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HomeMy WebLinkAbout25 - Sejour Appeal - PA2002-167 - 3400 Via LidoCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 95 October 14, 2008 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Planning Department Rosalinh Ung, Associate Planner (949) 644 -3208 rung @city. newport- beach.ca. us SUBJECT: Sejour European Bistro & Lounge Appeal Revocation of Use Permit Nos. 2001 -005 & 2002 -034 (PA2002 -167) 3400 Via Lido APPELLANT: Dennis & Christine Overstreet ISM Should, the City Council uphold the decision of the Planning Commission amending Use Perrnitf?lo. 2001 -005 and rescinding Use Permit No. 20027034 for a retail wine establishment? 7l "ON Staff rec©mmends that the City Council conduct a de novo public hearing and uphold and affirm -the decision of the Planning Commission by adopting the attached draft resolution (Attachment. A). BACKGROtMD On April 5, 2001, the Planning Commission approved Use Permit No. 2001 -005 to allow, a retail wine establishment to operate with a Type "21" Alcohol Beverage Control (ABC) license (Off - Sale, General) and Type "42" ABC license (On-Sale Beer and Wine, Public Premises) with periodic on -site wine tasting seminars. The Planning Commission also approved a parking waiver. On November 7, 2002, the Planning Commission approved Use Permit No. 2002 -034, amending conditions of approval of Use Permit No. 2001 -005, authorizing a Type "47° ABC license (On -Sale, General- Eating Place) for on -site consumption of distilled spirits beverages, live entertainment, and expansion of hours of operation. On January 17, 2008, the Planning Commission unanimously voted to set a revocation hearing for Use Permit No. 2001 -005 and Use Permit No. 2002 -034 on March 20, 2008, as the. terms and conditions of approval of the use permits were continuously violated by the business operator of Sejour European Bistro &. Lounge. The business was operated as an eating and drinking establishment and bar /lounge use rather than a retail sales establishment. The overall occupancy of the establishment exceeded the limits set forth in the Use Permits on Sejour European Bistro & Lounge Appeal October 14, 2008 Page 2 numerous occasions. The establishment opened beyond the permitted hours of operation, violated the special event permit and live entertainment allowances, and allowed unpermitted dancing activities. The original hearing date was set for February 21, 2008. The property owners requested to have the matter heard on March 20, 2008, but later requested the hearing be continued to April 17, 2008. On April 17, 2008, the Planning Commission commenced the revocation hearing. After the Planning Commission received public testimony, the Planning Commission continued the hearing to June 5, 2008, and directed staff to draft a list of conditions of approval that reflect the following considerations: ■ Reduction of the hours of operation to require the closing time of 11:00 p.m.; ■ Re- establishment of the retail sales use with wine tasting and educational seminars as an ancillary use; ■ Removal of the existing physical improvements not consistent with operational requirements for an off -site retail sale outlet with wine tasting as ancillary use; and, ■ Elimination of Type 47 ABC license. On June 5, 2008, the Planning Commission continued the revocation hearing to July 17, 2008, in order to give the property owners additional time to file a new use permit application for the operation of a full - service eating and drinking establishment with a retail sale component at the subject property. The Planning Commission directed the property owners to submit the use permit application to the Planning Department by June 30, 2008. If a new application was not received by June 30, 2008, the Planning Commission would resume the revocation hearing on July 17, 2008, with the intent of modifying the conditions of approval to allow the use to be re- established as was originally intended; specifically, an off -sale retail wine store with wine tasting as an ancillary use. On June 30, 2008, the property owners submitted a letter indicating that they had entered into negotiations to lease the property to HOM Real Estate Group of Newport Beach and would not be submitting a new use permit. DISCUSSION Plannino Commission Action On July 17, 2008, the Planning Commission resumed the revocation hearing. The property owners failed to submit the new use permit application as requested at the previous hearing. The property owners, instead, submitted a copy of the executed lease agreement with HOM Real Estate Group of Newport Beach. They also requested the Commission not to take any action on the existing use permits for 180 days and allow the use permits to expire. Section 20.91.050 of the Municipal Code allows a use permit or variance to lapse if the exercise of rights granted by it is discontinued for one hundred eighty (180) consecutive days. In turn, they would agree not to contest a public hearing to sunset the use permits after the 180 days. The Commission considered the property owners' request and determined that the lapse of use permits request would be problematic as it would allow opportunities for another tenant to operate a business under the use permits that supposedly were to lapse within a designated Sejour European Bistro & Lounge Appeal October 14, 2008 Page 3 time frame and there would be no resolution to the issues at hand. The Commission, therefore, did not favor this request. The property owners have asserted that the revocation is unfair as they have no responsibility for the violations of the terms of the use permits as they were not the business operators during at the time the violations occurred. The Commission determined that the terms of conditions of approval were continuously violated by the previous operator and the property owners are responsible as documentation showed that the lease between the property owners and the former business operator of Sejour stated the tenancy was for a bar, restaurant and live entertainment business. This is in direct violation of the conditions of approval, which specifically stated that the approval of the use permits does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or nightclub as defined by the Municipal Code. The Commission agreed that there is a degree of ambiguity in the language of the existing use permits. The inadvertent insertion of a "boiler plate" finding in the Planning Commission resolution for the approval of Type 47 license referred to the establishment as "full- service, sit -down restaurant ". Furthermore, Type 47 license authorizes, according to the Department of Alcoholic Beverage Control, the sale of beer, wine, and distilled spirits for consumption in a bona fide public eating place (i.e. a restaurant). This, compounded with approval of limited live entertainment, and expanded hours of operation was misconstrued by the property owners as allowing unpermitted restaurant/nightclub activities. The Commission agreed not to revoke the permits, but rather supported a more defined and enforceable use permit for the subject site. This includes conditions to bring the operation of the establishment into conformity with the original project approval, as retail sales use with wine tasting and educational seminars as an ancillary use. At the conclusion of the hearing, the Planning Commission voted (4 ayes, 1 abstain and 2 absent), to amend Use Permit No. 2001 -005 and rescind Use Permit No. 2002 -034, which permitted the sale of distilled spirits for on -site consumption, live entertainment and expanded hours of operation. The Planning Commission minutes and staff reports from the meetings of January 17, March 20, April 17, June 5, and July 17, 2008, are attached as Attachments C through G, respectively. Appeal On July 29, 2008, Dennis and Christine Overstreet, the property owners, filed an appeal of the Planning Commission's decision. The appeal application is attached to the report as Attachment H. The appellant believes that the Planning Commission's action has resulted in a partial revocation of a valuable portion of the use permit (that allows the sale of distilled spirits for on -site consumption) without due process and legal basis. The appellant also stated in their appeal application that the use permit language and restrictions contained ambiguities authorized by the Planning Commission stating, in effect, that the Planning Commission approved a restaurant, despite conditions to the contrary. Sejour European Bistro & Lounge Appeal October 14, 2008 Page 4 The Planning Commission thoroughly reviewed all documents relevant to the revocation hearing, listened to public testimony, including considerations of the many requests made by the property owners during the 6 -month public hearing process and concluded that the terms and conditions of approval of the Use Permits, specifically the Use Permit authorized the operation of Type 47 license, live entertainment, and expansion of hours of operation, were violated. For all of these reasons, the Planning Commission found that grounds for modification have been established and imposed such conditions which will return the premises to the original intended use. Environmental Review This project has been reviewed and it has been determined that it is categorically exempt from the requirements of the California Environmental Quality Act under Class 21 (Enforcement Actions by Regulatory Agencies). This exemption applies to actions by regulatory agencies to enforce or revoke a lease, permit, license, certificate, or other entitlement for use issued, adopted, or prescribed by the regulatory agency or enforcement of a law, general rule, standard, or objective, administered or adopted by the regulatory agency. Public Notice Notice of this hearing was published in the Daily Pilot, mailed to property owners within 300 feet of the property and posted at the site a minimum of 10 days in advance of this hearing consistent with the Municipal Code. Additionally, the item appeared upon the agenda for this meeting, which was posted at City Hall and on the city website. Alternatives The Council has the following options: 1. Modify any aspect of Use Permit Nos. 2001 -005 and 2002 -034 2. Uphold the appeal and reverse the amendment of Use Permit No. 2001 -005 and rescinding Use Permit No. 2002 -034 (that authorizes a Type "47" license for on -site consumption of distilled spirits beverages, live entertainment, and expansion of hours of operation). by: Submitted by: r M. Ung David Lepo Planner Planning Director Attachments: A. Draft City Council Resolution B. Planning Commission Resolution No. 1762 C. Excerpt of Minutes and Staff Report from January 17, 2008 Planning Commission meeting D. Excerpt of Minutes and Staff Report from March 20, 2008 Commission Planning meeting E. Excerpt of Minutes and Staff Report from April 17, 2008 Planning Commission meeting F. Excerpt of Minutes and Staff Report from June 5, 2008 Planning Commission meeting G. Excerpt of Minutes and Staff Report from July 17, 2008 Planning Commission meeting H. Appeal Application Attachments Attachment Page No. A 5 B 11 C 27 D 263 E 283 F 529 G 539 H 665 ATTACHMENT NO. A DRAFT CITY COUNCIL RESOLUTION 5 THIS PAGE LEFT BLANK INTENTIONALLY RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DENYING THE APPEAL AND UPHOLDING AND AFFIRMING THE DECISION OF THE PLANNING COMMISSION TO AMEND USE PERMIT NO. 2001 -005 AND RESCIND USE PERMIT NO. 2002 -034 (SEJOUR EUROPEAN BISTRO & LOUNGE) ON PROPERTY LOCATED 3400 VIA LIDO (PA2002 -167) WHEREAS, Sejour European Bistro & Lounge (' Sejour') is located at the northwest comer of Via Lido and Via Oporto and legally described as Lot 2 of Tract 1235; and WHEREAS, on April 5, 2001, the Planning Commission approved Use Permit No. 2001 -005 to allow a retail wine establishment to operate with a Type "21" Alcohol Beverage Control (ABC) license (Off -Sale, General) and Type "42" ABC license (On -Sale Beer and Wine, Public Premises) with periodic on -site wine tasting seminars and a parking waiver; and WHEREAS, on November 7, 2002, the Planning Commission adopted Resolution No. 1579 of Use Permit No. 2002 -034, amending conditions of approval of Use Permit No. 2001 -005, authorizing a Type "47" ABC license (On-Sale, General- Eating Place) for on -site consumption of general alcohol beverages, live entertainment and expansion of hours of operation; and WHEREAS, pursuant to Section 20.96.040 of the City of Newport Beach Municipal Code, the Planning Director determined that there were reasonable grounds for the revocation of Use Permit No. 2001 -005 and Use Permit No. 2002- 034 and set a public hearing so that the Planning Commission could set a date to consider the revocation of Use Permit Nos. 2001 -005 and 2002 -034; and. WHEREAS, after giving proper notice in accordance with law, a public hearing was held on January 17, 2008, in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. The Planning Commission unanimously voted to set a revocation hearing for Use Permit No. 2001 -005 and Use Permit No. 2002 -034 on March 20, 2008; and WHEREAS, on March 20, 2008, the Planning Commission continued the revocation hearing to April 17, 2008, at the request of the property owner; and WHEREAS, on April 17, 2008, after the Planning Commission commenced the revocation hearing and received public testimony, the Planning Commission directed staff to draft a list of conditions of approval that reflect the following considerations : 1 Page 2 of 3 ■ Reduction of the hours of operation to require the closure at 11:00 p.m.; ■ Reestablishment of the retail sales use with wine tasting and educational seminars as an ancillary use; ■ Removal of the existing physical improvements not consistent with operational requirements for an off -site retail sale outlet with wine tasting as ancillary use; and, ■ Elimination of Type 47 ABC license. WHEREAS, on June 5, 2008, the Planning Commission continued the revocation hearing to July 17, 2008, in order to give the property owner additional time to file a new use permit for the operation of a full - service eating and drinking establishment with a retail sale component at the subject property. The property owner was required to submit the use permit application to the Planning Department by June 30, 2008. If a new application was not received by June 30, 2008, the Planning Commission intended to resume the revocation hearing on July 17, 2008, with the intent of modifying the conditions of approval to allow the use to be reestablished as was originally intended; specifically, an off -sale retail wine store with wine tasting as an ancillary use; and WHEREAS, on June 30, 2008, the property owner announced that they have entered into negotiations to lease the property to HOM Real Estate Group of Newport Beach for an office use and will not be submitting a new use permit.; and WHEREAS, the property owner failed to submit the use permit application by June 30, 2008, and the Planning Commission resumed the revocation hearing on July 17, 2008, in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. Evidence, both written and oral, was presented to, and considered by, the Planning Commission at this meeting; and WHEREAS, it was the intent of the Planning Commission to bring the operation of the establishment into conformity with the original project approval, as retail sales use with wine tasting and educational seminars as an ancillary use. As a result, the findings stated for the approval of Use Permit No. 2001 -005 remain valid and were readopted, in addition to the findings of fact stated in Exhibit "A' of the Planning Commission Resolution No. 1762. WHEREAS, on July 29, 2008, Dennis and Christine Overstreet, the property owners, filed an appeal of the Planning Commission's decision. WHEREAS, on October 14, 2008, the City Council held a noticed public hearing in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California at which time the appeal was considered. Et Page 3 of 3 NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Newport Beach hereby denies the appeal and upholds and affirms the Planning Commission of amending Use Permit No. 2001 -005 by incorporating the conditions of approval in Exhibit "B" of Planning Commission Resolution No. 1762 and rescinding Use Permit No. 2002 -034 that permitted the sale of distilled spirits. for on -site consumption, live entertainment and expanded hours of operation. 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 October 14, 2008 by the following vote to wit: AYES, COUNCIL MEMBERS NOES, COUNCIL MEMBERS ABSENT COUNCIL MEMBERS MAYOR ATTEST: CITY CLERK i THIS PAGE LEFT BLANK INTENTIONALLY frj ATTACHMENT NO. B PLANNING COMMISSION RESOLUTION NO. 1762 THIS PAGE LEFT BLANK INTENTIONALLY RESOLUTION NO. 1762 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH AMENDING USE PERMIT NO. 2001 -005 & RESCINDING USE PERMIT NO. 2002 -034 (SEJOUR EUROPEAN BISTRO & LOUNGE) ON PROPERTY LOCATED 3400 VIA LIDO (PA2002 -167) THE PLANNING COMMISSION FOR THE CITY OF NEWPORT BEACH HEREBY FINDS, RESOLVES AND ORDERS AS FOLLOWS: WHEREAS, Sejour European Bistro & Lounge ( "Sejour") is located at the northwest comer of Via Lido and Via Oporto and legally described as Lot 2 of Tract 1235; and WHEREAS, on April 5, 2001, the Planning Commission approved Use Permit No. 2001 -005 to allow a retail wine establishment to operate with a Type "21" Alcohol Beverage Control (ABC) license (Off -Sale, General) and Type "42" ABC license (On-Sale Beer and Wine, Public Premises) with periodic on -site wine tasting seminars and a parking waiver; and WHEREAS, on November 7, 2002, the Planning Commission adopted Resolution No. 1579 of Use Permit No. 2002 -034, amending conditions of approval of Use Permit No. 2001 -005, authorizing a Type "47" ABC license (On -Sale, General- Eating Place) for on -site consumption of general alcohol beverages, live entertainment and expansion of hours of operation; and WHEREAS, pursuant to Section 20.96.040 of the City of Newport Beach Municipal Code, the Planning Director determined that there were reasonable grounds for the revocation of Use Permit No. 2001 -005 and Use Permit No. 2002 -034 and set a public hearing so that the Planning Commission could set a date to consider the revocation of Use Permit Nos. 2001 -005 and 2002 -034; and. WHEREAS, after giving proper notice in accordance with law, a public hearing was held on January 17, 2008, in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. The Planning Commission unanimously voted to set a revocation hearing for Use Permit No. 2001 -005 and Use Permit No. 2002 -034 on March 20, 2008; and WHEREAS, on March 20, 2008, the Planning Commission continued the revocation hearing to April 17, 2008, at the request of the property owner; and WHEREAS, on April 17, 2008, after the Planning Commission commenced the revocation hearing and received public testimony, the Planning Commission directed staff to draft a list of conditions of approval that reflect the following considerations : • Reduction of the hours of operation to require the closure at 11:00 p.m.; • Reestablishment of the retail sales use with wine tasting and educational seminars as an ancillary use; J' City of Newport Beach Planning Commission Resolution No. _ Page 2 of 14 ■ Removal of the existing physical improvements not consistent with operational requirements for an off -site retail sale outlet with wine tasting as ancillary use; and, ■ Elimination of Type 47 ABC license. WHEREAS, on June 5, 2008, the Planning Commission continued the revocation hearing to July 17, 2008, in order to give the property owner additional time to file a new use permit for the operation of a full - service eating and drinking establishment with a retail sale component at the subject property. The property owner was required to submit the use permit application to the Planning Department by June 30, 2008. If a new application was not received by June 30, 2008, the Planning Commission intended to resume the revocation hearing on July 17, 2008, with the intent of modifying the conditions of approval to allow the use to be reestablished as was originally intended; specifically, an off -sale retail wine store with wine tasting as an ancillary use; and WHEREAS, on June 30, 2008, the property owner announced that they have entered into negotiations to lease the property to HOM Real Estate Group of Newport Beach for an office use and will not be submitting a new use permit.; and WHEREAS, the property owner failed to submit the use permit application by June 30, 2008, and the Planning Commission resumed the revocation hearing on July 17, 2008, in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. Evidence, both written and oral, was presented to, and considered by, the Planning Commission at this meeting; and WHEREAS, it is the intent of the Planning Commission to bring the operation of the establishment into conformity with the original project approval, as retail sales use with wine tasting and educational seminars as an ancillary use. As a result, the findings stated for the approval of Use Permit No. 2001 -005 remain valid and are hereby readopted, in addition to the findings of fact stated in Exhibit "A ". NOW, THEREFORE, BE IT RESOLVED: Section 1. The Planning Commission of the City of Newport Beach hereby amends Use Permit No. 2001 -005 by incorporating the conditions of approval in Exhibit "B" and rescinding Use Permit No. 2002 -034 that permitted the sale of distilled spirits for on -site consumption, live entertainment and expanded hours of operation. Section 2. This action shall be become final and effective fourteen (14) days after the adoption of this Resolution unless within such time an appeal is filed with the City Clerk in accordance with the provisions of Title 20 Planning and Zoning, of the Newport Beach Municipal Code. �A City of Newport Beach Planning Commission Resolution No. _ Page 3 of 14 PASSED, APPROVED AND ADOPTED THIS 17TH DAY OF JULY 2008 AYES: Eaton. Hawkins, Peotter and McDaniel ABSTAIN: Unsworth NOES: None ABSENT: Toerae and Hillaren Scott Peotter. Chairman 15 City of Newport Beach Planning Commission Resolution No. _ Page 4 of 14 EXHIBIT "A" FINDINGS OF FACT FOR AMENDMENT TO USE PERMIT NO. 2001 -005 Having heard the evidence presented by the staff, owner and others, and having fully considered the evidence and the argument of the parties and their counsel, the Planning Commission does hereby find and determine as follows: That the following terms or conditions of approval stated in the Planning Commission Resolution No. 1579, an amendment to Use Permit No. 2001 -005, have been violated or other laws or regulations have been violated: 1. CONDITION NO. 1 The development was not operated in substantial conformance with the approved plot plan, floor plan and elevations dated January 22, 2001. This condition was violated on the following occasions as documented by the following: Fenced -off patio across sidewalk Ex 6 — 4/15/07 Doug Jones memo Ex 7 — 4/20/07 Supplemental police report DR 07 -03722 4/19/07 Follow -up police report Ex 8 — 4/28/07 Doug Jones memo Ex 9 — 5/01/07 Admin cite Ex 14 — 5/26/07 Admin cite Ex 5 — Floor plan showing Unit Al and A2 Ex 6 — 4/19/07 Follow -up police report Ex 14 — 5/26/07 Unit Al bottle service Ex 15 — 11/13/07 booth with alcohol consumption Al (dancing) lL% City of Newport Beach Planning Commission Resolution No. _ Page 5 of 14 2. CONDITION NO. 4 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 agent. Future owners, operators or assignees shall submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. The Overstreets submitted declarations that they submitted a copy of the Use Permit to Stockton as part of the sale transaction. (Declaration of Dennis Overstreet) "Sejour LLC" in its submittal to the Planning Commission (not signed by anyone) vaguely states it was misinformed about the conditions. The condition was violated in that a letter was never submitted acknowledging receipt and acceptance of the conditions. The Lease stated that a bar use was permitted. 4. CONDITION NO. 5 The applicant shall comply with all federal, state, and local laws. This condition was violated on the following occasion as documented by the following: Buildinq Code Ex 17 — Occ. Exceeded, 11/28/07 NBPD report (120 not 99) ABC requirements Ex 22 (ABC License) — hours, dancing Exs 6, 15, 17 — no dancing Blockinq sidewalk (NBMC 10.50.020) Ex 6 — 4/15/07 Jones memo Ex 14 — 5/26/07 Admin cite 11681 2 citations not appealed Ex 9 — 5/01/07 Admin cite 0395 Ex 14 — 5/26/07 Admin cite 11681 \1 City of Newport Beach Planning Commission Resolution No. Page 6 of 14 S. CONDITION NO. 11 The sale of distilled spirits for off -site consumption shall not exceed 15% of gross receipts of all off -site alcohol sales. The sale of distilled spirits for on -site consumption shall not exceed 10% of the total sales for on -site consumption of all alcoholic beverages. This condition was violated as proven by the following (and there is no evidence that the business was ever in compliance with this condition): Ex 10 — 5/04/07 Letter from Lepo asking for gross receipts for alcohol sales Ex 16 — 11/13/07 Request for sales records Ex 12 — 5/10/07 — Stocktons write liquor constitutes 17% of sales Stocktons (Sejour) contend need different ratios to be able to comply 6. CONDITION NO. 13 Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, unless the Planning Commission first approves a Use Permit. �.0 City of Newport Beach Planning Commission Resolution No. _ Page 7 of 14 This condition was proven to have been violated by the following: City proof /assertions Ex 7 — 4/21/07 NBPD DR 07 -3722 — "full bar" in operation with restaurant menu, bottle service Ex 14 — 5/26/07 Admin cite — private party Ex 6 — 4/20/07 Report — full bar open Ex 15 — 11/09/07 — bouncer at door, bottle service, amplified music; 11/13/07 — nightclub with hard alcohol, music, bouncer, dancing The Lease stated that "bar restaurant and live entertainment business" was a permitted use. 7. CONDITION 14 The interior area authorized for on -site alcoholic beverage consumption in conjunction with a Type 47 license shall be limited to 1,263 sq. ft. as delineated on the approved floor plans as "Unit A2" with a maximum of 29 seats. The interior area authorized for the retail sales for general alcoholic beverages for off -site consumption shall be limited to 1,328 sq. ft. as delineated on the approved floor plans as "Unit A1" with a maximum of 3 seats. On -site consumption of alcoholic beverages shall be prohibited in Unit Al. Substantial changes to the floor plans shall require prior approval by the Planning Commission. Any increase in area of either Unit Al or Unit A2 shall be deemed substantial for the purposes of requiring review by the Planning Commission. This condition was proven to have been violated by the following memorializations: !A City of Newport Beach Planning Commission Resolution No. _ Page 8 of 14 City proof /assertions Ex 6 — 4120107 Supplemental police report Ex 14 — 5126107 Admin cite Ex 15 — 11/09/07 Police report — drinking in Al, dancing in Al Ex 17 — 11128107 NBPD report — drink orders being taken in Al, 20 -25 people with food /drink 8. CONDITION NO. 15 Hours of operation shall be from 10:00 a.m. to 11:00 p.m. daily for the retail portion of the project, and 1:00 p.m. to 12:00 midnight Fridays and Saturdays and 1:00 p.m. to 11:00 p.m. Sunday through Thursday for the eating and drinking portion of the p roject. This condition was violated as reported as follows: City proof /assertions Ex 17 — 11/28/07 NBPD report — serving drinks after midnight 9. CONDITION NO. 16 Live entertainment may occur subject to the approval of a Live Entertainment Permit and dancing is prohibited. Live entertainment shall not occur more than 3 days per week. Music shall be limited to indoor areas only and all windows and doors shall remain closed during performances except for incidental ingress and egress of patrons. Management of the business shall make every effort to keep the doors closed during performances. p� City of Newport Beach Planning Commission Resolution No. _ Page 9 of 14 This condition was violated as described in the following reports: Ex 6 — On 4/19/07 — 4/20/07, NBPD DR 07 -322 observed /heard music from open doors, dancing Ex 14 — 5/26/07 Admin cite — door open facing Via Oporto, dancing? 10. CONDITION NO. 18 A Special Events Permit is required for any event, promotional activity outside the normal operational characteristics of this retail business that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. This condition was violated as described in the following reports: Ex 7 — 4/21/07 — roped off line 11/09/07 NBPD 11/30/07 NBPD 11. CONDITION No. 23 Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act (ABC) shall be posted as required by the State Department of ABC. This condition was violated as described n the following report: ns Ex 6 — NBPD — no signs posted i� k City of Newport Beach Planning Commission Resolution No. Page 10 of 14 DETERMINATION For all of the above reasons the Planning Commission finds that the Use Permit was violated. These violations also establish additional grounds of operating an establishment in an illegal manner, and violating ABC rules. These grounds are separate bases for the Use Permit revocation /modification. Although Overstreets contend they are not responsible for the actions of their tenants, the Planning Commission finds that the owner of a Use Permit, which runs with the land, has certain responsibilities to investigate and make sure the permit is being operated in compliance with the terms and conditions of the Use Permit. The Overstreets failed to supervise this operation as the owner of the Use Permit. For all of these reasons, the Planning Commission finds that grounds for modification have been established and does hereby impose such conditions which will return the premises to the original intended use. City of Newport Beach Planning Commission Resolution No. Page 11 of 14 EXHIBIT "B" CONDITIONS OF APPROVAL Conditions in bold are project specific conditions. All others are standards conditions. 1. The alcoholic beverage outlet is hereby defined as a retail establishment for the sale of general alcoholic beverages for off -site consumption as the primary and principal use of the subject property per the Type 21 ABC license. The on-site consumption of alcoholic beverages shall be limited to wine or beer tasting per the Type 42 ABC license and shall be confined to the wine tasting bar. The serving of distilled beverages is prohibited. 2. The primary and principal use of the establishment shall be retail sales with ancillary use of wine tasting and wine educational seminars. The existing floor plan shall be revised to reflect the primary and principal use of the establishment. Prior to the reopening of the establishment, all dining - related fixtures including tables and chairs shall be removed to the satisfaction of the Planning Director. 3. No seating is to be allowed in the wine tasting bar. 4. Wine tasting shall be defined and limited to the presentation of samples of one or more wines, representing one or more wineries or industry labels, to a group of consumers for the purpose of acquainting the tasters with the characteristics of the wine or wines tasted. 5. Each tasting shall be limited per the Department of Alcohol Beverage Control. 6. Wine tasting fees required by the Department of Alcohol Beverage Control shall not exceed 10 percent of the gross retail sales during the same period. The licensee shall maintain records that reflect separately the gross retail sales and the gross wine tasting sales. Said records shall be kept no less frequently than on a quarterly basis and shall be made available to the Planning Department on demand. 7. In addition to wine tasting, the licensee /business operator may provide small amounts of bread, crackers, cheeses or nuts to clear the taste buds of the participants between successive samples of wine during a wine tasting. No serving or preparation of food or meals (other than minimum associated with wine sampling such as small amounts of cheese, bread, or fruit) is allowed. City of Newport Beach Planning Commission Resolution No. Page 12 of 14 8. The hours of operation shall be limited to 9:OOAM to 11:OOPM daily. 9. The existing kitchen shall be maintained and utilized as a "Cold Kitchen" with no major cooking appliances (i.e. oven, cook top) allowed. 10. Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, nor maintain and operate as a bona fide eating place as defined by the Department of Alcohol Beverage Control. 11. A special events permit is required for any event or promotional activity outside the normal operational characteristics of this approval that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time, including any other activities requiring such special events permit as set forth in the Newport Beach Municipal Code. A maximum of 6 events may be permitted annually. 12. No outdoor loudspeaker or paging system shall be permitted in conjunction with either the retail sale or wine tasting /educational seminars. 13. No live entertainment or dancing shall be permitted. 14. The owner /operator of the proposed use shall enter into an agreement to provide and maintain a minimum of 21 parking spaces within the Lido Marina Village Parking garage to be accessible at all times during the operation of the use. 15. This approval supersedes and rescinds Use Permit No. 2002 -034. 16. The alcoholic beverage outlet operator 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, if directly related to the patrons of the subject alcoholic beverage outlet. If the operator fails to discourage or correct nuisances, the Planning Commission may review, modify or revoke this use permit in accordance with Chapter 20.96 of the Zoning Code. 17. 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. 18. All owners, managers and employees serving or selling alcoholic beverages shall undergo and successfully complete a certified training program in responsible methods and skills for selling alcoholic beverages. To qualify to meet the requirements of this section a certified program must meet the standards of the i City of Newport Beach Planning Commission Resolution No. _ Page 13 of 14 California Coordinating Council on Responsible Beverage Service or other certifying /licensing body, which the State may designate. The establishment shall comply with the requirements of these conditions within 180 days of the effective date of this Use Permit. 19. Records of each owner's, manager's and employee's successful completion of the required certified training program shall be maintained on the premises and shall be presented upon request by a representative of the City of Newport Beach. 20. Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act shall be posted as required by the ABC. 21. This use permit may be reviewed, modified or revoked by the Planning Commission or City Council should it be determined that the conditions of the use permit have been violated or that the proposed uses or conditions under which it is being operated or maintained is detrimental to the public health, welfare or materially injurious to property or improvements in the vicinity or if the property is operated or maintained so as to constitute a public nuisance. 22. The applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in connection with the use may be cause for revocation of this permit. 23. Should this business or either alcohol license be sold or otherwise come under different ownership or control, any future owners, operators or assignees shall be notified in writing of the conditions of this approval by either the current business owner /operator. Future owners, operators or assignees shall submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations, restrictions and conditions of approval of this Use Permit. 24. Any changes in operational characteristics, hours of operations, expansion in area, or modification to the floor plan, shall require an amendment to this Use Permit or the processing of a new Use Permit. 25. This approval was based on the particulars of the individual case and does not in and of itself or in combination with other approvals in the vicinity or Citywide constitute a precedent for future approvals or decisions. 26. The applicant or operator of the facility may provide valet attendant service for the use in conjunction with the Lido Marina Village parking garage. The applicant or operator shall prepare a valet operated parking plan to be reviewed and approved by the City Traffic Engineer prior to the commencement of the valet service use. City of Newport Beach Planning Commission Resolution No. Page 14 of 14 27. Delivery vehicles shall not park within the public right -of -way of Via Lido and Via Oporto. 28. Trash receptacles for patrons shall be conveniently located both inside and outside the proposed facility. 29. Trash generated by the business shall be screened from view from adjoining properties except when placed for pick -up by refuse collection agencies. 30. All signs shall conform to the provisions of Chapter 20.67 of the Municipal Code. 31. No temporary "sandwich" signs or similar temporary signs shall be permitted, either on -site or off-site, to advertise the establishment. 32. The applicant is required to obtain all applicable permits from the City Building and Fire Departments. The construction plans must comply with the most recent, City - adopted version of the California Building Code. Adequate access and exiting must be provided in accordance with the Building Code. 33. The operator of the facility shall be responsible for the control of noise generated by the subject facility. The noise generated by the proposed use shall comply with the provisions of Chapter 10.26 of the Newport Beach Municipal Code. 34. Upon evidence that noise generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code, the Planning Director may require that the applicant or successor retain a qualified engineer specializing in noise /acoustics to monitor the sound generated by the establishment to develop a set of corrective measures necessary in order to insure compliance. 35. This approval shall expire unless exercised within twelve (12) months from the end of the appeal period as specified in Section 20.89.060 of the Newport Beach Municipal Code. �y �G ATTACHMENT NO. C JANUARY 17, 2008 PLANNING COMMISSION MINUTES & STAFF REPORT �l TEAS PAGE LEFT BLANK INTENTIONALLY V Planning Commission Minutes 01/17/2008 Page 8 of 11 Absent: I None xxx SUBJECT: Sejour revocation (PA2002 -167) ITEM NO. 5 3400 Via Lido PA2002 -167 The Planning Director has determined that there are reasonable grounds for the Approved revocation of Use Permit Nos. 2001 -005 and the Planning Commission i equested to set a hearing date for the revocation of the use permits. Mr. Lepo noted that following complaints and a significant amount of time for investigation and man - hours, I have determined that there are grounds for the revocation of the Use Permit because the Conditions have not been adhered to. The action available to the Commission tonight is simply to determine which date he revocation hearing will be held. No other action or discussion is warranted. The property owner will be requesting that the date be set for the second meeting in March and because the location has been shut down and provided it does no re -open under this Use Permit staff agrees to set the date in March. Public comment was opened. Mrs. Christine Overstreet one of the property owners requests an extension of the hearing to March 20th to allow time to evaluate the viability of re- operating the ame business she operated from 2002 -2005. We since leased the property to enants who were unable to adhere to the terms of the Use Permit and were no ware of the amount of nuisance that was caused to the City until recently. She request that the date be set for March 20th Public comment was closed. Motion was made by Commissioner Toerge and seconded by Commissioner Cole o set a revocation hearing for March 20, 2008. Ayes: Eaton, Peotter, Hawkins, Cole, McDaniel, Toerge and Hillgren Noes: None Absent: None xxx ITEM NO. 6 SUBJECT: Fury Rok and Rol Sushi Lounge revocation (PA2005 -087) PA200"87 4221 Dolphin Striker Way he Planning Dire. has determined that there are reasonable grounds for the Approved revocation of Use Perm os. 3162 and 2005 -018 and the Planning Commission is requested to set a hearing a for the revocation of the use permits. Mr. Lepo noted that, after complaints a investigation, he determined there were rounds to set this for revocation hearing an equests this be set for February 21, 008. Mr. Harp noted there is a significant difference between th evious item and this ne in the fact the Sejour is now closed and that closure reso the immediate oncerns as long as that property remains closed, whereas Fury still open. pother issue is that outside counsel will be advising the Commission these matters and will be acting as the prosecutor and doing the presentation. Mr. Tod Ridgeway, owner of the building, noted he is appalled by the contents in he report. He asked for a continuation of this matter for 60 days to allow the Aerators to work with staff to clean up their act. The business operators are in �q file:HY: \Users \PLN\Shared \Planning Commission \PC Minutes\mn01172008.htm 09/04/2008 1 CITY OF NEWPORT BEACH '1 L �1Op� PLANNING COMMISSION STAFF REPORT FILE N January 17, 2008 Meeting Agenda Item 5 SUBJECT: Revocation of Amended Use Permit No. 2001 -005 (PA2002 -167) Sejour European Bistro & Lounge 3400 Via Lido APPLICANT: Arthur F. Stockton and Carolyr. C. Stockton CONTACT: Patrick J. Alford, Senior Planner (949) 644 -3235, palfordacitv.newport-beach ca us PROJECT SUMMARY The Planning. Director has determined that there are reasonable grounds for revocation of Amended Use Permit. No. 2001 -005. The Planning Commission is therefore requested to set a revocation hearing pursuant to Section 20.96.040 (Revocation of Discretionary Permits) for February 21, 2008. RECOMMENDATION Staff recommends that the Planning Commission adopt Resolution No. to initiate proceedings to revoke Use Permit No. 2001 -005, as amended. (See, Exhibit 1.) t ��� W� �' � �1 Revocation of Amendeu Jse Permit No. 2001 -005 January 17, 2008 Page 2 LOCATION GENERAL PLAN ZONING CURRENT USE ON-SITE Mixed Use Water - Related 2 MU -W2 Retail Service Commercial (RSC) Restaurant, bar and lounge NORTH MU -W2 RSC Retail stores and restaurants SOUTH General Commercial CG RSC Retail stores EAST MU -W2 RSC Retail stores WEST MU -W2 RSC Office and retail stores Ailwoil i NN �3'I THIS PAGE .LEFT BLANK INTENTIONALLY �3 Revocation of Amendelse Permit No. 2001 -0 05 January 17, 2008 -- Page 3 INTRODUCTION Protect Setting Sejour is located at the northwest corner of the Via Lido and Via Oporto intersection within' the Lido Village area. The area is primarily commercial. The site is not adjacent to sensitive land uses, and there are no day care centers, schools, or park and recreation facilities in the vicinity. The nearest residential uses are located approximately 600 feet to the west across Newport . Boulevard and approximately 600 feet to the southeast along the easterly side of Via Lido. The prior General Plan designated the site as Retail and Service Commercial, with an allowable floor area ratio for the Lido Village area of 0.5/0.75 FAR. As noted in the original staff report prepared for the April 5, 2001 Planning Commission meeting; the building exceeded the allowable General Plan FAR with an existing FAR of 0.83, although, the building is considered legal nonconforming. The April 5, 2001 staff report, meeting minutes and Use Permit No. 2001 -005 are attached hereto as Exhibit 3. The current General Plan designation is Mixed Use Water - Related 2 (MU -W2). The MU -W2 designation is applied to waterfront locations in which marine - related uses may be intermixed with buildings that provide residential on the upper floors. Permitted uses include those permitted by the Recreation and Marine Commercial (CM), Visitor- serving Commercial (CV), and Mixed Use Vertical (MU,V) designations. Background Use Permit 2001 -005 On April 5, 2001, Use Permit No. 2001 -005 was approved by the Planning Commission. (See, Exhibit 3). The primary use of the property was to be a retail establishment for the sale of general alcoholic beverages for off -site consumption with accessory wine tasting and seminars. According to the floor plan, the property was broken down into two Units (Unit A which later becomes Unit A -1 and Unit B which later becomes Unit A -2). Unit A was to be used for the retail operation and Unit B was to be used for on -site consumption. The on -site consumption (wine tasting) was to be accessory to the primary retail use. The hours. of operation approved by the Use Permit for the retail portion of the operation was 10:00 a.m. to 11:00 p.m. and the on -site wine tasting was to be conducted between 1:00 p.m. and 11 p.m. At the time the Use Permit was approved, the applicant had a Type 21 (off -site sale general) and Type 42 (on -site sale beer and wine — no distilled spirits) alcohol license. J� f....., Revocation of Amended ise Permit No..2001 -005 January 17, 2008 Page 4 According to the minutes from the April 5, 2001 Planning Commission meeting, the Planning Commission was very concerned that the property would convert into a bar or eating and drinking establishment. To address these concerns, specific conditions were included in the Use Permit which prohibited the sale of beer and limited alcohol sales for on -site consumption to Unit B. In addition, conditions were included to limit wine tasting sales to twenty percent (20 %) of gross sales so that the property would not become an eating and drinking establishment, restaurant, bar, tavern or cocktail lounge. Amendment to Use Permit 2001 -005 On November 7, 2002, the Planning Commission approved Resolution No. 1579 amending Use Permit No. 2001 -005 authorizing a Type 47 ABC License for on -site consumption of general alcoholic beverages, live entertainment and an expansion of the business hours on Friday and Saturday nights to 12:00 midnight. Due to continuing concerns that this establishment would convert to a bar or eating and drinking establishment, the Use Permit contained specific conditions on the operation as follows: ■ Condition 1: The development shall be in substantial .conformance with the approved plot plan, floor plan, and elevations dated January 22, .2001. ■ Condition 3: That any change in the operational characteristics, hours of operation, expansion in area,. or operation characteristics, or other modification to the floor plan, shall require an amendment to the Use Permit or the processing of a new use permit. ■ Condition 4: 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 agent. Future owners, operators or assignees shall submit, within 30 .days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. ■ Condition 5: The applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in connection with the use will be cause for revocation of this permit. ■ Condition 10: The alcoholic beverage outlet is defined as a retail establishment for the sale of general alcoholic beverages for off -site consumption as the primary and principal use of the project site. On -site consumption of alcoholic beverages shall be accessory and subordinate to the principal retail use and alcoholic beverages sales for on -site consumption shall not exceed 20% of gross sales for the business. The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the City said records when requested. The time 35 Revocation of Amender Jse Permit No. 2001 -005 January 17, 2008 Page 5 period for the purposes of conducting this review shall be in accordance with Alcoholic Beverage Control Board standards. ■ Condition 11: The sale of distilled spirits for off -site consumption shall not exceed 15% of gross receipts of all off -site alcohol sales. The sale of distilled spirits for on -site consumption shall not exceed 10% of the total sales for on- site consumption of all alcoholic beverages. The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the City said records when requested. The time period for the purposes of conducting this review shall be 6 months. ■ Condition 12: Gross receipts shall be reviewed by the City for purposes of compliance with the requirements of the Zoning Code and Use Permit if the use is believed to be operating in non - compliance. If the sales percentages review finds that the applicant is not in compliance, this application shall be brought forward to the Planning Commission for review. ■ Condition 13: Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, unless the Planning Commission first approves a Use Permit. * Condition 14: The interior area authorized for on -site alcoholic beverage consumption in conjunction with a Type 47 license shall be limited to 1,263 sq. ft. as delineated on the approved floor plans as "Unit A2" with a maximum of 29 seats. The interior area authorized for the retail sales for general alcoholic beverages for off -site consumption shall be limited to 1,328 sq. ft. as delineated on the approved floor plans as "Unit Al" with a maximum of 3 seats. On -site consumption of alcoholic beverages shall be prohibited in Unit Al. Substantial changes to the floor plans shall require prior approval by the .Planning Commission. Any increase in area of either Unit Al or Unit A2 shall be deemed substantial for the purposes of requiring review by the Planning Commission. ■ Condition 15: Hours of operation shall be from 10:00 a.m. to 11:00 p.m. daily for the retail portion of the project, and 1:00 p.m. to 12:00 midnight Fridays and. Saturdays and 1:00 p.m. to 11:00 p.m. Sunday through Thursday for the eating and drinking portion of the project. Organized educational seminars shall not be conducted more than 3 days per week. ■ Condition 16: Live entertainment may occur subject to the approval of a Live Entertainment Permit and dancing is prohibited. Live entertainment shall not occur more than 3 days per, week. Music shall be limited to indoor areas only and all windows and doors shall remain closed during performances, except for incidental ingress and egress of patrons. Management of the business shall make every effort to keep the doors closed during performances. 3� ' } Revocation of Amended Jse Permit No. 2001 -005 January 17, 2008 Page 6 ■ Condition 18: A Special Events Permit is required for any event or promotional activity outside the normal operational characteristics of this retail business that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. ■ Condition 20: The alcoholic beverage outlet operator 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, if directly related to the patrons of the subject alcoholic beverage outlet. If the operator fails to discourage or correct nuisances, the Planning Commission may review, modify or revoke this Use Permit in accordance with Chapter 20.96 of the Zoning Code. ■ Condition 23: Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act shall be posted as required by the State Department of ABC. The November.7, 2002 staff report, meeting minutes, Resolution 1579 adopting Amended Use Permit No. 2001 -005 are attached hereto as Exhibit 4. Newport Beach Police. Department, Code Enforcement and Planning Investigation .In January 2007, the Newport Beach Police Department received a verbal complaint that Sejour was operating as a club for dancing and entertainment on Friday and Saturday nights. A subsequent inspection by the Newport Beach.Police Department revealed that on April 15, 2007, Sejour had placed a wooden fence over most of the sidewalk adjacent to Via Oporto for the purpose of creating a smoking area. Sejour had also placed chairs and tables in the fenced area. A Newport Beach Police Officer contacted. the manager and asked her if she had modified the Use Permit to increase the size of the establishment. The manager replied that the Use Permit had not been amended and she was instructed to remove the fence. (See, Exhibit 6.) On April 19, 2007, the Newport Beach Police Department inspected the property and observed that the front entrance /exit, located off of Via Lido, was roped off to accommodate a line. The roped off area extended past Sejour and blocked off half of the public sidewalk. Officers also observed that there was a fenced off patio area along Via Oporto. The fence was approximately 4 feet high, 10 feet wide, and 35 feet long, which completely blocked access to the public sidewalk. The doors on the side facing Via Oporto had two doors that were open all night, the front door was open all night and the kitchen door was open most of the night. Officers also observed that music was playing and could be heard through the open doors. At 9:00 p.m., when the disc jockey began playing music, the music got 1 4, Revocation of Amended j se Permit No. 2001 -005 January 17, 2008 Page 7 measurably louder and more intense. In fact, officers were able to hear the music and the disc jockey from the City Hall parking lot. Upon entering the establishment, the officers. observed that there were five rooms in the establishment. The room immediately to the left (Floor Plan Unit A -1 — Retail Sales on Exhibit 5) had a bar area with beer, soda and an assortment of wine. There were approximately ten patrons inside this room eating dinner. The room to the right (Floor Plan Unit A -1 — Exist Sales on Exhibit 5) was occupied by four patrons who were eating and drinking. The other rooms, except .for Unit A -2, had couches and coffee tables. These rooms were unoccupied. The rear bar (Unit A -2 on Exhibit 5) had approximately 15 people and 2 bartenders at the bar. The bar appeared to be a "full bar' with an assortment of beer, liquor and wine. The officers who conducted the investigation of the interior of the establishment then requested to have dinner and were provided with full menus. The menus included four (4) soups, six (6) salads, nine (9) appetizers, six (6) sandwiches, twelve (12) entrees and seven (7) sides. The server asked if the officers wanted a drink and said that they have beers for sale including Amstel Light, Heineken, Coors Light, Corona, Corona Light and Stella Artois. The officers ordered a meal and were served beer (Corona and Stella Artois), filet mignon, calamari and cake. During their investigation, officers also observed approximately 4 to 5 people dancing in Unit A -1 and at least 7 to 10 people dancing in Unit A -2. The officers asked a server if "bottle service," which is a term used to describe a VIP area where people pay for a bottle of liquor as .well as a place to sit and additional attention from servers, was available and were told by the server that bottle service was available. The officers .asked how much and were told the cost, "it's $275 plus tax." When the officers left at 12:15 a.m. on April 20, 2007, Sejour was still open for business and the disc.jockey was still playing.music. A copy of the police reports related to the April 19 -20, 2007 investigation is attached hereto as Exhibit 7. .On April 28, 2007, the Newport Beach Police Department. inspected the exterior of the property and noted that the white wooden fence covering the sidewalk adjacent to Via Oporto was present and that 20 to 30 people were standing in this area. (See, Exhibit 8.) Based on reported observations by the Police Department on May 1, 2007, Code Enforcement Officer Charles Spence determined that Sejour was operating in violation of Conditions 3, 4, 10, 13, 14, 15, 17, 18 and 22 and issued, Ms. Carolyn Stockton and Sejour, Administrative Citation 12007 -0395. This citation was not appealed by Ms. Stockton or Sejour. A copy of Administrative Citation 12007 -0395 is attached hereto as Exhibit 9. On May 4, 2007, the City's Planning Department informed Mr. Arthur Stockton via correspondence that the Planning Department had received a copy of Administrative 3� Revocation of Amendea Jse Permit No. 2001 -005 January 17, 2008 Page 8 Citation No. 12007 -0395 and requested Sejour's gross receipts for review pursuant to Use Permit Condition No. 12. A copy of the May 4, 2007 correspondence is attached hereto as Exhibit 10. On May 4, 2007, an inspection of the interior of the property was performed by Code Enforcement. In the entrance, Code Enforcement Officers observed couches, tables and chairs. In Unit A -1, Code Enforcement Officers observed a small bar that had wine and soft drinks as well as tables, couches, chairs and booths. In the room. directly after the entrance, Code Enforcement Officers observed additional couches, tables and chairs. In a small room near the. bathroom, additional couches and chairs were observed. A copy of the photographs from the inspection is attached hereto as Exhibit 11. On May 10, 2007, Mr. Stockton responded to the May 4, 2007 correspondence. In the correspondence, Mr. Stockton admitted that the use of the property was a combination of restaurant, bar and lounge. He also noted that the Use Permit, as currently written, would prohibit Sejour from successfully operating and that he could not comply with the conditions as written. (See, Exhibit 12) In regards to the sales for the past 12 months ending May 30, 2007, Mr. Stockton admitted that total sales were $730,871 and that the sales components break down as follows; 41.% food, 36% wine /champagne, 17% cordials/liquor and 6% beer.. On -site sales were 78% of the total and retail sales were 22 %. The off -site sales ratios as to food, wine, liquor and beer were 48% food and 52% wine /champagne (no off -site sale of beer or hard alcohol). While the percentages .are difficult to follow, based on Mr. Stockton's own admissions over 40% of his business comes from the sale and consumption of alcohol on -site (i.e. 17% cordials /liquor (only on -site sales), 6% beer (only on site sales) 17.28% wine /champagne (i.e. 36% of total sales wine /champagne multiplied times 48% sold for on -site consumption). (No documentation was submitted by Mr. Stockton to verify these percentages.) Mr. Stockton also admitted in his correspondence that it is virtually impossible for him to comply with the terms of the Use Permit because of the retail sales requirement. In fact, in the 19 months preceding the May 10, 2007 correspondence, Mr. Stockton admitted that less than $10,000 had been generated by walk -in consumer retail purchases. Further, Mr. Stockton admitted that most of the retail component was comprised of off -site events, such as corporate parties. Mr. Stockton also admitted in his correspondence that he was using Unit A -1 for the purpose of serving alcohol and food. In conclusion, Mr. Stockton asked for clarification regarding the terms and conditions of the Use Permit and noted that he would like to explore appropriate amendments to the Use Permit. A copy of the May 10, 2007 correspondence is attached hereto as Exhibit 12. M Revocation of Amended. se Permit No. 2001 -005 January 17, 2008 Page 9 On May 14,2007, the'Planning Department issued a letter requesting submittal of a use permit application for the new use as a bar or cocktail lounge or that Sejour operate within the current conditions of the existing Use Permit. No application for an amendment to the Use Permit has been received to date. A copy of the May 14, 2007 correspondence is attached hereto as Exhibit 13. On May 26, 2007, the Newport Beach Police Department conducted an investigation of the establishment and determined there were approximately 35 people in Unit A -2 and approximately 15 -25 patrons in Unit A -1. Many people in Unit A -1 were consuming alcoho=ic beverages, including one table that had a bottle of vodka that they were sharing. The officer contacted the manager, Simone Miranda, and explained that he was concerned because Sejour was not complying with the terms of the Use Permit. Ms. Miranda informed the officer that she was not aware of the Use Permit restrictions and.was never told that alcoholic beverages could not be consumed in Unit A -1. The Officer then issued Administrative Citation No. 1168E for violation of Condition No. 14 of the Use Permit. This citation was not appealed by Sejour or Ms. Miranda. A.copy of Administrative Citation No. 1168E is attached hereto as Exhibit 14. On November 9, 2007, another inspection was performed to determine whether Sejour was complying with the terms of the Use Permit. During the inspection the officers noted that alcohol was available via waiter service in Unit A -1 and throughout the establishment. Very loud music was playing from two very large speakers in the area known as Unit A -1. There were also two large booths capable of holding 10.12 peple installed in Unit Al. At about 9:30 p.m., the officers asked if they could eat and the waiter, Kyle, stated "Sure, go ahead, sit anywhere you want. I'll get you a menu, it's new." The officers elected to sit in the area designated on the floor plan as "existtsales" between Unit A -1 and A -2. The officers ordered a filet and a tri -tip platter. The officers also observed that "bottle service" was occurring in the area located just off Unit A -2, near the bar in a small room. Kyle advised that bottle service could be had anywhere in the business and there was no menu for that. The price for bottle service was $300 for a bottle of "Grey Goose" vodka, while anything else was $250. The patrons having bottle service (Grey Goose) in the small room did not appear to be assigned a waiter who would be responsible for the party. Officers observed several patrons in the approximate party of ten pouring their own drinks. At approximately 10:30 p.m., Unit A -1 was quite crowded and the table booths were full. Dancing was occurring in this section and the music was maintained at a high level. At approximately 11:00 p.m., the officers observed that there were approximately 45 people in Unit A -1 and approximately 125 other patrons throughout the establishment. In addition, there were approximately 20 people outside the establishment smoking cigarettes. A copy of the police report related to the November 9, 2007 investigation is attached hereto as Exhibit 15. 46 Revocation of Amended c se Permit No. 2009 -005 January 17, 2008 Page 10 On November 13, 2007, the Planning Department again issued a request for records to determine compliance with. conditions of Use. Permit No. 2001 -005. The Planning Department requested that the records be submitted by December 13, 2007. A copy of the November 13, 2007 correspondence is attached hereto as Exhibit 16. On November 30, 2007, another . inspection of Sejour was performed. Officers inspecting the establishment observed that all areas of the establishment were being utilized. A private party was ongoing in the area of the business identified as Unit A -1 and there were approximately 4 tables set up in the middle of the room. Waiters were delivering drink orders to Unit A -1 and it was obvious food had been served as there were several uncleared plates on numerous tables. At approximately 10:00 p.m., the officers ordered dinner which consisted of beef skewers, a grilled chicken paninni sandwich and gritted chicken breast. A rough count of the number of patrons was conducted and the officers determined there were 150 to 160 patrons in the establishment. No ABC postings or maximum occupancy postings were observed by the officers. While there was no obvious dance floor, as previously observed, patrons were dancing throughout the establishment. All areas of the establishment were open throughout the evening and alcohol was served to one of the officers at 12:25 p.m. At 12:35 p.m. a..last call for alcohol was announced by the disc jockey. The business remained open until approximately 1:00 a.m. As the officers left, music from the establishment could be heard outside of the business. A copy of the police report related to the November 30, 2007 investigation is attached hereto as Exhibit 17. On December 12, 2007, Mr. Stockton informed the City that he had. elected to sell Sejour and asked whether he could allow the new owner to submit records and resolve the other issues related to the business. In the correspondence, Mr. Stockton clairned that he had been operating the business in substantial conformance with the Use Permit. A copy of the December 12, 2007 e-mail is attached hereto as Exhibit 19. In response, on December 12, 2007 the Planning Department sent a letter to Mr. Stockton noting the violations at the property and noting that the documents related to gross sales requested on May 4 and November 13, 2007 had not been provided. A copy of the December 12, 2007 correspondence is attached hereto as Exhibit 20. On December 26, 20.07, Mr. Stockton notified the City that Sejour was now closed because operation of the business was dependent upon their operation as a bar and restaurant as they bargained for in their lease. A copy of the December 26, 2007 e-mail is attached hereto as Exhibit 21. Lt\ Revocation of Amended Jse Permit No. 2001 -005 January 17, 2008 Page 11 At the time. the Use Permit was approved in 2002, the City applied a. standard requirement that should the operational characteristics of the. establishment change, including hours of operation, an amendment to the Use Permit or the processing of a new use permit would be required (Condition 4). Based on the minutes, the Planning Commission's intent when approving Use Permit 2001 =005 was to approve the establishment as a retail wine shop with wine tasting seminars. The current establishment does not operate as a retail establishment at all; rather, it operates as an eating and drinking establishment; restaurant, bar, cocktail lounge and /or night club. .1. Is Sejour Violating the Requirements Which Limit the Overall Sale of Alcohol? Condition 10 reads: The alcoholic beverage outlet is defined as a retail establishment for the sale of general alcoholic beverages for off -site consumption as the primary and principal use of the project site. On -site consumption of alcoholic beverages shall be accessory and subordinate to the principal retail use and alcoholic beverages sales for on -site consumption shall not exceed 20 percent of gross sales for the business. The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the City said records when requested. The time period for the purposes of conducting this review shall be in accordance with Alcoholic Beverage Control Board standards. The authorized primary use of the establishment is retail which requires on -site sales not exceed 20% of gross sales. To determine compliance with this condition, the City needs to be able to review the operator's gross receipts. On May 4 (Exhibit 10) and November 13, 2007 (Exhibit 16), the Planning Department issued formal notices requesting Sejour's gross receipt records required by the Use Permit to be maintained by the operator. To date these records have not been provided in violation of Condition 10. While Sejour has refused to produce these records, it is evident from the overall operation of the business and Mr. Stockton's admissions in his May 10, 2007 correspondence that Sejour is not complying with the terms of the Use Permit. Specifically, in his May 10, 2007 correspondence; Mr. Stockton admits that for the past year over 40% of his-gross sales were related to on -site alcohol consumption. In addition, the operation of the business, based on police officer observations, indicates that the vast majority of the gross sales are derived from alcohol sales. q-), Revocation of Amended Use Permit No. 2001 -005 January 17, 2008 Page 12 Condition 11 reads: The sale of distilled spirits for off -site consumption shall not exceed 15% of gross receipts . of all off-site alcohol sales. The sale of distilled spirits for on -site consumption shall not exceed 10% of the total sales for on -site consumption of all alcoholic beverages. The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the City said records when requested. The time period for the purposes of conducting this review shall be 6 months. As with Condition 10, to determine compliance with this condition, the City needs to be able to review the operator's gross receipts. As noted above, these records were requested on May 4 and November 13, 2007. To date these records have not been provided in violation of Condition 11. While Sejour has refused to produce these records, it is evident from the overall operation of the business and Mr. Stockton's admissions in his May 10, 2007 correspondence that Sejour is not complying with the terms of the Use Permit. Specifically, in his May 10, 2007 correspondence, Mr. Stockton admits that for the past year 17% of his gross sales were related to on -site consumption of hard alcohol. In addition, the operation of the business, based on police officer observations, indicates that the vast majority of the gross sales are derived from the sale of hard alcohol. Condition 12 reads: Gross receipts shall be reviewed by the City for purposes of compliance with the requirements of the Zoning Code and Use Permit if the use is believed to be operating in non - compliance. If the sales percentages review finds that the applicant is not.in compliance, this application shall be brought forward to the Planning Commission for review. Based on the citations issued to Sejour and the overall operation of the business, there is sufficient evidence to find that Sejour is not complying with the terms and conditions of the Zoning Code and the Use Permit. Based thereon, gross receipt records were requested on May 4 and November 13, 2007. However, Sejour has refused to produce its gross receipt records in violation of Condition 12. 2. Is Sejour Operating as an Eating Establishment, Bar or Night Club? The City authorized a "retail establishment" foe the sale of general alcoholic beverages for off -site consumption as the primary and principal use with the authorized on -site consumption of alcoholic beverages as an accessory and subordinate use to the principal retail use. 43 Revocation of Amendeb Use Permit No. 2001 -005 January 17, 2008 Page 13 Condition 13 reads: Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club. as defined by the Municipal Code, unless the Planning Commission first approves a Use Permit. Municipal Code Section 20.050.050(L) defines a retail food and beverage operation as being an establishment where 20% or less of the transactions is sales of prepared food for on -site consumption. If sales exceed 20 %, the operation must be classified as a catering service or eating and drinking establishment. Based on Mr. Stockton's own admissions in his letter dated May 10, 2007, the sales for on -site consumption of alcohol and food exceed the 20% limit. In addition, the Police Department reports .indicate this establishment is not operating as a wine tasting bar, but instead operating like a nightclub, cocktail lounge or bar with full food. service available. On April 19; 2007, plain clothes officers indicated that loud disc jockey house music started at 9:00 p.m. The volume of the music was such that an officer reported hearing it clearly from the City Hall's parking lot. The officers reported that their identifications were checked at the door before entering the establishment. around 9:15 p.m. and that "bottle service" was offered at $275 a bottle. "Bottle Service" is a term frequently used to describe a V.I.P. area where people pay for a bottle of liquor as well as a place to sit and receive additional attention from the servers. (See, Exhibit 7.) On Friday night, November 9, 2007, the Police Department reports more of the same conditions and activities occurring at Sejour as were occurring during their April 19, 2007 visit. In the retail portion of the establishment, Unit A -1, officers reported that two large booths were situated in the room and could sit approximately 10 to 12 people each. Use Permit Condition 14 specifically prohibits more than 3 seats in this portion of the establishment. Condition 14 also prohibits on -site consumption of alcohol in Unit A- 1. As the night went on, this room became crowded with patrons dancing in the center of the room to the loud music provided by the disc jockey. The server stated to the officers that the center of the room (Unit A -1) is specifically kept clear for use as the dance floor. Servers were observed taking sales orders for, and serving alcoholic beverages to, patrons in this room throughout the evening. The officers were provided menus at this visit and ordered full'meals. (See, Exhibit 15.) On November 28, 2007, Code Enforcement conducted an announced inspection of Sejour at the permission of the owner Arthur Stockton. At this inspection, Mr. Stockton stated his normal operating hours are from 5:00 p.m. to 12:00 a.m. The opening hour of 5:00 p.m. is not a normal hour for a retail establishment to open, rather, more typical of a restaurant or bar operation. (See, Exhibit 18.) q4 Revocation of Amended Use Permit No. 2001 -005 January 17, 2008 Page 14 On the evening of November 30, 2007, the plain clothes police officers conducted a follow up investigation into the operations at Sejour. The officers arrived at a later time in the evening at approximately 9:30 p.m. A full dinner menu was available. The officers were able to order appetizers, dinner entrees and drinks. The officers reported that the music played by the disc jockey was so loud they could not easily carry on a conversation and the establishment was quickly crowded with at least 150 patrons. (See, Exhibit 17.) Based on the evidence, the operation is not being operated for the permitted use of retail sales. Rather, the business is being operated as an eating or drinking establishment and barAounge. Specifically, Municipal Code Section 20.05.050(K) defines an eating and drinking establishment as a `businesses with the principal purpose to serve prepared food or beverages for consumption on or off the premises." Bars and cocktail lounges are further defined 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." 3. Is SeJour Operating in Violation of Permitted Occupancy Levels and Serving Alcohol in Unit A -1? In regards to occupancy, Condition 14 reads: The interior area authorized fur on -site alcoholic beverage consumption in conjunction with a Type 47 license shall be limited to 1, 263 sq. ft. as delineated on the approved floor plans as "Unit A2" with a maximum of 29 seats. The interior area authorized for the retail sales for general alcoholic beverages for off - site consumption shall be limited to 1,328 sq. ft. as delineated on the approved floor plans as "Unit Al" with a maximum of 3 seats. On -site consumption of alcoholic beverages shall be prohibited in Unit Al. Substantial changes to the floor plans shall require prior approval by the Planning. Commission. Any increase in area of either Unit A? or Unit A2 shall be deemed substantial for the purposes of requiring review by the Planning Commission. In addition to the requirements in the Use Permit, there is an overall occupant load for the property. Specifically, the Fire Department has confirmed the following occupancy load conditions: Using the original retail sales basis for determining the occupancy load based upon 1 person for each 30 square feet, Unit A -1 has an aggregate permitted occupancy load of thirty -three (33) persons. 45 j Revocation of AmendeL Jse Permit No; 2001 -005 January 17, 2008 Page 15 The occupancy load factor for a drinking establishment is 1 person for each 15 square feet. Using a drinking establishment basis, the same aggregate area could have a permitted occupancy load of 66. For both drinking and retail sales, an occupancy load of 50 or more requires two exits. Unit A -1 does indeed have two exits and the exits are properly spaced. Unit A -2 has a drinking establishment occupancy load of 29 persons based upon fixed seating. If Unit A -2 were used as a.stand alone unit, its exiting would be adequate. However, when both Units A -1 and A -2 are used together the building code requires them to be considered as a single area for exiting purposes. The combined occupant load of both Units A -1 and A -2 when used as a drinking establishment is 95. Because the total combined occupancy load of both units exceeds 50, the occupants of Unit A -2 must have access to a second exit. The second exit must be spaced a distance from the first exit equal to' /a of the maximum diagonal distance of the area. Additionally, access to the second exit may be through only one intervening room. In Unit A -2's case neither of these conditions is found; the distance to the second exit is greater than' /2 the diagonal distance and the occupants will be required to travel through three intervening rooms. Therefore, it can not be used in conjunction with Unit A -1 as a single occupancy. As forth above, Unit A -1 is the retail portion of the establishment while the main bar is located in Unit A -2. A copy of the floor plan is attached hereto as Exhibit 5. On Friday, November 9; 2007, the Police Department reported that by 10:30 p.m. Unit A -1 was crowded with dancing patrons and the two booths were full. At approximately 11:00 p.m., the officers observed that there were approximately 45 people in Unit A -1 and approximately 125 other patrons throughout the establishment. In addition, there were approximately 20 people outside the establishment smoking cigarettes. (See, Exhibit 15.) On Friday night, November 30; 2007, the plain clothes officers conducted a follow up investigation of the activities. at Sejour. The officers report that by 11:30 p.m. there were approximately 150 to 160 patrons at Sejour and that is was very difficult to walk through the establishment. The officers were unable to locate a door host or any other employee keeping a record of the number of patrons. There was no clear area set aside for a dance floor as there was on the previous visit; instead, patrons were dancing throughout. the establishment. (See, Exhibit 17.) Newport Beach Police Department reports indicate that both Units A -1 and A -2 are frequently used together and that the combined occupancy loads have been found to be far in excess of 50 people, there by creating not only an unsafe condition but also a condition that is prohibited by the California Building Code. qto Revocation of Amended Use Permit No. 2001 -005 January 17, 2008 Page 16 In addition, Newport Beach Police Department reports indicate that ,the overall occupancy of the establishment exceeds the limits set forth in the Use Permit. Furthermore, officers have documented that alcohol sales are occurring in Unit A -1 in violation of Condition 14 on April 14 and November 9 and 30, 2007. 4. Is Sejour Operating in Compliance with Permitted Hours of Operation? Condition 15 reads: Hours of operation shall be from 10:00 a.m. to 11:00 p.m., daily for the retail portion of the project, and 1:00 p.m. to 12:00 midnight Fridays and Saturdays and 1:00 p.m. to 11:00 p.m. Sunday through Thursday for the eating and drinking portion of the project. Organized educational seminars shall not be conducted more than 3 days per week. Officers have reported on a number of occasions that Sejour is not operating within their permitted hours of operation set by the Use Permit and their ABC License. During the April 19 -20, 2007 inspection the officers noted that when they left at 12:15 a.m. on April 20, 2007, Sejour was still open for business and the disc jockey was still playing music. (See, Exhibit 7.) On May 14, 2007, the Senior Planner Patrick Alford provided a letter to Arthur Stockton explaining that the City will consider Sejour in compliance with their hours of operation if at the specified closing time (11 p.m. or 12 midnight) no additional patrons were admitted and no additional food and beverage orders were taken and served. Planning indicated the interpretation is intended to allow patrons who were admitted and served prior to the specked closing time to finish their food and drinks. (See, Exhibit 13.) After the City's May 14th letter, the operators of Sejour continued to violate the Use Permit "hours of operation" condition and the underlying ABC license condition which only allows sales and service of alcohol until midnight on Friday and Saturday nights. Specifically, on Friday, November 30, 2007, the Police Department conducted a plain clothes investigation into complaints of Conditional Use Permit violations at Sejour. To document compliance with the hours of operation and the underlying compliance with ABC license regulations, the officers proceeded to order alcoholic beverages after 12:00 midnight. They reported that they ordered a cocktail and a glass of wine at 12:25 a.m. and were subsequently served. Further, the disc jockey was still playing music and did not announce "last call" until 12:35 a.m. All areas of the establishment reportedly remained open until 1:00 a.m. (See, Exhibit 17.) q1 Revocation of AmendeL Jse Permit No. 2001 -005 January 17, 2008 Page 17 6. Is Sejour Complying with Special Event Permit Requirements? Condition 18 reads: A Special Events Permit is required for any event or promotional activity outside the normal operational characteristics of this retail business that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specked in the Newport Beach Municipal Code to require such special events permit. The "normal operational characteristics" of a retail establishment, more specifically a retail wine shop offering wine tasting, would not typically include late night disc jockey music, dancing, V.I.P. bottle service, and crowds of patrons in excess of 100 people. Police Department investigations reveal that the occupancy levels within Sejour are well beyond the Use Permit condition requiring a Special Events Permit for .patron occupancy above 29. On Friday, November 9, 2007, officers counted approximately 170 patrons in the establishment at 11:00 p.m. On Friday, November 30, 2007, occupancy was reported at approximately 150 patrons. Sejour did not file applications for Special Event Permits for either date. (See, Exhibits 15, 17) 6. Is the Noise Generated by Live Entertainment Exceeding Noise Standards? Although the City has not actually measured the decibel levels of the music emanating from Sejour, reports indicate that the noise levels of the live entertainment provided by the disc jockey was so loud that officers could hear the music clearly outside the establishment and as far away as several blocks from the establishment. No specific noise complaints have been recorded by the City against Sejour. This is probably due to the fact that the immediate, vicinity is for commercial use; there are no, nearby residential properties. Condition 16 states in part that all windows and doors shall remain closed during performances except for incidental ingress and egress of patrons. Further, Condition 33 states in part that the operator of the restaurant facility shall be responsible for the control of noise generated by the subject facility. The noise generated by the use shall comply with the provisions of Chapter 10.26 of the Newport Beach Municipal Code. Additionally, Condition 34 reads upon evidence that noise generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code, the Planning Director may require that the applicant or successor retain a qualified engineer specializing in noise/acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures necessary in order to insure compliance. On April 19 -20, 2007, officers observed that music was playing and could be heard through the open doors. At 9:00 p.m., when the disc jockey began playing music, the AD Revocation of Amended Use Permit No. 2001 -005 January 17, 2008 Page 18 music got measurably louder and more intense. In fact, officers were able to hear the music and the disc jockey from the City Hall parking lot. (See, Exhibit 7.) 7. Is Sejour Allowing Dancing in Violation of the Use Permit and ABC license? Condition 16 provides that: Live entertainment may occur subject to the approval of a Live Entertainment Permit and dancing is prohibited. Live entertainment shall not occur more than 3 days per week. Music shall be limited to indoor areas only and all windows and doors shall remain closed during performances except for incidental ingress and egress of patrons. Management of the business shall make every effort to keep the doors closed during performances. In addition, the ABC License for this facility prohibits dancing. A copy of the ABC License is attached hereto as Exhibit 22. As set forth above, dancing is prohibited at this establishment. Officers have observed dancing on several inspections at this establishment including dancing on April 19, November 9 and 30, 2007. In addition, on November 9, 2007, a server. informed officers that a portion of Unit A -1 is specifically kept clear for dancing. (See, Exhibits 7, 15,17) 8. Is Sejour Complying with ABC Regulations? Condition 23 provides that: Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act shall be posted as required by the State Department of ABC. Based on the observation of the officers on November 30,. 2007, no ABC signs were posted at this establishment in violation of Condition 23. (See, Exhibit 17) 9. Has Sejour Changed the Floor Plan Without Approval? Condition 1 provides that: The development shall be in substantial conformance with the approved plot plan, floor plan, and elevations dated January 22, 2001, Condition 3 provides that: Any change in the operational characteristics, hours of operation, expansion in area, or operation characteristics, or other modification to the floor plan, shall require an amendment to the Use Permit or the processing of anew Use Permit. 4� ' 1 R Revocation of Amender- Jse Permit No. 2001 -005 January 17, 2008 Page 19 Significant changes to the floor plan have been made without approval by the Planning Commission. Specifically, on April 19, 2007, the Newport Beach Police Department inspected the property and observed that there was a fenced off patio area along Via Oporto. The fence was approximately 4 feet high, 10 feet wide; and 35 feet long, which completely blocked access to the public sidewalk. In addition, upon entering the establishment, the officers observed that there were five rooms in the establishment (See, Exhibit 7). The room immediately to the left (Floor Plan Unit A -1 — Retail Sales on Exhibit 5) had a bar area with beer, soda and an assortment of wine. On April 28, 2007, the Newport Beach Police Department inspected the. exterior of the property and noted that the white wooderi fence covering the sidewalk adjacent to Via Oporto was present and that 20 to 30 persons were standing in this area. (See, Exhibit 8.) On May 4, 2007, an inspection of the interior of the property was performed by Code Enforcement. In the entrance, Code Enforcement Officers observed couches, tables and chairs: In Unit A -1, Code Enforcement Officers observed a small bar that had wine and soft drinks as well as tables, couches, chairs and booths. In the room directly after the entrance, Code Enforcement Officers observed additional couches, tables and chairs. In a small room near the bathroom, additional couches and chairs were observed. A copy of the photographs from the inspection is attached hereto as Exhibit 11. On November 9, 2007, another inspection was performed. During the inspection the officers noted that there were also two large booths capable of holding 10 -12 people installed in Unit Al. (See, Exhibit 15.) On November 30, 2007, another inspection of Sejour was performed. Officers inspecting the establishment observed that there were booths and tables in Unit A -1. (See, Exhibit 17.) 10. Did Sejour Acknowledge Receipt of the Use Permit? Condition 4 provides that: 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 agent. Future owners, operators or assignees shall submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. Despite the fact that Sejour has operated the business at this location since November 2005, to date, Sejour has not submitted a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval try Revocation of Amended Jse Permit No. 2001 -005 January 17,.2008 Page 20 of this Use Permit. In fact, on May 26, when the officer contacted the manager, Simone Miranda, and explained that he was concerned because Sejour was not complying with the terms of the Use Permit, Ms. Miranda informed the officer that she was not aware of the Use Permit restrictions and was never told that alcoholic beverages could not be consumed in Unit A -1. (See, Exhibit 14.) Similarly, in Mr. Stockton's May 10, 2007 correspondence, he admits he was not aware of the conditions related to the use of the property. (See, Exhibit 12.) 11. Is Sejour Violating the Law? Condition 5 provides that: The applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in connection with the use will be cause for revocation of this permit As set forth in detail above, there are multiple violations of the Use Permit occurring at this property, each of which is a violation of the Municipal Code. In addition, there are documented violations of. the Building Code and ABC Regulations at the property. Furthermore, Sejour's blocking of the sidewalk during April 2007 is a violation of Municipal Code Section 10.50.020. Sejour has been issued two citations for violations of the Municipal Code and these citations were not appealed and are now final. (Exhibits 9, 14.) . CONCLUSION A use permit is a discretionary permit and may be revoked. The terms and conditions of approval of the Use Permit have been continuously violated. Further, the establishment fails to fully comply with all the rules, regulations and orders of the California State Department of Alcoholic Beverage Control. Pursuant to Municipal Section 20.89.060(C) and 20.96.040, the Planning Commission may revoke a use permit for an alcoholic beverage outlet upon making the applicable findings set forth in Section 20.89.060(C). (Municipal Code Sections 20.89.060 and 20.96.040 are attached hereto as Exhibit 24.) The operational characteristics of Sejour and the hours of operation are drastically different from the intended use that, was approved by the Planning Commission when approving Use Permit No. 2001 -005. The Operator has been provided 8 months to come into compliance with the Use Permit since the City first put Sejour on notice of the violations of the Use Permit. Since the first formal notice on May 1, 2007, Mr. Stockton has failed to comply with multiple conditions of the Use Permit and has also failed to comply with staff direction in pursuing the proper steps to apply for an amended use permit. 6� Revocation of Amender. se Permit No. 2001 -005 January 17, 2008 Page 21 Mr. Stockton is aware of the conditions of the Use Permit and admits he is not in compliance with the conditions of the Use Permit. It is staffs' recommendation that the Planning Commission initiate proceedings to revoke Use Permit No. 2001 -005 as amended. Environmental Review The proposed project has been reviewed and . it has been determined that it is categorically exempt from the requirements of the California Environmental Quality Act under Class 21 (Enforcement Actions by Regulatory Agencies). This exemption applies to actions by regulatory agencies to enforce or revoke a lease, permit; license, certificate, or other entitlement for use issued, adopted, or prescribed by the regulatory agency or enforcement of a law, general rule, standard, or objective, administered or adopted by the regulatory agency. Public Notice Notice of this -hearing was published in the Daily Pilot, mailed to property owners within 300 feet of the property (excluding roads and waterways) and posted at the site a minimum of 10 days in advance of this hearing consistent with the Municipal Code. Notice of this hearing were also mailed to the property owner and the last known operator. The environmental assessment process has also been noticed in a similar manner and all mandatory notices per the California Environmental Quality Act have been given. Finally, the item appeared upon the agenda for this meeting, which was posted at City Hall and on the city website. Submitted by: EXHIBITS (in the order they are referenced within the report) 1. Resolution No. 2. Vicinity Map 3. April 5, 2001 Planning Commission Minutes, Staff Report 4. November 7, 2002 Planning Commission Minutes, Staff Report, Resolution 1579 5. Floor Plan 6. April 15, 2007 E -mail from Officer C. Freeman to Detective D. Jones 7. April 19 -20, 2007 Newport Beach Police Report 8. April 28, 2007 E -mail from Officer C. Freeman to Detective D. Jones 9. May 1, 2007 Administrative Citation 10. May 4, 2007 letter from David Lepo, Planning Director to Arthur Stockton 11. May 4, 2007 Code Enforcement Investigation Pictures 12 May 10, 2007 letter from Arthur Stockton to City of Newport Beach 13. May 14, 2007 letter from Patrick Alford, Senior Planner to Arthur Stockton 5a Revocation of Amended Jse Permit No. 2001 -005 January 17, 2008 Page 22 14. May 26, 2007 Administrative Citation 15. November 9, 2007 Newport Beach Police Department Report 16. November 13, 2007 letter to Carolyn Stockton from City Attorney's Office 17. November 30, 2007 Newport Beach Police Department Report 18. November 28, 2007 Code. Enforcement Inspection 19. December 12, 2007 E-mail from Arthur Stockton to City of Newport Beach 20. December 12, 2007 E -mail from David Lepo, Planning Director to Stockton 21. December 26, 2007 E -mail from Arthur Stockton to City of Newport Beach 22. Sejour, LLC ABC Conditional License, Type 21 & Type 47 23. Notice of Public Hearing 24. NBMC §§ 20.89.060 and 20.96.040 25. January 4, 2008 letter from Dennis & Christine Overstreet to City of Newport Beach FIUSERSIPLMShsredlPAIMPAS - 20021PA2002- 16712008-0147 PC 5� J THIS PAGE LEFT BLANK INTENTIONALLY Exhibit 1 55 RESOLUTION NO. A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH SETTING REVOCATION HEARING FOR USE PERMIT NO. 2001 -005 (SEJOUR) THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH HEREBY FINDS, RESOLVES AND ORDERS AS FOLLOWS: WHEREAS, a public hearing was held on January 17, 2008 in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. A notice of time, place and purpose of the meeting was given in accordance with the Municipal Code. Evidence, both written and oral, was presented to, and considered by, the Planning Commission at this meeting; and WHEREAS, the Planning Commission finds as follows: Pursuant to Section 20.96.040 of the City of Newport Beach Municipal Code, the Planning Director has determined that there are reasonable grounds for the revocation of Use Permit No. 2001 -005 located at 3400 Via Lido. 2. The Planning Commission took final action on Use Permit No. 2001 -005 by approving an amendment to the Use Permit on November 7, 2002 and therefore has the duty of setting a revocation hearing pursuant to Section 20.96.040 of the City of Newport Beach Municipal Code. 3. This action is categorically exempt from the requirements of the Califomia Environmental Quality Act under Class 21 (Enforcement Actions by Regulatory Agencies). NOW, THEREFORE, BE IT RESOLVED that based on the aforementioned findings, the Planning Commission hereby sets a revocation hearing for Use Permit No. 2001 -005 for February 21, 2008. 5 (D City of Newport Beach Planning Commission Resolution No. _ Page 2 of 2 PASSED, APPROVED AND ADOPTED THIS 17TH DAY OF JANUARY 2008. 0 NOES: ABSENT: Robert Hawkins, Chairman BY: Bradley Hillgren, Secretary 51 Exhibit No. I 5� THIS PAGE LEFT BLANK INTENTIONALLY Exhibit No. 2 0 lk 7 THIS PAGE LEFT BLANK INTENTIONALLY i 1,& 0 200 400 Feet L. VICINITY ICI S AP w: . g 3400 Via Lido To.the north: Retail and service commercial.. To fhe east: Retail and service commercial across V is Oporto. To the south: I Retail and service commercial, iaLido Plaza across ViaLido. To the west; I Retail. and service commek ial. a' 1 THIS PACE LEFT BLANK INTENTIONALLY V3 ff Exhibit No. 3 �A THIS PAGE LEFT BLANK INTENTIONALLY City of Newport Beach Planning Commission Minutes April 5, 20GI Dennis & Chris Overstreet 3400 Via Udo • PA2001.025(UP2001 -005) FILE COPY INDEX A Use Permit for a new alcoholic beverage license (Type 21, off -sale general) in conjunction with a fine wine retail establishment. The applicant also proposes to conduct periodic on -site wine tasting seminars in the evenings for approximately 30 people with a Type 42- oicohol license. The project requires the consideration of a parking waiver: Mr. James Campbell, Senior Planner, commented that the project is located at the corner of Via Lido and Via Oporto and noted that the site has no parking and they are relying on the Lido Marina Village Parking garage.. 'Mr. Campbell said that project approval requires a parking waiver. Mr. Campbell presented to the Commission a supplemental staff report because staff inadvertently put in the incorrect crime statistics in the original staff report. The ABO ordinance requires us to evaluate the alcohol beverage outlet pursuant to some factors including crime statistics and over- concentration of liquor licenses in the area. Mr. Campbell said that staff prepared the report using the 1999 statistics for the Commission's consideration, The crime rates and concentrations are slightly better than were in 1998 but that does not change the fact that this is an over - concentrated area in terms of the number of licenses as well as the area has one of the higher crime rates in the City. Ms. Compbeti said that the via. Lido .parking garage inventory contained in the staff report is an outdated version and the correct one is attached to the supplementol staff report. Mr. Campbell said that the survey does not change the fact the parking garage is over. allaaated during the daytime and during the evening hours it is not and that this is something that should be considered. Mr. Campbell said that staff wanted to discuss a minor condition change to Condition No. 4 that referenced the wrong unit. it should be Unit, B in Condition No. 4. Mr. Campbell referred to Condition No. 19 that relates to valet parking services and said that it would imply that valet parking is required at all times. Mr. Campbell explained that the valet item is on amenity that the applicant wants to provide for the use for the educational and wine tasting sessions. Staff did not look of the valet requirement as being a mandatory factor in the consideration of the parking waiver. Staff wants to change the condition to if they provide valet parking service it would be subject to the review of the Traffic Engineer in the Public Works Department, Mr. Campbell stated that staff recommends approval of the. alcohol beverage outlet and feel that the way the permit is structured and how the conditions link these two operations together, it would not permit the use of these licenses by almost anyone else unless they operated the same operation that the Overstreets are proposing. 