Minutes - Council - 04/06/1999 - Special

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Exhibit "B": Letter to The Diamonds from City Attorney William Goodrich Exhibit "C": Letter to Mr. Goodrich from The Diamond's Attorney Stephen Nash City Attorney Goodrich stated the Council is present to consider an alleged on-sale liquor ordinance violation. We are dealing with an event that occurred on March 18 and 19, 1999, at approximately 12:00 a.m. through 1:30 a.m. The ordinance is Section 7.52 of the City Code which is the City's Intoxication Liquor On-Sale Chapter, and more specifically 7.52.12, Paragraph/Subdivision 3 and 4. This evening's purpose is that under the ordinance, the licensee is entitled to a public hearing. At the hearing, witnesses for each side can be presented, and then the City Council would make a decision whether or not a violation occurred. This is not that public hearing. You will recall that at the last City Council meeting (March 23) we scheduled a public hearing for April 13 to discuss this issue. If we do have a public hearing, he will recommend we will not have it on that evening, however, to get the process moving, we scheduled it for a regular rneeting. Since we scheduled that meeting, I have had correspondence with the licensee and the licensee's attorney and discussions of whether or not ~ve can settle on this. City staff is proposing a settlement and he (Goodrich) discussed it with Mr. Nash (Diamond's attorney). This would mean the licensee would have to waive the public hearing. Staff would recommend that the licensee have his liquor license suspended for 10 days with eight days stayed on the condition that no same or similar violation occurs in that same year. If another violation occurred, the license would be suspended and there would be the additional violation to deal with. The proposed days of suspension would be April 9 and 11. Mr. Goodrich stated he obtained information from the City of St. Paul on how they would handle this. He summarized the information and gave a couple of scenarios of what other cities would fine an establishment. With regard to staff's recommendation, the licensee is willing to accept everything except the days of actual suspension. They would agree to a Monday, Tuesday, Wednesday, or Thursday. We have obtained accounting information from Diamonds but it's been difficult to figure the net amount. The average for February and March for week days is $1,600 in sales; weekends it is about $4,500 to $5,000 a day in liquor sales. Mr. Goodrich stated he has been reluctant to give out this information because he feels it should be kept confidential for competitive reasons. The City of St. Paul has a special license that a bar can acquire to have this type of activity between the hours of 1:00 a.m. and 3:00 a.m. if no liquor is sold at that time. Mr. Nash, representing Diamonds, stated that we acknowledge the mistake made and are willing to accept a penalty based on that mistake but we feel the proposed penalty is not proportionate to the mistake made. The penalties go up significantly for a second and third violation. We are willing to live under that kind of a system, but we made one mistake. A second violation would essentially put Diamonds out of business. Diamonds would rather pay a fine than have the suspension penalty - the fine should be on the Diamonds - not on the employees. There are 69 employees - 38 work at any one time. As a practical matter, right now, Diamonds loses money. It's the hope that the softball season brings in more revenue - there is softball every day of the week. That will triple the number of people. If you take a Friday away - that's about $5,000 lost, plus there are costs associated too. The major portion of the Diamond's business is liquor and liquor related. Monday, Tuesday, Wednesday, and Thursday are days that would be move livable. Starting this weekend is softball teams. They are also willing to have the idea of suspension with revocation hanging over their head. They are willing to live with that. We are City Council/Special Meeting/April 6, 1999 Page 2 of 5