Vancouver City Council

POLICY REPORT
Licensing

Date: February 28, 2003
Author/Local: Guy Gusdal/6461

Trish French/7041

RTS No. 02949
CC File No. 2610

Meeting: March 27, 2003

TO:	Standing Committee on Planning & Environment
FROM:	Chief License Inspector in consultation with Director of City Plans
SUBJECT:	Provincial Liquor Control and Licensing: New Regulations

RECOMMENDATION

A. THAT with respect to development applications for all liquor stores, Council rescind the current Beer and Wine Store and Specialty Wine Store guidelines and approve guidelines generally as outlined or referred to in Appendix A as the basis for review,

B. THAT pending completion and adoption of the policies described below, Council instruct staff to process liquor licence applications on the following basis:

- amendments to, and new, Liquor Primary Licences be assessed based on current City policy and previous Provincial regulations and policy;
- extensions to hours of existing Food Primary Licences not be supported and new Food Primary Licences hours of service to be limited to midnight.

C. THAT Council endorse the Chief License Inspector continuing to approve temporary liquor licence amendments to hours of service, seating capacity, and/or extensions to the license area provided that:

- the extensions are to accommodate special events;
- extensions beyond 2:00 am are confined to defined geographic areas;
- extensions of hours are considerate of area resident and business concerns; and
- the opinion of the Chief Constable and other affected departments are considered.

D. THAT the Director of City Plans and the Chief License Inspector report back for referral to Public Hearing proposed amendments to the Zoning and Development By-Law to allow land use control of liquor sales in conjunction with other retail uses and lounges in restaurants.

E. THAT as an interim measure to provide City land use control pending completion of the comprehensive review of regulations embodied in Recommendation D, the Director of City Plans be instructed to make application to amend the Zoning and Development By-law, generally as outlined in Appendix B, prohibiting liquor sales in conjunction with other commercial or retail uses, and prohibiting food-optional lounges in restaurants, and this application be referred to a Public Hearing;

FURTHER THAT the Director of Legal Services be instructed to prepare the necessary by-law for consideration at the Public Hearing.

F. THAT staff undertake development of a comprehensive hours of service policy, with an initial report back for Council approval of work program, approach, and consultation process.

G. THAT, as longer term priorities, staff undertake other policy work on remaining issues including seating capacity, dealing with new business types that may be licensed, dealing with Retail-Limited Food Service establishments (if necessary), and revising guidelines for liquor sales in conjunction with other uses and lounges in restaurants, (if necessary).

H. THAT the Chief License Inspector continue discussions with the LCLB on issues concerning the application process, including the matter of delegation of authority to the Chief License Inspector, and report back as required.

I. THAT Council, through the Mayor, send a letter to the Minister of Public Safety and the Solicitor General, noting that the Province's enforcement work will be a critical component of the success of the new liquor regulations, and urging that enforcement be timely, meaningful, and adequately resourced.

COUNCIL POLICY

The City has reviewed liquor-related applications for development permits and business licences based on:

· Council-adopted area policies for the West End, Central Business District, Granville Street Theatre Row Entertainment District, Downtown Eastside, Gastown and Downtown Granville South (the latter 3 are "moratorium" areas)
· case-by-case reviews for rest of City, based on neighbourhood opinion expressed through various forms of neighbourhood consultation

Since 1998, new liquor establishments have been subject to a time-limited development permit, a Good Neighbour Agreement, and in some cases a legal operating agreement; amendments to existing licences have had legal operating agreements.

PURPOSE AND SUMMARY

This report deals with recent changes to Provincial Liquor Control and Licensing Branch regulations, and what the City needs to do to respond to them. For many years the City has had an active role in balancing the positive and negative aspects of liquor sales and service. The Zoning and Development By-Law and the Business License By-Law have been used in coordination with Provincial regulations. The report describes changes to Provincial regulations, and how City policy, regulations and application processing need to respond. Council is requested to endorse a set of actions to address these needs.

