POLICY REPORT
LICENSING

Date: July 21, 1999
Author/Local: Guy Gusdal/6461
RTS No. 835

CC File No. 2600

P&E: July 29, 1999

TO:	Standing Committee on Planning & Environment
FROM:	Chief License Inspector and Director of Legal Services in Consultation with the Director of Planning
SUBJECT:	Review of Time-Limited Development Permit Policy for Liquor Licensed Establishments

RECOMMENDATION

THAT Council endorse the policy as set out in this report to use time-limited development permits and/or legal agreements as a condition of endorsement for new liquor licenses or amendments to existing liquor licenses.

FURTHER THAT the Director of Land Use and Development be instructed to amend the Zoning & Development Fee By-law 5585, Appendix E, Schedule 1, Section 13 by deleting clause (c).

COMMENTS

The General Manager of Community Services RECOMMENDS approval of the foregoing.

POLICY

THAT Council endorse a process for issuing time-limited development permit approvals for new or physical expansion of existing Class ‘A’ Lounge/Pub, Class ‘C’ Cabaret, Class ‘D’ Neighbourhood Pub or Restaurant-Class 2 licensed establishments, such process tobe generally as outlined in Appendix A of the administrative report dated December 3, 1997.

THAT, with respect to existing Class ‘A’ Lounge/Pub, Class ‘C’ Cabaret or Class ‘D’ Neighbourhood Pub licensed establishments seeking extended hours or seating, Council endorse a process of requiring the holder of the existing development permit to relinquish that permit, and to apply for a time-limited permit.

PURPOSE

To review the Council approved policy requiring time-limited development permits for new liquor licenses and amendments to existing liquor licensed establishments.

BACKGROUND

Time Limited Development Permits for New Establishments

On December 10, 1997, Council approved a policy instructing staff to issue development permits limited in time to four month increments for new Class ‘A’, ‘C’ and ‘D’ and Restaurant-Class 2 liquor licensed establishments.

Staff has alway recognized that applicants may have difficulty obtaining financing, particularly for larger premises, with time-limited development permits, but weighed this concern against Council’s desire to gain a significant enforcement tool over liquor licensed establishments.

The time-limited development permit has been implemented as an interim measure to increase Council’s enforcement ability over primarily new liquor licensed establishments. This new enforcement tool was expected to remain in place until such time as the provincial Liquor Control & Licensing Branch implemented more effective enforcement tools to deal with problem businesses.

Staff has also requested amendments to the Vancouver Charter to alter the show cause hearing process. It is anticipated that these proposed changes will streamline the show cause hearing process and allow a more efficient use of Council and staff time in dealing effectively with problem businesses. Bill 88 containing these amendments was passed by the Legislative Assembly during the current sitting.

Time Limited Development Permits for Existing Establishments

A process was also approved by which the owner of an existing liquor licensed establishment who wishes to extend the hours of operation or increase seating capacity could rescind its existing development permit and apply for a four month time-limited development permit. This process has not been workable due to legal complications and, therefore, legal agreements have been used in place of rescinding the existing development permit. A number of existing establishments have signed a legal agreement as a condition of the licensees’ request to extend the hours of operation, whereby they agree to reduce the hours of operation if problems related to the extended hours arise and such problems are not dealt with to the satisfaction of the Chief License Inspector.

DISCUSSION

Applicants and other members of the industry have expressed a number of concerns over the effect time-limited development permits have on their ability to obtain financing, particularly when new buildings are being proposed.

Staff has not been able to ascertain the validity of these concerns, but recognizes that when a significant investment is needed to finance the refurbishing or construction of a building, it would be difficult to obtain financing where the use approval is based on a four-month renewable development permit. Staff has also been advised by applicants that they will encounter similar financing difficulties even if the time limit is increased.

Any arrangement whereby multiple development permits are issued for one location (for example where an applicant applies for a Restaurant-Class 2 development permit and then applies for a time limited approval for a cabaret or pub) does not appear to mitigate the financing difficulties. This “stacking” of development permits does not appear viable in some cases, as expressed by members of the industry. Their argument is based on the contention that the amounts the banks are willing to finance for the “lesser” use is not significant enough to cover the construction and implementation costs of the “intended” use. It should be noted the Planning Department has also expressed concern about stacking development permits in cases where the department is aware that the “lesser” development permit is never intended to be used. The public process is confusing as the notification would identify a restaurant use when in fact staff is aware of the intended future use as a cabaret or pub.

Staff notes that notwithstanding the financing difficulties involved with time-limited development permits, there are situations where the increased risk created by the presence of a time-limited development permit is warranted and must be born fully by the applicant. It is important that they be made fully aware of these conditions prior to receiving any endorsement for their proposal. The following are some examples of where the use of the time-limited development permit is warranted from a land use perspective:

(a) A new establishment is proposed within a predominantly residential area, for example a Class ‘D’ Neighbourhood Pub or Restaurant-Class 2 anywhere in the West End or in a ‘C’ zone along West Broadway.

