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HomeMy WebLinkAboutItem 1 - Cash Box KTV AppealDATE: May 10, 2016 TO: Honorable Chairman and Business Permit and License Review Board FROM: Jim Kasama, Community Development Administrator By: Silva Vergel, Business License Officer SUBJECT: AN APPEAL OF A BUSINESS LICENSE REVOCATION FOR NONCOMPLIANCE WITH THE CITY OF ARCADIA MUNICIPAL CODES BY CASH BOX KTV AT 612 E. LIVE OAK AVENUE Recommendation: Uphold Revocation and Deny Appeal SUMMARY At the recommendation of the Arcadia Police Department, the Business License Office on April 4, 2016 revoked the Business License of Cash Box KTV at 612 E. Live Oak Avenue for noncompliance with the City of Arcadia Municipal Codes and Karaoke regulations. The revocation notice is attached as Exhibit ‘A’. Mr. Kevin Liu, the attorney for Mr. Sitong Rong, the owner of Cash Box KTV filed an appeal of the business license revocation on April 12, 2016. The appeal letter is attached as Exhibit ‘B’. The Police Department’s revocation request and the face pages of the Police Department Incident Reports are attached as Exhibit ‘C’. It is recommended that the Business Permit and License Review Board uphold the revocation and deny the appeal. BACKGROUND Ordinance No. 2263 was adopted on December 1, 2009 and designates the Planning Commission as the Business Permit and License Review Board (Board). The Board serves to hear appeals of business license application denials, and license revocations, and is the first arbiter of appeals. The Board’s decision may be appealed to the City Council. On October 1, 2015, a business license was issued to Mr. Sitong Rong to take over the karaoke business at 612 E. Live Oak Avenue. In early February of this year, Code Services began receiving complaints that this karaoke business was operating in violation of the City’s regulations. Code Services was unable to make contact with the business owner/operator, and referred the complaints to the Arcadia Police Department. On February 15, 2016, at about 3:40 a.m., the Police Department attempted to conduct a business check of Cash Box KTV at 612 E. Live Oak Avenue. Officers reported that Appeal of Business License Revocation 612 E. Live Oak Avenue May 10, 2016 – Page 2 of 5 they were able to hear loud music from inside of the building, but received no response to their knocking on the door and announcing of themselves as Police Officers. On March 2, 2016, the Arcadia Fire Department inspected Cash Box KTV and found menus, and cooking equipment that had been installed illegally. There was no indication of a certificate from the County Health Department for the preparing or serving of food. The Fire Department inspection report is attached as Exhibit ‘F’. On March 5, 2016, Police Officers conducted an inspection and met with Mr. Sitong Rong, the owner of the business. Officers were granted permission to inspect the facility. Cooking equipment was in use on this date. The Police Officers reported that Mr. Rong indicated that he does not serve alcoholic beverages and that the cooking equipment was for his employees. However, the Officers observed menus that advertised cooked foods. On March 7, 2016, the Arcadia Police Department recommended that the business license of Cash Box KTV be revoked - see Exhibit ‘C’. On March 11, 2016, shortly after midnight, the Police Department conducted another inspection of this business. When they arrived at the site, they observed in the trunk of a vehicle an open case of alcoholic beverages. When the officers entered the business they observed a customer hide a bottle under a table. This bottle of champagne then popped open. Mr. Rong denied providing the liquor and denied being the owner of the vehicle with the alcoholic beverages in the trunk. A check of the vehicle registration revealed Mr. Rong as the registered owner of that car. The Fire Department re-inspected Cash Box KTV on March 25, 2016, and found that the cooking equipment had been removed. On April 4, 2016, the Business License Office revoked the business license for Cash Box KTV - see Exhibit ‘A’. On April 11, 2016, at about 2:00 a.m., another inspection was conducted by the Police Department. Officers found that alcoholic beverages had been consumed onsite. Officers asked Mr. Rong for permission to inspect a locked cabinet in his office, and to inspect his vehicle. Mr. Rong told the officers to contact his attorney. On April 12, 2016, an appeal of the business license revocation was filed by Mr. Rong’s attorney, Mr. Kevin Liu - see Exhibit ‘B’. DISCUSSION The business license issued to Mr. Sitong Rong for Cash Box KTV at 612 E. Live Oak Avenue was revoked on April 4, 2016, at the recommendation of the Arcadia Police Department for multiple, and continued violations of the Arcadia Municipal Codes. Per Arcadia Municipal Code Section 6216.7.(3), his license is subject to suspension or revocation. The following is a summary of the violations. Appeal of Business License Revocation 612 E. Live Oak Avenue May 10, 2016 – Page 3 of 5 By providing and allowing the serving of alcoholic beverages, Mr. Sitong Rong was in violation of State Department of Alcoholic Beverage Control regulations, and the Arcadia Municipal Code: • The holder of the license has violated any of the conditions of said license, or has violated or permitted to be violated any law or laws of the United States or the State, or any ordinance applicable to the premises where the business covered by said license is conducted, or in connection with said business. In 1991, the Planning Commission granted Conditional Use Permit No. CUP 91- 015 (Resolution No. 1473 - Exhibit ‘E’) to allow the serving of alcoholic beverages at the karaoke business at 612 E. Live Oak Avenue. However, the California Department of Alcoholic Beverage Control (ABC) revoked the alcohol license for this location on March 25, 1992, and since then has not issued another license for alcoholic beverages, and CUP 91-015 has lapsed, and is of no effect. See Exhibit ‘D’ for the revocation information from the ABC. • Arcadia Municipal Code Section 9275.10.4.4 states that no alcoholic beverages may be consumed or sold in any business exclusively operated as a karaoke sing-along. Alcohol may only be consumed or sold in conjunction with a restaurant and cocktail lounge when karaoke is an incidental or non-primary use. The installation of cooking equipment, particularly fryers was a violation of the City’s Fire Codes, which are an adoption of the State of California Fire Codes. Section 904.11 requires cooking equipment that produces grease laden vapors to be provided with a hood installed in accordance with the