Immediate Actions:
· Council to approve new guidelines (Appendix A) for development applications for liquor stores;
· City to continue to process new and amended food and liquor primary license applications based on current City policy until new policy is approved;
· City to approve temporary extensions to hours of service, seating capacity, and licenced area for special events subject to certain conditions including delegation of authority to Chief License Inspector

Short Term Actions
· staff to draft, and bring forward for referral to Public Hearing, zoning amendments to allow the control of liquor sales in conjunction with other retail sales (e.g. in grocery stores) and liquor lounges in restaurants
· staff to develop a comprehensive policy for hours of service for Council's consideration and adoption

Longer Term Actions
· staff to undertake development of policy on other issues (seating capacity, licensing of new business types, etc)

The report also outlines some issues related to the new application process which City staff are currently discussing with the LCLB, including whether approval authority can be delegated to the Chief License Inspector so Council does not have to deal with all applications. Lastly, possible impacts of the new regulations on the City's enforcement and processing work load are described. Council is requested to write to the Minister to stress the importance of adequate Provincial enforcement efforts.

BACKGROUND

In the past, and especially the last 5 to 10 years, City liquor licence policies and decisions on individual applications were closely aligned to and linked with Liquor Control and Licensing Branch (LCLB) policy and regulations.

In 1998, the Province began a comprehensive review of its liquor licensing policies with input from the industry and municipalities. The intent was to improve public safety, consumer choice and customer service.

Because of the changes to both Provincial regulations and the City's opportunity for input into the Provincial licensing process, it was recognized there would be a need for the City to adjust its own policies and practices. In late 2001, Council revised the Business Licence fees for liquor licensed establishments to reflect the size of establishments and to provide additional revenue to better cover additional processing, policy and enforcement staff costs.

The intended Provincial changes were publicly outlined by the Province in March 2002. Key new directions were:

· reducing liquor-serving license categories to two: Liquor Primary(LP) and Food Primary (FP);
· providing the opportunity for more seating capacity, longer serving hours; and greater variety of entertainment; and

· allowing private liquor retail stores.

In June 2002, staff reported to Council on the proposed changes and Council approved two temporary staff positions to address policy issues that would result. These positions are in the process of being filled.

In August 2002, the Province released detailed information on the new regulations. While some conformed to previous staff and Council expectations, there were a number of important unanticipated changes. As a result, much of the prior staff work on means to change City practices in response to the new regulations was not relevant. At that time, the Chief License Inspector updated Council by memo, noting that he intended to report back on options to address the regulatory changes prior to their coming into effect on December 2, 2002. However, he held off reporting given that further changes were forthcoming from the Province prior to the coming into effect of the regulations.

DISCUSSION

The following discussion describes:

· why the City is involved in liquor-related regulation and the City's regulatory tools;
· an overview of recent Provincial LCLB regulation changes and issues raised for the City; and
· proposed actions and priorities: immediate, short term and longer term.

1. The City's Interest

Liquor service and retailing are an integral part of entertainment, leisure and home activities, both for residents and visitors. It is an important part of city life and its economy. Many of the Provincial changes to what were complex and outdated rules will assist the liquor industry in playing its role by responding better to what its customers want, and to the maturity of Vancouver as a city.

On the other hand, some of the effects of liquor service and retailing are negative: noise and patron behaviour often annoy near-by residents and businesses; traffic and parking around retailers and venues can be busy; calls on Police, emergency services and enforcement staff are a cost to city taxpayers; increased access and general social and health effects of over-consumption have both human and financial costs.

The City's interest is in maintaining the balance and compatibility between liquor establishments and the rest of the community as being in the long run interest of both. Over the years the City has used its regulatory authority and enforcement powers, in coordination with the Province's, to mitigate the negative aspects. Most attention has been given to:

· ensuring appropriate location, parking, and external design (in some cases) of liquor service and retail venues;

· avoiding over-concentration of venues and oversupply of seating capacity in certain areas;

· controlling hours of service and noisy entertainment, relative to impact on neighbouring residents;

· ensuring that certain key areas are recognized by residents as entertainment areas; and
· monitoring establishment operations and intervening when issues arise.

