HomeMy WebLinkAboutExhibit 4Exhibit 4
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FURY REVOCATION HEARING - 412412008
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FURY REVOCATION HEARING
THURSDAY, APRIL 24, 2008
NEWPORT BEACH, CALIFORNIA
3:41 P.M.
HEARING RE "THE FURY" taken at 3300 Newport
Boulevard, Newport Beach, California, commencing at
3:41 p.m., Thursday, April 24, 2008, before
DEBORAH J. BLANCHET, CSR NO. 7614.
THOMAS W. ALLEN, HEARING OFFICER
STEPHEN JAMIESON, ATTORNEY FOR "THE FURY"
JUNE AILIN, ATTORNEY FOR THE CITY
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THE HEARING OFFICER: And we're back in session for the
Fury Rok and Rol Sushi revocation proceedings. Pm the
hearing officer, Thomas W. Allen. We need appearances for
the record again today?
MS. AILIN: I think that's probably a good idea June
Ailin, law firm of Aleshire & Wynder for the City of Newport
Beach.
MR JAMIESON: And Stephen Jamieson, Solomon, Sahsman &
Jamieson, attorneys for respondent. And with me is David
Gonzalez with a Z at the end.
MS. AILIN: And with me here today is Kristy Parker, a
paralegal from the city attorney's office.
THE HEARING OFFICER: And were scheduled today for
final arguments. There's no testimony planned; is that
correct?
MS. AZX,4: That's correct.
THE HEARING OFFICER: By either party!
MR JAMIESON: Correct.
THE HEARING OFFICER: Arid so the sole purpose today is
to present final arguments and end the hearing. So with that
let's proceed.
MS. AR,IN: All right. Thank you. As I think we're all
aware here the issue is whether Use Permit 2005 -0I8 has been
violated, and what we are focusing on is a number of the
conditions in the Use Permit rather than just the general
1 (Pages 1 to 4)
Page 3.
1 concept of whether Fury was a public nuisance.
2 While that is clearly a circumstance under which a
3 use permit cam be revoked, it isn't the only one. The cases
4 are pretty clear that you don't have to prove nuisance
5 necessarily to revoke a permit You can also revoke a permit
6 if the conditions of the permit have been violated.
7 And just for the record, because I frankly don't
e recall whether this was in the hearing brief that I did, the
9 cases pertinent to that are O'Hagen, and that's 0. apostrophe
lo H- a- g -e-n, vs. Board of Zoning Adjustment, a 1971 case,
11 19 Cahihmia Appellate Reports, 3d starting at Page 151 with
12 a pinpoint cite to Page 158, and also the somewhat infamous
13 around here anyway Croat MU Tavern vs. City of Costa Mesa, a
14 1992 case, 6 California Appellate Reports, 4th starting at
15 Page 1519 with a pinpoint cite to 1530.
16 I suppose you could look at both of those cases and
17 say well, both of those cases talk about nuisance as do many
is of the other cases. I think the reality is that what we
19 typically get from the Court of Appeal are cases dealing with
20 more difficult situations. The idea that you can revoke a
21 permit if the conditions are violated is almost axiomatic.
22 So we don 't really have a lot of case law on that particular
23 issue.
24 Before I start talking about the evidence and what
25 the evidence shows about the conditions that are violated I'd
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1 like to note that most of the evidence that was gathered with
2 regard to the violation of the conditions was gathered in
3 November and December of 2007. Whats interesting about that
4 is that there was a meeting in October 2007 mentioned in a
5 stipulation that we entered into mentioned by Mr. Gonzalez
6 during his testimony in which the city raised its concerns
7 about how Fury was operating.
8 And an this evidence was gathered at a time when
9 Fury was aware that there were concems about how Fury was
10 operating and whether those operations were consistent with
11 the conditions of the Use Permit, and nevertheless they were
12 doing things that were not consistent with the conditions of
13 the Use Perrtdt.
14 Mr. Jameson has made the point through testimony a
15 number of titres that a lot of the investigation was time — a
16 lot of the investigation that was time was not driven by
17 citizen complaints. Ion not exactly sure what Mr. Jamieson's
18 point with that was, but I think its significant because
19 what the people who are doing the investigation saw was Fury
20 operating normally as opposed to something unusual happening
21 that would necessarily precipitate a citizen complaint.
22 And so I think that that actually makes the
23 evidence even stronger because what the investigation was
24 looking at was Furyzs normal operating conditions, and when
25 the normal operating conditions as opposed to some
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FURY REVOCATION HEARING - 4/24/2008
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and there is some overlap. I'm going to start by going
through these three conditions and the evidence that I note
indicates a violation of these conditions, but because these
three conditions are kind of interrelated, the evidence
overlaps somewhat, so there may be some repetition, but at
the same time I'm going to try to avoid repetition.
First off, there's the video which was Exhibit C19.
1 know there's a lot of for lack of a better word controversy
about that video and whether it should have been admitted,
but it was clearly made with the knowledge of the owners of
the business. Brian Schillizzi was featured in the video,
and what you see in the video is a club scene, and it
promotes Fury as a club. There's no one in the video who's
eating. There's absolutely no mention of food in the video.
It's all focused on drinking, dancing, bottle service.
Exhibit C12, which is the Sienna Entertainment web
page, again, the Internet evidence was somewhat controversial
and its admissibility and reliability contested, but
Mr. Gonzalez testified that Sienna Entertainment did promote
for Fury. And so looking at Exhibit C12, the second page
categorizes Fury under nightclubs and lounges. It says
there's a cover charge, not exactly typical of a restaurant.
The hours are 6:00 p.m. to 2:00 am. Monday through
Friday, and it seems to indicate that there's music on all of
those nights. It also says that the age is 21 and over, and
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L trages 5 to 131
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just generally Pm not going to nitpick this through the
other exhibits. If what we have here is a restaurant with a
class 47 alcohol license, you don't have to be over 21 to get
in, and yet there are pieces of evidence, particularly some
of the police officer's reports that indicate that I.D.'s
were being checked. And if the estabhshatent is operating as
a restaurant as opposed to a bar or a nightclub, that
wouldn't be necessary.
One of the police reports that refers to the
checking of I.D.'s is Exhibit C27 where we have reports from
Officers Jones, Stark, Peterson, and Graham, all of whom
testified. They refer to bar and bottle service -- excuse
me.
C27 refers to a line outside, refers to intoxicated
persons in the perking lot and vomiting in the parking lot.
Again, I suppose -- I suppose if it were a really bad
restaurant, although I don't think it was a bad restaurant in
terms of the quality of the food, you might see that, but
that kind of behavior is much more closely associated with
bars.
Exhibit C13, which is the ladys night ad, makes no
reference to food, and we also had testimony from
Mr. Gonzalez about bottle service at Fury, again, not
something that's consistent with being a restaurant as
opposed to a bar to have people come in and sit doom as a
Page S
group, order a bottle or multiple bottles of some alcoholic
beverage at prices ranging from $275 to $600 a bottle, might
be cheaper than buying individual drinks, but that's not
putting an emphasis on food.
There's also some inconsistency in the various
exhibits that talk about what the restaurant's hours are.
For example, Exhibit F24, which was the -- one of the pages
From the promotional materials in F24, the one that refers to
WunderMarx — excuse me. That's not F24.
F24 was the excerpt form Orange Coast Magazine,
which is interesting for a couple of reasons. You know, it
starts with the headline that says, "What happens at Fury
stays at Fury," which doesn't exactly sound like a
restaurant, and refers to the wild Vegas LA. scene at Fury,
and this is promotional material that was put together by
Fury's own public relations team, but this same piece, when
it talks about the ham, says that dinner is served fiom
5:00 to 10:00 p.m Tuesday, 5:00 to 10:00 p.m. Wednesday and
Thursday, 5:00 to 11:00 on Friday and Saturday, but it
references a bar menu served from 11:00 p.m. to 1:30 am
Thursday through Saturday. So we have some indication there
that we don't have the full menu being served the entire time
the restaurant is open. in fact, Chef Sevan testified that
at the latest the kitchen closed at 1:00, but last call at
the bar wasn't until 1:30 or 2:00.
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Page 5'
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extraordinary event are outside the scope of the conditional
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Use Permit, that's pretty significant.
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I want to focus in particular on certain
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conditions. The really central issue here is what kind of
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establishment was Fury really functioning as as opposed to
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what it was supposed to be. And in looking at that I think
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the heart of the Use Pemdt is condition 20 which says, "The
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approval of this Use Permit does not permit the premises to
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operate as a bar, tavern, cocktail lounge, nightclub, or
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commercial recreation and entertainment use as defined in
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§ 20.05.050(i) of the Municipal Code."
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There are some other conditions that were put in
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place to help support that because clearly this was an
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establishment that was going to serve alcohol and was going
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to have music and dancing. And the supporting conditions are
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condition 16 which says, "Full menu food service shall be
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available for ordering at all times that the restaurant
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establishment is open for business," and we also have
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condition 29 which says, "The quarterly gross sales of
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alcoholic beverages shall not exceed the gross sales offood
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during the same period." And the condition goes on to
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require Fury to maintain records that separately show the
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gross sale of food and the gross sale of alcoholic beverages
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and to make those records available when requested.
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So starting particularly with those conditions --
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and there is some overlap. I'm going to start by going
through these three conditions and the evidence that I note
indicates a violation of these conditions, but because these
three conditions are kind of interrelated, the evidence
overlaps somewhat, so there may be some repetition, but at
the same time I'm going to try to avoid repetition.
First off, there's the video which was Exhibit C19.
1 know there's a lot of for lack of a better word controversy
about that video and whether it should have been admitted,
but it was clearly made with the knowledge of the owners of
the business. Brian Schillizzi was featured in the video,
and what you see in the video is a club scene, and it
promotes Fury as a club. There's no one in the video who's
eating. There's absolutely no mention of food in the video.
It's all focused on drinking, dancing, bottle service.
Exhibit C12, which is the Sienna Entertainment web
page, again, the Internet evidence was somewhat controversial
and its admissibility and reliability contested, but
Mr. Gonzalez testified that Sienna Entertainment did promote
for Fury. And so looking at Exhibit C12, the second page
categorizes Fury under nightclubs and lounges. It says
there's a cover charge, not exactly typical of a restaurant.
The hours are 6:00 p.m. to 2:00 am. Monday through
Friday, and it seems to indicate that there's music on all of
those nights. It also says that the age is 21 and over, and
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L trages 5 to 131
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just generally Pm not going to nitpick this through the
other exhibits. If what we have here is a restaurant with a
class 47 alcohol license, you don't have to be over 21 to get
in, and yet there are pieces of evidence, particularly some
of the police officer's reports that indicate that I.D.'s
were being checked. And if the estabhshatent is operating as
a restaurant as opposed to a bar or a nightclub, that
wouldn't be necessary.
One of the police reports that refers to the
checking of I.D.'s is Exhibit C27 where we have reports from
Officers Jones, Stark, Peterson, and Graham, all of whom
testified. They refer to bar and bottle service -- excuse
me.
C27 refers to a line outside, refers to intoxicated
persons in the perking lot and vomiting in the parking lot.
Again, I suppose -- I suppose if it were a really bad
restaurant, although I don't think it was a bad restaurant in
terms of the quality of the food, you might see that, but
that kind of behavior is much more closely associated with
bars.
Exhibit C13, which is the ladys night ad, makes no
reference to food, and we also had testimony from
Mr. Gonzalez about bottle service at Fury, again, not
something that's consistent with being a restaurant as
opposed to a bar to have people come in and sit doom as a
Page S
group, order a bottle or multiple bottles of some alcoholic
beverage at prices ranging from $275 to $600 a bottle, might
be cheaper than buying individual drinks, but that's not
putting an emphasis on food.
There's also some inconsistency in the various
exhibits that talk about what the restaurant's hours are.
For example, Exhibit F24, which was the -- one of the pages
From the promotional materials in F24, the one that refers to
WunderMarx — excuse me. That's not F24.
F24 was the excerpt form Orange Coast Magazine,
which is interesting for a couple of reasons. You know, it
starts with the headline that says, "What happens at Fury
stays at Fury," which doesn't exactly sound like a
restaurant, and refers to the wild Vegas LA. scene at Fury,
and this is promotional material that was put together by
Fury's own public relations team, but this same piece, when
it talks about the ham, says that dinner is served fiom
5:00 to 10:00 p.m Tuesday, 5:00 to 10:00 p.m. Wednesday and
Thursday, 5:00 to 11:00 on Friday and Saturday, but it
references a bar menu served from 11:00 p.m. to 1:30 am
Thursday through Saturday. So we have some indication there
that we don't have the full menu being served the entire time
the restaurant is open. in fact, Chef Sevan testified that
at the latest the kitchen closed at 1:00, but last call at
the bar wasn't until 1:30 or 2:00.
Precise Reporting Service
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FURY REVOCATION HEARING - 4/24/2008
25 paragraphs talk about Fury in a context that isn't exactly a 12 5
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In F26, which is the promotional material provided
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by Fury on the page from the WunderMarx i; public relations
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firm it says that "Fury combines an upscale sushi restaurant
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with a unique ultra lounge and nightclub," a similar —
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THE HEARING OFFICER: I'm sorry. What exhibit is that?
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MS. AIC.W: That's F26. I think that's F26. Let nx
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just double -check that Sony. That's F27. F27 is the
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promotional material.
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There's another excerpt from Great Taste Magazine
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in Exhibit F27 that says the same thing, "The restaurant is a
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combination of upscale sushi restaurant with a unique ultra
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lounge and nightclub." The same language appears in the
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article from Dining Out, which is included in F28.
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And the Dining Out article also says, "Alter dinner
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Fury morphs into an exciting ultra lounge where popular
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D.J.'s keep the music pumping and the mood upbeat with the
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best of hiphop top 40 and mash -ups, again, Fury promoting
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itself as something other than a restaurant that has dinner
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and dancing.
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Then there's the article in Riviera Magazine, which
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is Exhibit C22, and its also part of Exhibit C27, and in
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particular I could sit here and read excerpts, but I don't
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think we want to be here all afterown. At the beginning of
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the article the first paragraph, actually the first two
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restaurant Just a few lines. "At 12:00 a.m. the dance
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floor at Fury is packed with pretty young things, and the
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booths are filled with party people and set up for $300
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bottle service booze. The first time I went into Fury I I
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didn't know they served food, but to be frank, l wasn't
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noticing much of anything in the then brand new hot spoL"
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At the beginning of the first paragraph this 1
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article says, "It wasn't until my third trip to Fury that 1
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discovered its full Asian fusion menu." Later in the same 1
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paragraph, "The booze can easily overwhelm the food,
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especially if pack them in promoters are involved. Soon a 111
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restaurant becomes a full -blown club that happens to have a 112
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small easily overlooked menu."
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On the second page of that article, the second full
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paragraph or I should say the first full paragraph in the 115
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left -hand column that starts with "David Gonzalez and Brian
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Schillizzi own Fury." Toward the end of the column it -- end
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of the paragraph rather it talks about the bottle service. I
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"You can have the standard bottle of Ketel. Effen, or Grey
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Goose vodka served tableside for about $300, but why not
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change it up at the higher end with a bottle of Johnny Walker
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Blue for $800 or go nostalgic. A bottle of Yeagetmeister is
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$350."
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And if we skip the next paragraph and go down to
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the last paragraph that starts in the left -hand column, 125
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Page 11,
"Though food is served from 6:00 to 10:00 p.m. Monday through
Saturday, the energy is higher on a club night currently set
for Tuesday, Friday, and Sunday." Interesting because having
live entertainment and dancing on Tuesday would not be
consistent with other conditions in the Use Perini.
"On non-club nights the large decorated space can
seem expectant as if yearning for the party that doesnY
come. At 10:00 p.m. there's an almost seamless
transformation from restaurant to ultra lounge as the servers
switch from waiter mode, black buttondown shirt and pants to
party made, Annaniesque suit and tie." Again, these are
articles about Fury that Fury was involved with with placing
to promote the establishment.
Exhibit C24, C25, and F26, which are the various
daily sales system sales detail, as the hearing officer
requested, I've submitted a short brief on that subject, and
actually there was a stipulation we were going to put on the
record about that that we should do at some point today. I'm
sorry. Was it about that or about something else?
MR, JAMIESON: No. That was about —
MS.AILIN: That was about something else. That's
Tight. Right. And those clearly indicate that Fury was
selling considerably more alcohol than food particularly in
the fourth quarter of 2007.
In Exhibit C28, another one of the police reports,
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there is again talk about the line out in from ofpeopl e
waiting to get in. In the portion of the report prepared by
Detective Grab= he called to make a reservation, and quoting
from the report, "I then asked how late they would accept a
dinner reservation, and she stated 2030 hours, which would be
8:30. She then explained in detail that by 2200 hours, that
would be 10:00 p.m., the tables were set up for bottle
service. She stated if I wanted to reserve a table for
bottle service that I could stay at the table and be served
dinner as fate as 0045, that would be 12 — 45 minutes past
midnight hours. She stated that the minimal cost of bottle
was $275 for four people. She also stated that I would be
required to pay with a credit card at the time the
reservation was made. Without prepaying for bottle service
the latest I could make a dinner reservation was 2030 hours.
