HomeMy WebLinkAbout03 - Newport Beach Brewing Company - PA2006-177a
CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item 4
July 24, 2007
TO: Honorable Mayor and Members of the City Council
FROM: James Campbell, Senior Planner
(949) 644 -3210, j campbell acitv.newport- beach:ca.us
SUBJECT: Newport Beach Brewing Company, Review of Use Permit No. 3485
2920 Newport Boulevard (PA2006 -177)
At the last meeting, the City Council conducted a public hearing regarding the Newport Beach
Brewing Company. At the conclusion of the hearing, the Council acted to modify the use
permit and directed staff to prepare a revised resolution to reflect the Council's action. The
revised resolution is attached for review.
irepd by:
s Campbell,
Attachment
Revised Draft Resolution
Submitted by:
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT
BEACH MODIFYING THE CONDITIONS OF APPROVAL OF USE
PERMIT NO. 3485 FOR PROPERTY LOCATED AT 2920 NEWPORT
BOULEVARD (PA2006 -177).
WHEREAS, on September 27, 1993, the City approved Use Permit No. 3485
subject to findings and conditions of approval authorizing a restaurant/brewpub with a
Type 23 Alcoholic Beverage Control (ABC) license to operate at 2920 Newport
Boulevard within the Cannery Village area subject to findings and twenty-nine (29)
conditions of approval. A Type 23 license allows a small beer manufacturer (brewpub or
micro - brewery) where a brewpub is typically a small brewery with a restaurant. The
restaurant and brewpub began operations in 1994 using the business name of Newport
Beach Brewing Company referred to hereto as "NBBC" after the issuance of Coastal
Development Permit (CDP) No. 5 -93 -137 issued by the California Coastal Commission
(CCC).
WHEREAS, the NBBC represented to the City that the primary use would be a
restaurant and that the brewery and alcohol sales would be secondary to the primary
use. This fact is supported by the administrative record from the hearings conducted by
the City in 1993. Condition No. 10 was imposed requiring the operation of the brewery
and the service of alcoholic beverages to be ancillary to the primary food service
operation of the restaurant.
WHEREAS, on September 27, 1993, the City Council rescinded its March 8,
1993 approval to allow the purchase and use of in -lieu parking spaces within the
Cannery Village municipal parking lot prior to 5:00 PM in association with Use Permit
No. 3485.
WHEREAS, in 1999, the NBBC requested and received approval of an
amendment to Use Permit No. 3485. The amendment allowed the restaurant and
brewpub to operate with a Type 75 ABC license and the amendment was subject to
findings and additional and revised conditions of approval (twenty-nine [29] in total). A
Type 75 license authorizes the sale of beer, wine and distilled sprits at a bona fide
eating place plus the brewing of beer.
WHEREAS, the NBBC represented to the City that the primary use would be a
restaurant and that the brewery and alcohol sales would compliment and be secondary
to the primary use. This fact is supported by the administrative record from the
proceedings conducted in 1999. Condition.No. 9 was imposed requiring the operation of
the brewery and the service of alcoholic beverages to be ancillary to the primary food
service operation of the restaurant. Condition No. 10 was imposed that provides, "The
approval of this use permit is for a restaurant/brewpub and shall not be construed as the
approval of a bar, cocktail lounge, or other use serving alcoholic beverages during
hours not corresponding to regular meal service hours (food products sold or served
incidentally to the sale or service of alcoholic beverages shall not be deemed as
Resolution No.
rage z or -it)
constituting regular meal service) nor as the approval of a cabaret, nightclub, or other
use with the principal purpose of providing live entertainment and /or dancing."
Additionally, the closing hour on Friday and Saturday nights was changed from 2:00 AM
to 1:00 AM.
WHEREAS, in January of 2006, the City received a complaint from The Cannery
Village Concerned, a local group of residents, property owners and business owners,
alleging that the Newport Beach Brewing Company was violating the conditions of Use
Permit No. 3485. Alleged violations included, among other things: operating a bar rather
than a restaurant in violation of Condition No. 10; alcohol sales in excess of food sales
in violation of Condition No. 9; opening the entire dining area on weekends before 5PM
in violation of Coastal Development Permit No. 5 -93 -137, trash in the parking lot in
violation of Standard Condition E; failure of the establishment to curb unruly patron
behavior outside the establishment in violation of Standard Condition D; and inadequate
training of the owner and employees in responsible methods and skills for serving and
selling alcoholic beverages in accordance with Standard Condition F. Neighbors
contend that patrons create noise, fight, cause property damage, urinate, defecate, and
fornicate during the late evening and early morning hours on and in the vicinity of the
project site and that the operator was unable or unwilling to discourage or correct these
objectionable conditions. Based upon the complaints received, Use Permit No. 3485
was referred to the Planning Commission on May 4, 2006, for review.
WHEREAS, on May 4, 2006, the Planning Commission discussed the operation,
took input from the neighborhood and directed an official review of the Use Permit. At
the May 4, 2006, meeting, testimony was given to the Planning Commission supporting
the following facts:
a) Jerry Kolbly, General Manager, NBBC represented that the establishment's
emphasis was on being a restaurant. He also noted that the kitchen is opened
during the hours of alcohol service with the late night menu (pizzas and
appetizers) from 10:00 PM to closing. In addition, Mr. Kolbly noted that "service
from 11:00 pm and 1 am is about 90% alcohol (55% liquor and 45% beer and
wine) and 10% food. (See, Planning Commission Minutes dated May 4, 2006).
Operation of the brewery and the service of alcoholic beverages shall be ancillary
to the primary food service operation of the restaurant pursuant to Condition #9
and this testimony would support a finding of a violation. Condition #10 prohibits
a bar and based upon these representations, staff believes that the limited menu
after 10:00 PM and relationship between the sale of alcohol to food violated both
Condition Nos. 9 and 10.
b) Jerry Kolbly also testified that his staff had received certified alcohol training in
1999, but due to staff turnover, the training had since lapsed. (See, Planning
Commission Minutes dated August 17, 2006). No record of completion of a
certified alcohol sales training course is in evidence required pursuant to
Condition F. Failure to properly train the owners and staff who serve alcohol in
accordance with Condition F would constitute a violation of the condition. On
1 September 6, 2006, the majority of NBBC staff successfully complete the State
Department of Alcohol Control Board administered License Education on Alcohol
Resolution No.
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and Drugs (L.E.A.D.) training program. If this course had been completed by all
staff members, NBBC would have been in compliance with Condition F that
requires training of owners, staff and employees on responsible alcohol sales.
They may have previously been in violation of this condition, if there were
employees serving and /or selling alcoholic beverages who had not undergone a
certified training program.. All employees have since received the LEAD training
and the NBBC is believed to be in compliance with Condition F.
c) Bruce Low, a 29th Street resident, testified for a group of concerned citizens,
noting that:
i) They do not wish to close the Brewery as it brings value to the neighborhood
provided it is operated in accordance with the conditions of approval.
ii) There is a discrepancy between the Use Permit conditions and the condition
of the Coastal Development Permit related to the size of the dining room on
the weekends.
iii) The Brewery turns into an obtrusive bar operation after 10:30 PM and they
have bouncers, what restaurant has bouncers?
iv) The operators have made strides but the more serious issues still remain
nuisances to the neighborhood as outlined in the January 2006.
d) Joe Reese, 30th Street resident, testified that patrons have to show their
identification to get into the establishment. It is not a restaurant, not with
bouncers and serving only appetizers after 10:00 p.m. This operation between
10:00 PM and 1:00 AM is nothing more than a bar. This area is out of control
and he is disturbed by the noise in the early mornings.
e) Drew Wetherhault, 30th Street resident, testified that he supported the prior
speakers and he stated that the restaurants and bars need to comply with their
use permits.
f) Carrie. Stade, 29th Street resident, testified she has been awakened with noise
and victimized by patrons.
g) Stephanie Rosanelli, resident of Cannery Village, noted the noise at night and
that she cannot leave her windows open. She too has had her home vandalized
by tagging.
h) Christine Andros, 30th Street resident, testified the challenges are the noise and
patron activities (nuisances) in the parking lot. This establishment operates as a
bar. She has spoken to the bar operator on several occasions to inform him of
disturbances in his parking lot.
i) Tony Shepherdson, 31st Street resident, testified his agreement with previous
speakers and stated any help would be welcomed.
j) Kevin Weeda, the owner of a business located in the area, testified his
agreement with the previous speakers and asked that this item be brought back
for formal review. !`
Resolution No.