13 Item No. 5 PA2001.025 (UP2001 -005) Approved 0 City of Newport Beach Planning Commission Minutes April 5, 2001 INDEX Chairman Seiich said that it appears the basis upon which they are granting the parking waiver is the fact that they have an off -site parking management plan and asked if the Commission approves this with that parking waiver and one of the keys to it is the proposal to use 22 parking spaces in the garage, and the reason we are not using our standard off-site agreement is because it cannot meet the criteria at our standard off -site agreement but: since this is a part of a parking management plan and we are waiving the parking based an that, it the agreement with the parking garage ceases to exist, does that mean the applicant has to come back to the Planning 'Commission with another parking solution? Mr. Campbell said that is correct, and that Condition No. 18 requires that they provide 21 parking spaces in the Lido Marino Parking garage. Chairman Selich said that as long as [hey are in compliance with the Parking Management Plan, which controls the number of spaces they have, but it they lose the spaces and they cannot continue to operate, they would have to come back to the Planning Commission to seek relief tram that or have the spaces or cease operation one way or another. Staff responded yes. Commissioner Gifford asked about the idea of how many uses occur simultaneously. She said that her question has more to do with what the definition of the site is because the wine tasting seminars are scheduled tar evenings and almost all of Lido Marino Village is shut down in the evening in terms of the retail operations. Commissioner Gifford asked if "site' is not broad enough to include all at the parking that is availoble8 Is the site Lida Morino Village or the building? Mr. Campbell said the site is the building. The use of the parking garage and the use of the spaces that are in the Village area are a factor that could be considered in the parking waiver. Mr. Campbell said that most of the uses in the evening hours are closed and there is less parking demand at that time. Commissioner Gifford noted that the other two uses operated at similar hours of operation and asked what two uses are referred to specifically. Mr. Campbell said that particular finding is setup for a larger site with multiple uses that are not operating at the some time. In this particular case; the site is the properly, which are really the retail aspect as well as the wine tasting. Commissioner Gifford said that it is not Lida Marina Village but that parcel of property. Commissioner Kiser asked if there were any telephone calls or written, responses to the Public Notice sent out by the City from anyone either objecting or supporting the application. Mr. Campbell responded that he had. not received any telephone calls or letters tram anyone. The applicant submitted a petition of endorsement. Commissioner Kiser referred to Condition No. 5 and asked how they differentiate the proposed use from an eating and drinking establishment and the evening use. How is this put in the non - eating and drinking establishment colegary2 Mr. Campbell referred to the floor plan, Suite A and Suite B. Suite. A is the retail portion and Suite B is the on -site consumption portion. Staff structured this permit to authorize the retail sale of alcohol beverages and are indicating that the on- 14 b� City of Newport Beach Planning Commission Minutes April 5, 2001 INDEX site wine tosting, which Is in o separate suite, is accessory to that use. Therefore, this use permit does not authorize on eating and drinking establishment. The on- site consumption license is the some license you would hove at a wine bar. With this use permit, it is restricted as accessory to the retail use and you could not operate a bar or onything other than accessory wine tosting. Commissioner Kiser asked what is accessory to another use? If it turned out that this use of the wine tosting ended up being 60 percent of the revenue of the business, would that then make it less of on accessory use? Mr. Campbell commented that typically accessory would be less than 50 percent. This particular retail establishment would hove to be limited to 20 percent pursuant to the definitions of the Zoning Code. so they would fall below 20 percent. The on -site consumption aspect is accessory but no more than 20 percent of the overall ociivity of the entire operation. Ms. Wood noted that the Code definition of accessory use does not have anything quontifiobie in it. It means "a use that is appropriate. subordinate and customarily incidental to the main use of the site, which is located on the main site of the use." Commissioner Agajonian asked what the hours of operation for the wine tosting were. Mr. Campbell said it would be t p.m. to I I p.m. Commtssioner Agajonian asked how Suite B could be incidental offer 7 p.m. Mr. Campbell said they ore measuring it based on the overall use and it would average out over the entire use of the facifily. Commissioner Agojonion asked if during the hours [hot Suite B is open. do the doors need to remain open to the public? Mr. Campbell responded yes. Commissioner Agajonian asked if any adult could walk in, and Mr. Campbell responded that they hove to be 21 years old. Commissioner Agojonion asked if they could sit down and order wine. and Mr. Campbell responded yes. Commissioner Agojonian asked how that would differentiate on eating and drinking establishment from o bar? Commissioner Kranziey said he would like to confine'thot fine of thought and wonted it understood that it was not specific to the Overstreets. In theory. Thursday, Friday and Saturday nights you could walk into this establishment or any subsequent establishment that falls under this use permit, purchase o gloss of Wine. buy food because the applicant has suggested, in their letter, they will hove food [hot will include sandwiches. salods, etc. Commissioner Krontley said that, in Condition No. 5, the approval does not permit the premises to act as on eating and drinking establishment, he does not understond that. Commissioner Gifford asked to have the applicant clarity it for them. She said when she read the condition it was her understanding that if you conducted wine- tasting seminars, they would be ticketed events. The idea that the room could be used from 1 p.m. to 1 1 p.m. would be that they could conduct seminars on the weekends and tastings in the evenings. Commissioner Gifford referred to o second optional finding they could make about pocking and relying on the Lido Morino Village parking garage and asked about off the metered parking on the street that typically is not used at that hour and is available. Is that because of o requirement to provide on -site parking? i5 City of Newport Beach Planning Commission Minutes Aril 5,2001 INDEX Mr. Campbell said yes. Commissioner Gifford referred to the closest Municipal Parking Lot located at the comer of Villa Way and 30(h Street and asked If there was a public parking lot next to the Elks Club at the end of the street? Mr. Edmonstan responded there is but the City has entered Into an agreement with the Elks, which gives them the exclusive use of most of that lot from 6 p.m. to 6 a.m., seven days a week. Commissioner Tucker referred to Condition 1, the second sentence and said he was under the Impression that the seminar roam was going to be for wine tasting as a lead in to the sales from the liquor stare portion. He said he was confused haw this Condition ties in with the concern about it becoming a bar. Public Hearing Opened Chairman Selich asked the applicant to came forward and said the question is haw does the wine tasting operate subordinate to the retail portion of their operation and what assurances do they have that it will not became a bar, either through the applicant or some other owner. Dennis Overstreet, applicant, 128 Via Trieste. Mr. Overstreet commented that he has run the wine Merchant in Beverly Hills for three decades and that his operation is unique in the fact that they have wine tasting an site in conjunction with their retail sales. Mr. Overstreet said the ABC came up with the Type 42 license, which is primarily a wine- tasting license. Mr. Overstreet sold that they wanted their retail license to run at the same time as the on -sale license. Christine Overstreet commented that she wanted to clarify that they understand the concerns of an I I p.m. hour. People who are drinking later in the evening are more inebriated than those drinking earlier in the evening. Mrs. Overstreet said that their recommendation would be that, should the tasting roam dose at 8 p.m., three nights a week, that the retail part would have to close at the same time since the conditional use permit is recommending that the two licenses work hand in hand. Mr. Overstreet commented that, in purchasing the property, if was his understanding that they have a dedicated amount of spaces that are in the Lida Parking Garage that went along wilh the purchase of the building. Mrs. Overstreet said the agreement is through 2008 and that they also have on aff -site parking agreement "In the City of Newport Beach that went into effect 1975 and it is still in effect. Mrs. Overstreet said that to make sure they had enough parking, they went to .Colitornia Parking Services, the management of the parking structure for Lida Marina Village, and have came up with a contract that would guarantee 22 spaces from 10 a.m. until closing. Mrs. Overstreet sold in reference to valet parking, they spoke with Mr. Edmonston, the Fire Marshall and Mr. Campbell and it has been determined through the Udo Marino Village owner that they could have space and have a valet parking situation. Commissioner Tucker referred to Condition No. 3 and asked if the wine tasting 16 �q City of Newport Beach Planning Commission Minutes INDEX would be open 7 days o week but the educational seminars would be up to 3 days per week? Mr. Overstreet said it would probably be o 5 to 6 day o week type of operation. Commissioner Tucker asked staff if they looked of what is involved in a Type 42 nquor license, the application form. and the restrictions the ABC has? Mr. Campbell sold that the Police Department would know better what the ABC restrictions ore. Commissioner Tucker asked If Mr. Overstreet anticipates selling o gloss of wine to o person who happens on his premises of 9 p.m. on o Friday night who is interested in drinking and not into wine tasting? Do you contemplate selling wine by the glass in the tasting oreo? . Mr. Overstreet responded yes they do, and they hove hod 100 residents sign o petition endorsing they would like to see this type of operation. Commissioner MCDonie€ asked what Is to keep someone from stumbling in and getting three glosses of wine and hit the rood again and what is the difference between that and o bar? Mr. Overstreet responded that they are a fine wine merchant and the standard for the products they carry is raised very high. Mr. Overstreet said they own the property and have a vested interest. Chairman Selich commented that they understand what the operation is and what the clientele that he is trying to attract to his business. Commissioner Agalonion asked how detrimental would it be to their operation if the Type 42 license operating hours was restricted to 9 p.m. instead of I 1 p.m. Mr. Overstreet responded that it would get o little oppressive for adults and noted that they suggest' their clientele have o meal before they go to o wine tasting. Commissioner Agajonion asked if they were intending on offering any table service in Suite B to the seats aside from the bar? Mr. Overstreet said probably not. Chairman Selich asked if no table service would be on acceptable condition on the use permit? Mr. Overstreet said yes. Commissioner Kiser asked if they ore assuming that the wine tasting serving sizes will be typical of the serving sizes one would get in a restaurant if they were to order o gloss of wine? Or will they be more of o sample size with o few ounces of wine? Mr. Overstreet responded it would probably be o sample size. Commissioner Kiser asked if they would consider o normal retail price for the samples or would he be giving oway the samples? Mr. Overstreet said they would have at least o retail plus mark -up price. Mrs. Overstreet said the idea is to educate yourself without getting inebriated so you hove 112 ounce to on ounce of three.vvines. Commissioner Kiser suggested if they were able to lawfully restrict that wine- tasting side of the shop to be served only In I ounce maximum servings, would they hove o problem with that? Commissioner Kiser asked it they were talking about the classes only where they would receive the 3 ounces of wine? Mrs. Overstreet said not necessarily, it runs the gamut. Commissioner Gifford commented, in trying to structure something that did not 17 City of Newport Beach Planning Commission Minutes April 5, 2001 detract from their business. but gives the Commission confidence that a different operator who might come in the future, the permit would not have the latitude to have a significa'nlly different operation, Commissioner Gifford asked Mr. Overstreet if he would have any objection to a condition that required that service in the wine bar would be made in Riedel stemware. Mr. Overstreet said no and would welcome chat type of situation to ensure that wine appreciation is taking place rather than just tourism going from winery to winery for consumption. Mr. O4erstreet also suggested a requirement is made that there is a minimum $10.00 cover that could be applied towards purchase of wine from the retail aspect. Commissioner Gifford asked if they would consider a condition that they not serve beer? Mr. Overstreet responded yes. Commissioner Tucker said he would tike to clarify Condition 18 concerning the parking spaces, which is saying it they do not have a parking agreement at some point, they do not have a use permit. In other words, if they have a month to month parking agreement or one that expires in three or eight years. If they do not come back to the Commission to get a replacement use permit agreed upon, they will not have a use permit to operate. Mr. Overstreet said he understood that. Commissioner Tucker said he was not sure how he felt about requiring the applicant to have a cover charge or the type of stemware as a condition. Commissioner Gifford said that it is unusual to provide this as a condition, but the Riedel stemware alone would take care of any concerns they might have of what could happen in the future. Commissioner Gifford noted with respect to the hour of closing and said It has been her experience when a wine tasting event is over, people ringer and talk about what they might order and the idea of I f p.m. does not necessarily mean that people will still be doing the tasting but it would seem like a reasonable hour. Commissioner Gifford expressed that if they have some condition that locks someone Into a level of service that will require a certain pricing and not become a neighborhood bar, that would serve their purpose. Public Hearing Opened Christina Grace of Ltdo Island said that she has been to the Overstreets Wine Merchant in Beverly Hills and it is a lovely establishment. Ms. Grace supports it and urged the City to support it because it is for the betterment of the community. David Roster encouraged everyone to see the Wine Merchant in Beverly Hills and supports the applicant. Diana Chaumis of Lido Isle supports the applicant and urged the City to keep the sales tax in Newport Beach. 18 �ti City of Newport Beach Planning Commission Minutes Public Hearing Closed Commissioner Tucker suggested.fhot they come up with some type of resolution and conditions that would allow this use to go forward. Commissioner Kranziey expressed he felt the Overstreets would bring a quality to Lido Morino Village that they need. Commissioner Kronzley sold that he did not see anything in the conditions that would..prahibit the next person who owns this establishment from having on eating and drinking establishment. Mr. Campbell commented that he mentioned earlier about o 20 percent limitation and that is a definition in the Zoning Code for retail establishments for food and beverage sales for on -site consumption for example in a grocery store you could hove on -site consumption as long as those tronsoctions.do not exceed 20 percent and they are not defined as an eating and drinking establishment. Twenty percent limitation on transactions is something that the Overstreets can and will comply with. If it were to exceed 20 percent of their transactions, then they would be classified as on eating and drinking establishment, which is not authorized by this use permit and they could not become a bar. Commissioner Kronzley noted that it could become o bar if were o very successful liquor store. Commissioner Kronzley commented that his sympathy goes with. the Overstreets because they purchased o property at ground zero of alcohol related crimes in the City of Newport Beach. Commissioner Kranzley stated that they do want to keep revenues in the City of Newport Beach but the City spends a disproportionate amount of the budget in trying to keep the peace in District No. 15 and that is the problem in the Cannery Area and Lido Morino Village. Commissioner Kronzley expressed regret that he could not support this project in this area. Commissioner Kiser commented that the 20 percent limiloiion would naturally hove on effect on the amount of on premises consumption of wine because the applicant would wont and need to keep o close watch on what percentage was going out in their gross receipts in the tasting versus the off -sole. That would hove o limiting effect on it that they would not be eniertoining people coming in off the street-just for a gloss of wine. Commissioner Agojonian asked it there was anybody who could speak to the timilolions to the Type 42 type of license. Mr. Campbell responded that he did not see o representative from the Police Department and that he could not. Chairman Selich asked Mr. & Mrs. Overstreet to give o brief summary of the limitations on the Type 42 license. Mrs. Overstreet responded that, as for as she knew, it is limited to wine and beer only. She said their use permit would not allow beer, so it would be limited to wine only. Commissioner Agotanion asked how it would differ from the bar down the street that wonted to sell beer and wine? Mr. Overstreet commented that this goes bock to 1973 when Type 42 was originally thought up for wine stores to be able to hove on -site wine tasting. But unfortunotely, the Legislature did not restrict it to soy that the general public could not come in and buy o glass of wine or beer. That was the whole concept of this low originally. Mr. Overstreet said It is the same license that the wineries ore 19 W City of Newport Beach Planning Commission Minutes April S, 2001 ustng..Commtssloner_�,gojanian asked how it differs from a regular beer and wine license? Mr. Overstreet said that it does not. Commissioner Tucker said he would defer to the Police Department, which does not seem to believe that this particular use in this location will contribute to an alcohol related problem in the area. Commissioner Tucker said he would be supportive of this use in this location. Commissioner Kiser said he would be concerned about the cover charge and tying the applicant to a particular manufacturer that might become scarce or go out of favor. Commissioner Kiser brought up the possible limitation of evening hours of the on -site portion to bringing it back one hour to 10 p.m. so that it would restrict the potential future operator from creating a bar. Motion was made by Commissioner Kiser to approve Use Permit 2001 -005 with the following revisions to the Conditions of Approval: Commissioner Kranzley remarked that, after listening to the discussions of the other Planning Commissioners, having reviewed his notes with regards to the various limitations that have been placed and the additional limitations that have been placed. and his desire to have high quality businesses on the Peninsula, he was reversing what he said prior and will be supporting this motion. Commissioner Agajanian commented that he was concerned whether the hours ore open to the general public or whether you can be operating that wine tasting room and still have the doors closed to the public. Commissioner Agajanian asked what the Type 42 license either allow or permit you to do? Commissioner Agajanian said that he would support continuance on this project because he is not prepared. There was no answer to Commissioner Agaianion's question. Commissioner Kranzley suggested adding o Condition where receipts are reviewed annually by the City. Substitute motion for Condition No. 34 was made by Commissioner Gifford that would not require an annual audit of receipts and that the Condition would be enforced by the factual observations by the Police Department or others in the way of complaint. they would have the ability to audit and is consistent with what they do with other businesses. Commissioner Kiser accepted the substitute motion as an amendment to his motion. Ayes: McDanfei, Kiser, Selich, Gifford, Kronzley, Tucker Noes: None Abstain: Agajanian Commissioner Kranzley rec1. led Thal. F next time they have an aicoho permit, staff to have either - 111,7rrape the ABC permit or someone fron the Police Department press, ai ;$Wet question. 20 City of Newport Beach .Planning Commission Minutes April 5, 2001 EXHIBIT NO, 4 FINDINGS AND CONDITIONS OF APPROVAL FOR PA2001- 025(UP2001 -005) Findings: 1. The Land Use Element of the General Plan designates the site for "Retail and Service Commercial' use. Retail sales of alcoholic beverages and accessory wine tasting and wine educational seminars is permitted use within this commercial designation. The structure that the proposed use will occupy is legal. nonconforming with respects to the maximum floor area ratio. The proposed project does not increase the gross floor area of the building. Therefore. the proposed project is consistent with the General Plan Land Use Element and Local Coastal Program. 2, The project has been reviewed. and it has been determined. that it is categorically exempt under Class I (Existing Facilities) requirements of the California Environmental Quality Act as it permits the continued operation and minor alteration of existing facilities with negligible or no expansion of use. 3. The proposed project Is consistent with the purpose and intent of Chapter 20.89 of the Zoning Code (Alcoholic Beverage Outlets) and will not. under the circumstances of the case. be detrimental to the health. safety. peace. morals. comfort and general welfare of persons residing or working in the neighborhood or be detrimental or injurious to property or improvements in the neighborhood or the general welfare of the City and is consistent with the legislative intent of Title 20 of this Code for the following reasons: a. The primary and principal function of the proposed alcoholic beverage outlet is as a retail esfablishmenl for the sale of general alcoholic beverages for off -site consumption. On -site consumption of beer and wine is limited to wine tasting and shall be accessory and subordinate to the principal retail use. b. The primary retail use requires accessory wine tasting and wine educatian seminars. C. The accessory wine tasting may not be converted or otherwise become a restaurant bar. tavern. cocktail lounge. and night club. d. The hours of operation of the principal and accessory use is sufficiently restricted to prevent negative effects of alcohol sales and service. e. Conditions of approval have been Included which should prevent problems associated with the sale and service of alcoholic beverages. I. Off -site parking is available for the use within the Lido Marina Village parking garage and the site is not authorized as an eating or drinking 21 City of Newport Beach Planning Commission Minutes April 5, 2001 INDEX establishment as defined by the Zoning Code which could generate increased parking demand. . g. No live entertainment is permitted and a spedal events permit is required for any event outside the normal operating characteristics of the proposed alcoholic beverage outlet. The waiver of 21 parking spaces in this case will not, under the circumstances of the case, be detrimental to the health, safety, peace, morals, comfort and general welfare of persons residing or working in the neighborhood or be detrimental or injurious to property or improvements in the neighborhood or the general welfare of the City and is consistent with the legislative intent of Title 20 of this Code for the following reasons: a. The project includes a parking management plan that provides 22 parking spaces in the Lido Marina Village parking garage at all time the usels open for business. b. The project parking management plan includes the use of valet parking for in conjunction with the Lido Morind Village parking garage when the proposed educational seminars will occur. C. The project is not authorized as an eating or drinking establishment as defined by the Zoning Code which could generate increased parking demand. Conditions: The alcoholic beverage outlet is hereby defined as a retail establishment for the sale of general alcoholic beverages for off -site consumption as the primary and principal use of the project site. On- site consumption of alcoholic beverages shalt be limited to urine lasting and shall be accessory and subordinate to the principal retail use and sates shall not exceed 20 percent of gross safes. The retail use is prohibited from operation without the accessory wine tasting use. 2. The interior area authorized for on -site consumption of beer and wine in conjunction with 0 Type 42 alcohol license shall be limited to 1,263 sq. ft. as delineated on the approved floor plans as "Unit B:' The interior area authorized for the retail sales for general alcoholic beverages for off -site consumption in conjunction with a Type 21 alcohol license shall be limited to 1,328 sq. ft. as delineated on the approved floor plans as "Unit A." The development shall be in compliance with the approved floor plans dated April 5, 2001. Substantial changes to the flow plans shall require prior approval by the Planning Commission. Any increase in area of either Unit A or Unit B shall be seemed deemed substantial for the purposes of requiring review by the Planning Commission. 3. The hours of operation shall be limited to 10:00AM to 7 89RA4 11:001'M daily for the retail portion of the project and I:OOPM to 1 I:00PM daily for the wine tasting and wine educational activities. Organized 22 1 City of Newport Beach Planning Commission Minutes April S, 2001 INDEX educational seminars shall not be conducted more than 3 days per week and wine tasting, open to the general public may occur, any day during authorized hours. 4. The service for on -site consumption of beer and wine of shall be restricted to the interior of Unit A 8 as identified in Condition No. 2, unless approved by the Planning Commission, Police Department and the California Board of Alcoholic Beverage Control. 5. Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, unless the Planning Commission first approves a Use Permit. 6. The sale of distilled spirits shall not exceed 157a of gross receipts of all off - site alcohol sales. The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the city said records when requested. 7. Alcoholic beverage sales from drive -up or walk -up service windows shall be prohibited. 8. The alcoholic beverage outlet operator 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, if. directly related to the patrons of the subject alcoholic beverage outlet. If the operator fails to discourage or correct nuisances. the Planning Commission may review, modify or revoke this use permit in accordance with Chapter 20.96 of the Toning Code. 9. 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. 10. All owners, managers and employees selling alcoholic beverages shall undergo and successfully complete a certified training program in responsible methods and skills for selling alcoholic beverages. To quality 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 establishment shall comply with the requirements of these .conditions withln 180 days of the effective date of this Use Permit. 11. Records of each owner's; manager's and employee's successful completion of the required certified training program shall be maintained on the premises and shall be presented upon request by a representative 23 1� City of Newport 'Beach Planting Commission Minutes April 5, 2001 ANDEk of the City of Newport Beach. 12. Loitering. open container. and other signs specified, by the Alcoholic Beverage Control Act shalt be posted as required by the ABC. 13. this Use Permit for an alcoholic beverage outlet granted in accordance wilh the terms of this chapter (Chapter 20.89 of the Newport Beach Municipal Code) 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. 14. A special events permit is required far any event or promotional activity outside the normal operational characteristics of this retail business that would Increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special.events permit. 15. This.use permit may be reviewed, modified or revoked by the Planning Commission or City Council should they determine that the proposed uses or conditions under which it is being operated or maintained is detrimental to the public health, welfare or materially injurious to property or improvements in the vicinity or if the property is operated or maintained so as to constitute a public nuisance. 16. The applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in connection with the use may be cause for revocation of this permit. 17. Should this business or either alcohol license be sold or otherwise come under different ownership or control, any future owners, operators or assignees shag be notified of the conditions of this approval by either the current owner /operator. Future owners, operators or assignees shall submit, within 30 days of transfer ar sale of the business or alcohol license. a letter to the Planning Department acknowledging their receipt and acceptance of the limitations, restrictions and conditions of approval of this Use Permit. 18. The ownertoperator of the proposed use shall enter into an agreement to provide and maintain a minimum of 21 parking spaces within the Lido Marina Village Parking garage to be accessible at all times during the operation of the use. 19. The applicant or operator of the facility shell may provide valet attendant service for the use in conjunction with the Lido Marina Village parking garage. The applicant or operator shall prepare a valet operated parking plan to be reviewed and approved by the Pubiie City Traffic Engineer prior to the commencement of 24 City of Newport Beach Planning Commission Minutes April 5, 2001 the valet service use. 20. Delivery vehicles shall not park within the public right -of -way of Via Lido and Via Oporto, 21. Trash receptacles for patrons shall be conveniently located both inside rind outside the proposed facility. 22. Trash generated by the business be screened from view from odjoining properties except when placed for pick -ups by refuse collection agencies. 23. No outdoor loudspeaker or paging system shall be permitted in conjunction with the operation, 24. No live entertainment or dancing shall be permitted in conjunction with the permitted use. 25. All signs shall conform to the provisions of Chapter 20.67 of the Municipal Code. 26. No temporary. "sandwich" signs or similar temporary signs shall be permitted, either on -site or off -site, to advertise the restourant. 27. The project shall comply with Slate Disabled Access requirements. 28. A hondicapped assessable public restrooms are required. The restrooms must be In compliance with the. Uniform Plumbing Code and oil applicable Uniform Building Code requirements. 29. Health Department approval Is required before issuance of a building permit. 30. Where grease may be introduced into the drainage systems, grease inlercepibrs shall be installed on all fixtures as required by the Uniform Plumbing Code, unless otherwise approved by the Building Department and the Utilities Deportment. 31. The facility and related off- street parking shall conform to the requirements of the Uniform Building Code. 32. Upon evidence that noise generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code, the planning Director may require that the applicant or successor retain a qualified engineer' specializing in noise /acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures necessory in order to 25 1 of 1 HEW PoRr CITY OF NEWPORT BEACH Hearing Date: April 5; 2001 o� PLANNING DEPARTMENT Agenda Item: 5 t 3300 NEWPORT BOULEVARD u Staff Person: lames Campbell NEWPORT BEACH, CA 9265s (949) 6443210 (949) 644 -3200; FAX (949) 644 -3250 Appeal Period: 14 days REPORT TO THE PLANNING COMMISSION Project: The Wine Merchant (Dennis & Chris Overstreet, applicant) 3400 Via Lido Purpose of Application: A Use Permit for a new alcoholic beverage license (Type 21, off -sale general) in conjunction with a fine wine retail establishment. The applicant also proposes to conduct periodic on -site wine tasting seminars in the evenings for approximately 30 people with a Type 42 alcohol license. The project requires the consideration of a parking waiver. Recommended Action: Hold a public hearing and approve, modify or deny PA 2001 -025 (UP 2001 -005) General Plan: Retail and Service Commercial Zone: RSC (Retail and Service Commercial) Legal Description: Lot 2 of Tract 1235 Owner: Dennis & Chris Overstreet, Newport Beach Introduction The applicant requests to establish a fine wine retail establishment with accessory wine tasting and food preparation. In addition, the applicant proposes to conduct periodic seminars with up to 30 people in wine etiquette, wine tasting and fine wine in general. The project will be operated in two distinct areas of an existing retail/office building located at the northwest comer of Via Lido and Via Oporto adjacent to the Lido Marina Village area. The retail aspect of the project requires a Type 21 (off -site general) alcoholic beverage license and the wine tasting aspect of the project requires a Type 42 (on -sale beer and wine). The applicant's project description narrative is attached as Exhibit No. I and plans are attached as Exhibit No 5. ICI L�..� Vicinity Map PA20.01-025 (UP2001'4;005)° The VVirte: IVlercha'r[t Subject Property and Surrounding Land Uses Current Development: Retail facility within a commercially zoned block, that includes retail and office To the north: Commercially zoned block that includes retail, office and restaurants within Lido Marina Village. To the east: Commercially zoned block that includes retail, office and restaurants within Lido Marina Village. To the south: Commercially zoned block that includes retail, office, movie theater and restaurants within Via Lido Plaza Shopping Center. To the west: I Commercially zoned block that includes retail and office uses PA 2001 -025 (UP2001 -005) April 5, 2001 Page 2 Project Description The retail portion of the operation will occupy 1,328 square feet of the existing building, and is depicted on the attached plans as "Unit A ". Tenant improvements are generally limited to sales counters and display areas. The wine tasting and wine educational aspect of the project will occupy 1,263 square feet of the existing building, and is depicted on the attached plans as "Unit B ". The improvements to this area include a small residential style kitchen, tasting bar with 5 seats, display and storage areas, a cashier area and three distinct seating areas that resemble living rooms. These living room environments will seat 24 people and the total seating based upon the proposed floor plan is 29 seats. The proposed hours of operation are 10:00AM to 7:OOPM daily for the retail portion of the project and 1:OOPM to 11:OOPM daily for the wine tasting and wine educational activities, The applicant requests a Type 21 (off -sale general) license as they offer fine distilled spirits in addition to wine products. The Type 42 (on -site beer and wine) license permits on -site consumption of beer and wine only and is not associated with a restaurant. Analysis Conformance with the General Plan and the Local Coastal Program The Land Use Element of the General Plan and the Local Coastal Program Land Use Plan designate the site for "Retail Service Commercial' uses. The allowable floor area ratio for the Lido Village area is 0.5/0.75.FAR. Staff believes that the primary use of the facility is retail sales with accessory wine tasting and educational seminars. Retail sales are a permitted within the Retail Service Commercial designation. The facility is located in the Coastal Zone and staff believes the proposed project does not intensify the existing retail. Therefore, staff has determined that Coastal Commission approval is not required prior to implementation of this use permit. The project site is presently developed with a 2,591 square foot building on a 3,095 square foot lot which results in a 0.83 FAR. The building is considered legal, nonconforming and the project does not include any increase in floor area, therefore, the project can be found in compliance with the General Plan and Local Coastal Program. Zoning Ordinance Staff believes that the use is best classified as retail sales of food and beverages. Food consumption and on -site consumption of alcohol with the wine tasting operation is accessory to the retail use. The retail sales will consist of alcohol products, gourmet food and gift baskets. The primary purpose of the wine tasting and wine educational activities is to promote wine sales. The application requests that these activities be permitted 7 days a week which would provide flexibility in scheduling. The applicant indicates that seminars would occur as many as 2 to 3 times per week during the summer, primarily on weekend evenings, and infrequently during the winter months. Staff believes that the wine tasting and periodic wine educational seminars are accessory and complementary to the proposed retail use. These operational characteristics lead staff to conclude that the overall use of the site should not be classified as an eating and drinking establishment as this use classification is reserved for uses, such as restaurants and bars, that are in the business of providing food and beverage, whether for on -site or off -site consumption as a primary use. PA 2001 -025 (UP2001 -005) April 5, 2001 Page Required 'red Off - Street Parkine The project site presently provides no off -street parking and is considered legal, nonconforming. Although staff considers the use predominately as a retail use, and therefore eligible to take advantage of the legal, nonconforming parking requirement, the educational seminars can create an increased parking demand beyond a typical retail use. Clubs, lodges and assembly uses require parking based upon the number of seats (1 space per 3 seats). The parking requirement for educational facilities are unspecified but are determined through a Use Permit. Staff believes that the proposed use has similar parking demand characteristics to assembly uses, but additional parking should be considered for employees. The proposed floor plan has seating for 29 persons and employees range from 2 -6 persons. Using the 1 space per three seats and I space for each employee, a total of 16 spaces for the wine tasting/education portion of the use (29 seats /3 seats = 9.67 + 6 employees = 15.67 — 16 spaces) would be required. Since this operation occurs simultaneously with the retail use between IPM and 7PM, the peak demand could reach the sum total of the retail demand and the wine tasting/educational demand. The retail establishment occupies 1,328 sq. ft. and using a standard retail parking rate of I space per 250 sq. ft., 6 spaces would result (1,328/250 = 5.31 — 6 spaces). Since the employees would serve both uses and are included in each sub calculation, a reduction of one parking space might be appropriate. Therefore, the worst case demand may be 21 spaces when both uses operate. Staff suggests that this minimum number as spaces be established as the required parking for this unusual use. The site has access to 4 free parking spaces at all times within the Lido Marina Village parking garage pursuant to a 1974 off -site parking agreement. This agreement also provides access to 33 additional non - exclusive spaces for self parking as needed. The agreement terminates in December of 2008. Staff received a proposal from California Parking Services, the operator of the Lido Marina Village parking garage, to the applicant on March 27, 2001. The proposal outlines a new off -site parking arrangement with the operator of the garage. The applicant and operator of garage are proposing to provide 22 self parking spaces in the garage at all times at a cost to the applicant of $1,500 per month. In addition, the applicant proposes to have valet parking services from 6PM to I I PM daily with two attendants Friday and Saturday and one attendant Sunday through Thursday. A $3 fee valet service will be charged to the applicant's customers with a validation limit of two hours. The proposal between the California Parking Services the applicant appears to be a month to month arrangement. A formal agreement will need to be executed between Lido Marina Village and the applicant as the parking service does not have the authority to enter to an agreement according to the management company. In order to approve the proposed use, a parking waiver must be considered as the proposed off -site parking arrangement does not meet the criteria for an off -site parking agreement set forth in Section 20.66.080 as the parking arrangement involves the parking service and not the property owner. Section 20.66. 100 establishes the procedure and findings for consideration of a parking waiver. The one of the following findings must be made in order to approve the proposed alcoholic beverage outlet. A municipal parking facility is so located as to be useful in connection with the proposed use or uses on the site or sites. PA 2001-025 (UP2001 -005) April 5, 2001 Page 4 The closest municipal parking lot is located at the comer of Villa Way and 30 street and is not located in close proximity as to be useful to the project. 2. The site is subject to two or more uses and the maximum parking requirements for such uses do not occur simultaneously. The site does have more than one use, but the other two uses operate at similar hours of operation, and therefore this finding cannot be made. The use will rely upon the Lido Marina Village parking garage which does have a variety of mixed -uses that operate at different hours. Most non -food uses, typically close by 6PM and the applicants use of the garage after this time for educational seminars should not create a conflict. A parking management plan for the site has been approved by the Planning Commission pursuant to Section 20.66. 100 (B). The applicant's off -site parking arrangement and valet parking proposal can be considered as a parking management plan and can be used to make this finding for approval of the parking waiver. The characteristics of the parking management plan are discussed above and as noted, it does not secure parking for the long term. 4. The Planning Commission makes the following findings: a. The parking demand will be less than the requirement in Section 20.66.030. b. The probable long -term occupancy of the building or structure, based on its design, will not generate additional parking demand. In order to make this finding, the commission will need to find that the parking demand will be no more than a typical retail parking demand for the same space due to the legal, nonconforming status of the parking. Previously, staff identified a potential peak parking demand of 16 spaces for the educational component of the use. The 1,268 square foot space would require 6 spaces at the typical retail parking ratio (1,263/250 = 5.052 — 6 spaces). It is not likely that 35 people (29 patrons and 6 employees) will generate a parking demand no greater than 6 spaces. Therefore, this finding cannot be made. The latest parking survey prepared in 1998 for the Lido Marina Village parking garage puts it well over allocated during the evening and under utilized during the day. The parking analysis for the garage is attached as Exhibit No. 2. This parking survey is out -dated as the Thunderbird and the Buzz are presently closed, with only the Buzz potentially eligible to re -open. Recent inquiries have been made regarding the conversion of the space formerly occupied by the Thunderbird restaurant to office use. What impact that would have on the availability of parking will require additional review by staff when the specifics of the proposal are known. Staff contacted California Parking Service requesting data on the actual usage of the lot, but as of the writing of this report, no hard data is available on the actual usage of the garage over time. Staff has recently observed the garage and believes that the garage has sufficient unused capacity at this time to serve the project. If the former Thunderbird and Buzz were to reopen, evening parking availability may be impacted. According to Lido Marina Village management, the parking structure only gets full during special community events like the Christmas Boat Parade. PA 2001 -025 (UP2001 -005) Apri15, 2001 Page 5 Alcoholic Beverage Ordinance The use involves the sale and consumption of alcohol, and therefore, a Use Permit is required that is subject to the provisions of the Alcoholic Beverage Outlet ordinance as set forth in Chapter 20.89 of the Municipal Code. On June 8, 1998, the City Council adopted Chapter 20.89 of the Municipal Code, the Alcoholic Beverage Outlet (ABO) Ordinance. The purpose of the ordinance is to preserve a healthy environment for residents and businesses by establishing a set of consistent standards for the safe operation of alcoholic beverage retail outlets.. Chapter 20.89 is intended to prevent alcohol - related problems. The chapter provides a set of additional tools to help reduce the costly and harmful effects of irresponsible alcohol sales and consumption on local businesses, residents, law enforcement, and various other resources. The ABO Ordinance requires a Use Permit for all new alcoholic beverage outlets and revisions to existing licenses and requires that the Planning Commission consider the following factors when reviewing a request for a use permit: 1. Whether the use serves public convenience or necessity. 2. The crime rate in the reporting district and adjacent reporting districts as compared to other areas in the City. 3, The number ofalcohal licenses per capita in the reporting district and in adjacent reporting districts as compared to the county -wide average. 4. The numbers of alcohol - related calls for service, crimes or arrests in the reporting district and in adjacent reporting districts. 5. The proximity of the alcoholic beverage outlet to residential districts, day care centers, park and recreation facilities, places of religious assembly, and schools. The following charts provide 1998 data related to factors 2, 3 and 4. Maps showing the census tracts and Police Reporting districts with the project site highlighted are attached as Exhibit C. License Concentration PA 20 01-025 (UP2001-005) April 5, 2001 Page6 Census Tract Projected Based on IVa.635.00 Oran a Coma avers e 1990P ulation: 8182. mu 7 ABC Licenses: Total licenses 59 (1 per 104 persons) (1 per 893 persons) PA 20 01-025 (UP2001-005) April 5, 2001 Page6 i Crime Statistics "Part 1 Crimes" are homicide, forcible rape, robbery, aggravated assault, burglary, larceny -theft, auto theft, and arson All other crimes are "Part 2 crimes." The "Crime Rate" the number of crimes per 100,000 people. "Alcohol - related arrest" means the offender had been drinking prior to the incident for which they were arrested. Public Convenience or Necessity. City Council Policy K -7 provides criteria for situations when the public convenience or necessity will not be served. The policy states that the public convenience or necessity will not be served with the approval of a new, upgraded or transferred license for a bar within an over concentrated or high crime area. Although the project includes a 5 -seat wine tasting bar, staff believes that the proposed project is primarily retail oriented with the use of the bar accessory. Therefore policy K -7 does not apply. Currently, there are 71 establishments providing alcoholic beverage service in the area (see Table 1 below). It can be argued that there are an abundance of establishments providing alcoholic beverage service in this area and that the public convenience or necessity would not be served by pennitting another operation. The proposed operation is not a typical alcoholic beverage outlet and very few similar operations exist. The propose operation provides a benefit to the public as it promotes responsible alcohol consumption and education. Each of these views must be balanced by the other four factors to be evaluated by the Planning Commission for this use permit. Based upon all the information assessed in these factors, the Planning Commission may determine whether this approval is necessary to serve the public convenience or necessity. Table I Alcoholic Beverage Service Licenses Subject Reporting Adjacent Reporting Adjacent Reporting Adjacent Reporting City-Wide District No. 15 District No. 13 District No. 16 Crlrrres Part 1: 2,527 323 131 142 Part 2: 3,247 654 187 - 246 Total 5,774 977 318 388 Crime Rate: 3,510.1 11 262.2 6 084.53 5568.63 Arrests Total Arrests: 3,515 839 176 255 Alcohol- Related: 33.%% 50.3 ° /a 31.82% 47.71% "Part 1 Crimes" are homicide, forcible rape, robbery, aggravated assault, burglary, larceny -theft, auto theft, and arson All other crimes are "Part 2 crimes." The "Crime Rate" the number of crimes per 100,000 people. "Alcohol - related arrest" means the offender had been drinking prior to the incident for which they were arrested. Public Convenience or Necessity. City Council Policy K -7 provides criteria for situations when the public convenience or necessity will not be served. The policy states that the public convenience or necessity will not be served with the approval of a new, upgraded or transferred license for a bar within an over concentrated or high crime area. Although the project includes a 5 -seat wine tasting bar, staff believes that the proposed project is primarily retail oriented with the use of the bar accessory. Therefore policy K -7 does not apply. Currently, there are 71 establishments providing alcoholic beverage service in the area (see Table 1 below). It can be argued that there are an abundance of establishments providing alcoholic beverage service in this area and that the public convenience or necessity would not be served by pennitting another operation. The proposed operation is not a typical alcoholic beverage outlet and very few similar operations exist. The propose operation provides a benefit to the public as it promotes responsible alcohol consumption and education. Each of these views must be balanced by the other four factors to be evaluated by the Planning Commission for this use permit. Based upon all the information assessed in these factors, the Planning Commission may determine whether this approval is necessary to serve the public convenience or necessity. Table I Alcoholic Beverage Service Licenses Subject Reporting Adjacent Reporting Adjacent Reporting District No. 15 District No. 13 District No. 16 *Number of active ABC Licenses 1 59 7 5 *The Number of active ABC Bcenses is the total of all types of licenses known to the Newport Beach police department as of the date of this document 2. Crime Rate. There were 5,774 crimes reported to the Police Department in 1998, of which 2,527 were Part One Crimes. The remaining 3,247 crimes were Part Two Crimes that include alcohol related arrests. Crime statistics that exceed the citywide average by 20% are considered significant pursuant to City Council Policy K -7. The reporting district that the project is located exceeds the citywide average by 320 %. The Police Department has reviewed the proposed project and has stated that they have no serious concerns with the proposed operation. However, the Police Department also has stated that the project must be considered in light of the larger issue of the intensification of alcohol and related uses on the Balboa Peninsula, especially in the Cannery Village area, which has experienced resident �5 PA 2001 -M (UP2001 -005) April 5, 2001 Page 7 complaints regarding alcoholic beverage outlets. The Police Department believes that this demonstrates the disproportionate impact alcohol related offenses continues to have on their workload and on the quality of life in the community. However, the Police Department does not object to the proposed project as described and regulated. I Over Concentration. Census Tract 635.00 currently has a ratio of liquor licenses to population that exceeds the average ratio of Orange County. Within the reporting district, there currently are 59 alcoholic beverage outlets, which establishes a ratio of 1 liquor license per 104 persons. This ratio is significantly higher than the average ratio of Orange County, which is 1 license per 893 persons. This is due to the fact that the area is. predominately commercial and has a high number of eating and drinking establishments. The ratio of alcoholic beverage ,licenses to population also constitutes an `undue concentration" of licenses under the provisions of Section 23958.4 of the California Business and Professions Code. Therefore, the ABC is required to deny the application for the license unless it is determined that public convenience or necessity would be served by its issuance. The Police Department is especially concerned about the concentration of ABC licenses on the Balboa Peninsula. Therefore, the Police Department is recommending that the proposed project be reviewed against the greater issue of intensifying alcohol usage on the peninsula. 4. Alcohol Related Arrests & Calls for Service. Alcohol related arrests means the offender had been drinking prior to the incident for which they were arrested. There were 839 arrests in Reporting District No. 15 during 1999 as compared to the 3,515 arrests citywide. Of the arrests made in Reporting District No. 15, 50.3% were alcohol - related (422 total alcohol related arrests), while 34% of the arrests citywide were alcohol - related. (1,194 total alcohol related arrests). At public hearings for other projects in the Cannery Village and McFadden Square area, residents and business operators have reported a pattern of public nuisance behavior. Generally, this behavior is conducted by patrons of area restaurants and bars as they arrive, depart, or travel between establishments. Public nuisances related to alcohol service has been a historic problem in the Lido Marina Village due to various nightclubs, but all the establishments of this type are no longer in operation. The ABO Ordinance requires that the applicant take reasonable steps to discourage and correct objectionable conditions that constitute a nuisance in parking areas, sidewalks, alleys and other areas during business hours. However, in this area, with a high number of alcoholic, beverage outlets, it is difficult to determine which establishment is responsible for public nuisance behavior in public areas. Planning and Police Department staff do not believe that the proposed establishment as described and conditioned will contribute to any alcohol - related problems in the area. 5. Adjacent Uses. There are no day care centers, schools, or park and recreation facilities in the vicinity of the project site. There are few residences in the general vicinity of the project site, but none that directly abut the project site. The site is surrounded by commercial uses and staff does not believe that the proposed use retail sales of alcoholic beverages and accessory uses will prove detrimental to the surrounding commercial uses. L PA 2001 -025 (UP2001 -005) ApHI 5, 2001 Page 8 The last remaining issue related to this request is future operators. A future operator might not have the same objectives and principals that the applicant has. Use Permits run with the land and not with an individual. As long as a future operator abides by the parameters of the Use Permit, continued operation is permitted. Major changes in the operational characteristics will require Planning Commission review of a new Use Permit. Staff has structured this Use Permit to permit the on -site consumption of beer and wine as an accessory use to the retail establishment, and the conditions permit wine tasting only. Therefore, the use cannot become an eating and drinking establishment, bar or tavern without the approval of a new Use Permit. Staff believes that the city would be adequately protected from future use of the on -site beer and wine license. The off-site alcohol sales use is more difficult to regulate. The only thing that distinguishes the applicant's proposed use and regular liquor store is product quality and the reputation of the applicant. A Use Permit does not vest in an individual, and product quality is not something the City has regulated in the past. Staff does not recommend initiating a product quality condition in this case as the regulation alcohol of sales is within the jurisdiction of the Alcoholic Beverage Control Board. The Planning Commission should consider this permit as authorizing what it could become and that is typical liquor store. Staff has included a provision in the conditions of approval which requires that the retail use must conduct the accessory wine tasting use. Separate operation of the uses would require prior approval by the Planning Commission of an amendment to the Use Permit. Staff has also added a condition that the sales of distilled spirits shall not exceed 15% of transactions. Mandating these operational characteristics further limits the use to the applicant's proposal and makes re -use of the alcohol license for a typical liqour store. Environmental Compliance (California Environmental Quality Act). It has been determined that the project is categorically exempt under Class 1 (Existing Facilities). This exemption permits the continued operation and minor alteration of existing facilities with negligible or no expansion of use. Staff believes that the proposed project is eligible for this consideration. Recommendations Section 20.91.050 of the Newport Beach Municipal Code provides that in order to grant any use permit, the Planning Commission shall find that the establishment, maintenance or operation of the use or building applied for will not, under the circumstances of the particular case, be detrimental to the health, safety, peace, morals, comfort, and general welfare of persons residing or working in the neighborhood of such proposed use or be detrimental or injurious to property and improvements in the neighborhood or the general welfare of the City. Staff believes that the facts in this case can support a finding that the proposed alcohol - related use would be detrimental to the area. The public convenience or necessity might not be served by the new licenses allowing retail sales of alcoholic beverage products due to the number of alcohol - related arrests and the over - concentration of alcoholic beverage outlets in the area. g1 PA 2001-025 (UP2001 -005) April 5, 2001 Page 9 The Planning Commission could also find that typical issues associated with alcohol sales and consumption can be adequately addressed through conditions on the operation through the Use Permit. The findings and conditions of approval proposed are designed to provide the highest level of protection for the city by requiring the nature of the operation remain substantially similar to the applicant's request. Submitted by: PATRICIA L. TEMPLE Planning Director Exhibits Prepared by: JAMES W. CAMPBELL Senior Planner 1. Project description and justification 2. Parking inventory for Lido Marina Village 3. Map of police reporting districts and census tracts 4. Findings and conditions of approval 5. Findings for denial 6. Floor plans \NIS_I\SYS\ USERS\ PLMSHAREMPA 's\PA2001 -02SUP2001 -005 xpt.dm PA 2001- 025(UP2001 -005) April 5, 2001 Page 10 i' k EXHIBIT NO.4 FINDINGS AND CONDITIONS OF APPROVAL FOR PA2001- 025(UP2001 -005) Findings: The Land Use Element of the General Plan designates the site for "Retail and Service Commercial' use. Retail sales of alcoholic beverages and accessory wine tasting and wine educational seminars is permitted use within this commercial designation. The structure that the proposed use will occupy is legal, nonconforming with respects to the maximum floor area ratio. The proposed project does not increase the gross floor area of the building. Therefore, the proposed project is consistent with the General Plan Land Use Element and Local Coastal Program. 2. The project has been reviewed, and it has been determined that it is categorically exempt under Class 1 (Existing Facilities) requirements of the California Environmental Quality Act as it permits the continued operation and minor alteration of existing facilities with negligible or no expansion of use. 3. The proposed project is consistent with the purpose and intent of Chapter 20.89 of the Zoning Code (Alcoholic Beverage Outlets) and will not, under the circumstances of the case, be detrimental to the health, safety, peace, morals, comfort and general welfare of persons residing or working in the neighborhood or be detrimental or injurious to property or improvements in the neighborhood or the general welfare of the City and is consistent with the legislative intent of Title 20 of this Code for the following reasons: a. The primary and principal function of the proposed alcoholic beverage outlet is as a retail establishment for the sale of general alcoholic beverages for off -site consumption. On -site consumption of beer and wine is limited to wine tasting and shall be accessory and subordinate to the principal retail use. b. The primary. retail use requires accessory wine tasting and wine education seminars. C. The accessory wine tasting may not be converted or otherwise become a restaurant bar, tavern, cocktail lounge, night club. d. The hours of operation of the principal and accessory use is sufficiently restricted to prevent negative effects of alcohol sales and service. e. Conditions of approval have been included which should prevent problems associated with the sale and service of alcoholic beverages. f. Off -site parking is available for the use within the Lido Marina Village parking garage and the site is not authorized as an eating or drinking establishment as defined by the Zoning Code which could generate increased parking demand. te. __No live entertainment is permitted and a special events permit is required for any event outside the normal operating characteristics of the proposed alcoholic beverage outlet. 0 4. The waiver of 21 parking spaces in this case will not, under the circumstances of the case, be detrimental to the health, safety, peace, morals, comfort and general welfare of persons residing or working in the neighborhood or be detrimental or injurious to property or improvements in the neighborhood or the general welfare of the City and is consistent with the legislative intent of Title 20 of this Code for the following reasons: a. The project includes a parking management plan that provides 22 parking spaces in the Lido Marina Village parking garage at all time the use is open for business. b, The project parking management plan includes the use of valet parking for in conjunction with the Lido Manna Village parking garage when the proposed educational seminars will occur. C. The project is not authorized as an eating or drinking establishment as defined by the Zoning Code which could generate increased parking demand. Conditions: The alcoholic beverage outlet is hereby defined as a retail establishment for the sale of general alcoholic beverages for off -site consumption as the.primary and principal use of the project site. On -site consumption of beer and wine shall be limited to wine tasting and shall be accessory and subordinate to the principal retail use. The retail use is prohibited from operation without the accessory wine tasting use. 2. The interior area authorized for on -site consumption of beer and wine in conjunction with a Type 42 alcohol license shall be limited to 1,263 sq. ft. as delineated on the approved floor plans as "Unit B." The interior area authorized for the retail sales for general alcoholic beverages for off -site consumption in conjunction with a Type 21 alcohol license shall be limited to 1,328 sq. ft. as delineated on the approved floor plans as "Unit A." The development shall be in compliance with the approved floor plans dated April 5, 2001. Substantial changes to the floor plans shall require prior approval by the Planning Commission. Any increase in area of either Unit A or Unit B shall be seemed substantial for the purposes of requiring review by the Planning Commission. 3. The hours of operation shall be limited to I O:OOAM to 7:OOPM daily for the retail portion of the project and I:OOPM to 11:OOPM daily for the wine tasting and wine educational activities. Organized educational seminars shall not be conducted more than 3 days per week and wine tasting, open to the general public may occur, any day during authorized hours. 4. The service for on -site consumption of beer and wine of shall be restricted to the interior of Unit A as identified in Condition No. 2, unless approved by the Planning Commission, Police Department and the California Board of Alcoholic Beverage Control. 5. Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, unless the Planning Commission first approves a Use Permit. 6. The sale of distilled spirits shall not exceed 15% of gross receipts of all off -site alcohol sales. The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the city said records when requested. qb Alcoholic beverage sales from drive -up or walk -up service windows shall be prohibited. 8. The alcoholic beverage outlet operator 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, if directly related to the patrons of the subject alcoholic beverage outlet. If the operator fails to discourage or correct nuisances, the Planning Commission may review, modify or revoke this use permit in accordance with Chapter 20.96 of the Zoning Code. 9. 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. 10. All owners, managers and employees, selling alcoholic beverages shall undergo and successfully complete a certified training program in responsible methods and skills for 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 establishment shall comply with the requirements of these conditions within 180 days of the effective date of this Use Permit. 11. Records of each owner's, manager's and employee's successful completion of the required certified training program shall be maintained on the premises and shall be presented upon request by a representative of the City of Newport Beach. 12. Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act shall be posted as required by the ABC. 13. This Use Permit for an alcoholic beverage outlet granted in accordance with the terms of this chapter (Chapter 20.89 of the Newport Beach Municipal Code) 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. 14. A special events permit is required for any event or promotional activity outside the normal operational characteristics of this retail business that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. 15. This use permit may be reviewed, modified or revoked by the Planning Commission or City Council should they determine that the proposed uses or conditions under which it is being operated or maintained is detrimental to the public health, welfare or materially, injurious to property .or improvements in the vicinity or if the property is operated or maintained so as to constitute a public nuisance. 16. The applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in connection with the use may be cause for revocation of this permit. 17. Should this business or either alcohol license be sold or otherwise come under different ownership or control, any future owners, operators or assignees shall be notified of the q` conditions of this approval by either the current owner /operator. Future owners, operators or assignees shall submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations, restrictions and conditions of approval of this Use Permit. 18. The owner /operator of the proposed use shall enter into an agreement to provide and maintain a minimum of 21 parking spaces within the Lido Marina Village Parking garage to be accessible at all times during the operation of the use. 19. The applicant or operator of the facility shall provide valet attendant service for the use in conjunction with the Lido Marina Village parking garage. The applicant or operator shall prepare a valet operated parking plan to be reviewed and approved by the Public Works Department prior to the commencement of the use. 20. Delivery vehicles shall not park within the public right -of -way of Via Lido and Via Oporto. 21. Trash receptacles for patrons shall be conveniently located both inside and outside the proposed facility. 22. Trash generated by the business be screened from view from adjoining properties except when placed for pick -ups by refuse collection agencies. 23. No outdoor loudspeaker or paging system shall be permitted in conjunction with the operation. 24. No live entertainment or dancing shall be permitted in conjunction with the permitted use. 25. All signs shall conform to the provisions of Chapter 20.67 of the Municipal Code. 26. No temporary "sandwich" signs or similar temporary signs, shall be permitted, either on -site or ofd site, to advertise the restaurant. 27. The project shall comply with State Disabled Access requirements. 28. A handicapped assessable public restrooms are required. The restrooms must be in compliance with the Uniform Plumbing Code and all applicable Uniform Building Code requirements. 29. Health Department approval is required before issuance of a building permit. 30. Where grease may be introduced into the drainage systems, grease interceptors shall be installed on all fixtures as required by the Uniform Plumbing Code, unless otherwise approved by the Building Department and the Utilities Department. 31. The facility and related off-street parking shall conform to the requirements of the Uniform Building Code. 32. Upon evidence that noise generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code, the Planning 1 , Director may require that the applicant or successor retain a qualified engineer specializing in noise /acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures necessary in order to insure compliance. 33. The operator facility shall be responsible for the control of noise generated by the subject facility. The noise generated by the proposed use shall comply with the provisions of Chapter 10.26 of the Newport Beach Municipal Code. The maximum noise shall be limited to no more than depicted below for the specified time periods unless the ambient noise level is higher: Between the hours of 7:OOAM andt10:00PM Between the hours of 7:OOAM and 10:00PM Location Interior Exterior Interior Exterior Residential Property 45dBA 55dBA 40dBA 50dBA Residential Property located within 100 feet of a commercial property 45dBA 60dBA 45dBA 50dBA Mixed Use Property 45dBA 60dBA 45dBA 60dBA Commercial Property N/A 65dBA N/A 60dBA EmBrr No. 5 FINDINGS FOR DENIAL PA2001- 025(UP2001 -005) FINDINGS: The project site is located within Newport Beach Police Reporting District (RD) No. 15 and the proposed project is a new alcoholic beverage outlet. The outlet includes a Type 41 license for on -site consumption of beer & wine not in conjunction with a bona fide restaurant and a Type 21 license for the retail sale of general alcoholic beverages for off - site consumption. The granting of Use Permit No. 2001 -005 does not serve the public's convenience or necessity due to the following factors: a. Within RD No. 15, there were 5,774 crimes reported to the Police Department in 1998, of which 3,247 crimes were Part Two Crimes that include alcohol related arrests. The crime rate for this RD is 11,262.2 crimes per 100,000 people and the crime rate for entire city is 3510.1 crimes per 100,000 people. The crime rate within the reporting district exceeds the citywide average by 320 %. Due to the strong correlation between higher crime rates and availability of alcohol, upgrading the existing alcoholic beverage service in this area may contribute to increased crime. b. The proposed project is located in Census Tract 635.00, which has a ratio of alcoholic beverage licenses to population that is above the average ratio of Orange County. Within the reporting district, there currently are 59 alcoholic beverage outlets which establishes a ratio of 1 liquor license per 104 persons. This ratio is significantly higher than the average ratio of Orange County, which is 1 license per 893 persons. This constitutes an "undue concentration of licenses under the provisions of Section 23958.4 of the California Business and Professions Code. C. There were 839 arrests in Reporting District No. 15 during 1999 as compared to the 3,515 arrests citywide. Of the arrests made in Reporting District No. 15, 50.3% were alcohol - related (422 total alcohol related arrests), while 34% of the arrests citywide were alcohol- related. (1,194 total alcohol related arrests). d. The proposed parking management plan using the Lido Marina Village parking garage is insufficient to meet the parking demands of the proposed project 2. Due to the concentration of alcoholic beverage outlets, higher than average crime rates and their impact on the Lido Village area, and because the public convenience or necessity would not be served, the proposed project would be detrimental to the health, safety, peace, morals, comfort, and general welfare of persons residing or working in the neighborhood of such proposed use and would be detrimental or injurious to property and improvements in the neighborhood or the general welfare of the City. III 3. The proposed use can generate a parking demand as high as 21 parking spaces when all aspects of the proposed use occur simultaneously and the project site has no on -site parking. The proposed parking management plan using a combination of self parking and valet parking through the use of a private off -site parking agreement within the Lido Marina Village does not provide necessary long term parking. q5 �OWPORl CITY OF NEWPORT BEACH o ° PLANNING DEPARTMENT 3300 NEWPORT BOULEVARD NEWPORT BEACH, CA 92658 (949) 644 -3200; FAX (949) 644 -3250 Hearing Date: Agenda Item No.: Staff Person. SUPPLEMTAL REPORT TO THE PLANNING COMMISSION April 5, 2001. 5 James Campbell (949) 644 -3210 Project: The Wine Merchant (Dennis & Chris Overstreet, applicant) 3400 Via Lido Purpose of 14 Application: A Use Permit for a new alcoholic beverage license (Type 21, off -sale general) in conjunction with a fine wine retail establishment- The applicant also proposes to conduct periodic on -site wine tasting seminars in the evenings for approximately 30 people with a Type 42 alcohol license. The project requires the consideration of a parking waiver. Discussion Staff inadvertently provided 1998 crime statistics for this item when 1999 statistics are available. The following discussion should be referenced for the analysis of the request pursuant to the Alcoholic Beverage Outlet (ABO) Ordinance and the analysis contained in the previous staff report discarded. The findings for project denial also have been corrected to reflect the revised information below. Staff also attached the incorrect Lido Village parking inventory as Exhibit No.2 to the original report. The latest inventory, attached as Exhibit No. 2 of this report, does not change the fact that, on paper, the parking structure operates at a deficit during the daytime and a surplus during the night. The applicant's educational seminars generally occur in the evenings during the week. Occasional sessions occur on weekends but generally only during the day. Please note that the actual parking demand or use of the available spaces is not the same thing as the required parking. which is reflected in the inventory. Parking availability has only been a problem during unusual events such as the Christmas Boat parades, although the cost for parking in the structure would tend to reduce demand for parking leading some patrons to consider "poaching" free parking in nearby parking lots. Alcoholic Beverage Ordinance The use involves the sale and consumption of alcohol, and therefore, a Use Permit is required that is subject to the provisions of the Alcoholic Beverage Outlet ordinance as set forth in Chapter 20.89 of the Municipal Code. On June 8, 1998, the City Council adopted Chapter 20.89 of the Municipal Code, the Alcoholic Beverage Outlet (ABO) Ordinance. The purpose of the ordinance is to preserve a healthy environment for residents and businesses by establishing a set of consistent standards for the safe operation of alcoholic beverage retail outlets. Chapter 20.89 is intended to prevent alcohol - related problems. The chapter provides a set of additional tools to help reduce the costly and 0 3 harmful effects of irresponsible alcohol sales and consumption on local businesses, residents, law enforcement, and various other resources. The ABO Ordinance requires a Use Permit for all new alcoholic beverage outlets and revisions to existing licenses and requires that the Planning Commission consider the following factors when reviewing a request for a use permit: 1. "ether the use serves public convenience or necessity. 2. The crime rate in the reporting district and adjacent reporting'. districts as compared to other areas in the City. 3. The number of alcohol licenses per capita in the reporting district and in adjacent reporting districts as compared to the county -wide average. 4. The numbers of alcohol - related calls for service, crimes or arrests in the reporting district and in adjacent reporting districts. 5. The proximity of the alcoholic beverage outlet to residential districts, day care centers, park and recreation facilities, places of religious assembly, and schools. The following charts provide 1999 data related to factors 2, 3 and 4. Maps showing the census tracts and Police Reporting districts with the project site highlighted are attached to the Planning Commission staff report dated April 5, 2001. Public Convenience or Necessity. City Council Policy K -7 requires that the Police Department make a public convenience and necessity finding as the project site is located within an over concentrated and higher than average crime area. The policy also provides criteria for situations when the public convenience or necessity will not be served. The policy states that the public convenience or necessity will not be served with the approval of a new, upgraded or transferred license for a bar within an over concentrated or high crime area. Although the project includes a 5 -seat wine tasting bar, staff believes that the proposed project is primarily retail oriented with the use of the bar accessory. With this determination, the portion of Policy K -7 that prohibits a new bar in an over concentrated or high crime area does not apply. The Planning Commission also must make a finding that the project serves the public's convenience and necessity if the Use Permit is to be approved. Currently, there are 66 establishments providing alcoholic beverage service in the area (see table below). It can be argued that there are an abundance of establishments providing alcoholic beverage service in this area and that the public convenience or necessity would not be served by permitting another operation. The proposed operation is not a typical alcoholic beverage outlet and very few similar operations exist. The propose operation provides a benefit to the public as it is a' fine wine establishment providing wine education sessions and the City does not presently have such an operation in the area. Each of these views must be balanced by the other four factors to be evaluated by the Planning Commission for this use permit. Based upon all the information assessed in these factors, the Planning Commission may determine whether this approval is necessary to serve the public convenience or necessity. PA 2001 -025 (UP2001 -005) Supplemental "t1 April 5, 2001 Page 2 2. Crime Rate. The following table shows the crime statistics for 1999. (1) "Part 1 Crimes" are homicide, forcible tape, robbery, aggravated assault, burglary, larceny -theft, auto theft, and arson All other crimes are "Part 2 crimes," (2) The "Crime Rate" the number of crimes per 100,000 people. (3) Crime rates based upon crimes during 1999 compiled by NBPD and 1999 population projection from the Population Research Unit of the California State Department of Finance. (4) Crime ones based upon crimes compiled by NBPD and 1990 Census population for the reporting districts prepared by the Newport Beach Planning Department. (5) Newport Beach Police indicate that the total arrests within each Reporting District are not available at this time due to a mid- year reporting software change and software problems. There were 6,041 crimes reported to the Police Department in 1999, of which 2,623 were Part One Crimes. The remaining 3,418 crimes were Part Two Crimes. Crime statistics that exceed the citywide average by 20% are considered significant pursuant to City Council Policy K -7. The Part 1 crime rate for RD 15 is 210% above the citywide Part 1 crime rate. The Part 2 crime rate is 643% above the citywide Part 2 crime rate. Additionally, the Part 1 crime rate decreased from 1998 to 1999 by 34.1% and the Part 2 crime rate increased from 1998 to 1999 by 22.1 %. Both two adjacent reporting districts analyzed experienced a decrease in the Part 1 crime rate (RD 13 — 57.3 %, RD 16 — 20.4 %). The Part 2 crime rate fluctuated in the two adjacent reporting districts with RD 13 decreasing by 6.3% and RD 16 increasing by 18.3 %. It should be noted that the crime rate within the three reporting districts studied was derived using the 1999 crime figures and 1990 Census population counts. The population has probably increased since 1990, which could result in a modest overstatement of the crime rate. There is no other reliable population estimates for each reporting district as the police reporting districts do not correspond to conventional Census geography. When the new Census numbers are released at the block level within the next few years, more reliable population numbers for a reporting district will be available. The Police Department states that the project must be considered in light of the larger issue of the intensification of alcohol and related uses on the Balboa Peninsula, especially in the Lido area. This area has experienced limited resident complaints regarding alcoholic beverage outlets and problems historically have been created by bars and nightclubs. The Police Department believes that alcoholic beverage outlets are a contributing factor to a disproportionate level of crime in the area and this fact continues to have a significant impact on their workload and on PA 2001 -025 (UP2001 -005) Supplemental "6 April 5, 2001 Page 3 Subject Reporting Adjacent Reporting Adjacent Reporting ----70 -Wide District No. 15 District No. 13 District No. 16 Crimes (1) Part L 2,623 213 65 113 Part 2: 3,418 840 176 301 Total: 6,041 1,053 241 414 Crime Rate: (2) Part I:. 3,544.59 (3) 7,426.8(4) 2,601(4) 4,431.4(4) Part2: 4,618.92 3 29 288.7 4 8,174.6(4) 11 803.9 4 Arrests Total Arrests: 3,290 Unknown (5) Unknown (5) Unknown (5) DUI /Drunk arrests: 1,667 624 46 249 DUUDrunk %: 50 -66% 37.4% of citywide 2.75% of citywide 14.9% of citywide DUI /Drunk arrests DUUDnmk arrests DUI/Drunk arrests (1) "Part 1 Crimes" are homicide, forcible tape, robbery, aggravated assault, burglary, larceny -theft, auto theft, and arson All other crimes are "Part 2 crimes," (2) The "Crime Rate" the number of crimes per 100,000 people. (3) Crime rates based upon crimes during 1999 compiled by NBPD and 1999 population projection from the Population Research Unit of the California State Department of Finance. (4) Crime ones based upon crimes compiled by NBPD and 1990 Census population for the reporting districts prepared by the Newport Beach Planning Department. (5) Newport Beach Police indicate that the total arrests within each Reporting District are not available at this time due to a mid- year reporting software change and software problems. There were 6,041 crimes reported to the Police Department in 1999, of which 2,623 were Part One Crimes. The remaining 3,418 crimes were Part Two Crimes. Crime statistics that exceed the citywide average by 20% are considered significant pursuant to City Council Policy K -7. The Part 1 crime rate for RD 15 is 210% above the citywide Part 1 crime rate. The Part 2 crime rate is 643% above the citywide Part 2 crime rate. Additionally, the Part 1 crime rate decreased from 1998 to 1999 by 34.1% and the Part 2 crime rate increased from 1998 to 1999 by 22.1 %. Both two adjacent reporting districts analyzed experienced a decrease in the Part 1 crime rate (RD 13 — 57.3 %, RD 16 — 20.4 %). The Part 2 crime rate fluctuated in the two adjacent reporting districts with RD 13 decreasing by 6.3% and RD 16 increasing by 18.3 %. It should be noted that the crime rate within the three reporting districts studied was derived using the 1999 crime figures and 1990 Census population counts. The population has probably increased since 1990, which could result in a modest overstatement of the crime rate. There is no other reliable population estimates for each reporting district as the police reporting districts do not correspond to conventional Census geography. When the new Census numbers are released at the block level within the next few years, more reliable population numbers for a reporting district will be available. The Police Department states that the project must be considered in light of the larger issue of the intensification of alcohol and related uses on the Balboa Peninsula, especially in the Lido area. This area has experienced limited resident complaints regarding alcoholic beverage outlets and problems historically have been created by bars and nightclubs. The Police Department believes that alcoholic beverage outlets are a contributing factor to a disproportionate level of crime in the area and this fact continues to have a significant impact on their workload and on PA 2001 -025 (UP2001 -005) Supplemental "6 April 5, 2001 Page 3 the quality of life in the community. However, the Police Department does not object to the proposed project as described and regulated. 3. Alcohol License Over Concentration. The following table shows the concentration of retail alcohol licenses for the area of the project. A map of the Census Tracts is attached as Exhibit No. 4. (1) 1990 official Census (required source pursuant to Section 23958.4 of the California Business and Professions Code). (2) 1999 population estimate from Population Research Unit of the California State Department of Finance (required source pursuant to Section 23958 4 of the California Business and Professions Code). (3) Total licenses known to the Newport Beach Police. Department at [his tune. Census Tract 635.00 currently has a ratio of liquor licenses to population that exceeds the average ratio of Orange County. Within this Census Tract which encompasses the project site, there currently are 66 alcoholic beverage outlets, which establishes a ratio of l liquor license per 93 persons. This ratio is significantly higher than the average ratio of Orange County, which is 1 license per 590 persons. This is due to the fact that the area is predominantly commercial and has a high number of eating and drinking establishments and a relatively low population. The number of alcoholic beverage licenses within Census Tract 635.00 constitutes an "undue concentration" of licenses under the provisions of Section 23958.4 of the California Business and Professions Code. Therefore, the ABC Board is required to deny the application for the license unless it is determined that public convenience or necessity would not be served by its issuance. The City's finding of public convenience or necessity is advisory to the ABC Board. The Police Department is especially concerned about the concentration of ABC licenses within this Census Tract and on the Balboa Peninsula in general, but also indicates that the proposed use as described and regulated is not expected to exacerbate alcohol related problems in the area. 4. Alcohol - Related Calls for Service. Crimes or Arrests. The term "alcohol- related calls for service" is a misnomer, as a call for service is just a call, and no determination of whether it is alcohol - related or not is done by police dispatch. If an incident culminates in the preparation of a report or an arrest is made, a determination of whether or not the incident is alcohol- related is made by the officer and recorded. The Police Department updated their reporting systern in September of 1999 and is presently experiencing a data retrieval problem with alcohol - related incidents. This problem will be resolved in the near future by the software vendor. The PD however has provided information on alcohol - related arrests in two categories; driving under influence (DUI) and drunk in public or "plain drunk." Referring to the 1999 crime statistics table above, there were 3,290 total arrests within the City of Newport Beach, of which 1,667 were either driving under the influence or plain drunk in public (50.66 %). In Reporting District (RD) No. 15, there were 624 alcohol arrests during 1999, which accounts for 37.43% of the city's DU1 and drunk in public arrests. The Police Department indicates that total arrests within an individual reporting district is not available at this time due to the software problem, and therefore, the percentage of alcohol - related arrests PA 2001 -025 (UP2001 -005) Supplemental I't6 April 5, 2001 Page 4 Census Tract 635.0 Orange County Population 6,128 1 2,787,593 2) ABC Licenses (3) 66 4,721 Concentration 1 license per 93 persons 1 license per 590 persons (1) 1990 official Census (required source pursuant to Section 23958.4 of the California Business and Professions Code). (2) 1999 population estimate from Population Research Unit of the California State Department of Finance (required source pursuant to Section 23958 4 of the California Business and Professions Code). (3) Total licenses known to the Newport Beach Police. Department at [his tune. Census Tract 635.00 currently has a ratio of liquor licenses to population that exceeds the average ratio of Orange County. Within this Census Tract which encompasses the project site, there currently are 66 alcoholic beverage outlets, which establishes a ratio of l liquor license per 93 persons. This ratio is significantly higher than the average ratio of Orange County, which is 1 license per 590 persons. This is due to the fact that the area is predominantly commercial and has a high number of eating and drinking establishments and a relatively low population. The number of alcoholic beverage licenses within Census Tract 635.00 constitutes an "undue concentration" of licenses under the provisions of Section 23958.4 of the California Business and Professions Code. Therefore, the ABC Board is required to deny the application for the license unless it is determined that public convenience or necessity would not be served by its issuance. The City's finding of public convenience or necessity is advisory to the ABC Board. The Police Department is especially concerned about the concentration of ABC licenses within this Census Tract and on the Balboa Peninsula in general, but also indicates that the proposed use as described and regulated is not expected to exacerbate alcohol related problems in the area. 4. Alcohol - Related Calls for Service. Crimes or Arrests. The term "alcohol- related calls for service" is a misnomer, as a call for service is just a call, and no determination of whether it is alcohol - related or not is done by police dispatch. If an incident culminates in the preparation of a report or an arrest is made, a determination of whether or not the incident is alcohol- related is made by the officer and recorded. The Police Department updated their reporting systern in September of 1999 and is presently experiencing a data retrieval problem with alcohol - related incidents. This problem will be resolved in the near future by the software vendor. The PD however has provided information on alcohol - related arrests in two categories; driving under influence (DUI) and drunk in public or "plain drunk." Referring to the 1999 crime statistics table above, there were 3,290 total arrests within the City of Newport Beach, of which 1,667 were either driving under the influence or plain drunk in public (50.66 %). In Reporting District (RD) No. 15, there were 624 alcohol arrests during 1999, which accounts for 37.43% of the city's DU1 and drunk in public arrests. The Police Department indicates that total arrests within an individual reporting district is not available at this time due to the software problem, and therefore, the percentage of alcohol - related arrests PA 2001 -025 (UP2001 -005) Supplemental I't6 April 5, 2001 Page 4 within the RD is not available. During 1998, the total number of alcohol - related arrests, which is a larger category of offenses, than DUI and drunk in public arrest was 422. The Police Department does not attribute the entire 47.8% increase between 1998 and 1999 to social factors alone, but also to better record management. The total number DUI and drunk in public arrests cited above does not include other crimes such as homicides, assault, disorderly conduct etc. that were determined to be alcohol - related due to the software issues. Lastly, in this area, with a high number of alcoholic beverage outlets, it is difficult to determine which establishment is responsible for public nuisance behavior in public areas. At public hearings for other projects in the Cannery Village and McFadden Square area, r,- sidents and business operators have reported a pattern of public nuisance behavior. Generally, this behavior is conducted by patrons of area restaurants and bars as they arrive, depart, or travel between establishments. Public nuisances related to alcohol service has been a historic problem in the Lido Marina Village due to various nightclubs, but all the establishments of this type are no longer in operation. However, in this area, with a high number of alcoholic beverage outlets, it is difficult to determine which establishment is responsible for public nuisance behavior in public areas. Planning and Police Department staff does not believe that the proposed establislunent as described and conditioned will contribute to any alcohol - related problems in the area. The ABO Ordinance requires that the applicant take reasonable steps to discourage and correct objectionable conditions that constitute a nuisance in parking areas, sidewalks, alleys and other areas during business hours. 