That would be 8:30 p.m." So again, an emphasis on alcohol as
opposed to food.
Further quoting from Exhibit C28, Detective
Graham's portion of that report, "Once inside we remained at
our table after eating dinner. By 2145 hours I observed the
dining area begin to transform. Tables that had previously
been used for dining were being removed from the floor. This
occurred near the front door and on the south side near time
bar. I would estimate at least six tables were removed"
And as indicated in the article from Riviera
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FURY REVOCATION HEARING - 4/24/2008
4 (Pages 13 to 16)
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door, "We're full," but persons who paid a cover charge
continued to get in whether the cover charge was paid in
advance or at the door.
Grahams report reads in part, "Once at the bar, I
asked for a menu. I was given the full menu from the
bartender. I then placed an order with her. A short time
later she returned with a different menu, She stated that
the main menu was no longer being offered. The new menu that
she handed me was labeled late nigh' on the top." This is
consistent with Exhibit C43, the late night menu that was
introduced into evidence.
"The menu had three items: Pizza, chicken fingers,
and fries. The bottom of the menu read late night menu
service Thursday through Saturday 11:00 p.m to 1:00 a.m.'
At approximately 0015 hours, in other words a quarter after
midnight, I ordered a barbecue chicken piece and a beer. I
did not observe anyone else with food during my time inside
the establishment. I ate while standing at the bar. Chairs
were moved prior to my approval."
Detective Graham also noted seeing a number of
intoxicated patrons inside the restaurant and that the aisles
were not kept clear.
In Exhibit C26 Detective Stark reported, "I spoke
with the bartender regarding food service. She told me that
I could order the full menu until 2300 hours, and then just
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sushi was available after that." Detective Stark also noted
that a majority of the tables had been prepared for V.I.P.
service. Large buckets of ice and stacked glasses were on
those tables, and at about midnight he walked through the
establishment and didn't see food service anywhere in the
restaurant.
So again, as I stated at the outset, condition 16,
intended to insure that the establishment remained 38X
restaurant rather than a bar or a nightclub, was not being
observed. And w I mentioned when I was talking about
condition 20, condition 29 requiring that gross quarterly
sales of alcoholic beverages not exceed sales of, gross sales
of food for the same period.
Now, that's the heart of the Use Peri nit and the
heart of the issue here, but there are other conditions of
the Use Permit that were violated. Condition 5 in
conjunction with conditions 3 and 4 required that restaurant
employees be required to use the 16 off -site parking spaces.
There was testimony to the effect that there would be more
than 16 employees on duty at any given time, and so there
would be a need for some of those employees to park in the
surface, the shared surface parking lot near Fury and the
other two restaurants, but based on testimony from Shannon
Levin and the memos of her observations with regard to the
parking Exhibits CS, C9, C10, and C40 there didn't appear to
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Magazine, Detective Graham also noted that there was a change
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in the service personnel going from [Hale waiters to female
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cocktail waitresses, and he also noted that drink prices went
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up after dinner.
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In Exhibit 31 from the portion of that report
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prepared by Detective Hayward, Detective Hayward reported,
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"Detective Joe and 1 were seated immediately and remained at
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our table after eating dinner. At around 2130 hours
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employees removed the bar stools from the area around the
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bar. Our waitress closed our tab at around 2130 hours.
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That's 9:30 p.m We observed only one other group who
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ordered food after 2100 hours. At around zero hours, which
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would be midnight, Detective Joe requested a dinner Hems from
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an employee. We were provided with a menu which had around
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ten food items listed. This menu was two pages shorter than
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the dinner menu we were given at 2130. The items on the
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shorter menu included seared blue fin salads, scallops,
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sushi, and fillet mignon skewers." So there's plenty of
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evidence that what was going on was a bar or a nightclub.
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Supporting that is the evidence related to
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condition 16. Poe already mentioned ChefSevan testified—
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well, first he testified that the hours of service on the
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menus were correct and then, when it was pointed out that
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they indicated on one of them basically service overnight
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through to 11:00 a.m. he said well, it should be 1:00 a.m.,
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but again, last call for the bar he testified is 1:30 or
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2:00. So the full menu food service was not available at all
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hours that the establishment was open for business.
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Along the same lines in Exhibit C27, the portion of
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the report prepared by Officer Peterson, he couldn't get a
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9:30 dinner reservation because he was told they needed the
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table for bottle service at 10:00 p.m on Fridays. Quoting
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from that report, "At 9:35 p.m. I was advised by Krismia
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that she had to put in the last dinner order at 9:45 p.m. [
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asked her why, and she said that she was part of the bottle
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service shift on the other side of the restaurant, and that
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most of the tables are sold at 10:00 p.m. for bottle service.
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That was actually confirmed by Mr. Gonzalez in his
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testimony when he said that after 10:00 p.m. there were about
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ten tables available for dinner and 20 for bottle service.
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"Kristina told me that the hot portion of the menu
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closes at 10:00 p.m., and the cold portion of the menu, that
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is the sushi portion, shuts down at 11:00 p.m." So based on
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detective Peterson's report there is no food available after
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11:00. He noted that at 9:50 the lights were dimmed and
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personnel started setting up for bottle service. He also
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noted an overly intoxicated patron inside the restaurant.
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Detective Graham in the portion of Exhibit C27 that
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he wrote noted that he was in line outside the establishment.
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Brian Schillizzi came out and told the person manning the
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door, "We're full," but persons who paid a cover charge
continued to get in whether the cover charge was paid in
advance or at the door.
Grahams report reads in part, "Once at the bar, I
asked for a menu. I was given the full menu from the
bartender. I then placed an order with her. A short time
later she returned with a different menu, She stated that
the main menu was no longer being offered. The new menu that
she handed me was labeled late nigh' on the top." This is
consistent with Exhibit C43, the late night menu that was
introduced into evidence.
"The menu had three items: Pizza, chicken fingers,
and fries. The bottom of the menu read late night menu
service Thursday through Saturday 11:00 p.m to 1:00 a.m.'
At approximately 0015 hours, in other words a quarter after
midnight, I ordered a barbecue chicken piece and a beer. I
did not observe anyone else with food during my time inside
the establishment. I ate while standing at the bar. Chairs
were moved prior to my approval."
Detective Graham also noted seeing a number of
intoxicated patrons inside the restaurant and that the aisles
were not kept clear.
In Exhibit C26 Detective Stark reported, "I spoke
with the bartender regarding food service. She told me that
I could order the full menu until 2300 hours, and then just
Page 16
sushi was available after that." Detective Stark also noted
that a majority of the tables had been prepared for V.I.P.
service. Large buckets of ice and stacked glasses were on
those tables, and at about midnight he walked through the
establishment and didn't see food service anywhere in the
restaurant.
So again, as I stated at the outset, condition 16,
intended to insure that the establishment remained 38X
restaurant rather than a bar or a nightclub, was not being
observed. And w I mentioned when I was talking about
condition 20, condition 29 requiring that gross quarterly
sales of alcoholic beverages not exceed sales of, gross sales
of food for the same period.
Now, that's the heart of the Use Peri nit and the
heart of the issue here, but there are other conditions of
the Use Permit that were violated. Condition 5 in
conjunction with conditions 3 and 4 required that restaurant
employees be required to use the 16 off -site parking spaces.
There was testimony to the effect that there would be more
than 16 employees on duty at any given time, and so there
would be a need for some of those employees to park in the
surface, the shared surface parking lot near Fury and the
other two restaurants, but based on testimony from Shannon
Levin and the memos of her observations with regard to the
parking Exhibits CS, C9, C10, and C40 there didn't appear to
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1 particular Detective Graham notes that a group of 17 was let
2 in after Mr. Schillizzi noted that they were full.
3 We also have evidence in Exhibit 30 regarding an
4 actual count out that took place where -- what's interesting
5 is that in that report we have an informal estimate from
6 Dfficcr Hardy of 400 patrons in the restaurant We have a
7 conclusion from the count out in both Officer Hardy's report
e and Officer Yee's report of 518, and while 1 recognize that
9 the evidence about that number is disputed, we also have a
10 report that when Schillimi was first questioned about how
11 many people were in the establishment, he said that it was
12 more like 300 to 350, which in any event would be over the
13 297.
14 Condition 25 states that "no happy hour type of
15 reduced price alcoholic beverage promotion shall be allowed
16 except when served in conjunction with food ordered from the
17 full service menu;' but in Exhibit Cl 1, which is Internet
18 material tied to The Social Group, which Mr. Gonzalez admits
19 was a promoter for Fury, and this particular advisement
20 promotes a New Year's Eve party, it indicates that there's
21 free champaign from 7:00 to 9:00 with appetizers, but not the
22 fill] menu.
23 And in Exhibit C 13 the Ladies' Night advertisement
24 indicates that there's free champaign from 8:00 to 10:30. So
25 we have violations of condition 25 as well.
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Condition 27 states, "The eating and drinking
establishment shall take reasonable steps to discourage and
correct objectionable conditions that constitute a nuisance
in parking areas, sidewalks, and areas surrounding the
alcoholic beverage outlet and adjacent properties during
business hours." One of the things that's interesting is
that there's a sidewalk outside Fury, and you can see in
Exhibit C19 that the sidewalk is blocked by a line, and so we
have there a situation where Fury is creating, in effect, a
nuisance condition, a blocked sidewalk itself, as opposed to
patrons of Fury being the immediate source of the problem,
but regardless of the immediate source of the problem the use
condition puts the responsibility on Fury to take steps to do
something about it.
And we have a number of reports from the police
officers about various acti vities in the parking lot that
Fury staff was not doing very much about. In Exhibit C27 we
have reports from Detective Jones about drinking in the
parking lot, intoxicated persons in the parking lot, vomiting
in the parking lot, urinating in the parking lot. Detective
Stark reports a marijuana smell in the parking lot, and the
music from inside Fury being audible in the parking lot.
In Exhibit C28 we have Detective Jones reporting
again urination in the parking lot, overly intoxicated
persons in the parking lot, people breaking bottles and
Page 20
starting fights.
More of the same in Exhibit 29, the line out sub --
outside the establishment, drinking outside the
establishment, club music audible in the parking IoL
Exhibit 31, public urination. Exhibit 32, C32 more of the
same.
Mr. Jamieson in cross - examining these witnesses
focused on whetherornot these people had been in Fury, came
out of Fury, were on their way to Fury, really doesn't
matter. The Use Permit doesn't say do something about your
own patrons. The Use Permit says do something about these
conditions in the parking lot without focusing particularly
on where people were coming from a going to.
We also had testimony from Paul Solenko, the
statistician from the police department, where he looked at
statistics regarding certain reports of crimes in the
reporting district that Fury is located in, and comparing the
first half of 2007 before Fury was open with the second half
of 2007 after Fury opened. In the first half of 2007 there
were zero aggravated assaults.
There was one in the second half of 2007. In the
first half of 2007 there were 13 simple assaults. In the
second half there were 27. In the first half of 2007 there
were five DUI reports. In the second half there were 25 DUI
reports. In the first half of 2007 there were seven reports
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be very many of the Fury employees who were parking in the 16
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offsite parking spaces.
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Condition 18 is something of a catchall, "The
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applicant shall comply with all federal, state, and local
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laws. Material violation of any of those laws in connection
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with the use will be cause for revocation of this permit."
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There are indications of violations of other portions of the
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Municipal Code. We had testimony from Shannon Levin and
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material in Exhibits C8 and CIO about outdoor storage of
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trash and trash handling, dumpsters not being kept in the
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trash enclosure, and we had testimony from Mr. Gonzalez
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saying that the dumpsters were only left out of the trash
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enclosure when trash pickup was scheduled, but when
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questioned about when trash was picked up, Mr. Gonzalez said
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that it was Brian Schillizzi who made those arrangements. So 1
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1 think there's some question about how well- informed
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Mr. Gonzalez was about how trash was handled and where the
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dumpsters were kept. j
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Condition 21 requires strict adherence to the
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maximum occupancy limit of 297. We had a son of an informal
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report in Exhibit C27 from Detective Graham about the
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premises appearing to be overcrowded. On the first page j
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of Detective Graham's portion of that report in the third 123
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paragraph he reports that Brian Schillizzi carte out and said J
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we're full, but additional patrons were let in. In
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Page 18
1 particular Detective Graham notes that a group of 17 was let
2 in after Mr. Schillizzi noted that they were full.
3 We also have evidence in Exhibit 30 regarding an
4 actual count out that took place where -- what's interesting
5 is that in that report we have an informal estimate from
6 Dfficcr Hardy of 400 patrons in the restaurant We have a
7 conclusion from the count out in both Officer Hardy's report
e and Officer Yee's report of 518, and while 1 recognize that
9 the evidence about that number is disputed, we also have a
10 report that when Schillimi was first questioned about how
11 many people were in the establishment, he said that it was
12 more like 300 to 350, which in any event would be over the
13 297.
14 Condition 25 states that "no happy hour type of
15 reduced price alcoholic beverage promotion shall be allowed
16 except when served in conjunction with food ordered from the
17 full service menu;' but in Exhibit Cl 1, which is Internet
18 material tied to The Social Group, which Mr. Gonzalez admits
19 was a promoter for Fury, and this particular advisement
20 promotes a New Year's Eve party, it indicates that there's
21 free champaign from 7:00 to 9:00 with appetizers, but not the
22 fill] menu.
23 And in Exhibit C 13 the Ladies' Night advertisement
24 indicates that there's free champaign from 8:00 to 10:30. So
25 we have violations of condition 25 as well.
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Condition 27 states, "The eating and drinking
establishment shall take reasonable steps to discourage and
correct objectionable conditions that constitute a nuisance
in parking areas, sidewalks, and areas surrounding the
alcoholic beverage outlet and adjacent properties during
business hours." One of the things that's interesting is
that there's a sidewalk outside Fury, and you can see in
Exhibit C19 that the sidewalk is blocked by a line, and so we
have there a situation where Fury is creating, in effect, a
nuisance condition, a blocked sidewalk itself, as opposed to
patrons of Fury being the immediate source of the problem,
but regardless of the immediate source of the problem the use
condition puts the responsibility on Fury to take steps to do
something about it.
And we have a number of reports from the police
officers about various acti vities in the parking lot that
Fury staff was not doing very much about. In Exhibit C27 we
have reports from Detective Jones about drinking in the
parking lot, intoxicated persons in the parking lot, vomiting
in the parking lot, urinating in the parking lot. Detective
Stark reports a marijuana smell in the parking lot, and the
music from inside Fury being audible in the parking lot.
In Exhibit C28 we have Detective Jones reporting
again urination in the parking lot, overly intoxicated
persons in the parking lot, people breaking bottles and
Page 20
starting fights.
More of the same in Exhibit 29, the line out sub --
outside the establishment, drinking outside the
establishment, club music audible in the parking IoL
Exhibit 31, public urination. Exhibit 32, C32 more of the
same.
Mr. Jamieson in cross - examining these witnesses
focused on whetherornot these people had been in Fury, came
out of Fury, were on their way to Fury, really doesn't
matter. The Use Permit doesn't say do something about your
own patrons. The Use Permit says do something about these
conditions in the parking lot without focusing particularly
on where people were coming from a going to.
We also had testimony from Paul Solenko, the
statistician from the police department, where he looked at
statistics regarding certain reports of crimes in the
reporting district that Fury is located in, and comparing the
first half of 2007 before Fury was open with the second half
of 2007 after Fury opened. In the first half of 2007 there
were zero aggravated assaults.
There was one in the second half of 2007. In the
first half of 2007 there were 13 simple assaults. In the
second half there were 27. In the first half of 2007 there
were five DUI reports. In the second half there were 25 DUI
reports. In the first half of 2007 there were seven reports
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of public intoxication and 38 reports of public intoxication
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afterward.
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Now, we had testimony from Officer Hardy that Fury
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was the only alcohol establishment that opened in reporting
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district 34 during 2007. Particularly with regard to the DUI
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arrests, Mr. Jamieson focused on the question of whether the
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location of a DUI arrest is tied to where the person is
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arrested or where they were drinking. And the answer was the
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faces is on where they're arrested.
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It sure would be an interesting coincidence though
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for all of a sudden to have a significant increase in the
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number of DUI arrests in this reporting district from people
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who are coming into that repotting district from elsewhere.
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Just seems like that would be a really interesting
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coincidence that that would happen after Fury opens and not
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have some connection.