Page 4 of 16
k) The net public area of the establishment is no more than 1500 square feet
Monday through Friday before 5:00 PM and the net public area exceeds 1500
square feet before 5:00 PM on Saturday and Sunday in violation of Special
Condition No. of Coastal Development Permit No. 5 -93 -137.
1) The site was found to be generally free of litter and not in violation of Standard
Condition E.
At the conclusion of the discussion, the Planning Commission determined that there
was sufficient information to indicate that the use was operating in violation of the
conditions of approval and in a manner that may have been detrimental to the
reasonable peace and quiet of the neighborhood. The Commission also found that there
was sufficient information to consider potentially modifying the conditions of approval to
alleviate the problems reported by neighbors. The Commission requested and the
Planning Director determined pursuant to Section 20.96.040 of the Municipal Code that
a review of Use Permit No. 3485 was required.
WHEREAS, On August 17, 2006, the Planning Commission held a public
hearing regarding. the alleged violations of and potential modifications to the conditions
of approval of Use Permit No. 3485. The hearing was noticed in accordance with
Chapter 20.92 of the Municipal Code and the operator of the Newport Beach Brewing
Company was also mailed a notice of the hearing. The following facts were considered
by the Planning Commission:
a) A Code and Water Quality Enforcement Officer conducted a site visit on
February 10, 2006. It was a Friday night, and the officer noted that there was in
fact a line to get into NBBC and the officer noted that some individuals were
screaming at each other and a high noise level was being emitted from the
premises. This would constitute a violation of the nuisance provision in Condition
D. (Planning Commission Minutes dated August 17, 2006).
b) At the Planning Commission Meeting, Mr. Kolbly, the General Manager of NBBC,
acknowledged that the line to get into the establishment could reach up to thirty
people. Additionally, John Dale, a patron of NBBC noted that the establishment
"does a great job with security at the door." (See, Planning Commission Minutes
dated August 17, 2006).
c) At the Planning Commission meeting, Jill Markowitz, owner of a property near
NBBC contended that individuals were urinating in public (she did not specify that
the individuals came directly from NBBC). She also complained that, in general,
there were loud noises coming from the establishment and the parking lot.
(Planning Commission Minutes dated August 17, 2006). The noises /disturbances
would be in violation of the nuisance provision in Condition D.
d) Billy Steed testified that the establishment is nice until after 9:00 p.m. when it can
get out of control. Noise, public urination and fights coming out of the bar disturb
the peace. (See, Planning Commission Minutes dated August 17, 2006). The
noises /disturbances would be in violation of the nuisance provision in Condition
D.
Resolution No.
Page 5 of 16
e) Joe Reese testified at the meeting that he had visited NBBC after 9:00 PM on
August 5, 2005 to see how the NBBC operated. He testified that the security
guard at the door said that after 9:00 PM the restaurant becomes a bar and that
no one under 21 is allowed in or they would lose their liquor license. The
restaurant had patrons standing and loud music was playing. We sat at a table
and asked the waiter for food who told us the kitchen was closed and the only
thing to order was drinks. There were no chips, pretzels or popcorn being
served. There were three security guards inside the restaurant and another one
was outside. It was obvious that this was acting as a bar, not a restaurant.
Conversely, there was testimony given by Zach Stevens, a NBBC employee, on
duty that night noting that waiters are told to push food even past 11:00 PM to
increase sales and that the kitchen was open as evidenced by the sale of a '/2
chicken salad at midnight. (Planning Commission Minutes dated August 17,
2006). Closing the kitchen thereby eliminating food sales with the continued
sales of alcohol would constitute a violation of Condition #9 as the sale of alcohol
would exceed that of food and a violation of Condition #10 by operating a
prohibited bar.
f) Robby Hogan, a manager in charge of the kitchen at the establishment, testified
that he was on duty the night of August 5, 2005 and the kitchen was open and is
always open until the establishment closes (Planning Commission Minutes dated
August 17, 2006).
g) Roberta Aley, resident, testified that she frequents the brewery and that she
always has been able to get food after 12:00 PM and that she has not seen any
of these problems after 12:00 PM that have been portrayed by previous
speakers. (Planning Commission Minutes dated August 17, 2006).
At the conclusion of the hearing, the Planning Commission directed staff to set Use
Permit No. 3485 for possible modification and /or revocation given that the NBBC had
not addressed issues of nuisance and strict compliance with all conditions of approval.
WHEREAS, on or about August 21, 2006, Newport Beach Police informed
planning staff that the owners, staff and employees had successfully completed the
L.E.A.D. training classes administered by the State Department of Alcoholic Beverage
Control as required by Condition F. A violation of Condition F had occurred prior to
successful completion of the training curriculum.
WHEREAS, Condition #6 of Use Permit No. 3485 states: "The net public area of
the restaurant/brewpub, which is devoted to daytime use Monday through Friday (prior
to 5:00 PM.) shall be limited to 1,500 square feet. The balance of the net public area
shall be physically closed off to the public by a fixed barrier and shall not be used until
after 5:00 PM daily."
WHEREAS, Special Condition #1 of Coastal Development Permit (CDP) No. 5-
93 -137 states: `Prior to the issuance of a coastal development permit, the applicant
shall execute a deed restriction, in a form and content acceptable to the Executive j
Director, which shall provided no more than 1,500 square feet of service area for the ` 11
Resolution No.
Page 6 of 16
subject restaurant/brewpub shall be open before 5:OOPM, This document shall run with
the land, binding all successors and assigns, and shall be recorded free of prior liens."
On January 19, 1994, the property owner recorded a deed restriction pursuant to
Special Condition #1 that restricts the use of the property in accordance with Special
Condition #1.
WHEREAS, on Sunday October 8, 2006, Newport Beach Police Detectives
visited the NBBC, arriving at about 12:30 PM. They noted that the restaurant was
completely open with patrons occupying tables in all areas with no sections being
closed off. NBBC has admitted during the various public hearings that the NBBC does
not limit the size of the dining room on weekends before 5:00 PM.
WHEREAS, on January 4, 2007, the Planning Commission held a noticed public
hearing on the possible modification of conditions and /or revocation of Use Permit No.
3485. Testimony and a staff report, including a report prepared by the Newport Beach
Police Department, were considered by the Planning Commission:
a) The Newport Beach Police Department investigation did not reveal any violations
of conditions or a significant law enforcement issue with the operation of the
NBBC. The Department of Alcoholic Beverage Control was contacted and they
reported that the Department did conduct an investigation that was closed due to
a lack of evidence of a violation of license conditions.
b). All NBBC had successfully completed the L.E.A,D. training classes administered
by the State Department of Alcoholic Beverage Control abating past violation of
Condition F.