5. Adjacent Uses. There are no day care centers, schools, or park and recreation facilities in the vicinity of the project site. There are few residences in the general vicinity of the project site, but none that directly abut the project site. The site is surrounded by commercial uses and staff does not believe that the proposed use retail sales of alcoholic beverages and accessory uses will prove detrimental to the surrounding commercial uses. Conditions of approval can be applied to mitigate potential negative effects this project might introduce. The Police Department has no preventative design recommendations for this operation. One remaining issue related to this request is the possibility that future operators might change the operational characteristics of the use that could generate alcohol- related issues. A future operator might not have the same objectives and principles that the applicant has. Use Permits run with the land and not with an individual. As long as a future operator abides by the parameters of the Use Permit, continued operation is permitted. Major changes in the operational characteristics will require Planning Commission review of a new Use Permit. Staff has structured this Use Permit to permit the on -site consumption of beer and wine as an accessory use to the retail establishment, and the conditions permit wine tasting only. Therefore, the use cannot become an eating and drinking establishment, bar or tavern without the approval of a new Use Permit. Staff believes that the city would be adequately protected from future use of the on -site beer and wine license. The off site alcohol sales use is more difficult to regulate. The only thing that distinguishes the applicant's proposed use and a regular liquor store is product quality and the reputation of the applicant. A Use Permit does not vest in an individual, and product quality is not something the City has regulated in the past. Staff does not recommend initiating a product quality condition in this case as the regulation alcohol of sales is within the jurisdiction of the Alcoholic Beverage PA 2001 -025 (UP2001 -005) Supplemental lOX April 5, 2001 Page 5 Control Board. The Planning Commission should consider this permit as authorizing what it could become, and that is a typical liquor store. Staff has included a provision in the conditions of approval, which requires that the retail use must conduct the accessory wine tasting use. Separate operation of the uses would require prior approval by the Planning Commission of an amendment to the Use Permit. Staff has also added a condition that the sales of distilled spirits shall not exceed 15% of transactions. Mandating these operational characteristics further limits the use to the applicant's proposal and makes re -use of the alcohol license for a typical liquor store. Recommendation As noted in the original staff report for this item, staff believes that there are facts to support either project approval or denial. Staff also believes that the project as described and regulated pursuant to the condition of approval will not be detrimental to the area, and therefore, staff recommends approval subject to the findings and conditions contained in the previous staff report. Submitted by: Sharon Z. Wood Assistant City Manager Exhibits Revised findings for project denial Prepared by: JAMES CAMPBELL Senior Planner UP2001 -005 supplemental report.do PA 2001 -025 (UP2001 -005) Supplemental 10' April 5, 2001 Page 6 FINDINGS: EXHIBIT No.1 FINDINGS FOR DENIAL PA2001- 025(UP2001 -005) f The project site is located within Newport Beach Police Reporting District (RD) No. 15 and the proposed project is a new alcoholic beverage outlet. The outlet includes a Type 42 license for on -site consumption of beer & wine not in conjunction with a bona fide restaurant and a Type 21 license for the retail sale of general alcoholic beverages for off - site consumption. The granting of Use Permit No. 2001 -005 does not serve the public's convenience or necessity due to the following factors: a. The project site is located within Newport Beach Police Reporting District (RD) No. 15 and within Census Tract 635.00. b. Within RD No. 15, there were 6,041 crimes reported to the Police Department in 1999, of which 2,623 crimes were Part 1 crimes and 3,418 crimes were Part 2 Crimes that include alcohol - related arrests. The Part 1 crime rate for this RD is 7,426.8 crimes per 100,000 people and the crime rate for entire city is 3544.6 crimes per 100,000 people. The Part 2 crime rate for this RD is 29,288.7 crimes per 100,000 people and the Part 2 crime rate for entire city is 4,618.9 crimes per 100,000 people. The Part 1 crime rate within the reporting district exceeds the citywide Part 1 crime rate by 210 %. The Part 2 crime rate within the reporting district exceeds the citywide Part 2 crime rate by 643% Due to the strong correlation between higher crime rates and availability of alcohol, upgrading the existing alcoholic beverage service in this area may contribute to increased crime. C. Census Tract 635.00 has a ratio of alcoholic beverage licenses to population that is above the average ratio of Orange County. There are currently 66 alcoholic beverage outlets within this census tract which establishes a ratio of 1 liquor license per 99 persons. This ratio is significantly higher than the average ratio of Orange County, which is 1 license per 590 persons. This constitutes an "undue concentration" of licenses under the provisions of Section 23958.4 of the California Business and Professions Code. d. There were 624 alcohol - related arrests in Reporting District No. 15 during 1999. This represents 18.96% of the total arrests citywide and 37.43% of the alcohol - related arrests citywide. Comparing the number of 1998 alcohol- relates arrests and calls for service to 1999 alcohol - related arrests, there was an increase in activity of 202 arrests. The volume and increase in alcohol - related arrests is disproportionate and continues to have a significant impact on the quality of life in the community and Police Department resources. Due to the strong correlation between higher crime rates and availability of alcohol, the requested new licenses could contribute to increased crime. e. The proposed parking management plan using the Lido Marina Village parking garage is insufficient to meet the parking demands of the proposed project. 1 oa 2. Due to the concentration of alcoholic beverage outlets, higher than average crime rates and their impact on the Lido Village area, and because the public convenience or necessity would therefore not be served, the proposed project would be detrimental to the health, safety, peace, morals, comfort, and general welfare of persons residing or working in the neighborhood of such proposed use and would be detrimental or injurious to property and improvements in the neighborhood or the general welfare of the City. 3. The proposed use can generate a parking demand as high as 21 parking spaces when all aspects of the proposed use occur simultaneously and the project site has no on -site parking. The proposed parking management plan using a combination of self - parking and valet parking through the use of a private off -site parking agreement within the Lido Marina Village does not provide necessary long term parking. 165 Exhibit No. 4 ,tA THIS PAGE LEFT FLANK INTENTIONALLY kb5 t City of Newport Beach Planning Commission Minutes November 7. 2002 Condition 1 - ...... plot plan and floor plan dated September 16, 2002. to ition 3 - '....adequate access and exiting must be provided under the Bu Code.' The last sentence read, 'A grease interceptor of adequate s z y be required in association with food preparation activities pursuant o Building Code.' Condition 5 -the two 6: s changed to 7:00 p.m, Ayes: Toerge, Aga)anian, McDaniel, I(IseF,"GOQrd, Selich, Tucker Noes: None The Planning Commission then heard Item 4 at the request of SUBJECT: Oversheet's Wine Merchant & Wine Bar (PA2002 -167) 3400 Via Lido Request for an amendment to a previously- approved use permit to include the sale of distilled spirits (Type 47: beer, wine & spirits) for on -site consumption, to permit live entertainment, and to expand the hours of operation from 11:00 pm to 12:00 midnight on Fridays and Saturdays at an existing retail Alcoholic Beverage Outlet located in Lido Village. Referencing the 31d page of the staff report, Chairperson Kser asked about the menu and staff's belief that the food service is supportive of the retail business and not classified as an eating and drinking establishment. Has staff concluded this Is still a retail establishment and not changed into an eating and drinking establishment? Mr. Campbell answered, yes. The menu is fairly extensive but we still believe these offerings are supportive of the retail use and we consider it a retail operation. At Commission inquiry: he added that there has been no check of the receipt records to determine compliance with the condition that the sale of distilled spirits shall not exceed 15 percent of gross receipts of all off site alcohol sales since the opening of the establishment. This type of check would be done if staff felt that the operation was in non- compliance. Chairperson Kiser noted that with this very extensive menu, perhaps it would be appropriate to making those checks. Commissioner Selich asked how you could consider a five - course $65 dinner with five and a half glasses of wine a retail sale? That seems to be stretching It. Ms. Temple answered that staff went through the menu and even though they are very complex and elaborate, they serve relatively small portions and seem to be coordinated with a function to actually taste wine. In staff's final evaluation, if you look at the percentage of this operation's business, which would be attributable to retail sales, even in light of this more elaborate food service then INDEX Item 3 PA20D2 -167 Approved 16� City of Newport Beach Planning Commission Minutes November 7, 2002 originally understood, this business does this activity for the purpose of selling retail wines probably in a per case mode. Commissioner Selich asked if this business was sold to someone else, and they decided to emphasize more of the restaurant aspect, how would we be able to control it? In this scenario it is somewhat limited in the total scheme of things. Ms. Temple noted that keeping it under consideration in this fashion, as a retail use Is the safest thing to do because we are not approving a use permit for an eating and drinking establishment. They don't have a vested right to convert it into a restaurant without a new use permit. Commissioner Gifford asked if there was any consideration about giving the Commission this Information about the percentages prior to considering this application? I have seen the menus and have heard about the portions being small. I have been there on several occasions and I find that the categorization of the menu, as staff has given, is inconsistent with my observations. Chairperson laser noted that there is a concern of the conformance with the existing conditions. Ms. Clauson added for consideration the definition under the use categories of an eating and drinking establishment Is businesses with the principal purpose to serve prepared food or beverages for consumption on or off the premises. There is a description of the different kinds of establishments. There is also a provision in that use category for accessory eating and drinking establishments, which are establishments serving as an accessory use in a retail building with the gross floor area of 5,000 square feet or more, provided the establishment has no separate entrance; the hours of operation correspond to those of the principal use. If you have an eating and drinking establishment with the principal purpose, the one way to get out of that of being an eating and drinking establishment is that It qualifies as an accessory use. Commissioner Toerge noted that it was hard for him to read the. plans. What is cold kitchen equipment, Is there going to be a kitchen built in this new facility? Staff answered that the kitchen is already there and was built in conjunction with the use permit and the building permit issued subsequent to the Use Permit approval last year. Public comment was opened. INDEX Dennis and Christine Overstreet, 3400 Via Lido noted: • Referencing page 63 of the staff report, noted that there is a stainless steel refrigerator and convection oven In the kitchen. • Project Is educational and retail as well with sampling of unique items. which is a more sophisticated venue than what would be the norm. • . The food is complementary to the wine sampling and creates an 6 161 City of Newport Beach Planning Commission Minutes November 7, 2002 atmosphere that isn't a restaurant or bar, but an experience of fine wines. • We have made an investment In this project and have the support of over 200 of our neighbors. • This proposal is a fine upgrade to the Lido Village area. • The menu In the staff report is quite elaborate. This menu is more than what we want to handle because we have such a tiny kitchen. The menu is evolving. • The wine bar percentage is lower than the retail. Since we have opened in total the sale of alcoholic beverages for consumption on premises amount is less than 20% of total sales. • The products that we sell average about $35 per item. • These records are available for review. Commissioner McDaniel, referencing the applicant's letter, asked about the need for full on- premise liquor need. Mr. Overstreet answered: • Our business has prime wines and spirits, and coming to our location is an experience. • Being in our business allows people to enjoy the wines and spirits and not everyone wants to have a glass of wine, sometimes they want to have a taste of 25 year old scotch. • It would be nice to be able to offer this choice to our customers. • We currently have an off -sale full liquor license. Commissioner Gifford then read the passage from the Police Department's letter, 'the changes in operational characteristics proposed by the applicant are significant. The existing location does not have a kitchen (there is a 'hot plate' and small refrigerator, etc.)'. Ms. Overstreet answered that she provided the digital pictures of the kitchen and store and mailed them to Susan Seviane of the Police Department. Commissioner Gifford stated that when the applicants. first came to the Planning Commission, the proposal was very specific and very definite about a wine bar. It was based on their experience of the Los Angeles store, which had been operated for a number of years. I am puzzled why, if it is part of the normal experience, for a consumer to want to sample some scotch or such, that had never come to your attention before in the years you had operated the wine bar in Los Angeles, which is what I understood you were going to replicate here. Mr. Overstreet answered that our Beverly Hills operation did have the full liquor license. My deep concern when we bought this property and improved it, I did not think the audience here in Newport Beach would be prepared for such a high - ticket sophistication. Since we were residents here, I was reluctant to go for the full alcohol experience. Based upon what some of the stores in the area offered, it didn't seem that the situation for Lafitte Rothschild, etc at $150 per bottle would be a real demand. It didn't seem that for alcoholic beverages there X05 City of Newport Beach Planning Commission Minutes November 7, 2002 INDEX would be a demand for specialty vodkas and high -end scotch and such. Commissioner Gifford noted that the comments were Inconsistent with her recollection of the presentation at the first hearing where you spoke about the extreme array of very fine wines and that was your intent to bring them here and you felt there was a market for them. Mr. Overstreet noted that you go into business with very high hopes. Those hopes have been satisfied along the enthusiasm of our clientele to support us in this new venture. Commissioner Gifford noted that in spite of a condition that there would be no live entertainment, you began to have live entertainment. Mrs. Overstreet answered this was done with a permit by the City. Commissioner Gifford asked staff that the live entertainment that the City took action on was this done with a permit? Mr. Campbell answered that when the establishment initially opened there were three weekends during July they were authorized for live entertainment, which is similar to what the applicant is now requesting. There was an instance of an advertisement that went out for live entertainment that would not have been authorized and we were alerted to that fact. The applicant did not conduct that live entertainment. Commissioner Tucker asked what percentage for on site consumption, if we approve of a full liquor license, would you estimate would happen? Wine and beer versus hard liquor? Mr. Overstreet answered that we do not sell beer. Wine versus hard liquor, I would imagine that we are probably looking at the on site sales of 25%, if that. It is just a specialty thing that if we have a customer that would like one we could serve a cocktail. Commissioner Tucker asked if we put a condition limiting the on site sale for other than wine or beer not exceed 25 %, would that be something you could live with? He was answered, yes. Continuing, Commissioner Tucker noted we do not want this to change into a bar. I would like to add to condition 5 with a maximum occupancy of 29 people. That way I can be comfortable with the fact that there could be hard liquor served there but if it doesn't exceed 25% of the total liquor sales and only 29 people can occupy the room at one time it will not turn into something that we did not anticipate. Commissioner Gifford asked for clarification that when you say 25% of on -site liquor sales are you speaking about the non -wine alcohol would not be more than 25% of the on site wine sales? Commissioner Tucker replied that you take the total on -site consumption, wine, o9 City of Newport Beach Planning Commission Minutes November 7, 2002 INDEX beer, hard liquor, the hard liquor segment would not exceed 25% of the total of on -sale consumption. Commissioner Gifford noted that the Overstreets are not selling a lot of $15 or $20 bottles of wine and so the grand total of the retail sales allowing for 25% could be quite high. Commissioner Tucker noted that it is what is consumed on site, not what is being carried away. The percentage should be lower because the wine sales will be a higher price number. Maybe that number could be 20%. Chairperson Kiser noted the following: • How important live entertainment is to the applicant. • Concern about this facility not becoming a nightspot or bar. • Heavy concentration of bars in the area. • Most concerned about the entertainment drawing the wrong crowd. • Business seems to be moving towards becoming a nightclub. The Overstreet replied at Commission inquiry: • Acoustical background is very soothing. Music will increase the ambiance of the facility. • Want the option to have live music although it is very expensive and will not happen all the time. • Expensive to get a permit three weeks in advance every time to book a special act. • We have a few entertainers that we like. • There is a small piano against the kitchen wall off to the side. • Windows are all fixed and cannot be opened. • No drums, • The musician had a small microphone with small amplification. It has to be small because the store is so small. John Alterton spoke In favor of this application as a patron of the Beverly Hills site as well as the store here. The average pour is $10. This is not a package store and they are not serving tall liquors. They serve expensive pours; this is a high -end wine and high -end alcohol that will cost $10 to $15 a drink. You will not be getting people who will get drunk or rowdy. There will not be an increase in the alcohol related incidents; it is not that type of crowd. There is no room for a band. Their main thing Is to try to educate people about wines. They have spent a lot of money furnishing this place. Chairperson Kiser noted that what we approve here tonight goes with the property. If this were sold, then we could have another operator with a different agenda and at that point someone could use the conditions and operate the facility in a very different way. The following speakers spoke in support of the application for similar reasons: 'jU City of Newport Beach Planning Commission Minutes November 7, 2002 INDEX John Wortman, no address given Craig Bartow, 110 Via Trieste David Bradburn, 235 Via Ithaca Public comment was closed. Chairperson Kiser noted his overall support of the application due to the nature of the business and the way it is being run. He clarified condition 4 with staff on the sale of distilled spirits for off -site consumption shall not exceed 15 percent of gross receipts of all off -site alcohol sales. Mr. Campbell answered that this is to limit the percentage of distilled spirits to all alcohol sales off site. So this would be in comparison to beer and wine, and limits off site sale. If this license were to be used for some other purpose this condition is disincentive to become more of a liquor store in the future and is proactive. Commissioner Agajanian noted: • The proposed changes that have been made from the original application seem to be moving away from an Incidental use. • Supports changes to a number of conditions: put a condition that the seats be limited to 29 in the A2 section; the proposed live entertainment is for 2,3 nights; no beer; and the amplification of the music is to be low key or eliminated due to the small facility. Chairperson Kiser noted that he agrees with the no drums, no beer, no amplified music, maximum three nights per week on the live entertainment and the maximum occupancy of 29 people in the A2 unit space. Mrs. Overstreet noted that in the conditions, it is 29 guests and 6 employees because you have to have people to service the customers. The amendment to the use permit is just for the A2 area. There is no seating in the retail space. Chairperson Kiser noted that he wanted to bring the old condition 14 forward into the new conditions. Were the former conditions read to be sure that we picked up every special condition? Mr. Campbell noted that new condition 18 could be modified to reflect the old condition 14. Ms. Temple noted that we could also add a new condition to say that all conditions of the original use permit remain in effect unless modified by this approval. Everything will come over in place. Chairperson Kiser noted he supports the application with: • The additional condition that all old conditions remain in place except as modified by this approval. • Additionally would like to see condition 8 edited, All windows will remain closed at all times. Doors will be used as patrons enter and leave the 10 City of Newport Beach Planning Commission Minutes November 7, 2002 INDEX premises during any live entertainment. The need to talk about the sale of the distilled spirits for consumption on site and possibly limiting that as a percent of total on site consumption of alcohol. Commissioner Tucker noted: • Disappointed that the conditions are not tracking. In other situations there have been use permits upon use permits and after several years there is a lot of confusion as opposed to an amended and restated use permit, which is distinctly my preference. That way everything Is in one document and we are not trying to figure out inconsistencies in language between serial amendments to use permits. • Concerned about condition 8, since Lido Marina Village in its current iteration will not be that way forever. It has not been a terribly successful place, the City has ownership of some of the property in there and it would not shock me if it turns residential in some measure. I don't know, but I think we need to zero in on the potentiality of noise in the event we have residential across the street. Keeping the doors closed is an important aspect and I think we need to talk about the amplification. The drums and base are what we find to be problematic. • The 29 people for Unit A2 limit works. • I would not want. the restriction on beer. • As for as the number of nights for the entertainment, looking into the future, I am concerned so there should be some restriction. • The percentage of distilled spirits on sale consumption versus all other on sale consumption should be addressed with the price points considered. Commissioner Gifford noted: • Enjoys the premises, it is a nice space. • Music would be a lovely addition. • Concerned about the service of alcohol. • The enthusiasm of the Commission with the original application was to approve a wine bar and for someone to be able to offer a customer a glass of cognac as something to offer, I would never have voted for a full liquor license in the Lido Balboa area because of the problems that we have had as the permit runs with the land. Motion was made by Commission Gifford to adopt Resolution No. 1579 approving the requested amendment to Use Permit No. 2001 -005 (PA2002 -167) subject to the findings and conditions in Exhibit A with the following changes: • The use permit amended and restated to incorporate all the previous conditions. • Limitation of 29 seats in Unit A2 and no seating in Unit Al. • Modification to condition 18 regarding special events. • Modification to condition 8 regarding the windows being closed at all times during live entertainment. Doors will remain closed and be used only as patrons enter and leave the premises during any live entertainment. 11 City of Newport Beach Planning Commission Minutes November 7, 2002 INDEX • No beer • No drums • No base • Sale of distilled spirits for on -site consumption be 10% of the total sales of on -site alcohol consumption. Chairperson Kiser clarified other conditions and asked that old condition 14 be carried forward verbatim in the new conditions. Commissioner Tucker noted that old condition 14 says a special event permit is required for any event or promotional activity outside the norm, 29 people is tied into a special event permit. What I was suggesting was 29 people in Unit A2. They may end up having people wander In on the retail side and have a full house on the other side. I don't have a problem with that. It is the area where there will be drinking and drinks served that I am concerned with. Following a brief discussion it was decided that the floor plan is tied In with this vote. Public comment was opened. Ms. Overstreet noted that In the retail area there are two chairs as sometimes customers spend an hour there referring to books, checking ratings and comparing prices. It's a process that goes on and the patrons need to be able to sit down. Commissioner Tucker explained that you have a condition that says that the on- site consumption is only going to be 20% of the business. Most of the 20% of the on sale consumption will be wine. The price points on the wines are probably higher than the typical cocktail. What Commissioner Gifford was suggesting was that of the total amount of on -site consumption sales that occur, she would like to see that number for distilled spirits not exceed 10% (dollar volume). Commissioner Gifford added that the original 2096 of the gross sales, if you are selling the kind of wines you are talking about, generates a big number to have 20% of. Chairperson Kiser added that this is not on a nightly basis. It is only when the receipts are reviewed by the City reflecting the on site consumption as well as the 10% was distilled spirits. Public.comment was closed. Chairperson Kiser withdrew the suggestion to incorporate old condition 14 as it was only for special events outside the normal operation characteristics. Commissioner Gifford noted that there is no food service in Al and I proposed a condition that there be no seafing, but I would propose that there could be up to three seats in Al for customer use. 12 1,1.3 City of Newport Beach Planning Commission Minutes November 7, 2002 INDEX Commissioner Toerge noted that there are often times that acoustic bases are appropriate. I would not want to hamstring an entertainer's ability to create some dynamics at low volumes with some amplification. My experience, even in a solo presentation, it is often times reasonable to amplify either the voice or the Instrument to create proper dynamics in a small venue. I don't know If there is a way to allow some amplification but limit it so that it doesn't create the problem that we are addressing here. Commissioner Gifford noted that a compromise would be no base and the windows closed. I would suggest that amplification could be allowed within those restrictions. Ms. Temple suggested that limiting effects of entertainment venues on the live entertainment process rather than getting real specific in the use permit might be an option for the Commission. We know the issues, no base and drums is interesting but the issue is noise exiting or being heard outside the facility. I think that the idea is that you do not want the music heard nor felt outside the facility and that through the review that the Revenue Manager does with live entertainment permits, we are starting to get better managing that with real specific conditions on those licensing permits. Maybe to really express that is the goal that the music is not to be heard or felt outside the facility as provided in Title 5 and let us regulate it at the staff level. Additionally, it is a licensing permit not a use permit and therefore does not vest and run with the property. This is different than a special event permit, it is a continuing permit but it can be revoked if the standards of Title 5 are not met. The live entertainment permit is needed regardless of how specific or general your conditions are. Commissioner Gifford added that if we made a condition that said live entertainment is permitted subject to a live entertainment permit, we would be covering our concerns. Ms. Temple answered yes. Ms. Clauson added that you could limit the number of days per week pursuant to Chapter 5.28 of the Municipal Code. For the most recent determination on the Village Inn, staff worked out a procedure for having them submit as part of the live entertainment permit application what their amplification is going to be. The Commission can regulate the impact of that amplification based upon settings of the amplification. It is much better because it is specific to the applicant. Chairperson Kiser noted that based on that and staff's comment and the ability to actually control the entertainment and the sound vibrations outside the premises, would be willing to back off the no amplified music so long as the motion did add a maximum three days per week for live entertainment and subject to obtaining a live entertainment permit. Straw vote getting away from the no drums. no amplification and subject to obtaining the live entertainment permit for only maximum of 3 days per week: 13 1`� City of Newport Beach Planning Commission Minutes November 7, 2002 INDEX Commissioner Toerge - (no testimony recorded) Commissioner Agajanian - yes. Commissioner McDaniel - yes Commissioner Tucker - should new condition 8 appear at all? If the purpose of the use permit grants a right that runs with the property and I think what we are attempting to do is not grant any right that runs with the properly but not preclude the applicant from coming In for a live entertainment permit. Should we not have anything here at all? Mr. Campbell answered that this condition was based on the applicant's request asking for three entertainers. We needed to change one of the original conditions that prohibited live entertainment so what we did was turn that condition around to permit it. it could be achieved by eliminating the condition. Ms. Wood added that could be done except it does not cover the limitation on three nights. Ms. Ciauson suggested that one way to look at this is the live entertainment is an operational characteristic of the use the applicant is proposing. You can't automatically take the position that anybody who wanted live entertainment just has to get a live entertainment permit. The decision could be made by the Commission but should be made as part of the regulations because live entertainment is an operational characteristic; it is Just a matter of giving them the ability to have it, if you want to limit the number of days they can have it; all I was suggesting is that the live entertainment permit as far as controlling the noise and the sound and what type of musicians. In other words they would make an application if they want to have it. Commissioner Selich noted that the Commission should be as general as we can be in the conditions and only put those gross limitations on, whether It is the number of nights, etc., and leave the rest of it in the live entertainment permit. It does us no good to sit here and try to micro manage It. We look at the number of days or nights, that's all and leave the rest up to staff. The live entertainment permit can handle this. I don't have a problem in this location and the type of business It is to limit the number of nights; there will be enough controls over it. Commissioner Gifford continued with her motion and edited new condition 8 to read, live entertainment shall be permitted pursuant to a live entertainment permit. The experiences we have had over the years and the processes we have gone through, have given us confidence in this live entertainment permit process. I would be happy to leave it at that. Ms. Temple stated that the way to monitor the limitation of the percentages is if the cash regWering system is set up to ring alcohol sales that are wine as a different category from other distilled spirits unless they have a system that is capable of doing that, otherwise there is not a real valid way of monitoring it.. Additionally, there was some conversation about the monitoring requirements, we should mention that the percentages are either on a gross sales per monthly basis, 14 \I5 City of Newport Beach Planning Commission Minutes November 7, 2002 INDEX quarterly basis or annual basis, just so we know what the monitoring periods are. Commissioner Gifford answered that a six -month basis would be appropriate for the 10%. Chairperson Kiser clarified item 8, as restated with the live entertainment being subject to obtaining a live entertainment permit. That is, still with the windows to remain closed at all times and doors to remain closed during the live entertainment except when customers enter and /or leave. Mr. Campbell noted that there is a standard condition for the windows and doors closure. The provisions of the Chapter provide that sound not escape the building. Ms. Wood clarified that this is annual for the 20% and 6 months for the 10% on site, what about the 15% standard for all off -site alcohol sales? Following a brief discussion, it was decided that the City would look at the ABC report on an annual basis for the 20%, and the 15% and 10% reviews will be done on a half yearly basis. Chairperson Kiser stated he would like to keep. the reference about the windows and doors being closed during live entertainment as well as the maximum three days per week. These are matters that would be assurances that if another• operator picked up this business, it would be much more difficult to move this thing towards being a nightclub. Commissioner Gifford noted she would prefer to let the live entertainment. permit be the vehicle to handle all of those matters because the live entertainment permit can be reviewed If there is any problem, 1 don't see the reason to limit the number of nights. Straw vote was taken: Commissioner Tucker supports the three days per week and leaving the windows and doors closed as part of the motion. Commissioner Selich supports Commissioner Gifford Commissioner McDaniel supports the three days per week because the more we manage it now, the less it causes us trouble when we see it later. Commissioner Agajanian supports the three -day limitation as well as the doors and windows being closed. Commissioner Toerge stated he would like to put in that live entertainment shall be limited to three musicians, three nights a week subject to the provisions of the live entertainment permit. Chairperson IGser stated he would remove his support for the three entertainers limit. Commissioner Gifford clarified that her understanding was that the doors and 15 jib City of Newport Beach Planning Commission Minutes November 7, 2002 windows would be incorporated into the live entertainment permit so that we would not have reference to It In other places. Since this is the document we control, she amended her motion in terns of condition 8 to keep the language that was suggested earlier and add, during live entertainment, doors and windows shall remain closed at all times and live entertainment shall be limited to three nights per week subject to obtaining a live entertainment permit. Another condition shall read, 'If staffs review of the percentages find that the applicant is not in compliance, this application will be brought forward to the Planning Commission for review'. Ayes: Toerge, Agcianian, McDaniel, Kiser, Gifford, Selich, Tucker Noes: None EXX3 Yokoyama Residence (PA2002 -173) I Item 4 6705 Seashore Drive PA2002 -173 Cali review of the approval of Modification Permit No. 2002 -088 (PA 2002 -173) Decision modified with additional Chairpers Kiser noted that this item was called up at the request of the Public conditions Works,.Depa ent. The Modifications Committee voted 2 to 1 to approve the referenced pe it. The Public . Works representative voted against. The application reque a 2nd floor addition and alteration to an existing single - family dwelling with multiple onconformities. Ms. Temple noted that the ublic Works Director was in the audience and here to respond to questions. Nathan Lentz, representing the ap 'cant noted the following: • Most of the alterations on th round floor are reflective of the Planning Code requirements accom \thehouse. e required setbacks and providing the additional parkie the existing house has only one space. • The house Is being pushed oecause the house is on the eastern lot line. • The modification requested is nd has nothing to do with what the homeowner wants to se. • Once these modifications were approved we trying to move this project forward. • The concern of backing out onto the street given bike path and traffic are the same for other residences on the street. • The encroachment in the alley of 2 feet is to accommodate garage. The rest of the building has been held to the 6 -foot alley setbacl At Commission inquiry, Mr. Lentz added: • The depth along the garage along the alley is 18.6 inches to the the garage door. 16 1�� CITY OF NI vy rORT BEACH Hearing a : November 7, 2002 > i PLANNING DEPARTMENT Agenda Item: 3 3300 NEWPORT BOULEVARD Staff Person: Bill Cunningham a�oa``r NEWPORT BEACH, CA 92658 644 -3234 (949) 644.3200; FAX (949) 644.3229 Appeal Period: 14 days after final action REPORT TO THE PLANNING COMMISSION PROJECT: Overstreet's Wine Merchant & Wine Bar (PA2002 -167) 3400 Via Lido SUMMARY: Request for an amendment to a previously- approved use permit to include the sale of distilled spirits (Type 47: beer, Wine & spirits) for on -site consumption, to permit live entertainment, and to expand the hours of operation from 11:00 pm to 12:00 midnight on Fridays and Saturdays at an existing retail Alcoholic Beverage Outlet located in Lido Village. RECOMMENDED ACTION: Adopt Resolution No._ approving the requested Amendment to Use Permit No. 2001 -005 (PA2002 -167) with conditions, APPLICANT: Dennis & Christine Overstreet 3400 Via Lido Newport Beach, CA 92663 PROPERTY OWNER: Dennis & Christine Overstreet LOCATION: 3400 Via Lido (Lido Village) LEGAL DESCRIPTION: Lot 2 of Tract 1235 GENERAL. PLAN: Retail & Service Commercial ZONING DISTRICT: Retail and Service Commercial (RSC) a mro $y I Subject Property �ry M �J rn p 0 % 200 400 Feet VICINITY MAP Amendment to Use Permit No. 2001 -005 (PA2002 -167) 3400 Via Lido Current Development: Existing wine sales and wine tasting business. To the north: Retail and service commercial. To the east: Retail and service commercial across Via Oporto. To the south: Retail and service commnercial Via Lido Plaza across Via Lido. To the west: Retail and service commercial. i ( <<applicant>> ( <<applicatiom>)) f ( <<meetingdate >>) Page 2 of 9 Site/Project Overview The wine sales and tasting business is existing and located at the northwest comer of the intersection of Via Lido and Via Oporto. Currently, the business operates with a Type 21 off- sale general license and a Type 42 on -sale beer and wine license for wine tasting only. The applicant proposes the following modifications to the original use permit: 1. Permit the sale of distilled beverages for on -site consumption (Type 47 license); 2. Permit live entertainment; and 3. Expand the hours of operation from 11:00 pm on Fridays and Saturdays, to 12:00 midnight. The applicant proposes to maintain the size and other operating characteristics as approved under Use Permit No. 2001 -005 in that there are no interior or exterior modifications proposed to the building, and the maximum number of patrons on the premises at any time is to continue to be limited to 29 persons. In addition, as originally approved, only limited food service was to be provided such as hors d'oeuvres and light snacks. Applicant has submitted a copy of the menu which indicates that the food service is somewhat extensive, but staff believes that the food service is supportive of the retail business and is not classified as an eating and drinking establishment (see discussion that follows). The live entertainment is proposed for seven days a week, and will consist of three - musicians offering "light jazz and contemporary music." As approved and conditioned, the wine tasting arid food service portion of the business is limited to Suite B, and the retail portion limited to Suite A (note: the plans submitted with this application have changed the designation of Suite A to "Unit Al ", and Suite B to "Unit A2" -- the size of each portion of the business remain unchanged). Background Use Permit No. 2001 -005 was approved by the Planning Commission on April 5, 2001. The approval was for "a new alcoholic beverage license (Type 21, off -sale general) in conjunction with a fine wine retail establishment [with] periodic on -site wine tasting seminars in the evenings for approximately 30 people with a Type 42 alcohol license. " Included in the original application was a request for a parking waiver. In discussing the applicant's request at the April 5, 2001 public hearing, the Planning Commission had expressed concern that the on -site sale of wine be an ancillary use to the retail sale of alcoholic beverages for off -site consumption, and that the use was not classified as an eating and drinking establishment or bar. The Planning Commission's concerns with respect to this point related to the high number of alcohol- related crimes within the vicinity of the subject property, and the lack of on -site parking and limited number of parking spaces in close proximity to the site. To that end, the Planning Commission adopted a number of conditions (and added revisions to other conditions recommended by staff) that were intended to ensure that the business would be operated primarily as a retail use and would not operate as a restaurant or evolve into a bar or cocktail lounge. Specifically, the Planning Commission approved the use subject to, among other conditions, the following: («applicanb>(<capphcation)))) i�(] ( <<meetingdate))) Page 3 of 9 r: • Condition No. I stated that "the alcoholic beverage outlet is hereby defined as a retail establishment for off -site consumption as the primary and principal use... on -site consumption of alcoholic beverages shall be limited to wine tasting and shall be accessory and subordinate to the principal retail use and sales shall not exceed 20 percent of gross sales... " • Condition No. 5 that stated "approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club... " The minutes of the April 5, 2001 Planning Commission meeting and the finding and conditions of approval for Use Permit No. 2001 -005 are included as Exhibit No. 2. Analysis In analyzing the applicant's request, staff evaluated whether or not the change in the uses and business operation proposed by the applicant would materially change the use classification. The applicant is requesting a new Type 47 Department of Alcoholic Beverage Control license to permit the on -site consumption of alcoholic beverages including distilled beverages. .A Type 47 license is a restaurant license where the business must operate and maintain a bona fide eating place and make substantial sales of meals during normal meal times. Included within the request is an extension of the closing time from 11:00 pm to 12:00 midnight Fridays and Saturdays, and live entertainment seven days a week. As discussed above, the staff evaluation and Planning Commission discussion of the. original request centered on the business operating as a retail use, with the majority of the sales related to the retail sales of wine. Therefore, conditions were included that 1) prohibited the on -site consumption of beer, 2) prohibited live entertainment, and 3) required that on -site consumption of wine be as an accessory use to retail sales as the principal use and that the business not operate as a restaurant. In addition, as indicated in the attached minutes of the April 5, 2001 Planning Commission meeting, the applicant represented that the on -site consumption of wine would be limited to small sample sizes (one ounce or less) only. While the requested changes could.be viewed as a potential to change the classification of.the business, the applicant has stated that the intent is to remain as a business specializing in wine sales with ancillary wine tasting and consumption with light snacks and small food portions, and they have stated that they intend to continue to comply with the original conditions restricting the on -site consumption of alcoholic beverages to not exceed 20 percent of gross sales. Staff has included that condition in the draft resolution (Condition No. 4). Related to the classification of the business is the extent of the food service being offered at the business. As noted above, the original application included minor hors d'oeuvres and snacks. The applicant has submitted their menu (included as Exhibit No. 3), which shows the array of food items being offered is extensive. However, the menu items are mostly small portions and are offered with accompanying wine selections. Because of this, staff believes the food service remains accessory to the primary function of retail sales of wine, and staff notes that the kitchen facilities are very limited in terms of size and equipment. Therefore, in staff's opinion, the food service is ancillary to the on -site alcoholic beverage consumption and the business does not constitute an eating and drinking establishment. The findings and conditions of the original (oapplicanw (oappfication»)) 1a (omeetingdateo) Page 4 of 9 application approval restricting the on -site food and alcohol sales receipts has been carried forward in the draft resolution. City Council Policy K -7 states that establishments are defined as a bar or cocktail lounge if they demonstrate either one or both of the following characteristics: A. Is licensed as a 'public premises " by the Department of Alcoholic Beverage Control, or A 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. A Type 47 license is a restaurant license and not a "public premises." ABC defines a restaurant as having normal dining hours of between 6:00 p.m. and 9:00 p.m. The applicant proposes to service food from 11:00 a.m. to 12:00 midnight, which can be viewed as "not corresponding to regular meal service hours" as stated in Item B of City Council Policy K -7. However, for the reasons discussed above, staff is of the opinion that the business continues to operate as a retail business with ancillary on -site alcoholic beverage consumption. Therefore, City Council Policy K -7 does not apply. General Plan The City's General Plan designates the site as Retail and Service Commercial, with an allowable floor area ratio for the Lido Village area of 0.5/0.75 FAR. Retail sales of alcoholic beverages and ancillary uses thereto such as wine tasting and minor food service is a permitted use within the Retail Service Commercial designation. As noted in the original staff report for the April 5, 2001 Planning Commission meeting, the building exceeds the allowable General Plan FAR with an existing FAR of 0.83. However, as noted in that staff report, the building is considered legal, nonconforming and the project did not, and does not now, include an increase in flo Therefore, the applicant's request is consistent with the General Plan. or area. Alcoholic Beverage Ordinance (ABO) In accordance with Section 20.89.030A of the ABO, a use permit shall be required for any existing alcoholic beverage outlet if the business changes its type of retail liquor license with the Department of Alcoholic Beverage Control. Therefore, this staff analysis is required in conjunction with the ABO. The purpose of the ABO Ordinance is to preserve a healthy environment for residents and businesses by establishing a set of consistent standards for the safe operation of alcoholic beverage outlets, while preventing alcohol - related problems. The ABO requires the Planning Commission to consider the following factors: 1. Whether the use serves public. convenience or necessity. 2. The crime rate in the reporting district and adjacent reporting districts as compared to other areas in the City. (oapplicanb> ((<application»)) I ( «meetingdate» ) Page 5 of 9 } j , 3. The number of alcohol licenses per capita in the reporting district and in adjacent f reporting districts as compared to the county -wide average. 4. The numbers of alcohol- related calls for service, crimes or arrests in the reporting district and in adjacent reporting districts. ay ca 5. The proximity of the alcoholic beverage outlet to residential districts, and shoo re centers, park and recreation facilities, p of religious In accordance with the foregoing, and in order to provide the Planning Commission with the necessary data and analysis to make the required findings, each of the foregoing factors are discussed as follows: 1. Public Convenience or Necessity. The business has been in operation for approximately As one year, and has been operating as a retail wine merchant with ancillary on -site wine 7as and the noted above, the change in the license to a full on -site alcohol sales (Type ), introduction of live entertainment, will not substantially change the operating characteristics and the business continues to be classified as retail alcoholic beverage sales with ancillary on -site alcoholic beverage consumption. The Police Chief is designated by Council Policy K -7 to be responsible for making an official finding of Public Convenience and Necessity on behalf of the City. The Police Department's report (included as Exhibit No. 5) states that the new proposed use will substantially change the use as currently exists, and "could arguably make the business more like a bar /cocktail lounge and less like a restaurant that provides alcoholic beverages in conjunction with food service. " The Police Department concludes that the proposed changes will likely result in an increase in police activities in the area, and they state that "it is difficult for the Police Department to endorse the propose intensified use permit modification. " In addition, it is noted by both Planning and Police Department staff that the area is characterized by a number of existing establishments that have on -site service of alcoholic beverages. However, the Police Department analysis was based on the business changing to a bar or cocktail lounge, and there appears to be incomplete clarity relative to the exact. operating characteristics of the business. Therefore, the Police Department report leaves the decision to the Planning Commission with respect to the changes requested by the applicant. As discussed above, the changes do not materially change the overall operating characteristics of the business, which continue to operate as a retail wine business with ancillary on -site alcoholic beverage and food consumption. Therefore, in staff s opinion, the Pubic Convenience or Necessity finding contained in the original approval can continue to be made for this amendment request. 2. Crime Rate. Citywide, there were 6,955 crimes reported during calendar year 2001, of which 2,852 were Part One Crimes (serious offenses). The remaining 4,103 were Part Two Crimes that include alcohol related arrests. The project site, located within the Lido Village area, is located within Police Reporting District No. 15. During 2001, the number of Part One Crimes in RD No.15 was 367 and the number of Part Two Crimes was 912.. Adjacent Reporting Districts are Nos. 16 and 13. RD No. 16 had 178 Part One and 424 Part Two Crimes; and RD No. 13 had 101 Part One and 161 Part Two Crimes. As noted in the Police Department report, the crones within the reporting district of the project site are higher than surrounding RD's, and are significantly higher than the City -wide average. The reported crimes within RD No. 15 are («applicant» ( ((appticationv)) ( «meetingdate ») V3 Page 6 of 9 over 500% above the City -wide reporting district average. Even though the Police Department has expressed a concern that the revised operating characteristics requested by the applicant could result in the business operating more like a bar or cocktail lounge, the business will continue to operate primarily as a retail premium wine shop with ancillary on -site alcoholic beverage consumption. Therefore, in staff's opinion, the original finding can continue to be made that the business will not result in an increase in crime rate within the area. 3. Over Concentration. The request will result in one additional on -site alcohol beverage (Type 47) license within RD No. 15. There are a total of 70 active ABC licenses within RD No. 15. The census tract within which the business is located has a higher ratio of liquor licenses (1 license per every 88 persons) when compared with the average ratio for Orange County (1 license per every 590 persons), and the area has a number of businesses with Type 47 licenses. However, the new Type 47 license is a replacement for the existing Type 42 license. Therefore, there will be no net increase in the total number of ABC licenses within the reporting district. 4. Alcohol Related Crimes. The Police Department has provided statistics for driving under the influence and plain drunk arrests. There were 137 driving under the influence arrests and 476 plain drunk arrests within RD No. 15 in 2001. The percentage of alcohol related arrests within RD No. 15 is 68.7 %. City -wide, alcohol related arrests account for 48.7% of all arrests made. The alcohol - related arrest rate in the two adjacent reporting districts is 62.4% for RD No. 16 and 50.9% for RD No. 13. (A map of the reporting districts is included in Exhibit No. 4.) The rate within RD No. 15, within which the project is located, is higher than the city -wide average and also higher than the two adjacent RD's. As noted above, the Police Department report states that the changes proposed will result in a use more like a bar or cocktail lounge, and could result in a likely anticipated increase in police related activities. However, the use classification is not being changed, and the business will continue to operate primarily as a retail wine shop with ancillary alcoholic beverage sales. 5. Adjacent Uses. The site is located within the Lido Village area that is predominantly commercial. The project site is not adjacent to sensitive land uses, and there are no day care centers, schools, or park and recreation facilities in the vicinity of the project site. The nearest residential uses are located approximately 600 feet to the west across Newport Boulevard, and approximately 600 feet to the southeast along the easterly side of Via Lido. A concern also discussed in the staff report for the use as it was originally proposed in 2001 was relative to the potential to change the operational characteristics given a change in ownership. The business has operated for approximately one year with no known alcohol - related problems. However, the past operation has been with on -site alcohol consumption on a limited basis and incidental to the retail sales of wine. The proposed change would result in the business operating with a Type 47 license that will allow full liquor service for on -site consumption, and with live entertainment. As noted in the 2001 staff report, a use permit runs with the land and not with the individual. Staff is concerned relative to the potential adverse effects which may result if the business were sold to an operator that wished to change the characteristics resulting in less emphasis on the sale of fine wines, or change the type of live entertainment provided. This concern is tempered somewhat by the fact that the applicant is also the owner of the property, but staff remains concerned about a potential future operator of the business who could lack the («applicant» (((application »)), («meetingdate») Page 7 of 9 sensitivity to alcohol- related issues demonstrated by the current business owner. Nevertheless, these concerns relate primarily to the potential for the business being changed to a bar or cocktail lounge use. In response to this concern, staff has included a condition (No. 9) requiring future owners to be notified of the conditions and submittal of a letter by the owners acknowledging acceptance of the limitations and conditions. Hours of Operation The applicant's request includes an amendment to the operating hours. The existing conditions for the use permit include the hours of operation limited to 10:00 a.m. to 11:00 p.m. daily for the retail portion of the business, and from 1:00 p.m. to 11:00 p.m. for the wine tasting portion. Applicant is requesting that the wine tasting portion of the business be expanded to 12:00 midnight on Fridays and Saturdays. Staff does not feel that the request to extend the hours of operation as requested by the applicant is unreasonable. Parking The original approval of Use Permit No. 2001 -005 included a parking waiver. The site is nonconforming in that there are no off - street parking spaces provided on the site. The analysis at that time determined that the use (retail alcohol sales with ancillary on -site wine tasting) would require 21 parking spaces. This parking requirement was based on the retail portion of the business being 1,328 square feet and computed on the standard of one parking space per 250 square feet of floor area; and the wine tasting/seminar portion based on a maximum of 29 patrons .and six employees. In granting the parking waiver it was noted that a parking management plan exists for 22 spaces. provided within Lido Marina Village parking.garage, and a Condition ( #18) was included within the approving action requiring the applicant to submit documentation that at least 21 spaces are available. Subsequently, a copy of the parking agreement between the applicant and the Lido Marina Village parking garage was submitted and it stipulates that a total of 33 spaces have been made available to the business. The applicant has submitted a menu that suggests that the food service goes beyond light snacks and hors d'oeuvres. However, for the reasons discussed above, staff continues to classify the food service as ancillary to the predominate retail use of the business. However, staff notes that the original approval included a parking waiver that was based on the use being as retail sales with ancillary wine tasting and light food service. If the use classification were to be changed to an eating and drinking establishment, the parking requirement would increase for that portion of the business (i.e., the portion operated in Suite A2). Suite A2 consists of 1,263 square feet. The parking standard for eating and drinking establishments ranges from one parking space for every 30 to 50 square feet resulting in a requirement of 26 to 43 spaces for that portion of the business. Therefore, if the business is classified as an eating and drinking establishment, the parking waiver increases from 21 spaces, to 37 to 48 spaces. Since this analysis was based on the business classification remaining unchanged, a waiver of parking was not advertised as part of the public hearing notice. If, however, the Planning Commission determines that the use classification is in fact changing to that of an eating and drinking establishment, it will be necessary to continue the public hearing and send out a revised public hearing notice. ( «applicant» (oapplication>>)) 1 a� ( «meetingdate>>) Page 8 of 9 Environmental Review This project has been reviewed, and it has been determined that it is categorically exempt from the requirements of .the California Environmental Quality Act under Class 1 (Minor Alteration of Existing Structures). Conclusion In summary, staff believes that the changes requested by the applicant will not result in a substantial change in the operating characteristics of the business, which will continue to operate as a retail alcoholic beverage outlet with on -site alcoholic beverage consumption and food service that is incidental to the retail sales. If the Planning Commission agrees with this conclusion, staff believes, the findings of the ABO continue to be met by the findings contained within the approving action for the original use permit, in which case it would be appropriate for the Planning Commission to adopt the draft resolution of approval. The Commission has the option to determine that the business classification has changed to that of a bar or cocktail lounge, in which case, and in accordance with City Council Policy K -7, it would be necessary to deny the amendment. Staff has included Findings for Denial as Exhibit No.2. The Commission also has the option to determine that the portion of the business with on -site food and alcoholic beverage consumption is classified as an eating and drinking establishment. If so determined, it is necessary to continue the public hearing and instruct staff to re- notice the item to. include an amendment to the parking waiver. Submitted'by: PATRICIA L. TEMPLE Planning Director 1 Ia'4t I_ L I-l�n Exhibits Prepared by: WILLIAM CUNNINGHAM Contract Planner 1. Resolution No. 2002 -_, findings and conditions of approval -2. Findings for denial 4. Letter and project description from applicant 6. Police Department report 7. Project plans («applicanb> (oapplicatiorD ) («meetingdate ))) Page 9 of 9 r , RESOLUTION NO. 1579 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH APPROVING AMENDMENT TO USE PERMIT NO. 2001 -005 (PA2002 -167) FOR PROPERTY LOCATED AT 3400 VIA LIDO THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH HEREBY FINDS, RESOLVES AND ORDERS AS FOLLOWS: Section 1. An application was filed by Dennis and Christine Overstreet with respect to property located at 3400 Via Lido and legally described as Lot 2 of Tract 1235, requesting approval of Amendment to Use Pemiit No. 2001 -005 pursuant to the Alcoholic Beverage Outlet Ordinance (ABO) to authorize a Type 47 ABC license for on -site consumption of general alcoholic beverages, live. entertainment, and expansion of hours of operation. Section 2. A public hearing was held on November 7, 2002 in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. A notice of time, place and purpose of the aforesaid meeting was given. Evidence, both written and oral, was presented to and considered by the Planning Commission at this meeting. Section 3. The Planning Conunission finds as follows: The proposed location of the alcoholic.sales establishment needing this use permit, and the proposed conditions under which it would be operated or maintained, is consistent with the General Plan and the purpose of the district in which the site is located; will not be detrimental to the public health, safety, peace, morals, comfort, or welfare of persons residing or working in or adjacent to the neighborhood of such use; and will not be detrimental to the properties or improvements in the vicinity or to the general welfare of the city. The structure that the proposed use will occupy is legal, nonconforming with respect to the maximum floor area ratio, however, the proposed changes in the use do not increase tl�e gross floor area of the building. The amended use permit pertains to the on -site consumption of alcoholic beverages in conjunction with retail alcoholic beverage sales in a building that is designated and zoned for this activity. The use has been conditioned in such a manner to minimize the impacts associated with the sale of alcoholic beverages. The plans, as conditioned, meet the design and development standards for alcoholic sales. 2. The operational characteristics of the proposed use, including the hours of operation, are consistent with Municipal Code requirements. Any change in the operational characteristics, including a change in the hours of operation, would require an amendment to the Use Permit, reviewed by the Planning Commission, 3. The proposed project is consistent with the purpose and intent of Chapter 20.89 of the.Municipal Code (Alcoholic Beverage Outlet's Ordinance) for the following reasons: a. The convenience of the public can be served, by the sale of desired. beverages in conjunction with a ftill- service, sit -down restaurant that is complementary to surrounding! 1 City of Newport Beach Planning Commission Resolution No. 1579 Pale 2 of 6 uses within the Lido Village area. Alcohol service is typical and expected by the public in a full- service restaurant setting. b. The crime rate in the police reporting district and adjacent reporting districts is not likely to increase as a result of the proposed use provided that the use is operated as an eating and . drinking establishment, with the on -site consumption of alcohol incidental to the restaurant use. C. The number of alcohol licenses within the report districts and adjacent reporting districts is high given the nature of the land uses in the district and when compared with County -wide data, but the change in the license classification of a Type 42 to a Type 47 will not result in an increase in licenses within the report district. d. The percentage of alcohol- related arrests in the police reporting district in which the project is proposed is higher than the percentage citywide. However, on -site consumption is not expected to increase alcoholic related crime in that the use is incidental to the use of the site as an eating and drinking establishment. e. There are no sensitive uses such as residences, day care centers, schools, or park and recreation facilities in the vicinity of the project site. 4. The project has been reviewed, and it qualifies for a categorical exemption pursuant to the California Environmental Quality Act under Class 1 (Minor alteration of existing structures). Section 4. Based on the aforementioned findings, the Planning Commission hereby approves Amendment to Use I?emiit No. 2001 -005, subject to the Conditions set forth in Exhibit "A." Section 5. This action shall become final and effective fourteen days after the adoption of this Resolution unless within such time an appeal is filed with the City .Clerk or this action is called for review by the City Council in accordance with the provisions of Title 20, Planning and Zoning, of the Newport Beach Municipal Code. PASSED, APPROVED AND ADOPTED THIS 7th DAY OF NOVEMBER 2002. M AYES:- AQajanian. Gifford Kiser McDaniel, Selich. Toerge and Tucker NOES: None Chairman Secretary CY City of Newport Beach Planning Commission Resolution No. 1579 Page 3 of 6 EXHIBIT "A" CONDITIONS OF APPROVAL USE PERMIT NO. 2001-005 I. The development shall be in substantial conformance with the approved plot plan, floor plan, and elevations dated January 22, 2001. 2. This Use Permit for an alcoholic beverage outlet granted in accordance with the terms of this chapter (Chapter 20.89 of the Newport Beach Municipal Code) 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. 3. That any change in operational characteristics, hours of operation, expansion in area, or Operation characteristics; or other modification to the floor plan, shall require an amendment to this Use Permit or the processing of a new Use Permit. 4. 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 agent. Future owners, operators .or assignees shall submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. 5. The applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in connection with the use will be cause for revocation of this permit. 6. This use- pertnit may be reviewed, modified or revoked by the Planning Commission or City Council should they determine that the proposed uses or conditions under which it is being operated or maintained is detrimental to the public health, welfare or materially injurious to Property or improvements in the vicinity or if the property is operated or maintained so as to constitute 'a public nuisance.. 7. Trash generated by the business shall be screened from. view from adjoining properties except when placed. for pick -up by refuse collection agencies. Trash receptacles for patrons shall be conveniently located both. inside and outside the proposed facility. 8. No outdoor loudspeaker or Yaging. system shall be permitted in conjunction with the operation. 9. All signs shall conform to the provisions of Chapter 20.67 of the Municipal Code. No temporary "sandwich" signs or similar temporary signs shall be permitted, either on -site or off -site, to advertise the restaurant. 10. The alcoholic beverage outiet'is defined as a retail establishment for the.sale of general alcoholic beverages for off- -site consumption as the primary and principal use of the project site. On -site consumption of alcoholic beverages shall be accessory. and subordinate to the principal retail use and alcoholic beverages sales for on -site consumption shall not exceed 20 percent. of gross sales for the business. The applicant or operator shall maintain adequate records to determine a� - City of Newport Beach Planning Commission Resolution No..1579 Page 4 of 6 compliance with this condition and shall provide the City said records when requested. The time period for the purposes of conducting this review shall be in accordance with Alcoholic Beverage Control Board standards. 11. The sale of distilled spirits for off -site consumption shall not exceed 15 percent of gross receipts of all off -site alcohol sales. The sale of distilled spirits for on -site consumption shall not exceed 10% of the total sales for on -site consumption of all alcoholic beverages. The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the City said records when requested. The time period for the purposes of conducting this review shall be 6 months. 12. Gross receipts shall be reviewed by the City for purposes of compliance with the requirements of the Zoning Code and Use Permit if the use is believed to be operating in non - compliance. If the sales percentages review finds that the applicant is not in compliance, this application shall be brought forward to the Planning Commission for review. 13. Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, unless the Planning Commission first approves a Use Permit. 14. The interior area authorized for on -site alcoholic beverage consumption in conjunction with a Type 47 license shall be limited to 1,263 sq. ft. as delineated on the approved floor plans as "Unit AT' with. a maximum of 29 seats. The interior area authorized for the retail sales for general 'alcoholic beverages for off -site consumption shall be limited to 1,328 sq. ft. as delineated on the .approved floor plans as "Unit Al" with a maximum of 3 seats. On 'site consumption of alcoholic beverages shall be prohibited in Unit Al. Substantial changes to the floor plans shall require prior approval by the Planning Commission. Any increase in area of:either.Unit Al or Unit A2 shall be deemed substantial for the purposes of requiring review by the Planning Commission. 15. Hours of operation shall be from '10:00 AM to 11:00 PM, daily for the retail portion of the project, and 1:00 PM to 12:00 midnight Fridays and. Saturdays and 1:00 p.m. to l 1.:00 p.m. Sunday through Thursday for the eating and drinking portion of the project. Organized educational seminars shall not be.conducted more than 3 days per week. 16. Live entertainment may occur subject to the approval of a Live Entertainment Permit and dancing is prohibited. Live entertainment shall not occur more than 3 days per week. Music shall be limited to indoor areas only and all windows and doors shall remain closed during performances except for incidental ingress and egress of patrons. Management of the business shall make every effort to keep the doors closed during performances. 17. The sale of beer, whether for on -site or off -site consumption; shall be prohibited. A Special Events Permit is requiied;%r any event or promotional activity outside the normal operational Characteristics of this retail business •that would . increase, the expected occupancy. beyond 29 patrtiris and 6 employees at any one time or any other, activities as specified. In the; Newport Beach 'Municipal' Code to require such special events permit. J., City of Newport Beach Planning Commission Resolution No. 1579 Pace 5 of 6 19. 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. 20. The alcoholic beverage outlet opamtor'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, if directly related to the patrons of the subject alcoholic beverage outlet. If the operator fails to discourage or correct nuisances, the Planning Commission may review, modify or revoke this Use Permit in accordance with Chapter 20.96 of the Zoning Code. 21. Alcoholic beverage sale from drive -up or walk -up windows shall be prohibited. 22. Any event or activity staged by an outside promoter or entity, where the business owner or his employees or representatives share in any profits, or pay any percentage or commission to a promoter or any other person based upon money collected as a door, charge, cover charge or any other form of admission charge, including minimum drink orders or sale -of drinks is prohibited. 23. Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act shall be posted as required by the State Department of ABC. 24. All owners, managers and employees selling alcoholic beverages shall undergo' and successfully complete a certified training program in responsible methods and skills for'seliing °alcoholic beverages. The 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 establishment shall comply with the requirements of this section within .180 days of the issuance of the certificate of occupancy. Records of each owner's, manager's; and employee's successful completion of the required certified training program shall. be maintained on the premises and shall be presented upon request by a representative of the City of Newport Beach. .25. The applicant is required to obtain all applicable permits from the City Building and Fire Departments.1be construction plans must comply with the most recent, Cityr adopted version of the California Building Code. Adequate access and exiting must be provided. in accordance with the Building Code. 26. The facility and related off - street parking shall conform to the requirements of the Uniform Building Code. The project shall comply with State Disabled Access requirements. .27. Where grease may be introduced into the drainage systems, grease interceptors shall be installed on all fixtures as required by the Uniform'Plumbing Code, unless otherwise approved by the Building Department and the Utilities Department. . 28. Health Department approval is required for any changes to the kitchen and other portions of the building that require a Building Permit. { j City of Newport Beach Planning Commission Resolution No. 1579 Page 6of6 29. A handicapped assessable public restrooms are required. The restrooms must be in compliance with the Uniform Plumbing Code and all applicable Uniform Building Code requirements. 30. The owner /operator of the use shall enter into an agreement to provide and maintain a minimum of 21 parking spaces within the Lido Marina Village parking garage to be accessible at all times during the operation of the use. 31. The applicant or operator of the facility may provide valet attendant service for the use in i i conjunction with the Lido Marina Village parking garage. The applicant or operator shall prepare a valet operated parking plan to be reviewed and approved by the City Traffic Engineer prior to the commencement of the valet service use. 32. Delivery vehicles shall not park within the public right -of -way of Via Lido and Via Oporto. 33. The operator of the restaurant facility shall be responsible for the control of.noise generated by the subject facility. The. noise generated by the proposed use shall comply with the provisions of. Chapter 10.26 of the Newport Beach Municipal Code. The maximum noise shall be limited to no more than depicted below for the specified time periods unless the ambient noise level is higher: 34. Upon evidence that noise .generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code; the Planning Director may require that the applicant.or successor retain a qualified engineer specializing in noise /acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures necessary in order to insure compliance. Between the hours of 7:OOAM and 10:00PM Between the hours of 7:OOAM and 10:00PM Location . Interior Exterior Interior Exterior Residential Property 45dBA 55dBA 40dBA 50dBA Residental.Propeity located within 100 feet of a commercial pro6erty 45dBA 60dBA 45dBA 50dBA Mixed Use Property 45dBA 60dBA 45dBA 50dBA Commercial Property N/A 65dBA N/A 60dBA. 34. Upon evidence that noise .generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code; the Planning Director may require that the applicant.or successor retain a qualified engineer specializing in noise /acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures necessary in order to insure compliance. August 12, 2002 James Campbell Senior Planning Commissioner" City of Newport Beach 3300 Newport Boulevard Newport Beach, CA Dear Mr. Campbell: Dennis Overstreet and I (Christine Overstreet), owners and operators of Overstreets Wine Merchant and Wine Bar, located at 3400 Via Lido, Newport Beach, Ca 92663, respectfully submit a new (revised) Use Permit Application to the Planning Commission of the City of Newport Bearh.for your review and consideration. Attached for reference is our current Use Permit as well as our original application. . We are submitting a new application for the purpose of revising some of the conditions of our current Use Permit, as well as requesting new permit uses: We are not proposing any new construction; interior or exterior. All approved plans, inspec- tions and permits have been approved by all departments of the city of Newport Beach. No new ele- vations; roofs, or mechanical equipment are proposed. Photographs of the current and existing inte- rior and exterior Of the building are attached. There is no additional environmental impact on the surrounding area or the community regarding these uses. There are no variances required for these requests. We are seeking Use Permits for a full on- premise liquor license and an entertainment license for our Wine Bar. Overstreet's Wine Merchant and Wine Bar has demonstrated to the community that we operate a sophisticated and responsible establishment that caters to a mature audience that lives and visits the Peninsula area. We are not and will not be a "teen age hangout'. In fact we post a sign that one must be 21 years or older to enter the wine bar area. As owners of the building and operators of the business, we have a vested interest in the community of Newport Beach. We are a family of four, residing ore Lida Isle for the past four years and as residences of Newport Beach we offer local residences a unique relax- ing atmosphere that appeals to a mature audience who enjoys soft jazz and contemporary music. Because of our location and size, we appeal to residents in our local neighborhood. This mini- mizes travel distances, and traffic on and off the Lido Peninsula. While our feature is a wine bar, we have begun to experience the fact that not everyone in a given party prefers -wixw. Therefore; to encourage business and maximize customer satisfaction regarding beverage of choice, we respect- fully seek a use permit for a full on- premise liquor license. In addition, to offer the sophisticated atmosphere we are attempting to reach we respectfully seek your approval for a use permit that would entitle us to a live entertainment use permit. 133 Page 2 of Use Permit Application - August 12, 2002 Overstreet'a Wine Merdiant & Witte Bar Our establishment serves only 29 people (USE PERMIT is for 29) and we wish to offer entertainment. Our establishment is not adjacent to nor close to any residences. We are an enclosed building so noise is not a factor. Our entertainment will inchxde musicians that sing and /or play an instrument. We wish to offer soft jazz and contemporary music for our setting. We request that we be permitted to offer entertainment seven days a week and that the it be limited to not more than three musicians. Several charity organizations and businesses have requested.to hostsmall events because of our sophisticated atmosphere and convenient location. The live music we envision would clearly enhance the ambiance of our setting and appeal to our clientele. The parking has not caused any undue stress or added congestion to the village or the immediate area because of our size and evening hours. Customers find convenient parking in the Lido Marina Village parking structure arid Via the metered street parking, There is also a handi -cap parking space in the Village immediately adjacent to our side main entrance on Via Oporto. There have been no instances nor reports of instances by our local merchants, neighbors, police.. or community_ The presence of our unique establishment has brought a new interest and new customers to the Village and we are complimented daily on the appearance of the exterior and interior of our business and the services and products we provide. We request additional hours of operation: Friday and, Saturday evening closing at 12:00 mid- night rather than our present 11:00 pm closing time. This new closing time is consistent with people's desire to remain out a little later on weekends, and is consistent with hours of operation for establish- menu such as this. We are in the process of obtaining signaturesf names. &- addresses of lacalirsidences and busi- nesses that support our establishment and support this Use Permit application. (Attached is a copy of the beginnings of this supporting document.) We hope to obtain a space on the agenda for September 2002 Please advise us if this time frame is not feasible. a of our requests. Attachments: City of Newport Beach Application and other attachments as stated above l3� NEWPORT BEACH POLICE DEPARTMENT 870 Santa Barbara. P.O. Box 7000. Newport Beach, CA 92658 -7000 BOB MMiN Chief of Police October 15, 2002 TO: Bill Cunningham, Staff Planner FROM: CSO Susan Seviane SUBJECT: Overstreets at the Wine Merchant At your request, our office has examined the project review request for Overstreets at the Wine Merchant retail location located at 3400 Via Lido, Newport Beach. The applicant is requesting to upgrade the existing Use Permit to: 1) expand the ABC license to full alcoholic beverage on sale (Type 47), 2) allow daily live entertainment, and 3) expand the hours of operation from I I pm to 12 midnight on Fridays and Saturdays. A light gourmet menu will be provided (i.e. chicken breast entrees, muscles, cheese, cracker, etc.). Mrs. Overstreet provided the following details concerning the planned operations. While the main feature is a wine bar, they want to encourage business and maximize customer satisfaction by adding full alcoholic beverage service. For the same reasons, they are seeking to add daily live entertainment (maximum of three musicians), offering "soft jazz and contemporary music." Mrs. Overstreets added that charity organizations and businesses have requested to host small events at the location. No new construction (interior or exterior) is planned. The occupancy limit of 29 will remain the same. The changes in operational characteristics proposed by the applicant are significant. The existing location does not have a kitchen (there is a "hot plate" and small refrigerator. etc.). The proposal to provide full alcoholic beverage service could arguably make the business more like a bar /cocktail lounge and less like a restaurant that provides alcoholic beverages in conjunction with food service. The addition -of live entertainment with expanded hours is consistent with cabaret/nightclub operational characteristics. Based on our experiences with similar business models, such enhanced uses can create a situation where we can likely anticipate an increase in police related activities linked to the proposed business operation. While we have no serious concerns with the current operation, we believe there is a greater policy /land use issue involved in the approval process for intensifying the alcohol usage in this area of the community. As a result, it is difficult for the Police Department to endorse the proposed intensified use permit modification, especially considering the existing concentration of ABC licenses in the area. Accordingly, we believe the decision more appropriately should be left to the Planning Commission and /or City Council based on the said impacts. If the modification is approved, we recommend- in addition to those conditions currently in place- developing conditions to address the issues as listed below. The proposed changes will also require modifications to the ABC license. Upon application to the 1P Office ol'the Chief (949) 644 -3701 1 Administration (949) 644 -3654 1 Patrol - Traffic (949) 644 -3742 / Detectives (949) 644 -3790 . - 5 Department of Alcohol Beverage Control, our department will recommend conditions as necessary to maintain the health, safety and welfare of the community. For police services information refer to the attached report by Crime Analyst Paul Salenko. Signs and Displays: Mrs. Overstreet stated the signs for the location will be "elegant and understated" and designed to comply with city conditions as to sign type, size and location. Hours of Operation: According to Mrs. Overstreet, the operating hours will be between 10:00 A.M. to 11:00 P.M. Friday and Saturday 10:00 A.M. to 12:00 Midnight for both the retail and on -sale operations. Preventive Design: The Police Department has no recommendations. Securitv: The Police Department has no additional recommendations. Em lovee Training: Require 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. Additional Comments: None CSO Susan Seviane Vice and Intelligence Unit ')(P City of Newport Beach Police Department Memorandum October 8, 2002 - TO: Bill Cunningham, Staff Planner FROM: Paul Salenko, Crime Analyst SUBJECT: Alcohol Related Statistics At your request, our office has reviewed police services data for the Overstreet's Wine Merchant and Wine Bar at 3400 Via Lido. This area encompasses our reporting district (RD) number 15 as well as part of Census Tract 635. This report reflects City of Newport Beach data for calendar year 2001, which is the most current data available. Calls for Service Information City wide there were 55,291 calls for police services during this time, of which 5,658 were in RD 15. A "call for service' is, any contact of the police department by a citizen which results in the dispatching of a unit or causes the contacted employee to take some sort of action, such as criminal investigations, alarm responses, traffic accidents, parking problems, and animal control calls, etc. Crime Information There were 6,955 crimes reported to the Newport Beach Police Department during this period. Of this total, 2,852 were Part One Crimes. Part One crimes are the eight most serious crimes (Homicide, forcible Rape, Robbery, Aggravated Assault, Burglary, Larceny - theft, Auto Theft and Arson) as defined by the FBI in the Uniform Crime Reports. The remaining 4,103 were Part Two crimes. The Part One crime rate for the entire city during this same period was 3,770.24 per 100,000 people. The national Part One crime rate was 4,124.0 per 100,000 people. Crimes RD 15 Newport Beach California* National* Part 1 367 2,852 1,266,714 11,605,751 Part 2 912 4,103 N/A N/A Part 1Crime Rate 12,981.96 3,770.24 3,739.7 4,124.0 The number of active ABC licenses in this RD is 70 ** This reporting district had a total of 1,279 reported crimes as compared to a City wide -- reporting district average of 211 reported crimes. This reporting district is 1,068 crimes or 506.86% above the City wide reporting district average. This location is within an area where the number of crimes is at least 75% higher than the average of all reporting districts in the City as outlined in the City Council "K -7" policy. 3 1 Arrest Information There were 137 DUI arrests and 476 Plain Drunk arrests in this area during this same period as compared to 1,769 for the entire city. This RD amounts to 34.81 % of the DUI /Drunk arrests made in the entire City. According to a recent national study by the Department of Justice, more than 36% of adult offenders convicted of crimes in 1996 had been drinking at the time of their arrest. Arrests RD 15 Newport Beach (DUI/Drunk) 613 1,769 All Arrests 892 3,629 California* National* N/A N/A 1,408,904 9,123,428 Additional Information The Alcoholic Beverage Outlets ordnance states that the Planning Commission shall consider the crime rate in the adjacent reporting districts. The two adjacent reporting districts you requested are RD 16 and RD 13. Crimes RD 16 RD 13 Part 1 178 101 Part 2 424 161 Crime Rate 6,747.54 5,528.19 Arrests (DUI/Drunk) 221 58 All Arrests 354 114 Calls For Service 3,564 2,132 Number of active ABC licenses 5 ** 5 ** Note: It is important to remember that when dealing with small numbers any change greatly affects any percentage changes. The population figure used for the Crime Rate was 75,645. *These numbers are from the 2000 Uniform Crime Reports, which is the most recent edition. **The number of active ABC licenses is the total of ail types of licenses known to the police department as of the date of this document. If you are in need of any further assistance, please contact me at (949) 644 -3791. Paul Salenko Crime Analysis Unit i3� -- - -------- Li ---------- Reporting Districts E. M IF, Newport Beach Police Department NO Effective January 1, 2002 7�— 21 Zs Ll E) a PACIFIC OCEAN � 3q EXHIBIT 7 PROJECT PLANS t. o rlrr UV- R1'I IAfG ILL NtWr ti I' .;Z 4 !;' ; ... " wo 199'i UPGJwn' dtln xvrttiw'eaa . H9E rx I ew.Drd, uaaed n__tAw LY cGW.rfrLF'%d •lAi A4 MlaWiifeuw i� .i � 'Di :.uywllquallW AYP 04 L e 1 •n W f � $.MM9 i' r5' h T. D0. hPfMXP 'F{ iw...gpaq , p m o. #NY CA•M.✓ T AM'ev Jas�� '(/M AiY+I>K I. \' . S Ir1r. a Y.MYADnn4. s µa..H'rA+ V I ' I N I "j y M^ f' (wFTN 19 l�( (R / .. .. 'G11.CO. 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K er) a' •' o W'www.r.r .� .Ins fry � '� it �` �~ _ ; wr.l. rye sNa wa �W��p u'nf rxs.�Dw.- �4wruu4'�•• f I ". 00' , A Cep v_..... _. __ -1 I. '1YM.bt4 IMR /.1 r w .. 1.�'Slnµ��re ^w: jA 4. Fiwowiw r. ra .w. .ry YYR Y) «DD U "N'Y '1. ]D' '• Yr'✓ o « w a..Gr y.f eursv,owA:.n,d. .4 Nn1 n. Y4. iIIYµW 4JNMrL l: 1w,u.muieA 9. v •N '.L' .+carte 4Y O�Y Ir1�EM {lr� RtlM SUrveying'Inc. TOPOGRAPHIC SUP -V . 0 R t '.LEGAL DESCH fPT70N: �"""'`� (�LlflN. AOORESS OF PROJECT ;rr 1 Im ow 3Df0 tYVA Foeet Oir.e AnOB uS Gr'Bw rvaef p RLasRT M 9 Ills [A B.'sS) =OMNyyISA IPIC. NCJVOR] {BUSSN Y.SIE3S. 1B'%4 vlFJlvJfPaT� MVH]IY B(ACM. q ) X91 n rri4i �•S .N] nEVPORT BE W (N imN.vrt>DI G' 1p90 S t 1 \ r NIL 1 -Zt -0) 'vCP DB PA2001.167far UM0D04 1,.9.00 Via Lid. .. WV1 I: a. C. is .......... ........... .... IITTI M IT T. Ija I—TI IT ir 11 I Ni TA aw L I to . Vvr:'. MOM, 14 VD MI, t5" IT A, ,A1 III- UNIT A' vg,r Drm ol -77 I THIS PAGE LEFT BLANK INTENTIONALLY Exhibit No. 5 ,Au _1 THIS PAGE LEFT BLANK INTENTIONALLY 141 rasa -Y f9vloc It, .1,, lip, SNUH 154"AS� -N 7✓ f-6, Stiff y� j; 1 N'O Wa, IT r uf, I el 1p 1C-....,. --. Ir7 rw �All 4'A V'v✓ IA FJ wtol to f V4 f LEFT BLANK THIS paar IN ENTI NALLY ,Aq Exhibit No. 6 ,it, THIS PAGE LEFT BLANK INTENTIONALLY ,5� Page 1 of 1 From: Freeman, Chuck Sent: Sunday, April 15; 2007 6:04 AM To: Jones, Doug Doug I contacted the female manager at the wine joint located at Via Lido and Via Oporto. I initially wanted to chastise her about the cars parked in the red zone on Via Oporto (a weekly occurrence). I then noticed that they placed a wooden fence over most of the public sidewalk adjacent to Via Oporto for the purpose of a smoking area. I did not see any alcohol, but. did see chairs and tables with several people standing around the fenced area, smoking. The manager did not think they had a permit for that addition, and did not think the CUP was changed to reflect that new area. I told her to remove the fencing until a. permit could be obtained. I think the CUP might need some work as well. This is just a little info for you; I don't think any further action is needed unless you really want to. Thanks, Chuck. 10/24/2007 THIS PAGE LEFT BLANK INTENTIONALLY 6g Exhibit No. 7 15� THIS PAGE LEFT BLANK INTENTIONALLY � 5t) �NrsvonnT to77 . o.... nom.,'. �IF•.j 11 -v ❑ "rEI,EPHONIC L BKIFFING " " Y v• Preliminary Investigation of, ^•` r DR No. El GSU °v "I Operating. W/O a Business License 07 -03722 Location of Occurrence RD Date & Time Reported to PD Connected Reports - Type & DR 3400 Via Lido (Sejour) 15 0412112007 1230 Supplemental, Follow -up Month 1 Day I Year Day Time Month I Day 1 Year Day Time Occurred On Or Between: 0411912007 . Thursday 2015 & 0412012007 Friday 0015 Reportable Use of Force: ❑ Yes Z No Stolen 1 Lost [Recovered . Est.Dam. ArsonNandalism $ 00.00 0.00 $ 00.00 Last Name (Firm name if business) First Name Middle : DOB Age ex Desc i Hgl Wgl Hair (Eyes City of Newport Beach I X X I L , _ — Residence Address .C� �State I Zip I Res. Phone ' V I .. _ - — -- .— — I I Business Address City y Sta le Zlp Bus . Phon.e C 3300 Newport Boulevard I Newport Beach CA 92663 (949) 644 -3300 T I , -- L .. _.— . — —.. .. —) I -- - ... - -- . 'Model . Victim's Occupation Victim's Condition Veh. LiC. No. !State Year Make Model COlorj s) M Municipality Notifications - Persons & Division Victim Advised of Confidentiality Provisions Per 293 PC? O Yes O No Detective D. Jones - Vice and Intelligence Victim Desires Confidentiality? O Yes O No Domestic Violence Related? O Yes ( No Gang Related? O Yes O No + Hate Crime? O Yes O No Alcohol Related? Weapon Involved? O Yes Oa No Weapon Involved? O Yes OO No Weapon Involved? O Yes O No I O Yes O No Name If Known- Booking No. & Charge It Arrested (Lill Additional Suspects In Narrative) DOB Age Sex Desc I Hgt. , Wgl. Hair 'Eyes Stockton, Carolyn Christine Address City State, Zip Res. Phone IBus. Phone S 350 Buena Vista Newport Beach CA 9266 (949) 675 -6074 (949) 675 -9800 $ Personal Oddities (Unusual Features, Scars, Tattoos, Etc) Type Of Weapon (Threats.Force,sinnultd Gun, Etc) If Knife or Gun. Describe: P - E Clothing -Additional Descriptors 111 I Additional Suspects. O Yes C (List on Page 2) O No T ,-- Veh. Lic. No. i State Year Make Model Type Colors) y— Inside Colors) Modiacalions Damage- Additional Desc. Involved Pprsond COaes: V-Y¢4m RReoemne Person W- Witness 0. n Code Name Resideress City State Zip =e, W wm�w lT DOB Age Sex FBusmess Address (Include Zip Code) ' Bus. Phone Res. Phone 1870 Santa Barbara Drive, Newport Beach, CA 92660 (949) 644 -56 Code Name Residence Address City -Stale Zip W DOB Age SexTBusiness Address (include Zip Code) Bus. Phone Res. Phone 870 Santa Barbara Drive, Newport Beach, CA 92660 ' (949) 644 -3681 M.O. - SPECIFIC OR UNUSUAL ACTIONS THAT bWY TENO TO IDENTIFY THIS SUSP.(Us. reverse site l asdaional nanalwj Burg: [I Force 0 N Force Suspect is operating a reslauranUbartclub without the proper permits.from the city of Newport Beach and the Department of Alcoholic Beverage Control. Refer to supplemental report and follow -up report for details. S p 'S To ng ID INC. Investigating Officers) ID No. Signature of Reporting Person S 992 D e2 Time Reproduced' Cle [� do 7 LWPORT BEACH POLICE DEPARTMzNT SUPPLEMENTAL REPORT - FIELD DatelTime of Report Type of Original Report DR Number 4120107 1030 Crime 07 -3722 Date of Original Occurrence Location of Original Occurrence RD of Occurrence 4/1912007 3400 Via Lido (Sejour) 15 V Victim's Last Name (Firm Name if Business) First Middle IDOB Age City Of Newport Beach C Address Cdy F4 — Stale Res. Phone Phone T iZip IBus. Person Reporting Last Name - First Middle iDOB Age R P Address City —IRe --... IState iZip Res. Phone ..— • . .- -- .. .Bus. Phone I _ Name if Known, Booking No. & Charge if Arrested 'DOB Age Sex - Desc Hgl Wgl Hair I Eyes U I ! I S _. —... —. ..__ _. ^....._.. ... Address City — Z Slate 1p IRes. Phone Bus. Phone P I E C Personal Oddities (Unusal Features, Scars, Tattoos, Etc.) Weapon (Describe Fully) T --- 1 S Name if Known, Booking No. & Charge if Arrested DOB - I Age Sex Desc Hgt Wgt Hair ; Eyes U L �..�...