off the licensed premises. Food service is not required. Minors are allowed on the premises. 59 ON SALE BEER AND WINE – SEASONAL - Authorizes the same privileges as a Type 41. Issued for a specific season. Inclusive dates of operation are listed on the license certificate. 60 ON SALE BEER – SEASONAL - Authorizes the sale of beer only for consumption on or off the premises where sold. Issued for a specific season. Inclusive dates of operation are listed on the license certificate. Wine or distilled spirits may not be on the premises. Minors are allowed on the premises. 61 ON SALE BEER – PUBLIC PREMISES - (Bar, Tavern) Authorizes the sale of beer only for consumption on or off the licensed premises. Wine or distilled spirits may not be on the premises. Minors are not allowed to enter and remain (warning signs required). Food service is not required. 67 BED AND BREAKFAST INN - Authorizes the sale of wine purchased from a licensed winegrower or wine wholesaler only to registered guests of the establishment for consumption on the premises. No beer or distilled spirits may be on the premises. Wine shall not be given away to guests, but the price of the wine shall be included in the price of the overnight transient occupancy accommodation. Removal of wine from the grounds is not permitted. Minors are allowed on the premises. 70 ON SALE GENERAL – RESTRICTIVE SERVICE - Authorizes the sale or furnishing of beer, wine and distilled spirits for consumption on the premises to the establishment’s overnight transient occupancy guests or their invitees. This license is normally issued to “suite-type” hotels and motels, which exercise the license privileges for guests’ “complimentary” happy hour. Minors are allowed on the premises. 75 ON SALE GENERAL – BREWPUB - (Restaurant) Authorizes the sale of beer, wine and distilled spirits for consumption on a bona fide eating place plus a limited amount of brewing of beer. This license does not authorize the sale of alcoholic beverages for consumption off the premises where sold. Minors are allowed on the premises. 80 BED AND BREAKFAST INN – GENERAL - Authorizes the sale of beer, wine and distilled spirits purchased from a licensed wholesaler or winegrower only to registered guests of the establishment for consumption on the premises. Alcoholic beverages shall not be given away to guests, but the price of the alcoholic beverage shall be included in the price of the overnight transient occupancy accommodation. Removal of alcoholic beverages from the grounds is not permitted. Minors are allowed on the premises. 86 INSTRUCTIONAL TASTING LICENSE–Issued to the holder of and premises of a Type 20 or Type 21 licensee, authorizes the tasting of alcoholic beverages as authorized to be sold from the off-sale premises, on a limited basis. Requires physical separation from the off-sale premises while tasting is taking place and generally requires the participation of a specifically-authorized manufacturer or wholesaler licensee. ABC-616 (01-15) SPECIAL EVENTS The Department also issues licenses and authorizations for the retail sale of beer, wine and distilled spirits on a temporary basis for special events. The most common are listed below. Other less common ones are found in Business and Professions Code Section 24045.2, et seq. SPECIAL DAILY BEER AND/OR WINE LICENSE - (Form ABC-221) Authorizes the sale of beer and/or wine for consumption on the premises where sold. No off-sale privileges. Minors are allowed on the premises. May be revoked summarily by the Department if, in the opinion of the Department and/or the local law enforcement agency, it is necessary to protect the safety, welfare, health, peace and morals of the people of the State. In some instances, the local ABC office may require the applic ant to obtain prior written approval of the local law enforcement agency. Issued to non-profit organizations. (Rule 59, California Code of Regulations) DAILY ON SALE GENERAL LICENSE - (Form ABC-221) Authorizes the sale of beer, wine and distilled spirits for consumption on the premises where sold. No off-sale privileges. Minors are allowed on the premises. May be revoked summarily by the Department if, in the opinion of the Department and/or the local law enforcement agency, it is necessary to protect th e safety, welfare, health, peace and morals of the people of the State. In some instances, the local ABC office may require the applicant to obtain prior written approval of the local law enforcement agency. Issued to political parties or affiliates supporting a ca ndidate for public office or a ballot measure or charitable, civic, fraternal or religious organizations. (Section 24045.1 and Rule 59.5 California Code of Regulations) CATERING AUTHORIZATION - (Form ABC-218) Authorizes Type 47, 48, 51, 52, 57, 75 and 78 licensees (and catering businesses that qualify under Section 24045.12) to sell beer, wine and distilled spirits for consumption at conventions, sporting events, trade exhibits, picnics, social gatherings, or similar events. Type 47, 48 and 57 licensees may cater alcoholic beve rages at any ABC-approved location in the State. Type 51 and 52 licensees may only cater alcoholic beverages at their licensed premises. All licensees wishing to cater alcoholic beverages must obtain prior written authorization from the Department for each event . At all approved events, the licensee may exercise only those privileges authorized by the licensee’s license and shall comply with a ll provisions of the ABC Act pertaining to the conduct of on-sale premises and violation of those provisions may be grounds for suspension or revocation of the licensee’s license or permit, or both, as though the violation occurred on the licensed premi ses. (Section 23399 and Rule 60.5 California Code of Regulations) EVENT AUTHORIZATION - (Form ABC-218) Authorizes Type 41, 42, 47, 48, 49, 57, 75 and 78 licensees to sell beer, wine and distilled spirits for consumption on property adjacent to the licensed premises and owned or under the control of the license e. This property shall be secured and controlled by the licensee and not visible to the general public. The licensee shall obtain prior approval of the local law enforcement agency. At all approved events, the licensee may exercise only those privileges authorized by the licensee’s license and shall comply with all provisions of the ABC Act pertaining to the conduct of on-sale premises (including any license conditions) and violations of those provisions may be grounds for suspension or revocation of the licensee’s lice nse or permit, or both, as though the violation occurred on the licensed premises. (Section 23399) WINE SALES EVENT PERMIT - (Form ABC-239) Authorizes Type 02 licensees to sell bottled wine produced by the winegrower for consumption off the premises where sold and only at fairs, festivals or cultural events sponsored by designated tax exempt organizations. The licensee must notify the city and/or county where the event is being held and obtain approval from ABC for each event (Form ABC-222). The licensee must also comply with all restrictions listed in Business and Professions Code Section 23399.6. Note: 1. “Minor” means any person under 21 years of age. 2. Consult Section 25663(b) regarding age of employees in off-sale premises; consult Sections 25663(a) and 25663.5 regarding age of employees in on-sale premises. 3. In certain situations, ABC may place reasonable conditions upon a license, such as restrictions as to hours of sale, employme nt of designated persons, display of signs, restrictions on entertainment or dancing, etc. If a license has been conditioned, it will be endorsed as such on the face of the license. (Conditional licenses, Sections 23800-23805.) ABC-616 (01-15) 4. Licensees whose license allows minors on the premises may have a “house policy” restricting minors from entering certain area s of the premises or prohibiting minors in the premises during certain hours. 5. This handout contains only abbreviated information. Contact your local ABC office for full information before doing anything which may jeopardize your license. Also available from the ABC: Quick Summary of Selected ABC Laws (form ABC-608); Alcoholic Beverage Control Act (complete laws); Rules & Regulations; and P -90 (describes privileges of non-retail licenses).