G) The NBBC staff voluntarily offered the following physical and operational
changes for consideration as amended conditions of approval:
i) Construction of a trash enclosure cover.
ii) Relocation the entrance from the parking lot side of the building to the
Newport Boulevard entrance when a line of patrons forms to enter the
establishment.
iii) Discontinuation of the removal of condiments and menus from the tables.
iv) Discontinuation of the late night bar menu while keeping the kitchen open at
all times with a full menu.
v) Installation of signs requesting that patrons be respectful of the neighborhood.
vi) Initiation of regular security sweeps of the parking lot.
vii) Maintenance of a security presence at least ' /z hour after closing.
viii) Implementation of a recycling collection program that minimizes noise
generation.
ix) Scheduling building /business maintenance (waste disposal, deliveries, etc.)
activities during hours less objectionable to nearby residents.
d) Jerry Kolbly, General Manager of the Newport Beach Brewing Company, testified
that the queue line location change has worked well. Instituting the full menu in
the late evening and early morning has been advantageous from a business
Resolution No
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perspective.. The LEAD training program has been a valuable experience they
have undertaken. Every brewpub cards after 10:00 PM in order to protect their
licenses and other restaurants do the same. The Brewing Company maintains a
higher percentage of food sales than alcohol sales and have since day one.
e) Drew Wetherhault, a local resident, testified that there is a parking problem
before 5:00 PM on the weekends. He also indicated his belief that the
establishment operates as a bar after 9:00 PM due to high alcohol sales. He
noted his desire to see a reduction in the hours of operation on Friday and
Saturday having them shut down at 11:00 PM like other restaurants to address
nuisances. He also noted that the neighborhood is impacted by after hours
activities in the parking lots south of the Brewery and not all of them are
attributable to the Brewing Company's patrons.
f) Joe Reese, local resident, testified that it is his belief that there is no doubt that
the use was intended to be a restaurant and not a bar as alcohol was conditioned
to be ancillary to food service. The Brewing Company has security guards at the
doors and bouncers inside, it is a bar atmosphere. Every weekend he is
awakened by people leaving the drinking establishments.
g) Billy Staid, local resident, testified that in spite of the recent operational changes
instituted by the Brewing Company, there are still problems with the operation
principally with patron activity in the parking lot. He asked if the entrance could
be moved to the Newport Boulevard side of the building during the week after
9:00 PM.
h) Stephanie Rosanelli, local resident, testified that noise is a problem and
suggested that a restaurant would be a better business value.
At the conclusion of the public hearing, the Planning Commission adopted Resolution
No. 1709 amending Use Permit No. 3485 by modifying the conditions of approval to
clarify the meaning of the conditions principally recognizing that a brewpub was
originally authorized and that there was no violation of Condition No. 10 and to include
the physical and operational changes offered by the NBBC.
WHEREAS, the grounds for the modification or revocation of a use permit are
established by Condition K of the Use Permit No. 3485, Section 20.89.060.0 and
Section 20.96.040 of the Municipal Code, which provider
a) Condition K states that, "The Planning Commission may add to or modify
conditions of approval to this use permit upon a determination that this use
permit causes injury, or is detrimental to the health, safety, peace, morals,
comfort, or general welfare of the community."
b) Section 20.89.060(C) provides that, 'The Planning Commission, or the Planning
Director, as the case may be, may revoke a use permit for an alcoholic beverage
outlet upon making one or more of the following findings:
Resolution No.
Page 8 of 16
1. That the permit was issued on the basis of erroneous or misleading
information or misrepresentation.
2. That the terms or conditions of approval of the permit have been violated or
that other laws or regulations have been violated.
3. The establishment for which the permit was issued is being operated in an
illegal or disorderly manner.
4. Noise from the establishment for which the permit was issued violates the
Community Noise Control Ordinance (Chapter 10.26 of the Municipal Code).
5. The business or establishment for which the permit was issued has had or is
having an adverse impact on the health, safety or welfare of the
neighborhood or the general public.
6. There is a violation of or failure to maintain a valid ABC license.
7. The business or establishment fails to fully comply with all the rules,
regulations and orders of the California State Department of Alcoholic
Beverage Control."
c) Section 20.96.040 of the Municipal Code provides that, "The Planning Director
has the duty to schedule a discretionary permit for a noticed public hearing to
consider its possible revocation provided there are reasonable grounds to do so.
The body conducting the hearing shall revoke the permit upon making one or
more of the following findings'
1. That the permit was issued on the basis of erroneous or misleading
information or misrepresentation;
2. That the terms or conditions of approval of the permit have been violated or
that other laws or regulations have been violated.
3. That there has been a discontinuance of the exercise or the entitlement
granted by the permit for 180 consecutive days."
WHEREAS, decisions of the Planning Commission under Section 20.89.060 may
be appealed to the City Council pursuant to Section 20.89.070 and decisions of the
Planning Commission under Section 20.96.040 may be appealed to the City Council
pursuant to Section 20.96.040(H) and Chapter 20.95 of the Municipal Code.
WHEREAS, on January 12, 2007, The Cannery Village Concerned filed an
appeal of the Planning Commission's action in accordance with Chapter 20.95
(Appeals) of the Municipal Code.
WHEREAS, on March 27; 2007, the City Council held a public hearing on the
appeal and the possible modification of conditions and /or revocation of Use Permit No.
3485; however, the hearing was not properly noticed in accordance with the Municipal
Code. The following information was presented and considered by the City Council:
.J
Resolution No.
Page 9 of 16
a) Bruce Low, local resident and representative of The Cannery Village Concerned,
testified to his belief that the NBBC was violating Conditions #9 and #10 as
evidenced by the high alcohol sales admitted by the NBBC. He also testified to
his belief that the Condition #6 was not properly modified in September of 1993
to be consistent with Coastal Commission conditions.
b) Kevin Weeda, a resident and business owner operating a business on 30`h
Street, said the group of concerned residents did not want to drive away the
business, merely have the applicant comply with the use pen-nit. Most problems
occur late at night and he believed the business should be limited to an 11 :00 PM
closing.
c) Jerry Kolbly, co- owner, Newport Beach Brewing Company, spoke about his
establishment and the fact that it had maintained the same social atmosphere for
the past 12 years. He has attempted to work with adjacent neighbors and staff to
resolve the issues. There is a security guard stationed at the rear door and
patrons enter and exit only via Newport Boulevard on Friday and Saturday nights
after 10:00 PM as a way to address resident concerns. He testified that the
quarterly sales of food are 52% and 48% alcohol. He indicated that in the past,
the kitchen was closed and that he has now opened the kitchen during all hours
to boost food sales. He also testified that there has been no significant
operational change in the business since it first opened. Mr. Kolbly confirmed his
earlier statements to the Planning Commission that nearly 90% of sales past
11 :00 PM are alcohol; however, it was a guess and it may be approximately
80 %; clearly more than food.
d) Billy Steed, Cannery Loft owner, adjacent to the Brewery, said he has observed
all types of nuisances in the Brewery parking lot and his belief that the NBBC has
offered no solutions and it ignores complaints.
e) Stephanie Roselli, Cannery Village resident, testified to the NBBC's parking lot
being noisy.
f) Joe Reese testified that he believed the intent of the 1993 and 1999 use permit
approvals were clear in that this establishment was to be a restaurant and not a.
bar. He was personally carded and denied food after 10:00 PM one evening in
2005 and he has observed individuals standing around drinking after 10:00 PM
with no food service. He expressed his belief that this indicates that the NBBC is
a bar and not a restaurant in violation of conditions. He asked for enforcement of
the use permit.
g) Kristen Andros testified that it is her belief that the use operates as a restaurant
until 11:00 p.m. and thereafter it operates as a bar as evidenced by a queuing
line and carding.
h) There was conflicting testimony as to whether the nuisance incidents within the
NBBC parking lot are attributable to patrons of the NBBC.
Resolution No.
rage 1U or 1b
The Council acted to modify the conditions of approval; however, the action was not
implemented with the adoption of a written resolution in the light of the fact that
inadequate notice of the hearing was provided.
WHEREAS, on July 10, 2007, the City Council held a duly noticed public hearing
regarding the potential modification or revocation of Use Permit No. 3485. The hearing
was noticed as a "de novel' hearing and the subject, time, place and date of the hearing
included in the notice. The notice was published, mailed and posted a minimum of 10
days in advance of the hearing in accordance with the applicable requirements of the
Municipal Code. Evidence both written and oral was presented to and considered by the
City Council.
NOW, THEREFORE, BE IT RESOLVED, as follows:
Section 1. The Recitals above are hereby declared to be true, accurate, and correct.