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Another issue that's been raised we focused mostly
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on the Use Permit here, and that certainly has been the main
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focus of the planning department. Fury also had a live
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entertainment permit and a cafe dance pernit, which are
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actually issued by the city manager's office rather than the
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planning department. If the Use Permit were to be revoked,
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the live entertainment permit and the cafe dance permit would
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have to go with it because they are -- their issuance is
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premised on the Use Permit because the Use Permit
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specifically says that before any live entertainment takes
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place you have to get live entertainment permit. Before any
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dancing takes place you have to get a cafe
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Both of those permits focus on noise and state that
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they can be revoked if music or noise from the establishment
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for which the permit was issued interferes with the peace and
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quietness of the neighborhood, and I think we have enough
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reports from the police officers that music from Fury can be
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heard out in the parking lot to support a finding that that
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condition of the live entertainment pemvt and the cafe dance
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permit have been violated.
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The cafe dance permit also can be revoked if the
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establishment has been operated in an illegal or disorderly
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manner, and I think the reports about various activities in 114
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the parking lot would qualify as operation of the
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establishment in a disorderly mamrer.
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With regard to the live entertainment permit +
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theres another aspect to this. We heard from Mr. Gonzalez
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that Brian Schillizzi is no longer involved with Fury, and 1
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the live entertainment pemdt is issued specifically in
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Mr. Schillizzi's name. § 5.28.050 of the Newport Beach
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Municipal Code states that live entertainment permits are not
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transferable, and since Mr. Schillizzi is no longer connected
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with Fury, Fury could not continue to operate under that live
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entertainment permit
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Page 23
I looked at the Municipal Code to see if there was
a similarprovision regarding cafe dance permit and
discovered that there was not, which 1 found to be an
interesting inconsistency, but it% there nonetheless.
And while I'd like an opportunity to rebut what
Mr. Jamieson has to say, that's the end of my initial
presentation.
THE HEARING OFFICER: Just a couple of questions. In
all of the evidence put forth in an effort to try to
depict — if all the evidence put forth to try to demonstrate
that this is a bar, tavern, which 1 dont think is defined,
nevertheless a bar is, as opposed to a nightclub what
evidence here best supports the City's contentions in that
regard? What in your mind focuses in on this really is a
club or a bar rather than an eating and drinking
establishment?
MS. AILIN: I would say the sales detail that shows that
in the last quarter of 2007 alcohol sales were more than
twice food sales. The provision of bottle service, which is
not at all consistent with a focus on food, and the fact that
the bar stayed open and kept serving after food service was
terminated in the evening.
THE HEARING OFFICER: Solenko's testimony, wouldn't you
consider that pretty speculative? I mean in terms of the
trying to really tie down? 1 mean it's just a circumstance;
Page 24
right?
MS. AILIN: I m not sure speculative is the right word
for it It's certainly true that when youte dealing with
statistics, they can usually be interpreted in a number of
different ways, but 1 don't think — I think that
Mr. Jarrieson's criticisms of that testimony are possibly —
THE HEARING OFFICER: You havent even heard from him
yet.
MS. AILIN: Well, there was criticism of the testimony
inherent in his cross-examination.
THE HEARING OFFICER: Understand.
MS. AILIN: As to the DUI arrests 1 think that's where
he comes closest to having a point —
THE HEARING OFFICER: Yeah.
MS. AILIN: — because it certainly is possible that
those are people driving into reporting district 34 from
elsewhere. Din not persuaded by that, but I think it9
certainly possible.
But I think its a bit less likely that people are
coming into reporting district 34 just to get into a fight.
I think its less likely that people are coming into —
THE HEARING OFFICER: Okay. I understand. We don't —
MS. AILIN: — you know, where you have something that
inherently involves traveling, okay, let's see, public
intoxication, I think Ws a bit less likely that people are
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wandering into reporting district 34 just to be drunk in
public.
THE HEARING OFFICER: Yeah.
MS. AILIN: Unless they were there in the first place.
THE HEARING OFFICER: Let's go back to the very
beginning. You talked about the O'Hagen case --
MS. AILIN: Right.
THE HEARING OFFICER: -- and Goat Hill Tavem. 1
remember -- I think both of those really do focus on nuisance
primarily; don't they'
MS. AILIN: They do focus on nuisance.
THE HEARING OFFICER Are there any cases that you found
that strictly and solely uphold the revocation of a CUP or a
use permit based upon violation of conditions?
MS. AILIN: I looked and I couldn't find any.
THE HEARING OFFICER: Okay.
MS. AILIN: That certainly the case with other kinds
of permits. Obviously the circumstances are somewhat
different, but, for example, there are cases where coastal
commission permits have been revoked because people have
violated the conditions. Both of those cases include the
following language: "When a permittce has acquired a vested
right, it may be revoked if the permittee Jails to comply
with reasonable terms or conditions expressed in the permit
granted or if there is a compelling public necessity."
Page 26
1 suppose you would argue, and I half expect
Mr. Jamieson to argue, that once you have that vested right,
if it's not a public nuisance, you cant revoke the Permit.
And my response to that is why have a permit? Why have use
permits? Lefs just judge every land use by whether its
public nuisance or not. And boy, if were going to do that,
why bother having —
THE HEARING OFFICER Understand.
MS. AILM: -- a planning commission? Why bother doing
land use planning? It would defeat the entire purpose of
issuing conditional use permits and composing -- imposing
rather conditions on uses.
THE HEARING OFFICER: Yeah. With regard to condition
15, "This Use Permit shall be terminated if the operation is
no longer maintained as a bona fide public eating place," you
haven't really gone there with this one; right?
MS. AILIN: I haven't gone there with that one because
as near as I can tell the definition of bona fide public
eating place is, for lack of a better way, to put it a little
bit squishy. It's —
THE HEARING OFFICER: hn sure Mr. Jamieson would
enlighten us endlessly on that point.
MR JAMIESON: I got it right here.
MS. AILIN: I have it —
THE HEARING OFFICER: Ws 16 your exhibits; isn't it?
J gages LS Lo zo)
Page 27
1 MR. JAMIESON: Yeah.
2 MS. AILIN: Ihave it too
3 THE HEARING OFFICER Okay. Well, let's not even worry
4 about it then.
5 MS. AILIN: Yeah.
6 THE HEARING OFFICER: I didn'tthink there was any
7 evidence, but I don't want to overlook it if you think its
e there.
9 MS. AILIN: h, you know, it focuses more on the nature
10 of the food served --
11 THE HEARING OFFICER Yeah.
12 MS. AILIN: — than on quantity. And as a result I
13 think it is frankly more subjective than the conditions in
14 the Use Permit that specify youYe got to have your full menu
15 going at all times, and your gross food sales have to exceed
16 you gross alcohol sales. I suppose you could argue that
17 this late night menu, the C34 that just talks about pizza,
18 barbequed chicken could possibly fall outside the definition
19 of meals in Business and Professions Code § 23038. I don't
20 think its necessary to go there.
21 THE HEARING OFFICER: Right. Understand Condition 19,
22 there was certainly a considerable amount of effort to
23 demonstrate the promoters were present, and Mr. Gonzalez
24 talked about them openly as far as the relationships that
25 Fury had with them, but there's just no evidence from the
Page 28 i
1 City's point that I heard that there was any commission or
2 revenue sharing based upon entry fees or cover charges or any
3 of that, and that all we know is that Fury was paying a "flat
4 fee" for the promotions that they -- and I mean I guess that
5 could be the same as getting a bus load of old folks to wine
6 to dinner. 1 mean its the same concept.
7 MS. AILIN: Thais — the only evidence an the record is
6 Mr. Gomalei testimony. I don't have anything to contradict
9 that.
10 THE HEARING OFFICER: Yeah. Yeah.
11 MS. Afl.IN: There is, of course, the indications of
12 ticket sales on the Internet Mr. Gonzalez insists that
13 those were not authorized by Fury. 1 find it — how can 1
14 put it?
is THE HEARING OFFICER: Well, there just wasn't any
16 evidence of ticket sales. It's on the side on the website
17 apparently.
18 MS. AILIN: Right.
19 THE HEARING OFFICER: Maybe it was just part of the
20 website and Fury was plugged in.
21 MS. AILIN: And there's no indication, no clear
22 indication that that money is shared or where it goes.
23 THE HEARING OFFICER: Okay. You know, the condition 25
24 with respect to happy hour or oilier types of reduced price
25 alcoholic beverage promotion, and whats your position on
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Page 31
approach served to provide the basis to revoke these
constitutionally protected rights- And the problem with the
shotgun approach is that most of the shotgun pellets don't
hit the target, and that's the same situation here. All of
them don't hit the target.
So let's look and see what this is because the City
for some reason throughout the proceeding here before the
hearing officer and throughout the last eight months, nine
months failed to really specify what it is that they were
concerned about and what they were looking at.
First of all, we hear many times this is a
restaurant use. This is not supposed to be anything other
than a restaurant use. So to the extent that there is five
entertainment or there's bottle service or there's a D.J. or
there's dancing or gee, they're open until 2:00 in the
morning, somehow that makes them not a restaurant.
Well, first of all, it doesn't make them not a
restaurant, but perhaps more importantly let's look to see
what the Conditional Use Pemdt that were talking about
actually provides, what we're talking about here. So I
haven't heard that from the City and probably for good
reason.
If you look in the face of resolution No. 1671,
which is the CUP, it's Exhibit 2 in the City's materials,
where the Conditional Use Permit was granted, it says, "This
Page 32
is an existing eating and drinking establishment requiring
this Use Permit for live entertainment and dancing." This is
not intended to be and never was intended to be a Denny's.
It wasn't intended to be a Ruth's Chris Steakhouse. It
wasn't intended to be solely a restaurant where only people
that don't desire live entertainment or to listen to music or
to go dancing are going to go. That's not the
characterization of this location, never was, and when this
planning commission granted it, never intended it to be. It
was never offered to be anything else.
Under that first paragraph that says, "Whereas,
its an existing eating and drinking establishment, live
entertainment, and dancing;' it points out, it says, "The
existing restaurant is located within the airport commercial
area, and surrounding land uses are dominated by commercial
and professional offices. Most importantly, restaurant uses
with dancing and live entertainment can be expected to be
found in this and similar locations and are complementary to
the commercial uses."
Further down below that it says, "The restaurant
site is not located in close proximity to residential
districts, and there's no sensitive uses such as residences,
day care centers, schools, Playgrounds, hospitals, ar the
like." That part has been disregarded by the City because
that's the type of business, the We of use that was
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that? 1
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MS. AILIN: Looking at -- 1
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THE HEARING OFFICER: What evidence do you think is i
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there?
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MS. AMIN: Looking at Exhibit C11, which talks about
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free champaign with appetizer as opposed to full menu at the
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New Year's Eve party, Exhibit C 13, free champaign.
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THE HEARING OFFICER: It doesn't look like every nigh[
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they ran something like that. They just had special promos !
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from time to time? Or do --
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MS. AILIN: This is the evidence that's available. !
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THE HEARING OFFICER: Right. Right.
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MS. AILIN: You know, I suppose you could say if there's
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one promotion or two, perhaps there are more.
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774E HEARING OFFICER: Sure. But there's no evidence
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that there were.
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MS. AILIN: I am not aware of any evidence that they
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were doing it on a nightly basis.
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THE HEARING OFFICER: Okay. Well, now that
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Mr. Jamieson's son has come back in, let's give him an
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opportunity to show us what --
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MR. GONZALEZ: You better do good.
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THE HEARING OFFICER: You're on.
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MR. JAMIESON: He would do it.
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THE HEARING OFFICER: Pm sorry. Go abead.
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MR. JAMIESON: If the City of Newport Beach wants to
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make law to find that a conditional Use Permit that is a
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vested property interest and which also implicates Oust
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amendment rights of live entertainment and cafe dance, then
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they ought to pick a different case to do it in because this
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case isn't that case.
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I fully expected when 1 came into this case and 1
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B
looked at what the issues were and I looked at what the facts
( 8
9
were that night be proffered by the City that I was going to
I 9
10
be dealing with a situation like 1 might deal with with other
10
11
clients that I've had and other places that I ve represented
11
12
where a city or some state agency is trying to show that it
12
13
is, in fact, a nuisance, that its causing a problem, that
13
14
it's a danger to the community, and, therefore, there's a
i 14
15
reason to revoke these constitutionally vested property
15
16
interests, these constitutionally vested interest in
16
17
entertainment.
17
18
Not only do I not see it, not only do I not see it
is
19
in this proceeding, but the City has indicated that they
19
20
concede they're not proceeding on a nuisance theory. There
20
21
is no reported case, which is the reason why no one can find
21
22
a case, that says that it would be appropriate to revoke a
22
23
Conditional Use Permit under circumstances like these.
23
24
And let's look at what the circumstances are in
25
this particular situation. The City tries to make a shotgun
124
25
O kraq CLi ZJ t. mac,/
Page 31
approach served to provide the basis to revoke these
constitutionally protected rights- And the problem with the
shotgun approach is that most of the shotgun pellets don't
hit the target, and that's the same situation here. All of
them don't hit the target.
So let's look and see what this is because the City
for some reason throughout the proceeding here before the
hearing officer and throughout the last eight months, nine
months failed to really specify what it is that they were
concerned about and what they were looking at.
First of all, we hear many times this is a
restaurant use. This is not supposed to be anything other
than a restaurant use. So to the extent that there is five
entertainment or there's bottle service or there's a D.J. or
there's dancing or gee, they're open until 2:00 in the
morning, somehow that makes them not a restaurant.
Well, first of all, it doesn't make them not a
restaurant, but perhaps more importantly let's look to see
what the Conditional Use Pemdt that were talking about
actually provides, what we're talking about here. So I
haven't heard that from the City and probably for good
reason.
If you look in the face of resolution No. 1671,
which is the CUP, it's Exhibit 2 in the City's materials,
where the Conditional Use Permit was granted, it says, "This
Page 32
is an existing eating and drinking establishment requiring
this Use Permit for live entertainment and dancing." This is
not intended to be and never was intended to be a Denny's.
It wasn't intended to be a Ruth's Chris Steakhouse. It
wasn't intended to be solely a restaurant where only people
that don't desire live entertainment or to listen to music or
to go dancing are going to go. That's not the
characterization of this location, never was, and when this
planning commission granted it, never intended it to be. It
was never offered to be anything else.
Under that first paragraph that says, "Whereas,
its an existing eating and drinking establishment, live
entertainment, and dancing;' it points out, it says, "The
existing restaurant is located within the airport commercial
area, and surrounding land uses are dominated by commercial
and professional offices. Most importantly, restaurant uses
with dancing and live entertainment can be expected to be
found in this and similar locations and are complementary to
the commercial uses."
Further down below that it says, "The restaurant
site is not located in close proximity to residential
districts, and there's no sensitive uses such as residences,
day care centers, schools, Playgrounds, hospitals, ar the
like." That part has been disregarded by the City because
that's the type of business, the We of use that was
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those in the photographs where you got this line where all
this beautiful food is prepared.
The Fury folks also provided new equipment within
the kitchen facility so that all of these items could be
prepared. And we see this menu that provides such an
extensive array of items that its — it would be amusing but
for the fact that irs such a serious issue here wlu:u the
City is trying to revoke the Conditional Use Pemvt, but it
would be amusing to say this is not providing full menu
service at a0 times of the day whether it's what they call
full menu, late menu, side menu, I don't care what it is.
Just now I heard in closing argument it was pointed
out well, later on in the evening they only have blue fm
tuna and fillet mignon and some other items. We're not
talking about pizza and chicken fingers or bringing in
wrapped sandwiches. We're talking about a full menu.
Now, let's talk about what the conditional Use
Penton provides here and the permits because really that's
what it gets back to. The City can use the shotgun approach,
but when it really comes down to it they have to satisfy
their burden of proof to show that these conditions were
materially violated in a way that warrants a revocation of
this conditional Use Permit, and interestingly enough, and
I've been saying this all along, this proceeding would then
also revoke the live entertainment permit and the cafe dance
Page 36
entertainment permit both of which are clearly protected by
the first amendment yet none of that, none of those items,
neither of those items were part of the notice and,
therefore -- part of the notice and opportunity to be heard
and, therefore, that would be a violation of these
constitutional rights to due process.
So let's take a look at what we're dealing with.
And I'm just going by the City's brief because that's what
they attempted to prove, and its kind of like being in trial
before a jury you say what you're going to prove, then you
prove what you can, and at the end you better prove what you
said you m going to prove because otherwise it doesn't look
so great, and it damages the credibility of those who are
trying to satisfy their burden of proof.
Well, condition No. 1 they originally said it's
violated. Well, condition No. 1, according to the brief,
says, "The restaurant operation shall be in substantial
conformance with the approved plot plan and floor plan
June 3rd, 2005." Well, Ijust spent a few minutes going over
what that means. It is, in fact, what that Conditional Use
Permit was intended to be. It is, in fact, what that floor
plan and site plan reflected it would be. There's just
simply no violation. No evidence of it. No violation.
The nerd condition that they identified was
condition No. 5. Now, this is interesting because in the
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1
approved, and the type of business that was actually being
1
2
conducted at this location.
2
3
Anything other than an eating and drinking
3
4
establishment with live entertainment and with dancing would
4
5
not put together the type of location that we see in the
j 5
6
photographs that have been provided to the hearing officer of
6
7
this beautiful location with all of these tables and all of
7
8
time chairs according to the site plan that's set forth
B
9
under Exhibit 7 of the City's materials, and it reflects
9
lo
exactly the type of premises that we have here.
