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HomeMy WebLinkAboutItem 1 - Arcadia Spa AppealDATE: June 14, 2016 TO: Honorable Chairman and Business Permit and License Review Board FROM: Jim Kasama, Community Development Administrator By: Silva Vergel, Business License Officer SUBJECT: APPEAL OF A BUSINESS LICENSE REVOCATION FOR NONCOMPLIANCE WITH THE CITY OF ARCADIA MASSAGE THERAPIST AND BUSINESS LICENSE REGULATIONS BY MR. BAO GUI SUN, OWNER/OPERATOR OF ARCADIA SPA AT 28 EAST DUARTE ROAD Recommendation: Uphold Revocation and Deny Appeal SUMMARY At the request of the Arcadia Police Department, the Business License Office on May 16, 2016, revoked the Business License issued to Mr. Bao Gui Sun for Arcadia Spa at 28 E. Duarte Road for noncompliance with the City of Arcadia Massage Therapist and Business License regulations. The revocation notice is attached as Exhibit ‘A’. Mr. Bao Gui Sun, owner of Arcadia Spa filed an appeal of the business license revocation on May 17, 2016. The appeal letter is attached as Exhibit ‘B’, and the Police Department revocation request and the face page of the Police Report 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 February 28, 2005, a business license was issued to Mr. Bao Gui Sun to operate a day spa (dba: Arcadia Spa) at 28 E. Duarte Road. This day spa offers a variety of personal services, such as massages and facials. City staff has conducted numerous inspections of this day spa. Most recently inspections were conducted on April 17, 2014, December 8, 2014, and August 27, 2015. There were violations of the Arcadia Municipal Code (AMC) observed on April 17, 2014, and December 8, 2014. The violations were a massage therapist not having a Appeal of Business License Revocation Mr. Bao Gui Sun - Arcadia Spa at 28 E. Duarte Rd. June 14, 2016 – Page 2 of 6 business license, and a lack of Records of Treatment for clients. These violations were for the operation of the business and compliance is the responsibility of the business owner, Mr. Sun. On March 31, 2016, the Police Department arrested two massage therapists for performing illegal acts and transported them to the Arcadia Police Department Jail. Mr. Sun was not present at the time. On May 5, 2016, the Police Department requested that the Business License Office revoke the business license for Arcadia Spa. The face page of the Police Report and the request for revocation are attached as Exhibit ‘C’. On May 16, 2016, the Business License Office revoked the license of Mr. Sun for Arcadia Spa, as well as the licenses of the two massage therapists. On May 17, 2016, Mr. Bao Gui Sun, business owner of Arcadia Spa appealed the revocation of his business license. This letter is attached as Exhibit ‘B’. DISCUSSION The business license issued to Mr. Bao Gui Sun for Arcadia Spa at 28 E. Duarte Road was revoked on May 16, 2016, at the request of the Arcadia Police Department for violations of the Arcadia Municipal Code (AMC). Per AMC Section 6216.7.(3), the license is subject to suspension or revocation. The following is a summary of the violations: • 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. The appellant violated AMC Section 6418.9; Business Owner Responsibility. Under this Code Section, the business owner is responsible for the conduct of all of the employees and independent contractors at the business. Any act of an employee or independent contractor constitutes a violation by the business owner for the purpose of determining whether the owner’s license shall be revoked, suspended, denied or renewed. The Code Section reads as follows: 6418.9. - BUSINESS OWNER RESPONSIBILITY. All massage therapy business owners and/or operators shall be responsible for the conduct of all employees and independent contractors. Any act or omission of any employee or independent contractor constituting a violation of the provisions of this Division shall be deemed the act or omission of the business owner for purposes of determining whether the owner's license shall be revoked, suspended, denied or renewed. No business owner and/or operator shall employ any person, or allow any person, to conduct a massage or act as an independent contractor Appeal of Business License Revocation Mr. Bao Gui Sun - Arcadia Spa at 28 E. Duarte Rd. June 14, 2016 – Page 3 of 6 conducting massage who does not have a valid Massage Certificate and City of Arcadia Massage Verification Card. In order to ensure compliance with these Code provisions, no massage therapy business owner shall employ any person who has not shown them their valid Massage Certificate and City of Arcadia Massage Verification Card. Based on investigative resources, on March 31, 2016, the Police Department visited the business to determine if acts of prostitution were taking place at this location. The Police Department arrested two massage therapists for having performed illegal acts and transported them to the Arcadia Police Department Jail. Mr. Sun, the business owner was not present at the time. The business and the therapists violated the following Sections of the AMC. The face page of the Police Report is attached as Exhibit ‘C’. • Arcadia Municipal Code Section 6418.19.(A). Prohibited Activities – Expose/Touch Genitals - It is unlawful for any massage therapist, employee, patron, or any other person present where massage therapy services are being offered or performed, to expose or touch the genitals or anal area, or the breast of any female, whether his or her own, or those of another person. • Arcadia Municipal Code Section 6418.19.(B). Prohibited Activities – Perform/Engage in Sexual Activity - It is unlawful for any massage therapist, employee, patron, or any other person present where massage therapy services are being offered or performed, to engage in any sexual activities. • Arcadia Municipal Code Section 6418.19.(C). Prohibited Activities – State of Nudity - It is unlawful for any massage therapist, employee, patron, or any other person present where massage therapy services are being offered or performed, to be in a state of nudity or semi-nudity. • Arcadia Municipal Code Section 6418.20.(E). Operations – Covering. Each massage therapist shall provide to all patrons clean, sanitary and opaque coverings capable of covering the patron's specified anatomical areas, including the genital, anal and female breast area. Reuse is prohibited unless the covering is adequately cleaned. • Arcadia Municipal Code Section 6418.20.(J). Operations – Lighting. The lighting in each massage room shall be at least one (1) sixty-watt white light bulb and shall be activated at full wattage at all times (no dimming) while a patron is in such room or enclosure. No strobe flashing lights may be used. No colored lights shall be used nor shall any coverings be used which change the color of the primary light source. The Arcadia Police Department requested that the Business License Office revoke the license issued to Mr. Bao Gui Sun. The business license for Mr. Sun was revoked on May 16, 2016. Mr. Sun appealed the revocation on May 17, 2016. The revocation notice and appeal letter are attached as Exhibits ‘A’ and ‘B’. Appeal of Business License Revocation Mr. Bao Gui Sun - Arcadia Spa at 28 E. Duarte Rd. June 14, 2016 – Page 4 of 6 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 (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. Appeal of Business License Revocation Mr. Bao Gui Sun - Arcadia Spa at 28 E. Duarte Rd. June 14, 2016 – Page 5 of 6 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, Arcadia Spa has violated several municipal codes, and the regulations of the California Massage Therapy Council. RECOMMENDATION It is recommended that the appeal be denied and the revocation of the business license for Arcadia Spa be upheld, and that Mr. Bao Gui Sun 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 a reinstatement be subject to the following conditions: 1. Any business owned and/or operated by the appellant, and the premises must at all times be in compliance with the Arcadia Municipal Code, and all other applicable County, State and federal regulations. 2. Should the appellant and/or any business owned and/or operated by the appellant be found to have violated any applicable Arcadia Municipal Code or other applicable regulation 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 Arcadia Spa and require that Mr. Bao Appeal of Business License Revocation Mr. Bao Gui Sun - Arcadia Spa at 28 E. Duarte Rd. June 14, 2016 – Page 6 of 6 Gui Sun 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 of comments regarding this matter prior to the June 14, 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’ – Revocation Request & Face Page of the Police Report