�_. S Address City IState Zip 'Res. Phone 'Bus. Phone P E C Personal Oddities (Unusal Features, Scars. Tattoos, Etc.) Weapon (Describe Fully) T i Clothing - - �— - - - - 2 Veh. Lic. No State Year Make Mode(Type Colors) E❑Vitt H ❑ Sus Inside Color Body Modification Body Damage t (1)Addilional Information Reported. (2) If Property Involved. Itemize. Describe and Show Value. Listing All Serial Numbers. See Page 2 Supery o A r vi ID No. Reporting Officer(s) ID No. Person R eporting (Signature) ) S Dal /Time Reproduced /Dist. Clerk Nero Fa 3.17 (rtev. 04-01) Supplemental Report - Field ,NEWPORT BEACH POLICE DEPART1, -IT Continuation Sheet Page No. Type of Report Booking No. DR Number 2 1 Supplemental Report - Field I 107 -3722 On 4/19/07 I, along with Office was working in an undercover capacity for the City of Newport Beach. We were monitoring the bars for ABC violations. At approximately 2015 hours we entered Sejour (located at 3400 Via Lido). The person at the door asked for our identification and let us in. We walked in and observed (5) rooms throughout the entire restaurant/bar. The room immediately to the left had a bar area with beer and soda and assortment of wine. There wasn't an employee tending the bar. There were approximately (10) patrons inside that room eating dinner. The room to the right was occupied by (4) people who were eating and drinking. The other rooms (except for the rear bar area) had couches and coffee tables. Those rooms were not occupied. The rear bar area had approximately (15) people. There were (2) bartenders at that bar. The bar appeared to be a "full bar" with an assortment of beer, liquor,. and wine. As we were walking around, I observed an older white male with a black shirt and white pants walking around the bar and talking to the workers as if he was the manager. I heard a conversation between him and some patrons about the music and I overheard him say that they always have (2) DJs playing music. There was open seating so we sat at a table near the patio exit. We said that we wanted to have dinner so we were each given full menus. The menus included (4) soups, (6) salads, (9) appetizers, (6) sandwiches, (12) entrees, and (7) sides. The server asked if we wanted a drink and she said that they have beers for sale. She said that the beers were: Amstel Light, Heineken, Coors Light, Corona, Corona Light, and Stella Artois. We ordered a Jack Daniels and Coke and a Corona. We also ordered calamari and a filet for dinner. I ordered a Stella Artois. towards the end of dinner. The server asked if we wanted dessert and presented us with a dessert menu that had five items. We ordered one dessert. Throughout the time we were there we heard music playing inside the restaurant. At approximately 2100 hours a D.J. started playing loud music that could be heard inside the restaurant as well as the outdoor patio. I observed numerous speakers set up inside the rear bar and throughout the various rooms including the bar to the left of the front door. I observed approximately 4 -5 people dancing in the bar to the left of the entrance and at least 7 -10 people dancing in the rear bar area. I asked the blonde server if there was "bottle service ", which is a term used to describe a VIP area where people pay for bottle of liquor as well as a place to sit and additional attention from the servers. The server said, "Yes'. I asked how much is it and she said, "It's $275.00 plus tax ". Continued on page 3 Supervisor App it \ 10 No. IReporUng 0 Nlce s) to No. t 14EWPORT BEACH POLICE DEPARTMT7N'r Continuation Sheet Page No. Type of Report Booking No. DR Number 3 Supplemental Report - Field 1 1 07 -3722 1 didn't observe any occupancy signs inside the bar /restaurant area. Throughout the night, Office counted sections of the bar with a hand counter. There were no signs of overcrowding during the time we were there. I observed the doorman periodically walk through the restaurant to check the occupancy as well as make sure that nobody was bringing drinks with them to the outside patio area. It was obvious to me that the establishment was set up as a restaraunt/bar and not a wine tasting establishment. At approximately 0015 hours we left the location. Supervisor Approvin to No. Reporti Office ID No. I 'a I9 too. Sejour Newport Beach Server: Simone 04/19/2007 10 :20 PM Table 3/1 20008 Guests: 2 Jack Daniels 6.00 6.00 Corona 29.00 Filet Mignon 22.00 Spicy Calamari 6.00 Stella Artois 10.00 Spooncake Sub Total 80:00 i 6.20 Tax 86.20 Total Balance Due 86.20 Thanks for joining us! Come see us again soon! Sejour, the place to be in NB! 03-74 lib NEWrORT BEACH POLICE DEPT lhTMENT FOLLOW -UP REPORT Type of original Report Date Ot Original Report Date of This Report Maslen Case No. —i j Crime 04/19/2007 04/21/2007 ❑ Multiple 07 -03722 Reclassify Master Case To Victim _ Follow -Up No- City of Newport Beach 1 Mastery Property Value Rec This Report __ Total RPTD Loss ❑ Total Recovery []Partial Recovery 00.00 ❑ Change of Total Value 00.00 Master Case Status Property Disposition 50 Exceptionally Cleared ❑ Release ❑ Dispose ❑ Hold Until _ S U S P E Stockton, Carolyn Christine: (10/07/1953), F/W /5-7 /135 /Bm /Blu, AZDL B11829532 C T S DET CODED 11 List related reports by case numher. tune crimes victims name anA rase sums usnn rase status numbers. 21 Describe any chance in properly or value 3i Describe any addition property loss. 4) Identify partial recoveries. 5) Briefly summarize the original incident. 6) Explain invesligation progress and case On 04/19/2007 1 and I went to a business called Sejour, which is located at 3400 Via "Lido. We had become aware of numerous complaints regarding this business ,indicating it was operating as a full service restaurant/bar, and on weekends a nightclub. and in plain clothes, went inside Sejour. Refer to supntal report for "his i While and Overe inside Sejour, I stayed outside in adjacent parking lots and near adjacent businesses. I noticed the front entrance /exit, located off of Via Lido, was roped -off to accommodate a line. This roped -off area extended past Sejour and blocked half of the public sidewalk. The side of Sejour, the side facing Via Oporto, had two doors open. One door was closer to Via Lido and opened to a fenced -off patio area, which appeared to be a smoking area. This fence was approximately 4' high, 10' wide and 35' in length; it completely blocked access to the public sidewalk. The other door was closer to Central Avenue and led to a kitchen area. The front door and patio door were left open all night. The kitchen door was open most of the night. Music was playing upon our arrival and I could hear music from all open doors across Via Lido and Via Oporto. At approximately 9:00 pm, when the DJ began, the music got measurable louder and more Intense. (was able to hear the music and the DJ from the City Hall parking lot. , 10100010M and I left Sejour at approximately 12:15 am on 04/20/20; they were still open for business and the DJ was playing music. At approximately 12:50 am, I drove past Sejour and saw the business closing. For clarification purposes regarding Detective Peterson's report, when he refers to the front area he is referring to Unit Al of the business, a portion of the business supposedly operating as a retail area for wine sales. When Detective. Peterson refers to the rear bar area, he is referring to Unit A2 of the business. The stz— k 410,0Ilir �II` ANNO \ Lo k NEWR* RT BEACH POLICE DEVARTMENT CONTINUATION SHEET _ . ___.. '2 ; Follow -Up Report 07 -03722 terms Unit Al and Unit A2 were taken off a map from the planning deportment documenting the difforent areas of this business. Based on our observations, SeJour is clearly operating as a full service restaurant and bar. The layout has been reconfigured to accommodate diners, dancers and social drinkers. There was nothing observed to indicate Sejour was still in the wine tasting or wine selling business. This case will be forwarded to Code Enforcement Officer Charles Spence for dissemination among the appropriate City departments as well as to the Department of Alcoholic Beverage Control for review and investigation. Based on the jurisdiction for continued investigation into this matter resting with the City and ABC, this case will be exceptionally cleared. LL--_ _... iID No. Supervisor ApPro n ID No. ' Re anti THIS PAGE LEFT BLANK INTENTIONALLY 1U3 THIS PAGE LEFT BLANK .INTENTIONALLY }0 Page 1 of 1 From: Freeman, Chuck Sent: Saturday, April 28, 2007 3:56 AM To: Jones, Doug Subject: ABC stuff Doug: Another message reference the wine spot on Via Oporto. Tonight (Fri night/Sat morning) at about 0015 hours I saw (2) vehicles parked on Via Oporto in the Red Zone. I also noted that they have once again placed the white wooden fence up covering the sidewalk adjacent to Via Oporto. Inside the fenced area I noted 20 -30 folks standing around. Some were smoking, others were just hanging out, and I did not see any alcohol. I did not contact management on the fenced area, but I did ask the valet to move the parked cars. That's it for now. The place was packed but I did not do a bar check (unk if you guys or ABC were working it tonight). Chuck. l�� Exhibit No. 9 \�l THIS PAGE LEFT BLANK INTENTIONALLY ,V,x r I 1 NOTICE OF ADMINISTRATIVE CITATION I I CITY OFNEWPCIRTBEACB j Ofii¢eof toe Gtylt4pueger i Code& Mater Quality Enforuaaent Dwlslon Citation No. Z7.1^ -1^ _r7 T!�r 3360 Newport Blvd r Newport Sea* Ca. 92663 , ' (9491644-3215 Citation/Correction Date: _! /I 4 %/. Tfine: An Inspection of the premises boated at in the City of Newport Beach, revealed aviolati_on(s) of the Newport Beach Municipal Code. IST. CITATION $100.00......... IS NOW DUE AND PAYABLE THE NEXT LEVEL CITATION IS NOW PENDING AND YOU MAY BE CITED EACH DAY THE VIOLATION CONTIKUE$..OTHER ENFORCEMENT ACTION AND PENALTIES MAY ALSO RESULT IF COMPLIANCE IS NOT ACHTEYEO:OR lF YOU CONTINUE TO IGNORE THIS CITATION. () 2ND. CITATION $200.00,......... JS NOW DUE AND PAYABLE ( ) M. CITATION$ 500.00.. ........ : IS NOW DUE ANDPAYABLF THISMOLATION(S) WAS ORIGINALLY BROUGHT TO YOUR ATTENTION ON _ — AND YOU ��p�LTa>rr /III RECEIPT ACKNOWLEDGED BY _ DATE. i le-37 - sprw4G In !ECTED). i :I RESOLUTION NO. 1579 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH APPROVING AMENDMENT TO USE PERMIT NO. 2001 -005 (PA2002 -167) FOR PROPERTY LOCATED AT 3400 VIA LIDO THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH HEREBY FINDS, RESOLVES AND ORDERS AS FOLLOWS: Section 1. An application was filed by Dennis and Christine Overstreet with respect to property located at 3400 Via Lido and legally described as Lot 2 of Tract 1235, requesting approval of Amendment to Use Permit No. 2001 -005 pursuant to the Alcoholic Beverage Outlet Ordinance (ABO) to authorize a Type 47 ABC license for on -site consumption of general alcoholic beverages, live entertainment, and expansion of hours of operation. Section 2. A public hearing was held on November 7, 2002 in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. A notice of time, place and purpose of the aforesaid meeting was given. Evidence, both written and oral, was presented to and considered by the Planning Commission at this meeting. Section 3. The Planning Commission finds as follows: The proposed location of the alcoholic.sales establishment needing this use permit, and the proposed conditions under which it would be operated or maintained, is consistent with the General Plan and the purpose of the district in which the site is located; will not be detrimental to the public health, safety, peace, morals, comfort, or'welfare of persons residing or working in or adjacent to the neighborhood of such use; and will not be detrimental to the properties or improvements in the vicinity or to the general welfare of the city. The structure that the proposed use will occupy is legal, nonconforming with respect to the maximum floor area ratio, however, the proposed changes in the use do not increase the gross floor area of the building. The amended use permit pertains to the on -site consumption of alcoholic beverages in conjunction with retail alcoholic beverage sales in a building that is designated and zoned for this activity. The use has been conditioned in such a manner to minimize the impacts associated with the sale of alcoholic beverages. The plans, as conditioned, meet the design and development standards for alcoholic sales. 2. The operational characteristics of the proposed use, including the hours of operation, are consistent with Municipal Code requirements. Any change in the operational characteristics, including a change in the hours of operation, would require an amendment to the Use Permit, reviewed by the Planning Commission. 3. The proposed project is consistent with the purpose and intent of Chapter 20.89 of.the.Municipal Code (Alcoholic Beverage Outlets Ordinance) for the following reasons: a. The convenience of the public can be served. by the sale of desired. beverages in conjunction with a full- service, sit -down restaurant that is complementary to surrounding b �1 q City of Newport Beach Planning Commission Resolution No. 1579 Page 2 of 6 uses within the Lido Village area. Alcohol service is typical and expected by the public in a full- service restaurant setting. The crime rate in the police reporting district and adjacent reporting districts is not likely to increase as a result of the proposed use provided that the use is operated as an eating and drinking establishment, with the on -site consumption of alcohol incidental to the restaurant use. C. The number of alcohol licenses within the report districts and adjacent reporting districts is high given the nature of the land uses in the district and when compared with County -wide data, but the change in the license classification of a Type 42 to a Type 47 will not result in an increase in licenses within the report district. d. The percentage of alcohol- related arrests in the police reporting district in which the project is proposed is higher than the percentage citywide. However, on -site consumption is not expected to increase alcoholic related crime in that the use is incidental to the use of the site as an eating and drinking establishment. e. There are no sensitive uses such as residences, day care centers, schools, or park and recreation facilities in the vicinity of the project site. 4. The project has been reviewed, and it .qualifies for a categorical exemption pursuant to the California Environmental Quality Act under Class I (Minor alteration of existing structures). Section 4. Based on the aforementioned findings, the Planning Commission hereby approves Amendment to Use 1?emrit No. 2001 -005, subject to the Conditions set forth in Exhibit "A." Section 5. This action shall become final and effective fourteen days after the adoption of this Resolution unless within such time an appeal is filed with the City Clerk or this action is called for review by the City Council in accordance with the provisions of Title 20, Planning and Zoning, of the Newport Beach Municipal Code. PASSED, APPROVED AND ADOPTED THIS 7th DAY OF NOVEMBER 2002. AYES: Agaianian, Gifford. Kiser NOES: Chairman McDaniel, Selich, Toerge and Tucker Secretary ti 1 1 t - City of Newport Beach Planning Commission Resolution No. 1574 Page 3 of 6 FIMIBIT "A" CONDITIONS OF APPROVAL USE PERMIT NO. 2001-005 1. The development shall be in substantial conformance with the approved plot plan, floor plan, and elevations dated January 22, 2001. 2. This Use Permit for an alcoholic beverage outlet granted in accordance with the terms of this chapter (Chapter 20.89 of the Newport Beach Municipal Code) 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. 3. That any change in operational characteristics, hours of operation, expansion in area, or operation characteristics; or other modification to the floor plan, shall require an amendment to this Use Permit or the processing of a new Use Permit. 4. 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 agent. Future owners, operators or assignees shall submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. 5. The applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in connection with the use will be cause for revocation 9f this permit. 6. This use permit may be reviewed, modified or revoked by the Planning Commission or City Council should they determine that the proposed uses or conditions under which. it is being operated or maintained is detrimental to the public health, welfare or materially injurious to, property or improvements in the vicinity or if the property is operated or maintained so as to constitute 'a public nuisance. 7. Trash generated by the business shall be screened from, view from adjoining properties except when placed. for pick -up by refuse collection agencies. Trash receptacles for patrons shall be conveniently located bbth,inside an d outside the proposed facility. S. No outdoor loudspeaker or paging system shall be permitted in conjunction with the operation. 9. All signs shall conform to the provisions of Chapter 20.67 of the Municipal Code. No temporary "sandwich" signs or similar temporary signs shall be permitted, either on -site or off -site, to advertise the restaurant. 10. The alcoholic beverage outlet is defined as a retail establishment for the.sale of general alcoholic beverages for off- -site consumption as the primaiy and principal use of the project site. On -site consumption of alcoholic beverages shall be accessory and subordinate to the principal retail use and alcoholic beverages sales for on -site consumption s11a '11 not exceed 20 percent of gross sales for the business. The applicant or operator shall maintain adequate records to determine City of Newport Beach Planning Commission Resolution No..1574 Page 4 of 6 - compliance with this condition and shall provide the City said records when requested. The time period for the purposes of conducting this review shall be in accordance with Alcoholic Beverage Control Board standards. 1 I. The sale of distilled spirits for off -site consumption shall not exceed 15 percent of gross receipts of all off -site alcohol sales. The sale of distilled spirits for on -site consumption shall not exceed 10 % of the total sales for on -site consumption of all alcoholic beverages. The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the City said records when requested. The time period for the purposes of conducting this review shall be 6 months. 12. Gross receipts shall be reviewed by the City for purposes of compliance with the requirements of the Zoning Code and Use Permit if the use is believed to be operating in non - compliance. If the sales percentages review finds that the applicant is not in compliance, this application shall be brought forward to the Planning Commission for review. 13. Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, "tavern, cocktail lounge or night club as defined by the Municipal Code, unless the Planning Commission first approves a Use Permit. 14. The interior area authorized for on -site alcoholic beverage consumption in conjunction with a Type 47.1icense shall be limited to 1,263 sq. ft. as delineated on the approved floor plans as "Unit A2" .with. a maximum of 24 seats. The interior area authorized for the retail sales for general alcoholic beverages for off -site consumption shall be limited to 1,328 sq. ft. as delineated ons the approved floor plans as "Unit Al" with a maximum of 3 seats. On =site consumption of alcoholic beverages shall be prohibited in Unit Al. Substantial changes to the floor plans shall require prior approval by the Planning Conunission. Any increase in area of either.Unit Al or Unit A2 shall be deemed substantial for the purposes of requiring review by the Planning Commission. 15. Hours of operation shall be from 10:00 AM to 11:00 PM, daily for the retail portion of the project, and. 1:00 PM to 12:00 midnight Fridays and. Saturdays and 1:00 p.m. to 11:00 p.m. Sunday through 'Thursday for the eating and drinking portion, of the project. Organized educational seminars shall not be conducted more than 3 days per week. , 16. Live entertainment may occur subject to the approval of a Live Entertainment Permit and dancing is,prohibited. Live entertainment shall not occur more than 3 days per week. Music shall be limited to indoor areas only and all windows and doors shall remain .closed during performances except for incidental ingress and egress of patrons. Management of the business shall make every effort to keep the doors closed during performances. 17. The sale of beer, whether for on -site or off -site 'consumption; shall be prohibited. $". A Special vcnts Pprnut .is required for any event or promotional activity- the normal op"Orauonal Cl#racteristics of this" retail';business that, would`itice& tf* e4eeped" "occupancy. 15r&yond 29 paciiins 81id 6 employees at arty one, titre or any other activities as specified lit the , 1*ttfwport BeacFi Municipal Code to requite such spgzial everts perttii "t.. ` " ff City of Newport Beach Planning Commission Resolution No. 1579 Page 5 of 6 19. 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. 20. The alcoholic beverage outlet operator 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, if directly related to the patrons of the subject alcoholic beverage outlet. if the operator fails to discourage or correct nuisances, the Planning Commission may review, modify or revoke this Use Permit in accordance with Chapter 20.96 of the Zoning Code. 21. Alcoholic beverage sale from drive -up or walk -up windows shall be prohibited. 22. Any event or activity staged by an outside promoter or entity, where the business owner or his employees or representatives share in any profits, or pay any percentage or commission to a promoter or any other person based upon money collected as a door charge, cover charge or any other form of admission charge, including minimum drink orders or sale �of drinks is prohibited. 23. Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act shall be posted as required by the State Department of ABC. 24. All owners, managers and employees selling alcoholic beverages shall undergo' and successfully complete a certified training program in responsible methods and skills for `selling; alcoholic beverages. The 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. Tire establishment shall comply with the requirements of this section within .180 days of the. issuance of the certificate of occupancy. Records of each owner's, manager's and employee's sucessful completion of the required certified training program shall . be maintained on the premises and shall be presented upon. request by a representative of the City of Newport Beach. 25. The applicant is required to obtain all applicable permits from the City Building and Fire Departments., The construction plans must comply with the most recent, City- adopted version of the California Building Code. Adequate access and exiting must be provided. in accordance with the Building Code. 26. The facility and related off - street parking shall conform to the requirements of the Uniform Building Code. The project shall comply with State Disabled Access requirements. 27. Where grease may be introduced into the drainage systems, grease interceptors shall be installed on all fixtures as required by the Uniform Plumbing Code, unless otherwise approved by the Building Department and the Utilities Department. 28. Health Department approval is required for any changes to the kitchen and other portions of the building that require a Building Permit. ,�i City of Newport Beach Planning Commission Resolution No. 1579 Page 6 of 6 29. A handicapped assessable public restrooms are_ required. The restrooms must be in compliance with the Uniform Plumbing Code and all applicable Uniform Building Code requirements. 30. The owner /operator of the use shall enter into an agreement to provide and maintain a minimum of 21 parking spaces within the Lido Marina Village parking garage to be accessible at all times during the operation of the use. 31. The applicant or operator of the facility may provide valet attendant service for the use in conjunction with the Lido Marina Village parking garage. The applicant or operator shall prepare a valet operated parking plan to be reviewed and approved by the City Traffic Engineer prior to the commencement of the valet service use. 32. Delivery vehicles shall not park within the public right -of -way of Via Lido and Via Oporto. 33. The operator of the restaurant facility shall be responsible for the control of noise generated by the subject facility. The noise generated by the proposed use shall comply with the provisions of Chapter 10.26 of the Newport Beach Municipal Code. The maximum noise shall be limited to no more than depicted below for the specified time periods unless the ambient noise level is higher: 344. Upon evidence that noise .generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code, the Planning Director may require that the applicant or successor retain . a qualified engineer specializing in noise/acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures necessary in order to insure compliance. \15 Between the hours of 7:OOAM and 10:00PM Between the hours of 7:00AM and 10:00PM Location Interior Exterior Interior Exterior Residential Property 45dBA 55dBA 40dBA 5OdBA Residential Property located within 100 feet of a commercial property 45dBA 6OdBA 45dBA 50dBA Mixed Use Property 45dBA 60dBA 45dBA 5OdBA I Commercial Propert . NIA 65dBA N/A 60dBA. 344. Upon evidence that noise .generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code, the Planning Director may require that the applicant or successor retain . a qualified engineer specializing in noise/acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures necessary in order to insure compliance. \15 a ff b , -E, I' I�PfuEUI" c. cIw 9 (9 y I'104F,j WAQ 4d 1-4 t'i m Lm Wig V76 2)T" RlM(AP- 0� Fmft�"I/"lFq M111 Flv,' 'A VA l fil ok I-C aq, ckjq; ? ry lab Fk & ------ Uk rr 4, IAMAIC & ,Hl I. Tf ----------- ................. - � k\ F4. .� TIC s71 A), I. WAN', :HiW44,1 wm 77: I. Tf ----------- ................. - � k\ F4. .� TIC s71 A), I. WAN', :HiW44,1 wm Exhibit No. 10 01 THIS PAGE LEFT BLANK INTENTIONALLY jj� 1 CITY OF NEWPORT BEACH PLANNING DEPARTMENT May 4, 2007 Arthur F. Stockton 350 Buena Vista Newport Beach, CA 92663 RE: Use Permit No. 2001 -005 (5ejour) Dear Mr. Stockton, The Planning Department has received notice of Administrative Citation No. 12007 -0395 concerning violations of the conditions of approval of Use Permit No: 2001 -005 for the establishment .known as Sejour located at 3400 Via Lido. Condition No. 13 of the use permit requires that the City review. gross receipts of alcohollc. beverage sales if it .is believed that the use is not operating in compliance with the with the conditions of the use permit. Condition No. 12 of the use permit. requires the applicant, or hislher successor, to maintain. records on the: sales of alcoholic beverages and requires that these records'be provided to the City Upon request. This letter serves as a formal request of these records. If it is found that the use is not operating in compliance, the use permit is required to be brought forward to the Planning Commission for review.. . Sincerely, �_ , lr D� Planning Director Cc: City of Newport Beach Planning Commission 3300 Newport Boulevard • Post O1Hee Box 1768 - Newport Beacb, California 92658 -8915 y Telephone: (949) 644 -3200 � Fax: (949) 644 - 3229• www.city.newport- beach.cams 1 THIS PAGE LEFT BLANK INTENTIONALLY 114 Exhibit No. 11 THIS PAGE LEFT BLANK INTENTIONALLY \�x �� ::� � � y� � � � 22 , _, , -: �.,.��.����� ©. _ - - � � r:. � / \ °- © _ �� � «� � � . -.= 2� � � � � � � <` :� 2 -» zy�� <`» :_y\ �% 2�� ) �\ / \`» \ ® ?���\ �.�..:��.���% + f d i n.... J : � �ai�at 3�?t'3'{ "i"��'���'�,f Yr+av t� a�,�'r :•� °�`r'+��y� s .t s' £...i L.. d' o r� a ��yy.��a Yi d �y Z � "}� +s>• �eCp7 C dt "7r..u, .� drl IY i5- � e Ylb WGi ��'�.a�y,P I� SP ��l�$JY �.,�!'h >•�) ��d��H�����1 �"x.n� KP`.� y' � �d - c shy y.,� 3 •.s• ' F i+. k ' 3."a'�li�g'YkdsdUy 1 dt b� F i x5 `a''ra, r5 dzur n* �� I ✓', L 6 a nry �7y �,at d .I i ;PY�7x1141/NO pi' t �`" i , r ` }ar+"� �l i`cr ✓w�a !t..(,F f �.. Pr „di�' -. 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F.� Exhibit No. 12 O� THIS PAGE LEFT BLANK INTENTIONALLY ,qA May 10, 2007 Hand Delivered Sejour, LLC 3400 Via Lido Newport Beach, California 92663 (949) 310 -7698 Mr-Patrick Alford Mr. Jay Garcia Mr. Charles Spence City of Newport'Beach 3300 Newport Boulevard Newport Beach, California 92663 Gentlemen: The purpose ofthis letter is to (i) summarize Sejour's current status regarding the Use Permit at 3400 Via Lido, (ii) request direction and relief to create a feasible, temporary operating structure to prevent Sejour's demise while various issues in the permit are being addressed; and (iii) explore a permanent solution to permit Sejour to operate as a unique venue that it is contributing positively to the community. Sdoues PrincioaLs Sejour is owned and operated by Arthur and Carolyn Stockton. Arthur Stockton practiced law as a corporate finance and securities attorney. Carolya.Stockton also practiced corporate law. Both are: inactive members of the Arizona bar. We. co-€ounded Stockton Trust in the late 190s, Which eventually became the largest independesit trust company in Arizona, and Valley Bank of Arizona in the, late 1990's. We semi- retired in 1997 and moved to California, where we have maintained a residence since ,1996.. Our permanent residence is in Newport peach on the Peninsula. Two of our children have attended Newport Harbor High School. Our daughter, Allison, is currently a senior at Newport Harbor High. S& is the spokes model fox Squeeze OC and OC Post magazines and is one of the stars of MTV's new Newport Beach series. The series films every weekend at our home and has filmed at Scour as well.. The series paints Newport Peach in a very positive light and as a desirable dgstination. Sejour is a family business started in September X001. Both of our children work there. It has been our goal to make Sejour a unique, Newport Beach landmark. Sejour has donated its facilities and services to a number of charitable causes over the past 19 months, including Orangewood PALS and most recently the Newport Beach Film Festival. Our family has a strong interest and desire in promoting and maintaining the quality of life in Newport. Beach and on the Peninsula. )a5 SeiowPs Concert Sejour is the French word for "living room." Sejour is not a restaurant. We don't have traditional restaurant dining tables or kitchen facilities. Instead there are overstuffed sofas in small living rooms with coffee tables. We believe that Sejour is in a category by itself, in the tradition of Europe. It is not a restaurant, bar or lounge but has characteristics of all three. It is meant to be a gathering place where people can essentially enter our `living room" and enjoy good food, a glass of wine, a cordial or a Martini. It is a place to enjoy good conversation and great music. As the use permit is currently written, Sejour cannot successfully operate this business. Sejour has invested more than $600,000 over the past 19 months to find an operating structure that is both profitable and consistent with the spirit of the permit. Soour believes that it has found that operating structure. However, while the operating structure maintains the spirit of the permit, the structure does not technically comply with the permit as it is currently written. These technical issues could be addressed in the short term through a special use modification at the administrative level, or through securing special events permits while an amendment to the Use Permit is prepared It should be noted that Sejour was provided with City Council minutes at the inception of its lease at 3400 Via Lido and knew some of the permit requirements. Sejour also met with one of the City Planners in 2006. However, the first time Sejour saw the itemized list of permit limitations was in connection with the administrative citation received on May 2 °d There were a significant number of surprises on the list, It should also be noted that we are embarrassed about the misdirection of Sejour over the past few months. For the first 17 months of operation, Sejour (to the.best of our knowledge) never had any patron, police or neighbor complaints or problems. Unfortunately, that situation changed recently. Regrettably, Sejour hired two outside marketing firms to gain greater exposure in the marketplace. We were assured by these firms that they would bring a very high -end clientele consistent with our themes and with the goal to increase the popularity of our venue. While the program seemed successful initially, Sejour's popularity ballooned and we bcgan.to attract the wrong kind of business. Our early evening business began to fade and we were left with high -risk, late night patrons. Our revenues and profitability plummeted Our relations with these marketing firms became turbulent. The first firm was fired in early March. The second firm was fired in late April. Know that we too were concerned about our direction, not to mention our own personal liability and our net worth. We sincerely and profusely apologize for the situation. We stumbled due to our inexperience. C—Umnt Statistics In the trailing 12 months ending 5/30 /07, Sejour's total sales were approximately $730,$71. The sales components break down as follows: 41 % food, 36% ti kq� wine/champagne, l7a /a cordials/liquor and 6% beer. Onsite sales are 78% of the total and retail sales are 22% of the total. The offsite sales ratios as to food, wine, liquor and beer are 48% food, 52% winetchampagne. We do not currently sell liquor or beer for offsite consumption or events. Most of this business currently is generated by our event catering which Getters around wine. Such events tend toward the same consumption ratios whether they occur on or off site. While these ratios do not meet the technical requirements of the Use Permit for the period specified, we believe that they do meet the spirit of the guidelines. Retail Business at 3400 Via Lido The greatest challenge to the Use Permit as currently structured is retail sales. It has been explained to us that the Use Permit at 3400 Via Lido was originally crafted to create a wine store with a high class wine/martini bar for Dennis Overstreet, a prominent wine master with a similar operation in Beverly Hills. Notably, after three years of operations, the Overstreet venture was not successful at the location. What we have learned through experience is that it is virtually impossible to retail from 3400 Via Lido. A retail purchase of the nature contemplated is typically consummated by a consumer who can conveniently drive up, shop for what is needed and complete a transaction in a relatively short period of time. This is not currently possible at 3400 Via Lido. Street parking is typically occupied. Consumers who try to park at the grocery store, even if they are willing to shop at the Fritz Duda shopping center, are accosted by the parking guard who threatens to tow their car if they cross Via Lido to the Village. While there is plentiful parking available. in our parking garage, and we validate, the distance becomes . an obstacle for the shopping consumer. Accordingly, the cousumer chooses other venues. for their purchase, including Vons across the street, with easy parking and a very nice wine selection. Further, the Village has deteriorated as a retail destination in and of itself. There is virtually no foot traffic. The Village is run down. Most of the foot traffic is associated with the boat cruises. We benefit from the boat cruises in other ways, but it does not help our retail sales. In short, after 19 months of operations, our walk -in consumer retail purchases total less than $10,000. We have more theft from the wine shelves than we have walk -up retail sales. Our effort to achieve retail sales has come from three primary sources. First, we achieve retail sales through onsite events. People will take the time to park in the garage if we are a destination for an event such as a wine dinner or wine tasting. These events are multiple and varied. We generate some of these internally. Many, however, are corporate events or events associated with the boats, such as rehearsal dinners or corporate receptions. Regardless of the source or type of event, these events are the primary way we display our wares and achieve offsite sales. Second, we have a retail website called Winosaavy.com. This website is fairly new and we are on the learning curve. However, we believe that the website will grow to be an l`�'I important part of our retail strategy going forwaa incorporated into the websft will be ,a local wine baskeVgtft service with county -wide delivery. Again, we believe that this can contribute greatly to our retail sales. Finally, our offsite planning and events.service contributes significantly to our retail component. It is the largest component to date. We have done a number of offsite events, including corporate parties and residential wine events. We have a new residential Mansion facility coming online in August for corporate events, wine dinners, etc. that also will be serviced through Sejour. 3400 Via Lido Site Plan and Usage The nature and direction of our retail component, and the functional obsolescence of a meaningful retail store in the Via Lido facility, renders more than one -half of the facility at 3400 Via Lido useless as the permit is currently structured. Wine events, receptions, etc. are best suited to the Wine Salon component at 3400 Via Lido marked as Unit A -1 on the Site Plan. We found out for the first time last week that alcohol consumption and seating beyond three persons is proldbacd in this area. This seems illogical as it is the only area in the facility suitable for wine tastings, food pairings and similar events. To the best of our knowledge, the facility has always been utilized in this manner. It seems such events were at least contemplated in the portion of the Use Permit which contemplates special use permits. In short, prohibition of alcohol consumption and seating.in the area marked A -1 on the site plan would literally cause Sejour to close . its doors, as the remaining business would be insufficient to support the overhead. We must find an immediate solution to this problem. ROL% While Sejour has made a good faith effort to comply with the various ratios in the use permit, it will continue to take time for it to achieve 800% in offsite sales. Offsite sales are the fastest growing component of sales and onsite sales are stagnant as they are limited by the size of the facility. So we believe this ratio will be achieved eventually but we need more time. Conclusio We have now addressed every issue involved in the Administrative Citation dated May 5, 2007. Sejour is at least initially requesting the following immediate relief to continue operations: 1.) We need to explore some method of immediate relief to be able to utilize the remainder of our facility with more than 29 persons occupancy ongoing and for scheduled events, marry of which are it M j already scheduled throughout the remainder of the year. We cannot feasibly operate under current conditions. 2.) We need to work with staff on a timetable to meet the other ratios set forth in the Use Permit, which ratios do not directly address the time periods for measurement. Alternatively, we need to explore ratios that more reasonably reflect the reality of the operation and the were limitations associated with retailing from 3400 Via Lido. 3.) We would like clarification that it is permissible to will close our doors and stop serving at 11:00 pm and 12:00 pm on the applicable days, but that patrons will have sufficient time to finish their food and drinks without being rushed out the door, and 4.) We would like to explore appropriate amendments to the Use Permit where needed to bring Sejour's concept into complete compliance with the City's needs and requirements while permitting Sejour to operate profitably. Carolyn and 1 sincerely appreciate your collective efforts on our behalf: I ~ S cerely, Arthur R Stockton, q. )�R THIS PAGE LEFT BLANK INTENTIONALLY ebb Exhibit No. 13 ab i THIS PAGE LEFT BLANK INTENTIONALLY 01? May 14, 2007 Arthur F. Stockton 350 Buena Vista Newport Beach, CA 92663 NEWPORT BEACH PLANNING DEPARTMENT RE: Temporary Uses at 3400 Via Lido (Sejour) Dear Mr. Stockton, Thank you for your quick response regarding the Planning Department request for records on the sales of alcoholic beverages at your establishment. Regarding your letter of May 10, 2007, the Planning Director believes that it would not be appropriate to approve a restaurant, bar, lounge, or similar use on a temporary basis. We appreciate that you are only seeking temporary approval while the City processes a use permit application for the establishment. However, the Planning Director is only authorized to approve temporary or interim uses if they do not violate any other City regulations. Use Permit No. 2001 -005 authorized only a retail establishment for the sale of alcoholic beverages for off -site consumption and Condition No. 13 states that the premises cannot operate as a eating and drinking establishment, restaurant, bar, tavern, cocktail lounge, or night club unless the Planning Commission first approves a use permit. The Planning Director has concluded that approving such a use, even on a temporary basis, would violate this condition. The proposed use is best pursued through the use permit process. The City will make every effort to process the application in a timely manner. The Planning Director has discussed this matter with Code Enforcement. Code Enforcement has stated that citations will not be issued if events are conducted in conformance with the conditions of Use Permit 2001 -005 and you diligently pursue a use permit for the proposed use. You are advised to carefully review all of the conditions of approval. However, give particular attention to the following conditions Condition No. 14, which limits on -site consumption of alcoholic beverages to 1,263 square feet delineated as Unit A2 on the approved floor plans. ■ Condition No. 15, which limits the eating and drinking activities to 1:00 pm to 12:00 midnight Fridays and Saturdays and 1:00 pm to 11:00 pm Sunday through Thursday. 3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, California 92658 -8915 Telephone: (949) 644 -3200 • Fax: (949) 644 -3229 • www.city.newport- beach.ca,us Sejour May 14, 2007 Page 2 of 2 ■ Condition No. 16, which limits live entertainment to 3 days per week and requires the approval of a live entertainment permit. ■ Condition No. 17, which prohibits the sale of beer, whether for on -site or off -site consumption. Condition No. 18, which requires a special events permit if activities increase occupancy beyond 29 patrons and 6 employees at any one time. Condition No. 22, which prohibits any event or activity staged by an outside promoter or entity, where the applicant, operator, owner or his employees or representatives share in. any profits, or pay any percentage or commission to a promoter or any other person based upon money collected as a door charge, cover charge or any other form of admission charge, including minimum drink orders or sale of drinks. Regarding Condition No. 14, after reviewing the minutes from the hearing on this project, it appears that the Planning Commission intent was to limit the area where there will be drinking and drinks served. The Planning Commission recognized that may people wander into the retail section (Unit Al). Therefore, While on -site consumption of alcohol is prohibited in Unit Al, this section need not be closed off. Unit Al is also limited to a maximum of 3 seats. Regarding Condition No. 15, the establishment will be in conformance with the "hours of operation" if no additional patrons are admitted and food and beverage service ceases at the specified closing time. This interpretation is intended to allow patrons who were admitted and served prior to the specified closing time to finish their food and drinks. We look forward to assisting you with your use permit application. Sincerely, Patrick J. Alford Senior Planner �o i Exhibit No. 14 �O THIS PACE LEFT BLANK INTENTIONALLY M, MOIL G I.A.M- OF�1'A , r' 7' Dingwall, Matt From: Jones, Doug [DJones @nbpd.org) Sent: Tuesday, May 29, 2007 9:31 AM To: Spence, Cass Cc: Dingwall, Matt; Garcia, Jay; Vallercamp, Ron Subject: Sejour and Baja Sharkeez Good morning all, Page I of t We worked this Saturday and went by Sejour and Baja Sharkeez. Per a lengthy conversation I Fad with Mr. Stockton about two weeks ago, he assured me he would follow his CUP, get the appropriate special permits for his parties, and that either he or his son would be on property to oversee the operation until he had a trained reliable staff he could trust. While he did have a special permit for a "private" party, I made the following observations: The door facing Via Lido was closed; the door facing Via Oporto, the front door, was the point of ingress /egress; the sidewalk in front of the front door was completely blocked due to a roped -off area to accommodate a line of people; the front door and adjacent kitchen door were open; music could be heard coming out of both of these doors; there were approximately 35 people in Unit A2 and approximateely 25 people in Unit Al; many people in Unit Al were consuming alcoholic beverages, including one table that had a bottle of Vodka they were sharing. I contacted the manager, Simone Miranda, and explained my concerns. She was not aware of the CUP or its restrictions. She was never told alcoholic beverages could not be consumed in Unit Al, and she admitted they were serving alcoholic beverages in this area. She said Mr. Stockton was out of town and that his son was not on property. Mr. Stockton told her he had a special event permit for the party. He gave her a reservation list, which she was to give priority to, but she was not told the party was private. She was told to keep the occupancy around 70 people, including public and private patrons. Miranda said the security staff was new and did not know how to manage a potential line out front, they weren't given any instructions. Actually, Miranda said she was told she wasn't going to have any security but only due to her persistence did she get security. Miranda and another unnamed employee were very frustrated with Mr. Stockton. They did not feel comfortable with the way he was conducting business and felt vulnerable because they were not being trained relating to the lawful operation of Sejour. I Cited Miranda for violating the CUP, alcoholic beverage consumption not permitted in Unit Al, and explained that Mr. Stockton was culpable, not her (this time). Miranda was very cooperative. I will forward cite ADM 11681 to the planning department for follow -up. also went to Baja Sharkeez. They have been ignoring the CUP regarding closing the patio at 9:00 p.m, At approximately 10:10 p.m., I observed approximately 25 patrons eating and drinking on the patio. 1 contacted the .manager, Eric Levit, explained my concern and cited him for the violation, ADM 11682. Levit was very cooperative and said he had no idea the patio was supposed to be closed. We did not have enough personnel to conduct a count -out, but I was certain they were over occupancy, especially when you consider the extra 25 people who were in the patio. If you have any questions, please don't hesitate to contact me. Doug Jones Vice 8, Intelligence (949) 644 -3709 (Office) (949) 718 -1009 (Fax) Newport Beach Police Department 870 Santa Barbara Dr. Newport Beach, CA 92660 5/30/2007 X6 Exhibit No. 15 to oil N_` ,i }ORT BEACH POLICE DEPARTNIV r �IIPLOYEES REPORT Subject DR Number Sejour 61- 120G0 Date and Time Occurred Location of Occurrence RD 11/9/2007 3400 Via Lido 15 To:(Rank, Name,Assignment,Division) Date and Time Reported Aaron. Harp, Asst City Attorney, City of Newport Beach 11/13/2007 1100 Reportable Use of Force: ❑ Yes ®No On 11/9/07, Det JMMMM and I entered the the business known as " Sejour," located at 3400 Via Lido. We were conducting an investigation in an "undercover" capacity in regard to possible violations of the business per the City of Newport Beach Conditional Use Permit ( "CUP "). Upon our arrival at 2100 hours, the business was approximately half full with patrons, none of whom appeared to be dining, however; I did observe a few patrons eating appetizers (a loaf of bread and cut varieties of cheeses). There was very loud music emanating from within the business, and a DJ was operating digital music from a stand /speaker setup in the bar area of the location (described as "Section A -2 "). That music was also hooked up to very large speakers in the area known as "Section A -1," however; there was no one in there at that time this early in the evening. This section is described as the "retail portion" of the business. I noticed that the seating arrangement in this section consisted of two large booths, with each capable of holding approximately ten to twelve patrons at one time. The room was very open in the center, and this area became quite crowded later in the evening (more on that later). We stood at the bar area and I attempted to order a beer to which the bartender replied, "We don't sell beer." I observed no one with beer at any point during the evening. There was wine and "hard alcohol" available, and I ordered a "Jack Daniels and Coke." At 2130 hours we returned to the front reception area where we were met by a waiter, "Kyle:" I asked if we could eat and he said, "Sure, go ahead, sit anywhere you want, I'll get you a menu, it's new." We sat in the small area located on the south /east comer of the business, designated on the diagram as "exist/sales" which is between section A -1 and A -2. There appeared to be no designated eating areas in the establishment. The reason we selected this area for eating purposes rather than A -1 was due to the volume of the music in A -1 which was at such a level that conversation would have extremely difficult. I ordered a filet and Det Watts ordered a tri -tip platter (our meal was delivered shortly thereafter and while it was warm, it did not seem to be freshly prepared). 1 asked "Kyle" why there was no beer available and he replied that he did not know in that he was fairly new to the establishment. During the course of the evening 1 noticed that the business was becoming quite crowded, and Kyle Supervis r pp v' ID No. Reporting Offioer(s) ID No. Date and Time Reproduced and Distributed Clerk 15.7 (Rev. 72-03) Emnlovees Report NF, PORT BEACH POLICE DEPARTMP9 Continuation Sheet Page No. Type of Report Booking No. DR Number 2 Employees Report advised that as the evening goes on it should become quite crowded. Upon further questioning he advised that dancing occurs in the section we identified as A -1, and that was the reason the center of that room was so open. I had observed that "bottle service" was occurring in an area located just off section A -2, near the bar in a small room. Kyle advised that bottle service could be had anywhere in the business and there was no menu for that. The price was $300 for a bottle of "Grey Goose" vodka, while anything else was $250. That would include not only the liquor but any and all mixes and glasses for however many people were in the party. While observing the oiie bottle of "Grey Goose" which was served in that small room, there was no one particular Sejour employee who seemed to be responsible for the party. I obs'd several patrons in that approximate party of ten pouring their own drinks. During the course of the evening, I obs'd one individual who was possibly a "door host" or "bouncer," and this individual seemed to know many of the patrons. He would constantly walk through the establishment, however, he did not appear to be keeping watch on the front door nor the occupancy (speaking of which, I could locate no certificate of occupancy signs posted in the building anywhere). At approximately 2230 section A -1 was quite crowded and the table booths were all full. Dancing was occurring in this section and the music was maintained at the same level as previously described. I obs'd Kyle and another waitress taking drink orders to patrons in this section of the business, and the individual identified as the "bouncer' or the establishment security was continuously monitoring this area. I also noticed that a subject I overheard patrons greet and address as "Art" was in this area off and on throughout the evening. This same individual was also obs'd behind the bar on numerous occasions and was obviously an employee, quite possibly the owner Arthur Stockton. There was no wine tasting or servers in A -1, only the waiter and waitress bringing drinks from the bar in section A -2. At approximately 2300 hours, 1 asked Kyle if I could get something to eat and he advised that the kitchen was closed. At this time we also noticed that the business was quite full and appeared to be nearing what would possibly be maximum occupancy. In section A -1, I counted approximately 45 patrons and Det Watts counted approximately 125 throughout the rest of the establishment (approx 170 total). I also obs'd a group of approximately 20 people outside the establishment smoking cigarettes. This small crowd spilled out into the street which with the exception of this gathering was fairly deserted. Supervisor Approving ID No. Reporting Officer(s) to No. NBPO F O 3.15 (Rev. 3 -9 ? N,R• RT BEACH POLICE DEPARTMEPr,, O ontinuation Sheet Page No. Type of Report Booking No. DR Number 3 1 Employees Report It is my opinion that this establishment is operating as a nightclub complete with dancing and live entertainment and is in violation of several items listed in their CUP. While dining does not appear to be the main focus of their operation, it is available as are appetizers and desserts. Very loud amplified music from a DJ was present from the moment we entered, and while no beer was available, any type of "hard liquor" was offered as well as individual "bottle service." Alcohol was available via waiter or waitress in section A -1, or anywhere else in the establishment. We obs'd no maximum occupancy limits posted, and it appeared that the business was at what could be considered at or over maximum capacity (approximately 170 patrons, excluding staff). Supervisor Approving ID No, Reporting Officer(s) ID No. JBPD Forth 3.15 (Rw. 398) ��1'� Exhibit No. 16 715 THIS PAGE LEFT BLANK INTENTIONALLY T BEACH PLANNING DEPARTMENT November 13, 2007 Carolyn Stockton Sejour, LLC 3400 Via Lido Newport Beach, CA 92663 RE: REQUEST FOR RECORDS TO DETERMINE COMPLIANCE WITH CONDITIONS OF USE PERMIT NO. 2001 -005 Dear Ms. Stockton: On May 14, 2007, the City of Newport Beach provided you with a letter stating that citations will not be issued if your. establishment is conducting in conformance with the conditions of Use Permit No. 2001 -005 and if you diligently pursue a use permit amendment for the restaurant/lounge use. To date, the City has not received such use permit application. Use Permit No. 2001 -005 currently only authorizes a retail establishment with accessory on -site consumption of alcoholic beverages. To assist staff in determining whether or not you have been operating in conformance with the conditions of Use Permit 2001 -005, staff is formally requesting the following records: 1. In accordance with Condition No. 10, on -site consumption of alcoholic beverages. shall be accessory and subordinate to the principal retail use and alcoholic beverage sales for on -site consumption shall not exceed 20 percent of gross sales for the business. Please provide records to determine compliance with this condition in quarterly increments since the initial operation of the establishment. 2. In. accordance with Condition No. 11, the sale of distilled spirits for off -site consumption shall not exceed 15 percent of gross receipts of all off -site alcohol sales. The sale of distilled spirits for on -site consumption shall not exceed 10 percent of the total sales for on -site consumption of all alcoholic beverages. Please provide, records to determine compliance with this condition in six month increments since the initial operation of the establishment. 3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, California 92658 -8915 Telephone: (949) 644 -3200 • Fax: (949) 644 -3229 • www.city.newport- beach.ca.us I Carolyn Stocktor April 27, 2007 Page 2 of 2 3. In accordance with Condition No. 24, all owners, managers and employees selling alcoholic beverages shall undergo and successfully complete a certified training program in responsible methods and skills for selling alcoholic beverages. The 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. Please provide records of each owner's, manager's and employee's successful completion 'of the required certified training program to determine compliance with this condition. 4. In accordance with Condition No. 30, the owner /operator of the use shall enter into an agreement to provide and maintain a minimum of 21 parking spaces within the Lido Marina Village parking garage. These spaces shall be accessible at all times during the operation of the use. Please provide a copy of the agreement to determine compliance with this condition Please provide the requested information by December 13, 2007. Should you have any questions, please feel free to contact me at (949) 644 -3209 or by email at jmurillo @city,newport- beach.ca.us. Sincerely, irne Murillo Associate Planner Attachments:. May 14, 2007 Letter Exhibit No. 1 THIS AGE LEFT ELAND INTENTIONALLY "PORT BEACH POLICE DEPARTMF-P--. I -.-OLLOW-UP REPORT Type of Original Report Date of Original Report Date of This Report Misllpr Case No. Employees Report 11/9/07 111/28107 10 Multiple 07-12960 Reclassify Master Case To Victim Folio; -Up No. Master Property Value Rec: This Report — Total RPTD Loss El Total Recovery ❑ Partial Recovery $ 1 ❑ Change of Total Value $ Master Case Status Property Disposition ❑ Release ❑ Dispose ❑ Hold Until rt r Div. (1) List Related Reports by Case Number, Type, Crime, Victim's Name, and Case Status Using Case Status Numbers- (2) Describe any Change in Property or Value. (3) Describe any Additional Property Loss. (4) Identify Partial Recoveries. (5) Briefly Summarize the Original Incident- (6) Explain Investigation Progress and Case Status. (7) Reclassify Related Gases. This is follow up number 1 in regard to the investigation into Conditional Use Permit (CUP) violations at the business known as "Sejour," located at 3400 Via Lido in the City of Newport Beach. In an effort to better document the ongoing activities at Sejour, Det and I entered the business on 11/30/07 at 2130 hours in an undercover capacity. The-business was approximately three quarters full with patrons, and all areas of the establishment were being used. I noticed that a. private party was ongoing in the area of the business identified as A-1, and there were approximately four tables set up in the middle of the room. These tables had seating for approximately twenty, and this was in ,addition to the two booths which were against the north wall of the room, providing seating for approximately 20 to 25 more patrons..) noticed that servers were taking and delivering drink orders in section A-1, and it was obvious that food had been served as there were several un-cleared plates on numerous tables. I asked our server if we could order dinner and she advised us we Could sit anywhere we liked. We sat in a small room located in between sections A-1 and A-2 where I asked if I could order a beer. She advised that the "City" would not allow Sejour to offer beer in the establishment as they (the City) felt beer would "bring in the wrong crowd." She added that she felt the "City" was "trying to shut down all the restaurants" in the area. Det Freeman ordered a glass of wine and I ordered a vodka and cranberry. In order to ascertain if the kitchen was operational and to check the availability of freshly prepared food items, I ordered an appetizer of beef skewers. The appetizer was delivered approximatery 1.5 minutes later and' while it was warm, it most definitely was not hot. At approximately Su ng ID No. k li lReporting Officer(s) ID No, Date/Time Reproduced Clerk Y -, `pORT BEACH POLICE DEPARTM -T' -; i Continuation Sheet Page No. Type of Report Booking No. DR Number 2 Follow Up Report 07 -12060 2210 hours, we ordered dinner from the menu. I ordered a grilled chicken "paninni" sandwich while Det bordered a grilled chicken breast. Approximately twenty minutes later the food arrived and again, the food items were warm but not hot. I was advised by CNB Code Enforcement Officer John Kappeler that, via the Newport Beach Fire Department, the occupancy at Sejour is listed at 99. At 2330 hours, a "rough count" was conducted by Det Freeman and myself which put the estimated occupancy at between 150 and 160. In addition, there was no "maximum occupancy" sign located anywhere near the front door, and I also could not find any sort of ABC related postings anywhere in the building. While attempting to perform the count, I was unable to move about in the front lobby area, the span of the business which connects section A -2 and the front door leading out to Via Opporto. Section A -2 was also very crowded and did not allow freedom of movement: In addition to the approximate count, it was apparent to me that the business was overcrowded based on those observations. I could not locate a "door host' or any other security personnel posted outside the location maintaining a record of number of patrons. I checked the front door periodically throughout the evening and never saw anyone maintaining a count. While there was no obvious dancing location as there was on my previous visit (1119101, in section A -1), patrons were dancing.at all areas of the establishment. While I never located any sort of security personnel, several Sejour employees observed the dancing and did not attempt to curtail it. Throughout the evening, a DJ played music through a speaker system which, just at it was on my previous visit, was set up in all areas of the business. The DJ himself was situated in section A -2 of the bar area. While the music was very loud (making conversation difficult), the DJ would intermittently make announcements throughout the night which were largely unintelligible. All areas of the establishment remained open until closing. I heard "last call" from the DJ at 0035 hours, and the business closed at 0100. I ordered a vodka cranberry and a glass of wine at 0025 hours, despite the conditional use permit (condition # 15) which only allows patrons to be served alcohol until midnight on Friday and Saturday nights. This is also a violation of ABC Condition # 1 (sales and service until midnight, Friday and Saturday nights). We left the location at 0050 hours as the rest of the crowd also made, their way outside. The music was audible outside of the business, and there were at the most five taxicabs lined up outside on Via Opporto picking up patrons. Supervisor Ap ovi i f ID No. Reporting Of oer(s) ID No. Mb NBPD Forth 3.16 (Rev. 3.98) Exhibit No. 18 �-a3 MIS PAGE LEFT FLANK INTENTIONALLY Page 1 of 2 From: Cosylion, Matt Sent: Thursday, December 13, 2007 9:59 AM To: Parker, Kristy Subject: FW: ECIS- Sejour inspection Kristy, On November 28, John Kappeler, Jon Kinley from ECIS, and I inspected Sejour to determine if the food preparation occurring in the kitchen was such that a grease control device is needed. Based upon our inspection, it appears that most of the food preparation is limited to premade deseris,hot and cold finger foods, sandwiches, soups, salads, and paninis. The amount of grease produced is very limited and wasn't of concern to the City's contract utility inspector. Please see his email below. During our inspection, John Kappeler took photos of the kitchen area. We did obtain a copy of the menu. We did a walk through of the facility. We observed wine - related displays such as wine racks and wine bottles. It appeared that the use of the building was for a retail wine shop with tasting rooms and a bar. They did have DJ equipment set up in the area marked Unit A2. The rest of the building seemed to match pretty closely to the layout in their site plan. According to Mr.. Stockton the hours of operation are from 5- 12 PM. 1 have included the photographs from our inspection. Please note that pictures of the interior of Sejour can be found on their website as well. Matt 644 -3217 From: Kappeler, John Sent: Thursday, December 06, 2007 9:16 AM To: Cosylion, Matt Subject: FW: ECIS - Sejour inspection Matt, I'm out of the office on Friday and Monday (training class), you'll need to write this up for Aaron. Thanks John From: Jon Kinley [mailto:ecis @cox.net] Sent: Tuesday, December 04, 2007 7:20 AM To: Moritz, Terresa Cc: Kappeler, John Subject: ECIS - Sejour inspection Terresa- At the request of John Kappeler- ECIS assisted John recently on November 28th to perform an FSE- FOG Characterization inspection of Sejour located at 3400 Via Lido. ECIS found the following kitchen equipment- 1 -3 compartment sink - portable panini grill -meat slicer - refrigerator- holding ni 1n0?�nno Page 2 of 2 bins for meats - cheezes- sauces, mic „wave,there is no Class 1 Hood, no fryer, no. Uto Dish Washer, there is a shared community Grease Barell in the area near the parking garage that the owner says he occasionally uses from small amounts of grease produced by the panini maker. It appears this is more of a high end Karaoke - wine /lounge bar than a restaurant. Hours appear to be roughly from 5pm -12pm. John Kappeler was able to obtain a copy of the menu from the owner. Owner was very accomodative to our inspection and asked what more he could be doing to reduce grease. He also mentioned that if the city was going to require him to install a small Grease Trap that he would remove the panini maker. Even without the panini maker there would still be some FOG coming from the sink from the washing of dishes - pots /pans and cutlery however it would be a very small amount that in my opinion would not warrant the installation of a GT. It is the opinion of ECIS that this FSE be reclassified from a red (non grease producing) to a yellow (potentially grease producing) in light of the fact that there is food served here and the presence of the panini grill. Potential for introduction of FOG to the sewer system is less than a more normal FSE with a Class 1 Hood or fryer however. This is a very small kitchen and the menu shows cold and hot finger sandwiches, drinks and premade desserts. Without the panini maker ECIS would classify this FSE as a non grease producing FSE. There is no room inside the kitchen for a grease trap, new OC health dept law enacted in July 2007 prohibits the installation of a grease trap anywhere in this kitchen. There may be room for the installation of a small GT in a small bathroom near the kitchen. We went over some basic kitchen grease BMP's with the owner and also talked about stormwater BMP issues as well. Thanks Terresa - please contact me anytime with any questions. Jon ECIS Environmental Compliance Inspection Services ]on Kinley • President www.ecisglobal.com 12 Via Torre / Rancho Santa Margarita CA, 92688 Phone /Fax 949.888.6536 01/08/2008 �a� us, t ifl�£ 7y ��rll'i Pie CW At �'^+`IVin.w,I,yni al"P- W r -i x L- P»FS `xfs. lsrgki �� I t Mrn l�v $9 _- t - bxresc Lr E'r r,iy r' 4 a ">'.T'eFiyF.uRw - «Jm Sajy ft w I lfU cl, ry.CfgF{Y Ce+a-<sSrt�lnt! ?�';v:rla2 nstti>iH74! 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K. - F tj P re r>r lX'I�YEti t',hF c GII Jett_' to Luk t,i4eGi. {"ri4r P 011 -%7r t`.5'ta<hELr auf �iCyy mt ntt _ - ]' H S�� 3f f x� <ItK'F�P iF7�r _vfir a ,a: :;4 w, ovdirath- Ox r:.7jp. l fs s gr4 t'P"4kaS,G.JRYf.,Tt*�,fi pi }ti�fj(1(1rr:y GPflr<r ;.i.]ltSr r�}tr t.Lx 3f.,td,$4+ -{ a i ,t r z - -:; �� rt;Y .` �y � h �a i i r. .� ±,A . � «■ $ W : G» . 2 f \�/ � z > z.� . � «■ $ W : \�/ . � «■ $ W : THIS PAGE LEFT BLANK INTENTIONALLY Exhibit No. 19 ��5 THIS PAGE LEFT BLANK INTENTIONALLY Ung, Rosalinh From: Alford, Patrick Sent: Wednesday, December 12, 2007 1:06 PM To: Lepo, David; Ung, Rosalinh; Harp, Aaron Subject: Fw: Sejour - - -- Original Message - - - -- From: Arthur Stockton <arthurstockton @sbcglobal.net> To: Alford, Patrick Sent: Wed Dec 12 13:03:48 2007 Subject: Sejour Hi Patrick: Hope you and your family are enjoying the holidays. As you may know, I have had periodic health problems related to a recent heart attack. As such, our family made the difficult decision to sell Sejour. Two very nice couples, originally from Europe, have purchased Sejour and the sale is slated to close December 31st_ I recently received your letter. Given the sale, we felt it best for the new buyers to address amendments, if any, they would seek for the Use Permit. In contrast with our situation, the new buyers have received copies the Use Permit and all conditions. You will be receiving a letter from the new owners at closing (as required in the Permit) that they will adopt and abide by the conditions until such time as an amendment, if appropriate, _ can be sought. Incidentally the new owners like Sejour, as is, and would like to add an Art Gallery as part of the operation. This would be a nice addition to enhance the cultural appeal of the Cannery Village area. We have continued to operate Sejour in our last correspondence to you and the challenge simply relates to being able be addressed in an amendment. We still take a drink outside to smoke or to th, portion of the space. substantial compliance with the Use Permits since new owners plan to do the same. Our biggest to integrate the full space, which I believe could have to police the occasional patron who tries to Men's restroom which is located in the retail Given the fact that our operation of Sejour will become irrelevant in a few weeks, I was wondering whether it would be best to have the new owners address the issues raised in your letter with a new slate? Thank you for your consideration. Best of luck in your future. I have appreciated all your help, as I have appreciated the City's support and cooperation with us. Sincerely, Arthur Stockton THIS PAGE LEFT BLANK INTENTIONALLY Exhibit No. 20 .aIIA THIS PAGE E LEFT BLANK INTENTIONALLY CITY OF NEWPORT BEACH PLANNING DEPARTMENT December 12, 2007 Mr. Arthur Stockton Mrs. Carolyn Stockton Sejour, LLC 3400 Via Lido 350 Buena Vista Newport Beach, CA 92663 Re: Compliance with Use Permit 2001 -005 3400 Via Lido ( Sejour) Dear Mr. and Mrs. Stockton: I am in receipt of your e-mail directed to Patrick Alford on December 12, 2007, wherein.. you indicated you are selling the business Sejour and anticipate close of this sale to occur by .December 31, 2007. You also indicated that your operation of Sejour has been in substantial compliance with the Use Permit. Based on the information and documents I have reviewed, I have determined that your operation of Sejour is not in substantial compliance with the terms of the Use Permit. You claim that you are operating in substantial compliance with the terms of the Use Permit; however, you have been put on notice on several occasions that you are not operating in conformance with the conditions of the Use Permit. Specifically, on May 1, 2007, you received an administrative citation for violating the terms of the Use Permit. On May 4, 2007, 1 notified you that it appeared that you were not complying with the terms of the Use Permit and requested that you provide the Planning Department with records regarding gross alcohol sales (which records have still not been provided in violation of the terms of the Use Permit). In addition, in your correspondence dated May 10, 2007, you admitted that you were not operating in conformance with the Use Permit and requested relief from the conditions imposed by the Use Permit. On May 14, 2007, Patrick Alford informed you that your operation was not in conformance with the Use Permit and that approval of a restaurant, bar, lounge or similar use on a temporary basis was inappropriate. In that correspondence, Mr. Alford informed you that if you wished to operate Sejour in its current manner, you would need to amend the Use Permit. To date, you have failed to take any action to amend the Use Permit but have continued to violate the provisions of the Use Permit. 3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, California 92658 - 8915\ Telephone: (949) 644 -3200 • Fax: (9491644-3229 • www.ctty.newport- beach.ca.us Sejour, LLC Page 2 of 2 December 12, 2007 Specifically, you have continued to violate the terms of the Use Permit by, among other things: • Exceeding the building's maximum occupancy by having in excess of 140 people on multiple occasions which is a direct violation of Use Permit Conditions 3, 10, 13, 14 and 18; • Exceeding the number of permitted seats in Suite A -1 in violation of Condition 14; Exceeding permitted occupancy beyond 29 patrons and 6 employees without a Special Events Permit, in violation of Condition 18; • Remaining open and continuing to sell and serve alcoholic beverages past 12:00 midnight on Friday and /or Saturdays in direct violation of Conditions 3 and 15 as well as Condition No. 1 of Sejour's Department of Alcoholic Beverage Control License; • Operating as a bar, cocktail lounge or nightclub in violation of Conditions 3 and 13; • Setting aside a dance floor area and allowing dancing in violation of Condition 3 and 16; ■ Not closing all doors while live entertainment is occurring generating excessive noise in violation of Conditions16 and 33; • Not operating as a Retail Establishment for the sale of general alcoholic beverages for off -site consumption as the primary and principal use,. in violation of Condition 10; and • Not providing the City with the Gross Receipt information requested on May 4 and November 13, 2007 in violation of Condition 12. Given the significant violations of the Use Permit and your failure to have the Use Permit amended to allow the current use of Sejour, the Planning Department has no choice but to send this matter to the Planning Commission so that the Planning Commission can consider initiation of proceedings to revoke the Use Permit. The Planning Department plans to schedule this hearing for January 17, 2008. Please do not hesitate to contact me if you have any questions. Sincerely, ✓ D David Lepo Planning Director DL:ksp cc: Planning Commission Aaron C. Harp, Assistant City Attorney Police Chief John Klein �L p- Exhibit No. 21 THIS PAGE LEFT BLANK INTENTIONALLY Page 1 of 1 Parker, Kristy From: Harp, Aaron Sent: Wednesday, December 26, 2007 4:11 PM To: Alford, Patrick; Ung, Rosalinh; Hartford, Bill; Frizzell, Craig Cc: Lepo, David; Kappeler, John; Parker, Kristy; Vallercamp, Ron; Jones, Doug Subject: RE: Sejour From: Arthur Stockton [ mailto :arthurstockton @sbcglobai.net] Sent: Wednesday, December 26, 2007 3:14 PM To: Lepo, David; Alford, Patrick Subject: Sejour Gentlemen: I am in receipt of Mr. Lepo's letter dated December 12, 2007, which, unfortunately, I did not receive until December 23rd. While we would dispute a number of the matters raised in the letter, the reality of the situation appears to be that the entitlements necessary to make Sejour successful and profitable, namely to operate as a bar and restaurant as we bargained for in our lease, are not feasible at this time. We base these conclusions on (i) the extreme position of your letter, (ii) previous and current actions and overreaching by the City in the context of the considerable vagaries, blaring inconsistencies and ambiguities in the Use Permit at 3400 Via Lido (including the legally unenforceable provision in the Permit that prohibits the sale of beer), (iii) independent actions taken by the City in what appears to be a campaign against bars and restaurants in Newport Beach, (iv) official and unofficial discussions with City officials and the attitude and demeanor of certain officials in connection with our attempts both to file an amendment and, alternatively, comply with the Permit, including our attempts to secure special events permits. We simply have to cut the considerable losses we have incurred to date. Accordingly, Sejour is closed, the sale is canceled and we are terminating our lease. If you have any questions, please feel free to call me at (949)_ 838 -6558. Sincerely, Arthur Stockton ?IA5 01/08/2008 THIS PAGE LEFT BLANK INTENTIONALLY Exhibit No. 22 THIS PAGE LEFT BLANK INTENTIONALLY APR-26-2007 13:54 ANTA flR 714 953 4486 P.01 BEYORETHE DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL OF TIM STATE OF CALIFORNIA IN THE MATTER OF THE APPLICATION Or SEJOIIR LLC } FILE .21/47433267 DRA: Sajour } 3400 Via Lido } REG. Newport Beach, CA 92663 } } } } } PST w FOB cOmmg -nL . MUN For issuance of an Ot14sle General and On -Sale Cmncml ) Eating Place License Under the Alcoholic Bcverage Control Act WHEREAS, patitionct(s) hasmave filed an application for the issuance of th6 above- refen'ed -to Gcelase(s) for the above- mend wed premises; and, WHEREAS, the ioaal policing agency has expressed an objection to the issuance of the applied -far license without the beloA- lietedoondidons; and, WHEREAS, the :81otementioned objection is based on the police problems Alcti exist within, the vicinity of the applicant- pmnises;'arid; WJIIEBEA5, the ondeesholed applicatlt(s) Wam desirous to allay the policing agency's oomcerns; raid, W)3MAA$, the issuance ofan =0stricred license would be contrary to public welthm and morals; NOW, TkIE W0RX, the wsdersipned petitirnrot(s) do /does hereby potiUm fbr a conditional lioeose as follows, to -wit: 1, Sales, sctvice attd eottstunption of alcoholic bevraeges Well be pmaitled, only between the hours of 10;00 am, and 11:00 p,m. Sunday through Thursday and 10:00 a.m. and 12:00 M'aiaipitt Friday and Sattuday. 2. No "happy hour" type of reduced price eldoholic beverage promotion shall be allowed. 3. No alcoholic beverages dial( be 000somed on ally property adjacent to the licensed preanises under the control of the licensee(s) as depicted on the AHG 257 dated 111:11!95 end ABC -253 dated 10- 11.05. 4. There will ba no.daheing allowed on the premises. This pdtitiott for conditional license is made pursuant to the provislons of Sections 23800 through 23805 of the Business and Ptnfesskms Code and will be carried forward in any transfer at the applioantpmmisw. _Fwi oft ?, A 1 RPR -25 -2007 13 :54 SANTA RNA 714 953 4486 P.02 Petitioner(s) agrWs) to xetain a copy of this petition on the premises at all times and will be prepared to produce it iaj nvdiately upon the request of any peace officer. The petitioner(s) understands) that my violation of the foragoiog condition(s) shall be grounds for the suspousion or revocation of the liaanse(e). DATED S DAY OF OC A (eant(ft /i er ApplieanUPetitioner Pop 2 0'2. AStr172 (SIM TOTAL P.02 �� Exhibit No. 23 �5� THIS PAGE LEFT BLANK INTENTIONALLY ��'x DTICE OF PUBLIC HEARING Sejour (PA2001 -005 & PA2002 -167) NOTICE IS HEREBY GIVEN that the Planning Commission of the City of Newport Beach will hold a public hearing to set a revocation hearing for Use Permit Nos. 2001 -005 (PA2001 -025) and 2002 -034 (PA2002 -167) on property located at 3400 Via Lido. The Planning Director has determined that there are reasonable grounds for the revocation of Use Permit Nos. 2001 -005 and 2002 -034 and the Planning Commission is requested to set a hearing for the revocation of the use permits. NOTICE IS HEREBY FURTHER GIVEN that said public hearing will be held on January 17. 2008, at the hour of 6:30 p.m. in the Council Chambers of the Newport Beach City Hall, 3300 Newport Boulevard, Newport Beach, California, at which time and place any and all persons interested may appear and be heard thereon. If you challenge this project in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice or in written correspondence delivered to the City at, or prior to, the public hearing. For information call (949) 644 -3200. Bradley Hillgren, Secretary, Planning Commission, City of Newport Beach. a5�' ✓IGINI I MAI rq 9 O k M � WO p ry 4 r� q Y d n�7 3g23 S ^i I OL - -_ - 7 0 f t Use Permit Nos. 2001 -005 (PA2001 -025) & 2002 -034 (PA2002 -167), 3400 Via Lido ITEM NO: Use Permit Nos. UP2001 -0005 (PA2001 -025) & UP2002 -034 (PA2002- 167) SUBJECT: Sejour 3400 Via Lido SUMMARY: The Planning Director has determined that there are reasonable grounds for the revocation of Use Permit Nos. 2001 -005 and 2002 -034 and the Planning Commission is requested to set a hearing for the revocation of the use permits. Use Permits UP2001 -0005 (PA2001 -025) & UP2002 -034 (PA2002 -167) The Planning Director has determined that there are reasonable grounds for the revocation of Use Permit Nos. 2001 -005 and 2002 -034 and the Planning Commission is requested to set a hearing for the revocation of the use permits. The property is located in the RSC (Retail Service Commercial) District. Property located at: 3400 Via Lido Use Permit Nos. UP2001 -0005 (PA2001 -025) & UP2002 -034 (PA2002 -167) 3400 Via Lido The Planning Director has determined that there are reasonable grounds for the revocation of Use Permit Nos. 2001 -005 and 2002 -034 and the Planning Commission is requested to set a hearing for the revocation of the use permits. The property is located in the RSC (Retail Service Commercial) District. Use Permit Nos. Sejour UP2001 -0005 3400 Via Lido (PA2001 -025) & UP2002 -034 The Planning Director has determined that there (PA2002 -167) are reasonable grounds for the revocation of Use Permit Nos. 2001 -005 and 2002 -034 and the Planning Commission is requested to set a hearing for the revocation of the use permits. The property is located in the RSC (Retail Service Commercial) District. Status: Council District Action • Use Permit Nos. UP2001 -0005 (PA2001.025) & UP2002- 034 (PA2002- 167)3400 Via Lido r� THIS PAGE LEFT BLANK INTENTIONALLY Exhibit No. 24 THIS PAGE LEFT BLANK INTENTIONALLY a 5� 20.89.060 Expiration, Violation, P-'° continuance, and Revocation. Page 1 of 1 Title 20 PLANNING AND ZONING- Chaoter 20 89 ALCOHOLIC BEVERAGE OUTLETS 20.89.060 Expiration, Violation, Discontinuance, and Revocation. A. Expiration. Any use permit for an alcoholic beverage outlet granted in accordance with the terms of this chapter shall expire within twelve (12) months from the dale of approval unless a license has been issued or transferred by the California Slate Department of Alcoholic Beverage Control prior to the expiration dale - B. Time Extension. The Planning Commission, or the Planning Director, as the case may be, may grant a time extension for a use permit for an alcoholic beverage outlet for a period or periods not to exceed twelve (12) months. An application for a time extension shall be made in writing to the Planning Director no less than thirty (30) days or more than ninety (90) days prior to the expiration dale. C. Violation of Terms. 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: 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. D- Discontinuance. A use permit for an alcoholic beverage outlet shall lapse if the use is discontinued for ninety (90) consecutive days or if the ABC license for the establishment has been revoked or transferred to a different location. E. Revocation. Procedures for revocation shall be as prescribed by Chapter 20.96, Enforcement. (Ord. 98 -12 § 1(Exh. A) (part), 1998) << previous. I next» ,�'50� http:// rnunicipalcodes. lexisnexis.conilcodeslnewportb /_ DATA ITITLE20IChapter_20_89_ALCO... 01/08/2008 20.96.040 Revocation of Discretionary Permits. Page I of I Title 20 PLANNING AND zONING* i Chapter 20.96 ENFORCEMENT 20.96.040 Revocation of Discretionary Permits. A. Duties of the Planning Director. Upon the determination by the Planning Director that there are reasonable grounds for revocation of a use permit, variance, site plan review, modification permit, or other discretionary approval authorized by this code, a revocation hearing shall be set by the Planning Director, the Modification Committee, the Planning Commission, or the City.Council, whichever took final previous action on the permit, except for appeals. B. Notice and Public Hearing. Notice shall be given in the same manner required for a public hearing to consider approval. If no notice is required for the permit, none shall be required for the revocation hearing; provided, that notice shall be mailed to the applicant at least ten days prior to the hearing. C. Contents of Notice. The notice of public hearing shall contain: 1. A description of the location of the project site and the purpose of the hearing; 2. A statement of the time, place, and purpose of the public hearing; 3. A statement that any interested person or authorized agent may appear and be heard. D. Hearing. The person or body conducting the hearing shall hear testimony of City staff and the applicant, if present. At a public hearing, the testimony of any other interested person shall also be heard. A public hearing may be continued without additional notice. E. Required Findings. The person or 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 one hundred eighty (180) consecutive days. F. Decision and Notice. Within ten days of the conclusion of the hearing, the person or body that conducted the hearing shall render a decision, and shall mail notice of the decision to the applicant. G. Effective Date. The decision to revoke a discretionary permit shall become final ten days after the date of decision, unless appealed. H. Rights of Appeal. Appeals shall be as prescribed by Chapter 20.95, Appeals. (Ord. 2004 -18 (part), 2004; Ord. 98 -21 § 1 (part), 1998; Ord. 97 -09 Exh. A (part), 1997) << prev_ious I next_» .� Vb http: // municipalcodes .lexisnexis.comlcodeslnewportb /_ DATA ITITLE20IChapter_20_96_ENFO... 01/08/2008 January 4, 2008 Delivered by Hand and mailed 01/04/08 Mr. David Lepo City Planning f Newport Beach p�NNIN��D P� �Y 3300 Newport Blvd. htGAIr Newport Beach, CA 92663 ,l,Q�� a� 208 Dear Mr. David Lepo: C1, J We are the owners of property 3400 Via Lido Newport Beach, Ca 92663. On January fWP®T� 2008 at 1:53 pm, I received an email notice from Arthur Stockton, tenant occupying 3400 Via� Lido, that he had received a letter from the City of Newport Beach notifying him of a hearing before the Planning Commission on January 17, 2008 regarding the Use Permit for the property and possible revoking of the Use Permit. We are in the process of evicting the tenant, "Sejour LLC" and the attorney handling this matter is Dennis P. Block. As of this moment, we have not received any notification, by telephone or by written correspondence from the City of Newport Beach regarding this hearing and the circumstances leading to this result. To our knowledge, only our tenant was notified in writing on or about December 24, 2008 by mail. As of today, the tenant has not provided us a copy of the letter or the actual content of the letter. We also contacted our attorney, Mr. Michael Cho and he instructed us to prepare a letter to the Planning Department City of Newport Beach and respectfully request a thirty -day extension of the hearine, so we may obtain all pertinent documentation and correspondence regarding this matter. We appreciate and understand the importance of this matter to the City of Newport Beach and the Planning Department and we will act swiftly to remedy any inappropriate actions with regard to the Use Permit for 3400 Via Lido Newport Beach property. Please contact us at the address and telephone numbers provided. Sin , rely De s and Christine Overstreet 200 Via San Remo Newport Beach, CA 92663 (949) 673 -3953 or cell 949- 378 -7271 email: christineoverstreet@mac.com CC! Mr. Michael Cho, Attorney, Bernard & Associates 949 - 263 -1511 THIS PAGE LEFT BLANK INTENTIONALLY ATTACHMENT NO, D MARCH 20, 2008 PLANNING COMMISSION MINUTES & STAFF REPORT �o THIS PAGE LEFT BLANK INTENTIONALLY �d Planning Commission Minutes 03/20/2008 Permit for building height exemption; Modification Permit for setbacks ing separation; Tentative Tract Map established for condominium purp( 41 Residential Development Plan for compliance with CA Government ( on 5590 and Chapter 20.86 of the City's Municipal Code; and Mitic Ave Nclaration (MND). Lepo note that staff had just received a lengthy set of comments on D for this proj We had agreed to accommodate the applicant to place i on this agenda ith the proviso that if comments were received and staff have time to respo d to it, we would have to continue this item. Staff has the opportunity to view these comments and so requests this item tinued to April 3, 2008. the request of the Chairman, s. Lennie DeCaro referenced her letter sent Planning Department regardin improper noticing. She noted she preferr it this item be continued. airman Hawkins noted that staff Xhaade a recommendation to open 1 blic hearing and continue this item rtain. The pr oject applicant % t present. missioner Toerge noted that only one member the public testified on thi and that was to request that this item be continue . missioner McDaniel noted the absence of the project plicant and aske i this item should be continued to. r. Lepo recommended this item be continued to April 3, 2008, not present, with the option to continue this to April 17, 2008. )n was made by Commissioner Peotter and seconded by Comm to continue this item to April 3, 2008. irman Hawkins noted he had an ex parte communication with the appli discussed the project. He noted his opposition to continuing this item ed to open the hearing and begin the hearing and, if needed, continue Eaton, Peotter, Hawkins, Hawkins x x,r Sejour (PA2002 -167) 3400 Via Lido tion of use permits for an off -site alcoholic beverage outlet with alcohol consumption, food service and live entertainment. . Lepo noted that the property owner had requested that this item be contin April 3, 2008. Staff has no recommendation on this request. He noted :sense of outside attorneys representing the City for this item. stant City Attorney Harp recused himself from this portion of the meeting. )mey Alan Burns noted he is serving as counsel to the Planning Commis this matter. He noted the email continuance request as they claim they get noticed on this matter. However, he stated that in the file packet Page 17 of 18 Continued to 04/03/2008 PA2002 -167 Continue to 04/17/2008 A0 file: //Y: \Users \PLN\Shared \Planning Commission \PC Minutes \mn03202008.htm. 09/04/2008 Planning Commission Minutes 03/20/2008 Page 18 of 18 includes the January materials where the determination to go forward at this hearing, there was a letter from them asking that this hearing be set in March. The staff packet has not changed for this hearing. He reported that the Commission gave them what they had asked for, which was to continue the matter to this month. missioner Eaton noted that if the applicant is willing to keep the :d then we could continue this matter and discuss it. irman Hawkins asked if the pemtittee was present. rney Burns noted that it should be clarified both the permittee and ness and property owner, the Overstreets. n Hawkins then asked if anybody was present who had interest No one responded. m was made by Commissioner Peotter and seconded by Commissi to continue this matter to April 17, 2008, as the facility is closed and no senting the permittee is present. iissioner Toerge noted the permittee had asked for a continuance ago and now we get a letter from an attorney today that was ret day. He is not prepared to continue this item. Ayes: Eaton, Peotter, Cole, and Hillgren (Noes: Hawkins, McDaniel and Toerge ADDITIONAL BUSINESS a. City uncil Follow -up. None. b. Planning Comm iss Reports. Chairman Hawkins reported on the Economic Development Committee. C. Announcements on matters that mission members would like pl on a future agenda for discussion acti or report. Commissioner Peotter asked to have dis Sion on the minutes, other Commission business on the agenda of Ap i 2008. p.m. \ ADJOURNMENT CITY OF NEWPORT BEACH PLANNING COMMISSION 41+ file: //Y: \Users \PLMShared \Planning Commission \PC Minutes\mn03202008.htm 09/04/2008 CITY OF NEWPORT BEACH PLANNING COMMISSION STAFF REPORT March 20, 2008 Meeting Agenda Item 7 SUBJECT: Revocation of Use Permit Nos. 2001 -005 & UP2002 -034 PA2002 -167) Sejour European Bistro & Lounge 3400 Via Lido APPLICANT: City of Newport Beach CONTACT: Rosalinh Ung, Associate Planner (949) 644- 3208, rung@city.newport- beach.ca.us ROJECT-SUMMARY Revocation of use permits for an off -sale alcoholic beverage outlet with accessory on- site alcohol consumption, food service and live entertainment. RECOMMENDATION Staff recommends that the Planning Commission adopt Resolution No. to revoke Use Permit Nos. 2001 -005 and 2002 -034 (Exhibit —) BACKGROUND On January 17, 2008, the Planning Commission unanimously voted to set a revocation hearing of March 20, 2008 for Use Permit Nos 2001 -005 and 2002 -034. DISCUSSION The January 17, 2008 Planning Commission staff report (Exhibit 2) presented evidence that the terms and conditions of approval of Use Permit Nos. 2001005 and 2005 -034 were violated and that the establishment failed to fully comply with all the rules, regulations and orders of the California State Department of Alcoholic Beverage Control. Pursuant to Municipal Sections 20.89.060.0 and 20.96.040, the Planning Commission may revoke a use permit for an alcoholic beverage outlet upon making one or more of the findings set forth in Section 20.89.060.C: 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. � b1 Revocation of Use Permit Nos. 2001 -005 & 2002 -034 March 20, 2008 Page 2 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. Based on the information contained in the January 17, 2008 Planning Commission staff report (Exhibit 2), staff presents the following findings and facts in support of findings for the revocation of Use Permit Nos. 2001 -005 and 2002034: 2. That the terms or conditions of approval of the permit have been violated or that other laws or regulations have been violated. Sejour violated Condition No. 1, which requires substantial conformance with the approved plot plan, floor plan, and elevations. Significant changes to the floor plan have been made without approval by the Planning Commission, including the addition of a fenced off patio area along Via Oporto and the installation of tables, booths, and other seating areas. Sejour violated Condition No. 4, which requires future owners or assignees to be notified of the conditions of this approval by either the current business owner, property owner or the leasing agent. Future owners, operators or assignees are required to submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of the Use Permit. Sejour has operated at this location since November 2005 and, to date, Sejour has not submitted a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. Furthermore, the operator admitted in writing that he was not aware of the conditions related to the use of the property. Sejour violated Condition No. 5, which requires compliance with all federal, state, and local laws. There have been multiple violations of the Use Permit at this property, each of which is a violation of the Municipal a (0`? Revocation of Use Permit Nos. 2001 -005 & 2002 -034 March 20, 2008 Page 3 Code. In addition, there are documented violations of the Building Code and ABC Regulations at the property. Furthermore, Sejour's blocking of the sidewalk during April 2007 is a violation of Municipal Code Section 10.50.020. Sejour has been issued two citations for violations of the Municipal Code and these citations were not appealed and are now final. Sejour violated Condition No. 11, which requires the applicant or operator to provide records of gross receipts of all off -site alcohol sales when requested by the City. These records were requested on May 4 and November 13, 2007 and have not been provided to date. Sejour violated Condition No. 13, which prohibits the premises from operating as an eating and drinking establishment, restaurant, bar, tavem, cocktail lounge or night club as defined by the Municipal Code. Admissions by the operator and observations by Newport Beach Police Department (NBPD) officers indicate the premises were not operating as a wine tasting bar, but instead operating like a nightclub, cocktail lounge or bar with full food service available. Sejour violated Condition No. 14 by exceeding the maximum occupancy levels and by allowing alcoholic beverages to be served in Unit A -1. NBPD reports indicate that occupancy loads have been found to be far in excess of the occupancy limits, thereby creating not only an unsafe condition but also a condition that is prohibited by the California Building Code. Furthermore, NBPD officers have documented that alcohol sales are occurring in Unit A -1 on April 14 and November 9 and 30, 2007. Sejour violated Condition No. 15 by operating outside of the permitted hours of operation. NBPD officers have reported on a number of occasions that Sejour was not operating within their permitted hours of operation set by the Use Permit and their ABC License. Sejour violated Condition 16, which requires all windows and doors to remain closed during live performances except for incidental ingress and egress of patrons and prohibits dancing. On April 19 -20, 2007, NBPD officers observed that music was playing and could be heard through the open doors. NBPD officers also observed dancing on several inspections at this establishment, including dancing on April 19, November 9 and 30, 2007. In addition, on November 9, 2007, a server informed officers that a portion of Unit A -1 is specifically kept clear for dancing. Sejour violated Condition No. 18, which requires a special event permit for any event or promotional activity outside the normal operational Revocation of Use Permit Nos. 2001 -005 & 2002 -034 March 20, 2008 Page 4 characteristics of the retail business that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. NBPD investigations revealed that the occupancy levels within Sejour were well beyond those required by the use permit condition on November 9 and 30, 2007. Sejour did not file applications for special event permits for either date. Sejour violated Condition No. 23, which requires the posting of loitering, open container, and other signs specified by the Alcoholic Beverage Control Act. NBPD reports that no ABC signs were posted at this establishment. Sejour violated Condition 33, which requires the operator to control noise generated by the establishment and for the noise generated by the use to comply with the provisions of Chapter 10.26 of the Newport Beach Municipal Code. On April 19 -20, 2007, NBPD officers were able to hear the music and the disc jockey from the City Hall parking lot. 3. The establishment for which the permit was issued Is being operated in an illegal or disorderly manner. There have been multiple violations of the Use Permit occurring at this property, each of which is a violation of the Municipal Code. In addition, there are documented violations of the Building Code and ABC Regulations at the property. Furthermore, Sejour's blocking of the sidewalk during April 2007 is a violation of Municipal Code Section 10.50.020. Sejour has been issued two citations for violations of the Municipal Code and these citations were not appealed and are now final. 