The main regulatory tools which the City uses have been:

· the Zoning and Development By-law (Z & DB) which can regulate where particular defined uses (e.g., liquor store, restaurant, cabaret) may occur and under what conditions;
· the Business Licence By-law, which allows the City to require businesses to meet certain standards of operation (e.g. good neighbour agreements, legal operating agreements) or risk losing their licence; and
· input into the Provincial licencing process with reliance on Provincial regulations regarding hours, seating capacity etc.

City enforcement work involves staff from Inspections, Health, Fire, and particularly the Police, who are key to enforcement during late hours. More of the enforcement burden falls on the City than on the Province.

2. Overview of Regulatory Changes

The table below summarizes the most significant changes to LCLB regulations, and what City policy and regulations needs will be.

New LCLB Regulations & City Input	City Policy and Regulatory Needs
LIQUOR RETAILING
- in April 2002 existing Cold Beer and Wines stores were permitted to sell spirits - City was provided no input into sale of spirits	- can currently regulate size of these existing liquor stores under Z & DB but need guidelines (see below)
- currently existing pub, lounge, cabaret, and resort licence holders may apply to be liquor stores; Province has received 71 applications in Vancouver - anticipate Province will soon allow additional private liquor stores - City has no input into Provincial License	- can currently regulate liquor stores under Z & DB as a conditional use; need guidelines regarding: application process and location
- Province may begin to allow liquor sales in conjunction with other retail sales (e.g. in grocery stores)	- currently Z & DB doesn't allow control separately from ordinary retail stores; need new use definition and guidelines regarding location and consultation
LIQUOR SERVING
Liquor Primary Licence (LP)
- New licence category for all venues whose main business is selling liquor: bars, hotel pubs/lounges, pubs, clubs, cabarets - any business primarily in the hospitality, entertainment, or beverage business may apply - possible hours of liquor service expanded to 9 am to 4 am (previously 2 am latest) - old capacity limits removed; capacity now set by limits of Building, Fire or Health Bylaws - types of entertainment expanded - City has input on capacity, hours, type of entertainment; can decline to support	- current City policies and regulations can be used on an interim basis for case-by-case review of new LPs and changes to existing LPs - need policy (Licensing and / or Z&D) on hours of service, patron capacity, entertainment, and new types of businesses - policy will need to include review of existing area-based policies, and creation of a policy for the rest of the city
- existing licence holders may apply for a one time capacity increase up to building occupancy load with no City input - elimination of requirement for license holders to have accompanying non-licensed facilities e.g. hotel rooms	- may result in increases up to 8400 seats (currently have about 72,000 LP seats in eligible establishments); - affects capacities anticipated in City area-based policies - may make loss of SRO hotels more likely; Council has already requested staff to investigate measures to maintain SRO's including anti-coversion regulations
Food Primary Licence (FP)
- New licence category for venues whose main business is food service; restaurants, dining rooms, cafes - patron need no longer order food to be served liquor, but establishment's food revenue to remain greater than alcohol revenue - possible hours of liquor service expanded to 9 am to 4 am - City has no input on whether FP should be allowed but has input on hours of service after midnight and on patron participation entertainment	- there are 1023 liquor licensed restaurants in the City, throughout all neighbourhoods - City will be relying on LCLB enforcement to ensure restaurants don't become mainly liquor-serving - need policy (Licensing and /or Z&D) on hours of service and entertainment
- as part of FP, restaurants of 50 seats or more may apply for lounge areas (food optional) up to 20% of the capacity to a maximum of 40 seats - these will essentially be the same as neighbourhood pubs - City has no input on whether lounge should be allowed but has input on hours and entertainment as above	- may convert 16,000 to 18,000 of the FP liquor patron seats to lounges (currently have about 72,000 LP seats in hotel lounges/pubs, cabarets, neighbourhood pubs etc.) - currently no ability to control, since not defined separately from restaurant in Z&DB - need separate zoning definition and policy on process and locations - inequity with process required for approval of neighbourhood pubs
- uncertainty about whether FP licence will be available to "Retail-Limited Food Service" establishments (e.g. pizza slice places)	- 1300 Retail-Limited Food Service establishments in the City, many clustered in areas where City has had problems with liquor control; in future, may require separate zoning definition and development application /approval process to allow control
OTHER
Moratorium Authority - no local government authority for moratoria	- City's informal "moratoria"no longer allow us not to process certain applications, so application load higher
Application Process - Council resolution required for all LP and FP applications; - 90 day time limit and lengthy resolution "templates" - local governments may "opt out" of providing input on some categories or entire process	- more applications, time limit, and lack of ability to delegate the decision (now under discussion with the LCLB) means more City staff and Council time - need policy on whether to opt out of certain types of applications