This is particularly true in applications where the neighbourhood notification results in a significant amount of concern and uncertainty about the potential impact on the community. In this situation, the community may be willing to accept the proposal and give operators the chance to move forward under the provision that if the use does prove to be incompatible, it can be removed. Also, the use of the time-limited development permit may provide Council with some level of comfort for contentious applications that may impact on a community or the allocation of City resources, but where Council also sees merit in the proposal; and

(b) The proposal of a new or unique Council policy where staff has only been able to speculate as to what the potential impacts for the community/City may be in the future. This may include a concentration of new liquor licenses in a specific area like the Theatre Row Entertainment District or the proposed convention centre. The provision of time-limited development permits on new licenses would allow Council the opportunity to reverse the decision some time in the future should negative, anticipated or unforseen, impacts be greater than staff predicted.

Liquor License Regulation Amendments

Council is aware of the amendments being proposed to the provincial liquor license regulations. Staff is unsure when or if these regulations will be amended or if the amendments will be sufficient to address the enforcement shortcomings of the existing system (i.e., quick removal of licenses and trial periods, for example). If the proposed regulation amendments are sufficient to adequately control liquor licensedestablishments, then the policy requiring time-limited development permits could be eliminated, except in those cases where there is concern about the proposed establishments’ compatibility with surrounding uses.

RECOMMENDED PROCEDURES

The dilemma for staff is finding the middle ground between the competing interests of Council and staff desire for placing stricter controls over licensed establishments when the opportunity to do so is presented, and the applicants’ ability to finance and complete the development. Staff is suggesting that prior to the implementation of adequate controls at the provincial level, a combination of measures may be necessary to meet these conflicting needs of Council and the applicants.

The introduction of a streamlined show cause hearing process should improve the City’s ability to adequately deal with all types of problem businesses, including liquor licensed establishments. Therefore, it should be possible to reduce the emphasis on the time-limited development permit process.

Staff recommends that Council endorse the following procedure for issuing development permit approvals for new or physical expansions of Class ‘A’, Class ‘C’, Class ‘D’ or Restaurant-Class 2 license establishments and for development permit approvals for existing Class ‘A’, Class ‘C’, or Class ‘D’ license establishments seeking extended hours or increased seating capacity:

New or Physical Expansions of Existing License Estabishment

(a) The applicant will execute a legal agreement, to the satisfaction of the Director of Legal Services and the Chief License Inspector, whereby the applicant agrees to deal with any problems caused by the applicant’s operation to the satisfaction of the Chief License Inspector. If such problems are not adequately dealt with to the Chief License Inspector’s satisfaction, the applicant will voluntarily reduce the establishment’s hours of operation or decrease the seating capacity, to the satisfaction of the Chief License Inspector. If the applicant does not deal with the problems in accordance with terms of a legal agreement, or if the problems are seriousenough to warrant it, the City may utilize the show cause hearing process to remove the establishment’s business license.

(b) In addition to the legal agreements, time-limited development permits will be issued where, in the opinion of the Director of Planning, in consultation with the Chief License Inspector, the new establishment is proposed in close proximity to a significant amount of residential use or where the new establishment requires the proposal of a new or unique Council policy where staff has only been able to speculate as to what the potential impacts for the community/City may be in the future. The time limit for these time-limited development permits will be at the discretion of the Director of Planning, in consultation with the Chief License Inspector, with the length of the time limit to be determined on a case-by-case basis.

Existing License Establishment Seeking Extended Hours Or Seating

The applicant will execute a legal agreement, to the satisfaction of the Director of Legal Services and the Chief License Inspector, whereby the applicant agrees to deal with any problems caused by the extended hours or increased seating capacity to the satisfaction of the Chief License Inspector. If such problems are not adequately dealt with, the applicant will voluntarily reduce the establishment’s hours of operation or decrease the seating capacity back to the original approval, to the satisfaction of the Chief License Inspector. If the applicant does not deal with the problems in accordance with the terms of a legal agreement, or if the problems are serious enough to warrant it, the City may utilize the show cause hearing process to remove the establishment’s business license.

Existing Licensed Establishments That Were Issued a Four Month Time-Limited Development Permit

There are a few premises approved under the existing four month development permit policy which should be brought in line with the new policy outlined in this report.

The establishments where the use is not an issue will have their development permit issued permanently on the next renewal date, once a legal agreement to the satisfaction of the Director of Legal Services and the Chief License Inspector has been signed.

Those establishments where the use is a concern will, at the time of the next development permit renewal, be offered a legal agreement to sign. Once the legal agreement has been signed, the development permit renewal will be processed for a longer period, at the discretion of the Director of Planning in consultation with the Chief License Inspector.

The establishments holding four month time-limited development permits that do not wish to sign a legal agreement will remain on a four month time-limited development permit.

CONCLUSION

Staff acknowledges that the four month time-limited development permit process is not the ideal solution to the issues Council is trying to resolve, and note that it is only meant to be an interim solution. Staff recommends a combination of measures including, where necessary, issuance of time-limited development permits, execution of legal agreements and the utilization of the improved, streamlined show cause hearing process to address the issues facing Council, until such time as sufficient provincial regulations are in effect.

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(c) 1998 City of Vancouver