4. Noise from the establishment for which the permit was issued violates the Community Noise Control Ordinance (Chapter 10.26 of the Municipal Code). On April 19-20, 2007, NBPD officers observed that music was playing and could be heard through the open doors and could be heard from the City Hall parking lot. 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. NBPD officers have reported on a number of occasions that Sejour is not operating within their permitted hours of operation set by their ABC License. X10 Revocation of Use Permit Nos. 2001 -005 & 2002 -034 March 20, 2008 Page 5 • Sejour's Alcoholic Beverage Control license prohibits dancing. NBPD officers have observed dancing on several inspections at this establishment including dancing on April 19, November 9 and 30, 2007. ■ Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act were not posted. The subject property has been vacant since January, 2008. No additional information nor new evidence and investigation have been made since that time. The property owners indicated that the establishment, when under their management for a period of three years, did not receive any citations from the Police Department nor the Code Enforcement Division. However, the Planning Department conducted a review of establishment in 2004 after a brochure came to their attention that suggested that the establishment was operating in violation of the conditions of the Use Permit. The contents of the brochure were summarized as follows at that time: ■ Advertised as a destination for food, wine, and cocktails. Provides a welcoming and comfortable atmosphere for people to come enjoy the premium spirits and wine. • Live Jazz Thursday, Friday and Saturday. • Highlights Chef and notes he will create a meal to pair with your favorite beverage. • Features weekly cocktail and wine tasting. ■ Notes there are over a 1000 bottles of wine you may select to share during your visit or take with you. • Provides for "Private Catered Affairs ": formal cocktail party, wine tasting, wedding reception, corporate meeting, birthday, etc. (Reservations Required). ■ Advertises and emphasizes Overstreet's Bar as a place to come and enjoy wines, cocktails, jazz music, and food. Only in one part of a sentence does it mention you can take the wine with you (retail). Staff believes that the establishment operated as a restaurant, bar, and /or nightclub for a number of years, which violates the use permit conditions. Recently these violations have risen to a level that jeopardized the public health, safety or welfare. Despite specific and unambiguous conditions of approval, the potential remains for further Revocation of Use Permit Nos. 2001 -005 & 2002 -034 March 20, 2008 Page 6 violations should the use be reestablished. Therefore, staff recommends that the Planning Commission revoke the use permits. Alternatives The Planning Commission has the option of modifying or imposing new conditions to the use permit should it be determined that the uses or conditions under which it is being operated or maintained is detrimental to the public health, welfare or materially injurious to properly or improvements in the vicinity or if the property is operated or maintained so as to constitute a public nuisance. On March 5, 2008, staff met with the property owners to discuss potential revisions to the existing use permits. Staff stated that they could support the use continuing solely as a retail off -sale establishment. On -site consumption and live entertainment would not be permitted and the establishment would have to close at 9:00 p.m. The property owners expressed their desire to continue to operate under the existing use permits with the existing conditions. They said that revisions suggested by staff would take away half of their business and were unacceptable. They also indicated that they would like to postpone the revocation hearing in order to explore different land use aftematives far the subject property. Environmental Review The proposed project has been reviewed and it has been determined that it is categorically exempt from the requirements of the California Environmental Quality Act under Class 21 (Enforcement Actions by Regulatory Agencies). This exemption applies to actions by regulatory agencies to enforce or revoke a lease, permit, license, certificate, or other entitlement for use issued, adopted, or prescribed by the regulatory agency or enforcement of a law, general rule, standard, or objective, administered or adopted by the regulatory agency. Public Notice Notice of this hearing was published in the Daily Pilot, mailed to property owners within 300 feet of the property (excluding roads and waterways) and posted at the site a minimum of 10 days in advance of this hearing consistent with the Municipal Code. Notices of this hearing were also mailed to the property owner and the last known operator. The environmental assessment process has also been noticed in a similar manner and all mandatory notices per the California Environmental Quality Act have been given. Finally, the item appeared upon the agenda for this meeting, which was posted at City Hall and on the city website. Revocation of Use Permit Nos. 2001 -005 & 2002 -034 March 20, 2008 Page 7 Submitted by: �A ME I - EXHIBITS I. Draft Resolution No. 00: 2. -Janwe MPGOnc i as -,� 13 EXHIBIT 1 DRAFT RESOLUTION FOR REVOCATION /)a RESOLUTION NO. A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH REVOKING USE PERMIT NO. 2001 -005 AND USE PERMIT NO. 2002 -034 (SEJOUR EUROPEAN BISTRO & LOUNGE) ON PROPERTY LOCATED 3400 VIA LIDO (PA2002 -167) THE PLANNING COMMISSION FOR THE CITY OF NEWPORT BEACH HEREBY FINDS, RESOLVES AND ORDERS AS FOLLOWS: WHEREAS, Sejour European Bistro & Lounge ("Sejour7) is located at the northwest comer of Via Lido and Via Oporto and legally described as Lot 2 of Tract 1235; and WHEREAS, on April 5, 2001, the Planning Commission approved Use Permit No. 2001 -005 to allow a fine wine retail establishment to operate with a Type °21" Alcohol Beverage Control (ABC) license (Off -Sale, General) and Type °42" ABC license (On-Sale Beer and Wine, Public Premises) with periodic on -site wine tasting seminars and a parking waiver, and WHEREAS, on November 7, 2002, the Planning Commission adopted Resolution No. 1579 of Use Permit No. 2002 -034, amending conditions of approval of Use Permit No. 2001 -005, authorizing a Type "47" ABC license (On-Sale, General- Eating Place) for on -site consumption of general alcohol beverages, live entertainment and expansion of hours of operation; and WHEREAS, pursuant to Section 20.96.040 of the City of Newport Beach Municipal Code, the Planning Director determined that there were reasonable grounds for the revocation of Use Permit No. 2001 -005 and Use Permit No. 2002 -034 and set a public hearing so that the Planning Commission could set a date to consider the revocation of Use Permit Nos. 2001 -005 and 2002 -034 ("Use Permit'); and. WHEREAS, after giving proper notice in accordance with law, a public hearing was held on January 17, 2008 in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. The Planning Commission unanimously voted to set a revocation hearing for the Use Permit on March 20, 2008; and WHEREAS, after giving notice in accordance with law, a public hearing was held on March 20, 2008 in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. Evidence, both written and oral, was presented to, and considered by, the Planning Commission at this meeting; and WHEREAS, in January 2007, the Newport Beach Police Department received a verbal complaint that Sejour was operating as a club for dancing and entertainment on Friday and Saturday nights. A subsequent inspection by the Newport Beach Police Department revealed that on April 15, 2007, Sejour had placed a wooden fence over most of the sidewalk adjacent to Via Oporto for the purpose of creating a smoking area with chairs and tables without proper permits from the City; and ��5 City of Newport Beach Planning Commission Resolution No. Page 2 of 7 WHEREAS, on April 19, 2007, the Newport Beach Police Department inspected the property and observed that music was playing and could be heard through the open doors of the establishment, patrons were eating and drinking with full menus available, dancing was allowed, and bottle service was also available; and WHEREAS, based on reported observations by the Police Department and Code Enforcement it was determined that Sejour was operating in violation of Conditions 3, 4, 10, 13, 14, 15, 17, 18 and 22. Administrative Citation 12007 -0395 was issued based on these violations; and WHEREAS, on May 4, 2007, the Planning Department requested Sejour's gross receipts for review pursuant to Use Permit Condition No. 12; and WHEREAS, on May 4, 2007, an inspection of the interior of the property was performed by Code Enforcement. In the entrance, Code Enforcement Officers observed couches, tables and chairs. In Unit A -1, Code Enforcement Officers observed a small bar that had wine and soft drinks as well as tables, couches, chairs and booths. in the room directly after the entrance, Code Enforcement Officers observed additional couches, tables and chairs. In a small room near the bathroom, additional couches and chairs were observed. WHEREAS, On May 10, 2007, the business operator (Arthur Stockton) responded to the May 4, 2007 correspondence. In the correspondence, Mr. Stockton admitted that the use of the property was a combination of restaurant, bar and lounge. He also noted that the Use Permit, as currently written, would prohibit Sejour from successfully operating and that he could not comply with the conditions as written; and WHEREAS, Mr. Stockton admitted that total sales for the past 12 months ending May 30, 2007, were $730,871 and that the sales components break down as follows: 41% food, 36% wineJchampagne, 17% cordials/liquor and 6% beer. On-site sales were 78% of the total and retail sales were 22 %. The off -site sales ratios as to food, wine, liquor and beer were 48% food and 52% wine/champagne (no off-site sale of beer or hard alcohol). Based on Mr. Stockton's own admissions over 40% of his business comes from the sale and consumption of alcohol on -site; and WHEREAS, Mr. Stockton also admitted in his correspondence that it is virtually impassible for him to comply with the terms of the Use Permit because of the retail sales requirement. In the 19 months preceding the May 10, 2007 correspondence, Mr. Stockton admitted that less than $10,000 had been generated by walk-in Sumer retail purchases. Further, Mr. Stockton admitted that most of the retail component was comprised of off -site events, such as corporate parties. Mr. Stockton also admitted in his correspondence that he was using Unit A -1 for the purpose of serving alcohol and food; and WHEREAS, On May 14, 2007, the Planning Department issued a letter requesting submittal of a use permit application for the new use as a bar or cocktail City of Newport Beach Planning Commission Resolution No. Page 3 R-7 lounge or that Sejour operate within the current conditions of the existing Use Permit. No application for an amendment to the Use Permit has been received to date; and WHEREAS, On May 26, 2007, the Newport Beach Police Department conducted an investigation of the establishment and determined there were approximately 35 people in Unit A -2 and approximately 15 -25 patrons in Unit A -1. Many people in Unit A- 1 were consuming alcoholic beverages, Including one table that had a bottle of vodka that they were sharing. Administrative Citation No. 1168E was issued for violation of Condition No. 14 of the Use Permit; and WHEREAS, On November 9, 2007, the Police Department made an inspection and noted that alcohol was available via waiter service in Unit X1 and throughout the establishment. Very loud music was playing from two very large speakers and dancing was occurring in the area known as Unit A -1. The Police Department also observed that "both service" was offered. The price for bottle service was $300 for a bottle of "Grey Goose" vodka, while anything else was $250. WHEREAS, on November 13, 2007, the Planning Department issued a request for records to determine compliance with conditions of Use Permit No. 2001 -005. The Planning Department requested that the records be submitted by December 13, 2007; and. WHEREAS, on November 30, 2007, the Police Department made an inspection and observed that a private party was going on in the area of the business identified as Unit A -1 and there were approximately 4 tables set up in the middle of the room. Waiters were delivering drink orders to Unit A -1 and food had been served. Approximately 160 to 160 patrons were in the establishment. No ABC postings or maximum occupancy postings were observed by the officers. Patrons were dancing throughout the establishment; and WHEREAS, on December 12, 2007, Mr. Stockton informed the City that he had elected to sell Sejour and asked whether he could allow the new owner to submit records and resolve the other issues related to the business; and WHEREAS, on December 12, 2007 the Planning Department sent a letter to Mr. Stockton noting the violations at the property and noting that the documents related to gross sales requested on May 4 and November 13, 2007 had not been provided; and WHEREAS, on December 26, 2007, Mr. Stockton noted the City that Sejour was now closed because operation of the business was dependent upon their operation as a bar and restaurant as they bargained for in their lease; and NOW, THEREFORE, BE IT RESOLVED that based in the aforementioned findings, the Planning Commission finds as follows: ,�'11 City of Newport Beach Planning Commission Resolution No. _ Page 4 of 7 Section 1. The Recitals above are hereby declared to be true, accurate, and correct. Section 2. The Planning Commission hereby finds that the Administrative Record which was considered by the Planning Commission 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 and City including, without limitation, testimony received at 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 Planning Commission finds that notice of this hearing was to conformance with California law. Section 4. Pursuant to Municipal Sections 20.89.060.0 and 20.96.040, the Planning Commission finds as follows: That the berms or conditions of approval of the permit have been violated or that other laws or regulations have been violated. Sejour violated Condition No. 1, which requires substantial conformance with the approved plot plan, floor plan, and elevations. Significant changes to the floor plan have been made without approval by the Planning Commission, including the addition of a fenced off patio area along Via Oporto and the installation of tables, booths, and other seating areas. Sejour violated Condition No. 4, which requires future owners or assignees to be notified of the conditions of this approval by either the current business owner, property owner or the leasing agent. Future owners, operators or assignees are required to submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of the Use Permit. Sejour has operated at this location since November 2005 and, to date, Sejour has not submitted a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. Furthermore, the operator admitted in writing that he was not aware of the conditions related to the use of the property. Sejour violated Condition No. 5, which requires compliance with all federal, state, and local laws. There have been multiple violations of the Use Permit at this property, each of which is a violation of the Municipal �1� City of Newport Beach Planning Commission Resolution No. Page 5 R-7 Code. In addition, there are documented violations of the Building Code and ABC Regulations at the property. Furthermore, Sejoues blocking of the sidewalk during April 2007 is a violation of Municipal Code Section 10.50.020. Sejour has been issued two citations for violations of the Municipal Code and these citations were not appealed and are now flnal. Sejour violated Condition No. 11, which requires the applicant or operator to provide records of gross receipts of all off-site alcohol sales when requested by the City. These records were requested on May 4 and November 13, 2007 and have not been provided to date. Sejour violated Condition No. 13, which prohibits the premises from operating as an eating and drinking establishment, restaurant, bar, tavem, cocktail lounge or night club as defined by the Municipal Code. Admissions by the operator and observations by Newport Beach Police Department (NBPD) Officers indicate the premises were not operating as a wine tasting bar, but instead operating like a nightclub, cocktail lounge or bar with full food service available. Sejour violated Condition No. 14 by exceeding the maximum occupancy levels and by allowing alcoholic beverages to be served in Unit A-1. NBPD reports indicate that occupancy loads have been found to be for in excess of the occupancy limits, thereby creating not only an unsafe condition but also a condition that is prohibited by the California Building Code. Furthermore, NBPD officers have documented that alcohol sales are occurring in Unit A-1 on April 14 and November 9 and 30, 2007. Sejour violated Condition No. 15 by operating outside of the permitted hours of operation. NBPD Officers have reported on a number of occasions that Sejour was not operating within their permitted hours of operation set by the Use Permit and their ABC License. Sejour violated Condition 16, which requires all windows and doors to remain closed during live performances except for incidental ingress and egress of patrons and prohibits dancing. On April 19 -20, 2007, NBPD officers observed that music was playing and could be heard through the open doors. NBPD Officers also observed dancing on several inspections at this establishment, including dancing on April 19, November 9 and 30, 2007. In addition, on November 9, 2007, a server informed officers that a portion of Unit A -1 is specifically kept clear for dancing. Sejour violated Condition No. 18, which requires a special event permit for any event or promotional activity outside the normal operational G a� 1 City of Newport Beach Planning Commission Resolution No. _ Page 6 of 7 characteristics of the retail business that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. NBPD investigations revealed that the occupancy levels within Sejour were well beyond those required by the use permit condition on November 9 and 30, 2007. Sejour did not file applications for special event permits for either date. Sejour violated Condition No. 23, which requires the posting of loitering, open container, and other signs specified by the Alcoholic Beverage Control Act. NBPD reports that no ABC signs were posted at this establishment. Sejour violated Condition 33, which requires the operator to control noise generated by the establishment and for the noise generated by the use to comply with the provisions of Chapter 10.26 of the Newport Beach Municipal Code. On April 19-20, 2007, NBPD officers were able to hear the music and the disc jockey from the City Hall parking lot. 2. The establishment for which the permit was issued is being operated in an Illegal or disorderly manner. There have been multiple violations of the Use Permit occurring at this property, each of which is a violation of the Municipal Code. In addition, there are documented violations of the Building Code and ABC Regulations at the property. Furthermore, Sejour's blocking of the sidewalk during April 2007 is a violation of Municipal Code Section 10.50.020. Sejour has been issued two citations for violations of the Municipal Code and these citations were not appealed and are now final. 3. Noise from the establishment for which the permit was issued violates the Community Noise Control Ordinance (Chapter 10.26 of the Municipal Code). On April 19 -20, 2007, NBPD Officers observed that music was playing and could be heard through the open doors and could be heard from the City Hall parking lot. 4. The business or establishment fails to fully comply with all the rules, regulations and orders of the California State Department of Alcoholic Beverage Control. NBPD Officers have reported on a number of occasions that Sejour is not operating within their permitted hours of operation set by their ABC License. City of Newport Bead Planning Commission Resolution No. _ Page 7 of 7 Sejour's Alcoholic Beverage Control license prohibits dancing. NBPD officers have observed dancing on several inspections at this establishment including dancing on April 19, November 9 and 30, 2007. Section 5. The Planning Commission finds that pursuant to the Conditions of the Use Permit allowing for revocation, Section 20.96.040 of the Municipal Code, the Administrative Record, the findings in Sections 1, 2, 3, and 4 above, sufficient grounds exist to revoke Use Permit Nos. 2001-005 and 2002 -034. Based thereon, it is hereby resolved that Use Permit Nos. 2001 -005 and 2002 -034 are hereby revoked because the operator violated the terms or conditions of approval of the Use Permit. Section 6. This action shall be become final and effective fourteen (14) days after the adoption of this Resolution unless within such time an appealed is filed with the City Clerk in accordance with the provisions of Title 20 Planning and Zoning, of the Newport Beach Municipal Code. PASSED, APPROVED AND ADOPTED THIS 20TH DAY OF MARCH 2008 AYES: NOES: ABSENT: BY: Robert Hawkins, Chairman BY: Bradley Hillgren, Secretary 0 EXHIBIT 2 JANUARY 17, 2008 PLANNING COMMISSION STAFF REPORT (INCLUDING ALL OF ITS EXHIBITS) Im ATTACHMENT NO. E APRIL 17, 2008 PLANNING COMMISSION MINUTES & STAFF REPORT a3 THIS PAGE LEFT BLANK INTENTIONALLY CERTIFIED COPY TRANSCRIPTION OF AUDIOTAPED NEWPORT BEACH Planning Commission HEARING RE: SEJOUR (PA2002 -167) Taken on Thursday, April 17, 2008 PRECISE REPORTING SERVICE 714 647 -9099 800 647-9099 www.precisereport!ng.com 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 Thursday, April 17, 2008 UNIDENTIFIED SPEAKER: Do you want to vote, Mr. Hawkins, on number 1? MS. VARIN: Minutes. UNIDENTIFIED SPEAKER: Minutes as amended including your amendments. CHAIRPERSON HAWKINS: Were there oral amendments at the -- Precise Reporting Service 714 - 647 -9099 UNIDENTIFIED SPEAKER: No. CHAIRPERSON HAWKINS: -- dais UNIDENTIFIED SPEAKER: No. MS. VARIN: No, sir. CHAIRPERSON HAWKINS: Okay. I'll vote. UNIDENTIFIED SPEAKER: Let the record stand 7 -0 then. MS VARIN: Thank you. UNIDENTIFIED SPEAKER: And I'll pass the gavel to Mr. Hawkins. CHAIRPERSON HAWKINS: Thank you. My apologies everyone. I had business in adjacent jurisdiction so. . . So we are through agenda item No. 1, the minutes. So then we move on to agenda item No. 2. Mr. Harp, do you have a statement to make? MR. HARP: I'll be recusing myself, and Mr. Burns will be advising the Planning Commission. 2 Precise Reporting Service 714 - 647 -9099 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 AAA 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: Mr. Burns, you want to step forward and remind us who you are? UNIDENTIFIED SPEAKER: Yeah (inaudible). MR. BURNS: Good evening, Mr. Chairman, members of the Planning Commission. Alan Burns appearing specially on this matter as your attorney. CHAIRPERSON HAWKINS: Thank you, Mr. Burns. Okay. Agenda item No. 2 is Sejour PA2002 -167 3400 Via Lido. This is a proposed or potential revocation of use permits for an off -site alcohol beverage outlet with accessory on -site alcohol consumption, food service, and live entertainment. It has been continued from our hearing on March 20th. Our actions are to conduct a public hearing and then take action on a proposed resolution. Is the prosecution or the City attorney here tonight? Please come forward, introduce yourself. Once again we have another acting or special counsel. MS. AILIN: Good evening, Chair Hawkins and members of the Planning Commission. My name is June Ailin from the law firm of Aleshire & Wynder, and I am your City prosecutor on this matter. The staff has prepared a fairly extensive staff report on this item. I will attempt to not insult anybody's intelligence by reading from the staff report. We do have a PowerPoint presentation that focuses on the particular Precise Reporting Service 714 - 647 -9099 0 I ?1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 conditions of the Use Permit that have been violated. CHAIRPERSON HAWKINS: Ms. Ailin -- MS. AILIN: Yes. CHAIRPERSON HAWKINS: -- one moment, please. Mr. Burns. MR. BURNS: Mr. Chair, could I indulge the counsel by making an overview statement on this matter so -- CHAIRPERSON HAWKINS: Please, yes. I'm sorry. Yes. MR. BURNS: -- move us ahead so we know where we're r • •1 CHAIRPERSON HAWKINS: We -- we had your overview statement earlier on another matter, and I apologize. So thank you. MR. BURNS: Just to -- CHAIRPERSON HAWKINS: Please, please go forward. Ms. Ailin, please beg your indulgence. This will set the ground rules for everyone. MS. AILIN: Certainly. CHAIRPERSON HAWKINS: Thank you. MR. BURNS: Thank you, Mr. Chair. Honorable Chairman, members of the Commission, if it pleases the Commission, I'd like to make some introductory overview remarks for the record. Unfortunately you've heard this before so -- in a different matter, but it will be very similar. The hearing to be conducted tonight involves 4 Precise Reporting Service 714- 647 -9099 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 P4 22 23 24 25 SEJOUR HEARING - 4/17/2008 whether or not to revoke, modify, or otherwise restrict a use permit for the operation of an alcoholic beverage outlet for a business operated as both Overstreet Wine Merchant and later as Sejour located at 3400 Via Lido. There's two Use Permit numbers involved: 2001 -005 and 2002 -034. It's my understanding that one Use Permit superseded the other so you really have one Use Permit before you. Since the owners of the business and the property owners have vested rights to their Use Permits, you must provide the business owner and the property owner with due process before that right is taken away. I have been retained to advise you in these matters and to guide you in reaching your decision and in preparing that decision. However, the decision is yours to make. Tonight I'll use the term "staff" to refer to City staff representing the case for revocation. I will not use the term "City" since City includes you, the planning Commission, and you are the trier of fact and need to be impartial and provide a fair hearing. I will address all my comments through the chair, Mr. Chairman, and suggest that you insist on the same. It is especially important for the order of things that no one -on -one dialogues occur whether with staff, the other attorney, either attorney, or witnesses. (Inaudible) process is a flexible concept depending 5 Precise Reporting Service 714 - 647 -9099 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 MIN 20 21 % *1 23 24 25 SEJOUR HEARING - 4/17/2008 on the rights involved. It involves a fair hearing process that provides owners an opportunity to understand the problems, if any, with their business and an opportunity to fight or explain the charges. That hearing process must provide the business owner and the property owner with notice of the charges and a copy of the evidence upon which the charges are based. The staff has the burden of proof. The business owner and the property owner must have an opportunity to confront the evidence and to offer evidence to rebut staff evidence. Generally, a fair hearing process and administrative processes, such as planning or nuisance abatement hearings, do not require sworn testimony, cross- examination, or discovery, and I think you've previously been advised of the Mohilef vs. Janovici case in which the court held that in a nuisance abatement case that sworn testimony, discovery, and cross - examination were not required. And that providing staff reports to the owner and allowing him to respond in a hearing were enough. However, in an appropriate case you might decide to allow cross - examination in a limited basis if you felt it necessary to bring out the truth. I have contacted each of the attorneys and was advised that there were no general procedural objections to the way the matter is proceeding, and I think some of -- a 6 Precise Reporting Service 714 - 647 -9099 2 Cla 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 FWA 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 lot of the matter will be presented on written evidence by both sides. It's going to -- therefore going to be recommended that the hearing procedure consist of the following: The matter has been called to order, and the parties identified and the time estimates given. The public hearing is open. I provided my overview statement a little early on this one. Any procedural issues that need to be addressed, I don't believe there will be any. The Planning Commission then announces any ex -parte communications or site visits that they may have had to the property. And then staff should be allowed -- and the City's special counsel or staff should present the case for revocation -- and must carry the burden of proof on that matter. The property owner or business owner or both should then be allowed to present evidence and argument as to why the Use Permits should not be revoked or modified. The City should be allowed rebuttal evidence. Other public testimony should be allowed; Planning Commission should be allowed to ask questions; City staff closing remarks; business owner and property owner closing remarks. And then the hearing is closed, but we may need to modify that a little bit for the 10 -day requirement. And the Planning Commission should deliberate and advise me to bring back a resolution affirming or denying the Precise Reporting Service 714 - 647 -9099 7 aql 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Fly 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING — 4/17/2008 revocation or doing something along those lines and giving me something to work with on that, and I'll bring that back to you for you review and adoption Objected to hearsay shouldn't support alone a finding for revocation, but as I said there have been no objections to any evidence that's been submitted so far. It appears we are proceeding based on unobjected to written statements. As you probably know, you'll be required to render that decision with findings and conclusions. This means you'll have to articulate some of your thought processes, and then I'll try and capture that in the resolution. You're going to have to weigh the evidence tonight and support the findings with that evidence and articulate that, and then those findings support the ultimate decision. To assist you in weighing the evidence, I've.given you a matrix, and I've revised that matrix with the first packet that was -- originally the matrix just had the City staff's case for revocation. We did then have the benefit of the Overstreets' attorney submitting a packet, and we tried to include some of that information in the matrix to help you. Since that time, there's been another submittal with exhibits. That did not make it in so you'll have to make your own judgments and notes about that evidence. And of course, you're going to hear probably new evidence, some new 8 Precise Reporting Service 714 - 647 -9099 I %X 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 evidence tonight, too. So you're going to have to make your own notes about that. We now -- let's see. I guess I covered that. One issue that has not been fully developed until late is the issue of an owner's responsibility for a lessee's actions, and I don't want to step on anybody's lines. I suppose both counsel will have a point of view about that. The overstreets have -- attorney has stated flatly that owners are not responsible for a tenant's actions, but the law is not absolutely that clear. In fact, in the case cited, the Anderson vs. Souza case, both the owner and the tenant were found to be responsible for being involved in creating an airport nuisance situation. And, of course, we have a similar situation here where the owner developed the restaurant Use Permit and then the tenant maybe was the big offender. However, they have -- the Overstreets have raised a legitimate issue that you will have to, uh, consider for yourselves, and that is the owner's responsibility for actions of a tenant and whether they took appropriate action in light of all of the facts and what they were put on notice about. After the parties have submitted their evidence and make their closing arguments and the hearing is closed, it's anticipated you'll then deliberate and discuss whether evidence supports the action to revoke or modify, and you'll Precise Reporting Service 714 - 647 -9099 0 2a3 1 2 3 4 5 6 7 8 M 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 make any statements as to whether the owners of the property should or should not be charged with the acts of the tenant, namely Sejour. But in the end, I ask that you direct me to prepare that resolution for your consideration. I'll then try and capture the findings based on how you've articulated it, and maybe at the next -- then I guess we'll talk at the end as to whether or not we're going to have another meeting for that or -- and work around that 10-day requirement. That's my overview, Mr. Chairman. CHAIRPERSON HAWKINS: Thank you, Mr. Burns, I have a couple -- one -- two questions or one question, one comment. You said that we've got to be careful about one -on -one contact between Commissioners and attorneys or witnesses. That me -- but it -- that does allow for us to question anyone who makes a presentation or testifies; correct? MR, BURNS: Yes. And that's not a due process or an ill -- an illegality or anything like that. Just an orderly running of the meeting -- CHAIRPERSON HAWKINS: Oh, okay. MR, BURNS: -- concept. CHAIRPERSON HAWKINS: So -- MR. BURNS: So it's -- you're free to do anything you want. You're free to ignore all those rules I told you about if it works for you, CHAIRPERSON HAWKINS: You -- you have been at our Precise Reporting Service 714 - 647 -9099 10 I �q4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 hearings before -- MR. BURNS: Yes. CHAIRPERSON HAWKINS: -- so you know that we will ignore those rules. The second thing that you mentioned and that there was no evidentiary issues, and I believe there actually are a couple of evidentiary issues that Mr. Hunt has raised. And your advice would be that I resolve those issues with your advice? MR. BURNS: Yes. CHAIRPERSON HAWKINS: Okay. MR. BURNS: Yes. CHAIRPERSON HAWKINS: Ms. Ailin, why don't we allow Mr. Hunt to come forward, introduce himself as counsel for the applicant, permittee, or landlord? MS. AILIN: Certainly. CHAIRPERSON HAWKINS: Thank you. Mr. Hunt. MR. HUNT; Thank you. Thank you, Mr. Chairman. I am David Hunt, Sheppard Mullin Richter & Hampton. Our office and myself represent the owners of the property, the Overstreets. Sejour is not represented in front of you. Sejour no longer has an interest in the property. They've been out of the property since January. The interested parties are the Overstreets, and we represent their interests here. Precise Reporting Service 714- 647 -9099 11 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: Thank you, Mr. Hunt. And I see Ms. Rosenthal here as -- with you -- MR. HUNT: Yes. CHAIRPERSON HAWKINS: -- as well. MR. HUNT: Deborah -- CHAIRPERSON HAWKINS: Thank you. MR. HUNT: -- Rosenthal is here as well as my two clients whom I believe you actually know, but Dennis Overstreet and Christine Overstreet are present in the Commission's hearing chambers. CHAIRPERSON HAWKINS: Thank you. MR. HUNT: Thank you. CHAIRPERSON HAWKINS: And, Mr. Burns, I have got to confess I didn't read your matrix, but I left it in my office. Do you have a copy that we could get a copy of the most recent matrix because I thought it was excellent, was very helpful in analyzing. MR. BURNS: Certainly. UNIDENTIFIED SPEAKER: Yeah, we all need one. CHAIRPERSON HAWKINS: Well -- MR. BURNS: Would you like a copy to be made that -- CHAIRPERSON HAWKINS: Yes. Mr. Lepo, can you assist us in -- thank you. . We do have some business up here to make sure that due process is complied with. Anyone have any ex -parte 12 Precise Reporting Service 714 - 647 -9099 aa� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 contacts with the Overstreets or Sejour or -- Mr. -- Commissioner Hillgren? Commissioner Toerge? UNIDENTIFIED SPEAKER: No. UNIDENTIFIED SPEAKER: No. UNIDENTIFIED SPEAKER: No. CHAIRPERSON HAWKINS: I -- I have spoken -- I believe I disclosed this at the last hearing -- I have spoken with Mr. Hunt on numerous matters. I've known Mr. Hunt since 1993. Um, he actually did call me at one point and asked about a heads -up for dealing with the Planning Commission, and I told him well, I was on the Planning Commission. At which point he said well, we can't talk anymore. So I said that's right. Um, but other than that I've had no contact with any of the occupants. So Ms. Ailin, you're prepared to go? MS. AILIN: Yes. CHAIRPERSON HAWKINS: Okay. Please proceed. MS. AILIN: Okay. As -- CHAIRPERSON HAWKINS: And you don't have any concerns about my contact with Mr. Hunt? MS. AILIN: I do not. CHAIRPERSON HAWKINS: Okay. Perfect. Thank you. MS. AILIN: In fact, in my first phone -- phone conversation with Mr. Hunt he disclosed to me that he had contacted you and that you had said that you were on the Precise Reporting Service 714 - 647 -9099 13 ja1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 Planning Commission and that was where the -- CHAIRPERSON HAWKINS: Right. MS. AILIN: -- conversation ended. we -- we do have a brief PowerPoint presentation that focuses on the particular conditions of the Use Permit that were violated. Um, under the title slide we have a photograph of the establishment, just as a reminder of -- of what it looks like and where it is. I've lost my technical assistant, so -- oh, here we go. CHAIRPERSON HAWKINS: Oh. MS. AILIN: This first slide reviews what the original use was that was permitted on this site. The primary purpose was to be a retail establishment for the sale of general alcoholic beverages, although, as I understand it, the Overstreets were focusing on wine sales, and along with that wine tasting and seminars about wine. At the time the applicant had a Type 21 off sale general license and a Type 42 on -sale -- on -site sale beer and wine license. CHAIRPERSON HAWKINS: Ms, Ailin, what was the -- because this is grandfathered in as retail use; right? MS. AILIN: That's my understanding. CHAIRPERSON HAWKINS: And so what was the previous use? Do you have -- do you have an idea -- MS. AILIN: I -- CHAIRPERSON HAWKINS: -- or do you know? 14 Precise Reporting Service 714- 647 -9099 Aly 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 MS. AILIN: I -- I do not. CHAIRPERSON HAWKINS: Mr. Lepo? MR. LEPO: I do not know, sir. CHAIRPERSON HAWKINS: Was it -- I assume it was retail use. MR. LEPO: Oh, but that wasn't -- I CHAIRPERSON HAWKINS: So -- so it was, the previous use was a retail use? MR. LEPO: I presume so. i CHAIRPERSON HAWKINS: Okay. MR. LEPO: Yes, sir. CHAIRPERSON HAWKINS: Thank you. MR. LEPO: (Inaudible). MS. AILIN: Okay. And could I have the next slide? CHAIRPERSON HAWKINS: (Laughs) That happens to me, too. MS. AILIN: Someone else is defeated by the technology. Several years later the Use Permit was amended. The amended Use Permit was approved on November 7th, 2002, authorizing a slightly different use. The applicant had obtained a Type 47 license for on -site consumption of alcoholic beverages, and the Use Permit also permitted live entertainment and an expansion of the business hours on Friday and Saturday nights to 12 midnight. However, the intention was still for the primary use to be off -site sales with the other use being an accessory to the off -site sales. 15 Precise Reporting Service 714 - 647 -9099 �qq 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 MA 20 21 PEA 23 24 25 SEJOUR HEARING - 4/17/2008 Next slide. And again, we have a vicinity map giving you an orientation to where the property is located at the corner of Via Lido and Via Oporto. Next slide. The first condition of the Use Permit that we're concerned with here was one that required the development and use of the property to be in substantial conformance with the approved plot plan, floor plan, and elevations, and we also have here a picture of the floor plan. The establishment was essentially divided into two units referred to in the Use Permit as A -1 and A -2. A -1 was to be the sales portion of the property. A -2 was to be the area used for the accessory wine tasting and 'live entertainment use. There was also a requirement to obtain a special event permit for certain events. There was a limited number of wine tastings allowed. There are also some fire department concerns about exits if this property exceeds occupancy. Occupancy under this floor plan was limited to six persons in unit A -1 and I -- sorry. Nine in unit A -1 and 26 in unit A -2. The issues with Condition 1, which has been violated in a number of ways, is that, while the property was being operated as Sejour, there were fences and patios created along the sidewalk. At times there was a line 16 Precise Reporting Service 714 - 647 -9099 �6� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 outside the property. There was an increase in the seating provided that was not consistent with the floor plan you were just shown. The general ambience gravitated more toward a restaurant with tables and chairs, and there are photographs of the place configured in that way in your Planning Department report. These conditions are documented in the report in Exhibit 7, which is a memo from Doug Jones, an undercover officer who visited the site on several occasions. Exhibit 7, another supplemental police report and a followup report; Exhibit e, another memo from Doug Jones; Exhibit 9, an administrative citation for violating this particular condition of the Use Permit; and Exhibit 14, another administrative citation. And moving on to the next slide, Condition 4 required that if the business were sold or came under a different ownership, any future owners or assignees would be notified of the conditions of approval, and that the owners, the new owners, would within 30 days provide a letter to the Planning Department acknowledging receipt of the Use Permit and acceptance of the conditions. The Planning Department never received a letter from Sejour indicating that it was aware of the conditions and would follow them, and the manner in which the establishment was operated would indicate that they were not 17 Precise Reporting Service 714 - 647 -9099 �6� 1 2 3 4 5 6 Pl 10 11 12 13 14 15 16 17 18 19 20 0146 22 23 24 25 SEJOUR HEARING - 4/17/2008 aware of the conditions. In fact, on a couple of occasions, when citations were issued, the person who was managing the establishment at the time indicated that they were not aware that the manner in which they were operating violated the conditions of the Use Permit. The next slide shows us Use Permit Condition 5 which requires the applicant to comply with all federal, state, and local laws. There were issues with this establishment exceeding the very limited occupancy. I don't believe there was ever a count out done, but informal counts done by undercover officers on the premises indicated that at various times there were 70, 60, even as many as 120 persons on the premises. This is reflected in Exhibit 17. There were also limitations on the hours. The establishment was to close at midnight on Friday and Saturday. Undercover officers had the experience of being served after midnight at the establishment. Also, this location was not permitted for dancing, but undercover officers saw persons dancing pretty much throughout the establishment on several occasions. There were also, as noted before in connection with the deviations from the site plan, blocking the sidewalk and other issues with regard to compliance with general laws. There's -- Use Permit 10 is another condition that was violated. It isn't one where we can point to a specific 18 Precise Reporting Service 714 - 647 -9099 3 6 � 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 MUM 17 18 19 20 21 MAN 23 24 M62 SEJOUR HEARING - 4/17/2008 item that indicates this condition was violated. It's just a reflection of the manner generally in which the establishment was operated. This condition required that the alcoholic beverage outlet overate as a retail establishment for the sale of alcoholic beverages for off -site consumption. On -site consumption was to be an accessory and subordinate use to the retail use, but the manner in which the restaurant was operating -- excuse me. The manner in which the establishment was operating functioning as a restaurant with alcoholic beverage sales was an indication that they were not confining that to an accessory use. Alcoholic beverage sales for on -site consumption were not to exceed 200 of gross sales for the business. There's material in vour report that shows that the operator admitted that, in fact, on -site sales were more than 20% of the revenues of the business. One of the other conditions that we will get to required that the operator provide daily sales reports if requested by the City. They were requested and never provided. Let's go on to the next slide. Condition -- Condition No. 11, as I just stated in connection with the previous condition, limited sale of distilled spirits for off -site consumption to 15a of gross receipts for off -site alcohol sales. In other words, the emphasis was supposed to be on wine. And again, this condition required that the Precise Reporting Service 714 - 647 -9099 W011 �2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 P48l 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 applicant provide information on what their revenues were and what the source of those revenues was, and the request for that information got absolutely no response. In your materials Exhibit 10 is a request for those records. Exhibit 16 is another request, and no records were ever provided, Go on to 13. Condition 13 specifically states that this is not to be a restaurant. The Use Permit approval clearly stated that it does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge, or nightclub as defined by the Municipal Code unless a Use Permit for those uses was obtained. Exhibit 7 in your packet shows that they were actually operating with a full bar, with a restaurant menu that provided everything from appetizers to soups to entrees to dessert. There was one undercover officer who dined there and had a fillet mignon. The dinner check for that is in your materials at Page 127, and the operation of a full bar is also reported in Exhibit 6. Exhibit 15 reflects a bouncer at the door, bottle service at the establishment and amplified music. Several of the undercover officers reported that the ambiance was that of a restaurant or a nightclub, not an off -site sales location with an accessory wine tasting use. Precise Reporting Service 714 - 647 -9099 20 1 2 5 6 r 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 6&V SWOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: Ms. Ailin, you mentioned bottle service. Do you want to explain that for those -- MS. AILIN: Yes. CHAIRPERSON HAWKINS: -- who don't know? MS. AILIN: Yes. Bottle service is a type of service where someone essentially pays a price for an entire bottle of alcohol, frequently more, considerably more than the retail price of that bottle at a liquor store. And the concept is that the persons who are enjoying that bottle will receive greater attention from staff, and actually it's the service personnel at the establishment who are still supposed to do the pouring. Hard to say how well that gets adhered to, but that's what I'm referring to as far as bottle service. CHAIRPERSON HAWKINS: Thank you. MS. AILIN: Condition 14 gets back into the physical configuration of the establishment and the division of it into two units and the maximum occupancy for each unit. The on -site alcoholic beverage consumption was limited to a unit identified as A -2 with a maximum of 29 seats. The off -site sales were to occur in unit 1, which has only three seats. And as previously noted, there is material in your packet showing that these divisions between where the various activities were to take place were not respected and that the occupancy was exceeded. And we have photographs here. Precise Reporting Service 714 - 647 -9099 21 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 Here's unit A -1. Remember, this is supposed to be the off -site sales area, but we have tables and chairs here with table cloths as you would have in a restaurant with candles on the table. CHAIRPERSON HAWKINS: Mr. Burns? MS. AILIN: And additional -- MR. BURNS: Mr. Chair, may I inquire, will there be a written copy of this PowerPoint presentation for the record? CHAIRPERSON HAWKINS: We -- we have a copy up here. Ms. Varin, you have a copy; correct? MS. VARIN: Yes, sir, I do. CHAIRPERSON HAWKINS: Okay. Perfect. Then and now you have it. MR. BURNS: Both counsel I assume have one, too. CHAIRPERSON HAWKINS: Mr. Hunt, you have a copy of the PowerPoint in -- MR. HUNT: I do, Mr. Chairman, although (inaudible). CHAIRPERSON HAWKINS: We -- we have another one for you. Thank you. I'm sorry, Ms. Ailin. Please continue. MS. AILIN: Thank you. Condition 15 limits the hours of operation to 10:00 a.m. to 11:00 p.m. daily for the retail portion of the property, that's unit A -1 where the off -site sales were to be occurring, and from 1:00 p.m. to 12 midnight on Fridays and Saturdays, and from 1:00 p.m. to 11:00 P.M. 22 Precise Reporting Service 714 - 647 -9099 �6� 1 2 3 4 5 6 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 Sunday through Thursday for the eating and drinking portion of the project. The condition also limited the number of educational seminars to not more than three per week. As noted previously, Exhibit 17 in the staff report indicates that drinks were being served after those operating hours. Condition 16 states that live entertainment may occur subject to the approval of a live entertainment permit. However, dancing was prohibited, and in order to ensure that noise from the business would be contained, music was to be limited to indoor areas only. All windows and doors to remain closed except as necessary for persons to enter and leave the premises. In your staff report you have Exhibit 6 which indicates that doors were left open and music could be heard outside the premises. Exhibit 14 is an administrative citation for that kind of issue. CHAIRPERSON HAWKINS: Ms. Ailin, did they -- did Sejour ever apply for a live entertainment permit? MS. AILIN: I have seen a live entertainment permit that was issued to them, yes. CHAIRPERSON HAWKINS: But that was -- is it -- the permit was issued at goes forward or is it one -- one day permit? MS. AILIN: No. It's -- it's a -- it's an ongoing permit. Precise Reporting Service 714 - 647 -9099 23 �61 1 2 3 4 5 6 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 `may SEJOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: okay. MS. AILIN: It's not a special event permit. It is a live entertainment permit, but that permit does not permit dancing on the premises. CHAIRPERSON HAWKINS: I see. MS. AILIN: Condition 18 required a special events permit for any event, promotional activity outside the normal operational characteristics of this retail business. As noted earlier there was a condition that limited the number of wine tasting seminars to three per week. If there were to be more than three per week, a special event permit for that would be required. Also, part of the concern with this was the possibility that occupancy for these special events would exceed the normal occupancy. As noted in Exhibit 7, there was a roped -off line for entry into the premises and indications that there were private parties, in other words special events, going on at the site. But there's no record that a special event permit for those events was obtained. Condition No. 20 required the operator to take reasonable steps to discourage and correct objectionable conditions that constitute a nuisance in parking areas, sidewalks, and surrounding areas. There have been instances as noted in your staff report when there was a line outside the property essentially blocking the sidewalk and also Precise Reporting Service 714 - 647 -9099 %E ' 6? 1 2 3 M, 5 6 9 10 11 12 13 14 15 16 17 18 19 20 21 22 2-- 24 2° SEJOUR HEARING - 4/17/2008 persons loitering outside the premises, although I don't believe there was anyone specifically seen by a police officer consuming alcoholic beverages off the premises. Continuing in the -- in the matrix provided by Mr. Burns, there were signs that were required to be posted on the premises prohibiting loitering, open container and other signs specified by the Alcoholic Beverage Control Act. Exhibit 6 to your staff report is a report from the police department indicating that those signs were not posted. Condition 33 required the establishment to comply with certain decibel limits on sound. No one ever went out with a noise meter to confirm whether those readings were -- whether the noise exceeded those limits. However, officers did note that they could hear the music and noise from the premises from some distance away. CHAIRPERSON HAWKINS: Well, how -- how far was that distance? Do you have an idea? MS. AILIN: Several blocks. CHAIRPERSON HAWKINS: Okay. MS. AILIN: Sorry. Actually, I -- it could be heard from the City Hall parking lot. CHAIRPERSON HAWKINS: Okay. MS. AILIN: That concludes my presentation specifically about the conditions that were violated and the brief review of what's available to you in the staff report. We do have 25 Precise Reporting Service 714- 647 -9099 �6q im 2 3 4 5 M 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 f01Cl 24 25 SEJOUR HEARING - 4/17/2008 City employees available who have been involved in the investigation of this establishment available, some of them by phone because the undercover officers want to maintain their ability to continue to work undercover. So if the Commissioners have any specific questions for any of them, we will make them available now. CHAIRPERSON HAWKINS: Anyone have any questions of the officers? Okay. I don't think that's necessary, um, but there -- there have been issues that Mr. Hunt has raised in connection with the landlord's knowledge and so forth. Do you want to address those now or -- MS. AILIN: Certainly. And actually I -- I -- I have seen Mr. Hunt's letter and I -- I have a response to it, and you've -- you've asked specifically about the responsibility of the landlord so I'll begin with that. Even the case that Mr. Hunt cites in his letter states that a landlord is not responsible to other parties for the misconduct or injurious acts of his tenant to whom his estate has been leased for a lawful and proper purpose. Now, when the Overstreets entered into their lease with the Stocktons who operated Sejour, that lease specifically said that the permitted use was a restaurant -- excuse me, a bar, restaurant, and live entertainment use. The use for which it was leased ran specifically counter to the Use Permit which says that this establishment is not to 26 Precise Reporting Service 714 - 647 -9099 516 1 Ir 4 5 6 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 be a restaurant, bar, tavern, nightclub, etc. So I don't think that the Overstreets can claim that they didn't know what the tenant was doing. In effect, they limited the tenant to a use that was inconsistent with the Use Permit, which I think also undermines their -- their claim that they -- they had no knowledge of what was going on. They had no knowledge that the Use Permit was being violated because in a way they set the Use Permit up to be violated by leasing the property for a use that was inconsistent with the Use Permit. Another issue that Mr. Hunt raised is some arguably inconsistent language in the Use Permit where the word "restaurant" appears. I think the best way to look at that is to ask what a responsible property owner would do when faced with a use permit that is perhaps a little bit inconsistent. have this Use Permit. There are some things in here that seem to conflict. Can you help me understand what I can do, what I can't do? Maybe we need to amend this a little bit so that it's not inconsistent. But that's not what the Overstreets did. You could argue that they took advantage of any inconsistencies in the permit by deciding to lease the property for, as already mentioned, a use that is not Precise Reporting Service 714 - 647 -9099 27 5�1 A responsible property owner would come to the City, come to the Planning Department and say, you know, I have this Use Permit. There are some things in here that seem to conflict. Can you help me understand what I can do, what I can't do? Maybe we need to amend this a little bit so that it's not inconsistent. But that's not what the Overstreets did. You could argue that they took advantage of any inconsistencies in the permit by deciding to lease the property for, as already mentioned, a use that is not Precise Reporting Service 714 - 647 -9099 27 5�1 1 2 3 4 5 6 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Ply SEJOUR HEARING - 4/17/2008 consistent with the Use Permit. Mr. Hurt also makes the very interesting argument that revocation has to be based on this property being a nuisance and that it can't be based simply on violation of the conditions. He has no -- nothing to stand on that really says that. What's interesting is that the cases that do talk about revocation of Use Permits and talk about the due process requirements in connection with revocation of Use Permits pretty much uniformly say "When a permittee has acquired a vested right, it may be revoked if the permittee fails to comply with reasonable terms or conditions expressed in the permit granted, or if there is a compelling public necessity." So it's an either -or proposition. You can revoke the permit for the establishment being a nuisance even if it's fully in compliance with the conditions, but you can also revoke the permit for not complying with the conditions. Now, Mr. Hunt's argument is that the City has, in effect, waived its ability to revoke the permit for non- compliance with the conditions by including condition No. 6 in the Use Permit, which is the condition that says that the Use Permit may be reviewed, modified, or revoked by the Planning Commission or the City council if there's a determination that it's a nuisance. What this ignores is that there is a provision in 28 Precise Reporting Service 714 - 647 -9099 Nil 2 3 4 5 6 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 the Municipal Code that specifically says that a use permit can be revoked if the conditions are violated, if findings are made that the conditions have been violated. What Mr. Hunt is arguing is that this inclusion of condition 6 in the Use Permit is a waiver of the Municipal Code provision. There's absolutely no basis for seeing this as a waiver. Waiver has to be knowing and informed. You can't accidentally waive the application of a provision of the Municipal Code We might have a different argument if condition said this Use Permit may only be reviewed, modified, or revoked if this property becomes a nuisance. But the word "only" simply doesn't appear there. There's -- there's another aspect of this, and -- and I -- and I may be going a little bit out on a limb here so someone -- someone can tell me if they think I'm a bit out on a limb here, but you also have a provision in the Municipal Code that says that a use permit can be revoked based on a finding that there has been a discontinuance of the exercise of the permit, the use of the permit, for 180 consecutive days. And we have a situation here where Sejour stopped operating on December 31st, 2007. My understanding is that the property has been vacant since that time. CHAIRPERSON HAWKINS: I think we're a little bit far out on a limb. Precise Reporting Service 714 - 647 -9099 29 � t3 1 2 3 4 5 6 7 a 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 MS. AILIN: Okay. CHAIRPERSON HAWKINS: I'm not sure that the -- that the landlord was aware of that concern or received notice of that concern. Mr. Burns, did you have something to say? MR. BURNS: Absolutely agree. I don't think that was charged, and as a matter of due process you have to have notice of what the charges are. CHAIRPERSON HAWKINS: Okay. MS. AILIN: Okay. CHAIRPERSON HAWKINS: Ms. Ailin, Mr. Hunt also argues estoppel, that staff engaged in some settlement discussions or something and that for some unknown reason estops the City from taking this action. Do you have a response to that? MS. AILIN: I -- I don't see that as -- as being an estoppel. The Overstreets are in a position to be able to come in at any time and apply for a modification to the Use Permit to allow them to operate a business that's consistent with the zoning and consistent and appropriate with new conditions. There's nothing that would ever stop them from doing that, but I don't see how -- if they had filed a formal application to do so, I could see the Commission exercising its discretion to say: Okay, we're going to put this revocation hearing in abeyance, and instead of considering 30 Precise Reporting Service 714 - 647 -9099 ik 1 2 3 4 5 PA 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 that, we're going to consider the proposed modification. But as far as I know, there's been no formal application. CHAIRPERSON HAWKINS: And staff's conduct could not constitute an estoppel of this body; right? I mean is there anything that the staff could do that would constitute an estoppel for this body? MS. AILIN: The staff is not the decision makers. There -- there is extensive case law dealing with the question whether City employees, municipal employees, have any sort of apparent authority. The case law consistently says that they do not. CHAIRPERSON HAWKINS: Okay. Thank you. Any questions of Ms. Ailin? COMMISSIONER EATON: Mr. Chair, I have -- have one. CHAIRPERSON HAWKINS: All right. Mr. Eaton, please proceed. COMMISSIONER EATON: Is it the City's contention in this proceeding that any of the violations occurred during the operation of the premises by the Overstreets before Sejour took over? MS. AILIN: There's nothing in the staff report addressing that. I have not seen any information indicating that there were violations while the Overstreets were operating the business. It has been based on the information I've seen approximately five years since the Overstreets were 31 Precise Reporting Service 714- 647 -9099 .515 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 operating on the premises themselves. I think that would -- I think revoking the permit on the basis of things that might have happened that long ago would be a bit dilatory on the part of the Commission. COMMISSIONER EATON: So that's -- MS. AILIN: The Overstreets -- COMMISSIONER EATON: -- not what's in front of us. MS. AILIN: That's not really -- COMMISSIONER EATON: What's in front of us is the operations while it operated as the Sejour. MS. AILIN: What's -- what's in front of you is the material in the Planning Commission, excuse me, Planning Department report which focuses entirely on events that occurred while the Stocktons were operating the property as Sejour. COMMISSIONER EATON: Thank you. CHAIRPERSON HAWKINS: Ms. Ailin, Commissioner Eaton asked you if there was anything that -- that the Overstreets had -- had done during that period of time. And I assume one of the things that they did do was draft the lease and enter into a lease agreement. And as you indicated, the lease agreement did purport to allow a use or require a use which was inconsistent with the Use Permit. Is that your argument? MS. AILIN: That -- that is -- that is my argument about the lease, and -- and that is also my argument with regard to 32 I Precise Reporting Service 714 - 647 -9099 .�tb 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 the Overstreets' claim that they didn't know that the Use Permit was being violated. CHAIRPERSON HAWKINS: Okay. MS. AILIN: In response to Mr. Eaton's question, what I was more focused on were the actual operations -- CHAIRPERSON HAWKINS: The conduct. MS. AILIN: -- of the Overstreets. CHAIRPERSON HAWKINS: Yes. MS. AILIN: The conduct of a business on that property while it was under their immediate control. CHAIRPERSON HAWKINS: Okay. Thank you. Commissioner Toerge COMMISSIONER TOERGE: Yeah, thank you. On that specific topic, I don't believe we have a copy of that lease. Can you pull that -- that provision out so we can see that? CHAIRPERSON HAWKINS: I believe that Mr. Hunt provided a copy of that lease in -- COMMISSIONER TOERGE: In the folder? CHAIRPERSON HAWKINS: Yeah. In one of the -- COMMISSIONER TOERGE: Can you direct me what -- where the provision is that says that? MS. AILIN: I -- I saw the -- I saw a reference in the staff report to the lease. MR. HUNT: (Inaudible) staff report from the packet of January 17th. It's an unnumbered set of pages -- 33 Precise Reporting Service 714 - 647 -9099 --� 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 MS. AILIN: Right. MR. HUNT: -- involved under Exhibit 25 (inaudible) January 4th. COMMISSIONER TOERGE: Don't have it. MS. AILIN: Okay. CHAIRPERSON HAWKINS: It's here. MR. HUNT: It's in -- it's on the website -- COMMISSIONER TOERGE: 25? MR. HUNT: -- PDF. MS. AILIN: Oh. MR. HUNT: There's -- CHAIRPERSON HAWKINS: Mr. Hunt, thank you. I -- we will locate it. MR. HUNT: .Thank you. CHAIRPERSON HAWKINS: Just one moment. MS. AILIN: Oh. Oh. Do you have it? UNIDENTIFIED SPEAKER: Yeah, me too. COMMISSIONER McDANIEL: While people are looking, Mr. Chairman, I -- I have a -- MS. AILIN: We -- we can actually, it might take us a minute or two, but we can -- CHAIRPERSON HAWKINS: It is -- MS. AILIN: -- actually bring it up online. COMMISSIONER TOERGE: I only have -- CHAIRPERSON HAWKIINS: It is behind the -- this sheet 34 Precise Reporting Service 714 - 647 -9099 31� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 here. So it's Newport Volleyball is the other. COMMISSIONER TOERGE: Is there a handwritten page or anything? CHAIRPERSON HAWKINS: No, there is no handwritten page. It is a letter from Mrs. -- well, actually Dennis and Christine Overstreet. COMMISSIONER TOERGE: Okay. I -- I just -- I've been through this package -- CHAIRPERSON HAWKINS: No, that's fine. COMMISSIONER TOERGE: -- several times. I don't have it. CHAIRPERSON HAWKINS: Exhibit -- Exhibit 2 to January 17th, 108 Planning Commission. Exhibit 2. And this is the January 17th staff report. MS. AILIN: Oh, okay. I can -- COMMISSIONER TOERGE: I mean I'm not seeing it. MS. AILIN: -- sacrifice my copy. i, MR. HUNT: Do you want to give him mine? CHAIRPERSON HAWKINS: Are you handing Commissioner Toerge something new now? MR. HUNT: No. It's the lease. CHAIRPERSON HAWKINS: Together with the letter. MR. HUNT: Yes, CHAIRPERSON HAWKINS: Exhibit 2. COMMISSIONER TOERGE: So maybe you can direct me in this 35 Precise Reporting Service 714 -647 -9099 5A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 lease as to where that -- CHAIRPERSON HAWKINS: First page. COMMISSIONER TOERGE: -- language is. MS. AILIN: It's -- it's actu -- it's actually the second page of the lease, paragraph 1, character of leased premises which says, "The business conducted on the lease premises shall be a bar, restaurant, and live entertainment business." There is an alternative use for a certain type of medical or professional practice. The lease was entered into in September of 2005. In March of 2005 the parking requirements for medical practices were increased, and these premises would not have been able to meet that parking requirement. So in effect, the only use available under the lease is the bar, restaurant, and live entertainment use. COMMISSIONER TOERGE: The lease permit is -- is referred to in this paragraph, is it a part of the lease? Is it attached to the lease anywhere? Was it an exhibit to it? CHAIRPERSON HAWKINS: Rather than asking her about the lease, why don't we ask Mr. Hunt who represents the Overstreets? COMMISSIONER TOERGE: Okay. CHAIRPERSON HAWKINS: Ms. Ailin, though, are you suggesting that a medical use is a permitted use on this site at the time the lease was entered into? Precise Reporting Service 714 - 647 -9099 36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 MS. AILIN: The Planning Department has confirmed to me that -- that that was a permitted use, the difficulty being meeting the parking requirement at this particular location. CHAIRPERSON HAWKINS: Medical office is a permitted use at that site? MR. HUNT: That's correct. COMMISSIONER McDANIEL: That's a surprise. MR. HUNT: But there is a different parking requirement than for (inaudible)_ CHAIRPERSON HAWKINS: Understood. Commissioner McDaniel? COMMISSIONER McDANIEL: Yeah, just -- I was just sitting here thinking as we were going through that for what value it is to anybody as a disclosure, I am the only City Commissioner that was actually a part of the original CUP that was given to the -- the Overstreets. And I just thought someone ought to know that I actually was a part of all that and voted for it, as a matter of fact. So I don't know if anybody needed to know that, but I thought I better disclose that. I just -- CHAIRPERSON HAWKINS: Are you going to recuse yourself? Is that -- COMMISSIONER McDANIEL: I don't think I need to. I just -- I just wanted to make sure everybody knew that I was here when it happened, in case somebody wants to -- CHAIRPERSON HAWKINS: Mr. Burns, is it all right if Precise Reporting Service 714 - 647 -9099 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 Commissioner McDaniel proceeds with this? MR. BURNS: Absolutely. CHAIRPERSON HAWKINS: All right. Thank you. MR. BURNS: Mr. Chair, I was going to ask, though, it would be very helpful if we could have everything that's in the record identified. If there's any other documents been distributed that maybe -- like the PowerPoint presentation, the hard copy of that, I don't know that that had ever been stated that that's part of it. We -- maybe just to go through that everything submitted at previous planning Commission meetings just -- we have to create some kind of a record here. CHAIRPERSON HAWKINS: Understand. Thank you. And so, Ms. Ailin, your record includes what documents? MS. AILIN: The -- the record includes the staff report for today's meeting, which is backed up by the staff reports from March 20th. It includes the materials submitted by Sejour, but I think it might be best if I left it to Mr. Hunt to identify those. It includes the PowerPoint presentation. It would also include the matrix prepared by Mr. Burns. CHAIRPERSON HAWKINS: Now, Mr. Burns prepared that matrix, but that was based upon material in the staff reports; is that correct? MS. AILIN: That's correct. Precise Reporting Service 714 - 647 -9099 38 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: I mean, he didn't come up with those points on his own? MS. AILIN: I -- I don't believe so, but it might be best to direct the question to Mr. Burns. CHAIRPERSON HAWKINS: Mr. Burns? MR. BURNS: I just attempted to distill the evidence from both sides of the case as they existed, and I took the charging document and that became the issue, and then I tried to line them up on either side of a line for the -- then for the Commission. CHAIRPERSON HAWKINS: And we appreciated that. Thank you. MR. BURNS: But I think we also have talked about maybe the January staff reports being part of this matter. We've already referred to that. CHAIRPERSON HAWKINS: Ms. Ailin? MS. AILIN: I believe that everything in the January staff report was incorporated into the March 20 staff report. MR. BURNS: I'm not sure of that. I think that would include both. CHAIRPERSON HAWKINS: Yeah. Let's just identify both -- MS. AILIN: All right. Just to be -- CHAIRPERSON HAWKINS: -- out of an abundance of caution here for everyone. MS. AILIN: Certainly. Then just to be certain, the Precise Reporting Service 714 - 647 -9099 39 3�3 1 2 3 4 5 6 ON 11 12 13 14 15 16 17 ME 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 January -- Mr. Alford, do you recall the date? 17. CHAIRPERSON HAWKINS: 17. MS. AILIN: January 17th, 2008, staff report as well. CHAIRPERSON HAWKINS: Okay. Anything else? MS. AILIN: Not at this time. COMMISSIONER COLE: I have a question. CHAIRPERSON HAWKINS: Commissioner Cole. COMMISSIONER COLE: Mr. Chairman, can I follow up on your -- your discussion regarding our decision, our ability to revoke a use permit for not complying with conditions? We may do that. We don't have to do that; is that correct? We don't have to revoke because they violated conditions. CHAIRPERSON HAWKINS: Oh. COMMISSIONER COLE: Because I wasn't sure how you're going there. And let me go back, and if that's -- are you asking us also -- because my understanding to revoke for nuisance for public necessity doesn't appear to be the case since the operator has - -has closed the operations. So are we being asked to really revoke for not complying with conditions? Or maybe you're asking us to revoke because we doesn't have faith in the landowners to continue to operate in the future under the original lease -- Use Permit conditions? Could you kind of clarify what we're being asked to do here as relates -- MS. AILIN: What you're being asked to consider is Precise Reporting Service 714 - 647 -9099 K91 3a4 1 2 3 4 5 6 d 9 10 11 12 13 14 15 16 17 18 19 041N 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 revoking the permit based on violation of the conditions. COMMISSIONER COLE: Okay. MS. AILIN: With regard to whether you must revoke, the Municipal Code identifies violation of the conditions as a basis for revocation. I don't think I would sav that it necessarily compels it. COMMISSIONER COLE: Okay. And since -- will you -- can you validate that now that the operator., which I must -- I would assume, I guess we can get into it, there might be some that the owners might have some implication, but it would appear that the number of conditions that you cited as -- what -- that the operator is being in violation of, was the operator, and the operator is no longer there. So is it now -- are you still proposing that this is still a nuisance, a public nuisance, or a -- or a -- I think you used the words public necessary -- necessity to revoke the Use Permit? MS. AILIN: I -- I was not proposing that as a basis for revocation. The focus is on violation of the conditions here. Is it -- if we were looking at whether it's a public nuisance, I think that the fact that the former operator is no longer operating would be an issue. I think it's very significant that the Overstreets entered .into a lease that essentially put the tenant in the position of having to operate a business that violates the Use Permit. Precise Reporting Service 714 - 647 -9099 41 I p5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 And it's the violation of the conditions that we're focused on here, not the existence of a nuisance. COMMISSIONER COLE: Okay. Thank you. CHAIRPERSON HAWKINS: Any other questions? Okay. You're finished, Ms. Ailin? MS. AILIN: Unless the Commission would like to hear more from me later. CHAIRPERSON HAWKINS: All right. Now, presumably you would want to have some rebuttal time for Mr. Hunt. MS. AILIN: Yes. CHAIRPERSON HAWKINS: Okay. Thank you. Mr. Hunt, please come forward. once again identify yourself, please. MR. BURNS: Mr. Chair, we should probably have all the live witnesses available just in case Mr. Hunt wanted to -- CHAIRPERSON HAWKINS: Yes. MR. BURNS: -- ask a question of those persons. CHAIRPERSON HAWKINS: Ms. Ailin, did you hear Mr. Burns? MS. AILIN: Yes, I -- I did. And Ms. Parker will make them available. CHAIRPERSON HAWKINS: Perfect. Thank you. MR. HUNT: Use Permit capital punishment. That's what we're talking about. That's what we're talking about. Okay. So not only do we end Sejour's operation of the use, we end -- Precise Reporting Service 714- 647 -9099 42 3a(o 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 III 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: Mr. Hunt, our ex- officio secretary would like you to identify yourself -- MR. HUNT: I'm David -- CHAIRPERSON HAWKINS: -- even though I did. MR. HUNT: I'm David Hunt of Sheppard Mullin representing the interests of the Overstreets, the land owners. CHAIRPERSON HAWKINS: Thank you. MR. HUNT: And to follow up on Commissioner Cole's question, yes. I mean it -- this is what we're talking about. This is what's recommended by staff that -- and I will use the phrase "Use Permit capital punishment." This is the hardest, most harsh remedy you could possibly give. And so the question is are the Overstreets as the landlords responsible for the now removed former tenant, which they removed immediately upon learning about the problems. Now, let's go back to that Use Permit that staff in its staff report had said is clear, unambiguous. Let me refer you to par -- to condition 33 which Ms. Ailin didn't show to you, but you've obviously had the opportunity to read. And we have obviously cited it, and it says, "The operator of the restaurant facility." Now, you can -- they can sit there and say this is clearly never supposed to be a restaurant, bar, lounge, etc. 43 Precise Reporting Service 714 - 647 -9099 3 a'A 1 2 3 4 5 6 7 i 10. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 We understand that. The entire premises were never supposed to be a restaurant, bar, lounge, etc. There is, however, a restaurant use that was approved as an accessory use to retail use. The retail use was A -1. The restaurant spirits use was A -2. In fact, it was granted for the purposes of a Type 47 Alcoholic Beverage Control license which requires the feeding of food. All right. That's one thing. So to sit here and now say that they could not operate a restaurant consistent with a conditional use permit belies the actual phraseology of the conditional use permit, and we've shown that to you in what we've provided. To say that Sejour through its per -- through its principals were confused is completely inconsistent with the evidence that's been submitted, and 1 will refer you to C1 that we submitted to you, which is a series -- the beginning of a series of e -mails dealing with the actual leasing of these premises. Cl is dated September 27. It's from Mr. Stockton. Says at about the fifth line down, the sentence begins, "I did receive the Use Permit." About the sixth line down it talks about the different designations of A -- unit A -1 and A -2. And about halfway through it starts with, "Given that the permit is for retail wine store primarily" -- he knew what was going on here -- "with the on -site consumption of limited adjunct putting on a medical practice in a retail wine space 44 Precise Reporting Service 714 - 647 -9099 3) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 combining retail wine bar in one likely change of the character of occupancy required for approval." And if you go through -- and I won't read you all these e- mails, we cited them to you -- Cl references the fact he had it, he knew it, and he had it and knew it before he had the occupancy under the lease. The lease is -- or was at least under the -- under the -- on the website at the end of your packet from January 17th, the lease which we're saying only allows restaurant, bar, etc. that's -- that is a -- unduly restrictive and -- and it ignores a number of the different provisions in the lease. If you look at that paragraph 1, which is, in fact, at Page 238 of that packet -- do you all have the lease? And forgive me. I've got confused in all of that. Okay. Paragraph 1 specifically say -- it references the Use Permit, and we cite you to -- that we know he has. It also deals with retail uses that we knew -- know he knows about. CHAIRPERSON HAWKINS: Mr. Hunt, you're talking about paragraph 1 of the lease? MR. HUNT: Yes, sir. CHAIRPERSON HAWKINS: That references the Use Permit, permitted under the Use Permit. Is that what you're talking about? MR. HUNT: Right. 45 Precise Reporting Service 714- 647 -9099 3 a`1 im 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: Doesn't say -- okay. All right. MR. HUNT: Right. CHAIRPERSON HAWKINS: Thank you. MR. HUNT: Yes, sir. I'll refer you to what is Page 5 of the lease, paragraph 9 that talks about issues related to Use Permit compliance, paragraph 11 that talks about the landlord and tenant responsibilities, and identifies the tenant agrees to comply with all laws. COMMISSIONER EATON: Mr. Chair, can I interrupt for just a second? None of us on this end of the dais have the lease. Can you inform us as to where it's supposed to be? We have searched and searched and cannot find it. CHAIRPERSON HAWKINS: Just one moment, Mr. Hunt. MR. HUNT: Certainly. . CHAIRPERSON HAWKINS: I'm going to leave out the parking agreement. I'll get the substantive portions of the lease. Mr. Lepo, I think we're missing, various Commissioners are missing the lease. I'm only going to hand you a portion of the lease. It does not have exhibits, these. Okay. COMMISSIONER TOERGE, would you please hand Mr. Lepo the lease? Thank you, Mr. Lepo. MR. HUNT: I can go back to the lease, Mr. Chairman, once you get -- is that what's happening, you're getting copies made? Precise Reporting Service 714 - 647 -9099 His 330 1 2 3 4 5 6 VI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: Yes. MR. HUNT: .I'll go back to the lease. CHAIRPERSON HAWKINS: Okay. Perfect. MR. HUNT: But my point I'd like to be clearly left with the Commissioners is the lease required compliance with the conditional use permit, and there are other provisions I would point out to them. Now, I want you to -- you see attorneys always start their presentation where they don't expect to when they go after someone else. And I'm going after competent counsel, and so what I'm doing is starting where I didn't expect to, but I think what you have to understand and draw from this is two things: One, the conditional use permit is far from being crystal clear. It, in fact, allows a restaurant use. To be sure, in unit A -2 absolutely. To be sure, which Sejour, we regret to say, you have evidence that indicates Sejour violated. Yes. But you had no evidence -- and I'm pleased that Ms. Ailin has recognized that -- to say that the Overstreets ever violated this conditional use permit. Now let me set another little piece of puzzle back in context. Your original Use Permit was issued actually in April of 2001. The Overstreets operated the premises for three and a half years to October or September 2005. They operated consistent with your laws and the conditional use Precise Reporting Service 714 - 647 -9099 47 33 ti 1 2 3 4 5 6 rM 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 permit. There is an unfortunate, in our opinion, reference in the staff report to something that may or may not have occurred in 104. I take what Ms. Ailin says as a concession our objection to that reference, and it won't be considered for potential termination or revocation of the Use Permit. And I hope that's the Commission's standpoint. They do reference something that staff talks about, but never brought to the Overstreets' attention. Now, back to the issue of clarity of.that conditional use permit. I would refer you to Exhibit E, which is a menu that was, in fact, presented to the Planning Commission at the time of the original hearing on the modification of the permit. So we are dealing with an initially issued permit in April of tool, modified -- not several years later -- modified, in fact, ultimately November 7th, 2002, a little over -- well, a year and a half later. If you look at this, you will see that there are -- there's chicken and salads, seafood, desserts. These were all before the Planning Commission. So to sit here and say that because Sejour was serving dessert they're operating a full - service restaurant is not an accurate statement. Please remember this conditional use permit, or the modification thereto, was intended to allow restaurant use in A -2. It was. And that's what it says. 48 Precise Reporting Service 714 - 647 -9099 39- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 no 19 20 21 22 23 24 25 SWOUR HEARING - 4/17/2008 So there's nothing damning about saying you're going to -- you're going to actually have a use such as that in the lease, as long as you conduct it consistent with the conditional use permit. That the Overstreets not only put compliance requirements inside their lease, but they also -- we have shown you Mr. Stockton knew about them with his own e -mail. Okay. Last point on this tangent that I'm going off on: Ms. Ailin is talking about the evidence in your record that shows misunderstanding or lack of knowledge of the conditional use permit. Presumably she's relying upon an interview of the manager that is reflected in Mr. Freeman's e -mail and a letter from Mr. Stockton. Well, Mr. Stockton, we already know, knew before he took possession of the premises because he had the conditional use permit. we also know that Mr. Stockton is a former attorney formally practicing in Arizona. So we can presume that he had some ability to understand the documents. So I think it's disingenuous at best his letter of May 10th to your Planning Department saying: Oh, gosh, I didn't know. Forgive me, but that strikes me as difficult to believe in the face of his e -mail. As to his manager we can't speak to his manager. That manager was Mr. Stockton's responsibility or Sejour's responsibility, not the responsibility of the Overstreets. Precise Reporting Service 714 - 647 -9099 sm 3`33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 Now, let me go back, if I may briefly, to the case that was addressed by -- briefly by Mr. Burns and with respect to Ms. Ailin regarding the responsibility of a landlord in the operation of the premises. First of all, the Anderson case, and we've quoted it to you; has said it's clear and it's long established law landlords are not -- repeat -- are not responsible for their tenant's actions. Now, the Anderson case was not purely about what we would call the vicarious liability of responsibility of the landlord only for a tenant's action. The Anderson case essentially found that the landlord was engaged in the tenant's activity. I would submit to you if the only evidence of that that the City -- the staff is offering is the lease which required compliance with the conditional use permit is engaging in that activity and is actually engaged, it doesn't fit the Anderson scenario. The Overstreets had no control over the premises; Sejour had the right to quiet enjoyment; Sejour had all the responsibility; Sejour had the responsibility to comply with all laws. So the question then becomes do you as a Planning Commission institute Use Permit capital punishment where a user who got the permit operated clean for three and a half years and had a tenant who came in and did not operate clean, but they took immediate action to terminate the use Precise Reporting Service 714 - 647 -9099 50 33q 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 of their tenant as soon as they learned about it. We would suggest to you, and I've got more to say, but that is not an appropriate use of the power. Let me take it back again to another issue on the standard. We've had some discussions about what's a nuisance, whether nuisance has been applied and appreciate the questions of Commissioner Cole. We know, as Mr. Burns has told you, a conditional use permit creates a vested right in property. It's been relied upon; it's been vested upon, and pursuant to the Goat Hill Tavern case, it does create a vested property right. So the question then becomes what's the significance of that Use Permit and how or if you can revoke it under the circumstances. I would suggest to you, and I will admit there's no case law that addresses it, but I would ask you to use your logic -- the conditional use permit is in and of itself the constitution, the governing document, the blood, the bones, the arteries of the use. It says what the City staff thought it should say when they wrote the conditions. They wrote the condition No. 6 which says we revoke essentially upon the finding of a public nuisance. Now, it doesn't have to say we hereby waive the Municipal Code. It's setting the conditions upon which that operation and use will function. We believe, since the City 51 Precise Reporting Service 714 - 647 -9099 c- 33) 1 2 3 4 5 6 7 8 9 10 FEE 12 iNCI 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 wrote it, the City should live by it. That's why we believe it should be responsible for showing what the Use Permit requires. Now, I will put -- take one more step into the Goat Hill Tavern case and say not only is it the underlying document upon which this use is based, the Goat Hill Tavern days goes further in saying this is a vested right that you must have a compelling public interest to breach, to revoke. Ms. Ailin addressed that issue, and she quotes language that is, in fact, in the Goat Hill Tavern case, but let me address an issue that's more pertinent. The Goat Hill Tavern case -- formerly just straight up the road from here- - the trial court found that the Commission improperly revoked a permit -- or forgive we -- it failed to renew a permit because it did not show a compelling public interest. That was the trial court's finding. It issued what we would call a writ of mandate. So the Planning Commission in Costa Mesa and ultimately the council refused to renew the permit of Goat Hill Tavern. Then Goat Hill Tavern sought an order from the court, called a writ, saying that's wrong; reverse them. The court, trial court, reversed them saying you didn't show a compelling public interest. The trial -- the appellate court, which is the reviewing court above the trial court -- said: You know what? 52 Precise Reporting Service 714 - 647 -9099 33(-D ON 2 3 4 5 6 7 9 10 Otis 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 The trial court is right. Yes, the language she's talking about there is in Goat Hill Tavern, but the application of the law is the compelling public interest. Well, what was lacking in the Goat Hill Tavern case? And I point this out to you because again we're talking about conditional use permit capital punishment. Goat Hill Tavern had 19 police reports in a two -month period of incidents inside the tavern where there had been -- the police had been called to address. It had complaints of people urinating, vomiting, defecating on the neighbors' lawns. It had noise violations at 2:00 in the morning in the parking lot. It had very significant violations that resulted in the impact of the health, safety, and welfare of the immediate neighborhood. And the trial court found that that was not a compelling public interest under the circumstances. What do we have? We've got a situation where admittedly there's photographs that show Sejour modified the interior of the -- interior of A -1. Shouldn't have done it. They operated a DJ on a few occasions that we know about for -- that we know about, two of which that got administrative violations, the first of which resulted in the application for the live entertainment permit that Ms. Ailin now admits was actually obtained and is, in fact, reflected in the documents we presented to you in Exhibit D. 53 Precise Reporting Service 714 - 647 -9099 33� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 W1 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 But we've got -- originally they were cited for fencing off part of the public right -of -way and using it as essentially a seating area. Never happened again. That was the first citation. Never happened again. Then they did -- they did have lines twice, three times I believe. Is that 19 police reports where people are actually involved and causing police reports? This is not a situation where you have drunk and disorderly people. This is just not it. Were there violations? We're not here to contest that issue specifically, but we need to make sure that you understand the conditional use permit allowed restaurant use. The Overstreets were not aware of these conditions. And when they were -- did become aware of the conditions and concerns of the City, they took immediate action. And you have to find a nuisance pursuant to the terms of the permit itself which your staff wrote in order to revoke it. CHAIRPERSON HAWKINS: Mr. Hunt, we've been timing your presentation and you've almost consumed 15 minutes. Do you have an idea of how much longer you will be? MR. HUNT: Probably another 15 minutes at least. CHAIRPERSON HAWKINS: Okay. MR. HUNT: We made the estimate to Mr. Burns of two hours. I'm not sure how long Ms. Ailin was there, but I suspect it was more than the 15 so I -- Precise Reporting Service 714 - 647 -9099 as 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: No. No. That's fine. MR. HUNT: Okay. CHAIRPERSON HAWKINS: That's fine. And we still need to get your comments in connection with the lease document, and I believe it's coming here so MR. HUNT: I'll be happy to return to that as soon as the Commissioners are prepared. CHAIRPERSON HAWKINS: Okay. MR. HUNT: Thank you, Commissioner Hawkins. CHAIRPERSON HAWKINS: Thank you. MR. HUNT: Let me address the estoppel issue. And I'm bouncing around because what happens in our world as a -- as a replying attorney, is you end up having to deal with what other folks say. There's a misinterpretation of what's going on in our argument regarding estoppel. Now, you know, based upon what Mr. Burns has said and what's been told to you regarding due process, that essentially that an applicant here -- not an operator, but a landowner -- is entitled to due process, which is a basic fairness issue. You also have before you the declaration of Christine Overstreet that says -- and you have our proof before you that shows that as soon as we knew -- the Overstreets knew about the violations in May, they took immediate action. You have exhibits that establish for you that their action -- and 55 Precise Reporting Service 714- 647 -9099 33a 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 I'm referring you to Exhibits -- I believe it's Exhibit M that we've submitted -- to and including the actual termination of the lease -- excuse me. Exhibit L, a proposal to actually terminate the lease and other exhibits that show they instituted unlawful detainer proceedings in June of 2007 within a month of learning of the alleged violations by Sejour. So we know that the Overstreets were taking action. We know they were taking action more than six months before this went to the level of revocation of their conditional use permit. But we also know that they stopped that action because we've -- we've got the copy of the e -mail that went back and forth between Mr. Stockton and the Overstreets that said based upon the Overstreets' withdrawal of the unlawful detainer, he's going to go forward in reliance upon that and try,and work with the City to work it out, and that's reflected in your exhibits in your Exhibit D, D -4. So what was happening? The Overstreets were doing the right thing. They're trying to remove a tenant that was operating inconsistent with the lease and inconsistent with your use permit. Then what happened? Well, you have the declaration of Christine Overstreet that said that she talked with the City. She -- she met with the City and was told that Sejour was taking action to resolve the issues. Sejour was proceeding forward with making an application to change Precise Reporting Service 714 - 647 -9099 56 34b l 2 3 4 5 6 7 8 9 10 11 F4PA 13 14 0" 16 17 it.] 19 20 21 22 23 24 SEJOUR HEARING - 4/17/2008 its conditional use permit, was addressing the issues. It appeared to be resolving itself. She went to the point of going and meeting face to face with the code enforcement officer. She requested his -- his contact if there's any further action, and she left there based upon her conversation with him assured of the fact that if there were further problems, she would hear. Now, as the events then progressed -- and we have shown this to you as well, and I'm keeping us on Exhibit D -4 -- Sejour went forward and began the process, according to our understanding, of getting an amendment to the conditional use permit. And I'll refer you to D -5, which is a letter dated August 1st from Sejour to the City which we have. Now, if he never sent it to you, we didn't know that. This was presented to the Overstreets. And refer you to D -6 which shows Christine Overstreet's application -- excuse me, signature on the application to amend the conditional use permit. So what -- CHAIRPERSON HAWKINS: Mr. Hunt, just one moment. Miss Overstreet is a permit holder? Is that your position? MR. HUNT: Yes. CHAIRPERSON HAWKINS: Okay. MR. HUNT: Mrs. Overstreet -- the permit runs with the land and is attached -- 25 I CHAIRPERSON HAWKINS: Right. 