3. Proposed Actions and Priorities

A. Immediate Actions

Guidelines for Retail Liquor Stores

Recommendation A proposes that Council rescind the current guidelines for Specialty Wine Stores and Beer and Wine Stores and endorse the guidelines for processing development applications for liquor stores generally as contained in Appendix A. The new guidelines would apply to all types of liquor stores (e.g. private, government, specialty wine), ensuring equity in consultation expectations and in requirements for spatial separation from each other and schools, churches and parks. They also represent a simplification of the consultation process, relative to current guidelines.

Current Processing Applications for Liquor Licences

Recommendation B addresses how to deal with liquor licence applications that must be processed prior to the completion of policy and regulatory work described below. For the time being, in cases of new LP applications and amendments to existing LPs, it is proposed to process these on a case-by-case basis, using existing policy with regard to hours, capacity and entertainment. Also, with respect to new FP applications, it is proposed that hours of service past midnight not be approved at this time and for those existing FP licences that allow service past midnight, further extensions not be approved at this time.

On specific applications, staff will advise Council whether a decision may set precedent for future applications or bias policy that is under development.

Temporary Extensions to Hours, Capacity or Licence Area

Recommendation C proposes that while comprehensive policy is being developed, the Chief License Inspector continue to consider temporary liquor licence amendments to extend hours of operation, seating capacity, and/or licence area of LP and FP licences. The types of extensions contemplated are allowing establishments to open later for special events, e.g. on Sundays before holiday Mondays, Gay Pride week, New Year's Eve. This will enable operators to test later closing hours and staff to assess impacts on area residents and businesses, as well as study effects on workloads for police, licence and other enforcement staff.

B. Short Term Actions

Liquor Sales Ancillary to Other Retail and Lounge Areas in Restaurants

Provincial regulatory changes include two new types of liquor outlets:
· liquor retailing in conjunction with other types of retail, such as grocery stores, will likely soon be permitted; and
· restaurants over 50 seats may now have liquor lounges (up to the lesser of 20 % of seating or 40 seats). These are food-optional and can function more or less like neighbourhood pubs.

Currently, the Zoning and Development By-law does not define either of these two uses separately, therefore the City has no ability to control the location, spacing or consultation process for them. Various retail stores and restaurants are permitted "outright" in all our commercial (and mixed use) zones. Because residential is directly adjacent or mixed into the same developments, there is a lot of potential for impacts andcomplaints. Inequities also exist because the City requires certain separations, consultation processes, good neighbour agreements and so forth for liquor stores and neighbhourhood pubs, but not for these new similar establishments.

Recommendation D proposes bringing forward draft zoning amendments for referral to Public Hearing as soon as possible. The most likely approach is to create new use definitions, and include them as conditional uses in relevant zones. At the same time, proposed guidelines regarding location, consultation, and operating agreements would be brought forward for Council consideration, to be adopted if the zoning changes are approved.

It is important to bring these possible controls forward to Council for decision as quickly as possible because any significant delay would mean that too many of the establishments might already be in place to make controls practical. Therefore, public input about the proposed zoning changes will be focussed on the opportunity to speak at Public Hearing. Staff note that the longer term policy work described below would provide an opportunity for later fine-tuning of the regulations and guidelines on these two uses, should that be necessary.