10
11
Note that that premises that was approved, the site
11
12
plan and the floor plan that was approved by this Conditional
. 12
13
Use Permit, if we look at Exhibit 7, we unfold that, and we
13
14
look at whars right in the center of it. There's that
14
15
center bar. You've got the center bar. You've got all those
15
16
bar stools around the center bar. And off to the side of
16
17
that center but you ve got a dance floor. And off to the
17
18
side of that dance floor you've got an entertainment and D.J.
1 B
19
booth.
19
20
Now, there's also many tables and chairs and booths
20
21
and things, but that is how this particular business, this
21
22
site plan, this floor plan was approved. That's how it
22
23
operated. But it wasn't just to be a place that was for
23
24
drinking or for dancing or for live entertainment. It was
24
25
supposed to be a place that was a bona fide eating place.
_..----- ------------ —T—
! 25
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Page 341
1
And again, normally when I'd look at something like
I 1
2
this and I look to see what the site plan and the floor plan
2
3
reflects, and you see its got an occupancy load of 297
3
4
people, big place, 297 people, I look to see and the City
4
5
would normally look to see does it have a kitchen facility
5
6
that is sufficient to actually provide full meals, meals of
6
7
all types, meals that people would want at lunchtime, meals
1 7
8
that people would want at dinnertime?
B
9
And again, if we look back at Exhibit 7, which was
9
10
approved, its not like this thing changed. its not like
10
11
all of a sudden this business rnorphed into something it
11
12
wasn't supposed to be. Lt's totally contemplated to be this
12
13
way. We see a kitchen facility, a kitchen here that is
13
14
almost a third of the entire location. I think it's almost
14
15
3,000 square feet.
15
16
The Fury folks go out and they hire an executive
16
17
chef. The executive chef, Chef Sevan, who came in and
117
18
testified and went over all of the wonderful photographs that
18
19
we saw of the beautiful food and the creations that he
19
20
provides and all, and the menu items and all of this, came in
12 0
21
and told us that it's important to have an extensive kitchen
1 21
22
to provide a bona fide eating place. And since he can't do
22
23
it all himself, he gets a sous -chef, s-0 u -s, chef. That
23
24
sous -chef helps him to do these things. The sous-chef and
24
25
Chef Sevan, they have a whole staff of people, and we saw
25
9 (Pages 33 to 36)
Page 35
those in the photographs where you got this line where all
this beautiful food is prepared.
The Fury folks also provided new equipment within
the kitchen facility so that all of these items could be
prepared. And we see this menu that provides such an
extensive array of items that its — it would be amusing but
for the fact that irs such a serious issue here wlu:u the
City is trying to revoke the Conditional Use Pemvt, but it
would be amusing to say this is not providing full menu
service at a0 times of the day whether it's what they call
full menu, late menu, side menu, I don't care what it is.
Just now I heard in closing argument it was pointed
out well, later on in the evening they only have blue fm
tuna and fillet mignon and some other items. We're not
talking about pizza and chicken fingers or bringing in
wrapped sandwiches. We're talking about a full menu.
Now, let's talk about what the conditional Use
Penton provides here and the permits because really that's
what it gets back to. The City can use the shotgun approach,
but when it really comes down to it they have to satisfy
their burden of proof to show that these conditions were
materially violated in a way that warrants a revocation of
this conditional Use Permit, and interestingly enough, and
I've been saying this all along, this proceeding would then
also revoke the live entertainment permit and the cafe dance
Page 36
entertainment permit both of which are clearly protected by
the first amendment yet none of that, none of those items,
neither of those items were part of the notice and,
therefore -- part of the notice and opportunity to be heard
and, therefore, that would be a violation of these
constitutional rights to due process.
So let's take a look at what we're dealing with.
And I'm just going by the City's brief because that's what
they attempted to prove, and its kind of like being in trial
before a jury you say what you're going to prove, then you
prove what you can, and at the end you better prove what you
said you m going to prove because otherwise it doesn't look
so great, and it damages the credibility of those who are
trying to satisfy their burden of proof.
Well, condition No. 1 they originally said it's
violated. Well, condition No. 1, according to the brief,
says, "The restaurant operation shall be in substantial
conformance with the approved plot plan and floor plan
June 3rd, 2005." Well, Ijust spent a few minutes going over
what that means. It is, in fact, what that Conditional Use
Permit was intended to be. It is, in fact, what that floor
plan and site plan reflected it would be. There's just
simply no violation. No evidence of it. No violation.
The nerd condition that they identified was
condition No. 5. Now, this is interesting because in the
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FURY REVOCATION HEARING - 4/24/2008
10 (Pages 37 to 40)
Page 39
daytime?
MR. JAMIESON: No.
THE HEARAIG OFFICER: Because this condition says, "They
shall be required to park there." I agree with you on
Levins testimony in ber letter, but that doesn't mean that
the employees were required to park there, and I dicker hear
any evidence that they were required to park there.
MR. JAMIESON: Mr. Gonzalez said that the reason for the
hang tags, he got these hang tags and he pm numbers on them,
was — and they were told that they had to park in the lot,
the employees parked in the lot, but there were also
employees that parked in that shared lot. So they had to —
THE HEARING OFFICER: Well, they had to because there
were more than 16 or whatever the case might be; right?
MR. JAMIESON; Well, thafs true. But what it means is
if we have three, four, five employees, Chef Sevan,
Mr. Gonzalez, whoever it was that was there at 4:30 or 5:00
when this code enforcement officer was there, and there's
really nobody else at the location, shared lot has open
spaces, she testified to that, they parked there. Well, when
the parking lot gets filled up, the employees park, the
balance of the employees that came later in time, and there
was testimony to this, when the shift is at 8:00 or 8:30 or
9:00 it starts, those employees then go into the lot and they
use those spaces. There's no contradictory evidence m that.
Page 40
In fact, Ms. Levin said, and I was kind of
surprised at that, that she testified that when she was
there, and her documents reflect the same, she was there
between generally 4:30 and 5:00, 5:30, I mean its just way
too early. If they really want to identify what the problems
are who's parking where, and when all the employees are
there, all 30 to 60 employees, they go when they're busy and
start issuing citations and start doing something so that
there's a fair proceeding here. So there's no violation 3,
4, and 5.
Now, condition No. 12 was the next item here. It
says, "There shall be no on -site radio, television, video,
fibs, or other electronic media broadcasts including records
for the broadcast at a later time, which include the service
of alcoholic beverages without first obtaining an approved
special event permit" Thafs not —this YouTube video with
all the objections stated, we don't know what was edited in,
what was edited out. We don't know what the purpose of it
was. We don't know who cvmrrdssioned it. We don't know any
of this, and we don't know where it was broadcast We don't
know what broadcast means £or purposes of this Conditional
Use Penmt, and we don't know a lot of things in terms of the
intent
My assumption is that this type of condition,
because No seen it other locations, is when you have film
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1
1
brief, and I think it's really indicative of the City's
1
2
entire case in the way they put this together. Its just
2
3
a -- it's just filled with misstatements and hoping that, if
3
4
they repeat something, eves if its wrong the way ifs
i 4
5
stated, that somehow that makes it right, that somehow that
, s
6
means that the way they're describing it is correct.
1 6
7
And what Fur talking about is is in the brief where
1 7
8
it slated, "The restaurant employees shall be required to use
8
9
the 16 off -site parking spaces." And then it says,
9
10
"Referenced in conditions 3 and 4." W ell leis think back
10
11
to the testimony of Shannon Levin. And Shannon Levin talked
11
12
about what the City referred to in Exhibit 40, and Put not
+ 12
13
going to go through each one of these documents. I just
13
14
think that this kind of sets the tone for this entire
14
15
proceeding,
15
16
The hearing officer may remember that upon j
16
17
crams- examination Ms. Levin admitted that the Conditional Use
17
is
Permit that she said in her September 41h, 2007, letter to '
is
19
Mr. Schillizzi as identified in Exhibit 40, she says,
19
20
"According to UP -3162, conditions 3 and 5 all employees are
20
21
to park in the 1601Tsite parking spaces. "Restaurant i21
22
22
employees. All of them. That's what she said. Take a look 122
23
23
at Exhibit 40. She says all employees.
23
24
And upon cross- ccamination I said, well, let's look
24
25
at conditions 3, 4, and 5. They don't require all the i
25
10 (Pages 37 to 40)
Page 39
daytime?
MR. JAMIESON: No.
THE HEARAIG OFFICER: Because this condition says, "They
shall be required to park there." I agree with you on
Levins testimony in ber letter, but that doesn't mean that
the employees were required to park there, and I dicker hear
any evidence that they were required to park there.
MR. JAMIESON: Mr. Gonzalez said that the reason for the
hang tags, he got these hang tags and he pm numbers on them,
was — and they were told that they had to park in the lot,
the employees parked in the lot, but there were also
employees that parked in that shared lot. So they had to —
THE HEARING OFFICER: Well, they had to because there
were more than 16 or whatever the case might be; right?
MR. JAMIESON; Well, thafs true. But what it means is
if we have three, four, five employees, Chef Sevan,
Mr. Gonzalez, whoever it was that was there at 4:30 or 5:00
when this code enforcement officer was there, and there's
really nobody else at the location, shared lot has open
spaces, she testified to that, they parked there. Well, when
the parking lot gets filled up, the employees park, the
balance of the employees that came later in time, and there
was testimony to this, when the shift is at 8:00 or 8:30 or
9:00 it starts, those employees then go into the lot and they
use those spaces. There's no contradictory evidence m that.
Page 40
In fact, Ms. Levin said, and I was kind of
surprised at that, that she testified that when she was
there, and her documents reflect the same, she was there
between generally 4:30 and 5:00, 5:30, I mean its just way
too early. If they really want to identify what the problems
are who's parking where, and when all the employees are
there, all 30 to 60 employees, they go when they're busy and
start issuing citations and start doing something so that
there's a fair proceeding here. So there's no violation 3,
4, and 5.
Now, condition No. 12 was the next item here. It
says, "There shall be no on -site radio, television, video,
fibs, or other electronic media broadcasts including records
for the broadcast at a later time, which include the service
of alcoholic beverages without first obtaining an approved
special event permit" Thafs not —this YouTube video with
all the objections stated, we don't know what was edited in,
what was edited out. We don't know what the purpose of it
was. We don't know who cvmrrdssioned it. We don't know any
of this, and we don't know where it was broadcast We don't
know what broadcast means £or purposes of this Conditional
Use Penmt, and we don't know a lot of things in terms of the
intent
My assumption is that this type of condition,
because No seen it other locations, is when you have film
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1
employees to park there. They require, those conditions
1 1
2
require that 16 parking spaces by covenant be provided in
2
3
that multilevel structure. And she admitted there was no
! 3
4
violation She said there was rw violation. She admitted
4
5
she was wrong.
j 5
6
Now, people can be wrong. People can make
6
7
mistakes. But when the City makes a mistake, it doesn t
7
8
matter. When the City makes a mistake, irs okay to do that.
8
9
And when the City snakes a mistake and it puts a business
9
10
owner that's put, invested millions of dollars in a location,
10
11
is subject to a multi year lease, and it causes that business
( 11
12
owner to go through a proceeding like we have been here for
12
13
the last several months and to be subject to the scrutiny of
13
14
the City, well, that's a violation of their constitutional
14
15
rights to due process. It should not be countenanced here.
15
16
So 3, 4, and 5 simply has no basis, factual or
16
17
legal, if we read the Conditional Use Permit conditions,
17
18
which the City staff didn't do to begin with, it doesn't
18
19
require all of the employees to park there. They have more
+ 19
20
than 16 employees. Mr. Gonzalez testified that when the
120
21
employees came later in the evening, they parked in that lot,
1 21
22
and there was no contradictory evidence to that. So there's
22
23
just no violation of 3, 4, and 5. Doesn't exist.
24
THE HEARING OFFICER: Are you saying the restaurant
123
24
25
required the employees to park there at night, but not in the
1 25
10 (Pages 37 to 40)
Page 39
daytime?
MR. JAMIESON: No.
THE HEARAIG OFFICER: Because this condition says, "They
shall be required to park there." I agree with you on
Levins testimony in ber letter, but that doesn't mean that
the employees were required to park there, and I dicker hear
any evidence that they were required to park there.
MR. JAMIESON: Mr. Gonzalez said that the reason for the
hang tags, he got these hang tags and he pm numbers on them,
was — and they were told that they had to park in the lot,
the employees parked in the lot, but there were also
employees that parked in that shared lot. So they had to —
THE HEARING OFFICER: Well, they had to because there
were more than 16 or whatever the case might be; right?
MR. JAMIESON; Well, thafs true. But what it means is
if we have three, four, five employees, Chef Sevan,
Mr. Gonzalez, whoever it was that was there at 4:30 or 5:00
when this code enforcement officer was there, and there's
really nobody else at the location, shared lot has open
spaces, she testified to that, they parked there. Well, when
the parking lot gets filled up, the employees park, the
balance of the employees that came later in time, and there
was testimony to this, when the shift is at 8:00 or 8:30 or
9:00 it starts, those employees then go into the lot and they
use those spaces. There's no contradictory evidence m that.
Page 40
In fact, Ms. Levin said, and I was kind of
surprised at that, that she testified that when she was
there, and her documents reflect the same, she was there
between generally 4:30 and 5:00, 5:30, I mean its just way
too early. If they really want to identify what the problems
are who's parking where, and when all the employees are
there, all 30 to 60 employees, they go when they're busy and
start issuing citations and start doing something so that
there's a fair proceeding here. So there's no violation 3,
4, and 5.
Now, condition No. 12 was the next item here. It
says, "There shall be no on -site radio, television, video,
fibs, or other electronic media broadcasts including records
for the broadcast at a later time, which include the service
of alcoholic beverages without first obtaining an approved
special event permit" Thafs not —this YouTube video with
all the objections stated, we don't know what was edited in,
what was edited out. We don't know what the purpose of it
was. We don't know who cvmrrdssioned it. We don't know any
of this, and we don't know where it was broadcast We don't
know what broadcast means £or purposes of this Conditional
Use Penmt, and we don't know a lot of things in terms of the
intent
My assumption is that this type of condition,
because No seen it other locations, is when you have film
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Page 43
But condition No. 15 says, "The Use Permit shall be
terminated if the operation is no longer maintained as a bona
fide public eating place w defined by the California
Department of Alcoholic Beverage Control." Well, as
indicated during the closing argument of Ms. Aihn and is
referenced by the hearing officer, let's look at what the law
provides because one of the things that the City fails to do
in the shotgun approach is to look at and really read the
Conditional Use Permit, look at and really read the
conditions, look at and really read Municipal Code as far as
what it actually says, and look at what really the Business
and Professions Code deals with.
And the Business and Professions Code § 23038 for
bona fide public eating place talks about meals, and it says,
"Bona fide public eating place means a place which is
regularly and in a bona fide matmer used and kept open for
the serving oftneals to guests for compensation," clearly
that happened here, "and which has suitable kitchen
facilities connected therewith," clearly happened here,
"containing conveniences for cooking an assortment of foods
which may be required for ordinary meals." Well, that
clearly happened here with the sushi tables and the ovens and
the 24 barer stoves, and all of that, although I would fake
some exception with the idea that it was only ordinary meals
because I think they were extraordinary meals that Chef Seven
Page 44
provided.
It says, 'The kitchen of which must be kept in a
sanitary condition with the proper amount of refrigeration
for keeping of food" in a sanitary con -- Inn sorry, "for
keeping of food on said premises." Now that's important, and
that's one of the reasons I went over Exhibit 7 with
Mr. Gonzalez and with Chef Sevan because it has refrigeration
and freezers and lines. There's just no question that it
means bona fide public eating place and meals.
And interestingly enough it says, 23038 says,
"Meals means the usual assortment of foods commonly ordered
at various hours of the day." Well, let's deal with that
Full menus, late menus, whatever. 'The service of such food
and things only as sandwiches or salads shall not be deemed
compliance." We're not contending they are. Never had that
situation.
And then it talks about "guess shall mean person;'
guess in the context of the statute "shall mean persons who,
during the hours when the meals are regularly served therein,
come to a bona fide public meeting place for the purpose of
Obtaining and actually order and obtain at such time in good
faith a meal therein. Nothing in this section, however,
shall be construed to require that any food be sold or
purchased with any beverage." Thats what 23038 says.
There's no violation of condition No. 15. It clearly meets
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1
crews come out and they take over a restaurant or they take
1
2
over a parking lot or they take over an office building, and
2
3
they're going to have trucks parking there and they[ going
3
4
to have alcohol being served and they're going to have this
4
5
whole big thing that goes on, welk cities generally don't
5
6
want that to occur unless there s a special event permit
6
7
because it causes all these other problems. And if that
7
e
happens, then the police department can provide traffic
a
9
direction. They have police officers come out to make sure
9
10
that everything is kept okay.