57 Precise Reporting Service 714 - 647 -9099 ON 2 3 4 5 9 10, 0116 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 MR. HUNT: -- to the land as conditional use permit. CHAIRPERSON HAWKINS: Yeah. MR. HUNT: As the property owner -- CHAIRPERSON HAWKINS: Yeah. MR. HUNT: -- the Overstreets are the -- are the permit holders. They are -- CHAIRPERSON HAWKINS: I don't have any problems with Mr. Overstreet, but if you take a look at the lease, what it says is that Dennis Overstreet, a married man as his sole and separate property. So he's the landlord. He's the owner of the property as his sole and separate property. So I'm trying to figure out what her interest is. MR. HUNT: Well, I can tell you right now, based upon every other documents reflected in your applications in your files, Christine Overstreet is -- is an -- is a recipient and involved in the actual property. CHAIRPERSON HAWKINS: Okay. So she's a permittee. MR. HUNT: She's a permittee. CHAIRPERSON HAWKINS: Right. MR. HUNT: And she's got -- she's got the right and authority to sign for requesting an amendment. And our point of this is to show the good faith in the actions of the Overstreets to address the problems that they believe were being resolved. Now, the declaration of Mrs. Overstreet also tells 58 i Precise Reporting Service 714 - 647 -9099 34) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 ism 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 you she saw Mr. Stockton in the store, he said it was moving forward, but slowly. What's the next thing they heard? Well, they heard in January the City had taken action to revoke and had initiated initiating revocation proceedings. Now, in the law there's a concept called estoppel. And the law says -- and this is a basic fairness of what we call equity -- the law says if an individual acts on representation by another and that -- and changes their position in a way that adversely affects the individual, and the other person doesn't act consistent with the representation, and the individual -- such as the Overstreets -- are harmed, the person that made the representation and the entity that made the representation can't hold that against them. Now look what happened here. The Overstreets took immediate action to solve the problem. They -- they received assurances -- admittedly from Mr. Stockton as well -- as well as conversations with the code enforcement officer that they would at least hear about further actions, and they -- they dropped an unlawful detainer. This whole thing could have stopped in June of 2007. It was on the verge of stopping, but they chose not to because of assurances they received, admittedly from Mr. Stockton and also from representatives of the City. Then the City took action to revoke and initiated revocation Precise Reporting Service 714- 647 -9099 59 1 3�� 1 2 3 4 5 6 7. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 proceedings before letting the Overstreets know. Folks, picture one thing based upon what happened in May and June. The letter that was sent to Mr. Stockton by Mr. Lepo and is -- well, it's dated December 14th in your package. Picture -- picture that letter having a little thing at the bottom that says: cc Christine and Dennis Overstreet, who are the property owners, who are the ones who -- who are the permittees, who have requested assurances of knowledge or being told that there were further problems. What do you think would have happened? Well, you got what would happen. The Overstreets took immediate action to end the use that was the offending use that was causing the problem for the City, and it's over. So now back to the beginning of my presentation. Why are we here? Why are we here? Staff has everything they should ever want in this situation. An offending use is terminated. How was it terminated? By good faith and prompt action by the landlord. Why are we here? Are there any ongoing violations? No. Do we have a history of where the landlord has been in violation of its permit? No. Why are we here? Does this actually solve a problem for the City of Newport Beach? And we would suggest to you it doesn't solve a problem. In fact, we would suggest to you it causes a problem for the City of Newport Beach. no Precise Reporting Service 714 - 647 -9099 +� 1 2 3 4 5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 What's that problem? Look at Lido Village. Look what's going on over there. It's not going well. We have submitted to you five -- six declarations or six statements from tenants in Lido Village saying: Please return the Overstreets to their operations. We need them. We like them. They worked right. You've got a use that was operated for three and a half years by responsible persons who the people around them want returned and staff is still requesting that you revoke it based upon old nonresponsible actions.of a tenant that was actually removed by the person you're now -- the staff is now seeking to punish with a revocation. Quite candidly, we don't see any reason why we're here. We think the City has gotten what it should get. And it got it simply by letting the Overstreets know that there's a problem, and the Overstreets took care of it. And you wouldn't have had to be here at all if they'd done that in the first place. Now, part of me says I want to stop here, but I have other issues that are going on that I think I have to address, and I'll try to keep it brief. Effectively what's going on is -- I need to know a couple things. I appreciate the fact that you've already let us know that none of you had ex -parte communications except for my communications with Mr. Hawkins. 61 Precise Reporting Service 714 - 647 -9099 3 q 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 OW-9 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 I am concerned, however, regarding the issue of the administrative record, because I will tell you in your resolution that was drafted by staff, it says -- this is an exaggeration, little artistic license -- everything in its -- everything in the sun, moon, stars, kitchen sink -- is in the administrative record. Everything in the City's files -- whether presented to the Planning Commission or not -- is in the administrative record. Now, I object to that. I think what should be in the record is put in front of you today and what you gentlemen look at in order to make your decision. So what I need to know is what have you gentlemen looked at in order to make your decision? Because I know some of the things in that file, and I disagree with them. We've objected to some things presented by Mr. Stockton to the City, some lawsuits that are in there, I've referenced it in my letter as hearsay and objectionable. We've objected to the staff's 2004 references. And if I may, may I ask is there any documents that any member of this Planning Commission has seen that is not in the record that's been identified, or any incident that any Planning Commissioner will rely on that's not in the record here? CHAIRPERSON HAWKINS: Mr. Burns, do we need a response at this time? MR. BURNS: Well, there's -- you should handle this in Precise Reporting Service 714- 647 -9099 62 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING — 4/17/2008 any manner you want as far as, you know, obviously the applicant should not be allowed to voir dire the Commission. CHAIRPERSON HAWKINS: Right. MR. BURNS: But you are required to disclose -- and hopefully you did disclose - there should not be anything made available to everyone a evidence upon.which you will that isn't clear to anybody, kind of a statement. - and his point is well made -- other than what -- what was part of this record that is the rely. And if any -- you know, if I think we need to make some CHAIRPERSON HAWKINS: Does anyone have a question on that or have you considered anything other than what's been before us? UNIDENTIFIED SPEAKER: Well, I've only seen what was offered to us in our Planning Commission package. CHAIRPERSON HAWKINS: Thank you. UNIDENTIFIED SPEAKER: And various correspondents that I got from City. UNIDENTIFIED SPEAKER: Same. CHAIRPERSON HAWKINS: Anyone different? Commissioner Eaton, always -- COMMISSIONER EATON: Since it is a disclosure, I have to say that I do recollect receiving separately apart from what was in our packet a -- a product from the Stocktons. It was in the bag that we got from the staff, but it was not a part 63 Precise Reporting Service 714 - 647 -9099 3 �� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 of the packet, the binder itself. I do remember receiving that. It was months ago, January, and I don't remember what I did with it. I don't have it now. CHAIRPERSON HAWKINS: You don't recall what it was? COMMISSIONER EATON: It was something from the Stocktons, and the only thing I remember of it was that they were sort of trying to explain their position with regards to the Overstreets. CHAIRPERSON HAWKINS: But you don't have it here, and you haven't -- COMMISSIONER EATON: I don't have it here because I don't -- CHAIRPERSON HAWKINS: Okay. COMMISSIONER EATON: -- know what I did with it. CHAIRPERSON HAWKINS: Okay. COMMISSIONER EATON: It wasn't part of the binder, and so I didn't keep it with the binder. CHAIRPERSON HAWKINS: Mr. Hunt. MR. HUNT: I appreciate it. I appreciate the response, and I apologize for having to ask that question. I just need to know what I'm dealing with. Now if I may, I need to go back to that lease real quick now since you all have it, and because that appears to be a very important issue with respect to Ms. Ailin's position. And I've already started with paragraph 1 that Precise Reporting Service 714 - 647 -9099 M -�Ay 1 2 3 4 5 6 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 specifically references the Use Permit, which is at the first page of that lease or second page of that lease. The fifth page of that lease in paragraph 9 addresses permit, Use Permit compliance issues, addresses the Use Permit, addresses A -1. It doesn't specifically talk about anything related to restaurant use, etc. But again, it references the Use Permit. Paragraph 11 -- I'm seeing a couple Commissioners flip_ And I can go ahead for you all, or I can wait, whatever your intention is -- CHAIRPERSON HAWKINS: Please continue. MR. HUNT: All right. Paragraph 5 -- Page 5, paragraph 11, addresses landlord /tenant responsibilities saying they have to comply with all laws, which includes local, state, and federal governing laws, ordinances and regulations. On Page to under " Signage" again the Use Permit is referenced -- is referenced to and the requirement to comply with signage requirements. On Page 11 it says "all signage" addressing signage "must at all times comply with Newport codes and ordinances." Again on Page 11, paragraph 23 talks about complying with all restrictions, ordinances, governmental rule, regulations. CHAIRPERSON HAWKINS: Mr. Hunt, it sounds as if you're arguing for a breach of lease -- MR. HUNT: Oh, well -- Precise Reporting Service 714 - 647 -9099 65 3`q 1 2 3 4 5 6 7 10 11 12 13 14 016V 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: -- by -- MR. HUNT: That's not -- CHAIRPERSON HAWKINS: -- by the Stocktons. MR. HUNT: That's not the issue here, Mr. Chairman, and I don't want to burden you folks with it. The issue put for you is -- to counter Ms. Ailin's argument and to point out to you as we argued in our letter that the Overstreets, in fact, acted responsibly regarding this leasing. And as they say in their declarations, that was -- their responsibility as they did act responsibly regarding it. And I also refer you, which is an attachment to the lease -- and I'm hoping you all have it -- to Page 2 and 3 that references complying with the requirements of any conditional use permit issued to the seller in compliance with the law governing buyer's operations. And the last thing on that issue that I will point out to you is a document that's been presented to you by your staff -- or I mean, excuse me, the City's staff. And that falls at Exhibit 22 of your packet. That document is the application for the conditional license for Sejour to operate an A.B.C. facility. Now, remember the things that are complained of that Sejour says they just didn't know about. It says No. 4 on one of the conditions -- it says No. 1, the restrictions on hours, and No. 4 it talks about there shall be no dancing 66 Precise Reporting Service 714 - 647 -9099 35a 1 2 3 4 5 6 9 10 11 iVA 13 14 15 16 17 18 19 20 `46 22 23 24 25 SEJOUR HEARING - 4/17/2008 allowed on the premises. And 2 is no happy hour and 3 talks about A.B.C. issues. Who's that signed by? Carolyn Stockton. Jeepers. She knew about this back at the time that was signed, which was December of 2005. Now, my point, folks -- and I won't belabor it any longer is the Stocktons knew, the Overstreets made sure.they knew, and they sought to have those premises operated consistent with the conditional use permits. There's a number of different -- I will call it vagaries that I disagree with Ms. Ailin on -- for example, the occupancy allowed. Twenty -nine people plus six -- six employees. Twenty -nine patrons plus six employees. None of them are particularly important. I would take exception with her statements, but I don't think it's important for you at this stage. Bear in mind that if I don't say something, it doesn't mean I agree with it. Nor if I don't say something it means I waived anything I said in my letter. Now, let me talk about -- we've talked about nuisance. We've talked about due process. We've talked a little bit about evidence. We've talked about notice to the Stocktons. We know the Stocktons kne, so that entire condition is gone. You understand that. The complaint about that condition is gone. The only obligation of the Overstreets was to inform their -- the purchasers. They Precise Reporting Service 714 - 647 -9099 67 3�� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 have; we've proven it, it's gone. Now, and we've talked about Goat Hill Tavern and the distinct differences between this case and Goat Hill Tavern. CHAIRPERSON HAWKINS: Mr. Hunt, it seems like you're repeating yourself. Do you -- MR. HUNT: So on that note I'd like to introduce to you my client, Dennis Overstreet. And he has a brief statement for you. I'm hoping that you have read their declarations. We've done those so you don't have to listen to us go on and on. And with your permission Mr. -- I would call Mr. Overstreet forward. CHAIRPERSON HAWKINS: Thank you, Mr. Hunt. MR. HUNT: Thank you. CHAIRPERSON HAWKINS: Five minutes. Mr. Overstreet, do you have an idea of how much time you'll take? MR. OVERSTREET: I'm going to be so quick. CHAIRPERSON HAWKINS: Okay. Perfect then. Thank you. MR. OVERSTREET: Honorable Chairman and Commissioners, I'm Dennis Overstreet. I live at 200 Via San Remo, Lido Island, here in Newport Beach. I'm the co -owner of 3400 Via Lido, the property there, with my wife. This property is extremely important to us. We put a very substantial amount of money in improvements of it 68 Precise Reporting Service 714 - 647 -9099 315` 1 2 3 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 to -- to bring it up to make it something that we were really proud of and to create an attractive operation similar to an operation that I had in Beverly Hills for the last 39 years. We successfully operated it for three years, and we never had any police problems, never had any problems that I am aware of that were brought forth to us. All I can say is that we're ready, we're able, willing to go back there and run,it very successfully again. The neighbors that were there that we have spoken to that come forward and said: Look -it, we'll write you letters. This -- this little village, you're going to be like the calvary coming to our rescue again. We need a nice operation back here again. That's what I have to say. CHAIRPERSON HAWKINS: Thank you. MR. OVERSTREET: Thank you very much, Commissioners. CHAIRPERSON HAWKINS: Any questions of Mr. Overstreet? COMMISSIONER TOERGE: Yes. CHAIRPERSON HAWKINS: Commissioner Toerge? COMMISSIONER TOERGE: Mr. Overstreet, who holds the liquor license today? Did you buy it back? MR. OVERSTREET: No. The liquor -- this is -- we're still in dispute with the Stocktons who have the liquor license. There is a side issue still continuing, and a lot of this cannot be resolved until we actually find what the fate of things are going to be because if you take away our 69 Precise Reporting Service 714 - 647 -9099 353 1 2 3 4 5 6 9 10 11 12 13 14 15 16 i&A 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 right to run it and do what we were doing before, all that becomes -- it's useless, and the value of the property really becomes for us and any other operator -- because at the suggestion of Mr. Lepo we have even tried to seek other tenants. And unfortunately the only other tenant that even expressed any interest is a recovery center, which we happen to be highly against. I don't mean to bring that into the -- the picture here. COMMISSIONER TOERGE: So are you able to operate your business? MR. OVERSTREET: Not at the -- at this point it hasn't been resolved because it's pending what happens with this. COMMISSIONER TOERGE: If this revocation, you know, doesn't occur -- MR. OVERSTREET: Yes, we would be able -- we would be able to go back there and operate. COMMISSIONER TOERGE: Without a liquor license? MR. OVERSTREET: No, we would acquire a liquor license. COMMISSIONER TOERGE: .Okay. MR. OVERSTREET: They're available. COMMISSIONER TOERGE: Okay. And then the current status of the floor plan, has it been brought into compliance with the approved plans? MR. OVERSTREET: We have -- the floor plan has -- we've brought it back to the where it was before, and we have been 70 Precise Reporting Service 714- 647 -9099 �J� ON 2 3 4 5 6 7 8 9 10 11 12 13 OWN! 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 willing and -- and trying to sit down with the Planning Commission. We were even willing to make any type of adjustments that -- to prevent anything else in the future, but I guess those negotiations didn't take place. COMMISSIONER TOERGE: So -- so the construction has completed where you've modi -- you've taken away the modifications that made the property -- MR. OVERSTREET: The modifications were that they put tables into that area of -- COMMISSIONER TOERGE: Not a detail of them. I -- MR. OVERSTREET: Yeah. Yeah. Yeah. COMMISSIONER TOERGE: I mean, I just want a -- MR. OVERSTREET: Yeah, it would turn -- it would turn right back to the fine wine retailing, and the A -2 section would be that of the restaurant with the liquor license. COMMISSIONER TOERGE: One more second here. Okay. Thanks. MR. OVERSTREET: Thank you very much. Or you have more questions? CHAIRPERSON HAWKINS: Yes. Commissioner Hillgren. COMMISSIONER HILLGREN: Thank you. Mr. Overstreet, so your intention is to actually go back in and be the proprietor, the operating -- MR. OVERSTREET: I'm looking into that at this point of returning to do that or see whatever other type of situations 71 Precise Reporting Service 714 - 647 -9099 355 1 2 3 4 5 6 d 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 might avail themselves. COMMISSIONER HILLGREN; So the alternative would be to find another operator like -- MR. OVERSTREET. Or us -- us run it. Unfortunately, we thought we had a good operator before with their background, but I would never again entertain anyone going in there that didn't have proper experience in retail fine wine, and operating my type of operation. COMMISSIONER HILLGREN: I appreciate the fact that operators sometimes aren't exactly what you anticipate. My question -- your counsel raised the concept that you really have no responsibility for the operating standards within the facility. If you go to another operator, you're just the owner and -- MR. OVERSTREET: That -- COMMISSIONER HILLGREN: (Inaudible.) MR. OVERSTREET: You know, you don't know how proud we were of that place. And I mean, if you look through the documents, which are very lengthy, we were constantly admonishing the last operator there that we were concerned about what was going on with the exterior of the building and the appearance. Little things to the point that -- well, I'll leave it at that. COMMISSIONER HILLGREN: Thanks. CHAIRPERSON HAWKINS: Okay. Any other questions of Precise Reporting Service 714- 647 -9099 72 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 Mr. Overstreet? Mr. Overstreet, I have a couple questions for you. MR. OVERSTREET: Yes, your Honor. CHAIRPERSON HAWKINS: I'm the chairman of the Planning Commission. MR. OVERSTREET: Honorable chairman. CHAIRPERSON HAWKINS: Paragraph 11 of your declaration says, "While as landlords and property owners of 3400 Via Lido, Christine and I" -- and this is your declaration under penalty of perjury -- but the lease looks like that Christine holds no interest in the property. MR. OVERSTREET: That's not the case at all. It's -- we're partners. She's my wife. She helps -- CHAIRPERSON HAWKINS: Understood. But -- MR. OVERSTREET: Yeah. CHAIRPERSON HAWKINS: -- so the representation in the lease that it was your sole and separate property is incorrect? MR. OVERSTREET: That is incorrect. It is our common property. It's in our family trust. CHAIRPERSON HAWKINS: Okay. So you're both on title or the -- MR. OVERSTREET: Yes. CHAIRPERSON HAWKINS: -- trust is on title and -- MR. OVERSTREET: Yes, I believe so. Precise Reporting Service 714 - 647 -9099 73 1 351 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2r SEJOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: -- you're both trustees or whatever MR. OVERSTREET: We went -- I'm probably talking too long -- but when this lease was drawn up because rather than just going to a standard boilerplate lease, we went to what I thought was a very large law firm. I paid over $6,000 to make them make sure all of the I's and T's were crossed properly -- CHAIRPERSON HAWKINS: Wait a minute. MR. OVERSTREET: -- so we wouldn't have any problems. CHAIRPERSON HAWKINS: So you paid $6,000 for this lease? MR. OVERSTREET: An awful lot of money for this lease to insure that, boy ch boy, this would never happen. CHAIRPERSON HAWKINS: Oh. Okay. All right. And you recall my concern about -- and Ms. Ailin also referenced that that the first paragraph of the lease talked about the use of the premises, and it was for restaurant, bar, or live entertainment or some sort of medical use. MR. OVERSTREET: Yes. CHAIRPERSON HAWKINS: Why was that restaurant /bar provision in there? Did you understand that the -- MR. OVERSTREET: Yes. CHAIRPERSON HAWKINS: -- permit allowed that? MR. OVERSTREET: Yes, it did. CHAIRPERSON HAWKINS: Okay. Thank you. 74 Precise Reporting Service 714 - 647 -9099 K 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 MR. OVERSTREET: The permit allowed that, and on top of it we had gone through a lot of effort to secure that. And in the lease, if I can just kind of an -- bring it -- we were very concerned that if some operator went in there and they weren't successful and they did another type of an operation, we would lose this conditional use permit. So in the lease it said that you have to run this at -- for at least three years, maintain it. Then after three years, any other type of business that you go to do, fine, then we know you're substantial, but -- CHAIRPERSON HAWKINS: Yeah. MR. OVERSTREET: -- we -- my dream, if I can share it i, with you -- I'm an old man now and I've done this for over 40 years. We have a home here on Lido Isle with our children, my thought was walk over that bridge and have my own little place with the -- what I've done all these years of retailing wine and have the same type of operation that I had in Beverly Hills. CHAIRPERSON HAWKINS: Okay. So -- so just so I'm clear then you understood that the permit authorized a bar, restaurant, and live entertainment; right? MR. OVERSTREET: It did. It -- CHAIRPERSON HAWKINS: Okay. MR. OVERSTREET: -- it was part of it. CHAIRPERSON HAWKINS: Okay. Thanks. 75 Precise Reporting Service 714 - 647 -9099 ,�5� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 F *M 24 25 SEJOUR HEARING - 4/17/2008 MR. OVERSTREET: I think where the confusion happens is that the entire premises was not to be operated as a bar or restaurant. Only A -2 could be operated -- CHAIRPERSON HAWKINS: Okay. MR. OVERSTREET: -- as that CHAIRPERSON HAWKINS: Okay. Thank you. MR. OVERSTREET: Okay. Thank you. CHAIRPERSON HAWKINS: Mr. Hunt? MR. HUNT: Thank you, chairman. CHAIRPERSON HAWKINS: Perhaps five more minutes. You've had -- MR. HUNT: I'll do it in 30 seconds. CHAIRPERSON HAWKINS: Well, there are going to be some questions as well. MR. HUNT: Okay. Well, just to address, if I understand where you're going, Commissioner Hillgren, if you're worried about whether some other operator walks in and then the Overstreets wash their hands of the situation, that's not what's going to happen. What they've been asking all along is that they be told if there's a problem, because they'll fix it, and their actions have shown that they would. Then my last statement goes back to the issue of whether a restaurant should be allowed there or was allowed there. And I'll refer you to Page 94 of your staff packet, excuse me, which is under Exhibit No. 4, and its resolution 76 Precise Reporting Service 714 - 647 -9099 1 2 3 4 5. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 1579, which is the modify or modifications to the conditional use permit. This is the one that was actually adopted in 2002. And I refer you to Page 94, finding No. 3A, "The convenience of the public can be served by the sale of desired beverages in -- in conjunction with a full- service sit -down restaurant that is complementary to surrounding uses within Lido Village." If this is a clear permit that doesn't allow restaurant uses, why did staff write a resolution with.a finding that that's what's going to be done? I would suggest to you it's not. If you have questions, I'd be happy to address them for the Commissioners. CHAIRPERSON HAWKINS: Yeah. I have a question. Let's go to condition No. 13, and you can use your magic on condition No. 13 which provides: "Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge, and nightclub, as defined by the Municipal Code unless the Planning Commission first approves a use permit." MR. HUNT: Correct. CHAIRPERSON HAWKINS: And this Use Permit didn't allow that. That's this condition. MR. HUNT: It didn't allow it in A -1. This Use Permit, contrary to staff statement, is less than clear. I -- and Precise Reporting Service 714 - 647 -9099 77 ,��D \ ON 2 3 4 5 ;y 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 I've shown you the -- I've shown you the language that actually makes it clear that it was anticipating those things. But what was happening -- and Mr. McDaniel, you may remember -- but what was effectively happening is, first of all, your restaurant, bars, lounges are approved under a separate conditional use permit ordinance.. This is being approved as an accessory use to a retail sales of wine. So the two have to go together, which justifies the 20% or 15% limitation on distilled spirits and the other aspects. The primary use is the retail sale of wines. So the entire facility may not be used as an eating or drinking establishment, restaurant, bar, tavern, cocktail lounge, or nightclub. Agreed. And you've heard Mr. Overstreet say it and you've seen it in his declaration that that would not happen under his tutelage, and it never had. But you can't just read 13 alone and not read your finding No. 3 -A and not read condition 33. CHAIRPERSON HAWKINS: Let`s go to 33. 33? MR. HUNT: Yes, sir. 33, condition 33, Page -- CHAIRPERSON HAWKINS: 99. MR. HUNT: Yes, sir. I'm right here. CHAIRPERSON HAWKINS: Well, no, condition No. 33 is on Page 99, and it talks about noise standards. MR. HUNT: Then it says "the operator of the restaurant 78 Precise Reporting Service 714 - 647 -9099 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 facility." CHAIRPERSON HAWKINS: Okay. Thank you. Any other questions of Mr. Hunt? MR. HUNT: Just if I might finish that thought -- CHAIRPERSON HAWKINS: Certainly. MR. HUNT: -- chairman, you know, that the drafter of a document under the law is responsible for its terms, and any ambiguity is read against the drafter. That's the law.. My clients didn't draft this conditional use permit; your staff did, and the former Commission approved it. It's not my clients that drafted it. They're trying to get a use and they got a use. If there's ambiguity, it's then interpreted against the drafter, and that's your staff. CHAIRPERSON HAWKINS: Thank you, Mr. Hunt. Any other questions of Mr. Hunt? MR. BURNS: Mr. Chair, could I be indulged -- CHAIRPERSON HAWKINS: Please. MR. BURNS: -- a comment? Since you are relying on me to present, you know, advice on the law -- CHAIRPERSON HAWKINS: Yes. MR. BURNS: -- I -- I feel compelled to make at least a comment about the Goat Hill Tavern case which I have more than a passing familiarity with. The case was about a series of events that happened at the Goat Hill Tavern, and some of them are as Mr. Hunt Precise Reporting Service 714 - 647 -9099 mom 3P3 11 2 3 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 represented. But the issue in the case and why that was not grounds for revocation was that the City did not prove that those events occurred because of the Goat Hill Tavern because just south of there is another bar called the Helm, and the Goat Hill Tavern had tap beer and the Helm had bottled beer, and there was lots of bottle and broken glass and things out there. And the city also owned the parking lot that was known to be a hangout for homeless, and there was a lot of urination out there. And the bars both had bathrooms. So the court said you didn't prove it came from the rest -- the Goat Hill Tavern. So I thought -- I didn't want to leave you with the impression that all of those events wouldn't be enough to revoke the conditional use permit. I don't think that's what the case turned on. CHAIRPERSON HAWKINS: Okay. Thank you, Mr. Burns. COMMISSIONER McDANIEL: Mr. Chairman. MR. HUNT: May I address that, Commissioner? CHAIRPERSON HAWKINS: Commissioner McDaniel. Just one moment, please. COMMISSIONER McDANIEL: Yeah, I have a question that's -- I just -- it's been bothering me here. Mr. Overstreet mentioned just a little bit ago -- and you may want to respond to this -- he said, you know, he lives fairly close by, and he said,that this has been a very important 80 Precise Reporting Service 714- 647 -9099 1 2 3 4 5 9 10 11 12 13 F9A! 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 piece of property to him, and that he was constantly admonishing the tenant about -- my recollection was the condition of the property and such. Would that not lead me to believe that -- that he knew not just what was going on the outside, he might know what's going on on the inside and be aware of what's going on at the property? MR. HUNT: I think what -- CHAIRPERSON HAWKINS: I mean that was just what he said. MR. HUNT: No, I understand what you're saying, and I understand that, Commissioner, and I appreciate it. UNIDENTIFIED SPEAKER: (Inaudible). MR. HUNT: And I'll let Mr. Overstreet address it. I would caution all of us, and I -- and I have those concerns about some things Ms. Ailin said. Don't draw inferences from things that don-.t do it, that don't lead you -- that don't actually say it, and so -- COMMISSIONER McDANIEL: Well, that's why I'm asking. I'm trying not to, and I -- CHAIRPERSON HAWKINS: Mr. Overstreet? COMMISSIONER MCDANIEL: I don't want to make this a debate, Mr. Chairman. CHAIRPERSON HAWKINS: Let's just allow him to respond. MR. OVERSTREET: In going by the property from time there was the dangling of wires, there was the -- from time to -- because I didn't go in there. I -- Precise Reporting Service 714 - 647 -9099 3�5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 COMMISSIONER McDANIEL: So it was a physical appearance of the property. MR. OVERSTREET: Yeah, from the outside. COMMISSIONER MCDANIEL: Okay. Thank you. MR. OVERSTREET: Absolutely. And the shrubbery. These things mean something to me. CHAIRPERSON HAWKINS: Well, as a landlord that's what you .. Mr. Hunt, you wanted to respond to Mr. Burns' comments in connection with Goat Hill? MR. HUNT: Oh, yes. I'm sorry. Goat Hill Tavern. And not having the intimate knowledge of Goat Hill, attorneys who rely on it for -- what we call stare decisis, or precedent -- have to read what the court says. And those who have intimate knowledge understand the case better, to be sure, but I would -- and I agree with him. That's definitely in the case, but there are still 19 police calls to the interior of Goat Hill Tavern in the two -month period in 1990. And that's what it says. So there's no -- CHAIRPERSON HAWKINS: Thank you, Mr. Hunt. MR. HUNT: -- no such situation here. CHAIRPERSON HAWKINS: Appreciate it. Ms. Ailin? MS. AILIN: Thank you. I'd like to start by getting back to the idea of the CUP as the constitution for the property. And -- and frankly, I think that's a good way to Precise Reporting Service 714 - 647 -9099 30 1 2 3 4 5 6 7 8 9 10 11 12 13. 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 look at a CUP. But in effect what Mr. Hunt is also saying is we're free to ignore it. You can't revoke the CUP if all we do is violate the conditions. You can only revoke the CUP if it gets so bad that it's a public nuisance. I look at that as the scofflaw approach to the concept of the CUP and to the CUP as the constitution for the property. What is the point in having conditions? What is the point of having a CUP if those conditions.don't mean something? Take the whole Use Permit process. Throw it away. Regulate all of your land uses by whether the way they're being operated amounts to a public nuisance. That is what Mr. Hunt would have you do. That's not what your Municipal Code provides, and it's not what the law requires. We don't see a lot of reported cases on situations where permits are revoked -- Use Permits are revoked because of violation of conditions, because frankly it's a no- brainer. I've -- I've joked for years that the first thing you have to have to be an attorney is a keen grasp of the obvious, and it's just plain obvious that if you violate the conditions of the CUP, it can be revoked. It's obvious, and that's why we don't have case law on that because that's the easy case. We get case law on the hard cases. So I -- we cannot look to Goat Hill Tavern or any other case that deals with a permit being revoked because Precise Reporting Service 714 - 647 -9099 83 - O 1 2 3 4 5 6 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 there is a public nuisance and conclude that you can't revoke a permit just because the conditions have been violated. CHAIRPERSON HAWKINS: Anything else, Ms. Ailin? MS. AILIN: Related to that, there's condition 6 to the CUP, which again does not in any way limit the Commission's ability to revoke a use permit for violation of the conditions. The purpose of condition 6 is essentially to put the permit holder on notice that you don't just take this permit and walk off into the sunset, and we're just going to ignore what you're doing. And what's particularly significant about the way the Use Permit -- condition 6-of the Use Permit is worded is it talks about this permit may be reviewed, modified, or revoked. In other words, there -- there are other actions that can be taken at the Planning Commission's prerogative if it appears that these conditions are not working. The third thing I'd like to address is this question that -- that somehow the Use Permit did authorize the premises to be a restaurant. And I -- I keep hearing different things: Yes, it can be a restaurant; no, only unit A -2 could be a restaurant. There's some inconsistency in the Overstreets' position on this. And -- and I have to admit that the Use Permit is not a model of clarity. There are inconsistencies, but again, the responsible thing to do is not to take the Precise Reporting Service 714 - 647 -9099 no 3 �� 1 2 3 4 5 6 10 11 12 13 14 15 16 17 18 19 20 21 22 23 `'s 25 SEJOUR HEARING - 4/17/2008 position that: Well you know, the City drafted it. If it's not clear, that's the City's problem. The responsible thing to do is to come into the Planning Department and say there's some inconsistencies here. Can we work this out? There's also nothing in the record indicating that any part of this was really intended to be a restaurant. Yes, the Overstreets came in with a menu when they applied for the modification to the Use Permit, but if you look at the minutes from that session with the Planning Commission, which are in your staff report at Pages 74 to 75, it runs a few pages longer than that, but I'd particularly like to call your attention to -- to material on those pages, on Page 74. The second full paragraph reads, "Ms. Temple noted that keeping it under consideration in this fashion as a retail use is the safest thing to do because we are not approving a use permit for an eating and drinking establishment. They don't have a vested right to convert it into a restaurant without a new permit." And at the bottom of that page there is reference to comments that the Overstreets made at that hearing, and the last bullet point on that page says, "The food is complementary to the wine sampling and creates an atmosphere that isn't a restaurant or a bar." And then in the face of that, in the face of the condition that the chair pointed out that says that this is 85 Precise Reporting Service 714 - 647 -9099 - O 1 2 3 6 7 8 9 10 11 12 13 FZA! 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 not to be a restaurant, bar, or nightclub, the Overstreets signed a lease that said that it is to be a restaurant, bar, or nightclub. I keep coming back to that because I -- I think -- I think that's really important. Mr. Hunt pointed to other references in the lease showing that they weren't ignoring the Use Permit. That may be the case, but -- I encourage you -- I won't take the time to read it out loud, look at paragraph 9. In the context of the uses that this lease says are permitted paragraph 9 makes absolutely no sense, "if for any reason the.business to be conducted, including the placement of the medical professional practice in the portion of the lease premises "? There's no indication that there ever was a medical or professional practice in this property under a lease. This paragraph makes no sense. CHAIRPERSON HAWKINS: Well, but that was one of the uses, that was one of the two uses that the Overstreets were focusing on. MS. AILIN: It is -- it is one of the permitted uses, but how that -- how that dovetails with -- with having some sort of liquor license connected with this premises, that paragraph just makes no sense. CHAIRPERSON HAWKINS: Thank -- thank you, Ms. Ailin COMMISSIONER TOERGE: Mr. Chairman. CHAIRPERSON HAWKINS: Any questions of Ms. Ailin? Precise Reporting Service 714 - 647 -9099 mm 310 1 2 3 4. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 COMMISSIONER TOERGE: Can I just make one clarification about -- CHAIRPERSON HAWKINS: Do you have a question of -- a question of Ms. Ailin? COMMISSIONER TOERGE: No. CHAIRPERSON HAWKINS: Okay. COMMISSIONER TOERGE: Just about the question that was asked as to whether medical office was permitted use. CHAIRPERSON HAWKINS: That was my question, sir. COMMISSIONER TOERGE: We don't know enough about what this use was to indicate whether or not it's permitted under the Code. There's just not enough information here. CHAIRPERSON HAWKINS: Understood, but medical office is permitted in that -- at that site. COMMISSIONER TOERGE: Right. CHAIRPERSON HAWKINS: Okay. Commissioner Eaton? COMMISSIONER EATON: Yes. Ms. Ailin, I -- I believe you said that the operation of the facilities when the Overstreets operated it were not part of this consideration. If the operators that are a part of this consideration -- the Stocktons -- are gone -- and I think you said that we are not compelled to revoke it, although we -- there is grounds -- you feel very clearly there's grounds under the violation of the permits -- conditions under the Stocktons' operation to do so -- I guess I have a broader question which is if the Precise Reporting Service 714 - 647 -9099 M.N V 04 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 Stocktons are gone, what is the public interest to be served by revoking it now and depriving the Overstreets of the ability to go back in and operating it in accordance with the conditions? MS. AILIN: The public purpose of doing that is insuring that whatever use goes in there next works and makes sense on that site. What's interesting is we've -- we've not heard anything about why the Overstreets decided to stop operating the retail wine shop that they themselves were operating on the site. My -- my assumption has been that economically it wasn't a viable use at that location. That might be a question to direct to the Overstreets as to why they stopped that operation in the first place, but you have a potential for a continuing problem. You know, it's -- if there -- if there is a Use Permit, someone possibly could get in there, in effect, flying under the radar and -- and as long as they don't do anything that's too conspicuous that attracts a lot Of attention, you could potentially have somebody in there operating not in compliance with the Use Permit. And -- and I suppose under Mr. Hunt's theory that as long as you're not a public nuisance, that's okay. Then, you know, that might work, but I don't think that's what the City of Newport Beach wants. COMMISSIONER EATON: Well, I wouldn't maintain that it's 88 Precise Reporting Service 714 - 647 -9099 - q a- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SWOUR HEARING - 4/17/2008 okay to operate a use permit in violation of the permit's conditions, but don't we have that risk in every Use Permit— every site in the City that has a use permit of a possibility of an operator going in and not complying with the conditions? MS. AILIN: You do. That -- that is certainly always a risk, but particularly if the Overstreets were to decide to lease it out again, responsible tenants do tend to check with the Planning Department about whether the use that they have in mind is permitted on the property. And that would bring to light that there's -- that there's no Use Permit or that what they're doing is not consistent with the Use Permit. I think you just have a clearer situation in terms of getting a use in there that works at this location if you start from scratch. COMMISSIONER EATON: Thank you. COMMISSIONER PEOTTER: Mr. Chair? CHAIRPERSON HAWKINS; Commissioner Peotter. COMMISSIONER PEOTTER: I have a followup question to that. Using the capital punishment vernacular, do you have a lesser penalty you would recommend if this body decided not to revoke? In other words, do you have specific conditions of approval that you would recommend modifying to help make sure that maybe we didn't have problems like this in the future? Precise Reporting Service 714 - 647 -9099 N ,JI 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 MS. AILIN: I'm going to start by saying that that is perhaps a better question for Mr. Burns. Certainly you do have the option, as indicated in condition 6, of modifying the Use Permit. I don't have a particular set of conditions that I would propose. The Overstreets may, My understanding is that that is something that they have been trying to work out, and certainly they could come in at any time and file -- by the way, I should mention that the -- the application to amend the Use Permit that -- CHAIRPERSON HAWKINS: Stock -- MS. AILIN: -- Sejour had the Overstreets sign was never actually received by the Planning Department. So certainly You could -- you could modify the Use Permit, but someone would have to work up a set of conditions. I don't have one. CHAIRPERSON HAWKINS: Mr. Burns, do you have a comment on that? MR. BURNS: I would not be a party to that. I'm -- I'm your neutral advisor, and that would be -- certainly if you thought the level of proof was there, you would have that authority to modify. CHAIRPERSON HAWKINS: Modify conditions? MR. BURNS: Yes. CHAIRPERSON HAWKINS: Mr. Lepo? UNIDENTIFIED SPEAKER: Mr. Chair, (inaudible). Precise Reporting Service 714 - 647 -9099 90 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: Mr. Lepo, do you want to -- MR. LEPO: Mr. Chairman, and again, I think we mentioned before in previous staff report that at my request Mr. Alford and Ms. Ailin met with the Overstreets to talk about some conditions that would solve some problems that we saw continuing, in the absence of some action by the Planning Commission, specifically because of what we knew about the lease because we had communicated with Mr. Stockton numerous times. We said very clearly: Very frankly, this location is not viable if operated under the conditions of the existing Use Permit. And this came in light of the fact that we knew about the MPD productions out there, you know, the late night hours of operation, the fact that it was operating as a bar. On that basis, you know, we said we would be willing to work with the Overstreets then, once they got rid of them, to operate in conformity with the terms of the Use Permit. And, in fact, the Overstreets met with City managers, City manager, myself, and there were representations essentially that, you know, we operated it as it was potentially being operated by Mr. Stockton. That was the only way to make it viable. And the conditions that we had suggested be put, in in revising this, rather than revoking it, was shortening the hours so the police weren't getting called out there after midnight, because if this is truly not a restaurant, 91 Precise Reporting Service 714- 647 -9099 .3j5 1 2 3 4 5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 it's complementary food service in conjunction with the primary use of wine retail. And we also said put the wine display rack back in there, which I understand Mr. Stockton I believe took out, and we said take out the food service equipment that you use for cooking other than, you know, side or finger foods kind of thing. Those were the kinds of things that we offered them and said we could recommend that to the planning Commission, and the Overstreets very clearly said no, that doesn't work. CHAIRPERSON HAWKINS: So basically the answer is you're happy with the conditions of approval, and if they were to bring it back -- plan back to its original form, these conditions really are enforceable other than maybe we might want to clear up some of the ambiguity of the language. MR. LEPO: That is correct, sir. Yes. CHAIRPERSON HAWKINS: Thank you. COMMISSIONER McDANIEL: Mr. Chairman? CHAIRPERSON HAWKINS: Commissioner McDaniel. MR. BURNS: Can I mention a housekeeping matter of -- CHAIRPERSON HAWKINS: Please. MR. BURNS: -- before it gets too far into the night? We do have to open a public hearing and hear public testimony on this, and before you hear from the attorneys for the last time, you want to make sure you take care of that detail. 92 Precise Reporting Service 714 - 647 -9099 31� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SWOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: Thank you, sir. Commissioner McDaniel? COMMISSIONER McDANIEL: Mr. Lepo, just to follow up, did you have any discussion about the -- the spirits, the hard the hard liquor part of that -- that consideration to -- to give the Overstreets, some new -- a new CUP or adjust it? MR. HUNT: At the -- we met with them on March 5th, 2008, and among -- there would be no on -site consumption. COMMISSIONER McDANIEL: Of hard liquor? MR. HUNT: Of any type. MR. McDANIEL: Of any type? Okay. MR. HUNT: It would be -- COMMISSIONER McDANIEL: So no wine tasting? MR. HUNT: -- solely -- solely off -site. we would be open to the idea of going back to the wine tasting concept, but that would be the limit on the on -site consumption. COMMISSIONER McDANIEL: Okay. But -- but you'd still allow them to sell hard liquor? MR. HUNT: No. COMMISSIONER McDANIEL: I mean, I'm just wondering what the conversation was, because that's an issue for me. MR. HUNT: Again, we went with the original concept that this is primarily a place for the sale of wine for off -site consumption. COMMISSIONER McDANIEL: But -- okay. Okay. There's no 93 Precise Reporting Service 714 - 647 -9099 311 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 real -- MR. HUNT: And -- COMMISSIONER McDANIEL: -- real discussion about the the -- about the hard liquor. Okay. Thank you. CHAIRPERSON HAWKINS: Well, were they going to surrender the 47 license? MR. HUNT: We didn't get into that level of detail. CHAIRPERSON HAWKINS: But that was your intent; right? MR. HUNT: The intent was to modify the condition, not to deal with how the -- the disposition of the license. CHAIRPERSON HAWKINS: Okay. Ms. Ailin, anything else? MS. AILIN: Nothing further. CHAIRPERSON HAWKINS: Okay. I'm going to follow Mr. Burns' instructions. I will open it up for public hearing. This is a time for any member of the public, including the permittee, to come forward and make comment on this matter. Please come forward. Identify yourself please, sir. And we have a sign -in sheet so you can help us identify YOU in the minutes. MR. STOCKTON: Good evening. My name is Arthur Stockton. CHAIRPERSON HAWKINS: Good evening, Mr. Stockton. MR. STOCKTON: I really hesitate to get up tonight. My interest in this matter ended in late December, and I'm Precise Reporting Service 714 - 647 -9099 -Jl 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 basically here to try to minimize the damage that's.occurring by being thrown under the bus in this situation. There were certainly mistakes made, and there was certainly some inexperience, but there are also some very gross misrepresentations that I've heard in these proceedings. But I want to save the Commission time. I have a written statement which I'll file, and you can read at your leisure. CHAIRPERSON HAWKINS: Do you have enough copies for all of the Commissioners? MR. STOCKTON: I don't know if I do. I know that the council had one -- I printed five copies, and so I apologize for that. My -- CHAIRPERSON HAWKINS: No apologies necessary. Do you want to summarize your -- your comments so that we understand? MR. STOCKTON: Well, the written statement, you know, there's a lot of different ways to approach this issue. Certainly I think it makes no sense at all to revoke the Overstreets' Use Permit. I just don't think any -- anything is served by that. I think all the parties involved have learned a lot from the entire situation that's developed and, of course, there is a larger picture developing in Newport Beach that this was part of and part of the backdrop. And one of the things I mentioned in my statement was -- and I just need to Precise Reporting Service 714 - 647 -9099 95 -0q E1 2 3 4 5 6 7 8 9 10 Eva 12 13 14 15 16 17 18 19 20 21 22 23 24 WN SEJOUR HEARING - 4/17/2008 put this on the table because as I came into this industry in September of 2005, there were some -- a lot of misconceptions in the industry, and I think the lack of enforcement over a number of years and the lack of attention to detail over a number of years led to a belief amongst many people that essentially if you weren't causing problems, you know, you were pretty much left alone. I think it's positive and productive that that's changing, but it's definitely something different than when I came into the picture. But basically in -- in the statement I simply respond to a lot of the allegations that relate to the Use Permit violations. I vehemently disagree with a lot of the allegations. I think Sejour and its operations have been grossly mischaracterized. There are numerous magazine articles all over Orange County which describe a completely different picture than certainly has been represented here. But nevertheless, there were problems, there were issues, and there were challenges. There's been quite a bit of discussion about what, You know, the clarity or lack of clarity of the Use Permit, and that certainly was a big problem for us. But one of the things -- you know, the property had a type 47 license, and if you'll read your own case that you've -- your staff has filed against Fury, they go into great detail about describing what 96 Precise Reporting Service 714 - 647 -9099 ��b ON 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 `x-V 23 24 25 SEJOUR HEARING - 4/17/2008 a type 47 license is. It has to be a bona fide eating establishment. And frankly, the state requirements as you present in that argument to operate a 47 license are completely inconsistent with a statement in the Use Permit that says you can't operate an eating and drinking establishment. So there are definitely problems. There are definitely challenges, but what I can tell you is that after receiving the City's -- and again, it's all described in detail in here. We worked diligently to try to get an amendment. By the way, that amendment was presented to the City of Newport Beach. However, it was rejected, and that is described herein, but we did try to work towards an amendment. We did try to come up with something that would work, but we simply could not meet the requirements, and as such we closed. We just -- we threw in the towel and we gave up. I have better things to do, and you know, we just gave up. So we felt that we did what was in the best interest. I will note, having heard some of the commentary here, that that was our decision and our decision alone. I can tell you that that property was meticulously maintained. I'm surprised by some of the statements of Mr. Overstreet tonight. The Overstreets had nothing to do with our decision 97 Precise Reporting Service 714 - 647 -9099 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 to exit in December. That was our decision and our decision alone, and it was based on the fact that we did not feel that we could meet even what we felt was clear in the Use Permit and be successful. So we -- we simply gave up. And we hold no grudges as a result of that. I mean, that's simply what we did. And again, under those circumstances, I don't think, you know, stripping the Overstreets of their Use Permit makes a whole lot of sense. CHAIRPERSON HAWKINS: Thank you, Mr. Stockton. MR. STOCKTON: So. . . CHAIRPERSON HAWKINS: Please present all the copies that you have for us. MR. STOCKTON: I will. CHAIRPERSON HAWKINS: And we'll try to circulate them and review it before we come to any deliberation. You've also provided a copy to Ms. Ailin and to -- MR. STOCKTON: Well -- CHAIRPERSON HAWKINS: -- Mr. Hunt? MR. STOCKTON: -- I gave one to Mr. Hunt here. I did not give one to Mr. -- Ms. Ailin. I'd be happy to answer any questions if you have any -- CHAIRPERSON HAWKINS: No problem. Okay. MR. STOCKTON: -- to the extent I can. CHAIRPERSON HAWKINS: COMMISSIONER TOERGE? COMMISSIONER TOERGE: Yeah, I'll try to limit it to one. 98 Precise Reporting Service 714 - 647 -9099 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 Did you know you couldn't open a bar? MR. STOCKTON: No. No. We did a lease for restaurant and bar, and that's what we thought we could do. So that may have been naive on our part, but that is -- that is what we thought we were doing. COMMISSIONER TOERGE: Thanks. CHAIRPERSON HAWKINS: Mr. Lepo, this is actually quite lengthy. Seems like everybody is killing trees in this. It's a ten -page letter. Could we get copies of that, please? MR. STOCKTON: Any other questions? CHAIRPERSON HAWKINS: I don't see any. Thank -- thank you, Mr. Stockton. MR. STOCKTON: Thank you. CHAIRPERSON HAWKINS: I appreciate you coming forward and providing some light on this issue. Any other members of the public? Please come forward. we have a sign -in sheet there. Please identify yourself. MS. OTTING: Yeah, I'll sign before I leave. Thank you. My name is Dolores Otting. I live in Newport Beach. I didn't come for this item tonight. It's been very interesting. I have a -- I mean, like my first question is to why we have, you know, like separate counsel, different counsel than we normally have? Precise Reporting Service 714 - 647 -9099 e• 1 2 3 4 5 6 IN 10 11 12 13 14 15 16 17 iVI 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 My second question is where's the information for the public on this item? The only thing I got was a slide thing. There isn't anything else out there. I came at 20 past 6:00. Maybe there were some copies, but there wasn't any that I could view. Hearing all the testimony, I -- I've been around Newport Beach and bars in this community for many, many years, watched the Thunderbird close down. My husband and I used to spend the weekends and see the police go into the Thunderbird and take all these people out, and then there was the place across the street, but they wouldn't take the people out of that place. I don't think it serves any purpose to take away their CUP or whatever it is that is -- that -- that they have been having. I think that even last night watching the Hoag deliberations, the City has a problem with enforcement. And we know that if you want to close down an establishment in the City of Newport Beach, you send out -- you know, you send policemen in. This is not like the Fury where they have a video; okay? Where they have a company that's hired that's promoting this as a nightclub. This is a different type of situation. I think they deserve another chance. We're only trying to put up a perimeter fence at my association property, and it's taken two months. And so we 100 Precise Reporting Service 714 - 647 -9099 3�� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 have half a fence up and half a fence down because we got cited. So things don't move fast for people in the community. They don't -- they don't move well many times. I remember being in the Twin Palms -- remember the,Twin Palms we used to have? Okay. That wasn't supposed to have dancing and that wasn't supposed to have live music, and I was there one night and it was when Kevin Murphy was our City manager, and I said: Wow, you know, I sent him a -- I called him up. I said dancing, live music, what the hell is going on -- what the heck is going on? Well, he immediately -- I mean like delivers to the Twin Palms the necessary permit so that they could have the music and dancing. Otherwise they should have been shut down; right? So I think everyone kind of deserves a chance in some instances, and since they weren't the people -- and I admire Mr. Stockton for coming down also. I -- I think that was -- that was very nice to do, and he agrees and he had the place. So anyway, my name is Dolores Otting, and now I'm signing your book even though it's a violation of public records in the Brown Act. Thank you. CHAIRPERSON HAWKINS: Thank you, Mrs. Otting. Anyone else want to come forward and speak? Does the officer want 101 Precise Reporting Service 714- 647 -9099 )05 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 to come forward and speak on this issue? Oh, okay. Please come forward and identify yourself. I'm sorry. MR. BUNTING: Steve Bunting, Fire Marshal. There is one issue I feel I'd be remiss if I didn't bring up. There may be a problem with combining both units A -1 and A -2. Structurally the exiting doesn't work combining those two. So no matter what we do next, it's going to have to come back into the building department to be looked at again. CHAIRPERSON HAWKINS: Okay. MR. HUNTING: Okay. Thank you. CHAIRPERSON HAWKINS: Thank you very much. Anyone else care to address the Commission? Officer, would you like to come forward and address the Commission? MR. SPENCE: Sir, do you have any questions about (inaudible)? CHAIRPERSON HAWKINS: I don't know that there are any questions. Please come forward and identify yourself. MR. SPENCE: Charles Spence, code enforcement officer, City of Newport Beach. CHAIRPERSON HAWKINS: officer Spence, there has been no citations since the place closed down; correct? MR. SPENCE: No, Sir. CHAIRPERSON HAWKINS: So -- so you have no opinion 102 Precise Reporting Service 714 - 647 -9099 -3S(') 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 currently of the current condition of the property, any violations, anything like that? MR. SPENCE: Negative, sir. CHAIRPERSON HAWKINS: Okay. Thank you, Mr. Spence. Anyone else, please come forward. Okay. I will close the public hearing. I guess, Mr. Hunt, I'll give you one more opportunity to address for three minutes and then Ms. Ailin to conclude for three minutes. MR. HUNT: Okay. CHAIRPERSON HAWKINS: Mr. Burns, do you have an opinion on that? MR. BURNS: I think he should have the last shot. He has the vested right and -- CHAIRPERSON HAWKINS: Okay. That's fine. Ms. Ailin, do you want to come forward, please? If you have anything else to add. MS. AILIN: I -- I don't have anything else to add, but if anyone has any questions that have occurred to them since I last spoke, I'd be happy to entertain those questions. CHAIRPERSON HAWKINS: Any questions of Ms. Ailin? Okay. Thank COMMISSIONER HILLGREN: I was going to ask them of staff, but I'll ask them now. Has the hearing been properly noticed? There was some issue about that in the -- the 103 Precise Reporting Service 714 - 647 -9099 3$1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 hearing properly noticed? MR. LEPO: Yes, sir, it was. COMMISSIONER HILLGREN: Okay. And then as to this expiration of a Use Permit, I understand that if a Use Permit goes unused for 180 days regardless of the issues, that it expires. I mean, whether there's been a violation or no violation or -- it just goes unused for 180 days. MR. LEPO: That is correct, except for the caveat here that, you know, we agreed to the request from the Overstreets to delay the hearing to this date provided they did not operate it so there was no possibility of a public nuisance or other problems being created. COMMISSIONER HILLGREN: So these proceedings kind of give that a stay, is what we're saying? MR. LEPO: That was our representation to them -- COMMISSIONER HILLGREN: Okay. MR. LEPO: -- that that would do -- that would happen. COMMISSIONER HILLGREN: Okay. Thank _you. MS. AILIN: Sust one comment on that. Under your -- under your Municipal Code, that's not automatic. Findings have to be made, that it has been -- the use has been discontinued for 180 days. CHAIRPERSON HAWKINS: Thank you, Ms. Ailin. COMMISSIONER HILLGREN: And that could be consistent with state case law, too, that says you have to give a hearing 104 Precise Reporting Service 714 - 647 -9099 ��W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20, 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 even is there's an automatic termination based on 90 days. CHAIRPERSON HAWKINS: Mr. Hunt, three minutes. MR. HUNT: First, on behalf of the Overstreets, just allow me to thank Mr. Stockton for his comments. We appreciate it, and I'm sure the Overstreets appreciate it. On the issue of 180 days, we have to abandon it. It hasn't been abandoned. We've told you repeatedly we want to continue to go. I can beat this conditional use permit to death, like by telling you paragraph 15 -- condition 15 refers to an eating and drinking establishment and use, then condition 34 refers to a restaurant facility, but I won't do that. The -- the one thing I will point out is you want to be careful of assumptions. One of the first things I learned in the law is you don't assume things because it makes certain things out of you. And I would suggest to you that the argument by Ms. Ailin has been assuming a number of things. One, it's assuming that I'm saying you can't enforce your conditional use permit. Hogwash. You can. You've got all sorts of different options. You don't have to find a nuisance to cite them. They did it. You don't have to do all the other things that are in between before capital punishment. You can do it. You've got that power, and we didn't write the conditional use permit; the City did. So you have other options for enforcement. The 105 Precise Reporting Service 714 - 647 -9099 3�g 1 2 3 4 5 6 7 a 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 Overstreets aren't talking about walking away from their responsibilities. They're talking about operating consistent with the conditional use permit. So don't make assumptions like Ms. Ailin was making with respect to that. That having been said, can we work out these issues and so forth? I will tell you point -- point blank that my clients walked away from their last meeting with staff that was basically feeling that's why they came and hired us, and they can testify to this if you want to hear it. Staff basically said: Tear it all out; go back to a retail use. We appreciate Mr. Lepo basically saying that. That's not -- that's a revocation, folks. That is flat -out revocation. So if the only things offered to us by staff is rip it all out, go back to an only retail off -- off -site consumption, we're going to have to roll that dice and come back to you because we think what happened here was wrong. And our last question regarding notice, notice of this hearing was improperly given in our opinion for January 17th, but our clients by happenstance found out about it. So we have to no beef about the hearings. The problem we have is you have an owner of a vested right who was never given notice of the problems and time to solve them. That's what we talk about in our letter; you need to give them notice and opportunity to cure. The first notice they got is revoked. Capital punishment. That's wrong. In our opinion 106 Precise Reporting Service 714 - 647 -9099 ,�Aa 1 2 3 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 it's a violation of due process, and it's a violation of nuisance law that we think is applied here. Thank you for your time. CHAIRPERSON HAWKINS: Thank you. Okay. MR. BURNS: Mr. Chair, one other -- CHAIRPERSON HAWKINS: Mr. Burns? MR, BURNS: -- thing to consider is I haven't seen the letter. It was just present tonight, but if it's ten pages, the may five - minute recess and read Commission y want to take a whatever it is in the ten pages. CHAIRPERSON HAWKINS: I think that's a good suggestion, but we have yet to get copies of that; right? MR. BURNS: Why don't we just have the guy read it? UNIDENTIFIED SPEAKER: Is that okay? MR. BURNS: Well, we're going to read it. I mean, what's the difference? CHAIRPERSON HAWKINS: Okay. Mr. Stockton, you want to come forward and just go ahead and read your letter? MR. STOCKTON: I'm not much of a public speaker. I'll do my best. Ladies and gentlemen, Sejour, LLC, permanently closed its operation four months ago. Sejour will not reopen and has no interest in pursuing the matter further with the City. In the interest of insuring its credibility in this matter, Sejour and its principals hereby release the City of Newport Beach with regard to any liability respecting these 107 Precise Reporting Service 714 - 647 -9099 ��C1 l 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 matters. CHAIRPERSON HAWKINS: Mr. Stockton, I believe we have our copies. So -- MR. STOCKTON: Okay. CHAIRPERSON HAWKINS: I'm going to relieve you of your public speaking -- MR. STOCKTON: Thanks. CHAIRPERSON HAWKINS: -- duties and we will -- we will take a five - minute recess, but I'd like to keep everybody up here when you're reviewing this so that we don't have any -- well, you can have a potty break, but just so that we're not discussing this outside of the area. So we will be in recess for -- UNIDENTIFIED SPEAKER: Mr. Chairman, before you do that, I believe Ms. Parker said that there are a couple of copies available out at the table for the public, if they'd like. CHAIRPERSON HAWKINS: All right. Thank you. Thank you, ma'am. So we will be in recess for five minutes to 8:S0. Call the meeting back to order. Mr. Burns, any comments from your -- from the legal department in connection with lesser sanctions than -- than revocation? MR. BURNS: No, Mr. Chair. If you determine that you thought the revocation was too severe a penalty, you could, you know, continue the matter and direct staff to work further at it. But I think without staff and the Stock -- the 108 Precise Reporting Service 714 - 647 -9099 �Cj � 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 Overstreets agreeing, then it would be futile for the Commission to determine that you'd modify it in a certain way and that he could successfully operate a business in that fashion. So I think there has to be some meeting of the minds, and it has to be done at another level besides the Commission or myself. So -- CHAIRPERSON HAWKINS: So to the extent that we say pull the 47 license from the permit and then hand it back to them, you don't think that's a viable solution? MR. BURNS: I don't think it's a viable practical solution. Legally you could be correct. CHAIRPERSON HAWKINS: Okay. MR. BURNS: You could say -- yes, you can withdraw a certain right to operate that business less than the entire right to operate the business, but it may be -- may be not viable for the business owner. CHAIRPERSON HAWKINS: Okay. Okay. Mr. Lepo, any comments? MR. LEPO:, Mr. Chairman, if it would -- if it ends up being the majority of the Planning Commission would want to do something less than revoke, I would certainly appreciate direction as to what you intend because I -- I think, and again, I'm going to paraphrase Mr. Hunt, I may not be totally accurate -- but it's where we felt we were left. We tried to modify some conditions, and obviously, if you want to go with 109 Precise Reporting Service 714 - 647 -9099 ,�q3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 something less than revocation, certainly we'd clean up those conditions that were boilerplate, it would seem to suggest a restaurant, but beyond that, you know, be clear that your intention is to have it operated consistent with what the minutes, for example, showed from back in 2002 or what was intended. And then, you know, I'd suggest you might want to consider conditions that we had suggested about reinstalling the wine display racks, limiting the hours to, you know, closing it like 11:00 p.m., that kind of thing, but give us direction. We can be back and work with them (inaudible). that. HAWKINS: Certainly. We'll be happy to do MR. LEPO: Thank you, sir. CHAIRPERSON HAWKINS: So I'll bring this back to the Commission. Any discussion? Commissioner Toerge? COMMISSIONER TOERGE: Yeah, I'm happy to start. You know, this is a pretty unique process here, you know. We're citizens of the City here. We're not attorneys. We're not judges, and the way this has been presented has been very legal oriented. And I don't think it's my requirement to act like an attorney. I'm not an attorney. I think it's my requirement or obligation to provide the common sense test of a citizen in our community faced with our codes and the information that was presented 110 Precise Reporting Service 714 - 647 -9099 ��i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 %tea 23 24 25 SEJOUR HEARING - 4/17/2008 to us. And that's what I intend to do. The analogy to capital punishment I think is a little extreme. I mean capital punishment is not reversible. There's -- there's no restriction on this property owner from coming back and reapplying for Use Permit that would take into account what we've all learned and what they've learned. Apparently their business did close, and maybe they've learned some things. Maybe they'd like to do some things differently. It sounds to me from what I'm hearing that the Use Permit the way it's currently created doesn't satisfy the owners, doesn't satisfy the City, and I don't know why we allow it to stay. The argument about ambiguity in the lease and the conditions as to a restaurant, I won't argue those, but there's no ambiguity in my -- in my review of these documents as to a bar. And the -- it's very clear in the conditions that this was never intended to be a bar. The lease is drafted clearly to require it to be a bar and -- and the operator of the bar said he didn't know that it couldn't be a bar. And -- and as to these issues of risk mitigation and so forth and the fact that the current operator is gone so the risk is gone that -- I see it a little differently. I mean these Use Permits run with the land. And we've all -- we all know that up here, and they run with the land, and Precise Reporting Service 714 - 647 -9099 111 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 FUI 18 19 i.Tll 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 there's a certain element of the character of the operator that comes into the application, the granting of it, but nonetheless they run with the land. And while the -- the original applicant holder may have limited obligations to police the -- the subtenant in -- in fulfilling their conditions, they have one clear, it's very clear obligation, there's no dispute of it, and that is to notify the subsequent owner that -- of the conditions of the -- of the use. Now, I'm not going to put words in anybody's mouths, but I'm sure that if some of the attorneys involved here had the chance to do this over again, they might redraft this provision that talks about use or characterization of the use and actually refer to the Use Permit, that allowed use would be subject to the use of the Use Permit and attach it to the lease. Then there would be no dispute. It's the obligation of the operator to inform the tenant of these conditions. Tenant said he didn't get it. The lease kind of misrepresents it. And so -- and the other thing that I find a little disingenuous is the common sense. I'm just up here -- common sense, and again., I'll state again there's nothing to restrict the applicant from reorganizing what they want to do, come back in and do another use permit. There's no -- there's no prohibition against that. Precise Reporting Service 714 - 647 -9099 112 30VD 1 2 3 4 5 6 d 4 10 11 12 13 14 15 16 17 1s 19 20 21 22 23 PC,2 25 SEJOUR HEARING - 4/17/2008 But the whole idea that this is a vested property right, something of enormous value that we're trying so hard to hold onto just doesn't jive with me with the attitude that -- the actions of the operator or the original applicant. They heard of some problems in June and July of '07. They talked to the applicant. They -- they were told -- or they talked to the operator, said it would be okay. They talked to code enforcement, said it would be okay. And then for six months they don't check. They live down the street, but they don't check. Now, this is something that they're here fighting for. This is our vested right. We own this. It has value to us. But their actions don't support that they were that interested in that at that time during that six -month period when there was some allegations of impropriety here or some violations. So I would think that again, common sense, you know, you -- you would have checked, you know, what is happening? That's something that's really important to us. That's a vested right. That's a conditional use permit. I don't want to give that up. And it's my requirement to inform them of it. And since I own the property -- there may -- this discussion of landlord's obligations is -- is -- you know, liability, I understand that, but this is -- we're talking Precise Reporting Service 714- 647 -9099 113 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 about the applicant and the holder of the Use Permit. And I think they do have an obligation to clearly -- and frankly, your position today would he much different if you didn't have a lease that says it's going to be a bar and if you had a document in front of me that said that you -- here's the -- here's -- here, Mr. New Operator, here's the list of conditions. You're obligated to abide by these in writing. I don't see that anywhere in here. Your attorney hasn't presented it, nobody has presented it. So, you know, for those reasons -- and also -- and this is a close call. These things aren't all absolute. There has been an effort, and I think a good, a reasonable effort to step up enforcement in our City. This whole discussion of enforcement, it doesn't start and end out in the street. It kind of starts and ends up here. And this is all part of it. And so from my standpoint, you know, when I look at the circumstances, I don't. -- I do see a one clear obligation of this operator that they didn't do, and that -- that should sustain. And so I start to think about what's the next operation going to look like? My guess is they know maybe how to represent that today maybe, but -- but there's also no -- but I also hear that the -- the -- the current conditions don't meet and don't work with the state of the 114 Precise Reporting Service 714 - 647 -9099 JC, 1 2 3 4 5 6 7 a 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 market. And for me to me it's most appropriate in this circumstance to -- to revoke the permit and -- and then allow the property owner to come back in and submit a new one if they so desire. CHAIRPERSON HAWKINS: Thank you. Commissioner Cole? COMMISSIONER COLE: Thank you, Mr. Chairman. I'm not in favor of revoking this Use Permit. Based on the testimony it just doesn't seem to be an appropriate action given the, as I interpret it, some ambiguity in the Use Permit language. It appears to potentially allow for at least some partial restaurant use. The landlord, there's been no evidence given that the landlord -- landowner was actively engaged in any of the operations of this, of Sejour. They seemed to take appropriate action when they were aware of the condition violations. And revoking this permit at this -- at this stage, since the tenant has vacated the premises, doesn't really seem to in my opinion serve any kind of compelling public interest because there really isn't, as I see it, any kind of nuisance. I don't know -- I know we don't have to find nuisance, but in this case I believe that's really a common sense reaction to what we're being asked to do. The violations of the conditions actually did have 115 Precise Reporting Service 714 - 647 -9099 3qq 1 2 3 4 5 6 7 El 9 10 11 12 13 It'! 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 consequences, obviously, and we had the operator testify that he didn't think it could work and so he vacated the premises. So it served, you know, it served a purpose. I commend this effort taken in initiating the action to revoke the Use Permit due cc the -- due to the significant violations of the conditions, but I don't believe pursuing this action after the operat -- operator had vacated the premises and abandoned the property has -- has served the City well. I think the time and energy and cost in my opinion has been just -- just wasteful, and I don't think there's significant evidence enough that the landowner has any kind of inability to adhere to the original Use Permit conditions, and I -- and I would -- and I just -- I don't think this should be in front of us in my opinion. So I would move that we deny the request to revoke the permit and allow staff to work out with the landowner any appropriate condition, the changes that have to be made in order for them to create another operation under the original Use Permit language. COMMISSIONER PEOTTER: Second. CHAIRPERSON HAWKINS: Commissioner McDaniel? COMMISSIONER MCDANIEL: Thank you, Mr. Chairman. I was here for the original approval of this Use Permit, and I can tell you that the -- the conversation that went on that night was 100% that this will never be a bar. Period. Never. And 116 Precise Reporting Service 714- 647 -9099 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 we were given lots of conversation about how high end this -- the Overstreets were, and we certainly believed them that -- that, you know -- there was conversation about how expensive the wine would be and -- and just all sorts of conversations about wine tasting. Never was it going to be a bar. In fact, I remember the conversation and I found it where I asked Mr. Overstreet about why he needed the liquor license, the hard liquor license. And his comment was, you know, this is a basically -- I'll paraphrase it but, you know, this is a high -end establishment, you know, and not everyone wants to have a glass of wine. Sometimes they want to have a taste of 25- year -old scotch. So I understand tasting. I understand. I don't have a problem with tasting, but that -- that 47 is the problem in my mind that, you know, what we approved is not what it became. It was never supposed to be a bar. I don't think it was ever supposed to be functioning as a restaurant, although the 47 gives them that right. So we kind of had to do that. And we -- and my view was we did that so that the Overstreets could, you know, as -- operate. You know, we had full confidence that they were going to operate this and do a wonderful job, bring a high class tasting, a wine tasting area to us. That's not what it became. So I -- I'm not going to support the motion because if that 47 stays, I can't vote for it. That's the problem in 117 I Precise Reporting Service 714 - 647 -9099 q\ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 my mind. The main issue is hard liquor. I think if they want to operate with -- with wine tasting, like they said they were going to do, like what I understood I approved in the first place, I'd be -- I'm willing to allow them to continue because we're going to have to have a use permit there of some sort. I'd be okay with that. If they want to go back in and operate in that manner, that works for me, but the hard liquor and then the hours of operation, those are the two things have caused trouble here. And if they can't make a profit by doing that, you know, guess what? I can't support that. So I won't support the motion, but if anybody else has some conversation about leaving that in place with Chat -- leaving a use permit in place, but removing 40 -- the 4 ?, hard liquor, and -- and changing the hours of operation, I'd be interested in that. CHAIRPERSON HAWKINS: Thank you. Commissioner Peotter. COMMISSIONER PEOTTER: Mr. Chair, I'd like to propose maybe amending the motion to give some direction to staff along those specific lines. CHAIRPERSON HAWKINS: I'm sorry? COMMISSIONER PEOTTER: I'd like to propose an amendment to the motion to give staff direction on some of the items that we'd like to have incorporated in revised -- CHAIRPERSON HAWKINS: Perfect. Precise Reporting Service 714 - 647 -9099 1 y6�- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 COMMISSIONER PEOTTER: -- conditions. CHAIRPERSON HAWKINS: Okay. Please. COMMISSIONER PEOTTER: One is I agree we ought to propose reduced hours similar to what staff had suggested. CHAIRPERSON HAWKINS: Can you specify those hours? COMMISSIONER PEOTTER: You know what? I'd leave it up to staff and -- and the applicant to come back with a recommendation and have a shot at it when he comes back. But the 11:00 one seemed reasonable for -- that Mr. Lepo had mentioned. So one, reduce hours. Two, that we would establish the use like as it was originally intended as Mr. McDaniel said that it would be a I retail first; that the wine testing would definitely be ancillary to that, along with the food as well and the educational portions of that -- all ancillary to retail, and that the floor plan and hard improvements should be revised to support that, whether i't's racks or whatever. I'll leave that up to the applicant. But the floor plan, as we approve it, should reflect that original intent of hating it be -- be a retail first. So reduce hours, retail first, and I have no objection if -- if part of that proposal is to delete the 47 liquor license. CHAIRPERSON HAWKINS: Delete the 47? COMMISSIONER PEOTTER: Yeah. I have no objection. What 119 Precise Reporting Service 714 - 647 -9099 W 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 I would recommend is or ask is that the staff and the applicant would put their head together in regards to that and come back to us with a proposal on that. Whether it's delete or severely restrict it, it doesn't -- I agree with Mr. McDaniels. It doesn't seem to be part of that wine retail use that was approved. CHAIRPERSON HAWKINS: But food would be allowed under the comment. COMMISSIONER PEOTTER: I think -- I have no objection to food, again as long as it supports wine retail, If they want to have cheeses, salamis, and, you know, whatever else finger foods that might be appropriate for wine tasting, I have no problem with that. And then the other thing is we need to clean up the -- the condition of approval, make sure that there's no ambiguity in that. So those would be my four suggestions or amendments to the main motion. CHAIRPERSON HAWKINS: All right. Any other discussion? COMMISSIONER MCDANIEL: Mr. Chairman, I`d support that if that's a second. CHAIRPERSON HAWKINS: Well, it was proposed as an amendment, so -- COMMISSIONER McDANIEL: Oh, okay. CHAIRPERSON HAWKINS: Does the maker of the motion accept the amendment or not? Precise Reporting Service 714 - 647 -9099 120 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 UNIDENTIFIED SPEAKER: I would like to let staff -- I mean there's a lot of things I think we have the ability to get into at this stage as it relates to some of those areas. I would like to see if the -- the -- the maker of the motion or the suggested amender of the motion allow staff to kind of come back. I think the concept you mentioned of having staff come back to us is probably better because I think there's a lot of things we have to look at the entirety. I don't want to get into removing certain licenses at this stage without really having the staff really look at it and see what the impact is on the overall Use Permit. CHAIRPERSON HAWKINS: So it's a general -- so your proposal would be you would accept an amendment which would allow for a general delegation of the revisions to the permit -- UNIDENTIFIED SPEAKER: Along the -- CHAIRPERSON HAWKINS: -- but without specific directions. UNIDENTIFIED SPEAKER: Yeah. Along the lines of what Commissioner Peotter mentioned, but I don't think we want to get into tying them to exactly the what -- they may come back to us what -- COMMISSIONER PEOTTER: No, that's the intent, Mr. Chair, is that these would be -- these would be four guidelines that staff could take and work out with the applicant, come back 121 Precise Reporting Service 714 - 647 -9099 �6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 with recommendations to us on the specifics. UNIDENTIFIED SPEAKER: Yeah. I would agree. CHAIRPERSON HAWKINS: Commissioner McDaniel, does that do it for you? COMMISSIONER McDANIEL: No, it doesn't. If the 47 stays, it's -- I can't vote for it. Period. CHAIRPERSON HAWKINS: Okay. COMMISSIONER McDP.NIEL: I mean that's -- that's -- that is the problem. That's not what we approved. It was incredibly clear that evening when we approved it by every Commissioner that evening that would not be a bar, and that's what we leave open if we leave that open. CHAIRPERSON HAWKINS: Yeah. COMMISSIONER MCDANIEL: And I can't allow that to stay open because it leaves all those other problems that we're having on the table. CHAIRPERSON HAWKINS: Okay. So we -- we have a motion and an amendment to that motion. And, Commissioner Peotter, did you second the motion? I believe you did. COMMISSIONER PEOTTER: I did, yes. CHAIRPERSON HAWKINS: Okay. And you obviously accept the -- COMMISSIONER PEOTTER: Amendment. CHAIRPERSON HAWKINS: -- amendment as proposed. COMMISSIONER PEOTTER: Okay. Precise Reporting Service 714 - 647 -9099 122 t 6� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 CHAIRPERSON HAWKINS: So the proposal is or the motion as amended is as follows: To deny the request for revocation but modify the permit as follows: Reduced hours as determined by staff. Mr. Lepo, do you have a question? Are you swearing at us, sir? Oh, okay. Thank you. All right. The primary use would be retail with secondary use of wine tasting and food that would accompany wine tasting and attempt to condition the 47 license. And there was a third one to clean up the conditions so that we would not have ambiguity. There would be general consistency. Was that it? COMMISSIONER PEOTTER: The fourth one would be that the plan would reflect those priorities as far as uses go, the hard improvements. CHAIRPERSON HAWKINS: Oh. COMMISSIONER PEOTTER: Yes. CHAIRPERSON HAWKINS: Thank you. COMMISSIONER COLE: And just to clarify my -- my -- I think my -- CHAIRPERSON HAWKINS: Acceptance. COMMISSIONER COLE: -- suggestion was that the -- that license 47 be considered in the scope of work, not necessarily a request by the Planning Commission to re -- to take it out. I know Commissioner McDaniel has a different opinion, but that was my -- my -- 123 Precise Reporting Service 714 - 647 -9099 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 COMMISSIONER MCDANIEL: No, agreed. COMMISSIONER COLE: -- amendment. Okay. COMMISSIONER PEOTTER: It's -- COMMISSIONER COLE: My motion. COMMISSIONER PEOTTER: -- come back with suggestions and allow us to make a decision. CHAIRPERSON HAWKINS: This is again very squishy, gentlemen. Okay. COMMISSIONER PEOTTER: It's direction. It allows flexibility for staff and the applicant to work out the specifics. CHAIRPERSON HAWKINS: Yes. All right. Thank you. COMMISSIONER PEOTTER: Since I'm not in the wine business, I trust the applicant to give than input, not me. CHAIRPERSON HAWKINS: Thank you. But you're in the talking business. So Commissioner Eaton. COMMISSIONER EATON: Mr. Chairman, I have a procedural question. If we deny the revocation, is the matter still in front of us? Haven't we -- haven't we determined the matter at that point? CHAIRPERSON HAWKINS: Mr. Burns? MR. BURNS: I'm assuming the motion is going to be to -- CHAIRPERSON HAWKINS: Modify. MR. BURNS: -- potentially modify. We haven't done the resolution yet so you're directing it to go back to staff to 124 Precise Reporting Service 714 - 647 -9099 �t 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 workout. So you're, in effect, continuing this, but you're giving everyone a flavor of what your decision is going to be provided it comes back in the proper form to you. CHAIRPERSON HAWKINS: Yeah. So I think it's more of a modification rather than a denial. COMMISSIONER EATON: Okay. The original motion I think specified denial. CHAIRPERSON HAWKINS: Yes. MR. BURNS: Yeah. CHAIRPERSON HAWKINS: And so -- so -- COMMISSIONER EATON: And then I have another- - CHAIRPERSON HAWKINS: Just one moment. I'm going to treat that as a -- an amendment, a motion to amend. Does the maker of the motion accept that? COMMISSIONER COLE: Yes. CHAIRPERSON HAWKINS: And does the maker of the second? Okay. Good. Commissioner Eaton. COMMISSIONER PEOTTER: Modification with a continuance. CHAIRPERSON HAWKINS: Yes. Commissioner Eaton. COMMISSIONER EATON: My only other comment was a cautionary one. You may recall that when the City council attempted to modify the conditions of the alcoholic beverage license, that had to be re -heard and come all the way back to them because they found out they were preempted from doing that. So that may enter into this discussion relative to the 125 Precise Reporting Service 714 - 647 -9099 'A6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 47 license as well. CHAIRPERSON HAWKINS: Yeah. COMMISSIONER EATON: !Ill just treat that as a caution when it -- when the staff and the attorneys deal with it, keep that in mind. CHAIRPERSON HAWKINS: Mr. Burns, do you want to comment on the preemption issue for A.B.C. and our ability to condition the license? MR. BURNS: I don't have all of those answers, but I think the issue that's been raised is a good one and we'll have to try and dance around that a little bit about, you know, certainly I suppose your use permit could not allow something and they could still have the license. So they have to deal with selling it or doing something with it, but we have to work out some details there. CHAIRPERSON HAWKINS: Right. MR. BURNS: There's an issue. CHAIRPERSON HAWKINS: Okay. Thank you. Commissioner Hillgren. COMMISSIONER HILLGREN: Mr. Chair, thanks. CHAIRPERSON HAWKINS: I couldn't see your light because your big book that you read today -- COMMISSIONER HILLGREN: Sorry if it was blocking it. Good news is we've gotten a problem operation removed through a process that's been less than smooth and 126 Precise Reporting Service 714- 647 -9099 14 1,6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 easy for all of us, and that to me is part of the challenge with all of this. And what I've heard in this motion is basically going back to the original conditions that were set up in the original conditional use permit, and they all seem right, but we had them in place and we had a problem that cropped up. We relied upon an operator who then gave their rights away. That operator happens to be the property owner in this instance, and I continue to have the challenge of the comment that all they have is a responsibility to provide notice, and beyond that there's nothing else that they have to deal with. And I worry that we're going to have an operator to be determined that comes in and leads us to the same issue. And so without some really direct responsibility placed upon the property owner for enforcement and true notice and fcllowup on this, I'm troubled by the permit as modified or as it exists. CHAIRPERSON HAWKINS: So let me see if I understand your concern. It is that the landowner is somehow not on the hook for the enforcement issues and has no enforcement obligation. MR. BURNS: Correct. They've got the right with no responsibility associated with it. That's a problem. CHAIRPERSON HAWKINS: Okay. Any other? Commissioner Toerge? COMMISSIONER TOERGE: Yeah. I presume we're getting Precise Reporting Service 714 - 647 -9099 127 I 'A0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 ready to vote. I'll just express my point of view. I mean the operator was notified of this issue that by their own admission in January. It's April 17th. And 90 days, 120 days we're asking staff and the operator to go back and do what they haven't been able cc do the last 120 days. You talk about decisive. You talk about clarity. You revoke the license. Let them reorganize. Let them identify what their business plan is, and re- present to the City. Maybe we can waive the fee. Maybe the City can do that on their own if they want to do that kind of thing. I don't want to be punitive here, but I do want to be clear, and what you're recommending is not clear and doesn't solve the problem. CHAIRPERSON HAWKINS: And you by recommending you're referring to the motion that's before us. Okay. My -- my concern is I -- I -- I take heart with the lease. I think that the landowner as well as the operator misunderstood the conditions of the permit. Albeit I do believe that the lic -- the 47 license with the restriction of no restaurant is very problematic, but it is also a restriction of no bar, and I think that we had a bar here. Given that the Overstreets had some success in the three years that they were operating it, I guess I would be inclined to hear what staff had in connection with the modification of the hours conditions on the 47 license, but I 128 Precise Reporting Service 714 - 647 -9099 qo- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 MV SEJOUR HEARING - 4/17/2008 continue to believe that the 47 license is the problem. I -- I don't believe -- now let's go back because we asked Ms. Ailin what was the cond -- what were the conditions or Mr. Lepo and Mr. Alford what were the conditions prior to the Overstreets taking over, and it was a retail use. Well, it moves from a retail use to a quasi - retail use with wine sales and wine tasting, which it will come clear in some other hearings that that may also create some different use issues, and then we all of a sudden get a restaurant with -- with alcohol consumption and -- and -- and I think that's where things went downhill on that license, which I will note, Commissioner McDaniel, I did not see your dissent in that -- in that hearing. So correct me if I'm wrong, please. COMMISSIONER McDANIEL: We voted for it because we were given assurances that one, it would never become a bar; that wine tasting, we had the credibility of the applicant that we believed that it was going to be a high end wine tasting establishment, which we thought the area could definitely use. We were given assurances and believe that -- that, you know, only high end ey_pensive alcohol would be dispensed, and it would -- and our concerns of having a bar there would never take place. CHAIRPERSON HAWKINS: Okay. Precise Reporting Service 714 - 647 -9099 129 1 L' O 1 2 9 5 6 9 10 11 12 13 Ig-2 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 COMMISSIONER McDANIEL: So that's why I voted for it, but clearly the 47 is the problem. CHAIRPERSON HAWKINS: Okay. Now, Mr. Burns, in connection with a modification we need to still make findings; correct? MR. BURNS: Yes. CHAIRPERSON HAWKINS: And.so perhaps we need to go through the matrix that you helpfully provided us and talk about those issues, the permit conditions and so forth that we believe have been violated that would warrant the modification if we go that way. MR. BURNS: That would be helpful. I did try and take note of what each of you were saying as you went through the evidence, but if you wanted to go back through that, that would be fine. CHAIRPERSON HAWKINS: Well, do you believe that you have enough discussion from the Planning Commissioners to write the requisite findings that we need? MR. BURNS: I believe I could take a crack at it, but if anybody thinks they did not express themselves well enough on that, we could -- COMMISSIONER McDANIEL: Mr. Chairman. MR. BURNS: -- certainly go through it, but I don't know if you go through and vote on each -- on each issue. CHAIRPERSON 14AWKINS: No. No. No. No. I think all 130 Precise Reporting Service 714 - 647 -9099 qt i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 I'm talking about is that Planning Commissioners would express some concern -- because I don't have concerns about all the alleged violations, but I do have significant concerns about specific ones. So Commissioner McDaniel. COMMISSIONER MCDANIEL: Yeah. There's a motion before us that I plan on voting no on. So if there's a -- if -- if it passes, then I think that's appropriate. If it doesn't, then it's a -- CHAIRPERSON HAWKINS: Well, sir, we are discussing that motion. And to discuss that motion, we need to be clear on the basis for voting for that motion. Now, you have made it clear why you were voting. COMMISSIONER MCDANIEL: Because 47 is in there, and I can't vote for it, yes. CHAIRPERSON HAWKINS: And you regard the 47 as cons -- the 47 and the conduct under that as constituting violations of the various conditions. COMMISSIONER McDANIEL: Correct. CHAIRPERSON HAWKINS: Correct? And maybe even a nuisance. COMMISSIONER McDANIEL: Correct. CHAIRPERSON HAWKINS: Okay. All right. Commissioner Toerge. COMMISSIONER TOERGE: Thank you. Yes, but -- but the motion is to continue this, and the motion is to have staff 131 Precise Reporting Service 714 - 647 -9099 �t� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 go back and work out some issues including this matrix. And so we're going to revisit it anyway. If our counsel thinks he has a good handle on it, that's all he really has to have to come back and re- present it to this Commission because we're continuing it. We're not deciding tonight. I mean that's what the motion is. So I don't know that we need to go through that eight pace document. I'd prefer not to. CHAIRPERSON HAWKINS: I understand that. Mr. Burns, okay, so we continue it. We come back with your recommendation. We have closed the public hearing. I take it the public hearing remains closed at that point. MR. BURNS: Yes. CHAIRPERSON HAWKINS: All right. COMMISSIONER PEOTTER: Mr. Chair, one more thing regarding the continuance. I'd like to add a date specific of June 5 to have staff come back to us on since we're going to hear the -- Ci-LAIRPERSON HAWKINS: So that's a month and a half. COMMISSIONER PEOTTER: We're going to hear the Fury on the 22nd of May, probably not a good night to have this come back. CHAIRPERSON HAWKINS: No, I would agree with that. MR. BURNS: Mr. Chair, with your permission I would suggest that if you could just make whatever notes you're going to make in your file, but that we could -- when we do 132 Precise Reporting Service 714 - 647 -9099 �1� 1 2 3 4 5 6 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 continue it and staff and Ms. Ailin I suppose will work out with Mr. Hunt and his client, and they can maybe even try and work out on some of the findings they can agree on, it comes to the conclusion you want to get to, and if the whole deal falls apart and they can't agree, but you still feel as though the evidence will support modification as you want to impose, then we'll go through the issues line by line if you want and -- CHAIRPERSON HAWKINS: Okay. But you're suggesting not to put a date certain to return? MR. BURNS: You can put a date certain to return as long as we have a backup position in case they can't get to an agreement that you won't be disturbed if we can't go another meeting if they don't agree. CHAIRPERSON HAWKINS: Well, perhaps we could go to June 19th then. That would give them two more weeks. MR. BURNS: Well, I think you need the first meeting to see if they can work out a deal. CHAIRPERSON HAWKINS: Okay. Okay. deal. MR. BURNS: And then the next meeting in case there's no MR. HUNT: Forgive me, Mr. Chairman. You're talking about putting out a piece of property that's vacant that needs to be producing income for another two months at least, and that's just a long time. And we'd like to encourage you 133 Precise Reporting Service 714 - 647 -9099 X11 1 2 3 4 5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 to try and move this more quickly if we're going to go through this process. The -- this property is currently vacant, and we can't just sit there and let that property be vacant. CHAIRPERSON HAWKINS: Thank you. Notwithstanding the fact that Ms. Overstreet came here and requested a fairly lengthy continuance herself, so MR. HUNT: Notwithstanding the fact that they never got a notice. CHAIRPERSON HAWKINS: Mr. Hunt, we -- we heard your point. June Sth would be workable for me. Okay. So we have a motion to continue with this item with direction to staff to modify the -- to attempt to come up with a modification of the existing permit, which would reduce the hours as staff had earlier proposed; the priority of retail use; consideration of conditioning the 4? license; cleaning up the ambiguity in the Use Permit; and then returning the infrastructure or the improvements or the fixtures to the original condition. COMMISSIONER McDANIEL: Mr. Chairman. CHAIRPERSON HAWKINS: Yes. Commissioner McDaniel. COMMISSIONER McDANIEL: Does Ms. Ailin need to be a part of that, too? I mean is everybody else going to be available for that that evening? CHAIRPERSON HAWKINS: Ms. Ailin, do you want to address 134 Precise Reporting Service 714 - 647 -9099 �_ � t 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 your availability? MS. AILIN: I am available. CHAIRPERSON HAWKINS: Okay. Thank you. All right. So I will call the question. Please vote. MR. BURNS: Mr. Chairman, just one clarification. I -- the -- regarding the floor plan. CHAIRPERSON HAWKINS: Yes. MR. BURNS: I believe the motion was to revise the floor plan to be -- reflect the priority of uses being retail first. CHAIRPERSON HAWKINS: That's right. MR. BURNS: Okay. But not the original -- CHAIRPERSON HAWKINS: That's correct. I stand corrected. Thank you. Please vote. MS. VARIN: Excuse me. Motion passes with four ayes and three noes. (WHEREUPON THE AUDIOTAPED HEARING CONCLUDED.) Precise Reporting Service 714 - 647 -9099 135 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SEJOUR HEARING - 4/17/2008 CERTIFICATE ISM CERTIFIED SHORTHAND REPORTER The undersigned Certified Shorthand Reporter of the State of California does hereby certify: That the foregoing is a true transcript of an audio tape transcribed to the best of my ability. In witness whereof, I have subscribed my name. DATED: JUNE 6, 2008 ,L,}I/1 L it iyjiL'f..r� Carolyn Gregor CSR #2351 Precise Reporting Service 714 - 647 -9099 IMIN -�� PLANNING DEPARTMENT POWERPOINT PRESENTATION FOR APRIL 17, 2008 PLANNING COMMISSION HEARING ti-Pl\ OJI61 epw Original Use ■ Use Permit No. 2001 -005 ■ The primary use of the Property was to be a retail establishment for the sale of general alcoholic beverages for off -site consumption with accessory wine tasting and seminars. ■ The applicant had a Type 21 (offsite sale general) and Type 42 (onsite sale beer and wine — no distilled spirits) alcohol license. W Amended Use ■ Use Permit 2002 -034 • Planning Commission approved November 7, 2002. • Authorizing a Type 47 ABC License for onsite consumption of general alcoholic beverages, live entertainment and an expansion of the business hours on Friday and Saturday nights to 12:00 midnight. Use Permit Condition No. 1 ■ The development shall be in substantial conformance with the approved plot plan, floor plan, and elevations dated January 22, 2001. ,,r r�lx LN 7, y Approved Floor Plan .,r A V1. v•Yh :Ov '61 Ag FIKp Iffla ,,r r�lx LN 7, y Approved Floor Plan .,r A '61 ,,r r�lx LN Use Permit Condition No. 3 ■ Any change in the operational characteristics, hours of operation, expansion in area, or operation characteristics, or other modification to the floor plan, shall require an amendment to the Use Permit or the processing of a new Use Permit. I� Use Permit Condition No. 4 ■ 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 agent. Future owners, operators or assignees shall submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. s Use Permit Condition No. 5 ■ The applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in connection with the use will be cause for revocation of this permit. s Use Permit Condition No. 10 ■ The alcoholic beverage outlet is defined as a retail establishment for the sale of general alcoholic beverages for off -site consumption as the primary and principal use of the project site. On -site consumption of alcoholic beverages shall be accessory and subordinate to the principal retail use and alcoholic beverages sales for on -site consumption shall not exceed 20 percent of gross sales for the business. Use Permit Condition No. 10 ■ The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the City said records when requested. The time period for the purposes of conducting this review shall be in accordance with Alcoholic Beverage Control Board standards. s. Use Permit Condition No. 11 ■ The sale of distilled spirits for off -site consumption shall not exceed 15% of gross receipts of all off -site alcohol sales. The sale of distilled spirits for on -site consumption shall not exceed 10% of the total sales for on -site consumption of all alcoholic beverages. The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the City said records when requested. The time period for the purposes of conducting this review shall be 6 months. iL Use Permit Condition No. 12 ■ Gross receipts shall be reviewed by the City for purposes of compliance with the requirements of the Zoning Code and Use Permit if the use is believed to be operating in non - compliance. If the sales percentages review finds that the applicant is not in compliance, this application shall be brought forward to the Planning Commission for review. Use Permit Condition No. 13 ■ Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, unless the Planning Commission first approves a Use Permit. w Use Permit Condition No. 14 ■ The interior area authorized for on -site alcoholic beverage consumption in conjunction with a Type 47 license shall be limited to .... "Unit A2" with a maximum of 29 seats. The interior area authorized for the retail sales for general alcoholic beverages for off -site consumption shall be limited ... "Unit A1" ... maximum of 3 seats. On -site consumption of alcoholic beverages shall be prohibited in "Unit Al ".. . I s. 1 Use Permit Condition No. 15 ■ Hours of operation shall be from 10:00 a.m. to 11:00 p.m., daily for the retail portion of the project, and 1:00 p.m. to 12:00 midnight Fridays and Saturdays and 1:00 p.m. to 11:00 p.m. Sunday through Thursday for the eating and drinking portion of the project. Organized educational seminars shall not be conducted more than 3 days per week. Use Permit Condition No. 16 ■ Live entertainment may occur subject to the approval of a Live Entertainment Permit and dancing is prohibited. not occur more than 3 Live entertainment shall days per week. Music shall be limited to indoor areas only and all windows and doors shall remain closed during performances except for incidental ingress and egress of patrons. Management of the business shall make every effort to keep the doors closed during performances. s Use Permit Condition No. 18 ■ A Special Events Permit is required for any event or promotional activity outside the normal operational characteristics of this retail business that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. c� Use Permit Condition No. 20 ■ The alcoholic beverage outlet operator 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, if directly related to the patrons of the subject alcoholic beverage outlet. If the operator fails to discourage or correct nuisances, the Planning Commission may review, modify or revoke this Use Permit in accordance with Chapter 20.96 of the Zoning Code. THIS PAGE LEFT FLANK INTENTIONALLY M CITY OF NEWPORT BEACH PLANNING COMMISSION STAFF REPORT April 17, 2008 Meeting Agenda Item No. 2 SUBJECT: Revocation of Use Permit Nos. 2001 -005 & UP2002 -034 PA2002 -167) Sejour European Bistro & Lounge 3400 Via Lido APPLICANT: City of Newport Beach CONTACT: Rosalinh Ung, Associate Planner ( 949) 6443208, rung @city.newport- beach.ca.us PR Revocation of use permits for an off -sale alcoholic beverage outlet with accessory on- site alcohol consumption, food service, and live entertainment. BACK_GROUNQ On January 17, 2008, the Planning Commission unanimously voted to set a revocation hearing for the use permits. The hearing date for the revocation was set for March 20, 2008, at the request of the applicant. At the March 20, 2008, meeting the Planning Commission continued the revocation hearing to April 17, 2008, at the request of the applicant. Staff has no new information or analysis to present to the Planning Commission. The evidence that the terms and conditions of approval of Use Permit Nos. 2001 -005 and 2005 -034 were violated and that the establishment failed to fully comply with all the rules, regulations, and orders of the California State Department of Alcoholic Beverage Control were presented in the March 20, 2008, (Exhibit 3) and January 17, 2008, (Exhibit 4) staff reports. The applicants attorney has presented materials in opposition to the revocation (Exhibit 2). RECOMMENDATION Staff recommends that the Planning Commission adopt Resolution No. to revoke Use Permit Nos. 2001 -005 and 2002 -034 (Exhibit 1.) 