It will take several months for the zoning amendments described in Recommendation D to be drafted, go to Public Hearing and, if supported by Council, be enacted and come into force. Therefore, in order for the City to have some control in the meantime, staff put forward Recommendation E generally as shown in Appendix B. This will mean that, as an interim measure, the Zoning and Development By-law will not permit either liquor sales in conjunction with the other retail or commercial uses, or food-optional lounges in conjunction with a restaurant use.

Comprehensive Hours of Service Policy

With respect to both Liquor Primary and Food Primary licenses, the expansion of hours of liquor service past 2 am to 4 am is the most important and contentious issue. The entertainment and hospitality industry is very anxious to expand their hours. However, late night impacts of bars and restaurants are what generate the most complaints from nearby residents and businesses. The opportunity for later hours might result in fewer illegal after-hours operations. However, the advantage that staggered closing times currently provide in making enforcement easier may be lost.

Recommendation F proposes that a comprehensive liquor license policy on hours of service be developed as a top priority. This policy will need to consider neighbourhood impacts, enforcement issues, industry desires and fairness. The first step will be a report back on work program, approach and consultation process.

C. Longer Term Actions

Recommendation G proposes a number of other issues that will need to be addressed once the above actions have been completed:
· comprehensive seating capacity policy, including review of current area-based policies;
· understanding the new types of businesses that might be granted LP licences, and adjustments to Business License By-law and Zoning and Development By-law as required;
· revisions to guidelines for liquor sales in conjunction with other retail and lounges in restaurants, if necessary; and
· policy and regulation for Retail-Limited Service Food establishments, if needed.

4. Other Issues

New Provincial Liquor License Application Process

Recommendation H proposes that staff continue discussions with the LCLB regarding a number of concerns with their proposed new application process and report back as required. Issues include the 90 day time limit for processing an application, the wording of the standard Council resolution, logistical problems with determining seating capacity, and whether Council would be able to delegate certain duties to the Chief License Inspector. Resolution of these issues is important in understanding the work load associated with processing the number of applications expected.

Progress is being made in discussions, and LCLB staff in Victoria are reviewing the Vancouver Charter provisions regarding delegation of authority. If the LCLB is favourable to the delegation of decisions, staff will prepare the necessary report. Staff will also report on whether, based on how the issues have been resolved, Council should consider "opting out" of the process on certain types of applications, which they are now entitled to do.

Enforcement

The increases in capacity, numbers of establishments and hours of service will mean more demand for enforcement by Inspections, Police and Fire staff. It is not possible to predict how big the impact will be until Council adopts policy on these matters.

It is clear that the Provincial Government, through the LCLB, wants to concentrate its enforcement on illicit liquor sales, liquor service to minors, and public safety issues such as overcrowding (fire risk) and over consumption. To achieve these goals, it will be necessary for liquor inspectors to conduct inspections during all hours of service. Staff are concerned that the Province may not have sufficient resources to adequately enforce regulations concerning an establishment's responsibility to not adversely impact its neighbours, that liquor inspectors may not be available for monitoring during new extended hours and that rather than being a deterrent, enforcement may just become a "cost of doing business".

Recommendation I proposes that City Council, through the Mayor, write to the Minister of Public Safety and Solicitor General noting that timely, meaningful, and adequately resourced enforcement is required to make the new liquor regulations successful.

Staffing Implications

Completing the work outlined above will engage the efforts of the two staff positions in Licenses previously approved by Council, as well as significant time from members of other departments. Ongoing processing of liquor license applications will also likely require adjustment of existing staffing allocations in Licences and other involved staff groups. It is uncertain at this time if there will be any staffing implications for the Development Service Groups. The clearer the policy that results from the above work becomes, the less resources that will be needed in processing.