10
11
But, what, are we saying if somebody went through
11
12
with all these cell phones these days that have video or
12
13
photographs and theyre doing that, and somebody puts it up
13
14
on what's now ubiquitous of YouTube, MySpace, and all the
14
15
rest of it, things that the younger generation understands
15
16
how to do when they put up, that Chats violation? I don't
16
17
think that's what that was intended to do. And with all of
17
is
the objections that we made, that's also a condition,
is
19
therefore, that was not violated.
19
20
Condition No. 13, in the brief it says, "Prior to
20
21
the commencement of patron dancing the applicant shall obtain
21
22
a cafe dance permit, and dancing shall be limited from 9:00
22
23
to 2:00 Thursday through Sunday." There's no violation
23
24
there. There's no testimony of anybody that says they
24
25
didn't, that [trey didn't get a cafe dance permit, that they
25
Page 42
1
didn't get a permit that they're supposed to have, or that
1
2
they weren't having entertainment and dancing after 9:00 p.m.
2
3
and before 2:00 a.m.
3
4
Interestingly enough, and this strikes me as
4
5
something that just boggles my mind, the City tries to
5
6
characterize this as someplace that's supposed to be a
6
7
Denny's or it's supposed to be something like that, and they
7
a
say well, gee, this live entertainment or the dancing or the
a
9
bottle service or the loud music or all the young people that
9
10
go there and all the people that show up there late in the
10
11
evening, that that's not what this permit is supposed to be
11
12
or gee, it's not a restaurant, the permit allows activities
12
13
there until 2:00 a.m. 2:00 a.m. contemplates serving
13
14
alcohol. This permit contemplates serving alcohol. This
14
15
permit was issued to an eating and drinking establishment
15
16
with live entertainment and dancing. That's what it's
16
17
supposed to be, and that's what it was. There's no
i 17
la
violation.
is
19
The next one identified in the brief -- and by the
19
20
way, as fin sure the hearing officer is aware, we don t have
20
21
to prove compliance with every one of these conditions. The
21
22
City has to prove that there has not been compliance with the
22
23
conditionsthey'veidentified. So that's what we're
23
24
addressing. So byjust going through these Pro not saying
24
25
the rest of them were not complied with. We think they were.
25
11 (Pages 41 to 44)
Page 43
But condition No. 15 says, "The Use Permit shall be
terminated if the operation is no longer maintained as a bona
fide public eating place w defined by the California
Department of Alcoholic Beverage Control." Well, as
indicated during the closing argument of Ms. Aihn and is
referenced by the hearing officer, let's look at what the law
provides because one of the things that the City fails to do
in the shotgun approach is to look at and really read the
Conditional Use Permit, look at and really read the
conditions, look at and really read Municipal Code as far as
what it actually says, and look at what really the Business
and Professions Code deals with.
And the Business and Professions Code § 23038 for
bona fide public eating place talks about meals, and it says,
"Bona fide public eating place means a place which is
regularly and in a bona fide matmer used and kept open for
the serving oftneals to guests for compensation," clearly
that happened here, "and which has suitable kitchen
facilities connected therewith," clearly happened here,
"containing conveniences for cooking an assortment of foods
which may be required for ordinary meals." Well, that
clearly happened here with the sushi tables and the ovens and
the 24 barer stoves, and all of that, although I would fake
some exception with the idea that it was only ordinary meals
because I think they were extraordinary meals that Chef Seven
Page 44
provided.
It says, 'The kitchen of which must be kept in a
sanitary condition with the proper amount of refrigeration
for keeping of food" in a sanitary con -- Inn sorry, "for
keeping of food on said premises." Now that's important, and
that's one of the reasons I went over Exhibit 7 with
Mr. Gonzalez and with Chef Sevan because it has refrigeration
and freezers and lines. There's just no question that it
means bona fide public eating place and meals.
And interestingly enough it says, 23038 says,
"Meals means the usual assortment of foods commonly ordered
at various hours of the day." Well, let's deal with that
Full menus, late menus, whatever. 'The service of such food
and things only as sandwiches or salads shall not be deemed
compliance." We're not contending they are. Never had that
situation.
And then it talks about "guess shall mean person;'
guess in the context of the statute "shall mean persons who,
during the hours when the meals are regularly served therein,
come to a bona fide public meeting place for the purpose of
Obtaining and actually order and obtain at such time in good
faith a meal therein. Nothing in this section, however,
shall be construed to require that any food be sold or
purchased with any beverage." Thats what 23038 says.
There's no violation of condition No. 15. It clearly meets
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Page 45
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1
the statute 23038 Business and Professions Code.
1
2
Condition No. 16, here's another misstatement with
2
3
regard to the idea that it's just a shotgun approach. Wbat's
3
4
stated in the brief, it says condition No. 18, "The
4
5
applicant" -- Pm sorry. Condition No, 16. It says, "Pull
5
6
menu food service shall be available for ordering at all
6
7
times that the restaurant establishment is open for
7
e
business." Every piece of evidence provided by the City and
8
9
provided by the respondent here says full menu food service
9
10
shall be available for ordering.
10
11
Now, if the kitchen shuts down at 1:00 or whatever
11
12
time it's shut down but [bar food service was still
112
13
available, which is what Chef Sevan testified to, that the
! 13
14
food was made available, it doesn't mean that they have to be
14
15
cooking. It also doesn't mean that if people aren't ordering
15
16
things that they have to keep the restaurant open and the
t 16
17
fires burning. The food service has to be available. And
17
18
there's been no evidence to say that it was not available,
18
19
and all of this 1 want to use the phrase witch hunt or
19
20
repeating it over and over again doesn't make it so when they
20
21
talk about advertisements and what the police officers
21
22
allegedly talked to somebody, and what that person allegedly
22
23
said about what might occur sometime later on.
23
24
One of the things we found with the police officers
24
25
is is that they were there for hours and hours and hours at
25
Page 46
1
different times, and when they were there, they got food.
1
2
They ate. And when they were there, whatever they said that
2
3
they had actually observed, and the City can disregard the
3
4
import of this because the City will disregard the import of
4
5
much of this, but the fact is is that the undercover officers
5
6
mid the uniformed officers and various officers that were for
6
7
some reason without being called by the public, without being
7
8
a nuisance, without being a problem to the City or the
a
9
community at all, because it's in a location where its
9
10
supposed to be, they don't arrest anybody. They don't detain
i 10
11
anybody. They don't arrest and thenjust detain somebody.
11
12
They don't approach them. They don't do anything.
12
13
The evidence shows that they make these alleged
13
14
observations about somebody who arrives at the location and
14
15
supposedly urinates outside or arrives at the location and
15
16
then they're tamed away because maybe they ve had too much
1 16
17
to drink. Are we to assume that in the Ciry of Newport Beach
17
18
that there are no other locations where people go and drink
18
19
and dance and drink alcohol and have food and then try and go
19
20
someplace else? Its just not real.
i 20
21
And, in fact, this particular shared parking lot
21
22
has two other locations that the testimony shows was open
22
23
dining that time that sells alcohol, not to mention all the
23
24
p1wes down near the pier, on Balboa Peninsula, or whatever.
24
25
So there's just simply no violation of 16.
25
12 (Pages 45 to 48)
Page 47
Condition No. I& says, "It shall comply with all
federal, stare, and local laws. Material violation of arty of
those laws in connection with the use will be cause for
revocation." There's no facts to show that. They haven't
satisfied their burden there.
I beard some argumentjust now that the various
observations could possibly constitute some kind of
violations. Well, could and possibly even in an
administrative hearing like this where hearsay evidence can
be utilized, but it cant be relied upon solely as we all
know, it cannot be relied upon solely doesn't prove a
violation there.
And although it really wasn't argued, but since
its something we spent time on, rll just lightly touch on
it, the two items that there were even citations issued
nothing happened on. We 've got that one issue with the valet
back in September and then never again. The testimony was
never did it again. Issued a citation. They connected it.
And that was in September.
And then the other one having to do with the
alleged overcrowding. Well, the testimony from Mr. Gonzalez
was he was there that night. He visually observed it. He
was there many nights. He visually observed it. He had a
good basis, good faith estimate on how many people would be
in that room, and his good faith estimate was it was under
Page 48
the limit. And then when the police were there, he checked,
Mr. Gonzalez and only Mr. Gonzalez, checked both the
clicking, the clicker in and the clicker out and determined
that the number was actually less than the occupancy load .
on the other side of it we had a police officer who
had never by his own testimony estimated any mom at greater
than 300, had never estimated for this particular room,
hadn't been in this location because normally he's on the
bike patrol down on the pier, and yet he was the guy that the
City chose to bring in to testify about what happened at that
alleged overcrowding. Why not bring in the guy that
supposedly clicked them out? That was an Officer Dugan. He
didn't come in. He didn't testify. Why not? Perhaps he was
wrong. Perhaps he didn't want to be subject to
crossexamination and he found out to be wrong.
Mr. Gonzalez also testified that although the
citation was issued, we all know that you're not guilty until
you're proven guilty. And the mere fact that the citation
was issued proves nothing. And the condition talks about a
violation. And the other condition having to do with you
cant exceed occupancy talks about a violation. Repeating it
over and over again doesn't make it true. Issuing a citation
doesn't make it true.
If the City felt it had a case there when it issued
the citation, they would have filed that case. The City
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Page 51
limits, the City goes in there every other night, every week,
they count these people out, and they make sure that the guy
that counts them out has somebody who's watching what he does
and he makes, counts him in and out so the number is correct,
and then they bring that person in to testify that it'sjust
a serial violation. Well, that didn't happen here. One
instance. It wasn't proven anyway. So condition No. 21 is
not violated.
Now let me back up to condition 20, and this one
actually is one of the more interesting conditions and again
reflects the City not reading its own Conditional Use Perni t
and not reading the conditions that it says were violated and
what it's seeking to revoke here.
The language ofcondition No. 20 says, "The
approval of this Use Permit does not pemtit the premises in
operate as a bar, tavern, cocktail lounge, nightclub, or
commercial recreation and entertainment use," and identifies
the code section. All right. So let's take a look at the
code section.
The first thing is it can't operate as a bar.
Well, do we see a bar in here? Well, actually, a bar is not
defined under 20- 05.050(i). Rather, it's under 1 want to say
0). So arguably cant be violated anyway, but let's just
look at it anyway just for kicks.
It says bars and cocktail lounges. It defines what
Page 52
a bar is. A bar it says "is an establishment with the
principal purpose to sell or serve alcoholic beverages for
consumption on the premises." Fury was not a location that
had as its principal purpose at any time to sell or serve
alcoholic beverages for consumption on the prernises. If it
were, it wouldn't have hired Chef Sevan. If it were, they
would have all that wonderful food that we saw pictures of.
Wit were, it wouldn't have the full extensive menu. If it
were, it wouldn't be open for lunch. If it were, it wouldn't
be open for the dinnertime crowd. If it were, it wouldn't be
serving food all tight long. If it were, then it would be
violated, but its not
Its not like this location changed and morphed
from when the Conditional Use Permit was granted to all of a
sudden have that big wood bar in the middle, but having that
big wood bar doesn t make it a bar. Having that big wood bar
physically in the center of the premises was exactly what was
approved by the plarming commission for this Conditional Use
Permit as an eating and drinking establishment.
The other part of No. 7 there it says, "Or any
establishment having any of the following characteristics."
(a) says, "Is licensed as a public premises by the A.B.C."
Well, that would be a type 48, and we're not licensed for
that. Type 47 is what were talking about.
And (b), "Provides an area for serving alcoholic
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i
Attorney or District Attorney would have looked at it,
1
2
decided to file it, and when N&. Gonzalez went to the trouble
2
3
and effort of hiring a lawyer and sending the lawyer down on
3
4
the appointed day on that ticket, it would have been there,
4
5
and he would have pled guilty or not guilty on the
1 5
6
arraignment that he was supposed to be there, but instead he
( 6
7
wasted his time and he wasted his money to have a lawyer go
7
8
down there, and it was never filed and it's still never been
8
9
filed. If they had a case, they could have filed it. They
9
10
didn't have a case, they knew it therefore they didn't file
10
11
it, and they certainly haven't proven it up.
11
12
Condition Na 19 is a similar example of the
12
13
shotgun approach that means nothing. Read the Conditional
13
14
Use Permit. Read the condition. I heard all of this
j 14
is
testimony about gee, there me promoters involved. Gee,
115
16
promoters are bad. Promoters are not permitted in this
16
17
Conditional Use Pemmt. It's just one more example of the
17
18
City, of the government here using its ability to oppress j
18
19
this business by not reading the Conditional Use Permit
19
20
they're trying to revoke.
20
21
What's the condition say? The condition, the
21
22
condition doesn't say you can't use a promoter. The
22
23
condition doesn't define what a promoter is. In this '
23
24
situation the facts before this hearing officer, the facts of 124
25
location were that whether you call Social Group or
25
.this
Page 5(T
i
whatever the other names were promoters or advertising people
1
2
or marketing people or e-mail marketers or whatever you want
2
3
to call them, the fact is is that the condition says that the (
3
4
only way to violate that condition is if any of the profits
4
S
are shared with the person that is the so-called promoter.
5
6
JI
And there's been absolutely no evidence about that, and the
6
7
only evidence about that says they were paid a flat fee. No 1
7
8
profits were shared from any source, door charge, cover
8
9
charge, or any other form of admission charge, minimum drinks 1
9
10
or anything; therefore, condition No. 19 was not violated, I
10
11
clearly not violated.
11
12
Condition No. 20 -- actually, let me deal with
12
13
condition No. 21 while the idea and the argument is still .
13
14
fresh with regard to the overcrowding or alleged
14
15
overcrowding. Condition No. 21 talks about the occupancy
15
16
limit of 279, and there's just been no indication, no proof
16
17
of any violation. And even if we were to assume argueado or
17
18
even if we were to concede, which we don't, that on that one
18
19
particular night where the CIry did issue a citation, that
19
20
there was a basis for it and it was over 297, is one 120
21
violation on the one night enough to violate this Conditional 1
21
22
Use Permit where not one reported case has ever revoked a 1
22
23
Conditional Use Permit where its not been a nuisance?
23
24
And normally, at least in my experience the last 23
24
25
years where a city is relying on violation of occupancy 125
13 (Pages 49 to 52)
Page 51
limits, the City goes in there every other night, every week,
they count these people out, and they make sure that the guy
that counts them out has somebody who's watching what he does
and he makes, counts him in and out so the number is correct,
and then they bring that person in to testify that it'sjust
a serial violation. Well, that didn't happen here. One
instance. It wasn't proven anyway. So condition No. 21 is
not violated.
Now let me back up to condition 20, and this one
actually is one of the more interesting conditions and again
reflects the City not reading its own Conditional Use Perni t
and not reading the conditions that it says were violated and
what it's seeking to revoke here.
The language ofcondition No. 20 says, "The
approval of this Use Permit does not pemtit the premises in
operate as a bar, tavern, cocktail lounge, nightclub, or
commercial recreation and entertainment use," and identifies
the code section. All right. So let's take a look at the
code section.
The first thing is it can't operate as a bar.
Well, do we see a bar in here? Well, actually, a bar is not
defined under 20- 05.050(i). Rather, it's under 1 want to say
0). So arguably cant be violated anyway, but let's just
look at it anyway just for kicks.
It says bars and cocktail lounges. It defines what
Page 52
a bar is. A bar it says "is an establishment with the
principal purpose to sell or serve alcoholic beverages for
consumption on the premises." Fury was not a location that
had as its principal purpose at any time to sell or serve
alcoholic beverages for consumption on the prernises. If it
were, it wouldn't have hired Chef Sevan. If it were, they
would have all that wonderful food that we saw pictures of.
Wit were, it wouldn't have the full extensive menu. If it
were, it wouldn't be open for lunch. If it were, it wouldn't
be open for the dinnertime crowd. If it were, it wouldn't be
serving food all tight long. If it were, then it would be
violated, but its not
Its not like this location changed and morphed
from when the Conditional Use Permit was granted to all of a
sudden have that big wood bar in the middle, but having that
big wood bar doesn t make it a bar. Having that big wood bar
physically in the center of the premises was exactly what was
approved by the plarming commission for this Conditional Use
Permit as an eating and drinking establishment.
The other part of No. 7 there it says, "Or any
establishment having any of the following characteristics."
(a) says, "Is licensed as a public premises by the A.B.C."
Well, that would be a type 48, and we're not licensed for
that. Type 47 is what were talking about.
And (b), "Provides an area for serving alcoholic
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was was leas than 20% He didn't say what the percentage
was, but he said less than 20 %.