43 Revocation of Use Permit Nos. 2001 -005 & 2002-034 April 17, 2008 Page 2 Submitted by: EXHIBITS 1. Draft Resolution No. 2008- 2. Letter from the Applicants attorney (including exhibits) 3. March 20, 2008 Planning Commission staff report 4. January 17, 2008 Planning Commission staff report (including exhibits) 0 Exhibit No. 1 Draft Resolution 45 RESOLUTION NO. A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH REVOKING USE PERMIT NO. 2001.005 AND USE PERMIT NO. 2002434 (SEJOUR EUROPEAN BISTRO & LOUNGE) ON PROPERTY LOCATED 3400 VIA LIDO (PA2002 -157) THE PLANNING COMMISSION FOR THE CITY OF NEWPORT BEACH HEREBY FINDS, RESOLVES AND ORDERS AS FOLLOWS: WHEREAS, Sejour European Bistro & Lounge ( "Sejour") is located at the northwest comer of Via Lido and Via Oporto and legally described as Lot 2 of Tract 1235; and WHEREAS, on April 5, 2001, the Planning Commission approved Use Permit No. 2001 -005 to allow a fine wine retail establishment to operate with a Type "21" Alcohol Beverage Control (ABC) license (Off -Sale, General) and Type "42" ABC license (On -Sale Beer and Wine, Public Premises) with periodic on4te wine tasting seminars and a parking waiver; and WHEREAS, on November 7, 2002, the Planning Commission adopted Resolution No. 1579 of Use •Permit No. 2002 -034, amending conditions of approval of Use Permit No. 2001 -005, authorizing a Type "47" ABC license (On -Sale, General- Eating Place) for on -site consumption of general alcohol beverages, live entertainment and expansion of hours of operation; and WHEREAS, pursuant to Secdon.20.96.040 of the City of Newport Beach Municipal Code, the Planning Director determined that there were reasonable grounds for the revocation of Use Permit No. 2001 -005 and Use Permit No. 2002 -034 and set a public hearing so that the Planning Commission could set a date to consider the revocation of Use Permit Nos. 2001 -005 and 2002 -034 ("Use Permit"); and. WHEREAS, after giving proper notice in accordance with law, a public hearing was held on January 17, 2008 in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. The Planning Commission unanimously voted to set a revocation hearing for the Use Permit on March 20, 2008; and WHEREAS, after giving notice in accordance with law, public hearings were held on Mare 20, 2008 and on April 17, 2008 in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. Evidence, both written and oral, was presented to, and considered by, the Planning Commission at this meeting; and WHEREAS, in January 2007, the Newport Beach Police Department received a verbal complaint that Sejour was operating as a dub for dancing and entertainment on Friday and Saturday nights. A subsequent inspection by the Newport Beach Police Department revealed that on April 15, 2007, Sejour had placed a wooden fence over most of the sidewalk adjacent to Via Oporto for the purpose of creating a smoking area with chairs and tables without proper permits from the City; and LAA(P City of Newport Beach Planning Commission Resolution No. _ Page 2 of 7 WHEREAS, on April 19, 2007, the Newport Beach Police Department inspected the property and observed that music was playing and could be heard through the open doors of the establishment, patrons were eating and drinking with full menus available, dancing was allowed, and bottle service was also available; and WHEREAS, based on reported observations by the Police Department and Code Enforcement it was determined that Sejour was operating in violation of Conditions 3, 4, 10, 13, 14, 15, 17, 18 and 22. Administrative Citation 12007 -0395 was issued based on these violations; and WHEREAS, on May 4, 2007, the Planning Department requested Sejoues gross receipts for review pursuant to Use Permit Condition No. 12; and WHEREAS, on May 4, 2007, an inspection of the interior of the property was performed by Code Enforcement. In the entrance, Code Enforcement Officers observed couches, tables and chairs. In Unit A -1, Code Enforcement Officers observed a small bar that had wine and soft drinks as well as tables, couches, chairs and booths. In the room directly after the entrance, Code Enforcement Officers observed additional couches, tables and chairs. In a small room near the bathroom, additional couches and chairs were observed. WHEREAS, On May 10, 2007, the business operator (Arthur Stockton) responded to the May 4, 2007 correspondence. In the correspondence, Mr. Stockton admitted that the use of the property was a combination of restaurant, bar and lounge. He also noted that the Use Permit, as currently written, would prohibit Sejour from successfully operating and that he could not comply with the conditions as written; and WHEREAS, Mr. Stockton admitted that total sales for the past 12 months ending May 30, 2007, were $730,871 and that the sales components break down as follows: 41 % food, 36% wine/champagne, 17% cordials/liquor and 6% beer. On -site sales were 78% of the total and retail sales were 22 %. The off -site sales ratios as to food, wine, liquor and beer were 48% food and 52% wine/champagne (no off -site sale of beer or hard alcohol): Based on Mr. Stockton's own admissions over 40% of his business comes from the sale and consumption of alcohol on -site; and WHEREAS, Mr. Stockton also admitted in his correspondence that it is virtually impossible for him to comply with the terms of the Use Permit because of the retail sales requirement. In the 19 months preceding the May 10, 2007 correspondence, Mr. Stockton admitted that less than $10,000 had been generated by walk -in consumer retail purchases. Further, Mr. Stockton admitted that most of the retail component was comprised of off -site events, such as corporate parties. Mr. Stockton also admitted in his correspondence that he was using Unit A -1 for the purpose of serving alcohol and food; and WHEREAS, On May 14, 2007, the Planning Department issued a letter requesting submittal of a use permit application for the new use as a bar or cocktail f,II LI` 1I City of Newport Beach Planning Commission Resolution No. Page 3 of 7 lounge or that Sejour operate within the current conditions of the existing Use Permit. No application for an amendment to the Use Permit has been received to date; and WHEREAS, On May 26, 2007, the Newport Beach Police Department conducted an investigation of the establishment and determined there were approximately 35 people in Unit A -2 and approximately 15-25 patrons in Unit A -1. Many people in Unit A- 1 were consuming alcoholic beverages, including one table that had a bottle of vodka that they were sharing. Administrative Citation No. 1168B was issued for violation of Condition No. 14 of the Use Permit; and WHEREAS, On November 9, 2007, the Police Department made an inspection and noted that alcohol was available via waiter service in Unit A -1 and throughout the establishment. Very loud music was playing from two very large speakers and dancing was occurring in the area known as Unit A -1. The Police Department also observed that 'bottle service" was offered. The price for bottle service was $300 for a bottle of "Grey Goose" vodka, while anything else was $250. WHEREAS, on November 13, 2007, the Planning Department issued a request for records to determine compliance with conditions of Use Permit No. 2001 -005. The Planning Department requested that the records be submitted by December 13, 2007; and. WHEREAS, on November 30, 2007, the Police Department made an inspection and observed that a private party was going on in the area of the business identified as Unit A -1 and there were approximately 4 tables set up in the middle of the room. Waiters were delivering drink orders to Unit A -1 and food had been served. Approximately 150 to 160 patrons were in the establishment. No ABC postings or maximum occupancy postings were observed by the officers. Patrons were dancing throughout the establishment; and WHEREAS, on December 12, 2007, Mr. Stockton informed the City that he had elected to sell Sejour and asked whether he could allow the new owner to submit records and resolve the other issues related to the business; and WHEREAS, on December 12, 2007 the Planning Department sent a letter to Mr. Stockton noting the violations at the property and noting that the documents related to gross sales requested on May 4 and November 13, 2007 had not been provided; and WHEREAS, on December 26, 2007, Mr. Stockton notified the City that Sejour was now closed because operation of the business was dependent upon their operation as a bar and restaurant as they bargained for in their lease; and NOW, THEREFORE, BE IT RESOLVED that based in the aforementioned findings, the Planning Commission finds as follows: �'I City of Newport Beach Planning Commission Resolution No. _ Page 4 of 7 Section 1. The Recitals above are hereby declared to.be true, accurate, and correct. Section 2. The Planning Commission hereby finds that the Administrative Record which was considered by the Planning Commission 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 and City including, without limitation, testimony received at 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 Planning Commission finds that notice of this hearing was in conformance with California law. Section 4. Pursuant to Municipal Sections 20.89.060.0 and 20.96.040, the Planning Commission finds as follows: That the terns or conditions of approval of the permit have been violated or that other laws or regulations have been violated. Sejour violated Condition No. 1, which requires substantial conformance with the approved plot plan, floor plan, and elevations. Significant changes to the floor plan have been made without approval by the Planning Commission, including the addition of a fenced off patio area along Via Oporto and the installation of tables, booths, and other seating areas. Sejour violated Condition No. 4, which requires future owners or assignees to be notified of the conditions of this approval by either the current business owner, property owner or the leasing agent. Future owners, operators or assignees are required to submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of the Use Permit. Sejour has operated at this location since November 2005 and, to date, Sejour has not submitted a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. Furthermore, the operator admitted in writing that he was not aware of the conditions related to the use of the property. Sejour violated Condition No. 5, which requires compliance with all federal, state, and local laws. There have been multiple violations of the Use Permit at this property, each of which is a violation of the Municipal 4A(� City of Newport Beach Planning Commission Resolution No. _ Page 5 of 7 Code. In addition, there are documented violations of the Building Code and ABC Regulations at the property. Furthermore, Sejour's blocking of the sidewalk during April 2007 is a violation of Municipal Code Section 10.50.020. ■ Sejour has been issued two citations for violations of the Municipal Code and these citations were not appealed and are now final. ■ Sejour violated Condition No. 11, which requires the applicant or operator to provide records of gross receipts of all off -site alcohol sales when requested by the City. These records were requested on May 4 and November 13, 2007 and have not been provided to date. ■ Sejour violated Condition No. 13, which prohibits the premises from operating as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code. Admissions by the operator and observations by Newport Beach Police Department (NBPD) Officers indicate the premises were not operating as a wine tasting bar, but instead operating like a nightclub, cocktail lounge or bar with full food service available. Sejour violated Condition No. 14 by exceeding the maximum occupancy levels and by allowing alcoholic beverages to be served in Unit A -1. NBPD reports indicate that occupancy loads have been found to be far in excess of the occupancy limits, thereby creating not only an unsafe condition but also a condition that is prohibited by the California Building Code. Furthermore, NBPD officers have documented that alcohol sales are occurring in Unit A -1 on April 14 and November 9 and 30, 2007. ■ Sejour violated Condition No: 15 by operating outside of the permitted hours of operation. NBPD Officers have reported on a number of occasions that Sejour was not operating within their permitted hours of operation set by the Use Permit and their ABC License. ■ Sejour violated Condition 16, which requires all windows and doors to remain closed during live performances except for incidental ingress and egress of patrons and prohibits dancing. On April 19 -20, 2007, NBPD officers observed that music was playing and could be heard through the open doors. NBPD Officers also observed dancing on several inspections at this establishment, including dancing on April 19, November 9 and 30, 2007. In addition, on November 9, 2007, a server informed officers that a portion of Unit A -1 is specifically kept clear for dancing. ■ Sejour violated Condition No. 18, which requires a special event permit for any event or promotional activity outside the normal operational , `r City of Newport Beach Planning Commission Resolution No. _ Page 6 of 7 characteristics of the retail business that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. NBPD investigations revealed that the occupancy levels within Sejour were well beyond those required by the use permit condition on November 9 and 30, 2007. Sejour did not file applications for special event permits for either date. Sejour violated Condition No. 23, which requires the posting of loitering, open container, and other signs specified by the Alcoholic Beverage Control Act. NBPD reports that no ABC signs were posted at this establishment. Sejour violated Condition 33, which requires the operator to control noise generated by the establishment and for the noise generated by the use to comply with the provisions of Chapter 10.26 of the Newport Beach Municipal Code. On April 19-20, 2007, NBPD officers were able to hear the music and the disc jockey from the City Hall parking lot. 2. The establishment for which the permit was Issued Is being operated in an illegal or disorderly manner. There have been multiple violations of the Use Permit occurring at this property, each of which is a violation of the Municipal Code. In addition, there are documented violations of the Building Code and ABC Regulations at the property. Furthermore, Sejoues blocking of the sidewalk during April 2007 is a violation of Municipal Code Section 10.50.020. Sejour has been issued two citations for violations of the Municipal Code and these citations were not appealed and are now final. 3. Noise from the establishment for which the permit was issued violates the Community Noise Control Ordinance (Chapter 10.26 of the Municipal Code). On April 19 -20, 2007, NBPD Officers observed that music was playing and could be heard through the open doors and could be heard from the City Hall parking lot. 4. The business or establishment fails to fully comply with all the rules, regulations and orders of the California State Department of Alcoholic Beverage Control. NBPD Officers have reported on a number of occasions that Sejour is not operating within their permitted hours of operation set by their ABC License. �51 City of Newport Beach Planning Commission Resolution No. _ Page 7 of 7 Sejour's Alcoholic Beverage Control license prohibits dancing. NBPD officers have observed dancing on several inspections at this establishment including dancing on April 19, November 9 and 30, 2007. Section 5. The Planning Commission finds that pursuant to the Conditions of the Use Permit allowing for revocation, Section 20.96.040 of the Municipal Code, the Administrative Record, the findings in Sections 1, 2, 3, and 4 above, sufficient grounds exist to revoke Use Permit Nos. 2001.005 and 2002 -034. Based thereon, it is hereby resolved that Use Permit Nos. 2001 -005 and 2002-034 are hereby revoked because the operator violated the terms or conditions of approval of the Use Permit. Section S. This action shall be become final and effective fourteen (14) days after the adoption of this Resolution unless within such time an appealed is filed with the City Clerk in accordance with the provisions of Title 20 Planning and Zoning, of the Newport Beach Municipal Code. PASSED, APPROVED AND ADOPTED THIS 17TH DAY OF APRIL 2008 AYES: NOES: ABSENT: BY: Robert Hawkins, Chairman BY: Bradley Hillgren, Secretary q5',`- at Exhibit No. 2 Letter from Applicant's Attorney (with Exhibits) �r�5 SII1:�I'1'.lIiI1 Jll�i.l�l March 27, 2008 Honorable Robert Hawkins Chairman and Planning Commissioners Planning Commission City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92658 650 Town Center Drive I 4th Floor I Costa ivtesa, CA 92626.1993 714- 513 -5100 mice 1 714-513-5130 fm 1 wwwjheppordmui#n.com Writer's Direct Line: 714424 -8227 rlbunt@sbeppardmullin.com Our. File Number: 17VL•136292 Re: Oversheet CUP Revocation Proceedings CUP's 2001 -005 at 2002 -034 Your Agenda - March 20.2008 & April 17-M8 Dear Chairman Hawkins and Honorable Commissioners: Thank you for taking action to continue this matter on March 20, 2008. We also wish you to know that the undersigned was in fact present, along with our clients, at the hearing on March 20, 2008. I arrived at or about 6:45, apparently right after you had taken the action to continue the matter and the Overstreets arrived shortly thereafter. We were subsequently informed of that action by Assistant City Attorney Aaron Harp. I had the hard copies of the materials that we had previously submitted via email with me to submit to you at the hearing that night. Since the matter had been continued, I chose not to interrupt your business with the submission. Mr. Bums, counsel for the Commission, has requested that we forward the hard copies and we do so via this correspondence. We enclose for your information the "hard copies" of our letter from the email of the night of the hearing. We also enclose binders for each of you with the exhibits we presented in the email attachments. It was our intent to utilize the letter and exhibits at the hearing. They will now be relevant to your proceedings on April 17, 2008. While there almost certainly will be further material we will submit, these will be part of the presentation and we ask that you familiarize yourself with them. In the time between now and the hearing, we also invite you to visit the premises. Our clients will be pleased to show you the nature of the establishment that is subject to the proccedings. We believe that you will see that it is not a beer drinking, twenty- something club. When operated correctly it serves an older, more sophisticated, clientele that is unlikely to cause problems for the City or its neighbors. To that end, please note Exhibit "B" in the materials ,J5` Honorable Robert Hav*1w Chairman and Planning Commissioners March 27, 2008 Page 2 provided, a compendium of letters of neighbors requesting the return of the Overstreet business and a denial of the revocation request. Sincerely, David R. Hunt Special Counsel for SHEPPARD, MULLIN, RICHTER & HAMPTON LLP W02-WEST:30 N00764334.1 Enclosures: • Binder of Materials Prepared for March 20, 2008 Hearing cc: Allan R. Bums, Esq. (w /enclosures) June S. Ailin, Esq. (w /enclosures) David Lepo, Esq. (w /enclosures) Rosalin H. Ung, Esg. (w /enclosures) X155 R March 20, 2008 VIA EMAIL AND HAND DELIVERY Honorable Robert Hawkins Chairman and Planning Commissioners Planning Commission City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92658 650 Town Center Drive I 4th Floor I Costa Mesa, CA 92626.1993 714 - 5135100 afkre I 714-513-5130 fm I wwwcshgWrdmuffin cam Writer's Direct Line: 714-424 -8227 dhunt®shgjwdmullincom Our FileNmiber: 0100492513 Re: 3400 Via Lido, Newport Beach March 20.2008 Agenda - Revocation Proceedings. Item 7 Dear Chairman Hawkins and Honorable Commissioners: This office and the undersigned have been retained to represents the interests of Dennis and Christine Overstreet with respect to the above - referenced proceedings. We thank you in advance for the opportunity to address the issues in your hearing. While we would like to make a substantial written presentation of the issues, time has not allowed us to do so. Please accept this correspondence outlining the issues and transmitting evidence important to your consideration of this matter. The Overstreets have been working with City staff before and since your January 17, 2008 meeting. They had hoped they could resolve the issues related to the revocation proceedings in that contot and that this formal revocation hearing would not have to go forward. In addition, during that time, they have been attempting to work out logistical issues related to the utilization of the premises. They were not able to resolve those issues in the time frame provided. Further, in light of their desire to resolve the issue at the staff level, this office was not retained until Wednesday, March 18, 2008. In light of the above circumstances and the difficult task of preparing for defense of the revocation proceedings in two days, we request on behalf of the Overstreets that this hearing being continued for a sufficient length of time to allow for defense to develop and to address the logistical issues related to the use of the property. The Overstreets are also willing to i y y5(p Hi�; .... P.1f 11 . X11 1,1,1\ —IkIIW March 20, 2008 VIA EMAIL AND HAND DELIVERY Honorable Robert Hawkins Chairman and Planning Commissioners Planning Commission City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92658 650 Town Center Drive I 4th Floor I Costa Mesa, CA 92626.1993 714 - 5135100 afkre I 714-513-5130 fm I wwwcshgWrdmuffin cam Writer's Direct Line: 714-424 -8227 dhunt®shgjwdmullincom Our FileNmiber: 0100492513 Re: 3400 Via Lido, Newport Beach March 20.2008 Agenda - Revocation Proceedings. Item 7 Dear Chairman Hawkins and Honorable Commissioners: This office and the undersigned have been retained to represents the interests of Dennis and Christine Overstreet with respect to the above - referenced proceedings. We thank you in advance for the opportunity to address the issues in your hearing. While we would like to make a substantial written presentation of the issues, time has not allowed us to do so. Please accept this correspondence outlining the issues and transmitting evidence important to your consideration of this matter. The Overstreets have been working with City staff before and since your January 17, 2008 meeting. They had hoped they could resolve the issues related to the revocation proceedings in that contot and that this formal revocation hearing would not have to go forward. In addition, during that time, they have been attempting to work out logistical issues related to the utilization of the premises. They were not able to resolve those issues in the time frame provided. Further, in light of their desire to resolve the issue at the staff level, this office was not retained until Wednesday, March 18, 2008. In light of the above circumstances and the difficult task of preparing for defense of the revocation proceedings in two days, we request on behalf of the Overstreets that this hearing being continued for a sufficient length of time to allow for defense to develop and to address the logistical issues related to the use of the property. The Overstreets are also willing to i y y5(p ssEerAet, MUUM ateeM & eAMPM u,P Honorable Robert Hawkins Chairman and Planning Commissioners nor 20, zoos Page 2 continue discussions with staff in attempts to resolve the issues consistent with City policy and the conditional use permit. We note that the undersigned immediately upon being retained, contacted the City staff through its attorney. We requested a continuance. The attorney contacted staff and obtained a response that they were unwilling to make such a recommendation to this Commission, but that were five to raise the issue at the time of hearing. We enclose a copy of the correspondence to your attorney confirming the circumstances of that request. We note that the continuance of this matter will not be harmful to the City of Newport Beach. The property is currently vacant. The entity subject to this enforcement action, Sejour European Bistro & Lounge ("Sejour") and its principals, Arthur and Carolyn Stockton, are no longer in possession of the property and are no longer operating the establishment subject to this enforcement action. Further the Overstreets have already confirmed in writing to the City staff that they will not operate any establishment on the premises until the issue of revocation of the conditional use permit is resolved. We refer you to a letter from the Overstreets to the City staff presented to you at page 231 of your agenda packet ( "AP "). Therefore, continuance of the hearing will not cause an inconvenience to the City nor will it adversely impact any City interest. OPPOSITION TO REVOCATION Since we are compelled to proceed anticipating the hearing on the staff recommendation of revocation of the permit, we will address the issues as best we can in the short time frame provided us. We note that as a result of the time fiwne, we will not address the substantive questions of Sejour's violation of the permit. Instead, however, we point out that this proceeding is really against the interests of the Overstreets, but none of the accusations arise from the time period when the Overstreets operated the establishment. All of the accusations regarding permit violations occurred during the last eight months of Sejour's occupancy and use of the premises. When the Overstreets learned of the issues, however, they took immediate action to deal with them, but received assurances from the City that their involvement was not needed at the time. Additionally, the Overstreets have not been properly notified of these enforcement proceedings and in fact were left out of the loop in spite assurances from City staff that they would be contacted should there be problems with the premises. Under the circumstances, therefore, there has been a violation of the landlord's right to notice of the violations and their right to attempt to cure the violations prior to the institution of revocation proceedings. , 5'1 SREPPARD YULUN MM & HANPUM t.t.P Honorable Robert Hawkins Chairman and Planning Commissioners March 20, 2008 Page 3 1. Tr► EAcrroNASrsWOuToFSkjoun 's OPERA no If you review your staff report you will see that all activity upon which this proceeding is based arises out Sejoues operations, not the operations under the Overstreets. As shown in the attached Iease (AP, 229) Sejour took over operations effective October 15, 2005. The activity that gives rise to this proceeding all took place in 2007. None of that activity was based upon the conduct of the Overstreets. 2. THE RLvmcA 77ONAc77ON IS, ArowEyEg, PgLcM AgAINST THE OMFS A conditional use permit is a vested p %petty right that nuts with the land. (Goat Hill Tavern v. City of Costa Mesa (1992) 6 Ca1.App.4 1919. Thus it is the property owner who is affected by its revocation. Here the Overstreets are the property owners. Asa result, this enforcement action is really directed against them. As will be discussed at the hearing, however, the Overstreets have always ailed responsibly under the CUP. They: • Operated without citation or problem from 2001 through 2005; • Acted responsibly in leasing the premises to the owners of Sejour (see Exhibit "C" and the Lease in the Agenda Packet, beginning at p. 229);1 • Acted immediately to address the permit violations when they first came up in May (see, Exhibit "D "); and • Took immediate action to address the issues when they learned again of them in January (see, Overstreet letters in Agenda Packet). We note that the staff has given a summary of alleged issues during the Overstree& operations arising in 2004. We object to that material in its entirety. No communications with the Overstreets were shown. No citations were issued. To raise this material now four years later is entirely inappropriate and we respectfully demand the Commission not consider it under the circumstances. To do so would clearly violate the Overstreets procedural due process rights. ' We note that staffs file contains are two lawsuits filed by Mr. Stockton, Svelte Body Centers, Inc. and Sejour, LLC. These lawsuits have no relevance to this matter and contain allegations which are soundly disputed, and which the Overstreets consider outright fabrications. We object to their consideration as hearsay and Jacking any foundation of truth and request that they not be considered in any way. qty sHMUW rdUUM MCHrM a HAM MUr Honorable Robert Hawkins Chairman and Planning CommWioim March 20, 2008 Page 4 3. PRoc Empi G TO REVOKE THE CVPATTHIS TIME VIOLATES THE 0Mas ='s DUE PROCESSRIGHM Staff never gave notice to the Overstreets of the problems with the operations of their property. They never gave the Overstreets the opportunity to cure the alleged violations. All of the City contact was initiated to the Stockton, the operator of Sejour. In fact the Overstreets only learned of these difficulties inadvertently in May of 2007 through discussion with a neighbor. In spite of the lack of notice, however, the Overstreets immediately contacted Code Enforcement Officer, Charles Spence, when they learned of the difficulties. Christine Overstreet talked with, and met with, Charles Spence in June of 2007. Mr. Spence indicated to Mrs. Overstreet that the tenant, Arthur Stockton, was working with the City and it looked like they would resolve the issues related to Sejour's operation through an amendment of the conditional use permit. The Mrs. Overstreet thanked Mr. Spence for his time and requested that Mr. Spence contact her immediately if there were any further difficulties. Mr. Spence assured her that he would. Mrs. Overstreet accepted those assurances and ultimately relied upon them to her detriment. In spite of these assurances and requests, the Overstreets were never notified of further difficulties which began to be experienced in November of 2007. All of these facts violate the letter and the spirit of the law both for procedural due process reasons, but also the intent of the Administrative Citation provision of the Newport Beach Municipal Code. (Newport Beach Municipal Code Chapter 1.05 et. seq.) The Overstreets did not receive any notice of the revocation proceedings either. Their first clue that there was a problem came after the revocation proceedings had been scheduled. They heard from their tenant, but never received any notice, nor any letter from the City. Yet in spite of that fact, they took immediate action to remedy the perceived difficulties. They initiated proceedings to evict Sejour, and the property was abandoned. They wrote the City assuring it that it would not operate in the property without a resolution of these issues. They met with staff repeatedly to address the alleged violation and permit ambiguities. Yet they are now faced with this formal revocation proceeding. Li SHEPPARD MULLIN RICRM & HAMPTON LLP Honorable Robert Hawkins Chairman and Planning Commissioners March 20, 2008 Page 5 The evidence will show that the Overstreets have always acted responsibly with respect to the property; that the only activities upon which permit revocation is based arise from their former tenant's actions; and that they did not receive notification of these alleged violations and thus did not receive an opportunity to solve the problems. In spite of all of those facts, however, when they did learn of the situation they, acted responsibly to end the activities and have committed to operations consistent with the CUP. Yet staff still seeks to revoke the CUP. To do so would be unjust, without basis and a violation of the Overstreets' due process rights. Therefore, we request this honorable Commission reject staff's recommendation and allow the Overstreets to continue to operate under the CUP. Additionally, the Overstreets are willing to discuss clarifications of the CUP that can assist in resolving any of the issues with which we are faced at this time. Sincerely, 131a R. unt Special Counsel for SHEPPARD, MULLIN, RICHTER & HAMPTON LLP W02- WEST:3DRH 11400754313.1 Enclosures: • E)d6itc A through H cc: Dennis and Christine Overstreet Conditional Use Permit — Revocation Dennis and Christine Overstreet Sejour, LLC Exhibit A Latter to Counsel .hoe S. Shin, , dated 3/19/1008, from A -I thru A -3 David F- Hunt, Esq. Letters of Support from Gondola Company of Newport Exhibit B A Square LLC 13-1 thru B-4 Charlie's Locker D. Kruse Exhibit C Email Correspondence from Arthur Stockton to Christine and G 1 thin C-4 Dennis Overstreet Exhibit D Conditional Use Permit Compliance Efforts D-1 thru D-19 Exhibit E Exiubit in 2002 CUP Proceedings: E 1 thnt E -11 Overstreefs Wine Bar Mean Exhibit F CA Department of Alcoholic Beverage Control F -1 thtu F -2 License Summary — Sejour LLC Exhibit G Notice of Final Approval CUP Amendment and Conditions, G -t thm G -7 dated 12/9/2002 State Bar (CA, AZ) Information: Arthur F. Stockton Exhibit H Carolyn C. Stockton H -1 thru H -6 NV Secretary of State Information: Svelte Body Centers, Inc. q�y S[IF'I'I'AI "dUL LI ... March 19, 2008 VIA FACSIMILE (310) 532 -7395 June S. Ailin, Esq. Aleshire & Wynder, LLP 1515 West 190th Street, Suite 565 Gardena, CA 90248 650 Town Center price i 4th Floar I Costa Mesa, CA 926261993 714.513 $100 dre, I 714-513-51301a i WWWJheppardmuRla.mm Writer's Direa Line: 714 -424 -8227 dhunt@sheppsrdmullm.can Dur. File Number 0100- 092513. Re: 3400 Via Lido Newport Beach Planning Commission Agenda, March 20, 2008, Item 7 Our Clients: Dennis and Christine Overstreet Dear Ms. Ailin: By way of confirmation, this office and the undersigned represent the interests of Dennis and Christine Overstreet, the owners of 3400 Via Lido, Newport Beach. As you know, the Overstreets own the property and had leased it to Arthur Stockton dba Sejour European Bistro and Lounge. The property is now scheduled on the March 20, 2008 Planning Commission Agenda for consideration of revocation of an underlying conditional use permit applicable to and running with the property. As we discussed over the telephone, our office and the undersigned were retained by the Overstreets to assist them with respect to this matter yesterday morning. I then called and spoke with you and requested a continuance of the revocation hearing to a later date in order to provide for time to prepare for the hearing. In response to your questions I indicated it was the Overstreets' intention to retain the permit and continue to operate the facility consistent with the conditional use permit and it would be helpful to them to have a continuance to we if they could work out the logistics for that continued operation as well. You consented to contact City staff to determine whether or not a continuance was a possibility. We spoke later in the day, just after 5:00 p.m. In that conversation you indicated City staff was not willing to recommend a continuance at this time and wished for the hearing to go forward on Thursday, March 20. It was also discussed that we could, of course, request a continuance at the hearing, but the hearing would proceed as scheduled. While we are disappointed that a continuance of the matter has not been agreed to, especially in light of the fact that the Overstreets took immediate action to stop the conduct of A -1 lO SHEPPARD.MHWJM RMRM & HAMPTON UP Jerre S. Ai1in, Esq. March 14, 2008 Page 2 their tenant when they learned of the severity of the situation and, in fact, the establishment is not operating at this time, we appreciate your courtesy and cooperation in raising the issue and your prompt response. At this time we will do our best to prepare for the hearing but are not in a position to address many of the substan ive grounds raised in light of the short time frame available for preparation Sincerely, a 41nt Special Counsel for SHEPPARD, M[JLLIN, RICHTER & HAMPTON LLP W62 -WEM.3 DRHI%W753S25.1 cc: Dennis and Christine Overstreet A -2 V0 Transmission Report Data /Time Lo<ai tD LOCBf Name COMOSAY LOCO This document was confirmed. {reduced sample and details below} Document Size Letter -S OmY 1 MTNeairOel I RMr.G 1111I•ae i 1 e a s •rNMw1411 uladplle l �OYY -ww FAC47 M.1 LE COVER SHBE .3=Ff�67ZtNWj= /lF=M)!ffiAO910w AMe, M"196:0136 iaTYaelXn ®ilgalxaat '' 11lsuoo Ar LA16,t1Ae P @)JWM s . A1AA: aaaAL imt U AI08 Vb1Lb DItlRIbtR- Aem4W1062962078.1 7 O¢ DaWAtlCYWYAOnabY MCBAaI 1 I �ostlY�llbtrdoAN +OYewiFeb9r_- _ -_�_. -•wMs ] Y 1 5 r f T __ Total Pages Scanned 3 Total P890S Confirmed : 3 3- 10 -09: 2:31PM 714 b19 S13D SHEPPARD MULLIN OC SHEPPARD MULLIN OC No. Doc Remote station Start Time Duration Paged mod* comments Results I 118 +38092E139131osa2730 3 -t9 -081 2:29PM 1.". 3/ 9 EC CP 14.4 Notes . EC: Error Correct BC: Broadcast Send CPC Completed HS: Most Scan MP - Host PDX RE: Reiland MP: Multi -Poll RM: Receive t0 Memory HP: Host Print HR: Host Receive PD: Polled by Remote P0: Polling C Remote OR: Document Removed FO: Forced OUtPUt FM: Forward MallboX Doc MB: Receive t0 MaIIDOX PI: Power Interruption TM: Terminated Dy user WT: Welting Transfer WS: waiting Send A -3 ql�J Exhibit No. 6 q(, e GONDOLA COMPANY January 17, 2008 To Whom It May Concern: We have been merchants in Lido Marina Village for 15 years. We have no objection'to the Ovemtreets operating a quiet wine bar across the street from our offices in accordance with the use permet When they first opened, their buss, Ctverstraefs Wine Bar, was an asset to our area and there were no problems with their patrons. It was only when they ceased Their operation and new operators tumed the establishment into a bar/nightclub that big problems began in our area: vandalism, loud music, unruly crowds,. fights, etc. As long as the use permit is not amended to allow the building to be turned into a nightclub again, we would support the continuation of the existing use permit merely , e Vot, e" James Mahoney Gondola Co. of Newport & . Gondola Romance (949) 675 -4730 Lido Marina Villiage -3400 Via Oporto, Suite 103 - Newport Beach, CA 92663 - 949 - 675 -1212 - Fax 949 -675 -8812 E -mail: gondolaNB@nol.com Web site: wwwgondolas.com ' B -3 nl �� ". mob i. ni �i City of Newport Beach Newport Beady CA 92863 Attn: City Manager RE: (hwstireet's Wine Merchant & Bar We weIcoine the opportunity to embrace OverstreWs Wine Merchant & Bar in our community once again. During the more than three year \- period in which the Overstreees operated their ibcility as our next door neighbor we never had any issue with them, their staff or their customer's. We frequented their store often and recommended It highly to family. friends and customers. The same cannot be said for Sgour - Good Riddancet Diana ,Thomas Managing Member B-2 4 �a is ,s;.. .. a...�r.....w.+ n� �. .#4•(0..1.: `t:ti. �.. p _ �4y carrcti�z� Co eM 7�T 7`71LG , T-' /�Ewj+T /CAGN /.0 (JN$1,pE)21rIG- T�C,C1� A&t/OCA"O/ ^/ OF 77YE r/TE PCA -w11T Fore, ✓A �..Jo. RE�ro TE 7-fff OvrkCr �� M4ve 6e &-1 A,^l A.fiscy- ,sac O /or � /H ,4A4F,4 FDA- WrArr ��A�ts . -� t S �q 77� Amrlwt2 t- not� f-F X�/f ! 6A Xr— ova—, I s /�rz 6vr7rfl "47- 7-MA 13C 14N ASSE'7- To t,1190 Lowin,dMr� S/NC�iCEG. 3410 Via Lido - Newpon Beach. CA 92663 • 949 675 -6230 Fox: 949 675 -6335 B-3 qv Garcia, Jay From: Buzz Person [buzzlaw@buzzperson.com] Sent: Thursday, September 04, 2008 11:31 AM To: Garcia, Jay Cc: Lepo, David; Parnell Delcham; Tim Goodell; Liza Goodell Subject: A Restaurant Jay, As I indicated in my email of yesterday, I want to bring you up to date since we met on August 21st. With respect to the parking issue on Santa Ana and La Jolla, the management at the A Restaurant has implemented the following: 1. Employees have been advised of the problems and the complaints and have been requested to use the public lot on Old Newport Blvd., although I have been informed that they are also parking on the street on Old Newport. I visited the restaurant last evening around 6:00 p.m. and observed that there was only one vehicle parked on the hill going up Santa Ana and I observed no vehicles on La Jolla. 2. Lisa Goodell, one of the partners is in the process of directly contacting the parties who filed grievances with the City as a result of the public notice. In addition, we are considering doing a mailing to the entire list indicating a spirit of cooperation and that if there are any problems, giving contact information for the proper party to contact so that the problem can be corrected or rectified. 3. Managers (including kitchen management and upper management) have been instructed to park on site in the parking lot of the restaurant. This would take up to about six cars off street parking at peak hours. As a footnote to the parking issue, it is my understanding that one of the employees vehicles which was parked on Old Newport Blvd. was severely "keyed" during the week that we were away. The other two "keyingn incidents were in months past and up on Santa Ana. As a further footnote to the parking issue, in reviewing the correspondence concerning the application for the outdoor dining area, it appears that the parking issue was the main concern of the correspondence although I do not believe that it is related to the request that has been made. Our working with the neighbors will be ongoing to mitigate the overall operation and in the spirit of being a good neighbor. With respect to the noise generated late at night, which would be long after the outdoor service of food and liquor would have ceased, according to the condition proposed by the PD, the following steps have been taken: 1. Valet parking employees have been instructed to attempt to keep order with the exiting guests, explaining that there are neighbors in the area that might be disturbed. 2. Kitchen and maintenance employees have been instructed to, and have implemented, a program of not dumping trash during late night or early morning hours. Key management personnel, on site, have been given specific instructions concerning maintaining all of the above actions as an ongoing policy of the restaurant and have been instructed to take immediate remedial action in the event there is a deviation from any 1 a'1b of the above or any further complaints We believe that this goes a long way to rectifying the concerns expressed to us by you and David Lepo on August 21, 2008. If you need further information or comment, please do not hesitate to contact me. Regards, James C. "Buzz" Person Attorney at Law 507 29th Street Suite A Newport Beach, CA 92663 Telephone: (949) 673 -9201 Facsimile: (949) 673 -0774 email: buzzlaw@buzzperson.com The information contained in this e-mail message is intended only for the CONFIDENTIAL use of the designated addressee named above. The information transmitted is subject to the attorney - client privilege and /or represents confidential attorney work product. If YOU are not the designated addressee named above or the authorized agent responsible for delivering it to the designated addressee, you received this document through error and any further review, dissemination, distribution or copying of this communication by you or anyone else is strictly prohibited. IF YOU RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY ME IMMEDIATELY BY TELEPHONING THE SENDER NAMED ABOVE AT 949- 673 -9201. Thank you. ql1 RFSIOfNi[AL 6 G04YERGfAF tBiERfOB OESISN TOWmtmoucmmm thmmmt0 mvdathg @ EE34D�YhiidD.ltl�FlFl�sd at> �Uop�.The�F'stra�¢I�ehaenmas�eh Fhr i8 tde ikb 4�e. VIe WENFI� W ®NWf118 the UNeI'sd'ee68 hY�k Ea t� � I>� Eglu off ol k Mil, B4 �� a- Christine Overstreet FMP: Arthur Stockton [arthumt xkton @sbcglobal.net) Tuesday, September 27, 2005 9:56 AM ommr&W@adelphia.net Chris: one other quick note, I do not and have not in any way questioned your integrity. In fact, I found both of you quite refreshingly honest and that is a major incentive for me to move forward, as nobody can ever anticipate all the issues which might arise in a transaction and the good faith and integrity of the parties is ultimately what makes a transaction successful. I did receive the use permit. I simply believe that Renetta's interpretation of it is (as it should be when she represents you) aggressive. Paragraph 10 requires any liquor license transferee to notify the City that they accept the terms of the Use Permit as amended. The terms of the permit specifically reference the locations in what is designated Unit A -1 and A -2 as to separate the retail store from the bar. Then the permit says any change in the character of occupancy requires approval. Given that the permit is for a Retail Wine store primarily with the on -site consumption limited and adjunct, putting the medical practice in the retail wine store space and combining the retail wine/ bar into one is likely a change in the character of occupancy requiring approval. While we all believe it would be approved as the business is downsizing, you don't have the time for us to pursue this before we sign a lease. Without pursuing this, we cannot covenant to maintain the liquor licenses if the City pulls the use permit and we cannot compromise so far to maintain the permit that the issue prevents us from doing our core business. Our solution is that we will purchase the Liquor Licenses but if the City pulls the permit and /or makes the requirements to maintain it such that we cannot do our core business (this is a space issue), then we would no longer have the obligation to maintain the liquor licenses and you have the right (but not the obligation) to buy them.back. I hope this helps you understand what the issue was and I hope the solution is satisfactory. 1. -qtta will advise you accordingly. ai A I Christine Overstreet mom: Arthur Stockton [arthurskxMon®sbcglobal.net) t: Saturday, October 01, 2005 11:21 AM coverstreet @adelphia.Itet Subject: laidsciln® Dear Chris and Dennis: In getting ready for the 15th, would it be alright if we had our people (at our expense) address the overgrown landscaping? In addition to normal trimming, we would like to trim back the trees out iron o-•i1nM%se the sign. Also, we may eventually want to put nice flowers where the existing non - flowering green foliage is along the side. iurther, who owns /maintains the pots along the sidewalk? once again, we would like to upscale the flowers, etc. (and maintain them in good condition at all times) if that is possible. Frankly, we would like to upscale the pots tool Also, if we wanted to use some other decorative pots along the'sidewalk on the street side, is that possible? One other thing we are examining is egtgrior_1gAtAg• We might want to wash the walls (artistically) with very upscale lighting, and outline the roof perimeter in fine white band lighting. We are having a lighting expert look at the situation and give us an illustration/ proposal. I just wanted you to be thinking about it. Again, everything is being considered on a Ritz- Carleton type of approach. The general idea of all of this is to make the exterior appearance and'maintenance every bit as important as the interior. The signs have been ordered and will be ready on the 15th. They will just replace the existing signs so they will go up in just a few minutes. Unfortunately (or fortunately) entire canvas out front had to be replaced for the new signs. At least everything will cud look brand new. I am also now understanding that there is no stove.kAJQUA. Of course, we have to serve some kind of food to maintain the liquor licen se e is thse and I have no problem purchasing a stove for this purpose. However, there is no _or vent. Again, we have no problem installing a hood or vent, but is there a reason why there sn't one now, i.e. it is not permitted, etc.? Thanks and I hope you are experiencing some relief now. agMig�1is being very helpful and appears to be capable of maintaining the status crao while we work out the logistics and permit issues so that we can o +iS'P�fE'EndeTffi6T�g�e'�usiness. My contacts at the City are adv_ isinq me to move ,cautioV gjy_alld R9t sin er a -�!.c an,gge� tfie current opQrations until we a o feel for the City's attit S`o'we wig adt'be putting up aRs gn" of i the ' Ende��sTt1858 - taiCrY �5��conf ident in our position - Because we want to guard your reputation zealously, and people may ask about the change, what would you like us to say to anyone who might inquire? Arty-• . /if I C -2 ,1. I age a va i Christine Overstreet Fromm: Arttuar Stodaon larlhurstoc*tonosbeglebat.net] Sent: Tuesday, October 04.200514:45 AM To: cb+rershreetCadeiphia.nat Subject: tie: more Christine: Again, thanks for the information. You can drop off at the post office until we get a dedicated fax in. The funny thing is that we have a fax at the house, but these computers search phone lines for fax tones and before you kamw,it someone has taken over your fax for their own personal advertising. Then I wonder why they do it, because I am so offended that I would never buy their products. Anyway, we can turn on the fax manually if you want to call me. I am at home this am - 949- 675 -M74. I was hoping we could keep the old phone number so that we might be We to book some of the private parties You mentioned if they became available. Jamie thought it important. At the same time, I understand and do not want to preclude any of the opportunities you earned and bunt there. Maybe you could send us any events that you cannot handle at your new places. Likewise, I hope we can feed customers to your new restaurants as well. We will just have to evaluate the efficacy /advisability of the cooking situation. We will likely reach the same conclusions you did. I do on want the names of those permit helpers you mentioned I remain quite paranoid .about changing ANYTHING without the City in the loop and happy. It would be nice to nave someone help us who is wired into the politics. We will change the locks to seem everything. We use Balport as well. Have you had an theft problems with the wine over the years? I would appreciate any input you have on any theft issues - bar or wine. We remain interested in purchasing the building. I know you have a lot on your plate and, as 1 told you before, nobody understands your position better than Carolyn To this very day she has not forgiven me for the position I put her in with the businesses when the kids were young. She was beside herself most Of the time and I made it worse with my travel schedule. Worst of all, I missed a lot with the kids when they were growing up. I don't think any amount of money is worth that and I would do things quite differently if given anotber chance. If it would W helpful and your plate has room, would you and Dennis lice to discuss the sale of the building? Art The pot around the perimeter are taken ewe of by lido Marina Village. They be" to them. Donna is your contacL The phone number is one the wall dkecdy across Via Oporto. She handles all of the leases for the waterfront and manages the Village. Sorry, I don't recall her phone number. line of the Olive Trees C =3 i niai�nna ,agoZ. uit Yes SBC Is fine phone line. M will arrange to remove our phone numbers as of 10/14. We will keep our main line and rarer our customers to our Beverly Hills store since we have a lot of overlap between stores. Yes, Kyle Is confidential to Jamie. Thank you. Kyle leaves for Mau€ on Thursday anyway. How do you want me to get the information to you since you don't have a fax. Shah t drop it at your mail box on Riverside? Hood - we looked at it and didn't want to deal with a Grease Trap so we dropped the matter. school. 'WG on Satwday 10/15 is tine w€ih me. I'll video tape on Friday 10 fl4 when my kids are in Are you changing the locks? Belport is familiar with the guikding, ff you don't want to you can simply change the entry codes on the Alarm System which Is Bay' Security. Contact is Janet C,arirgetr 65045560. As mentioned, the cost is $345.00 per months which Is pretty reasonable. They also send you a monthly report of Wout per code. You can have up to 6 € xKvldual codas. Chris 0. C-4 10/4/2005 ajI Exhibit No. D 41 NEWPORT BEACH ADMINISTRATIVE SERVICES May 15, 2007 SEJOU& LLC 3400 Via Lido Newport Beach, CA 92660 PERMIT TO CONDUCT LIVE ENTERTAINMENT The City of Newport Beach does hereby authorize live entertainment activities to be conducted at 3400 Via Lido, Newport Beach, CA, 92660 and this permit must be posted at the location. This permit is issued to Sejour, LLC and is not transferable to another location or entity. The approval of this permit is contingent on the compliance with the regulations for operation as defined by Newport Beach Municipal Code Section 5.28.041 and the following specific conditions: 1) Hours of live entertainment shall be limited to: 1:00 p.m to 1 I :00 p.m. Thurs. 1:00 p.m. to 12:00 a.m. Fri., Sat., & Sun. 2) Live entertainment is permitted, Fridays, Saturdays and Sundays. On alternate weeks, Thursdays, Fridays and Saturdays. 3) The live entertainment shall be limited and confined to the interior of the structure. 4) Dancing is prohibited in conjunction with this facility. 5) Comply with all conditions of the. Use Permit. This permit may be revoked for any of the following reasons: I) Failure to comply with the above stated conditions. 2) The permitee has ceased to meet the requirements for issuance of the permit, 3) The establishment has been operated in an illegal or disorderly manner or in violation of any of the regulations set forth in Section 5.28.04. 4) Music or noise from the establishment for which the permit was issued interferes with the peace and quietness of the neighborhood. 5) The permittee or any person associated with him as principal or partner, or in a position or capacity involving total or partial control over the establishment for which this permit is issued, has been convicted of a criminal offense involving moral turpitude. e Approved by: Date: l S- Permit Conditions Acknowledged Date: � /�/ cc: City Manager _Police Department (' D-2 3300 Newport Boulevard - Pont Wee Box 1768 - Newport Beach, California 92658 -8915 Telephone: (949) 644 -3141 - Fax: (949) 644 -3073 - www.elty.netvport- beach.ca.us t1 r 6 RECREATION & SENIOR SERVICES Wes Morgan, May 17, 2007 Sejow /ATthur Stockton 3400 Via Lido Newport Beach, CA 92663 Mr. Stockton, Qn Wednesday, May 160i you submitted 3 Special Event Permits for events planned on May 17, May IS', an May 190' at Sejour (3400 Via Lido). You had been previously advised that Level 1 Special Event Permits are required to be submitted a minimum of 6 calendar days prior to the event dates. Therfore, the permits you submitted for May 17th, 18th, and 19th, 2007 are hereby denied and you are not authorized to hold these events. In the future, we will be happy to process your permit requests if they are submitted with at Ieast 6 calendar days notice. If you should have any questions, you can contact our office at (949) 644-3151. Sincerely, Adtt- 91 � Matt Dingwall Recreation Supervisor Cc: Sean Levin, Recreation Superintendent Jay Garcia, Senior Planner Patrick Alford, Senior Planner Charles Spence, Code and Water Quality D-2 3300 Newport Boulevard • Post Office Boor 1769 - Newport Beach, Caltfornta 92658 -8915 Telephone: (949) 641 -3151 • Fax. {9491$44-3155 • www.city,newpor t- beach.ea.us A atV 1 VI 1 Christine Ovew eet From: Arftr Stockton jartasajour.us] Serf Friday, June 15, 2007 2:49 PM To: oaverstree%adelphia.net Subject: fifty tUse Permit Dear Dennis and Christine: 1 plan to file for a Use Permit Amendment on Monday. WR either of you be available for a signature as property owner On Monday? We are going to file for the ability to have an integrated retall wine store and restaurant. We Will work our way beds from there. Business continues to be very strong. Unfortunately, we are turning away more than 100 people per weekend because of our operating limits. Everyone at the City seems to have a good attitude. I am optimistic that we can get most of what we need. I continue to appreciate your indulgence in this difficult time. I_� 2/25/2008 D-3. 0 Christine Overstreet Frown: Arlhur Stockton [artQMour.us) Sent: Friday, June 29, 20071:38 PM To: ooverstrestQadeiphia.net Sub)eft Miscellaneous Items HI Demis and Christine: We will have the rent check on Monday. We will put it in your maillm across the street unless otherwise t whi ted. I have received several notices now of a pending Forcible Erty and Detainer in Orange Courtly SuperW Court. In my conversation with Christine last Friday, she told me it had been withdrawn. I am operaft in r eltance on that statement. The roof is still an open item that needs to be addressed. The roof has leaked every time it has rained since we took possession of the bulkfing. Acowdirtgty, we are not responsbe for these repairs or consequences. The roof Sill leaks in the women's restroom and lately even leaks when the air oorditlaw sweats. The drywall also needs to be repaired on the ceiling. I am simply too busy to address these items and need you to take tetra of it. I will make myself available to meet the repairmen. It Is my strong opinion that the roof reeds to be reptaced. The damages that could ensue if It keeps looking are considerable. Also, there is a strung risk of black mold. Finally, I should have the use permit amendment finataed this coming week. I was able to get the radials map and address 1813919. 1 will try to have this to you Monday or Tuesday and would like to Me with the City by Friday. I appears that the worst is behind us. Business is very strong, even through we are operating with our hands tied .iehi idour backs. Sincerely, D64 q� -)-- 7/1/2007 Sejour, U-C 3400 wi$ Lido Newport Beach, California 92663 (949) 310.7698 August 1, 2007 Phmning Departand City of Newport Beach 3300 Newport Boulevard Newport Beach, Catifamia 92658 RE: Amendraw to Use Pamit Num ber 20014W —3400 V'z%Udo AUwbed is the proposed aaWndwast to the above -ref -WV pefmit $fie tlae are no physical changes whatsoever proposed to the structure, we are rogg tint the requhmmmt to submit complete sets of bb*rim be waived. We bave enclosed the bhle rlat relevant to the space utilization issues as well as an c0lanataiy tRhabation which should be adequate for the decision n u*mg pr oom As you already know, this has been a very difficult and obWkn&g experience lot our basic m We wwW appreciate you expediting tins pmess to the mda t possible so than our business bma lice best dmnoe to suvive. T F. S fi D-5 CITY OF NEWPORT BEACH COMMtMWAMMCONOWCDSVSLOPMOrr PIANNINO MWART114W u a C „r 3300 NS9V WrDOE118VARD NZ31 ORT SPACa. CA 99656 (949) 644.3900. PAX 1949) 644 -3950 PART I: Cover Pace APPLICANT (Print): LLL Mailing Address: 3400 lr . cL �Z�fe3 Phone: ()4q) 3 i o - ?4 4$ Fax(ILI) G Property Owner (if diffenennt from above): Muffing Address: Applieation: ❑ Use Permit No. ❑ Planning Director's Use Permit No. Cl G.P.AJAmendinent No. ❑ Variance No. FEES: CONTACT PERSON (if diftrent): Mailing Address: C. c', %, c-- Phone: ( ) w c. Fax ( PROJECT ADDRESS: 3400 Project Description (If applying for a variance, also complete attached form for required findings.): -A-eni r. %A �. &.-k . k6, PROPERTY OWNER'S AFmAVTr (1) (We) depose and say that (I am) (we are) the owner(s) of the property(ies) involved in this application. (1) (We) furdter certify, penalty of perj , that the foregoing statements and answers herein contained and the information herewith submitte a all respects eqDW to the best of (my) (our) knowledge and belief. ' Signature(s) J ti A NOTE: An agent may sign forte owner if written authorization from a record owner is filed with the application. D-6 DO NOT COMPLETE APPLICATION BELOW THIS LINE FOR PLANNING DEPARTMENT USE ONLY: indicate Previous Modifications, Use Permits, Specialty Food Service Permits, etc. General Plan Designation: Zoning District: Coastal Zone: YES or NO »ss sssssss#s s�» s»• s���»»s s»ss: t»» as r» �»» +ss. »ssss :s »+e »s »»�.s »ss » * »ss »s Date Filed: Fee Pd: Dow Deemed Complete: Hearing Date: Posting Date: Mailing Date: Planning Director Action Date P.C. Hewing- D ate C.C. Hearing »s+�stwarrn�FOrtn�au�st:- nPraoc Appeal P.C. Action Appeal C.C. Action ReceiptNw. D-7 ,q�5 PART II: Project Data Sheet. Project COMM Name: Application Number(s): Project Address/Locadow Assessors Parcel Namber(sy. Legat Descript" (Attach on separate shed, if necessary)' Existing land'Use: Proposed Land Use: Zoning Distriche Land Use Designation: �-kQ p 0 Existing Development Proposed Development Zmdng Code Re4wiftn"t Lot Area (s� Lot Width (R) Lot Depth (ft) Setback Yards. Front (ft) Side (ft) Side (ft) Rea (ft) Gross Floor Area (st) Floor Area Ratio Building Coverage ( %) Building Height (ft) Landscaping M Paving (°Y.) NIA Parking Number of Employees Howl otY3perstion Number of seats Dwelling Units �-kQ p 0 PART M. Plans Each application shall be accompanied by 20 sets of plot plans, floor plans, and elevations; 8 sets shall be drawn to scale on 24 inch by 36 inch sheets with margins not less than 112 inch and 12 sets shall reduced to 11 inches by 17 inches. The required number of plans to be submitted for a Planning Director's Use Permit application is 12 sets; 4 sets drawn to scale and 8 sets reduced. All plans shall be collated, stapled and folded to a she of 844" by 14", maximum. A. Plot Plan Plot plans shall be fully dimensioned and show the following information on the subject property and to a minimum of 20.feet on contiguous properties: • Vicinity Map. • Nortb arrow. • Scale of the plan. • Existing and Proposed property lines • Required and proposed yard setback lines. • Locations, names, dimensions, and descriptions of all existing and proposed right of way lines, dedications and easements. C. • Locations of existing and proposed structures, additions, utilities, driveways, walks, and open spaces. • Any structures to be relocated, removed or demolished • Locations, heights, and materials of existing and proposed walls and fences. • Locations, dimensions and descriptions of parking areas. • Location, heights, size and materials of signs. • Existing and proposed gnide elevations and any significant natural features. • An information block containing the name and telephone number of the contact person and calculations in tabular form showing compliance with, applicable property development.regulations (i.e., density, floor area limits, height, parking, etc.) 4 D-9 ��1 B. Floor Plan Floor plans shall be fitly dimensioned and show the Mowing information: • Overall building and individual room dimensions, including square footage calculations. • All proposed interior walls and partitions. • Room identification • Window and door locations. C. do Elevations shall be fully dimensioned and show the following informatiew, • Exterior wall openings. • Exterior materials and finishes. • Roof pitches. • All roof mounted equipment and screening. • Heights above grade of all floors, eaves, and ridges. • Materials board (specifications and samples of type, color and texture of proposed construction materials). • Color photographs of the subject and adjacent properties. Part 1V: Other Information and Materials Each application shall he accompanied by the following. One set of gummed address labels (Avery 5160 or equivalent) containing the names and addresses of owners of the subject property and properties within a radius of three hundred (300) feet of the exterior boundaries of the subject property (e_xcludm made and w away =mmll Motes only) sba11 be submitted The list shall also contain the addresses of occupants of residentially zoned property within the required pmscn' bed radius an if the Planning Department makes the determination that the project is of significant public interest. Additional sets of gummed labels shall be required if the proposed development is appealed or called up for review. 2. An assenots parcel map(s) indicating the 300 -foot radius line and the subject property shall also �i be submitted. 5 D-10 C. This information stall be prepared by a title company or an ownership listing service doing business in Orange County, utilizing names and addresses iian► the last equalized assessment roll and utilizing the most recent assessoes maps, or alternatively, from such other records as contain more recent names, addresses or maps. The iufonwAian shall be verified by the title company or ownership listing service and be accompanied by a written affidavit. EL Project Dewrintlon and Justification A statement describing the proposed project in dowL This will serve as tie formal statement to the approving authority on what the project is and why it should be approved. Please include any relevant information which supports the application. Particular attention should be given relating this information to airy findings that must be made in order to approve the application (see table below). Required Biadints Application Section Transportedon Demand Mtamganeft Ord'mtmtx 20.64.040 EstaDlWwatt of grade by die Ptmning Commission 20.65A30 (B-3) Sign Exception Pennft 20.67.04S (B) Accessory Outdoor !lining 20.82.050 (B) waiver of locetion.mbiedonsformosage etmblWunents 2DA7.025(B) Modtfinetioo Pewm* (Generd) 20.93.040 - Foreondomfiaiom anemia ns ' 20.83.025.20.83.035 (B) Use Permits (General) 20.91.035 (Aj To axecOme development allocations 20.63.040 (B or C) To allow mkid use developments with less than 025 FAR for eonwimmial development 20.63.040 (E) To restore of damop or Destroyed swnconformhsg Structures 20.62.070 Coovemion of a Mwdnmm FAR use to a Base FAR use or to a Reduced FAR use, or toner- sion of a Sue FAR use to it Reduced FAR use 20.63.050 (B) To transfer deveMpmmt i aam ity 20,63.090(f) To modify or waive of o8' -street parking and 10adi89 requireme"S 20 56.100 (A) For bars and cocktail lounges 20.82.020 (B) For take-out service, limited 20.82.020 (C) Variances (See page 8 of application) 20.91.035 (B) Enviroulhhental Infornsstion Form: F The Environmental Inforination Form is intended to provide the basis information necessary for the evaluation of your project to determine its potential environmental effects. This review provides the basis for determining whether the project may have a significant effect on the environment, as required by state law. After this information has been evaluated by the Planning Department, a determination will be made regarding the appropriate environmental documentation for your projecL N MI, ;q6 i Variances: Rwdled Fw&n: 1. That because of special circumstances applicable to the property, including size, shape, topography, location or sunonadiags, the strict application of this code deprives such property of privileges enjoyed by other property in the vicinity and under identical zoning classification. 2. That the granting of the application is necessary for the preservation and enjoymem of substantial property rights of the applicant. 3. That the granting of the application is consistent with the purposes of this code and will not constitute a grant of special privilege inconsistent with the limitations on other properties in the vicinity and in the same zoning district. 4. That the granting of such application will not under the circumstances of the particular case, materially affect adversely the health or safety of parsons residing or working in thus neighborhood of the property of the applicant and will not -under the circumstances of the particular case be materially detrimental to the public welfre or injurious to property or improvements in the neighborhood. To aid staff in determining that the finding can be made in this particular case please answer the Mowing questions with regard to your request. (Please attach on separate sheet; if necessary.) 1. What exceptional circumstances apply to the property, including size, shape, topography, location or surroundings? 2. Why is a variance necessary to preserve property rights? 3. Why will the pmposal not be detrimental to the neighborhood ?. D-13 �� The purpose of Ods ammrstment is to permit Selovr to operate as a holly integrated Art Gallery, Wine Store, Tq%s, Wine sad Msrtim Bistro. The principal goal of the amendment is to pemrit Sejow to utilize its entire facility for these purposes, rather than bane the space apportioned for these uses tin currently wrists under Use Permit No 2001- 005 - Conditions of Approval. The proposed operation is uMustrated an Esbibit A afteched hereto. 9ejour is nearly tvro years old and amts the coma of lido Marina V01sge. The Pillage currently is in state of deterioration. It is hoped than there will be redevidopoinit bud the timing is far from certain and still may be five years away. In the meantime, the Village is no kmgm a significant pedestrian destination.. Accordingly, after five years of effort both by the prior owner and Sejour, the operation as currently permitted has beam unprofitable. Howavey what has been generally succesdif and has bolsbared retail sales of wino, cordials and armies has been to utilise the facility as a romantic evening sa well as for special events Imusing an wine, ceadials, martinis, scolebes and the hlw as centerpieces. These events - include food wiring events, angagernant patties, corporate events, wedding weeption% birthday parties, chardable. eventar, etc. Some of than events oc co r in won with harbor which originate in the Villege. Squat is a very desirable location for these events due to its unique, BYsopea a ambience, which will atoly be enhanced by the integration of a fine art gallery. Ueda the current use permit, bowever, Sejotr is not allowed to serve alcohol or food in the largest rooms most logical for these eveals. Spedficalty, Sgoce is requesting the following 413SWUMIS to 1110 Conditions of Approval for Use Permit No. 2001 -005 (attached hereto as Exhibit W. 1. Revise condition number 10 to give equal emphasis to on -site and off-ft alcohol asks. 2 Revise condition number 11 to read that the majority (5190 of ou -site and off -rite arks will be wine. 3. Revise condition rtumaher 13 to permit 3ejow to operate as a finny integrated Art Cutlery, Wme Store, Tapas, Wine and Martini Bistro. 4. Bfuminata condition mmube' 14 segregating space strictly for retail. 5. Revise condition Masher 15 to reflect integrated hours of operation from 11.00 AM until Md,nght Sunday through Wednesday and frown 11:00 AM until 1:00 AM Thausday — Ssdrdsy and our any day befare a WmIly reeopirmd holiday. 6. - Mirninaie Condition 17 pcohibitiog the sale of beer. 7.- Fiiminade Condition 18 and permit Sejour's occupancy to be irucreased to the maxinmam umber of people allowable as dateamined by the Building Department (recently eswnsted by &a fire departinent to be about 85 people). �C\)- D -14 It is our sincere belief that Sejour will mein an and to the community and Lido Marina Village under these conditions. It is also our sincere WW *a there is more than adequate parking available is the existing pecking garage and suamuoding areas to accommodate SejoWs needs withow bang a burden to the mmunding community. Sejour can obtain additionst parking fmm the garage depending an the occopamcy moons described above. mis 03 Ex6iil* A Operation BkmpdW 1 D-16 � q q i 6oraco.u)L t� jy1R1N BrrR i�o�.vst�> UQeve.L- t-rov� f A, e.� }p,fci -(-b r AIC.Oinp` PIor\. O� 0 � a X' Q v� -IT- 0 i x S �`°` T { ll R oa v-1 6CC). �o `1 0 D nip Exhibit B Use Permit 2001 -WS Conditions of Approval gcjt D-18 Christine Overstreet From: Arthur Stockton ierthurstocktonQsbcglobal.net] Sent: Thursday, August 02, 200710:23 AM 7o: c overstreeWade0is -nat Subject: Re: Check and Use Permit Amendment Attachments: Project Description and Justification.doc Hi Christine: 1 have the rent check and the completed Use Permit Amendment Would Ake to coordinate with you and chop off today. !Left you a phone message. You can reach me at (949) 310 -7698. If at all possible, would like to got your signature and possibly file this today. Attached is the project description attached to the Use Permit. Please let me know if you have any suggestions or revisions. Thanks, Art 2/25/2009 D -19 y l 1.. ! W1• H I MENU 4 E-1 1 Overstreet's Wine Bar 3400 Via Lida, Newport Beach, CA 92660 (949 )566 -9463 The Menu at Overstreet's L/ -f •sl- e/ boa oq--� When food and wine find a perfect marriage, it's a maglcal moment, an unforgettable sensual experieax. Dermts Overstreet Overstreet Is New Wine Gulde Small Plates Malpeque Oysters on the Half Shen / champagne mignonette / fleur de sel 1.25each Cured Olives / candied walnuts / coriander / lemon 100 Olive Tapenade / shallots / cr&me fraiche / toasted baguette 4.00 Croque Madame / baooa -onion marmalade f gruyere / field greens 6.00 Wild Mushroom Santee / creamy polenta / bleu cheese / balsamic reduction 10.00 Salads Grilled Figs f bleu cheese / parsley / shallots 6.00 Kenter Greens Salad / sherry vinaigrette / pine nuts / parmesan 6.00 English Cucumber Salad / cherry tomatoes / basil / balsamic vinegar 6.00 Heirloom Tomato Salad / basil / chevre / citrus vinaigrette 7.00 Chicken Ancho Chile Grilled Chicken / sweet corn salad / red onions / parsley 9.00 Five Spice Chicken / coconut steamed rice / ginger broth / bamboo shoots 9.00 Pan Roasted Chicken Breast / wild mushroom / cous sous / pine nuts 9.00 E-2 OveratreetIs Rine Bar 3400 Vie Lido, Newport Beach, CA 92660 (949) 566 -9463 Lam The Sea Cold Smoked Tasmanian Salmon I dill came fraiche / vodka / mesclun mix 8.00 Steamed Mussels / white wine / garlic / shallots 9.00 Ginger -Soy Marinated Prawns / star anise panna -cotta / scallions 10.00 Ahi Tuna Tartare / Asian aioli / guacamole / ponzu sauce 12.00 Pan Roasted Alaskan Halibut / fava beans / tomatoes / English peas 12.00 Pan Seared Sea Bass / celery root puree / English pea emulsion / black sesame 12.00 Traditional loz. Service of Caviar / chives / egg / shallots / capers / toast points Sevruga 55.00 Ossetra 65.00 Beluga 75.00 From The,Land. Roasted Lamb Chops / cranberries / cous cous / mustard jus. 14.00 Seared Foie Gras / caramelized figs / balsamic gastrique / frisee 22.00 For Dessert All Desserts, 7.50 Berry Trifle / raspbenies / blackberries / whipped cream Fran jelico- Infused Chocolate Mousse / single - estate chocolate / whipped cream Black & White Sundae / chocolate sauce / marshmallow cream / vanilla bean ice-cream Tapioca Brulee / caramelized sugar / mint / bluebenics ,�C1 E -3 Overstreet's Wine Bar 3400 Via Lido, Newport Bach, CA 92660 (949) 566 -9463 The Cheese Degustation. There are more than 2,000 cheeses in the world. Here, Chef Jason has selected a few of his current favorites. What's more, to fully explore the cheese's full range of flavor, he has paired each cheese with key ingredients. Much like wine, cheese can be described in terms beyond the obvious. Seldom does someone say, "This wine tastes lilts grapes. " More often one hears, "This wine kinda tastes like ... grass /vanillalwood/smokelpears." The some can be said for cheese. Close your eyes, take a bite and... enjoy! Our Current Compositions Goats Milk Gouda, raspberries — peppery / tangy / from Holland Pave du Morin, Whisky- smaked pecans soft! refreshing! creamy (cream is actually added!) French cow's milk Point Reyes Blue, walnuts, honey - California's only classic -style blue cheese Rochebaron; candied cashews, blackberries soft French cow's milk cheese / swathed in ash Crottin de Chaviguol, peach, balsamic reduction —salty yet sweet French goat's cheese One Cheese Composition 7.00 Three Cheeses 12.00 Artisan Cheese Board, the entire selection of five cheeses 15.00 Please Note: All cheese served at Overstraet's Wine Bar can be purchased at our retail counter. Take home a little wedge of havatl �� Overstreel's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 566 -9463 Lhe Prix Fixe The Prix Fix* menu is the crux of the Overstreves mission. Here, we've paired some of our favorite plates with wines that offer both balance and symmetry. Certain pairings kelp to accentuate or highlight a flavor, while other pairings arc simply to comiteract or tame an unruly iogredieat. Always changing and always flat, the Ovetstreefs Prix Fixe is a total- dining - experience. Kick up `yee heels and settle int Prix Fire # 37 Three Courses Paired With Three Glasses of Wine 45.00 English Cucumber Salad // Chateau Haut Rian, Bordeaux Abi Tuna Tartare // Torii Mor, P'utot Blanc Cheese Composition: Pave du Morin, whisky- smoked pecans Il Dehesa Gago Prix Pile 1112 Three Courses Paired With Three Glasses of Wine 45.00 Kenter Greens Salad // Teruai & Puthad, Tetra dl Tufi Ginger-Soy Marinated Prawns // Gerhard, Riesling Cheese Composition: Roehebaron, cashews and blackberries // Baileyana, Ponot Noir C. Prix Fite #82 Five Courses Paired With Five h Glasses of Wine 65.00 Heirloom Tomatoes // Bouvet Pau Roasted Chicken B Cbakau Montelena, Cbardounsy Grilled Figs // Byington "Alliage," Californian Bordeaux -style blend Cheese Composition: Crottin de Chavignol, peach and balsamic reduction // Echevetria Berry Trifle // Chateau Coutek Barsac Prix Fite #61 Five Courses Paired With Five % Glasses of Wine Kenter Greens Salad /l Colombefle 65.00 Cold Smoked Tasmanian Salmon // Sokol Blosser, Evolution #9 Roasted Lamb Chops 11 Downing Family, Cabernet Sauvignon Cheese Composition: Point Reyes Blue, walnuts and horsey It Fusee, Syrah Tapioca Brulee //Chateau Coutet, Barsnc Please Note: Prix FNe dinners are carefully planned for your enjoyment Please, No Substitutions. E-5' Ovemirett's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 566.9463 ...bubbles Wine is the world's most intriguing beverage. It begets an endlessly fascinating conversation that, involves mathematics, science, art, music, opinion, romance, speculation, desire... Dennis Overstreet Oversweet's New Wine Guide NV Bouvet, lAdubay Signature, Loire Valley, France 4.00 17.00 delicate, perfume, vanilla, candy, roses 199 Varithou & Clerc, Batt Blanc do Blunts, France 6.50 20.00 poignant, lively, creamy, toasty, citrus NV Piper- Heidsieck, Brut Champagne, France (split- bottle w /straw) 14.00 elecb*ing, fun, oyster shell, hazelnut, toast NV Lanson, Brut Champagne Black Label, France 12.00 50.00 proud, consistent, dough, honey, pepper NV Mumrn de Cramant, Brut Blanc de Blanes, Champagne, France 20.00 65.00 determined, solid, crisp citrus, rare mineral 193 Dom Perignou, Brut Champagne, France 100.00 dignified, chic, toast, coffee, hazelnut '95 Louis Roederer, Cristai, Champague, France darling, opulent, rich, citrus, dough 150.00 o0 Don't see anything you like? Just askl Our salon and cellar Is filled with the best the world has to offer. Overstreet's Wine Bar boccie prices am based upon on -site consumption only. Wines from the salon and cellar may require a $ 15.00 corkage foe. Ask your server for details. Orerstreer's Wine 84r 3400 Via lido, Newport Beech, CA 92660 (949) 566 -9463 .:.whIte RQM '01 Colombelle, Cotes de Gascogue, France 1.25 3.50 15.00 vivid, appealing. green Pasch, lemon, mineral '00 Heather Ranch, Chardounay, Russian River Valley 3.75 7.50 25.00 brooding, smoky pear, toast, butterscotch, melon '00 Torii Mor, Pinot Blanc, Oregon 5.00 10.00 25.00 graceful, peach, pear, melon, spice '01 Chateau Haut Man, Bordeaux, France 3.00 6.00 20.00. surprising, rogue, grass, nuts, fruit '01 Gabriel Meffre, "Fat Bastard" Chsrdonnay, France 3.25 6.50 20.00 "get in my belly," butter, pear, citrus, monkey elbow 902 Isabel* Sauvignon Blanc, New Zealand 3.50 7.00 20.00 waif- runway -strut, Pear, grapefruit, celery? '99 Konica River, Chardounny, New Zealand 7450 15.00. 45.00 debonair, refined, apple, spice, peach '99 Teruzzi & Puthed, Terre di Tufr, Italy 2.25 SSO 20.00 graceful, darling, lemon, apple, vanilla 100 Gerhard, Riesling Kabinett, Gernurny 3A0 6.00 25.00 brilliant, dense, nectarine, mineral, passion NV Sokol- Blosser, Evolution No. 9, Oregon 3.25 6.50 25.00 ...uncanny, complex, floral, sweet, dry l' '00 Chateau Montelena, Chardonnay, Napa Valley 4.00 8.00 28.00 stalwart, oak, apricot, fig, vanilla Doo't see aayfins You like? lust ask) Our salon sad cellar is fiIIed with the best the world has W otter. Ovesstreet's Wine Bar bottle pric¢s are based upon on,site oossumption oply. W inea;rom the salon and cellar may require a $ 15.00 corkage fee. Ask your server for details. 56) E- Overstreet's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 566-9463 ...red !E . 1A .. j ON '98 Pascal Avrll, Cabernet Franc, Chinon, Loire Valley, France 3.50 . 7.00 20.00 gentle, velvety, plurhs, spice, leather '99 Balleyana, Flout Noir, Edna Valley 4.00 8.00 30.00 silly, suave, chary, plum, sage '00 Elk Cove, Pluot Noir, Willamette Valley 5.00 10.00 32.00 prrzafighter, symmetric, strawberry, vanilla mew '00 Bodegas Toresanas, Dehesa Gago, Toro, Spain 225 4.50 20.00 aggressive, wild, plum, blackberry, rustic spice '98 Chateau Crazeau, Pewac- Lkognan 4.50 9.00 32.00 berry, Je4 chocolate, tobacco, suede Puma's '49 Canoe Ridge, Merlot, Washington 4.75 9.50 35.00 smooth, chillin', black cherry, currant, chocolate '99 Byington, "Alllage," Sonoma County 4.00 8.00 30.00 steadfast, blackberry, currant, smoko, mint NV Fusee, Syrah, California 4.00 8.00 30.00 shotgun blast, truckload of fine, currant, pepper, meat '99 Rex HUI, Pinot Noir, Willamette Valley 4.25 8.50 35.00 funky- fresh-fly, raspberry, chocolate, mingling licorice '99 Downing Family, Cabernet Sauviguon, Rutherford Valley 5.50 11.00 35.00 inky, anise, black currant, mocha, bee's knees _ , '98 Virginie de Valandraud, St.- Emilion, Bordeaux- 9.00 18.00 70.00 l kinky, smoky, vanilla- ahocotate -love, berries Don't see anything you bite? Just askl our salon and cellar is filled whb the best the world has to offer. Overstreet's Wine Bar bottle prices are based upon oa-she consumption only. Wines from the salon and cellar may require a $15.00 corkage fa. Ask your server for details. E-8 Overstreet Is Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 566 -9463 ...confecfion The only ptablem'with so,-Ailed dessert wines, in my opinion, is dessert. Hemingway is supposed to have said that any man who eats dessert is not drinking enough. -.lay McInerney Bacchus & Me, .adventures in the Wine Cellar .. .. nta '00 Robert Mondavi Winery, Moscato d'Oro, Napa Valley 6.50 28.00 austere, simple, sweet, litchi, pear NV Osbourne, Ruby Porto, Portugal 8.00 30.00 poised, lengthy, candy, dancing nancies, gorilla NV Bodegas Dios Baeo, Sherry- s101oroso," Spain 5.00 30.00 dapper, rich, hazelnut, semi sweet, ale! '97 Chateau Coutet, Bursae, France 14.00 50.00 siren- esque, boundless, lemon, pineapple, boney NV Jean FMom6 Pinean des Charentes, France 14.00 50.00 esoteric, heavenly, almond, caramel, a sweet bite Don't see anything you like? Just ask! Our salon and cellar is filled with the best the world has to offer. Oversrreet's Wine Bar bottle prices are based upon on-sift consumption only. Wines from the salon and cellar may require a$15.00 corkage fee. Ask your server for details. 6! Overstreet's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 56&9463 ...flights three 2,5oz. DOOM 1. Chardonnay: A lesson in terroir ( dimate, mlcrocibrtate, and soil composltlon) 15.00 —A diverse grape variety that, from one wine to the next, shows a complex range of character. The wines of this flight are all made from the exact same grape, but you'll soon taste the differences in climate, soil, and winemaking. Most interesting will be the major differences between the two Califomian wines (a and e.) a. '00 Heather Ranch, Chardonnay, Russian River Valley b. '99 Kamen River, Chardormay, New Zealand c. '00 Chateau Montelens, Chardonnay, Napa Valley 2. Plant Noir. Terroir with the world's most flnleky grape. 15.00 --Just when things couldn't get arty more difficult ... Pinot Noir comes alongl Not only does the vigneron (winemaker) have to deal with terrolr, but also be or she must contend with a grape variety that doesn't follow, the ruled Tbis genetically unstable grape has problems at every stage. Offspring grapes are often nothing like their parents. And due to a rare presence of 18 different amino acids, the grape can "act up" during its sometimes- violent fermentation. All this being true —a great Pinot is like no other wine in the worldl Ahl The sexy rewards of complexityl a. '99 Baileyana, Pinot Nov, Edaa Valley b. '00 Elk Cove, PinotNoir, Willamette Valley c. '99 Rex Hill, Pinot Noir, Willamette Valley 3. Bordeaux and Bordeaux - style: It's all about the blending! 19.00 —France's Bordeaux region has long been at the pinnacle of idaemaldng excellence. Simply, in 1855 France built a classification tier for all of the major Cbaoeaux; fast through fifth growths. The Chateaux of the premier crux (first growths) produce the most sought after wines in the world. Its "Big - Red - Guns:" Lafite Rothmhild, Maigaur, Latour, Haut - Brio., Mouton- Rothschild. But beyond the history, beyond the tarroir, and beyond the hundreds of years of knowledge... there is the blending. Usually, Bordeaux -style wine is driven by one of two grapes: Merlot or Cabernet Sauvignon. Then the two arc balanced and rounded by several other grapes, namely Cabernet Franc, Petit Verdot, and Maibec. In this alight we offer one New World Bordeaux (a.) and two true Bordeaux's (b and c.), from one of the most famous St: &million estates, and a lesser known but respectable Pessar.L6ognan offering. a. '99 Byington, "Alliage," Sonoma County b. '98 Chateau Cruzeau,Pessac- Ldognan c, '98 Virginie de Valandmud, St.