Section 2. The City Council hereby finds that the Administrative Record which was
considered by the City Council in adopting this Resolution consists, without limitation, of all
documents, correspondence, testimony, photographs, and other information presented or
provided to the Planning Director, Planning Commission, City Council and City including,
without limitation, testimony received at City Council and Planning Commission
meetings, staff reports, agendas, notices, meeting minutes, police reports,
correspondence, and all other information provided to the City and retained in the files
of the City, its staff and attorneys, and such is hereby incorporated by reference into the
` - Administrative Record and is available upon request ( "Administrative Record ").
Section 3. The City Council finds that notice of this hearing was provided in
conformance with California law and the Municipal Code of the City of Newport Beach.
Section 4. The City Council finds that pursuant to Condition K of the Use Permit No.
3485, Section 20.89.060.0 and Section 20.96.040 of the Municipal Code, the
Administrative Record, the findings stated above above, that sufficient grounds exist to
modify and add to the conditions of approval for Use Permit No. 3485.
Section 5. The City Council of the City of Newport Beach does hereby approve an
amendment and modification of Use Permit No. 3485 as set forth in as Exhibit "A ".
Resolution No.
Page 11 of 16
Section 7. This resolution shall take effect immediately upon adoption. Passed and
adopted by the City Council of Newport Beach at a regular meeting held on the July 24,
2007 by the following vote to wit:
AYES, COUNCIL MEMBERS
NOES, COUNCIL MEMBERS
ABSENT, COUNCIL MEMBERS
ATTEST:
CITY CLERK
u_ M411C
C
Exhibit A
Use Permit No. 3485
CONDITIONS:
Resolution No
rage Iz or I
1. The proposed development shall be in substantial conformance with the
approved site plan, floor plan and elevations, except as noted below.
2. That a covenant or other suitable, legally binding agreement shall be recorded
against the off -site parking lot assuring that all of the requirements of Section
20.63.080 (1) of the Municipal Code, will be met by the current and future
property owners. Said covenant or agreement may include provisions for its
future termination at such time as the development on the building site is
removed or at such time as the floor area devoted to the restaurant/brewpub
reverts back to a base FAR use.
3. The applicant shall provide a minimum of one parking space for each 50 square
feet of net public area before 5:00 p.m. and one parking space for each 40
square feet of net public area after 5:00 p.m. in conjunction with the
restaurant/brewpub.
4. An amended off -site parking agreement approved by the City Council shall be
maintained, guaranteeing that a minimum of 41 parking spaces shall be provided
on property located on Lots 18 -21 and portions of Lots 17 and 22, Block 230,
Lancaster's Addition, for the duration of the existing and proposed uses located
on Parcel 1, Parcel Map 9240 (Resubdivision No. 527).
5. The property owner shall pay for 29 in -lieu parking spaces in the Cannery
Village Municipal Parking Lot on an annual 'basis for the nighttime operation
(after 5:00 p.m.) of the restaurant/brewpub use as agreed upon by the Sales
Agreement between the City of Newport Beach and the property owner.
6. The net public area of the restaurant/brewpub, which is devoted to daytime use
prior to 5:00 p.m. shall be limited to 1,500 square feet daily. The balance of the
net public area shall be physically closed off to the public by a fixed barrier and
shall not be used until after 5:00 p.m. daily.
7. The hours of operation for the restaurant/brewpub shall be limited to the hours
between 6:00 a.m. and 11:00 p.m. Sunday through Thursday and between 6 :00
a.m. and 1:00 a.m. on Friday and Saturday.
8. All employees shall park either in the privately owned off -site parking area or in
one of the municipal parking lots in the area.
9. The operation of the brewery and the service of alcoholic beverages shall be
j ancillary to the food service operation of the restaurant (e.g. the brewery and
the service of alcoholic beverages may not be conducted without the concurrent
Resolution No,
Page 13 of 16
operation of the restaurant during all hours the use is open for business). The
quarterly gross sales of alcoholic beverages shall not exceed the gross sales of
food during the same period. The operator shall at all times maintain records
which reflect separately the total gross sales of food and the total gross sales of
alcoholic beverages. Additionally, the records shall indicate the percentages or
unit volumes of food, beer and other alcoholic beverages sold by the hour from
after 9:00 PM to closing on Thursday, Friday and Saturday nights. Said records
shall be kept no less frequently that on a quarterly basis and shall be submitted
to the Planning Director within 15 days of the end of the calendar quarter.
10. The principal use authorized by this Use Permit is a restaurant/brewpub. The
accessory operation of a bar is permitted provided that the kitchen remains
open for the service of meals and that a full menu is provided. This Use Permit
shall not be construed as the approval of a bar, cocktail lounge, or other use
with the principal purpose of serving alcoholic beverages during hours not
corresponding to regular meal service hours nor as the approval of a cabaret,
nightclub, or other use with the principal purpose of providing live entertainment
and/or dancing. The kitchen of the restaurant/brewpub shall be in operation to
serve meals at all times that the business is open. A full meal menu (including
the service of those meals ordered) shall be made available. Menus and
condiments shall be available at the tables at all times.
11. No outdoor loudspeakers or paging system shall be permitted in conjunction
with the proposed location.
12. A washout area for refuse containers shall be provided in such a way as to
allow direct drainage into the sewer system and not into the Bay or storm
drains, unless otherwise approved by the Building Department.
13. Kitchen exhaust fans shall be designed to control smoke and odor to the
satisfaction of the Building Department.
14. All mechanical equipment and.trash areas shall be screened from surrounding
public streets and alleys and adjoining properties. The existing trash enclosure
shall be covered and the doors or gates to the enclosure shall be modified to be
self- closing and self - locking for security.
15. Deleted
16. Should prerecorded music be played within the restaurant facility, such music
shall be confined to the interior of the building, and all doors and windows shall
be kept closed while such music is played.
17. A special events permit is required for any event or promotional activity outside
the normal operational characteristics of this restaurant business that would
attract large crowds, involve the sale of alcoholic beverages, include any form
Resolution No.
Page 14 OT lb
of on -site media broadcast, or any other activities as specified in the Newport
Beach Municipal Code to require such permits.
18. Should this business be sold or otherwise come under different ownership, any
future owners or assignees shall be notified of the conditions of this approval by
either the current business owner, property owner or the leasing company.
19. The parking lot entrance to the building shall not be used as an entrance or exit
(except in the case of an emergency) after 9:00 PM daily. If a line to enter the
building occurs prior to 9:00 PM, the door shall be closed immediately and not
used as an entrance or exit thereafter and the line shall be relocated to the
Newport Boulevard entrance.
20. The operator shall discourage loitering on site at all times the establishment is
open or employees or owners are present.
21. The operator shall conspicuously post and maintain signs indicating to patrons
to be courteous to residential neighbors while outside the establishment.
22. The applicant shall prepare a detailed security operations and property
maintenance plan within 45 days of approval of this amendment to the Use
Permit. The plan shall be subject to the review and approval of the Police
Department and Planning Department. The plan shall specifically outline
methods and personnel necessary to control patron activity on and abutting the
project site to minimize or avoid land use conflicts. When security services are
required pursuant to the plan, security shall be provided whenever necessary
and up to a minimum of 30 minutes after the posted closing time. Additionally, a
security guard shall be stationed outside the establishment principally in the
parking lot to discourage and report objectionable behavior of patrons after
9:OOPM. The property maintenance portion of the plan shall address activities
including, and not limited to, trash pickup, recycling disposal and pickup, grease
trap cleaning, cooking oil recycling, brewery servicing, deliveries, cleaning or
general building maintenance.
23. Deliveries and exterior property maintenance activities shall not be conducted
between 8PM and 8AM daily.
24. The use shall maintain a Type 23 or a Type 75 license to sell alcoholic
beverages from the State Department of Alcoholic Beverage Control No other
license type shall be permitted without review and approval by the Planning
Commission.