In addition to that we got Exhibit 7. ExJdbit 7
reflects the dance floor. It reflects that little booth
area. And if we look at Exhibit 7, ifs clear that the dance
floor and the D.J. booth, if you will, the D.J. booth is
5' x 5'. The dance floor, I mean Inn not testifying, I'm
just, if you look at it ifs tiny. And then the dance floor
is not much bigger than that. Its probably, I don't know,
probably 15' x 15', but whatever it is Exhibit 7 reflects it,
and its Icss than 20 %. So its neither the principal
purpose of providing five entertainment for dancing and nor
is it more than 20 "/0
And just talking about principal purpose. We're
not talking about -- even if we were to assume for a moment
that in that limit between 1:00 a.m. and 2:00 a.m. most people
aren't having dinner. Most people aren't ordering a lot of
food. That's not what people normally eat. That's why
Business and Professions Code 23038 deals with normal meal
time periods. So let's just take that one hour.
If in that one hour that place was devoted, if you
could say well principal purpose during that one hour was
providing live entertainment and dancing, whether it be just
the dance floor or anything else, this location was open for
lunch, it was open for dinner, it was open for louts and
Page 56
hours and hours every day. It was entitled to be open from
11:00 in the morning until 2:00 in the moming.
So what are we looking at? Were looking at from
2:00 that's 12, 14, that's 15 hours. So even if we were to
say that one hour, we still got to be principal purpose of
this use, it's not just at a moment in time, it's notjust
during one particular hour, its not just during one
particular time in the evening or even one day during the
week. You have to look at it as a whole, and looking at it
as a whole, this place was clearly one that did rot have as
its principal purpose providing live entertainment and/or
dancing in an area thats 20% or more.
In any case so condition No. 20 would require that
if it were to be violated, and since it's neither a bar nor a
tavern nor a cocktail lounge, and there's been no indication
that they even attempted to go that route, nor is it a
nightclub under their Municipal Code. 1 don't can what
people call it. I don't care if — and nor should anybody
else.
If somebody on a video says, "Gee, this is a great
club," doesn't matter. What matters is what the law provides
and requires, and the CSry of Newport Beach could have
defined nightclub differently, could have deemed bar
differently, but it didn't. It set the rules. We'rejust
following the rules.
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beverages that is operated during hours not corresponding o
1
2
regular meal service hours, Food products sold or served
2
3
incidentally to the sale or service of alcoholic beverages
3
4
shall not be deemed." Clearly that's not the case. So its
4
5
not a bar.
5
6
Going back to No. 20, they're not contending its a
6
7
tavern. I don't think they're contending it's a cocktail
7
8
lounge. I have heard the word nightclub. So let's take a
1 8
9
look at nightclub.
9
10
Nightclub under 20.05.050(1)(3) says cabarets and
10
11
nightclubs. And here it says, "Establishments with the
11
12
principal purpose of providing live entertainment and/or
' 12
13
dancing occupying more than 200/. of the net public area in
i 13
14
conjunction with the serving of food and/or beverages."
14
15
Well, in this situation this is also, this also
15
16
reflects and proves that Fury was not a nightclub. First of
17
all, it did not have as its principal purpose providing five
116
17
18
entertainment and/or dancing. Mr. Gonzalez testified to
18
19
Drat. The menu reflects it. The pictures reflect it Even
i 19
20
the dollars reflect it in terms of the sales reports. That
20
21
is not — that does not reflect the principal purpose.
21
22
And besides that it's not a principal purpose of
j 22
23
drinking alcohol. It's a principal purpose of live
24
entertainment and/or dancing. So where does live
I23
24
25
entertainment and/or dancing as approved by this Conditional
25
Page 54'
i
1
Use Perrot as we see in Exhibit 7 take place? It rakes place
1
2
on the dance floor. And the dance floor is tiny and it
2
3
doesnt approach 20% of the net public area.
3
4
So even if, again assurning arguendo and if we were
4
5
conceding, which we're not, that its principal purpose was to !
5
6
provide live entertainment and/or dancing, it still docent
6
7
meet that 20%. So on both of those conditions it doesn't I
7
8
meet it
8
9
THE HEARING OFFICER: You 're contending now that this
9
10
definition of cabaret or nightclub requites that more than
10
11
20% of the net public area be utilized for live entertainment
11
12
and dancing, that that's the definition.
12
13
MR. JAMIESON: I'mjust reading the language— 113
14
THE HEARING OFFICER: Yeah. 114
15
MR. JAMIESON: —but that's what Inn saying. It says +
15
16
here principal purpose —
16
17
THE HEARING OFFICER: And you're saying Fury does not
17
18
fall within that —1 don't think we had definitive testimony
18
19
with respect to the square footage devoted. It was about 20
19
20
as I recall for the dance floor and then ten or 20% of that
20
21
for the D.J. booth.
21
22
MR. JAMIESON: Actually, I had Mr. Gonzalez, because
22
23
clearly I was — I had read this before we got started, and 1 !
23
24
had Mr. Gonzalez testify, and he testified, he was the only
24
25
one that testified, that the dance floor and where the booth
25
.1'f lrayes D.3 co .no)
Page 55
was was leas than 20% He didn't say what the percentage
was, but he said less than 20 %.
In addition to that we got Exhibit 7. ExJdbit 7
reflects the dance floor. It reflects that little booth
area. And if we look at Exhibit 7, ifs clear that the dance
floor and the D.J. booth, if you will, the D.J. booth is
5' x 5'. The dance floor, I mean Inn not testifying, I'm
just, if you look at it ifs tiny. And then the dance floor
is not much bigger than that. Its probably, I don't know,
probably 15' x 15', but whatever it is Exhibit 7 reflects it,
and its Icss than 20 %. So its neither the principal
purpose of providing five entertainment for dancing and nor
is it more than 20 "/0
And just talking about principal purpose. We're
not talking about -- even if we were to assume for a moment
that in that limit between 1:00 a.m. and 2:00 a.m. most people
aren't having dinner. Most people aren't ordering a lot of
food. That's not what people normally eat. That's why
Business and Professions Code 23038 deals with normal meal
time periods. So let's just take that one hour.
If in that one hour that place was devoted, if you
could say well principal purpose during that one hour was
providing live entertainment and dancing, whether it be just
the dance floor or anything else, this location was open for
lunch, it was open for dinner, it was open for louts and
Page 56
hours and hours every day. It was entitled to be open from
11:00 in the morning until 2:00 in the moming.
So what are we looking at? Were looking at from
2:00 that's 12, 14, that's 15 hours. So even if we were to
say that one hour, we still got to be principal purpose of
this use, it's not just at a moment in time, it's notjust
during one particular hour, its not just during one
particular time in the evening or even one day during the
week. You have to look at it as a whole, and looking at it
as a whole, this place was clearly one that did rot have as
its principal purpose providing live entertainment and/or
dancing in an area thats 20% or more.
In any case so condition No. 20 would require that
if it were to be violated, and since it's neither a bar nor a
tavern nor a cocktail lounge, and there's been no indication
that they even attempted to go that route, nor is it a
nightclub under their Municipal Code. 1 don't can what
people call it. I don't care if — and nor should anybody
else.
If somebody on a video says, "Gee, this is a great
club," doesn't matter. What matters is what the law provides
and requires, and the CSry of Newport Beach could have
defined nightclub differently, could have deemed bar
differently, but it didn't. It set the rules. We'rejust
following the rules.
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1
And if we look at the roles and we all follow the
1
2
rules, it's neither a bar nor is it a nightclub. It is an
2
3
eating and drinking establishment, and condition No. 20 is
3
4
not violated.
4
5
We talked about condition No. 21. I already showed
5
6
that one is not violated.
6
7
Condition No. 25, CI 1 and C13, which were the
I 7
8
exhibits upon response to the request by the hearing officer,
8
9
the City said well, that proves a violation, CI 1, C13 do
' 9
10
nothing to prove violation of condition No. 25. There's just
10
11
no evidence of any violation there.
11
12
With regard to condition No. 26, which I didn't
12
13
hear any argument about but it is in the brief, that talks
1 13
14
about the training that the Fury folks had to put their
114
15
personnel through. Mr. Gonzalez testified that he did as
115
16
soon as it was reasonably possible to do it It got done.
16
17
That was it There's no contrary evidence to that
17
18
Condition No. 27 is the next one. It says, "Eating
18
19
and drinking establishment shall take reasonable steps to
19
20
discourage and correct objectionable conditions that
20
21
constitute a nuisance in the parking areas. If the operator
21
22
fails to discourage or correct nuisances" -- well, first of
22
23
all, I thought we weren't going on nuisances.
23
24
Secondly, if these observations that the police
24
25
reports reflect of urination or whatever else they said they
25
Page 58'
1
observed, if they were serious enough to constitute a
1
2
nuisance, one would think that citations of some sort would
2
3
be issued. One would think that the City would at least say,
3
4
"You know what, Fury! We're concerned about this, and you
4
5
need to comply with this. You got to do something
j 5
6
different." And there's been no evidence, no evidence before
6
7
this hearing officer that the City did that There's some
7
8
nebulous reference to a meeting in October, but whatever we
a
9
assume happened, whatever we think may have happened at that
9
10
rweting, whatever we think may or just assume could have been
10
11
discussed at that meeting we dont have any testimony as to
11
12
what it was. And, in fact, Mr. Gonzalez testified that
12
13
whatever the meeting was it included far fewer people dean
13
14
the City seemed to indicate may have been there. They ratted
14
15
off a list of people that were there from various
15
16
departments. Mr. Gonzalez said no, the meeting I'rn thinking
16
17
of only had a couple of people in it, but however many people
17
18
were there the record will reflect, the transcript when
18
19
prepared will reflect there is nothing in the record that
i 19
20
indicates what was discussed, what therefore put — Fury was
20
21
put on notice about and, therefore, as far as this condition
21
22
is concerned and correction or discouraging of some nuisance
22
23
activity, fair process, due process, fair and reasonable
23
24
steps before one looks to revoke such a valuable property
24
25
right here they need to be put on adequate notice that they
25
lb trages 5_I To ouj
Page 59
can correct it or that they need to correct it There s
nothing to indicate that. Absolutely nothing to indicate it.
Not me police officer came in and testified, which
1 was also kind of surprised about, that in his, I dont know
if there were any hers, in his experience based on his
education or training as a law enforcement officer for five
years or ten years or 17 years or whatever, that the security
at the Fury was inadequate, wasn't working, or that the
security was doing — was not doing what they were supposed
to be doing.
They testified about certain observations they
made, but again, nothing important enough that they felt that
it was a danger to themselves or anybody else or do anything
else, and the whole idea and the whole argument about well,
they were undercover and it would have blown their undercover
capacity, Wete not talking about a place here that's den of
iniquity. We're not talking about a place here where theres
narcotic trafficking going on. There's no evidence of that
WeSe not talking about a place here where there
were dangerous conditions that were happening where this
undercover operation was so important that they needed to
maintain their undercover status. And you know what? When
they did finally decide that they had to bring in some people
to make some citations a do something like the overcrowding,
they got the guys off the bicycle route and they brought them
Page 60
in and they did that so they still didn't blow it. So
there's simply no violation of that. There's no violation of
condition NO. 27.
Now, condition No. 36 I want to j ump to and then
we'll move back to 29 which is the last one, Condition No.
36 says that "the applicant shall submit a comprehensive
security plan for use and review by Newport Beach." There
has been no evidence that Fury did not provide such a
security plan in compliance with condition 36. An absolute
absence of evidence. Zero. Nothing was there.
And again, we don't have to prove that we did. We
don't have to prove that we did comply with any of these
other conditions either. The City has to prove that that
wasn't done, and that there was a complete failure of proof
on that.
Now, going back to condition No. 29, and this is an
interesting one because having to do with the quarterly gross
sales of alcoholic beverages, the documentation that's before
the hearing officer in the Citys exhibits as well as Fury's
exhibit, I think it's Exhibit 26, reflects something that has
not been pointed out by the City but I think is important for
the hearing officer to consider, and that is that when one
looks at the documents reflecting the first couple of
quarters after this location opened up, one actually sees a
trend of the dollars of food rising up. Its an increasing
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16 (Pages 61 to 64)
Page 63
the parking lot for hours and hours and spending all this
time without issuing any citations, without arresting people,
without detaining people.
What are they doing? Are they just trying to set
it up for this place to fail? Is the City of Newport Beach
looking at this thing and saying, you know what,
notwithstanding the fact that this Fury location was in
exactly the right type of spot for it, just like the CUP says
there's no residences around, its right on MacArthur
Boulevard, but you can't get to MacArthur directly from
there, its got offices complex, its got two other similar
businesses there, its got more than adequate parking, it's
got all those things that if you're going to have an eating
and drinking establishment with live entertainment and
dancing, that's where you put it. You don't put it down on a
strand next to the people that live there. Of course we know
that happens. You don't put it where all the other merchants
are so that when people walk out and they've been drinking
and they've been dancing and theyve been doing whatever,
that theyre going to leave evidence of that as they walk by
some other merchant's place, but that type of thing that we
find on the pier, near the pier, or on the strand or on the
boardwalk, if we want to have a resort kind of an area, if we
want to have a place where people go to have fun and
entertain, I guess we're stuck with locations that are going
Page 64
to be where there's also residences and things like that, but
luckily that's not -- maybe. But that's not what were
talking about here.
What were talking about is a location that has
been at least three different businesses in the last In
years. While, because while it may be a perfect place from a
land use standpoint and a perfect place where you stick it
off in a comer so that it doesn't bother people, and this
place didn't bother people, it's also a place that's
difficult to make a living. It's difficult for them to be
successful, and that seems to be evidenced by I guess it was
El Torito before it didn't make it. Hamburger Mary's, they
got this, didn't stay there. And then Fury comes in and here
we are seven mombs later without causing any problems to
anybody of the public is now having to go through all of this
difficulty to prove what we've nowjust shown that none of
these conditions were violated.
And yet what has it done -- what has this whole
process and pmceedingiust in general done to this business?
No matter what the decision of the hearing officer and the
recommendation is and ultimately the decision of the planning
commission, its -- this business has been horribly damaged.
And I would contend that since no violations of these -- of
this Conditional Use Permit, certainly the conditions theyve
contending were violated occurred, that its been a complete
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4,4
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1
trend. The documents reflect that
1
2
Now, keep in mind, and its an important point —
2
3
THE HEARING OFFICER There was just two quarters one
3
4
was open; right? Or there's three- quarters, but we donR
4
5
have the third quarter.
5
6
MR. JAMIESON: But we do have the first month of the
6
7
third quarter, and I want to talk about that for a second.
i 7
8
We have only two quarters, and that's important because this
B
9
location opened up Jane 22nd. Any business, any location,
9
10
especially one that holds 279 people, that spends all of this
i 10
11
money, time, and effort in marketing and trying to get people
11
12
in there and hires a chef and spends all this money to do it,
12
13
they want people to eat their food. They want people to come
113
14
in. And they want to be able to serve as much as theycan
+ 14
15
do.
15
16
And what one sees is is that with the failure rate
16
17
inherent in restaurants in general anyway, its a difficult
17
18
business. But to see the trend here of overall the dollars
1 B
19
going up and overall the balance going up for food, that's +
19
20
important because it reflects that the — that Fury was
20
21
intending to and attempting to and ultimately did in January
21
22
obtain, and that's why January is in there, they ultimately
22
23
obtained a balance where the food actually exceeded the
23
24
alcohol sales.
24
25
Now, the reason that quarterly is looked at
25
16 (Pages 61 to 64)
Page 63
the parking lot for hours and hours and spending all this
time without issuing any citations, without arresting people,
without detaining people.
What are they doing? Are they just trying to set
it up for this place to fail? Is the City of Newport Beach
looking at this thing and saying, you know what,
notwithstanding the fact that this Fury location was in
exactly the right type of spot for it, just like the CUP says
there's no residences around, its right on MacArthur
Boulevard, but you can't get to MacArthur directly from
there, its got offices complex, its got two other similar
businesses there, its got more than adequate parking, it's
got all those things that if you're going to have an eating
and drinking establishment with live entertainment and
dancing, that's where you put it. You don't put it down on a
strand next to the people that live there. Of course we know
that happens. You don't put it where all the other merchants
are so that when people walk out and they've been drinking
and they've been dancing and theyve been doing whatever,
that theyre going to leave evidence of that as they walk by
some other merchant's place, but that type of thing that we
find on the pier, near the pier, or on the strand or on the
boardwalk, if we want to have a resort kind of an area, if we
want to have a place where people go to have fun and
entertain, I guess we're stuck with locations that are going
Page 64
to be where there's also residences and things like that, but
luckily that's not -- maybe. But that's not what were
talking about here.
What were talking about is a location that has
been at least three different businesses in the last In
years. While, because while it may be a perfect place from a
land use standpoint and a perfect place where you stick it
off in a comer so that it doesn't bother people, and this
place didn't bother people, it's also a place that's
difficult to make a living. It's difficult for them to be
successful, and that seems to be evidenced by I guess it was
El Torito before it didn't make it. Hamburger Mary's, they
got this, didn't stay there. And then Fury comes in and here
we are seven mombs later without causing any problems to
anybody of the public is now having to go through all of this
difficulty to prove what we've nowjust shown that none of
these conditions were violated.
And yet what has it done -- what has this whole
process and pmceedingiust in general done to this business?