DIRECTOR OF SOCIAL PLANNING COMMENTS

The changes outlined in this report may have a variety of social impacts which can be summarized as follows:

· Council has worked with various neighbourhoods to develop plans for liquor license approval which balance the needs of the license holders and the neighbours. The City's current public consultation process for individual licenses is well-defined and fairly well understood by the public. The latest round of provincial liquor license changes have not provided communities with an opportunity to be consulted or provide input. This has lead to retroactive changes to the results of previous public consultations, effectively nullifying these consultations. The City will need to communicate with residents about the new provincial processes and the changes in the City's and community's role as policy is developed.

· Increased liquor availability and consumption may be associated with increased levels of alcohol-related harms. Rates of alcohol-related deaths and alcohol related spousal assault have not changed significantly in the past decade. Rates of regular heavy drinking show a worsening trend. There is some indication that increased access may lead to an increase in impaired driving.

· Hazardous drinking patterns are predominately found in younger rather than older age groups and in males rather than females. Any increase in alcohol consumption by volume or by frequency in these groups should be viewed with concern.

· Increased access to liquor is occurring in a context where treatment resources are extremely inadequate. There is a need for a dedicated and secure funding base to ensure that treatment resources are adequate and available, and to support work on public safety issues like underage drinking, impaired driving, public intoxication, overcrowding.

CONCLUSION

The Provincial LCLB has made major changes to liquor sales and liquor service regulations, to their application process, and to the input that the City may or must provide. These necessitate changes to the City's own previous practices. The industry wants to be able to take advantage of the new opportunities as soon as possible. However, the City needs to ensure that it controls the negative effects of liquor establishments and that its decisions on liquor applications are fair and consistent.

To do this, the City needs new policy and regulations in a number of areas. The actions recommended in this report will see the available staff working on the issues in the most effective order of priority. Staff intend that the eventual outcome of the actions, and ongoing discussions with the LCLB, will be a regulatory regime that ensures long term compatibility between liquor establishments and the community at large.

* * * * *

APPENDIX A

That the development permit application review process for "Liquor Stores" is as follows:

1. The Applicant submits a copy of the Liquor Control and Licencing Branch (LCLB) preliminary approval letter;

2. That staff conduct a neighbourhood notification of affected neighbours (size of notification area will be determined for each application);

3. That staff should review the application for appropriateness of the following factors:

· hours of operation,
· the primary focus of business (liquor, beer, or wine),
· the Parking By-law with particular concern for short term parking, and
· design layout and operational plans for bottle returns.

4. That the Development Permits be approved for a limited period of time subject to the discretion of the Director of Planning;

5. Applications deemed controversial by the Director of Planning may be referred to Council for advice.

The following guidelines should be applied to Development Permit applications:

· "Liquor Store" should not be permitted within 150 metres of another "Liquor Store".

· No "Liquor Store" should be permitted within 150 metres of a school (public or private), church or park.

APPENDIX B

The new provisions in Section 10 (General Regulations) of the Zoning and Development By-law would generally be as follows, subject to revision as necessary by the Director of Legal Services, prior to posting of the draft by-law in advance of the Public Hearing:

10.26 Limitation on Commercial, Retail or Service Uses

10.26.1 Wherever the words "commercial", "commercial uses", or "service uses" appear in this By-law or in any by-law passed pursuant to this By-law, such permitted use shall not, unless otherwise specifically provided by this By-law, include a Body-rub Parlour as defined in section 2 of this By-law.

10.26.2 Wherever the words "commercial", "commercial uses", "retail", "retail uses", "retail store" or "drive-through service" appear in this By-law or in any by-law passed pursuant to this By-law, such permitted use shall not, unless otherwise specifically provided by this By-law, include a Liquor Store as defined in Section 2 of this By-law.

10.26.3 Wherever the word "restaurant" appears in this By-law or in any by-law passed pursuant to this By-law, such permitted use shall not, unless otherwise specifically provided by this By-law, include a Lounge as defined in the Liquor Control and Licensing Act.

Note: Amendments are shown in italics.

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