25. Live entertainment and dancing shall be prohibited without an amendment to
this Use Permit and a Live Entertainment Permit and /or a Cafe Dance permit
issued by the City Manager's Office.
j 27. This use permit shall be reviewed by the Planning Commission at a noticed
public hearing no later than July 31, 2008, to assess any nuisance issues and to
Resolution No.
rage i s or -i b
determine whether the use operates within what was represented to the City
when the use permit was originally granted in 1993 and when the use permit was
amended in 1999. The Planning Director may schedule additional reviews of
this permit if there is a determination that the use directly causes or is
contributing to conditions found to be detrimental to the community (this
provision shall not be construed to diminish the City's ability to enforce this Use
Permit or any aspect of the Municipal Code).
STANDARD CITY REQUIREMENTS:
A. The project is subject to all applicable City ordinances, policies, and standards,
unless specifically waived or modified by the conditions of approval.
B. Signs and displays shall not obstruct the sales counter, cash register, seller and
customer from view from the exterior.
C. Loitering, open container, and other signs specified by the Alcoholic Beverage
Control Act shall be posted as required by the ABC.
D. The applicant shall take reasonable steps to discourage and correct
objectionable conditions that constitute a nuisance in parking areas, sidewalks,
alleys and areas surrounding the alcoholic beverage outlet and adjacent
properties must be taken during business hours if directly related to the patrons
of the subject alcoholic beverage outlet.
E. The exterior of the alcoholic beverage outlet shall be maintained free of litter
and graffiti at all times. The owner or operator shall provide for daily removal of
trash, litter debris and graffiti from the premises and on all abutting sidewalks
within 20 feet of the premises.
F. All owners, managers and employees serving and /or selling alcoholic
beverages shall undergo and successfully complete a certified training program
in responsible methods and skills for serving and selling alcoholic beverages.
To qualify to meet the requirements of this section a certified program must
meet the standards of the California Coordinating Council on Responsible
Beverage Service or other certifying /licensing body, which the State may
designate. The operator shall provide proof of completion for all owners,
managers and employees within 30 days of the approval of this amendment
and new employees shall successfully complete the training within 30 days of
initially starting work.
G. The project shall comply with the provisions of Chapter 14.30 of the Newport
Beach Municipal Code for commercial kitchen grease disposal.
H. All signs shall conform to the provisions of Chapter 20.67 of the Municipal
Code.`
Resolution No.
rage I . OT lb
This Use Permit for an alcoholic beverage outlet granted in accordance with the
terms of this chapter shall expire within 12 months from the date of approval
unless a license has been issued or transferred by the California State
Department of Alcoholic Beverage Control prior to the expiration date.
J. Coastal Commission approval shall be obtained prior to issuance of any
building permits.
K. The Planning Commission may add to or modify conditions of approval to this
Use Permit upon a determination that this Use Permit causes injury, or is
detrimental to the health, safety, peace, morals, comfort, or general welfare of
the community.
_1
CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and Members of the City Council
FROM: James Campbell, Senior Planner
(949) 644 - 3210, �mpbell (c�city.newport- beach.ca.us
C01-1 I
NO.
Agenda Ite*,7
July
SUBJECT: Newport Beach Brewing Company, Review of Use Permit No. 3485
2920 Newport Boulevard (PA2006 -177)
RECOMMENDATION
1. Hold a "de novo" public hearing,
2. Determine whether the Newport Beach Brewing Company is operating a bar in violation of
use permit Conditions #9 and #10.
3. If a violation of Conditions #9 and #10 is determined, modify Use Permit No. 3485 by
adopting the draft attached as resolution Attachment No. 1.
4. If there is no violation of Conditions #9 and #10, modify Use Permit No. 3485 by adopting
the draft attached as resolution Attachment No. 2.
INTRODUCTION
On March 27, 2007, City Council considered the potential modification or revocation of Use
Permit No. 3485. The Council acted to modify the use permit principally by prohibiting the
sale of distilled spirits after 11 PM. After the hearing, it was discovered that the item was not
noticed as a "de novo" hearing and the limitation considered on the sale of distilled spirits
conflicts with the California Constitution and State law. The prior Council report and the
minutes from March 27, 2007 are attached to this report as Attachment No. 3.
The City began reviewing the Newport Beach Brewing Company (NBBC) use permit last year
due to complaints received from `The Cannery Village Concerned," a group of residents,
business owners and property owners. They alleged that NBBC was violating the conditions
of their use permit. A complete discussion of the complaints and issues are contained in the
attached Planning Commission reports (Attachment Nos. 4 & 5). The Planning Commission,
after three meetings, modified the conditions of approval to address the concerns of the
neighborhood (Attachment No. 6). The NBBC voluntarily agreed to the change in conditions,
which included operational and physical improvements. An appeal was filed by The Cannery
Village Concerned contending that the Commission "failed to take responsibility for the
enforcement of the California Coastal Commission permit, and make the restaurant conform
to their use permit as such and not as a bar" (Attachment No. 7)
Newport Beach Brewing Company
July 10, 2007
Page 2 of 10
PUBLIC NOTICE
The Newport Beach Brewing Company and the appellant have been notified of this hearing.
A hearing notice indicating the subject, time, place and location of this "de novo" hearing was
provided in accordance with the Municipal Code. Notice was published in the Daily Pilot,
mailed to property owners within 300 feet of the property (excluding abutting roads) and the
site was posted a minimum of 10 days in advance of this hearing.
DISCUSSION
As noted, the Planning Commission acted to add to and modify the conditions of approval of
Use Permit No. 3485 on January 4, 2007. Despite having grounds for the revocation or
modification of the Use Permit based upon violations of the conditions of approval, no finding
to that effect was made as the NBBC voluntarily agreed to changes in the conditions of
approval to address neighborhood complaints. Bruce Low, who resides at 411 29" Street
adjacent to the Brewing Company's parking lot submitted two letters in support of the appeal
(Attachment Nos. 8 & 9).
Attachment No. 10 contains the provisions of the Municipal Code that establish the legal
standards for the review, modification or revocation of a use permit. In summary, if a use
permit was granted on the basis of erroneous information or if the use operates in a
disorderly manner or in violation of conditions or other laws, the permit could be modified or
revoked. This attachment also contains the specific conditions of approval of this use permit
that were at issue in this matter.
Attachment No. 11 contains a summary of the history of Use Permit No. 3485 and a summary
of the prior proceedings before the Planning Commission and City Council.
The following discussion focuses on the 4 key issues at hand.
1. Does the way the NBBC operate after 11'00 PM constitute a violation of Use
Permit Conditions # 9 and # 10?
In 1993, Use Permit No. 3485 permitted a combination restaurant and brewpub subject to
conditions. The brewery itself was to occupy only 32 percent of the total floor area, its use
was determined to be ancillary to the restaurant, and therefore, it was considered a
permissible use. Condition #10 read as follows: "The operation of the brewery and the
service of alcoholic beverages shall be ancillary to the primary food service operation
of the restaurant." The term ancillary is defined as "a use that a) is clearly incidental to and
customarily found in connection with the principle use; b) is subordinate to and serve the
principle use; c) is subordinate in area, extent, or purpose to the principal use served; d)
contributes to the comfort convenience, or necessity of the operation, employees, or customers
of the principal use served. An ancillary use may be located on a property separate from the
principal use." The definition of an ancillary use was modified in 1997 with the comprehensive
update and reformatting of the Zoning Code; however, it did not amend its meaning.
In 1999, the Use Permit was amended subject to findings and revised conditions of approval_
allowing the sale of distilled spirits at the restaurant pursuant to a Type 75 ABC license. The
Newport Beach Brewing Company
July 10, 2007
Page of 10
closing hour on Friday and Saturday nights was also changed from 2:00 AM to 1:00 AM.