No matter what the decision of the hearing officer and the
recommendation is and ultimately the decision of the planning
commission, its -- this business has been horribly damaged.
And I would contend that since no violations of these -- of
this Conditional Use Permit, certainly the conditions theyve
contending were violated occurred, that its been a complete
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4,4
Page 621
1
generally is because you can't just look at one day or one
1
2
week, and you can'tjust look at one month, and quanerly is
2
3
generally a better indication of what is actually happening
3
4
at the location. And the idea of doing it quarterly and
4
5
trying to make it a half and half kind of deal is so that
5
6
really theyre attempting to make it so they're selling food
6
7
and its a legitimate eating and drinking establishment as
7
8
opposed to a bar or a nightclub the way it's defined here or
8
9
whatever it is. And they were, in fact, in that progression.
9
10
And in January they did, in fact, meet that 1
10
11
In December it got skewed because it was Christmas
11
12
and it was all of the parties and all the various things, so '
12
13
I'm not surprised about that, but if one looks at the whole
13
14
thing going up, its a trend that goes up and they met it 114
15
ultimately in January,
is
16
And really the last entry before we look atjust
16
17
December, the number is actually 47% food and 53% alcohol.
17
18
It was almost right there. And then in January it finally
l8
19
exceeds it all in the context of a situation where for some
19
20
reason without the nomtal public outcry for locations causing
20
21
a nuisance with residences that are -- residents that are
21
22
saying its too noisy, its too loud, its too this, its too
22
23
t hat, all these people are causing problems, without any of
23
24
that the City is expending its effort by having undercover
24
25
people sitting in there for hours and hours or sitting out in
25
16 (Pages 61 to 64)
Page 63
the parking lot for hours and hours and spending all this
time without issuing any citations, without arresting people,
without detaining people.
What are they doing? Are they just trying to set
it up for this place to fail? Is the City of Newport Beach
looking at this thing and saying, you know what,
notwithstanding the fact that this Fury location was in
exactly the right type of spot for it, just like the CUP says
there's no residences around, its right on MacArthur
Boulevard, but you can't get to MacArthur directly from
there, its got offices complex, its got two other similar
businesses there, its got more than adequate parking, it's
got all those things that if you're going to have an eating
and drinking establishment with live entertainment and
dancing, that's where you put it. You don't put it down on a
strand next to the people that live there. Of course we know
that happens. You don't put it where all the other merchants
are so that when people walk out and they've been drinking
and they've been dancing and theyve been doing whatever,
that theyre going to leave evidence of that as they walk by
some other merchant's place, but that type of thing that we
find on the pier, near the pier, or on the strand or on the
boardwalk, if we want to have a resort kind of an area, if we
want to have a place where people go to have fun and
entertain, I guess we're stuck with locations that are going
Page 64
to be where there's also residences and things like that, but
luckily that's not -- maybe. But that's not what were
talking about here.
What were talking about is a location that has
been at least three different businesses in the last In
years. While, because while it may be a perfect place from a
land use standpoint and a perfect place where you stick it
off in a comer so that it doesn't bother people, and this
place didn't bother people, it's also a place that's
difficult to make a living. It's difficult for them to be
successful, and that seems to be evidenced by I guess it was
El Torito before it didn't make it. Hamburger Mary's, they
got this, didn't stay there. And then Fury comes in and here
we are seven mombs later without causing any problems to
anybody of the public is now having to go through all of this
difficulty to prove what we've nowjust shown that none of
these conditions were violated.
And yet what has it done -- what has this whole
process and pmceedingiust in general done to this business?
No matter what the decision of the hearing officer and the
recommendation is and ultimately the decision of the planning
commission, its -- this business has been horribly damaged.
And I would contend that since no violations of these -- of
this Conditional Use Permit, certainly the conditions theyve
contending were violated occurred, that its been a complete
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FURY REVOCATION HEARING - 4/24/2008
17 (Pages 65 to 68)
Page 67
going to be in certain locations? We might as well just take
California's entire system of land use planning and throw it
out the window if the only way you can enforce a use pernrit
is if the violations rise to the level of a nuisance.
Mr. Jamieson has focused an the size and capacity
of the kitchen, an executive chef was htred, and so forth,
but theres absolutely no evidence of the number of meals
served. There was certainly a recognition that I dunk is
reflected in the conditions on this pern9t that having an
eating and drinking establishment you have dancing, where you
have live entertainment has the potential to cause some
issues, and there were conditions imposed that were intended
to address those issues by putting the emphasis an the
restaurant side, on the food side, and those conditions
baven't been followed. They haven't been met
I understand the point about it takes some time for
a business to get going, but by the time we're looking at
October 2007, this business has already been open for three
months. The food total is 68,000 and change. The alcohol
total is 299,000 in the month of October. Contrary to what
Mr, Jamieson said it wasn't -- well, it was getting close to
not 50150, but 2:1 in November where the food Waal is
121,000 and change and the total for all alcohol categories
is 239,000 and change. That's more like two-thirds W
one -Hurd which is what it ends up being for the full
Page 66
quarter.
As far as January being the month where food
finally exceeded the alcohol sales, that would be a lot more
persuasive if we had numbers from February and March because
I agree with Mr. Jamieson, the reason that the Use Permit
says we're going W look at this on a quarterly basis is that
there can be variations from month W month, and particularly
if you can get into a situation where its pretty close to
50150 food and alcohol, you're going to have months where one
is going to be a little more than the other and one is going
to be a little less. And frankly, if what we were dealing
with were a situation where its 490/6 food and 51 %alcohol or
42 — 48% food and 52% alcohol, I don't think we'd be here,
but that's not what we have. What we have is 2:1.
THE HEARING OFFICER: So how do you deal with this?
He's saying that there's this whole, that this shotgun
approach that the City is taking, and I'm not saying that's
what the City did, but thats the characterization, that
there really to %any significant compelling reason W shut
this place down except that they sell MOM alcohol than food.
MS. AILIN: Well, first of all, Pra in something of a
disadvantageous position for responding to that question
because I was not involved in the investigation, I wasn't
involved in putting the case together, and Itn not the one
ultimately advising the planning wmarission. 1 wish I were
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714 - 647 -9099
j -0
Page 65
1
witch hunt. It's been a complete waste of time, money, and
1
2
effort for the City and this respondent, and it's been a
2
3
violation of their constitutional due process rights for the
3
4
vested property interest as well as their first amendment
4
5
rights with regard W their live entertainment and cafe
5
6
dance.
6
7
I think the evidence reflects exactly that. 1
7
8
think there s no question that there's been no violation of
e
9
this Conditional Use Permit. And W the extent that there's
9
10
even arguably anything, certainly there's nothing that
10
11
warrants a revocation of this permit. And 1 want to thank
11
12
you for your time. j
12
13
THE HEARING OFFICER: Do you wish W rebut some of this? i
13
14
MS. AILIN: I do.
14
15
THE REPORTER: 0o you mind if we take a quick break
15
16
first?
16
17
M5. AILIN: Sure.
17
18
THE HEARING OFFICER: Of course.
18
19
(A brief recess is taken from 5:24 p.m. until
19
20
5:29 p.m.)
20
21
THE HEARING OFFICER: So on the record. Away we go.
21
i
22
MS. AILIN: On the record and away we go.
22
23
To some degree, although Mr. Jamieson hasn't said
23
24
it in so many words, what Mr. Jamieson is saying is that the
24
25
conditions in the Use Permit don't make sense. The
25
_.----
'� - -_. —.--- Page 66
1
resolution says it's a restaurant with live entertainment and
1
2
dancing, but then there are all these limitations on how you
2
3
can do that.
3
4
If the problem is that the Use Permit doesn't make
1 4
5
sense, the statute of limitations on that has long since
5
6
gone. The property owner could have come in — could have
6
7
filed a lawsuit when the permit was first issued with those
7
a
conditions questioning the conditions. He could have come in
8
9
at any time to ask for modification to those conditions.
9
10
Fury looked at the Use Permit before they entered
10
11
into a lease for these premises. They looked at the
11
12
conditions. They didn't go to the planning department and
12
13
say, you know, we'd really like to establish a business here,
13
14
but we can't do it under these constraints, how can we make
14
15
this work? No one has done that. So we have the conditions
15
116
16
that we have and the business that's there needs to live with
17
them.
! 17
18
Mr. Jamieson has also argued that you have to have
is
19
a nuisance to revoke the permit. Well, if you have to have a
19
20
nuisance to revoke the permit, in a sense you can't really
20
21
enforce the permit because what you're saying, in effect, is
21
22
do anything you want up to the level of being a nuisance, and
22
23
if you can't enforce the Use Permit for that reason, how do
23
24
you justify enforcing zoning? How do you justify enforcing
24
25
or even having a general plan that says certain uses are
25
17 (Pages 65 to 68)
Page 67
going to be in certain locations? We might as well just take
California's entire system of land use planning and throw it
out the window if the only way you can enforce a use pernrit
is if the violations rise to the level of a nuisance.
Mr. Jamieson has focused an the size and capacity
of the kitchen, an executive chef was htred, and so forth,
but theres absolutely no evidence of the number of meals
served. There was certainly a recognition that I dunk is
reflected in the conditions on this pern9t that having an
eating and drinking establishment you have dancing, where you
have live entertainment has the potential to cause some
issues, and there were conditions imposed that were intended
to address those issues by putting the emphasis an the
restaurant side, on the food side, and those conditions
baven't been followed. They haven't been met
I understand the point about it takes some time for
a business to get going, but by the time we're looking at
October 2007, this business has already been open for three
months. The food total is 68,000 and change. The alcohol
total is 299,000 in the month of October. Contrary to what
Mr, Jamieson said it wasn't -- well, it was getting close to
not 50150, but 2:1 in November where the food Waal is
121,000 and change and the total for all alcohol categories
is 239,000 and change. That's more like two-thirds W
one -Hurd which is what it ends up being for the full
Page 66
quarter.
As far as January being the month where food
finally exceeded the alcohol sales, that would be a lot more
persuasive if we had numbers from February and March because
I agree with Mr. Jamieson, the reason that the Use Permit
says we're going W look at this on a quarterly basis is that
there can be variations from month W month, and particularly
if you can get into a situation where its pretty close to
50150 food and alcohol, you're going to have months where one
is going to be a little more than the other and one is going
to be a little less. And frankly, if what we were dealing
with were a situation where its 490/6 food and 51 %alcohol or
42 — 48% food and 52% alcohol, I don't think we'd be here,
but that's not what we have. What we have is 2:1.
THE HEARING OFFICER: So how do you deal with this?
He's saying that there's this whole, that this shotgun
approach that the City is taking, and I'm not saying that's
what the City did, but thats the characterization, that
there really to %any significant compelling reason W shut
this place down except that they sell MOM alcohol than food.
MS. AILIN: Well, first of all, Pra in something of a
disadvantageous position for responding to that question
because I was not involved in the investigation, I wasn't
involved in putting the case together, and Itn not the one
ultimately advising the planning wmarission. 1 wish I were
Precise Reporting Service
714 - 647 -9099
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FURY REVOCATION HEARING - 4/24/2008
lb (rages 07 t.v 141
Page 71
Going back o the issue of whether this
establishment is a bar or not, Mr. Jamieson says well, if
alcohol is the primary service, why would they hire the
executive chef? Why would they have the kitchen? If alcohol
is not the primary purpose, why have bottle service? If
alcohol is not the primary service, primary purpose, why are
alcohol sales more than two times the food sales? I think
that there's a lot that comes down to that. I think that a
lot of the rest of it, in effect provides a basis for making
money from the business at the hours when people are less
likely to drink, and also, in effect, provides some cover for
what's really going oa
Mr, Jamieson has made a big deal about the size of
the dance floor and the D.J. booth. I don't think you can
really tell from Exhibit 7 exactly how large those areas are,
and I think that vague testimony he says that he old
Mr. Gonzalez to go measure it, well, if he really measured
it, I think we would get more specific testimony than just
it's less than 200/..
THE HEARING OFFICER: Our problem is we ve got this
definition about what, you know, that it bas to be -- it is
the City's law --
MS. AILIN: Right.
THE HEARING OFFICER: -- as he points out
MS. A11U N: Right. Mr. Jar ieson has also argued that
Page 72
what they have to do is serve food at the times that people
normally eat. Well, thats not what the Use Permit says, but
still if were talking about having only alcohol service from
1:00 to 2:00 a.m., if that's the only time you have people
who are drinking and not eating, how do you get alcohol sales
more than twice the food sales? Because that hour from 1:00
to 2:00 a.m. is really only a small fraction of the hours
that the restaurant is open.
I'll close with that. That's really -- that's
really the focus. You know, I -- if you want to argue that
the conditions don't make sense, come in and ask for a
modification, but if you don't come in and ask for
modification, then live with the conditions you have.
MR. JANDESON: I just have brief rebuttal.
THE HEARING OFFICER: Sure.
MR, JAMIESON: I never argued that the Conditional Use
Permit doesn't make sense. I never argued the Conditional
Use Permit needed to be changed or modified. I only argued
that the City has to read the Conditional Use Permit and the
City has to read the conditions. And the City failed to read
the Conditional Use Pertit itself as to what it did grant and
the conditions as to what those were
My argument was the Conditional Use Permit allows
this exact use, not that the Conditional Use Permit needs to
be changed. I went through in great detail at the beginning
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in a better position to answer that question. 1
1
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1 don't recall specifically frankly whether the — i
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whether what was put before the planning commission was
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revocation only or whether the potential exists for
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modification. I frankly don't recall.
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Could we go off the record for a second?
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THE HEARING OFFICER: Sure.
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(A brief recess is taken from 5:36 p.m. until
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5:37 p.m.)
9
to
THE HEARING OFFICER: Okay. Anyway, I —
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i l
MS. AILIN: Okay. You know, let's go back on the
11
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record.
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Mr. Jamieson has talked about the absence of
13
14
evidence of arrests. I wouldn t say that that's quite
14
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accurate. We do have the arrest statistics, the crime report
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statistics for reporting district 34 that Paul Solenko
16
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presented. We could have gone into specific incidents and
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would have been here for many, many more days given i
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Mr. lamieson's pension for lengthy cross- examination,
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although 191 note that it seems that his desire to do that
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decreased somewhat once Fury reached the point where they had i
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a deal for disposing of their business or assets, whichever
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it is. So Idont think— I don't think fiat's a fair
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statement to make.
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With regard to the materiality— well, with regard
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1
to the issue of the full menu being served, you know, again,
1
2
another example of a situation where if there is a question
2
3
about what a use permit means, you go and talc to somebody at
3
4
the planning department You don'tjust make it up as you go
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along.
i 5
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There clearly is evidence of officers either being
I 6
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there late because they've been there for hours or arriving
7
s
late and attempting to order food and being old that they
a
9
can't, and again, the testimony from Chef Seven that the
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kitchen closed at the latest at 1:00 while the establishment
10
11
remained open until 1:00 or 2:00 in the morning.
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With regard to the materiality of some of the
12
13
violations, particularly with regard to the issues about
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t rash, you know, we think of it -- we think of it as being
14
15
is
almost ajoke at this point but historically dealing with
16
public sanitation issues that are a threat to human health
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like trash, and I don't mean to suggest there are any issues
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with sewage at this location, but that's certainly the
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primary one, are pan of the reason we even have cities.
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When trash isn't dealt with properly, we end up with vermin,
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we end up with disease problems. So to say that we re not
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dealing with material violations when we have outside storage
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of t rash, when we have mash dumpsters that aren't kept in
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the proper trash disclosures I trunk is not recognizing the
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significance of the issue.
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lb (rages 07 t.v 141
Page 71
Going back o the issue of whether this
establishment is a bar or not, Mr. Jamieson says well, if
alcohol is the primary service, why would they hire the
executive chef? Why would they have the kitchen? If alcohol
is not the primary purpose, why have bottle service? If
alcohol is not the primary service, primary purpose, why are
alcohol sales more than two times the food sales? I think
that there's a lot that comes down to that. I think that a
lot of the rest of it, in effect provides a basis for making
money from the business at the hours when people are less
likely to drink, and also, in effect, provides some cover for
what's really going oa
Mr, Jamieson has made a big deal about the size of
the dance floor and the D.J. booth. I don't think you can
really tell from Exhibit 7 exactly how large those areas are,
and I think that vague testimony he says that he old
Mr. Gonzalez to go measure it, well, if he really measured
it, I think we would get more specific testimony than just
it's less than 200/..
THE HEARING OFFICER: Our problem is we ve got this
definition about what, you know, that it bas to be -- it is
the City's law --
MS. AILIN: Right.
THE HEARING OFFICER: -- as he points out
MS. A11U N: Right. Mr. Jar ieson has also argued that
Page 72
what they have to do is serve food at the times that people
normally eat. Well, thats not what the Use Permit says, but
still if were talking about having only alcohol service from
1:00 to 2:00 a.m., if that's the only time you have people
who are drinking and not eating, how do you get alcohol sales
more than twice the food sales? Because that hour from 1:00
to 2:00 a.m. is really only a small fraction of the hours
that the restaurant is open.