California Mechanical Code and an automatic fire extinguishing system. The use of household extension cords in a commercial establishment is a violation of Section 605.1 that prohibits electrical hazards. Revocation and Appeal Process Per Arcadia Municipal Code Section 6216.7, the Business License Officer may suspend or revoke any business license upon receipt of information from any source that any of the following has occurred: (1) The holder of the license, or his or her employee, agent, partner, director, officer, controlling stockholder or manager has knowingly made any false, misleading or fraudulent statement of material facts in the application for the license or permit, or in any report or record required to be filed with the City’s Police Department, County Health Department, or any other City Department or office in connection with the operation of the business; or (2) The business has been expanded, or partially or wholly converted to another business without the required City approvals and permits; or (3) The holder of the license has violated any of the conditions of said license, or has violated or permitted to be violated any law or laws of the United States or the State, or any ordinance applicable to the premises where the business covered by said license is conducted, or in connection with said business; or Appeal of Business License Revocation 612 E. Live Oak Avenue May 10, 2016 – Page 4 of 5 (4) The holder of the license, or his or her employee, agent, partner, director, officer, controlling stockholder or manager has, in the conduct of the same or any similar business, been guilty of fraud, misrepresentation or conduct detrimental to the public welfare which includes operations or activities that do not comport with the peace, health, safety and convenience of the public such as (a) operation of a business prohibited by local or state law (b) allowance of activities that are or become a public nuisance which includes the disruptive conduct of business patrons whether on or immediately off the premises where such patrons disturb the peace, obstruct traffic, damage property, engage in criminal conduct, violate the law and otherwise impair the free enjoyment of life and property. Subsequent to the issuance of a revocation and within ten (10) days, an applicant or business licensee may file an appeal to the Business Permit and License Review Board (Board) and within 30 days or as soon thereafter as possible, a hearing shall be conducted by the Board. Any Board member who has any financial interest in the outcome of the hearing or is unable to make a fair, impartial and unbiased determination shall not participate in either the hearing or in any determination or recommendation after the hearing. Per Section 6216.8 of the Arcadia Municipal Code (AMC), during the hearing, all parties involved shall have the right to offer testimonial, documentary, and tangible evidence bearing upon the issues and may be represented by counsel. The Board shall not be bound by the formal rules of evidence and may require the presentation of additional evidence from any party involved. Any hearing under this Section may be continued for a reasonable time for the convenience of a party or witness at the request of the applicant or licensee, or any other party. Extensions of time or continuances sought by an applicant or licensee shall not be considered delay on the part of the City and shall not be deemed to constitute failure by the City to provide for a prompt decision. At the conclusion of the hearing, the Board shall, by a majority vote of the members present at the hearing, order that the license be revoked, suspended, reinstated, or reinstated contingent upon the applicant or licensee performing some remedial action such as, but not limited to, paying a fine or penalty. The Board may also prevent the holder of a revoked or suspended license from applying for a new license within one (1) year or such other certain, specified reasonable time period as the Board deems prudent. Within ten (10) days of receiving notice of the Board’s decision, the holder of the revoked license, any member of the City Council, any affected City Department Head, or any other business or resident of the City may appeal the decision by filing an appeal to the City Council. FINDINGS Based on the reports from the Arcadia Police Department and Fire Department, Cash Box KTV has violated several municipal codes, and the regulations of the California Department of Alcoholic Beverage Control. Appeal of Business License Revocation 612 E. Live Oak Avenue May 10, 2016 – Page 5 of 5 RECOMMENDATION It is recommended that the appeal be denied and the revocation of the business license for Cash Box KTV be upheld, and that Mr. Sitong Rong not be allowed to own or operate a business in the City of Arcadia for a period of one (1) year. BUSINESS PERMIT AND LICENSE REVIEW BOARD ACTION Approval of Appeal If the Business Permit and License Review Board (Board) intends to approve the appeal and overturn the revocation, the Board should approve a motion to sustain the appeal and overturn the revocation and state the reason(s) for the decision based on the evidence presented. It is recommended that the reinstatement of the business license be subject to the following conditions: 1. The business and premises must be in compliance with the Arcadia Municipal Code, and all other applicable County, State, and federal regulations. 2. Should any violation occur within the next 12 months, it may be brought directly to the Board’s attention, at which time the Board may revoke the business license in accordance with Sections 6216.7 and 6216.8 of the Arcadia Municipal Code. Denial of Appeal If the Business Permit and License Review Board (Board) intends to deny the appeal and uphold the revocation, the Board should approve a motion to deny the appeal and uphold the revocation of the business license for Cash Box KTV and require that Mr. Sitong Rong not be allowed to own or operate a business in the City of Arcadia for a period of one (1) year, or for such time that the Board deems prudent. If any Board Member, or other interested party has any questions or comments regarding this matter prior to the May 10, 2016 hearing, please contact Business License Officer, Silva Vergel at (626) 574-5430, or svergel@ArcadiaCA.gov. Approved: Attachments: Exhibit ‘A’ -- Revocation Notice Exhibit ‘B’ -- Letter of Appeal Exhibit ‘C’ -- Police Department Recommendation and Incident Report Cover Pages Exhibit ‘D’ -- California Department of Alcoholic Beverage Control Report Exhibit ‘E’ -- Resolution No. 1473 Exhibit ‘F’ -- Fire Department Inspection Report