Condition #10 above was maintained, but it was renumbered as Condition #9. A new
Condition #10 was applied, which reads as follows: "The approval of this use permit is for
a restaurant/brewpub and shall not be construed as the approval of a bar, cocktail
lounge, or other use serving alcoholic beverages during hours not corresponding to
regular meal service hours (food products sold or served incidentally to the sale or
service of alcoholic beverages shall not be deemed as constituting regular meal
service) nor as the approval of a cabaret, nightclub, or other use with the principal
purpose of providing live entertainment and /or dancing." These two conditions maintain
the principal use as a restaurant and brewpub and not a bar, nightclub or similar use.
A bar is defined by Chapter 20.05 of the Zoning Code as:
"Establishments with the principal purpose to sell or serve alcoholic beverages for
consumption on the premises or any establishment having any of the following_
characteristics:
a. Is licensed as a "public premises" by the California Department of Alcoholic Beverage
Control.
b. Provides an area for serving alcoholic beverages that is operated during hours not
corresponding to regular meal service hours. Food products sold or served
incidentally to the sale or service of alcoholic beverages shall not be deemed as
constituting regular meal service."
Regular meal service hours are not defined by the City. The State Department of Alcoholic
Beverage Control (ABC) defines regular meal service hours as 6:00 AM - 9:00 AM, 11:00 AM
- 2:00 AM, and 6:00 PM - 9:00 PM. These hours might be used as a guide although the
Council retains the discretion to determine what the term means for the purpose of
implementing the Zoning Code.
NBBC food sales after 11:00 PM are limited. The NBBC General Manager at the May 4, 2006
Planning Commission meeting, stated that the dinner crowd is usually between 7:00 PM
and 9:00 PM with alcohol sales being approximately 90% of sales after 11:00 PM.
Additionally, NBBC General Manager also indicated that the majority of alcohol sales are
distilled spirits. At the March 27, 2007 hearing of the City Council, the NBBC General
Manager again indicated that alcohol sales after 11:00 PM are at least 80% of sales,
although he indicated that it was a guess and not based upon a review of records. Based
upon these representations, it is reasonable to conclude that the use principally serves
alcohol after 11:00 PM and the use could be considered a bar by the definition above after
11:00 PM. The change from restaurant to bar based upon alcohol sales being more than food
sales could actually be happening earlier in the evening at various times or varying days, but
there is no specific evidence in the record to establish a particular time other than 11:00 PM.
In the past, the City has looked at the operating characteristics over all hours /days of
C operation to determine the primary use. In this case, the NBBC principally operates a
)
' restaurant during the majority of its operating hours and it operates a bar on Friday and
Saturday evenings after 11:00 PM. Staff would conclude that the use as a whole operates as
Newport Beach Brewing Company
July 10, 2007
Page 4 of 10
primarily as a restaurant and brewpub. As an alternative to the traditional interpretation, the
City Council may find that Condition #10 that prohibits the operation of a bar applies during all
hours. This would mean that the restaurant aspect of the use must be the principal use during
every hour of the day. This interpretation is supported by the administrative record; however,
it should be noted that Use Permit No. 3485 authorized a restaurant and a brewpub. Should
this be the Council's direction, additional restrictions can be considered to require the
restaurant to remain the principal use during all hours. The following three examples can be
considered:
• The kitchen shall remain open for service during all operating hours with a full menu.
• Menus and condiments must remain on the tables.
• Alcohol sales must be less than food sales during all hours of operation.
The first two items were considered and included by the Planning Commission. The
effectiveness of these additional restrictions in achieving the goal of eliminating the bar use is
uncertain. While the availability of a full menu makes it more likely food service will occur
during all hours, it does not require that customers order food. However, if there is no
requirement for providing full menu food service, the likelihood that the primary operation will
be a bar is higher. Requiring alcohol sales to be less than food sales during each hour of
operation will require a certified audit of cash register receipts and any audit will only be as
good as the accuracy of the inputs to the point of sale system. Due to these potential
difficulties in enforcement, it is not a recommended restriction.
A physical change of the floor plan is another method of eliminating the bar use. The physical
bars themselves might be reduced in size in exchange for additional dining tables.
Eliminating the stand up bar opposite the existing main bar or the secondary bar near the
brew kettles might be considered. Again, these changes will not guarantee food sales in
excess of alcohol sales during the late evening and early morning hours as these hours are
not typical meal service hours. If the early morning hours are retained and the primary use
must be a restaurant during those hours and no one orders food, the NBBC would need to
voluntarily regulate sales in order maintain food sales in excess of alcohol sales to maintain
compliance. The City could not condition a limit on alcohol served without food service. When
food service tapers off later in evening, the establishment would need to close to remain in
compliance with conditions.
If the Council feels that operational conditions will not effectively limit alcohol sales to be less
than food sales after 11:00 PM, the only reliable method of eliminating the bar use is to close
the establishment at 11:00 PM. Additionally, staff would recommend the three bulleted items
above; however, the alcoholtfood percentage limitation is recommended to be based on
quarterly sales not hour by hour. This action would effectively eliminate the bar use after
11:00 PM and would eliminate the alleged nuisances testified to by the community
attributable to the NBBC even though clear and compelling evidence of direct link between
NBBC patrons and nuisances occurring in the parking lot has not been established, in staffs
opinion (see below).
2. Is the failure to train employees a violation of Condition F?
Newport Beach Brewing Company
July 10, 2007
Page 5 of 10
Condition F requires all owners, managers and employees serving and /or selling alcoholic
beverages to undergo and successfully complete a certified training program in responsible
methods and skills for serving and selling alcoholic beverages. Although the condition
specifically states that compliance is required within 180 days of the 1999 the issuance of the
certificate of occupancy, the intent is clear that anyone serving alcohol must be trained.
Evidence in the record indicates that this training did not occur until September of 2006,
although the general manager testified that training did occur in 1999. Based on the
testimony and other evidence, staff believes a violation of Condition F occurred and was not
remedied until September of 2006. Staff recommends that this condition be modified to read
as follows for clarity:
F. All owners, managers and employees serving and /or selling alcoholic beverages shall
undergo and successfully complete a certified training program in responsible methods
and skills for serving and selling alcoholic beverages. To qualify to meet the
requirements of this section a certified program must meet the standards of the
California Coordinating Council on Responsible Beverage Service or other
certifying /licensing body, which the State may designate. The operator shall provide
proof of successful completion of the training program for all owners managers and
employees serving and/or selling alcoholic beverages within 30 days of the approval
of this amendment and new employees shall successfully complete the training
within 30 days of initially starting work The establishment shall nmmP+„ with
eec-upafl6y-
3. Does the operation of the IVBBC constitute a nuisance in violation of Condition D?
Neighbors contend that the Newport Beach Brewing Company is violating its use permit and
that the operators are not sufficiently controlling patron behavior, which creates nuisances
especially during the late evening and early morning hours. The primary complaint from
neighbors is that patrons create noise, carry on loud conversations or on occasion yelling,
cause property damage, fight, urinate, defecate and fornicate during the late evening and
early morning hours, to the detriment of the neighborhood.
On February 10, 2006, Code and Water Quality Enforcement conducted a site visit and the
officer observed that there was a line to get into NBBC and the officer noted that some
individuals were screaming at each other and a high noise level was being emitted from the
premises. This could constitute a violation of Condition D as NBBC staff could have quieted
the line, closed windows or doors if they were open or even reduced occupancy to address
interior noise levels. Testimony from residents at the prior hearings on this issue supports a
conclusion that noise from patron activity outside the establishment has caused nuisances on
other occasions.
Based on testimony of residents and local business owners, the nuisances listed above occur
periodically on and around the NBBC property. However, establishing whether the patrons of
,O F" the NBBC are the cause of the nuisance behavior has proven difficult to corroborate as the
City staff visits and investigations, with the exception of the February 10, 2006 investigation
by Code Enforcement, failed to find that there was clear and compelling evidence that the
problems occurring were directly related to NBBC patrons.
Newport Beach Brewing Company
July 10, 2007
Page 6 of 10
Residents have also complained to staff that noise from early morning deliveries, noise from
late night recycling disposal and other waste disposal and the general maintenance of the
trash enclosure area constitute nuisances.