I'll close with that. That's really -- that's
really the focus. You know, I -- if you want to argue that
the conditions don't make sense, come in and ask for a
modification, but if you don't come in and ask for
modification, then live with the conditions you have.
MR. JANDESON: I just have brief rebuttal.
THE HEARING OFFICER: Sure.
MR, JAMIESON: I never argued that the Conditional Use
Permit doesn't make sense. I never argued the Conditional
Use Permit needed to be changed or modified. I only argued
that the City has to read the Conditional Use Permit and the
City has to read the conditions. And the City failed to read
the Conditional Use Pertit itself as to what it did grant and
the conditions as to what those were
My argument was the Conditional Use Permit allows
this exact use, not that the Conditional Use Permit needs to
be changed. I went through in great detail at the beginning
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Page 75
for the reasons reflected during the course of the heating.
The issue there was storage, not whether or not it happened
to be outside at the time, the moment when a photograph was
taken and they were breaking down boxes, but whether or not
it was stored these, and they have improved that
in terms of the dollars one of the things that is
always interesting is is that we're talking about bottle
service, and the people, the younger generation these days
tend to appreciate bottle service. When I was going to
places, we didn't do bottle service. I didn't know what
bottle service was, but if we wanted to equate what the
generation today deems as appropriate to eat with their food
and they get bottles, they get this bottle service. That's
I ust what they do.
It's really no different than if I were to go with
a number of my friends to a restaurant and I might buy a
bottle of wine for the table. lt's a bottle of alcohol.
That's -- that doesn't mean that its anything other than an
cating/dninking establishment. And there's no prohibition of
bottle service anywhere here.
Alcohol is more expensive generally so were
talking about dollars. That's one of the issues that we have
to deal with, and the A.B.C. sometimes identifies dollar
value of alcoholic sales and so forth, but as we see 23038 of
the A.B.C. Act talks about what a bona fide eating place is.
Page 76
A bona fide eating place, we went through that in great
detail, it doesn't say 50150, it doesn't say specific dollar
amount to percentage, but by California constitution it's
§ 20, article 22 or § 22, article 20,1 always get it mixed
up, but the California constitution that gives the state the
exclusive right to regulate alcohol when prohibition was
wiped out and it was -- and the right was given to the states
to regulate alcohol, the State of California enacted that
particular provision, and there are many cases that hold that
the State of California through its Departhrent of Alcoholic
Beverage Control has the exclusive right to regulate the sale
of alcohol.
Now, there's always kind of a little bit of a hazy
thing as to whether or not when the City issues a Conditional
Use Permit and talks about places that sell alcohol and says
well, it's a land use issue, its not really regulation of
alcohol per se, it's really a land use issue under the
police, the police rights and so forth that a city bas, but
at some point the courts find that when the City gets into
specifically regulating alcohol, not where it can be sold or
what the zoning might be or what the location is or even some
respects sometimes the hours, although that gets a little bit
dicey, but I would also contend that if the only thing that
were left with here is these, the dollar amount, the
percentages of alcohol sales, I would also contend that that
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1
this is an eating, drinking establishment, live entertainment
1
2
and dancing with a dance floor and a big old bar structure
2
3
right in the middle based on the approved floor plan and site
3
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plan.
4
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I argued not that it should be changed, but rather !
5
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it operated exactly the way the CUP was intended to be
6
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utilized for exactly the premises that existed, and it was
7
a
done in exactly the way that was contemplated. And then 1 j
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argued, and I went through each one of the conditions, that
9
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the City said were violated, and 1 said theyre not violated
10
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So in terms of the argument that Fury should have
11
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gone in and asked for modification or something, I've had
12
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clients, other clients that say that. Tbafs not this
13
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situation. I've had other clients that say well, gee, these
14
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conditions just don't make sense and I shouldn't have to deal
is
16
with it But that's not this situation
16
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This situation was if both sides, the City and
17
is
Fury, both read the CUP and particularly, obviously since my
18
19
concern here is the City in my opinion did not read the CUP,
19
20
we wouldn't be sitting here today. And it would have beet !
20
21
handled differently. And just look back to what Shannon
21
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Levin wrote in her report to Mr. Schillizzi and what she said
22
23
to the city attorney that the Conditional Use Permit was
23
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violated, and then here under cross - examination, which is
24
25
exactly the reason for an adversarial process like this, she
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1
admitted she was wrong. She was incorrect. Didn't violate
1
2
it. She said that.
2
3
Well, had everybody looked at this at the beginning
3
4
and not now for the first time, this proceeding should not
4
5
have even been initiated. That's what I argue. And that's
I 5
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what I'm saying. So the CUp just simply wasn't violated. It
: 6
7
contemplated the use here.
7
e
The evidence of the meals, of the number of meals
e
9
served, you know, the issue, that's me of the reasons 1
9
10
brought up the issue of the size of the kitchen and what the
10
11
A.B.C. through its Business and Professions Code section,
11
12
which is the Alcoholic Beverage Control Act, deals with the
12
13
size of the kitchen and whether or not it actually can serve
13
14
this stuff. There s no indication, certainty no proof that
14
15
it didn't
15
16
With regard to the trash dumpster, I'm going to
16
17
argue right now that in the brief it doesn't say anything
17
is
about exhibits -- strike that, conditions 34 and 35 having to
! 18
19
do with the trash, and there was testimony to that, but at
19
20
some point notice, due process, and opportunity to be heard,
20
21
prepare I think would be violated if now contrary to even
21
22
what the brief said at the beginning of what was going to be
22
23
proven that they were even trying to prove a violation of 34
23
24
and 35, but even if the hearing officer does consider that,
24
25
which wed object to, there's been no violation of 34 and 35
25
17 troyCa /D t-v rvI
Page 75
for the reasons reflected during the course of the heating.
The issue there was storage, not whether or not it happened
to be outside at the time, the moment when a photograph was
taken and they were breaking down boxes, but whether or not
it was stored these, and they have improved that
in terms of the dollars one of the things that is
always interesting is is that we're talking about bottle
service, and the people, the younger generation these days
tend to appreciate bottle service. When I was going to
places, we didn't do bottle service. I didn't know what
bottle service was, but if we wanted to equate what the
generation today deems as appropriate to eat with their food
and they get bottles, they get this bottle service. That's
I ust what they do.
It's really no different than if I were to go with
a number of my friends to a restaurant and I might buy a
bottle of wine for the table. lt's a bottle of alcohol.
That's -- that doesn't mean that its anything other than an
cating/dninking establishment. And there's no prohibition of
bottle service anywhere here.
Alcohol is more expensive generally so were
talking about dollars. That's one of the issues that we have
to deal with, and the A.B.C. sometimes identifies dollar
value of alcoholic sales and so forth, but as we see 23038 of
the A.B.C. Act talks about what a bona fide eating place is.
Page 76
A bona fide eating place, we went through that in great
detail, it doesn't say 50150, it doesn't say specific dollar
amount to percentage, but by California constitution it's
§ 20, article 22 or § 22, article 20,1 always get it mixed
up, but the California constitution that gives the state the
exclusive right to regulate alcohol when prohibition was
wiped out and it was -- and the right was given to the states
to regulate alcohol, the State of California enacted that
particular provision, and there are many cases that hold that
the State of California through its Departhrent of Alcoholic
Beverage Control has the exclusive right to regulate the sale
of alcohol.
Now, there's always kind of a little bit of a hazy
thing as to whether or not when the City issues a Conditional
Use Permit and talks about places that sell alcohol and says
well, it's a land use issue, its not really regulation of
alcohol per se, it's really a land use issue under the
police, the police rights and so forth that a city bas, but
at some point the courts find that when the City gets into
specifically regulating alcohol, not where it can be sold or
what the zoning might be or what the location is or even some
respects sometimes the hours, although that gets a little bit
dicey, but I would also contend that if the only thing that
were left with here is these, the dollar amount, the
percentages of alcohol sales, I would also contend that that
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particular issue, which by itself is not sufficient to revoke
1
2
the CUP, is also one that's preempted by state law.
2
3
I don't think a city can revoke a CUP solely on
3
4
that issue. I think that the state has the exclusive right.
4
5
Its clear it has exclusive right to regulate alcohol. And 1 I
5
6
think on that particular issue I think that the City would
6
7
violate it if they — if the City were to revoke based on
7
8
that
8
9
And so based on that 1 would contend that it is
9
10
preempted. But even if its not preempted, just factually j
10
11
and legally and for all the other reasons, there's just i
11
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simply no basis to revoke this CUP. And this was a
12
13
proceeding that was noticed for revocation, and the City's
13
14
failed to meet its burden of proof. These conditions that
14
15
identified were not satisfied They weren't proven. The
15
16
factual basis not there. The legal basis not there, and we
16
17
would urge the hearing officer to recommend to the planning
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commission that the CUP not be revoked, and that the live
is
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entertainment and dancing not be revoked. !
19
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THE DARING OFFICER: In terms of we need to end this
20
21
certainly, there's an unusual situation present here from my
21
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perspective because this business has now closed, and I don't
22
23
know whether its permanently closed, temporarily closed, but ;
23
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it is always desirable for anybody in this — in a 124
23
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decision - making capacity with respect to these kinds of 1
25
20 (Pages 77 to 80)
Page 79
this matter.
MR. JAMIESON: You know, its kind of an interesting
situation, and I appreciate that the hearing officer is
considering listening to both sides about potential ways to
deal with that, if this were a location where again what was
going on is, for instance, its allowed to be open until 2:00
in the morning and by doing that its causing a problem in
the neighborhood, people are complaining, it's too loud,
people are leaving, its too late, those types of things,
which we see all the time, in other situations then one right
say well, okay, maybe a modification of the hours might be
warranted because then it will address that issue, and yet we
don't have that situation here.
It's very clear that the hours is really not an
issue its not bothering anybody. The public is not being
adversely affected. The -- whatever -- whether you believe
what goes on, what's alleged to have gone on, or you don't
believe what's alleged to have gone on, whatever, its simply
not the same simation as if that were the case, for
instance.
If we had a situation where the location was
allowing minors to come in, and even though its a type 47
where they're allowed to get minors in, that they're not
checking I.D.'s or something, I've sear conditions imposed
where it requires them to get one of those white machines and
Page 80
there's a condition with that and it tightens up around that,
but this is one of the reasons that its such — its such a
difficult situation from the City's standpoint is that its
not addressing those types of concerns unless —
THE HEARING OFFICER: Okay. I understand your point,
and I don't —
MR, JAMIESON: And Pd like to give the hearing officer
some way to find something that would address that concern,
and really obviously anything — we don't want to see this
revoked. Clearly we don't want it see it revoked. From a
legal standpoint I don't see any basis for it. I trade that
clear. I think. I hope. But its a difficult thing.
THE HEARING OFFICER: Okay. I think I understand.
MR. JAMIESON: And maybe, you know, if we come up with
something following the close of today on either side, maybe
we could share it with the hearing officer, and the hearing
officer can incorporate, if the hearing otiicer feels it
appropriate, might be able to incorporate something like that
in his recommendation obviously having shared it between
counsel so that there's no ex pane commtmication, but we
could do that. And that might be appropriate. I don't know.
I think it may be appropriate.
THE HEARING OFFICER: Well, okay. That's —
MS. AILIN: Just one more thing —
THE HEARING OFFICER: Shoot.
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1
issues to consider alternatives to outright revocation, and
1
2
do you have any wisdom to share with me as to whether there's
1 2
3
any utility in me spending time and city money in attempting
3
4
to devise any recommendations as alternatives, which is what
4
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1 might do in this instance, given the fact that this place
5
6
is closed? And you don't have to answer at all should you
6
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choose not to. Thank you.
7
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MR. JAMIESON: rll leave it to the City to --
e
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THE [-TEARING OFFICER: Okay.
! 9
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MR. JAMIESON: -- initiate that Does the City have any
10
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thoughts on it?
11
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MS. AII.W: I think it is still worth spending the time
12
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to consider. If the hearing officer concludes that
13
14
revocation is not appropriate, its worth spending the time
14
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to consider what modifications might make sense to address
15
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the issues that have been flushed out in this hearing because
li 16
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there is the potential if another establishment comes in
17
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under the same conditions for the same issues to arise, and
is
19
so I think it is worth looking at what modifications could be
19
2o
made that would address those issues.
20
21
I think that if the hearing officer were to do
21
22
that, the planning commission would be likely to refer the
22
23
matter to staff for the staffs consideration, but I still
23
24
think that that is a worthwhile endeavor absent the plamring
1 24
25
commission directing the hearing officer to cease working on
125
20 (Pages 77 to 80)
Page 79
this matter.
MR. JAMIESON: You know, its kind of an interesting
situation, and I appreciate that the hearing officer is
considering listening to both sides about potential ways to
deal with that, if this were a location where again what was
going on is, for instance, its allowed to be open until 2:00
in the morning and by doing that its causing a problem in
the neighborhood, people are complaining, it's too loud,
people are leaving, its too late, those types of things,
which we see all the time, in other situations then one right
say well, okay, maybe a modification of the hours might be
warranted because then it will address that issue, and yet we
don't have that situation here.
It's very clear that the hours is really not an
issue its not bothering anybody. The public is not being
adversely affected. The -- whatever -- whether you believe
what goes on, what's alleged to have gone on, or you don't
believe what's alleged to have gone on, whatever, its simply
not the same simation as if that were the case, for
instance.
If we had a situation where the location was
allowing minors to come in, and even though its a type 47
where they're allowed to get minors in, that they're not
checking I.D.'s or something, I've sear conditions imposed
where it requires them to get one of those white machines and
Page 80
there's a condition with that and it tightens up around that,
but this is one of the reasons that its such — its such a
difficult situation from the City's standpoint is that its
not addressing those types of concerns unless —
THE HEARING OFFICER: Okay. I understand your point,
and I don't —
MR, JAMIESON: And Pd like to give the hearing officer
some way to find something that would address that concern,
and really obviously anything — we don't want to see this
revoked. Clearly we don't want it see it revoked. From a
legal standpoint I don't see any basis for it. I trade that
clear. I think. I hope. But its a difficult thing.
THE HEARING OFFICER: Okay. I think I understand.
MR. JAMIESON: And maybe, you know, if we come up with
something following the close of today on either side, maybe
we could share it with the hearing officer, and the hearing
officer can incorporate, if the hearing otiicer feels it
appropriate, might be able to incorporate something like that
in his recommendation obviously having shared it between
counsel so that there's no ex pane commtmication, but we
could do that. And that might be appropriate. I don't know.
I think it may be appropriate.
THE HEARING OFFICER: Well, okay. That's —
MS. AILIN: Just one more thing —
THE HEARING OFFICER: Shoot.
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Page 81
MS. AILIN: -- that I meant to do before we started
arguments and I forgot to. Mr. Jamieson and I had discussed
the other day a stipulation with regard to Mr. Ridgeway and
his presence at various planning commission meetings, and so
I just want to put that on the record before we close if I
remember correctly the stipulation was that we would
stipulate that Mr. Ridgeway was present at and addressed the
planting commission at both the January 17th, 2008, and
February 21st, 2008, planning commission hearings regarding
the Fury Use Permit
MR. JAMIESON: And what I — and what I had indicated is
I was comfortable entering into a stipulation that — that
the record of both of those hearing dates does reflect that,
and the only reason that that being somewhat obsequious is
neither one of us were at the January 17.
MS. AMIM Right.
MR. JAMIESON: So I think its more appropriate w say
the record does reflect it We looked, and I agree, the
record reflects that
MS. AILIN: Yeah. That's fine.
MR. JAMIESON: And then with regard to February 211
honestly didn't remember, and I really sell don't remember
him being there, but we did have the court reporter read a
back, and it seems to be clear that he was, in fact, there.
So I'm --
Page 82
MS. AJDN: Right.
MR JAMIESON: So that's why Ill stipulate that the
record reflects that
MS. AILIN: That's fine.
MR. JAMIESON: Okay,
THE HEARING OFFICER: Okay. I have nothing further.
So--
MS, AIL]N: Okay.
THE HEARING OFFICER: We're through. Thank you --
MR. JAMIESON: Thank you.
THE HEARING OFFICER: —both very much.
4 =Fk
(WHEREUPON THE HEARING CONCLUDED AT 5:58 P.M.)
21 (Pages 81 to 83)
Page 83
1 CERTIFICATE
2 OF
3 CERTIFIED SHORTHAND REPORTER
4
I
5 The undersigned Certified Shorthand Reporter of the
6 State of California does hereby certify:
7 That the foregoing proceedings were taken before me
a at the time and place therein set forth;
9 That the foregoing proceedings were recorded
10 stenographically by me and were thereafter transcribed, said
11 transcript being a true copy of my shorthand notes thereof.
12 In witness whereof, I have subscribed my name.
13
14
i 15 DATED: MAY 9, 2008
16
17
i Deborah J. Blanchet
1 18 CSR #7644
19 20
22
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