To address the question of nuisances, the NBBC has agreed to make the following physical
and operational changes designed to alleviate the issues:
• Construction of a trash enclosure cover (construction underway).
• Employee training on responsible alcohol sales has been completed.
• Relocation of the entrance from the parking lot side of the building to the Newport
Boulevard entrance when a line of patrons forms to enter the establishment
(completed).
• Retention of condiments and menus on the tables (ongoing).
• Discontinuation of the late night bar menu while keeping the kitchen open at all times
with a full menu (ongoing).
• Installation of signs requesting that patrons be respectful of the neighborhood
(completed).
• Regular security sweeps of the parking lot (ongoing).
Provision of a security presence at least' /2 hour after closing (ongoing).
• Recycling collection program that minimizes noise generation (ongoing).
• Scheduling if maintenance activities outside of sensitive hours (ongoing).
The Planning Commission acted to modify the conditions of approval to incorporate the
physical and operational changes offered by the Newport Beach Brewing Company. The
basis for the change in conditions was the voluntarily acceptance of the changes rather than
documented violations of the conditions of approval.
Staff recommends all of the changes noted in the bulleted list if the Council chooses not to
reduce the permitted hours of operation. If the Council determines that the NBBC is operating
as a bar in violation of Condition #10 and chooses to restrict the hours of operation to 11:00
PM, the provision requiring security would not be necessary. If security is provided, the
Council might consider the posting of a security guard in the parking lot rather than allowing
the current practice of periodic security sweeps as a posted security presence would be more
effective.
4. Has the NBBC violated other laws and regulations?
Staff is not aware of any violation of law or regulation related to the State Department of
Alcoholic Beverage Control. The Department conducted an investigation in 2006 and
concluded that no violations were occurring and the investigation was closed.
A violation of Special Condition #1 of Coastal Development Permit (CDP) No. 5 -93 -137
occurs when the NBBC opens the entire dining room (in excess of 1,500 square feet) on
weekends prior to 5:00 PM. Special Condition #1 states:
"Prior to the issuance of a coastal development permit, the applicant shall execute a deed
restriction, in a form and content acceptable to the Executive Director, which shall provided
no more than 1,500 square feet of service area for the subject restaurant/brewpub shall be
Newport Beach Brewing Company
July 10, 2007
Page 7 of 10
open before 5:OOPM. This document shall run with the land, binding all successors and
assigns, and shall be recorded free of prior liens."
The deed restriction was recorded against the property. On Sunday October 8, 2006,
Newport Beach Police Detectives visited the NBBC, arriving at about 12:30 PM. They noted
that the restaurant was completely open with patrons occupying tables in all areas with no
sections being closed off. When they arrived, they estimated that the restaurant was 70% full
and when they left at 2:30 PM it was 90 % full. Testimony from residents and the applicant at
prior hearings supports the fact that the NBBC has opened the entire restaurant on Saturday
and Sunday for many years. Staff has observed that the NBBC routinely closes one section
of the dining room before 5PM, making it approximately 1,500 square feet in area, during the
week and NBBC opens the entire dining area on Saturday and Sunday before 5:00 PM.
This issue is complicated by the fact that Condition #6 of the Use Permit is in conflict with
Special Condition #1 of the CDP. It should be noted that the peace and quiet of the
neighborhood during the late evening or early morning hours and the question of the principal
use are not directly tied to this issue. The appellant believes that Condition #6 is inaccurate
and inconsistent with Special Condition #1 and should be modified accordingly. Staff concurs.
Condition #6 limits the amount of net public area (1,500 sq. ft.) that can be utilized prior to
5:00 PM, Monday through Friday. This condition was imposed by the City in September of
1993 after the Coastal Commission required the City to rescind its prior approval of the
daytime use of the adjacent City parking lot. The Coastal Commission did not want the
operation of the Brewing Company to impact the parking supply for coastal visitors.
The use of the City parking lot for this establishment originated with the City purchasing the
land for the existing municipal parking lot from the owner of the adjacent parking lot presently
leased to the NBBC. As a condition of the sale to the City, the property owner received the
ability to purchase a maximum of 47 in -lieu parking permits for their use in the City parking
lot; however, the availability of the spaces only extended between the hours of 5:00 PM and
6:00 AM daily. The stated reason for this limitation was to avoid reducing the availability of
parking to the public as parking during the daytime hours are in higher demand to visitors.
Since the NBBC use permit application required more parking than the leased lot provided
and the effect of this shortfall was the reduced dining area commensurate with actual parking
provided based upon the required parking ratios for restaurants before 5:00 PM, the property
owner requested an amendment to the original agreement to allow the daytime use of the
City lot. If approved, a larger dining area during the day could be permitted. The City Council
approved the request in March of 1993. When the Coastal Commission required this action to
be rescinded later that year in exchange for project approval, the property owner was forced
to bring the matter back to the City Council.
In September of 1993, the City Council rescinded its prior action to modify the terms of the
purchase agreement allowing daytime use of the City parking lot. This action disallowed any
use of the City parking lot prior to 5:00 PM daily. Concurrent with this action, the City Council
modified the conditions of the use permit for the purpose of making them consistent with the
conditions applied by the Coastal Commission through the CDP. However, Condition #6
contained provisions allowing the NBBC's use of the City parking lot prior to 5:00 PM on the
weekends inconsistent with Special Condition #1 and the Council's own action to rescind its
Newport Beach Brewing Company
July 10, 2007
Page 8 of 10
prior approval to allow the daytime use of the City parking lot. All other changes necessary to
comply with the action of the CCC were made. Pursuant to a separate condition of the CDP
requesting that the City enforce Special Condition #1, James Hewicker, the Planning Director
sent a letter to the Coastal Commission indicating that the City 'would enforce Condition #6,
not recognizing that an error was made.
In a letter dated May 9, 2007, Coastal Commission Staff Analyst Meg Vaughn indicates that
Special Condition #1 applies daily and she goes on to indicate the intent behind the condition
as being to minimize conflicts of the use of the abutting public parking lot (Within Attachment
#10). Ms. Vaughn was the staff analyst who worked on the NBBC coastal development
permit application in 1993. In conclusion, it is reasonable to conclude that Condition #6 is
incorrect and staff recommends a change to this condition as follows:
6. The net public area of the restaurant/brewpub, which is devoted to daytime use
MORday thiceugh FpWay4prior to 5:00 PM.) shall be limited to 1,500 square feet daily:
The balance of the net public area shall be physically closed off to the public by a fixed
barrier and shall not be used until after 5:00 PM daily.
The revision to Condition #6 corrects the error, is consistent with the Council's action to
rescind the amendment of the approval for the daytime use of the City parking lot and it is
consistent with Special Condition #1 of the CDP. Lastly, the record reflects that the NBBC
and the property owner have previously agreed to this provision as they have accepted
Special Condition #1.
SUMMARY
Staff does not believe the NBBC is in violation of Condition D regarding NBBC's responsibility
to correct objectionable patron behavior. It is staffs belief that the late night and early
morning problems in the area are attributable to the concentration of late night eating and
drinking establishments in the area, the service of alcohol and the availability of public
parking adjacent to the Brewing Company. Although the Brewing Company contributes to this
neighborhood problem, testimony from the community and the City's own investigative efforts
did not provide a clear connection between the nuisance incidents and the NBBC.
Additionally, the NBBC has relocated the line to the front of the building and enhanced their
security to address the complaints of alleged violation. Furthermore, staff does not believe
that the NBBC misrepresented their application in the past as they operate a restaurant with
an extensive menu and they operate a brewpub and the full menu is available during all
hours of operation.
The NBBC may not be in compliance with the following conditions and the revocation or
modification of the use permit on this basis would be appropriate. However, City Council
interpretation of the following conditions may be the basis for determining that the NBBC is
operating in compliance with the use permit and in that case, modification of the conditions
may be appropriate to eliminate conflicting interpretations.
1. Condition #9 with alcohol sales dominating food sales after 11:00 PM. The operator
contends that when alcohol sales are considered over all operating hours, food sales
Newport Beach Brewing Company
July 10, 2007
Page 9 of 10
exceed alcohol sales. The City's past practice has been to consider all operating hours
when applying conditions similar to this one.
2. Condition #10 if the operation is determined to be a bar after 11:00 PM. It should be noted
that the use permit authorizes a brewpub in addition to the restaurant. The NBBC
represented both uses in 1993 with the primary use being a restaurant. In 1999, when the
amendment to the use permit was approved, the NBBC again represented that the
primary use would be a restaurant and the addition of distilled spirits would be a
convenience to patrons and they would not operate a bar. If the Council determines that
the primary use must be a restaurant during all hours of operation, the NBBC is in
violation of Condition #10. If the Council views the operation after 11 :OOPM as part of the
permitted brewpub function and finds it secondary to the restaurant that operates during
the majority of the hours, no violation of Condition #10 exists.
3. Condition F: The NBBC violated this condition in the past regarding responsible alcohol
sales training and they are currently in compliance.
Violations of the conditions of approval are sufficient grounds to modify or revoke the use
permit. Depending upon how the Council interprets the conditions, violation of Conditions #9
and #10 may exist. There is no violation of Condition #6 although staff believes the condition
to be inconsistent with past Council action and the condition should be modified. There is an
ongoing violation of the Special Condition #1 of the Coastal Development Permit and this
violation can be used as the grounds for modification or revocation of the use permit.
If the Council finds that violations of Conditions #9 & 10 are present, the draft resolution
attached as Attachment No. 1 should be considered. In summary, it would change the
closing hour to 11:00 PM daily, requires food service during all hours, requires food sales to
exceed alcohol sales based upon a quarterly basis, amends Condition #6 to be consistent
with the Coastal Development Permit and does not include provisions for added security as it
would not likely be necessary with an earlier closing time.
If the Council finds that no violations of Conditions #9 & 10 are occurring, the draft resolution
in Attachment No. 2 should be considered. This resolution incorporates the changes to the
conditions of approval as approved by the Planning Commission with the correction to
Condition #6 as noted.
Prepared by:
ames Camp, ell, Senior Planner
Submitted by:
W(,Ppw, kid
vid Lepo, Planning Director
Newport Beach Brewing Company
July 10, 2007
Page 10 of 10
ATTACHMENTS
1. Draft Council resolution modifying Use Permit No. 3485
2. Draft Council resolution modifying Use Permit No. 3485
3. Staff report and minutes from March 27, 2007 City Council hearing
4. Staff report and minutes from August 17, 2006 Planning Commission hearing
5. Staff report and minutes from January 4, 2007 Planning Commission hearing
6. Planning Commission Resolution No. 1709
7. Appeal dated January 12, 2007
8. Letter from Bruce Low dated February 28, 2007
9. Letter from Bruce Low dated March 2, 2007
10. Relevant legal standards
11. Background of Use Permit No. 3485 and summary of proceedings
12. Additional materials submitted to the Planning Commission & City Council for
consideration
#t3 -qHL 7
FAINBARG AND FEUERSTEIN PROPERTIES
C/O S & A PROPERTIES
129 W. WILSON ST.
SUITE 100
COSTA MESA, CA 92627
949 - 722 -7400
949 -722 -8855 FAX
August 9, 2007
Honorable Councilman Michael Henn
Members of the City of Newport Beach Council
c/o Mr. Aaron Harp, Assistant City Attorney
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92663
RE: Use Permit No. 34SS — Newport Beach Brewing Company
Councilman Henn:
As the manager of S & A Properties — which manages the Newport Beach Brewing
Company ("Brewing Company) property (the "Property") for the owner, Fainbarg and
Feuerstein Properties — it has come to my attention that you made a motion to adopt a
Resolution that would modify several provisions of Use Permit No. 3485. Specifically,
both draft Resolutions brought to the City Council's attention by City Staff proposed the
same modification to Condition No. 6 of Use Permit 3485, which pertains to the 1,500
square feet restriction on use of the building.
This letter is intended to voice Fainbarg and Feuerstefn Properties opposition,
specifically, to any effort to modify Use Permit No. 3485, Condition No. 6, While I
question the wisdom behind several other condition modifications, I believe those issues
can be worked out between the Brewing Company and the City Council. In contrast, I
believe that a modification to Condition No. 6 would result In a substantial impairment to
the leasehold and would further interfere with a fundamental vested property right that
"runs with the land" by way of Use Permit No. 3485. I'm concerned that you would
advocate changing a Use Permit condition that has been in place for 14 years without
concern from the Coastal Commission or the City from 1993 when it was originally
issued, through, 1999 when the permit was amended, and continuing to today. My
understanding is that no formal complaint, action, or notice of violation has been issued
by City Code Enforcement, the Newport Beach Police Department, ABC, or the Coastal
Commission relating to Use Permit No. 3485. In this context why does the City want to
engage in a largely academic exercise that will negatively Impact the most family and
food oriented part of the restaurantjbrewpub and impair a fundamental vested property
right?
I would respectfully suggest that in caring about the continued success of a
restaurant/brewpub that bangs people to the City of Newport Beach, provides favorable
national media for the City, and provides an area for the beachgoing public to park, eat
and relax, that you reconsider modifying Condition No. 6. Actions speak louder than
words and the Coastal Commission has taken no issue with Use Permit No. 3485 for 14
years. On this topic, I urge you revisit the 1993 and 1999 testimony about parking
shortfall and the assignment of spaces to the offices above the Brewing Company. Then;
was a rational distinction between the weekday use of the offices and the corresponding
additional 13 weekend parking spaces in the Brewing Company's lot to support the
wording of Condition No. 6. Also, the Coastal Development Permit, Special Conditions .
Honorable Councilman Henn
August 9, 2007
Page 2 of 2
specifically delegated to the City of Newport Beach the enforcement of the 1,500 foot
restriction. Additionally, the general conditions of the Coastal Development Permit states
that issues of interpretation are to be resolved by the Coastal Commission or the
Executive Director. Please do not interfere with this proper procedure to the detriment
of the Brewing Company and the Property, The Coastal Commission is well suited to
decide (without solicitation by the City or other parties) when and where there is an
enforcement issue to deal with.
I am familiar with the underpinnings of the original complaint against the Brewing
Company and that ultimately, very little evidence was presented to indicate a nuisance -
like impact caused by the Brewing Company. I have first hand knowledge of the
motivations of certain members of the "Cannery Village Concerned" to acquire the
Brewing Company property and have had to inform Mr. Kevin Weeda on numerous
occasions that the property is subject to a long term lease and not for sale.
I am also familiar with the parking lot situation and believe that progress could be made
by the City to secure the municipal parking lot that is adjacent to the Brewing Company
parking lot. I was Informed that at the last City Council hearing on Use Permit No. 3485
that the Mayor, you, and a majority of your fellow Councilmembers indicated that the
parking lots were a source of concern. Therefore the Council directed City Staff to come
up with a plan to address potential parking lot issues for both the Brewing Company and
municipal parking lots. I feel that this is a sound approach to dealing with the original
focus of the Cannery Village Concerned complaint — noise emanating from the gathering
of patrons at the rear entrance of the restaurantjbrewpub on weekend evenings.
I hope that you can see through the unreasonable opposition that has been restated
time and again and see the many beneficial contributions that the Brewing Company
makes to the City and the immediate community. Please reconsider your position on
Condition No. 6 so that the Brewing Company's weekend operations are not financially
harmed and impairment of fundamental vested property right can be averted. Thank
you.
kespect#ully,
Fainbarg andPeas n Properties
By:
Irving M. Chase
cc: Allan Fainbarg
Arnold D. Feuerstein
Elliot Feuerstein
Ryan Chase
David Scheppers, CPA
Mr. Jerry Kolbly, Newport Beach Brewing Company
Mr. Stephen Nines, Kies Law Group
Mr. Jim Campbell, City of Newport Beach