- Bmilion, Bordeaux 4. Build your own flight! Use our by- the -glass fist to create your own tasting! Varies 0,S cc�� Don't see anything you like? Just ask! Our salon and cellar is filled with the best the world has to offer. Overstreer's fYtne Bar bottle prices are based upon on-site consumption only: Wines from the salon and cellar may require as 15.00 corkep fee. Ask your server for details. E -10 Overstreet's Wine Bar 3400 Via Lido, Newport Roach, CA 92660 (949) 566-9463 ...limited engagement Throughout the course of the week the staff wildly cracks open random bottles for the sake of "education and evaluation." '(Ahem.) The wines here will eventually run out, but while the bottle is cracked... we thought we'd be nice and share. All Pours, 55.00 199 Tahbilk Estate, Marsanne, Australia 101 Nautilus, Sauvignon Blanc, New Zealand '01 Seresin, Sauvignon Blanc, New Zealand '00 Wairau River, Sauvingnon Blanc, New Zealand. '01 Livio Feltuga, Pinot Origio, Italy '00 Coastal Ridge, ChaMonnay, California Lad '01 Chateau De Segries, Rhone '00 "Fat Bastard," Shirai,, France '99 Ceechetti Sebastiani, Merlot, Italy '00 Ross Estate, Australia Don't we anything you like? Just ask! Our salon and cellar is filled with the bast the world has to offer. r�0� Overstreet's Wine Bar bottle prices are based upon on -site consumption only. Wines from the salon and cellar stay require a 515.00 corkage fee. Ask your server for details. E -11 Califbm f'ABC - License Query System - Data Summary California Department of Alcoholic Beverage Control License Query System Summary as of 311011005 Page 51� F -1 I La�JL_____. .�._ __ ___.!!_i__....n �nr_._ __.. nrsti�nnn e..n��nn +•.n.- Mof67 Status: ACTIVE UR LLC ation: SANTA ANA usiness Name boing Business As: SEJOUR asi ness Address ddress: 3400 VIA LIDO Census Tract: 0635. i : NEWPORT BEACH County: ORANGE fate: CA Zi Code. 92663 icensee Information icensee: SEJOUR LLC ( Company Q07cer Information Officer: STOCKY 29 f OLYN CHRISTINE MANAGING MEMBER `:e Ty0es 1 License e: 47 - ON,SALE GENERAL EATING PLACE Licens a 41e A. ACTIVE Statue JAN -2006 Term: Mons) Ori ' al Issue Date: 30- JAN -2006 Ultration Date: 31- DEC -2008 Master: Y Duplicate: 0 Fee Code: P40 Condition: OPERATING RESTRICTIONS License as T aferred On: From: 17L9N 2 License : 21 - -SALE GENERAL Lice : ACTIVE Sta : 30- JAN -2006 Term: Month s Ori inalIssueDate:30- JAN -2006 Ea irationDate:31- DEC -2008 Master: Y Duplicate: 0 Fee Code: NA Condition: OPERATING RESTRICTIONS License a was Transferred On: From: 1Z= 3) License Type: 30 - TEMPORARY PERMIT —� License Type Status: ISSUE Status Date: 28-OCT-2005 Term: Month s �'Trmlrt al Is sue Date: Ea iration Date: : Y Du licate: I Fee Code: NA urreot Disciplinary Action No Active Disciplinary Action found.. . Page 51� F -1 I La�JL_____. .�._ __ ___.!!_i__....n �nr_._ __.. nrsti�nnn e..n��nn +•.n.- .+.wavaauti. /lLLa4 - L1 omw query Jystem - I)Sfa Summary � F iscilMnary Histo No Disci lira MkIo2 ound .. . old Information ``to Active Holds .,.:row crow: CENTRAL ESCROW INC 20 CORPORATE PLAZA DR 150 NEWPORT EACH CA 92660 --- End of Report - - - For a definition of codes, view our glossgry. C 5)d, F -2 ttp:I /www.abc.ca.QOV /datmrt/I n',T)nt- C- I%ZAA, Exhibit No. G 5'3 l CITY Off' NEWPORT BlEACH P.O. BOX 1768, NEWPORT BEACH, CA 92659 -1768 DATE: December 9. 2002 PLANNING; DEPARTMENT (949) 644 -3210 .lt. • �, y....17�. FILE COPY TO: Dennis Overstreet and Christine Overstreet FROM: Planning Director SUBJECT: UP2002 -034 (PA2002 -167) Plaose be advised that UP2002-034 (PA2002-167) was reviewed and approved by the Planning Corra*slon at Its meeting of November 7. 2002 and became effective November 21. 2002. Any deviation from the applications and plans on file in the Planning Department may require an amendment to the appllcotlon(s) mentioned above for the pro )ect. Appi(c ont: Dennis Overstreet and Christine Overstreet Location: 3400 Via Lido P Description: Request for an amendment to a previously-approved use permit to Include the sate l of distilled spirits (Type 47: beer, wine & sprits) for on-site consumption, to pemtltt Ave entertainment, and to expand the hours of operatlori from 11:00 pm to 12.00 midnight on Fridays and Saturdays at an existing retall Alcoholic Beverage Ou"et located In Lido Village. Should you have any questions, please contact our office. Very truly yours PLANNING DEPARTMENT Patrice L Temp / Director By gar Varin Executive Secretary Planning Commission Enclosure: 19 Approved Resolution with Findings and Conditions of Approval O Approved Planning Commission minutes with Final Findings and Conditions of Approval cc: Property Owner Of not applicant) GvarinlPlanCom mintcet'ftpc.doc 3300 Newport Boulevard, Newport Bearh 5' `l C RESOLUTION NO. 1579 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH APPROVING AMENDMENT TO USE PERMIT NO. 2001-OS (PA2002 -167) FOR PROPERTY LOCATED AT 3400 VIA LIDO THE PLANNING COhffAIS,SION OF THE CITY OF NEWPORT BEACH HEREBY FINDS, RESOLVES AND ORDERS AS FOLLOWS: Section 1. An application was filed by Dennis and Christine Overstreet with respect to property located at 3400 Via Lido and legally described as Lot 2 of Tract 1235, requesting approval of Amendment to Use Permit No. 2001 -005 pursuant to the Alcoholic Beverage Outlet Ordinance (ABO) to authorize a Type. 47 ABC license for on -site consumption of general alcoholic beverages, live entertainment, and expansion of hours of operation. Section 2. A public hearing was held on November 7, 2002 in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, Califomia. A notice of time, place and purpose of the aforesaid meeting was given. Evidence, both written and oral, was presented to and considered by the Planning Commission at this meeting. Section 3. The Planning Commission finds as follows: 1. The proposed location of the alcoholic .sales establishment needing this use permit, and the proposed conditions under which it would be operated or maintained, is consistent with the General Plan and the purpose of the district in which the site is located; will not be detrimental to the public health, safety, peace, morals, comfort, or'welfare of persons residing or working in or adjacent to the neighborhood of such use; and will not be detrimental to the properties or improvements in the vicinity or to the general welfare of the city. The structure that the proposed use will occupy is legal, nonconforming with respect to the maximum floor area ratio, however, the proposed changes in the use do not increase the gross floor area of the building. The amended use permit pertains to the on -site consumption of alcoholic beverages in conjunction with retail alcoholic beverage sales in a building that is designated and zoned for this activity. The use has been conditioned in such a manner to minimize the impacts associated with the sale of alcoholic beverages. The plans, as conditioned, meet the design and development standards for alcoholic sales. 2. The operational characteristics of the proposed use, including the hours of operation, are consistent with Municipal Code requirements. Any change in the operational characteristics, including a change in the hours of operation, would require an amendment to the Use Permit, reviewed by the Planning Commission. 3. The proposed project is consistent with the purpose and intent of Chapter 20.89 of the Municipal Code (Alcoholic Beverage Outlets Ordinance) for the following reasons: a. The convenience of the public can be served by the sale of desired beverages in conjunction with a full- service, sit -down restaurant that is complementary to surrounding ��5 City of Newport Beach Planning Commission Resolution No. 1574 Page 2 of 6 uses within the Lido Village area. Alcohol service is typical and expected by the public in a NU- service restaurant setting. b. The crime rate in the police reporting district and adjacent reporting districts is not likely to increase as a result of the proposed use provided that the use is operated as an eating and drinking establishment, with the on -site consumption of alcohol incidental to the restaurant use. c. The number of alcohol licenses within the report districts and adjacent reporting districts is high given the nature of the land uses in the district and when compared with County -wide data, but the change in the license classification of a Type 42 to a Type 47 will not result in an increase in licenses within the report district. d. The percentage of alcohol - related arrests in the police reporting district in which the project is proposed is higher than the percentage citywide. However, on -site consumption is not expected to increase alcoholic related crime in that the use is incidental to the use of the site as an eating and drinking establishment. e. There are no sensitive uses such as residences, day care centers, schools, or park and recreation facilities in the vicinity of the project site. ( 4. The project has been reviewed, and it qualifies for a categorical exemption pursuant to the L California Environmental Quality Act under Class 1 (Minor alteration of existing structures). Section 4. Based on the aforementioned findings, the Planning Commission hereby approves Amendment to Use Rermit No. 2001 -005, subject to the Conditions set forth in Exhibit "A." Section 5. This action shall become final and effective fourteen days after the adoption of this Resolution unless within such time an appeal is filed with the City Clerk or this action is called for review by the City Council in accordance with the provisions of Title 20, Planning and Zoning, of the Newport Beach Municipal Code. PASSED, APPROVED AND ADOPTED THIS 7th DAY OF NOVEIVIIgER 2002. FN Chairman avian, Secretary AYES: Aeajanian, Gifford Kiser McDaniel. Selich, Togrge and Tucker NOES: None 61� t City of Newport Beach Planning Commission Resolution No. 1579 Page 3 of 6 EXHIBIT "A" COND1T10NS OF APPROVAL USE PERMIT NO. 2001-005 1. The development shall be in substantial conformance with the approved plot plan, floor plan, and elevations dated January 22, 2001. 2. This Use Permit for an alcoholic beverage outlet granted in accordance with the terms of this chapter (Chapter 20.89 of the Newport Beach Municipal Code) 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, 3. That any change in operational characteristics, hours of operation, expansion in area, or operation characteristics, or other modification to the floor plan, shall require an amendment to this Use Permit or the processing of a new Use Permit. 4. 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 agent. Future owners, operators or assignees shall submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. 5. The applicant shall comply with all federal, state, and local laws. Mater'sal violation of any of those laws in connection with the use will be cause for revocation bf this permit. 6. This use permit may be reviewed, modified or revoked by the Planning Commission or City Council should they determine that the proposed uses or conditions under which it is being operated or maintained is detrimental to the public health, welfare or materially injurious to property or improvements in the vicinity or if the property is operated or maintained so as to constitute a public nuisance. Trash generated by the business shall be screened from view from adjoining properties except when placed for pick -up by refuse collection agencies. Trash receptacles for patrons shall be conveniently located both inside and outside the proposed facility. 8. No outdoor loudspeaker or paging system shall be permitted in conjunction with the operation. 9. All signs shall conform to the provisions of Chapter 20.67 of the Municipal Code. No temporary "sandwich" signs or similar temporary signs shall be permitted, either on -site or off -site, to advertise the restaurant. 10. The alcoholic beverage outlet is defined as a retail establishment for the sale of general alcoholic beverages for off -site consumption as the primary and principal use of the project site. On -site consumption of alcoholic beverages shall be accessory and subordinate to the principal retail use and .alcoholic beverages sales for on -site consumption shall not exceed 20 percent of gross sales for the business. The applicant or operator shall maintain adequate records to determine � -1 City of Newport Beach Planning Commission Resolution No. 1579 Page 4 of 6 compliance with this condition and shall provide the City said records when requested. The time period for the purposes of conducting this review shall be in accordance with Alcoholic Beverage Control Board standards. 11. The sale of distilled spirits for off -site consumption shall not exceed 15 percent of gross receipts of all off -site alcohol sales. The sale of distilled spirits for on -site consumption shall not exceed 109o' of the total sales for on =site consumption of all alcoholic beverages. The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the City- said records when requested. The time period for the purposes of conducting this review shall be 6 months. 12. Gross receipts shall be reviewed by the City for purposes of compliance with the requirements of the Zoning Code and Use Permit if the use is believed to be operating in non - compliance. If the sales percentages review finds that the applicant is not in* compliance, this application shall be brought forward to the Planning Commission for review. 13. Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, unless the Planning Commission first approves a Use Permit. 14. The interior area authorized for on -site' alcoholic beverage consumption in conjunction with a Type 47 license shall be limited to 1,263 sq. ft. as delineated on the approved floor plans as "Unit A2" with a maximum of 29 seats. The interior area authorized for the retail sales for general alcoholic beverages for ofd site consumption shall be limited to 1,328 sq. ft. as delineated on the approved floor plans as "Unit Al" with a maximum of 3 seats. On =site consumption of alcoholic beverages shall be prohibited in Unit Al. Substantial changes to thi floor plans shall require prior approval by the Planning Commission. Any increase in area of either.Unit Al or Unit A2 shall be deemed substantial for the purposes of requiring review by the Planning Commission. 15. Hours of operation shall be from 10:00 AM to 11:00 PM, daily for the retail portion of the project, and I:DO PM to 12:00 midnight Fridays and Saturaays and 1:00 p.m. to 11:00 p,m. Sunday through Thursday for the eating and. drinking portion of the project. Organized educational seminars shall not be conducted more than 3 days per week. 16. Live entertainment may occur subject to the approval of a hive Entertainment Permit and dancing is prohibited. Live entertainment shall not occur more than 3 days per week. Music shall be limited to indoor areas only and all windows and doors shall remain closed during performances except for incidental ingress and egress of patrons. Management of the business shall make every effort to keep the doors closed during performances. 17. The sale of beer, whether for on -site or off -site consumption, shall be prohibited. 18. A Special Events Permit is required for any event or promotional activity outside the normal operational characteristics of this retail business that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. G. City of Newport Beach Planning Commission Resolution No. 1579 Page 5 of 6 19. 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. 20. The alcoholic beverage outlet operator 'shall take reasonable steps to discourage and correct objectionable conditions that constitute a nuisance m parking areas, sidewalks and areas surrounding the alcoholic beverage outlet and adjacent properties during business hours, if directly related to the patrons of the subject alcoholic beverage outlet. if the operator fails to discourage or correct nuisances, the Planning Commission may review, modify or revoke this Use Permit in accordance with Chapter 20.96 of the Zm ng Code. 21. Alcoholic beverage sale from drive-up or walk -up windows shall be prohibited. 22. Any event or activity staged by an outside promoter or entity; where the business owner or his employees or representatives share in any profits, or pay any percentage or commission to a promoter or any other person based upon money collected as a door charge, cover charge or any other form of admission charge, including minimum drink orders or. sale -of drunks is prohibited 23. Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act shall be posted as required by the State Department of ABC. 24. All owners, managers and employees selling alcoholic beverages shall undergo and successfully complete a certified training program in responsible methods and skills for selling alcoholic beverages. The 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 establishment shall comply with the requirements of this section within 180 days of the issuance of the certificate of occupancy. Records of each owner's, manager's and employee's successful completion of the required certified training program shall be maintained on the premises and shall be presented upon request by a representative of the City of Newport Beach. 25. The applicant is required to obtain all applicable permits from the City Building and Fire Departments.. The construction plans must comply with the most recent, City- adopted version of the California Building Code. Adequate access and exiting must be provided in accordance with the Building Code. 26. The facility and related off - street panting shall conform to the requirements of the Uniform Building Code. The project shall comply with State Disabled Access requirements. 27. Where grease may be introduced into the drainage systems, grease 'interceptors shall be installed on all fixtures as required by the Uniform Plumbing Code, unless otherwise approved by the Building Department and the Utilities Department. 28. Health Department approval is required for any changes to the kitchen and other portions of the building that require a Building Permit: S1I -1 C City of Newport Beach Planning Commission Resolution No. 1579 Page 6 of 6 29. A handicapped assessable public restrooms are required. The restrooms must be in compliance with the Uniform Plumbing Code and all applicable Uniform Building Code requirements. 30. The owner /operator of the use shall enter into an agreement to provide and maintain a minimum of 21 parking spaces within the Lido Marina Village parking garage to be accessible at all times during the operation of the use. 31. The applicant or operator of the facility may provide valet attendant service for the use in conjunction with the Lido Marina Village parking garage. The applicant or operator shall prepare a valet operated parking plan to be reviewed and approved by the City Traffic Engineer prior to the commencement of the valet service use. 32. Delivery vehicles shall not park within the public right -of -way of Via Lido and Via Oporto. 33. The operator of the restaurant facility shall be responsible for the control of noise generated by the subject facility. The noise generated by the proposed use shall comply with the provisions of Chapter 10.26 of the Newport Beach Municipal Code. The maximum noise shall be limited to no more than depicted below for the specified time periods unless the ambient no level is higher: 34. Upon evidence that noise generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code, the Planning Director may require that the applicant or successor retain a qualified engineer specializing in noise/acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures necessary in order to insure compliance. �a� 1 Between the hours of 7:OOAM and IO:OOPM Between the hours of 7:OOAM and 10:OOPM Location Interior I Exterior Interior Exterior Residential Property 45dBA 55dBA 4OdBA 50dBA Residential Property located within 100 feet of a commercial property 45dBA 6OdBA 45dBA 50dBA Mixed Use Itroperty, 45dBA 60QBA 45dBA 5AdBA Commercial Pro N/A 65dBA NIA 60dBA 34. Upon evidence that noise generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code, the Planning Director may require that the applicant or successor retain a qualified engineer specializing in noise/acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures necessary in order to insure compliance. �a� 1 i 1 0datc nn. VI %I'M .: Attorney aearcn V •t••Yi Page 1 of t Tbursday, Meircb 20, 2008 State Bar Home r' ATTORNEY SEARCH Attorney Nam or Bar Number "ur F Stockton Advanced Search n r Include similarty sounding nausea end aftemate spelings Your search for Arthur F Stockton returned no results. Would you lice to search for names that sound Oka ArMur F Stockton? L� Contact US Site Map Privacy Policy Notices 02068 The Stale Bar of CaRkmis http:// members .calbar.ca.gov /search/member Search.aspx ?ms= Ar&ur+F. +Stockton 3/20/2008 cq i Page 1 of 1 Mr. Arthur F Stockton _ Mailing Address: 9030 W Sahara Ave Suite 137 Las Vegas, NV 89117 -0001 Telephone: Fax: Law School: U OF A Admitted to Practice- 1985 Admitted to AZ Bar: November 9, 1985 3urfadiction: ARIZONA Professional Llabllity Insurance: Not renulred to report Status: inactive Activity=: Click here to dose lawyer activity. Date Activity Detail 02/27/05 Ind Membership Status Change 11/29/01 Active Membership Status Change 03102/01 MEW Membership Status Change 1 This Web site displays changes In membership status and disciplinary actions taken against a lawyer. It does not Include pending disciplinary proceedings. This Web site does not display all lawyer sanctions, such as Informal reprimands. Contact the State Bar of Arizona at 602- 340 -7384 or use this atitorngted fomh to confirm the lawyers entire record of activity. , http:// www .azbar.orgILegaiResourcesIMF_ Detail .cf3n?ID= 46325&SearchPageoffserl 3/19/2008 Im r f -$Me Liar OI q A :: Attorney search ATTORNEY SEARCH Page 1 of 1 ii 2F' _ Attorney Name or Bar Ntnnber Carolyn C 5tordctan j Advanced Search n l- Include similarly sounding names and aftemate swWngs Your search for Caron C Stockton returned no results. Would you like to search for rrarnes that sound Ice Caro" C Stockton ?. Contact Us site Map Privacy Policy Notices 02MBTM state BarolCatitoma http : / /members.calbar.ca.gov/ search /member search.aspx?mT— Carolyn+C. +Stockton 3/20/2008 Page I of 1 Ms. Carolyn C Stockton Malang Address. 31761 Pepper b" Bend San Juan Capistrano, CA 92675 Telephone: 520-476 -2200 Law School. ASU Admitted to Practice: 1985 Admitted to AZ Bar: November 9, 1985 Jurisdiction. 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Contact the State Bar of Arizona at 602- 340 -7384 or use this automated form to confirm the lawyer's entire record of activity. http:// www .azbar.org/LegalResources/MF_ Detail. cfin ?ID= 40344&SearchPageOffset =l 3/19/2008 Entity Details - Secretary of.State, Nevada Page 1 of 2 a HOME ABOUT ROSS - NEWS FAQ CO Wonnation Center Election Center Business Center Licensing Center Securities Center O My Data Reports I Business Entity Search I Fee Schedule (Data Reports) I SVELTE BODY CENTERS, INC. Business Entity Information Name: Status: Revoked on 6!12007 File Dat®: SI9V2000 Type: Domestic Corporation CM Num C12931 -M 0"ai y m State: w List of Officers Phone: 51312006 Fax: By., Expiration Dais: Resident Agent Information . 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Page 2 of 2 https:Jlesos. state. nv. us/ SOSServices/ AnonymousAccesslCorpSearchJCorpDetails .aspx ?1x8... 3/19/2008 5& ATTACHMENT NO, F JUNE 5, 2008 PLANNING COMMISSION MINUTES & STAFF REPORT tai THIS FAUC LEFT BLANK INTENTIONALLY J Planning Commission Minutes 06/05/2008 Page 2 of 9 53� OBJECT: Sejour (PA2002 -187) ITEM NO.3 3400 Via Lido PA2002 -167 Revocation of use permits for an off -site alcoholic beverage outlet with accessory Continue to on-site alcohol consumption, food service and live entertainment. 07/17/2008 Planning Director David Lepo noted that the applicant requests that the Planning Commission continue this Rem to July 17, 2008. The applicant has been advised of potential pitfalls for the new application, specifically their parking agreement that Aires in December. The applicant has been told to submit an application for use permit that is consistent with whatever conditions there might be; and, there as no assurance that the submitted appllcation would be approved. hairman Hawkins noted his concerns with the applicant's letter requesting ntinuanoe, that the letter seems based upon the permit holder isunderstanding, and that the revocation on the current use permit could mmence. ublic comment was opened. hristine Overstreet, one of the owners of 3400 Via Lido, stated their reason for he request for the continuance and noted their submission of a new application. ublic comment was closed. Notion was made by Commissioner Toerge and seconded by Commission cDaniel to continue this item to July 17, 2008. Ayes: Eaton, Peotter, Hawkins, McDaniel, Toerge and Hillgren Noes: None Absent: Cole OBJECT: Housing Element (PA2008 -078) ITEM NO.4 PA2008 -078 he Housing Element contains goals, polices and programs related to the velopment, maintenance and improvement of the City's housing stock. dditionally, it includes identification of the adopted Regional Housing Needs Continue to ssessment (RHNA), housing opportunities and constraints with particular 06/19/2008 ttention given to providing housing for people at all income levels. tanning Director David Lepo noted that staff requests that the Planning ommission continue this item to June 19, 2008. otion was made by Commissioner Peotter and seconded by Commission ill ren to continue this matter to June 19, 2008. yes: Eaton, Peotter, Hawkins, McDaniel, Toerge and Hillgren oes: None bsent: Cole OBJECT: Panini (PA2007 -063) ITEM PA2007-13 -133 2421 E. Coast Highway The applicant has submitted an amended application for Use Permit, Accessory Approved Outdoor Dining Permit, and Off -site Parking Agreement for the operation of a full - service restaurant, with a Type 41 ABC License for beer and wine, an outdoor fining area and an off -site parking agreement. The proposed project includes 53� CITY OF NEWPORT BEACH PLANNING COMMISSION STAFF REPORT June 5, 2008 Meeting Agenda Item No. 3 SUBJECT: Revocation of Use Permit Nos. 2001 -005 & UP2002 -034 PA2002 -167) Sejour European Bistro & Lounge 3400 Via Lido APPLICANT: City of Newport Beach PROPERTY Dennis & Christine Overstreet OWNER: CONTACT: Rosalinh Ung, Associate Planner (949) 644- 3208, rung @ciity.newport- beach.ca.us PROJECT SUMMARY The property owner requests a continuance of the revocation hearing for the former Sejour. The continuance is necessary in order for the property owner to submit a new use permit application to operate a full- service eating and drinking establishment. It is anticipated that the use permit application will be submitted by June 30, 2008. Staff recommends that the Planning Commission continue the revocation hearing to July 17, 2008. Should the property owner fail to submit a complete use permit application by June 30, 2008, staff recommends that the Planning Commission resume the revocation hearing on July 17, 2008. BACKGROUND On April 17, 20D8, the Planning Commission commenced the revocation hearing for Sejour, for an off -sale alcoholic beverage outlet with accessory on -site alcohol consumption, food service and live entertainment. After receiving public testimony, the Planning Commission continued the hearing to June 5, 2008 and directed staff to draft a list of conditions of approval to reflect the following considerations: Reduction of the hours of operation to require the closure at 11:00 p.m. Reestablishment of the retail sales use with wine tasting and educational seminars as an ancillary use. 53�l Revocation of Use Permit Nos. 2001 -005 & 2002 -034 June 5, 2008 Page 2 • Removal of the existing establishment's physical improvements to reflect what was originally intended as an off -site retail sale outlet with wine tasting as ancillary use. • Elimination of Type 47 ABC license. The transcript of the April 17th meeting will not be available until June 12"' and will be included in the Planning Commission package for the June 19th meeting. A list of conditions with the above considerations has been prepared and forwarded to the property owner. The property owner; however, has now expressed a desire to operate a full- service eating and drinking establishment with a retail sale component at the subject property. This request would necessitate the filing of a new use permit application instead of modifying the existing use permits that are currently being considered for revocation. Due to time constraints, the property owner is requesting a continuance of the revocation hearing while the new use permit application is being prepared. Staff is in support of this request and, therefore, recommends a continuance to July 17, 2008 with the owner's agreement that there would be no business operated at the subject property during this time frame and the use permit application must be submitted to the Planning Department by June 30, 2008. With this deadline, it is anticipated that the new use permit will be presented to the Planning Commission on August 7, 2008; however, should the property owner fail to submit a complete use permit application by that date, staff recommends that the use permit revocation hearing resume on July 17, 2008. Staff received a follow -up letter from the property owner dated May 21, 2008. Besides the continuation request and their agreement to the deadlines, the letter includes several suggested conditions regarding limited live entertainment, hours of operations and bottle service of distilled spirits for the proposed restaurant operation. Staff has no comment on these proposed conditions at this time. Prepared by: salinh Ung, Associat P nner Exhibits: Submitted by: 1. Request for Continuance Letter dated May 21, 2008 X33 EXHIBIT I CONTINUANCE REQUEST LETTER 5-3-1 May 21, 2008 Mr. David Lepo Planning Director Planning Department 3300 Newport Boulevard Newport Beach, CA 92663 Dear Mr. Lepo: R MqY ��1aDe C/IY0 Rr��H Thank you for following up on Use Permits 2001 -005 and 2001-034 for 3400 Via Lido. We are pleased to hear that the City of Newport Beach Planning Department Staff is supportive of our desire to "modify" our current Use Permits and our new Use Permit application for as a full service restaurant at 3400 Via Lido. We are looking forward to a productive and rapid resolution to the issues at hand. We are confident that the City Council does not want our Use Permit Revocation to become yet another legal matter for the City of Newport Beach. As per your instructions through Ms. Rosalmh Ung, Associate Staff Planner, we are requesting a continuance of the currently scheduled June 5, 2008 Use Permit Hearing for our 3400 Via Lido property in Newport Beach, CA 92663. Please advise us by Tuesday, May 27, 2008 if Planning Staff will recommend a continuance for the Hearing, so we may be prepared. Please use our contact phone, email or address below. We understand that this continuance will permit the City and ourselves to negotiate a Modified Use Permit and achieve Staff recommendation for a New Use Permit application for an Eating and Drinking Establishment. In communications with the City, we have agreed to modify certain conditions of our current Use Permit, provided that we can obtain a Modified Use Permit and a New Use Permit for an Alcoholic Beverage Outlet maintaining our rights to operate a Type 47 License for a Restaurant. In summary, we offer to modify certain conditions as follows: Limit Live Entertainment to a maximum of 9 times per year by Special Permit. 2. Modify the Hours of Operation from 10:00 am to 11:00 pm 7 days per week. The current Use Permit hours are until midnight on Friday and Saturday evenings. 3. No bottle service of distilled spirits permitted. This is a NEW CONDITION WE OFFER. Continued on page 2 535 Page 2 of 3 4. The property will be modified to comply with City Codes with respect to the restaurant Use Permit 5. A parking agreement will be obtained and provided for the Restaurant. We understand that you and Patrick Alford, Senior Planner, City of Newport Beach Planning Department agree to work positively and efficiently with us to modify our current Use Permit for an Alcoholic Beverage Outlet and assist us in obtaining a new Use Permit for an Eating and Drinking Establishment to operate as a restaurant at 3400 Via Lido. We understand that Planning Staff is supportive of our desire to modify our Use Permit from a Retail Store & Bar to a Retail and Restaurant. We believe that restaurant business operations in the City of Newport Beach are consistent with City goals. Our offer to eliminate live entertainment three days a week and cut our evening hours to 11:00 pm ate two important conditions that will make the Planning Staff and Planning Commission comfortable with our Permits for 3400 Via Lido. We understand that we are to prepare and submit the Use Permit Applications for a Type 47 Alcoholic Beverage Outlet and an Eating and Drinking Establishment at 3400 Via Lido to the City of Newport Beach, Planning Department no later than June 30, 2008. My telephone conversation with Rosalinh Ung on Friday, May 16 is recapped as follows. " Mr. Lepo requested I (Rosalinh Ung) call you and tell you the following': 1. That you (the Overstreets) are to request in writing no later than May 23, 2008 to David Lepo a continuance of our June 5, 2008 hearing of 3400 Via Lido 2. That you agree not to operate any business at 3400 Via Lido until this Use Permit matter is resolved and settled 3. That you prepare and submit a new Use Permit Application to the City of Newport Beach, by June 30, 2008. 4. Mr. Lepo recommends two Planning Consultants that could assist you in these matters. Mr. Martin Potts MPA Associates AND Ms. Carol McDermott, Government Solutions. - --- -End of Phone call with Rosalinh Ung. Continued on page 3 ,5 Page 3 of 3 1 contacted both consultants on Friday May 16, 2008, leaving specific details of the requirements requested by you via Rosalinh Ung on that same date. Mr. Martin Potts contacted us late Friday afternoon, advising me he would be out of town for a trade show and could not meet with us until Thursday, May 22 or Friday, May 23 at the earliest. We agree not to operate a business under the current Use Permit at 3400 Via Lido while we are discussing modifications to the Use Permit with Staff. We are relying on your statement that the City will not try to argue that we have given up our rights under the Use Permit because of the passage of time or lack of use. If any of the information set forth above is not clear or accurate, we will expect notice from the Planning Director, advising us of the contrary. Please contact us by telephone, email, and/or mailing address provided. Dennis Overstreet Property Owners - 3400 Via Lido CONTACT: 419 31st Street #C Newport Beach, CA 92663 chrisdneovertwt@mac.com Cell Phone 949- 378 -7271 Office Phone: 949 - 723 -0574 cc: Deborah M. Rosenthal, Sheppard, Mullin, Richter & Hampton Planning Commission - City of Newport Beach Patrick Alford, Senior Planner, City of Newport Beach Rosalinh Ung, Associate Planner, City of Newport Beach 531 538 ATTACHMENT NO. G JULY 17, 2008 PLANNING COMMISSION MINUTES & STAFF REPORT 0 THIS PAGE LEFT BLANK INTENTIONALLY REPORTER'S TRANSCRIPT - 7/17/2008 Precise Reporting Service 714 - 647 -9099 CAI t [rctye5 1 �v `tl Page 3 BEFORE THE PLANNING COMMISSION OF THE 1 who is serving as Counsel to the Planning Commission on CITY OF NEWPORT BEACH 2 this case. Those findings were made on the assumption 3 that the Commission might want the option of approving 4 revised conditions to the use pemut consistent with your IN RE: ) 5 direction the last time we discussed this matter. REVOCATION OF USE PERMIT ) 6 The findings were trade in more detail than what NOS. 2001 -005 & UP2002 -034 ) 7 had originally been proposed, because it's our PA2002.167 ) 8 understanding that the Overs[reets, the applicants, or SEJOUR EUROPEAN BISTRO & ) 9 permit holders, are not willing or not interested in LOUNGE, 3400 VIA LIDO ) 10 changing the conditions. So you, essentially, have the 1 11 option of changing them unilaterally. That's why we have 12 more detailed findings. 13 The other option is to just go ahead. And we 14 would suggest if you want to go with a revocation, you've NEWPORT BEACH, CALIFORNIA 15 taken the testimony, you can just discuss them amongst THURSDAY, JULY 17, 2008 16 yourselves, and take that action to revoke. 17 As a courtesy, anybody who wants to speak, we 18 suggest a public hearing and let them speak, but not for 19 the purposes of providing testimony, in case the attorney 20 or the applicants have any comments about any of the 21 findings for the revocation hearing. But no new 22 testimony needs to be taken. I do understand that the 23 applicants are going to be requesting a continuance to 24 the August 7th meeting. . 25 So if you re interested, you have those three Page 2 Page 4 1 NEWPORT BEACH, CALIFORNIA; JULY 17, 2008 1 different options. Again, adopting the resolution to 2 APPEARANCES: 2 make these findings consistent with Mr. Bums' submittal 3 CHAIRMAN SCOTT PEOTTER, COMMISSIONER 3 to you this afternoon, go ahead and deliberate, and make 4 ROBERT HA WKINS, COMMISSIONER CHARLES 4 findings to revoke or not to revoke the use permit. 5 UNS WORTH, COMMISSIONER BARRY EATON, 5 But in any event, we do understand the 6 COMMISSIONER EARL MC DANIEL. 6 applicants are asking for a continuance, so you might 7 7 want to open it to public hearing and ask them to come a CHAIRMAN PEOTTER: Item number 4 is Sejour. 8 up. And I think Mr. Bums also has some comments to 9 This is a revocation hearing. And this is a public 9 make. 10 hearing on the public - - well, it's a public revocation 10 CHAIRMAN PEOTTER: Mr. Bums. 11 hearing to adopt the resolution modifying the subject of - 11 MR. BURNS: Mr. Chairman, thank you. 12 findings and conditions, and wehave a staff report- 12 I think Mr. Lepo did cover it pretty well. You 13 MR. LEPO: 'Mr. Chairman, this, again, is a 13 did close the hearing last time, so the hearing should 14 continuation of this item. If you recall the hearing, 14 not be reopened. All the evidence is now before you. 15 the testimony's already been received on the grounds, 15 There has been some additional submittals to 16 basis for revoking the pemut, and rebuttal. And that 16 you from -- possibly from staff and from the applicant, 17 testimony was provided by the defendant's attorney in 17 and those should not be considered in any decision as to 18 this case. 18 whether or not to revoke or modify the permit. You can 19 So tonight, there's no need to open the public 19 certainly consider those for other purposes, but not for 20 hearing on the revocation testimony for purposes of 20 the rain matter that is before you tonight. 21 taking more testimony on the revocation, if that's what 21 Only those persons who did hear the evidence 22 the — if revocation is what planning commission decides 22 should be voting on this. And I guess we have a new 23 to pursue. 23 Commissioner, so he should probably abstain from that, 24 A couple of options here. I believe you all 24 unless he read all the evidence. And you certainly have 25 received an additional set of findings from Mr. Burns, 25 a resolution before you tonight, and you'd have to count Precise Reporting Service 714 - 647 -9099 CAI REPORTER'S TRANSCRIPT - 7/17/2008 Page 7 CHAIRMAN PEOTTER: Let's bring it back to the Commission just to discuss that portion of it before we open it up for public hearing. Commissioner Hawkins? COMMISSIONER HAWKINS: Thank you, Mr. Chairman. I have a question of Mr. Bums. And that question is, there was a tentative direction at the last hearing after we closed the public comment portion. But that was only tentative, and we could move to revoke or not do anything at all; NO that right? MR. BURNS: Tbat's correct. It was only your tentative decision. COMMISSIONER HAWKINS: Okay, Okay. So everythingk up for grabs possibly? MR. BURNS: Correct. COMMISSIONER HAWKINS: Okay. Thank you. CHAIRMAN PEOTTER: Commission discussion. Mr. Eaton? COMMISSIONER EATON: Mr. Chairman, I had a question for Mr. Bums, too. Mr. Bums, you provided the Commission some findings to go along with the possible modification. One of the conditions in the possible modification was actually the rescission, as 1 read it, of the entire permit granted in 2002. And 1 didn't see any of your Page B findings that were directed to that possible condition. Should there be findings for that possible condition? MR- BURNS: The way I wrote the findings was to justify a new CUP that was modified and that would supersede the other CUPS. I wasn't sum if that was not the intent, but that's the way read it COMMISSIONER EATON: So the fact that — MR BURNS: One new CUP would replace the two CUPS that were previously in existence. COMMISSIONER EATON: Okay. Maybe I need clarification for staff. I thought the proposed resolution was modifying the first CUP and rescinding the second CUP. Am I incorrect on that? CHAIRMAN PEOTTER: I'm sorry, Mr. Chairman. Mr. Eaton, would you repeat that question? COMMISSIONER EATON: My understanding was the proposed resolution would modify the first CUP and rescind the second CUP, as opposed to granting an entirely new CUP which would supplant both of the original CUPS. Do 1 misunderstand that? MR. BURNS: No, that's clearly what the title is, how ifs worded in the staff report. MS. UNG: That's correct Precise Reporting Service 714 - 647 -9099 Page 5� 1 the votes and see if there's enough to pass that I 1 2 resolution to move it on. 2 3 CHAIRMAN PEOTTER: The entire evidence that 3 9 you're talking about for Commissioner Unsworth -- 4 5 MR. BURNS: Yes. 5 6 CHAIRMAN PEOTTER: -- was the staff report, and 6 7 it was in his notebook. So if he read that entire ' 7 8 packet -- a 9 MR. BURNS: It would require the transcript and 1 9 10 all of the exhibits that were in the charging documents j 10 11 back in March. That's really the body of the evidence. 11 12 It's really quite -- I have basically two volumes of 12 13 evidence that should be read. ; 13 14 CHAIRMAN PEOTTER: So, Mr. Unsworm, l presume i 14 15 you will abstain from that? 15 16 COMMISSIONER UNSWORTH: Yes. 16 17 CHAIRMAN PEOTTER: Go ahead, Mr. Bums. 17 18 MR. BURNS: I wasjust going to also add that 1e 19 it would be appropriate to allow persons to speak on this 19 20 matter but not to present evidence in the issue about 20 21 whether or not to modify or revoke the permit but for 21 22 purposes of asking for the continuance or challenging, 22 23 possibly, the findings, or the way that the decision is 23 24 worded, or something like that, but not to put additional 24 25 evidence in before the evidence before you. 25 Page 6 1 CHAIRMAN PEOTTER: Thank you very much. 1 2 So, then to summarize staff, basically we have i 2 3 the option to revoke the CUP tonight, we can 3 4 take -- well, we can revoke, we can modify, or we can I 4 5 continue, and the public hearing that we would -- public 5 6 hearing that anybody might want to help orjoin us in is 6 7 not for evidence in deciding whether to revoke or not, 7 8 but purely input to the Commission as far m whether we 8 9 want to modify, maybe, some of the conditions or findings 9 10 that you prepared for that modification, or whether to 10 11 ask for a continuance and give reasons for their 11 12 continuance. 12 13 MR. BURNS: That's correct. And maybe, if I 13 14 could just add that, at your last -- when you did close 14 15 the public hearing, you did determine that you were going 15 16 modify and not revoke, and -- but allow the parties an 16 17 opportunity to try to work that out. 17 18 And it's my understanding m of Monday, that 18 19 that had not occurred, and, therefore, you directed them 19 20 to come back. You had unilaterally imposed a I 20 21 modification of the CUP. 21 22 That's the way you were leaning towards in your 22 23 intended decision back when you made that decision. And 23 24 it wasn't the decision that night. It was your intended 24 25 decision. That's the status of the matter. 1 25 Page 7 CHAIRMAN PEOTTER: Let's bring it back to the Commission just to discuss that portion of it before we open it up for public hearing. Commissioner Hawkins? COMMISSIONER HAWKINS: Thank you, Mr. Chairman. I have a question of Mr. Bums. And that question is, there was a tentative direction at the last hearing after we closed the public comment portion. But that was only tentative, and we could move to revoke or not do anything at all; NO that right? MR. BURNS: Tbat's correct. It was only your tentative decision. COMMISSIONER HAWKINS: Okay, Okay. So everythingk up for grabs possibly? MR. BURNS: Correct. COMMISSIONER HAWKINS: Okay. Thank you. CHAIRMAN PEOTTER: Commission discussion. Mr. Eaton? COMMISSIONER EATON: Mr. Chairman, I had a question for Mr. Bums, too. Mr. Bums, you provided the Commission some findings to go along with the possible modification. One of the conditions in the possible modification was actually the rescission, as 1 read it, of the entire permit granted in 2002. And 1 didn't see any of your Page B findings that were directed to that possible condition. Should there be findings for that possible condition? MR- BURNS: The way I wrote the findings was to justify a new CUP that was modified and that would supersede the other CUPS. I wasn't sum if that was not the intent, but that's the way read it COMMISSIONER EATON: So the fact that — MR BURNS: One new CUP would replace the two CUPS that were previously in existence. COMMISSIONER EATON: Okay. Maybe I need clarification for staff. I thought the proposed resolution was modifying the first CUP and rescinding the second CUP. Am I incorrect on that? CHAIRMAN PEOTTER: I'm sorry, Mr. Chairman. Mr. Eaton, would you repeat that question? COMMISSIONER EATON: My understanding was the proposed resolution would modify the first CUP and rescind the second CUP, as opposed to granting an entirely new CUP which would supplant both of the original CUPS. Do 1 misunderstand that? MR. BURNS: No, that's clearly what the title is, how ifs worded in the staff report. MS. UNG: That's correct Precise Reporting Service 714 - 647 -9099 REPORTER'S TRANSCRIPT - 7/17/2008 3 (Pages 9 to 12) Page 11 Mr. Stockton has testified that the Overstreets have no responsibility for the violations of this use permit. They are owners of the property, and they have a vested right that, by revocation, would be taken away from them And that'sjust simply not appropriate, unfair, and it's a violation of their due process when they didn't do this. And Mr. Stockton put that in the record. So at this point, they've got a lease. There's -- this lease is for a realty company called Hem Realty. It's not going to be an alcohol bar, or anything like that. So why are we having this hearing? Why don't youjust let the Icase or let the permit lapse? That's what we propose, absolutely. So if we -- but if we can't do that, all right, then, for the record, we object to these findings, because we think these findings that are being proposed here are defective. And from a legal standpoint, they are particularly defective. At the end, I think the finding is, and the Commission is asked to make a finding, that the Overstreets are responsible for the conduct of their tenant. And I realize that it's not a court of law, but I submit to you that that's completely contrary to the law. Page 12 So if this happens here, they get their vested rights taken after investing literally hundreds of thousands of dollars into this location. We all know what the next step's going to be, so why go there when we canjust let this lapse? They do not want the stigma. They have been in the restaurant business, the bar business, for years with an excellent reputation in Los Angeles and in Orange County. Everybody knows that they operate La Quai. Everybody knows that they did the Wine Merchant. And at no time when Mr. and Mrs. Overstreet operated either one of these was there a citation. Ever. The only citation was to their tenant, which they were never given notice of to go to try to correct. So let's just let it lapse. CHAIRMAN PEOTTER: Thank you, Mr. Thomas. MR. THOMAS: Mrs. Overstreet would like to have a few minutes to address you CHAIRMAN PEOTTER: That would be great. MRS. OVERSTREET: Thank you, Commissioners. I promise r11 make it extremely brief Ijust wanted to say, honestly, that Dennis and I have worked incredibly diligently the last six weeks to negotiate this lease, because we really felt it was in the best interests of not only what the Planning Commission wanted Precise Reporting Service 714 - 647 -9099 6,43 Page 9 1 COMMISSIONEREATON: Sowe'remodifyingone 1 1 2 CUP, and you've given us findings for most of those i 2 3 modifications, virtually all of them. But the one I'm 3 4 curious about was the condition that rescinded the other 4 5 CUP. I 5 6 Do we need findings for that? 6 7 CHAIRMAN PEOTTER: Mr. Bums? 7 e MR, BURNS: No, I don't think so, Mr. Chairman. 8 9 Because you just have to have findings tojusfify taking 9 to away the vested right the person had. And the proposed 10 11 findings would give you the evidence that you need to 11 12 modify. i 12 13 I'm not sure there's a technicality that needs 13 14 to be corrected, but I think the evidence supports the I 14 15 decision here you're about to make. And it should be 15 16 fine, unless there's some technicality in the way that 16 17 resolution lines up or something like that. 17 18 COMMISSIONER EATON: Okay. As long as you say 16 19 we're covered, that's all I wanted to know. Thank you 19 20 CHAIRMAN PEOTTER: Other Commission discussion 20 21 before we open the public hearing? 121 22 (No audible response. j 22 23 CHAIRMAN PEOTTER: Okay. We'll open the public 23 24 hearing. We do have a time limit, and we are interested j 24 25 in hearing not new evidence but your comments regarding 25 -- -_' Page 101 -- 1 1 either of the optional decisions we have before us. 1 2 MR. THOMAS: Yes. Good evening. My name is i 2 3 1 Chris Thomas, and I'm the attorney for the Overstreets. 3 4 CHAIRMAN PEOTTER: rm sorry. You said j 4 5 Chris -- 5 6 MR. THOMAS: Chris Thomas, I'm sorry. And this 6 7 is Mrs. Overstreet. 7 8 CHAIRMAN PEOTTER: If you both wouldn't mind 8 9 signing in, that would be great. 9 10 MR. THOMAS: Thank you for giving us the 10 11 opportunity to address you briefly on this matter. I 11 12 just want to say -- and I think all the Counsel or 12 13 Mr. Lepo would agree with us -- that we've been working 13 14 very hard this week to try to resolve things short of a 14 15 hearing. 15 16 And to that end, I told Mr. Lepo when I came in 16 17 tonight that we have a signed lease for 3400 Via Lido 17 16 from HOM Realty, and it's a five -year lease with options. 18 19 So the point is -- and I think one of the Commissioners 19 20 said this, and I believe it was 20 21 Mr. Hawkins -- technically, at this point, you don't have 21 22 to do anything at all. 22 23 We're agreeable to simply have this use permit 23 24 lapse, because the Overstreets -- everybody knows -- and 24 25 I know the evidence is in, but everybody knows, and even 1 25 3 (Pages 9 to 12) Page 11 Mr. Stockton has testified that the Overstreets have no responsibility for the violations of this use permit. They are owners of the property, and they have a vested right that, by revocation, would be taken away from them And that'sjust simply not appropriate, unfair, and it's a violation of their due process when they didn't do this. And Mr. Stockton put that in the record. So at this point, they've got a lease. There's -- this lease is for a realty company called Hem Realty. It's not going to be an alcohol bar, or anything like that. So why are we having this hearing? Why don't youjust let the Icase or let the permit lapse? That's what we propose, absolutely. So if we -- but if we can't do that, all right, then, for the record, we object to these findings, because we think these findings that are being proposed here are defective. And from a legal standpoint, they are particularly defective. At the end, I think the finding is, and the Commission is asked to make a finding, that the Overstreets are responsible for the conduct of their tenant. And I realize that it's not a court of law, but I submit to you that that's completely contrary to the law. Page 12 So if this happens here, they get their vested rights taken after investing literally hundreds of thousands of dollars into this location. We all know what the next step's going to be, so why go there when we canjust let this lapse? They do not want the stigma. They have been in the restaurant business, the bar business, for years with an excellent reputation in Los Angeles and in Orange County. Everybody knows that they operate La Quai. Everybody knows that they did the Wine Merchant. And at no time when Mr. and Mrs. Overstreet operated either one of these was there a citation. Ever. The only citation was to their tenant, which they were never given notice of to go to try to correct. So let's just let it lapse. CHAIRMAN PEOTTER: Thank you, Mr. Thomas. MR. THOMAS: Mrs. Overstreet would like to have a few minutes to address you CHAIRMAN PEOTTER: That would be great. MRS. OVERSTREET: Thank you, Commissioners. I promise r11 make it extremely brief Ijust wanted to say, honestly, that Dennis and I have worked incredibly diligently the last six weeks to negotiate this lease, because we really felt it was in the best interests of not only what the Planning Commission wanted Precise Reporting Service 714 - 647 -9099 6,43 REPORTER'S TRANSCRIPT - 7/17/2008 Page 13 4 (Pages 13 to 16) Page 15 1 but what was in the best interests for the community. 1 your attorney, you are suggesting that we let the pemtit 2 Because there's so much -- concern about 2 lapse, because it has not been used? Is that the theory? 3 various activities going on in Newport Beach. And even 3 MRS. OVERSTREET: Yes, sir. 4 though, again, 1 really didn't feel we were responsible 4 COMMISSIONER HAWKINS: Okay. 5 for what our previous tenants did, I understand them 's 5 MRS. OVERSTREET: It's been vacant for seven 6 concerns about whoever's in a property like that, that 1 6 months. 7 1 there's concerns. But I really would be grateful if you 1 7 COMMISSIONER HAWKINS: Yes. Yes, it has. 8 would look into that. 8 that goes to my point. Rather than wait 180 days -- 9 We spoke with Mr. Lepo and Mr. Alford on 9 because we have always assured you in these proceedings 10 Tuesday of this week, and we were hoping to have this 10 that we would not take any action on the lapse issue 11 signed lease yesterday, but attorneys like to dot every I 11 because you have not been using it. 12 "I" and cross every "T." And they did, and we do have an 12 But if your proposal is to simply let it lapse, 13 executed lease here. This is the original in my hand. 13 you can waive all of those reservations that you've made, 14 1 know I'm not allowed to submit evidence, 14 and we could today find that it had lapsed, 1 believe, 15 so -- but it is here. And I just would like to say that 15 for the period since the disuse. 1 think it was like 16 if we can just lapse this use permit -- it should lapse 16 January 1, right, or something like that, when they 17 in 180 days, because that's what the Code says, 1 17 vacated? Hasn't been used since January 1? So 180 days 18 believe. Mr. Lepo and Mr. Alford are more familiar with i 18 has already expired. 19 the exact wording -- I'd be grateful. 19 MR. THOMAS: Could 1 address that? 20 Thank you very much. 20 MR. BURNS: Mr. Chairman -- 21 CHAIRMAN PEOTTER: Thank you, 21 CHAIRMAN PEOTTER: Yes, please. Hold on a 22 Mrs. Overstreet. 22 second. 23 Mr. Hawkins, Mr. Robert C? 23 Mr. Bums, why don't you go ahead. 24 COMMISSIONER HAWKINS: Thank you, Bruce. 24 MR. BURNS: Thank you. 25 Mr. Bums, 1 have a question for you in terms 25 If I could add just a little bit on the law of Page 16 lapse CUPS, the law does provide under the Fort Brag case that if a CUP is being terminated for lack of use, there has to be a hearing before that determination is made. If the applicant were to restart a CUP, then it could not have been lapsed, then it triggers the fact that it's live again. CHAIRMAN PEOTTER: Could this hearing then function as that hearing on the lapse? MR. BURNS: No, because they don't have notice to that effect. And they can waive that right, like they can surrender their CUP tonight, or surrender it on a certain date, or something like that, an irrevocable surrender. CHAIRMAN PEOTTER: Do they need to follow it up in writing, or can they surrender it tonight at the hearing? MR. BURNS: Well, I think they can put it -- I think you want it both ways, but they can make that offer on the record and theft give you something in writing late. But you'd want to have it irrevocable, effective on a date certain. But that may not work with what she's trying to do. Shejust leased the property. I'm just offering that in case that works any solution. CHAIRMAN PE07TER: Okay. Mr. Thomas? Precise Reporting Service 714 - 647 -9099 0 Page 14 1 of the— receiving evidence. Certainly we can— 1 2 CHAIRMAN PE017ER: It's a quick interrupt. Do you 2 3 have any question of the applicant? 3 4 COMMISSIONER HAWKINS: Idohavequestionsof 4 5 the applicant, and I was leading to that question. 5 6 Is there a reason why We cannot receive the 6 7 lease? 7 8 MR BURNS: No, you can receive the lease for 8 9 purposes of considering that she's — 9 10 COMMISSIONER HAWKINS: The request -- 10 11 MR BURNS: Yes. It doesn't go to the heart. I 11 12 COMMISSIONER HAWKINS: Right. Okay. 12 13 MR. BURNS: The issue is it's going to a 13 14 request to do something different in terns of your 14 15 ultimate decision. 15 16 COMMISSIONER HAWKINS: Okay. 16 17 Mrs. Overstreet, would you tender the lease, 17 18 assmning we will return it to you after we make copies? 18 19 MRS. OVERSTREET: Yes, sir. 19 20 COMMISSIONER HAWKINS: Okay. Could you hand itj 20 21 to Mr. Lepo? Would you confirm that it's fully executed, 21 22 and we — all right. 22 23 My second question is for the permit holder. 23 24 MRS. OVERSTREET: Yes. j 24 25 COMMISSIONER HAWKINS: Yes, Mrs. Overstreet, or 25 Page 16 lapse CUPS, the law does provide under the Fort Brag case that if a CUP is being terminated for lack of use, there has to be a hearing before that determination is made. If the applicant were to restart a CUP, then it could not have been lapsed, then it triggers the fact that it's live again. CHAIRMAN PEOTTER: Could this hearing then function as that hearing on the lapse? MR. BURNS: No, because they don't have notice to that effect. And they can waive that right, like they can surrender their CUP tonight, or surrender it on a certain date, or something like that, an irrevocable surrender. CHAIRMAN PEOTTER: Do they need to follow it up in writing, or can they surrender it tonight at the hearing? MR. BURNS: Well, I think they can put it -- I think you want it both ways, but they can make that offer on the record and theft give you something in writing late. But you'd want to have it irrevocable, effective on a date certain. But that may not work with what she's trying to do. Shejust leased the property. I'm just offering that in case that works any solution. CHAIRMAN PE07TER: Okay. Mr. Thomas? Precise Reporting Service 714 - 647 -9099 0 REPORTER'S TRANSCRIPT - 7/17/2008 Page 17j Page 18 1 MR. THOMAS: Yes, sir. Thank you. 1 1 2 Here's the situation. They are not going to 2 3 surrender it, obviously, because they feel they have a 3 4 vested right. However -- all right. The proposal is j 4 5 that they have got the lease. It wasjust signed at 6 5 6 o'clock tonight. You'll see. That's the date on the 6 7 lease. So their proposal is to run the 180 days from the 7 8 date of the decision of the Commission, which is fair. a 9 And the only issue here with them is -- and 1 9 10 they have to protect themselves in this sense, and I 1 10 11 think anybody who's a businessman would as well -- if, j 11 12 for some reason, unlikely reason, HOM Realty decided to 1 12 13 blow up this lease within that six -month period, that 180 13 14 days period, if they surrendered all their rights under ! 14 15 that use perut, then they can't have any opportunity to 15 16 use that building for what's already -- it's already set ! 16 17 up to use. 17 18 And, I mean, that would take -- that would 1 18 19 take -- that would effect them economically in the event j 19 20 that this happened. And 21 CHAIRMAN PEOTTER: Mr. Thomas, one of the 20 21 22 requests that this Commission made last time was that 1 22 23 they resubmit their CUP application to address that 23 24 issue. Whether or not they had another lease going or 24 25 not, didn't make any difference to us. If they wanted to 25 5 (Pages 17 to 20) Page 19 agree not to contest a public hearing after the 180 days. CHAIRMAN PEOTTER: Okay. Your position is clear. Any Commission comments for MT. Thomas? Questions? (No audible response.) CHAIRMAN PEOTIER: All right. Thank you both. Is there anybody else in the public that would wish to speak on this issue? (No audible response.) CHAIRMAN PEOTTER: Seeing none, we'll close the public hearing, and bring it back to -- COMMISSIONER HAWKINS: Mr, Chairman, I would like to hear from Ms. Ailin. MS. AMIN: I'm not -- Good evening. Let me introduce myself again. I'm June Ailin, appointed Counsel for the staff on this matter. I don't know whether I qualify as a member of the public exactly. But the concern that I have about the proposal is where will this be if, for some reason, the realty office that theyjust entered into a lease with decides that this location doesn't work for them and they leave in less than six months? Yeah, we're going to have an agreement that says that the CUP lapses in six months, but it leaves Page 20 them with a CUP in place that is problematic. And there's the potential for some other tenant to come in behind the realty company, and then you have somebody in there operating under a CUP that supposedly is going to lapse in a few months. And it'sjust kind of working toward another situation where you m going to be in this kind of revocation hearing, and you're going to have problems bringing this to a conclusion. CHAIRMAN PEOITER: So your preference, then, if 1 can short you out there, is would be to modify it per the request tonight? MS. MEIN: At a minimum. CHAIRMAN PEOTTER: And then perhaps let it lapse? MS. AILIN: At least if it's modified, you should have a more workable CUP than what you have now in the event that the new tenant decides the location doesn't work out and decides to depart. And frankly, if you have a more workable CUP, I'm not sure that having it lapse in six months without a hearing is particularly necessary; although, 1 haven't discussed that specific option with the staff, but that may not be necessary if you have a more workable CUP. CHAIRMAN PEOTTER: All right. Thank you. Commissioner Robert C.? Precise Reporting Service 714 - 647 -9099 5 q5 Page 18 1 continue in a modified form, they gave them a lot of i 1 2 opportunity. 2 3 So what you're asking to us do is to wait 180 3 4 days -- fmjust clarifying this. You're asking us to 4 5 wait the 180 days, then hold a hearing saying that it's ! 5 6 lapsed, the CUP would be suspettded or lapsed. 6 7 MR. THOMAS: No, sir. 1 made the suggestion to 7 8 Counsel, Ms. Allen, and I've also spoken to Mr. Lepo s 9 about this just this evening. I said they can draft an 1 9 10 agreement that says that they will not require a public to 11 hearing. They will not contest in a public heating. At j 11 12 the end of that 180 days, if they have not exercised or 12 13 attempted to exercise any rights on that lease, they just 13 14 won't contest it. 14 15 So I propose an agreement that Counsel draft 15 16 and that the Overstreets -- we would work out the 16 17 language, and they would sign it. So there would no need 17 18 for a public hearing. They would basically waive their 18 19 right to that public heating. 19 20 CHAIRMAN PEOTTER: Do you have that agreement) 20 21 tonight? I 21 22 MR THOMAS: No. I said Counsel, who has been 22 23 appointed by die City, draft the agreement. We'll work 23 24 out the language. If the Commission approves this, well ! 24 25 work out the language for that part of it. But we would i 25 5 (Pages 17 to 20) Page 19 agree not to contest a public hearing after the 180 days. CHAIRMAN PEOTTER: Okay. Your position is clear. Any Commission comments for MT. Thomas? Questions? (No audible response.) CHAIRMAN PEOTIER: All right. Thank you both. Is there anybody else in the public that would wish to speak on this issue? (No audible response.) CHAIRMAN PEOTTER: Seeing none, we'll close the public hearing, and bring it back to -- COMMISSIONER HAWKINS: Mr, Chairman, I would like to hear from Ms. Ailin. MS. AMIN: I'm not -- Good evening. Let me introduce myself again. I'm June Ailin, appointed Counsel for the staff on this matter. I don't know whether I qualify as a member of the public exactly. But the concern that I have about the proposal is where will this be if, for some reason, the realty office that theyjust entered into a lease with decides that this location doesn't work for them and they leave in less than six months? Yeah, we're going to have an agreement that says that the CUP lapses in six months, but it leaves Page 20 them with a CUP in place that is problematic. And there's the potential for some other tenant to come in behind the realty company, and then you have somebody in there operating under a CUP that supposedly is going to lapse in a few months. And it'sjust kind of working toward another situation where you m going to be in this kind of revocation hearing, and you're going to have problems bringing this to a conclusion. CHAIRMAN PEOITER: So your preference, then, if 1 can short you out there, is would be to modify it per the request tonight? MS. MEIN: At a minimum. CHAIRMAN PEOTTER: And then perhaps let it lapse? MS. AILIN: At least if it's modified, you should have a more workable CUP than what you have now in the event that the new tenant decides the location doesn't work out and decides to depart. And frankly, if you have a more workable CUP, I'm not sure that having it lapse in six months without a hearing is particularly necessary; although, 1 haven't discussed that specific option with the staff, but that may not be necessary if you have a more workable CUP. CHAIRMAN PEOTTER: All right. Thank you. Commissioner Robert C.? Precise Reporting Service 714 - 647 -9099 5 q5 REPORTER'S TRANSCRIPT - 7/17/2008 6 (Pages 21 to 24) Precise Reporting Service 714 - 647 -9099 6 �(p Page 21 Page 23 1 COMMISSIONER HAWKINS: Yes. . 1 introduced during the hearing. 2 Mc Chairman, I'll make a motion to move I 2 CHAIRMAN PEOTTER: Okay. Other changes? 3 approval of staffs recommendation for resolution of the 1 3 MR. BURNS: And then also under condition 13, 4 Platting Commission's permit number -- amending use 4 at the end of my little matrix box -- 5 permit number 2001 -005, and rescinding use permit number 1 5 CHAIRMAN PEOTTER: That would be page -- 6 2002 -034, Sejour European Bistro & Lounge, on the 6 MR. BURNS: Page 4, I'm sorry. 7 property located at 3400 Via Lido, PA2002 -167, together ( 7 CHAIRMAN PEOTTER: Page 4, and line -- 8 with the findings that Mr. Bums prepared for our j 8 MR. BURNS: Line 24, 25, very end of that 9 consideration. 9 block, after — where it talks about there was music, 10 CHAIRMAN PEOTTER: Thank you. 1 10 bouncer and dancing. And then if we could add to it, 11 Motion is on the floor. Is there a second? 11 "And by the lease which stated that the tenancy was for, 12 MR. BURNS: Mr. Chairman, I know it's highly 12 quote, bar, restaurant and live entertainment business 13 unusual for me to speak at this time, but Mr. -- the 13 attached to the January 10, 2008, letter, from 14 maker of the motion did actually have a couple of 14 Overstreet." 15 suggestions on the findings that I would want the 15 CHAIRMAN PEOTTER: Other suggestions ?', 16 Commission to consider also. 16 MR. BURNS: I think thafs it. 17 THE COURT: Let's me see if there's a second 17 CHAIRMAN PEOTTER: Is that acceptable to the 18 first, then we'll come back and address it. 18 maker of the motion of the second? 19 Is there a second? 1 19 COMMISSIONER HA WKINS: Yes, it was or is. 20 COMMISSIONER MC DANIEL: Mr. Chairman, I 20 COMMISSIONER MC DANIEL: Yes. 21 second, but I have comments. 21 I do have some questions. 22 CHAIRMAN PEOTTER: You've got discussion? 22 CHAIRMAN PEOTTER: Yes. 23 You're than welcome. 23 MR. MC DANIEL: Thank you. 24 Mr. Burns? 24 I think I was in the office, and I got a good 25 MR. BURNS: Ijust wanted to add that j 25 look at that, but I didn't bring a copy -- is the -- oh, Page 22 Page 241 1 Mr. Hawkins did point out that the findings should i good. Thank you. 2 probably have added to it some information about what the 2 1 guess what I1n looking at is the conditions 3 lease said, because the lease was for a bar use, and 1 3 that are for the type 42 — is it a type 42 liquor 4 think that's very appropriate that we should add that 4 license? Is what we're talking about, OR is 47 still in 5 CHAIRMAN PEOTTER: Exactly which page and which line[ 5 there? 6 are we modifying? 6 CHAIRMAN PEOTTER: We're eliminating the type 7 MR BURNS: On page 2, the lease stated the 7 47. 8 tenancy was for bar use, and we bring this back in 8 COMMISSIONER MC DANIEL: Okay. So that would 9 another version for you to sign. But Tonight, you could 9 go to a 42 at that point for beer and wine, Mr. — 10 adopt it in concept. 10 CHAIRMAN PEOTTER: Mr. I..epo. 11 CHAIRMAN PEOTTER: I didn't follow where you 11 COMMISSIONER MC DANIEL: I f you remember last 12 were at. 12 time, I was very concerned that the 47 was not there, 13 MA BURNS: Okay. That was page 2, under the 13 because that's what got us into trouble. And 1 14 condition 4, about — I 14 had -- I'm the only Commissioner that was on the 15 CHAIRMAN PEOTTER: You have line numbers to the 15 Commission at the time this was originally done. And my 16 left. Do you have a line number? 16 recollection of my conversation was I was concerned about 17 MR BURNS: Line 28, just to add — 17 that 47, that night get us into trouble, and that's 18 COMMISSIONER EATON: Mr. Bums, you4e talking 18 kind of what the deal was. 19 about your documents, are you? 1 19 So I really want to -- I really want to make 20 MR. BURNS: Dri song, I am. The documents I 20 sure that we address that. I'm happy with the 42, beer 21 prepared, the findings of fact. It's on numbered paper. 21 and wine. We have no problem with that It's dte hard 22 CHAIRMAN PLATTER: So you add to the end of 22 spirits that gel us into trouble. 23 that last sentence? 23 CHAIRMAN PEOTTER: Mr. Lepo, do you have a 24 MR. BURNS: Yes, that lease state that tenancy 24 comment on that? 25 was for bar use. If youll remember, that is a lease 25 MR. LEPO: I believe we have that as a revised Precise Reporting Service 714 - 647 -9099 6 �(p REPORTER'S TRANSCRIPT - 7/17/2008 7 (Pages 25 to 28) Precise Reporting Service 714 - 647 -9099 Page 251 Page 27 1 condition that that -- 1 asked for, and IM comfortable that. 2 MR. MC DANIEL: As long as ifs in there 2 You know, wete not going to take away their 3 someplace. 1'd like the maker of the motion — if that's 3 rights. We're going to give them exactly what they asked 4 a part of [ha[, I'd like rojusL- in terms of the 4 for in the first place. The 47 request was just kind of 5 motion, Pd like that in there to make sure that it's not 5 just- incasc kind of thing. So hn very comfortable at 6 a 47. 42 is fine. 6 this point that we've given them what they originally 7 CHAIRMAN PEOTTER: Is [here - -are there other 7 asked for, and hopefully that will — whatever. e comments on this, other discussions? S 8 And if this lease doesnY work out, whatever 9 COMMISSIONER MC DANIEL: The other comment I. 9 they end up with, you know, if it comes backs to them, 10 have is, one of the three things that was requested this i 10 the original, IM okay with that, bemuse that's what we 11 evening was an extension, and I've heard no information 11 approved pretty much originally. So that's what we going 12 tonight why there would be an extension. i 12 to approve. And that's the thing that we ve gotten in 13 So 1 guess Pm not going to be concerned about i 13 trouble, and we mn stay out of it. So it makes some 14 that. So -- but I've heard nothing about an extension, 14 sense to me. 15 why we would want one. So 1 guess that's off the 15 That's it, Mr. Chairman. 16 table. 16 CHAIRMAN PEOTTER: Mr. Hawkins? 17 CHAIRMAN PEOTTER: With the modification, it's 1 17 COMMISSIONER HAWKINS: Thank you, Mr. Chairman. 18 not part of the modification. I 18 1 have a question, Mr. Burns, if you may. 19 Rosalinh? 1 19 Bemuse we're talking about two different 20 MS. UNG: Mr. Chairman, if I may clarify a 20 documents, and 1 think there was some confusion before. 21 couple of things? I 21 Mr. Bums, you prepared findings and fact to support the 22 The draft resolution attached to your staff I 22 resolution; is that right? 23 report, specifically condition number 15, 15 basically 23 MR. BURNS: That's correct. 24 says that this approval supercedes and rescinds the use j 24 COMMISSIONER HAWKINS: So the resolution is 25 permit that carries the type 47. 25 that document which carries the amended or modified __-- ...- ....__ Page 261 Page 28 1 So when we are doing that, then we effectively 1 conditions, right? 2 eliminate the approval of the 47 license. We keep the 2 MR. BURNS: Correct. 3 original approval of the 21 and then the 42 license, 3 COMMISSIONER HAWKINS: Okay. Ijust want to 4 which allow them to do the retail and the wine tasting as 4 make that clear- 5 ancillary use. 1 5 And I do have some other further comments when 6 So the original findings for the use permit, 1 6 the time is appropriate. 7 the original use pemtt, still carry through with this 7 CHAIRMAN PEOTTER: Please proceed- 8 approval- And that is one of the findings that I 8 COMMISSIONER HAWKINS: I understand 9 identify on page -- 9 Ms. Overstreefs concerns here, and I applaud their 10 CHAIRMAN PEOTTER: And condition 1 also. ! 10 efforts. It's unfortunate that after more than six 11 MR. MC DANIEL: Condition 1, which is here. 11 months those efforts just now bore fruit. 12 MS. UNG: Right And that's one of the I 12 This is not an easy process. It was clear that 13 "Whereas,' the very last "Whereas" in the draft 13 the permits were being abused by the tenant. It is also 14 resolution, page 2. I[ basically says that, "The 14 clear to me that the lease which the Overstreets proposed 15 findings stated for the approval of the original use 15 to the tenant and the tenant signed authorized or said 16 pemtit, which is 2001 -005, remain valid and are hereby I 16 the tenancy was for a bar, restaurant, live entertainment 17 readopted." 17 business. 18 CHAIRMAN PEOTTER: Mr. McDaniel? 18 That Flew in the face of the permits, and 19 COMMISSIONER MC DANIEL: But, Ms. Uug, thei 19 that's why I can't support any further extension at this 20 original request fmm the Overstreets was to have a beer 20 time. I think we've carried on long enough. 21 and wine, and I questioned Mr. Overstreet at the time, 21 It was clear when I asked Mr. Thomas if they 22 saying, "Why do you need spirits ?" Arid that was supposed 1 22 were willing to somehow either surrender today or allow 23 to be totally ancillary, just in case somebody wanted a ! 23 the permit to -- permits to lapse today that there was 24 very old Scotch, if I remember right So I am 24 still the thought of operating a restaurant of a similar 25 comfortable with -- because that's what they originally 25 fashion, and thatjust cant happen. Precise Reporting Service 714 - 647 -9099 REPORTER'S TRANSCRIPT - 7/17/2008 8 (Pages 29 to 32) Page 31 of my motion. CHAIRMAN PEOTTER: Motion has been restated. The second is okay with you? MS. UNG: Mr. Chairman, before you make the motion -- CHAIRMAN PEOTTER: Motion has already been made. MS. UNG: All right. CHAIRMAN PEOTTER: Twice. MS. UNG: Staffjust wanted to request for an addition of one condition, which basically addressed the expiration of the approval if not exercised. It's a standard condition that staff did not add in in this fn M. So basically it say, "This approval shall expire unless exercised within 12 months from the end of the appeal period for a specific in -- as specified in section 20.89 of the Newport Beach Municipal Code." CHAIRMAN PEOTTER: Why is it 12 months instead of six? MS. UNG: Because it's under the ABO section, rather than the use permit section. CHAIRMAN PEOTTER: Okay. So we're going to add condition number 35 saying that "nis shall expire if not exercised within 12 months." MS. UNG: Correct. CHAIRMAN PEOTFER: Is that okay with the raker of the motion? COMMISSIONER HAWKINS: Maker of the motion accepts. CHAIRMAN PEOTTER: Okay with the second? COMMISSIONER HAWKINS: Amend the conditions as stated by Ms. Ung. CHAIRMAN PEOTTER: Is that okay with the second? COMMISSIONER MC DANIEL: Yes. CHAIRMAN PEOTTER: Okay. We have a motion and a second. Any further Commission discussion? (No audible response.) CHAIRMAN PEOTTER: Please vote. MS. VARIN: Motion passed with four "ayes" and one abstaining. CHAIRMANPEOTTER: Thank you very much, Ms. Overstreet and Counsel. We are rroving on. And Mr. Bums, thank you. (Proceedings ended.) Precise Reporting Service 714 - 647 -9099 5V Page 2911 1 So that's the reason for my motion. I do it 1 2 reluctantly. This is not something that the City enjoys 2 3 doing, but its something under its police porter it is j 3 4 forced to do. 4 5 Thank you, Mr. Chairman, 5 6 CHAIRMAN PEOTTER: Any further Commission ! 6 7 discussion? We have a motion and a second. 11 7 8 MR. THOMAS: Could I be heard further before 8 9 you vote? 9 to CHAIRMAN PEOTTER: No. 11 10 11 MR. LEPO: Mr. Chairman, I want to be clear 11 12 that the resolution taking the action directed clearly 12 13 incorporates the findings that Mr. Bums has prepared and 13 14 submitted to you. 14 15 COMMISSIONER HAWKINS: My rnotionincorporated 15 16 both. 16 17 MR. BURNS: I think there's an issue that the ! 17 18 findings are titled "Amending a CUP," whereas the 18 19 resolution has rescinding one and modifying another. 19 20 It's meant to support the resolution you had before 11 20 21 you. 21 22 CHAIRMAN PEOTTER: To }nu need to make a 22 23 correction to these findings or to the resolution before 23 24 we vote ?. 24 25 MR- LEPO: Could we, again, read back the 11 25 8 (Pages 29 to 32) Page 31 of my motion. CHAIRMAN PEOTTER: Motion has been restated. The second is okay with you? MS. UNG: Mr. Chairman, before you make the motion -- CHAIRMAN PEOTTER: Motion has already been made. MS. UNG: All right. CHAIRMAN PEOTTER: Twice. MS. UNG: Staffjust wanted to request for an addition of one condition, which basically addressed the expiration of the approval if not exercised. It's a standard condition that staff did not add in in this fn M. So basically it say, "This approval shall expire unless exercised within 12 months from the end of the appeal period for a specific in -- as specified in section 20.89 of the Newport Beach Municipal Code." CHAIRMAN PEOTTER: Why is it 12 months instead of six? MS. UNG: Because it's under the ABO section, rather than the use permit section. CHAIRMAN PEOTTER: Okay. So we're going to add condition number 35 saying that "nis shall expire if not exercised within 12 months." MS. UNG: Correct. CHAIRMAN PEOTFER: Is that okay with the raker of the motion? COMMISSIONER HAWKINS: Maker of the motion accepts. CHAIRMAN PEOTTER: Okay with the second? COMMISSIONER HAWKINS: Amend the conditions as stated by Ms. Ung. CHAIRMAN PEOTTER: Is that okay with the second? COMMISSIONER MC DANIEL: Yes. CHAIRMAN PEOTTER: Okay. We have a motion and a second. Any further Commission discussion? (No audible response.) CHAIRMAN PEOTTER: Please vote. MS. VARIN: Motion passed with four "ayes" and one abstaining. CHAIRMANPEOTTER: Thank you very much, Ms. Overstreet and Counsel. We are rroving on. And Mr. Bums, thank you. (Proceedings ended.) Precise Reporting Service 714 - 647 -9099 5V Page 3011 1 i motion? I want to make sure that it is very clear. I ! 1 2 apologize, because we were trying to figure out where we 2 3 were going. 3 4 COMMISSIONER HAWKINS: I will be happy to 4 5 restate the motion. 5 6 MR. LEPO: Would you do that, sir? 6 7 CHAIRMAN PEOTTER: Go ahead, Mr. Hawkins. 7 B COMMISSIONER HAWKINS: Thank you. I'm sorry, B 9 Mr. Chairman. Old habits diehard, Please bear with me 9 10 for the next 12 months. 10 11 I make a motion to approve staffs i 11 12 recommendation for a resolution of the Planning 12 13 Commission amending use pennit number 2001 -005, and 13 14 rescinding use permit number 2002 -034, Sejour European 14 15 Bistro & Lounge, on property located at 3400 Via Lido, 15 16 PA2002 -167, together with the findings which support that 16 17 resolution that have been prepared by the special city 17 18 attorney, Mr. Allen Bums. 18 19 That was my motion at that time. 19 20 MR. BURNS: Mr. Chaimum, wejust have, for the ! 20 21 record, out of an abundance of caution, to the extent the 21 22 findings have any kind of an inconsistent title, the 22 23 title should be disregarded. The findings support the .23 24 resolution that's before you, j 24 25 COMMSSIONER HAWKINS: And that would be part; 25 8 (Pages 29 to 32) Page 31 of my motion. CHAIRMAN PEOTTER: Motion has been restated. The second is okay with you? MS. UNG: Mr. Chairman, before you make the motion -- CHAIRMAN PEOTTER: Motion has already been made. MS. UNG: All right. CHAIRMAN PEOTTER: Twice. MS. UNG: Staffjust wanted to request for an addition of one condition, which basically addressed the expiration of the approval if not exercised. It's a standard condition that staff did not add in in this fn M. So basically it say, "This approval shall expire unless exercised within 12 months from the end of the appeal period for a specific in -- as specified in section 20.89 of the Newport Beach Municipal Code." CHAIRMAN PEOTTER: Why is it 12 months instead of six? MS. UNG: Because it's under the ABO section, rather than the use permit section. CHAIRMAN PEOTTER: Okay. So we're going to add condition number 35 saying that "nis shall expire if not exercised within 12 months." MS. UNG: Correct. CHAIRMAN PEOTFER: Is that okay with the raker of the motion? COMMISSIONER HAWKINS: Maker of the motion accepts. CHAIRMAN PEOTTER: Okay with the second? COMMISSIONER HAWKINS: Amend the conditions as stated by Ms. Ung. CHAIRMAN PEOTTER: Is that okay with the second? COMMISSIONER MC DANIEL: Yes. CHAIRMAN PEOTTER: Okay. We have a motion and a second. Any further Commission discussion? (No audible response.) CHAIRMAN PEOTTER: Please vote. MS. VARIN: Motion passed with four "ayes" and one abstaining. CHAIRMANPEOTTER: Thank you very much, Ms. Overstreet and Counsel. We are rroving on. And Mr. Bums, thank you. (Proceedings ended.) Precise Reporting Service 714 - 647 -9099 5V REPORTER'S TRANSCRIPT - 7/17/2008 9 (Page 33) 1 i i 2 3 4 I, the undersigned, a Certified Shorthand j 5 Reporter for the State of California, do hereby certify: 6 That prior foregoing proceedings were taken � 7 before me at the time and place herein set forth; that 8 any witnesses in the foregoing proceedings, prior to 9 testifying, were placed under oath; that a verbatim 10 record of the proceedings was made by me using machine 11 shorthand which was thereafter transcribed under my j 12 direction; further, that the foregoing is an accurate j 13 transcription thereof 14 I further certify that I am neither financially 15 interested in the action nor a relative or employee of j 16 any attorney of any of the parties. 17 IN WITNESS WHEREOF, I have this date subscribed 18 my name. 19 20 Dated: 21 22 Laura A. Millsap, RPR 23 CSR No. 9266 24 25 j i i i i i 1 I j i I I i j I i i Precise Reporting Service 714- 647 -9099 Ck CITY OF NEWPORT BEACH PLANNING COMMISSION STAFF REPORT July 17, 2008 Meeting Agenda Item No. 4 SUBJECT: Revocation of Use Permit Nos. 2001 -005 & UP2002 -034 PA2002 -167) Sejour European Bistro & Lounge 3400 Via Lido APPLICANT: City of Newport Beach PROPERTY Dennis & Christine Overstreet OWNER: CONTACT: Rosalinh Ung, Associate Planner (949) 644- 3208, rung@city.newport- beach.ca.us PROJECT SUMMARY This is a continuation of the revocation hearing of Use Permit Nos. 2001 -005 & 2002- 034 for the former Sejour. Per Planning Commission's direction, modified project conditions have been drafted with the intent of bringing the operation of the establishment into conformity with the original project approval, retail wine sales with wine tasting and educational seminars as an ancillary use. RECOMMENDATION Staff recommends that the Planning Commission 1) resume the revocation hearing; 2) adopt the attached resolution (Exhibit 1) modifying Use Permit No. 2001 -005 to incorporate the modified conditions and rescinding Use Permit No. 2002 -034, subject to the findings and conditions included within. BACKGROUND On April 17, 2008, the Planning Commission commenced the revocation hearing as the terms and conditions of approval of the use permits were continuously violated by the business operator of Sejour European Bistro & Lounge. On June 5, 2008, the Planning Commission continued the revocation hearing to July 17, 2008, in order to give the property owner additional time to file a new use permit application for the operation of a full- service eating and drinking establishment with a retail sale component at the subject property. The Planning Commission directed the property owner to submit the use permit application to the Planning Department by June 30, 2008. If a new application was not received by June 30, 2008, the Planning 5 5 �' Revocation of Use Permit Nos. 2001 -005 & 2002 -034 July 17, 2008 Page 2 Commission indicated that they would resume the revocation hearing on July 17, 2008, with the intent of modifying the conditions of approval to allow the use to be reestablished as was originally intended; specifically, an off -sale retail wine store with wine tasting as an ancillary use. On June 30, 2008, the property owner submitted a letter indicating that they have entered into negotiations to lease the property to HOM Real Estate Group of Newport Beach and will not be submitting a new use permit (Exhibit 2). The letter also stated that, in the event that the lease negotiation is not brought to fruition, the property owner will attend the July 17, 2008, hearing to dispute the revocation. A letter of intent to lease and convert the subject property into a professional real estate office from HOM Real Estate Group of Newport Beach is attached as Exhibit 3. As the property owner failed to submit the use permit application by June 30, 2008, staff recommends that the Planning Commission resume the revocation hearing. Consistent with prior direction from the Planning Commission, staff drafted a list of appropriate conditions of approval to ensure that future operations are consistent with the intent of the original use permit approval: ■ Reduction of the hours of operation to require the closure at 11:00 p.m.; • Reestablishment of the retail sales use with wine tasting and educational seminars as an ancillary use; • Removal of the existing establishment's physical improvements to reflect what was originally intended as an off -site retail sale outlet with wine tasting as ancillary use; and, • Elimination of Type 47 ABC license. Draft conditions for incorporating the above have been prepared and are attached to the staff report as Exhibit 1. In the interest of clarity and future administration, staff recommends that the Planning Commission adopt the resolution modifying Use Permit No. 2001 -005 to incorporate the recommended conditions of approval. Adoption of the resolution will also rescind Use Permit No. 2002 -034, which pe rmitted the sale of distilled spirits for on -site consumption, permitted live entertainment, and expanded the hours of operation. 551 Prepared by: AW Exhibits: Revocation of Use Permit Nos. 2001 -005 & 2002 -034 July 17, 2008 Page 3 Submitted by: I. Draft Resolution 2. Letter from the property owner dated June 30, 2008 3. Letter of Intent from HOM Real Estate Group of Newport Beach 55) EXHIBIT NO, 1 DRAFT RESOLUTION 553 RESOLUTION NO. A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH AMENDING USE PERMIT NO. 2001 -005 & RESCINDING USE PERMIT NO. 2002 -034 (SEJOUR EUROPEAN BISTRO & LOUNGE) ON PROPERTY LOCATED 3400 VIA LIDO (PA2002 -767) THE PLANNING COMMISSION FOR THE CITY OF NEWPORT BEACH HEREBY FINDS, RESOLVES AND ORDERS AS FOLLOWS: WHEREAS, Sejour European Bistro & Lounge ( "Sejour") is located at the northwest comer of Via Lido and Via Oporto and legally described as Lot 2 of Tract 1235; and WHEREAS, on April 5, 2001, the Planning Commission approved Use Permit No. 2001 -005 to allow a retail wine establishment to operate with a Type 021" Alcohol Beverage Control (ABC) license (Off -Sale, General) and Type "42" ABC license (On -Sale Beer and Wine, Public Premises) with periodic on -site wine tasting seminars and a parking waiver, and WHEREAS, on November 7, 2002, the Planning Commission adopted Resolution No. 1579 of Use Permit No. 2002 -034, amending conditions of approval of Use Permit No. 2001 -005, authorizing a Type "47" ABC license (On-Sale, General -Eating Place) for on -site consumption of general aloohol beverages, live entertainment and expansion of hours of operation; and WHEREAS, pursuant to Section 20.96.040 of the City of Newport Beach Municipal Code, the Planning Director determined that there were reasonable grounds for the revocation of Use Permit No. 2001 -005 and Use Permit No. 2002 -034 and set a public hearing so that the Planning Commission could set a date to consider the revocation of Use Permit Nos. 2001 -005 and 2002 -034; and. WHEREAS, after giving proper notice in accordance with law, a public hearing was held on January 17, 2008, in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. The Planning Commission unanimously voted to set a revocation hearing for Use Permit No. 2001 -005 and Use Permit No. 2002 -034 on March 20, 2008; and WHEREAS, on March 20, 2008, the Planning Commission continued the revocation hearing to April 17, 2008, at the request of the property owner; and WHEREAS, on April 17, 2008, after the Planning Commission commenced the revocation hearing and received public testimony, the Planning Commission directed staff to draft a list of conditions of approval that reflect the following considerations : • Reduction of the hours of operation to require the closure at 11:00 p.m.; • Reestablishment of the retail sales use with wine tasting and educational seminars as an ancillary use; City of Newport Beach Planning Commission Resolution No. _ Page 2 of 7 Removal of the existing physical improvements not consistent with operational requirements for an off-site retail sale outlet with wine tasting as ancillary use; and, • Elimination of Type 47 ABC license. WHEREAS, on June 5, 2008, the Planning Commission continued the revocation hearing to July 17, 2008, in order to give the property owner additional time to file a new use permit for the operation of a full- service eating and drinking establishment with a retail sale component at the subject property. The property owner was required to submit the use permit application to the Planning Department by June 30, 2008. If a new application was not received by June 30, 2008, the Planning Commission intended to resume the revocation hearing on July 17, 2008, with the intent of modifying the conditions of approval to allow the use to be reestablished as was originally intended; specifically, an oft -sale retail wine store with wine tasting as an ancillary use; and WHEREAS, on June 30, 2008, the property owner announced that they have entered into negotiations to lease the property to HOM Real Estate Group of Newport Beach for an office use and will not be submitting a new use permit.; and WHEREAS, the property owner failed to submit the use permit application by June 30, 2008, and the Planning Commission resumed the revocation hearing on July 17, 2008, in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. Evidence, both written and oral, was presented to, and considered by, the Planning Commission at this meeting; and WHEREAS, it is the intent of the Planning Commission to bring the operation of the establishment into conformity with the original project approval, as retail sales use with wine tasting and educational seminars as an ancillary use. As a result, the findings stated for the approval of Use Permit No. 2001 -005 remain valid and are hereby readopted. NOW, THEREFORE, BE IT RESOLVED: Section 1. The Planning Commission of the City of Newport Beach hereby amends Use Permit No. 2001 -005 by incorporating the conditions of approval in Exhibit "A" and rescinding Use Permit No. 2002 -034 that permitted the sale of distilled spirits for on -site consumption, live entertainment and expanded hours of operation. Section 2. This action shall be become final and effective fourteen (14) days after the adoption of this Resolution unless within such time an appeal is filed with the City Clerk in accordance with the provisions of Title 20 Planning and Zoning, of the Newport Beach Municipal Code. �5 City of Newport Beach Planning Commission Resolution No. _ Page 3 of 7 PASSED, APPROVED AND ADOPTED THIS 17TH DAY OF JULY 2008 AYES: NOES: ABSENT: BY: Chairman BY. Secretary 5�(C' City of Newport Beach Planning Commission Resolution No. _ Page 4 ;f7 EXHIBIT' A" CONDITIONS OF APPROVAL Conditions in bold are project specific conditions. All others are standards conditions. The alcoholic beverage outlet is hereby defined as a retail establishment for the sale of general alcoholic beverages for off -site consumption as the primary and principal use of the subject property per the Type 21 ABC license. The on -site consumption of alcoholic beverages shall be limited to wine or beer tasting per the Type 42 ABC license and shall be confined to the wine tasting bar. The serving of distilled beverages is prohibited. 2. The primary and principal use of the establishment shall be retail sales with ancillary use of wine tasting and wine educational seminars. The existing floor plan shall be revised to reflect the primary and principal use of the establishment Prior to the reopening of the establishment, all dining - related fixtures including tables and chairs shall be removed to the satisfaction of the Planning Director. 3. No seating is to be allowed in the wine tasting bar. 4. Wine tasting shall be defined and limited to the presentation of samples of one or more wines, representing one or more wineries or industry labels, to a group of consumers for the purpose of acquainting the tasters with the characteristics of the wine or wines tasted. 5. Each tasting shall be limited per the Department of Alcohol Beverage Control. 6. Wine tasting fees required by the Department of Alcohol Beverage Control shall not exceed 10 percent of the gross retail sales during the same period. The licensee shall maintain records that reflect separately the gross retail sales and the gross wine tasting sales. Said records shall be kept no less frequently than on a quarterly basis and shall be made available to the Planning Department on demand. 7. In addition to wine tasting, the licenseelbusiness operator may provide small amounts of bread, crackers, cheeses or nuts to clear the taste buds of the participants between successive samples of wine during a wine tasting. No serving or preparation of food or meals (other than minimum associated with wine sampling such as small amounts of cheese, bread, or fruit) is allowed. 8. The hours of operation shall be limited to 9:OOAM to I1:00PM daily. 55`I City of Newport Beach Planning Commission Resolution No. Page 5 of 7 9. The existing kitchen shall be maintained and utilized as a "Cold Kitchen" with no major cooking appliances (i.e. oven, cook top) allowed. 10. Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, nor maintain and operate as a bona fide eating place as defined by the Department of Alcohol Beverage Control. 11. A special events permit is required for any event or promotional activity outside the normal operational characteristics of this approval that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time, including any other activities requiring such special events permit as set forth in the Newport Beach Municipal Code. A maximum of 6 events may be permitted annually. 12. No outdoor loudspeaker or paging system shall be permitted in conjunction with either the retail sale or wine tasting /educational seminars. 13. No live entertainment or dancing shall be permitted. 14. The owner /operator of the proposed use shall enter into an agreement to provide and maintain a minimum of 21 parking spaces within the Lido Marina Village Parking garage to be accessible at all times during the operation of the use. 15. This approval supersedes and rescinds Use Permit No. 2002-034. 16. The alcoholic beverage outlet operator 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, if directly related to the patrons of the subject alcoholic beverage outlet. If the operator fails to discourage or correct nuisances, the Planning Commission may review, modify or revoke this use permit in accordance with Chapter 20.96 of the Zoning Code. 17. The exterior of the alcoholic beverage outlet shall be maintained free of fitter 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. 18. All owners, managers and employees serving or selling alcoholic beverages shall undergo and successfully complete a certified training program in responsible methods and skills for 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 establishment shall 55b City of Newport Beach Planning Commission Resolution No. _ Page 6 of 7 comply with the requirements of these conditions within 180 days of the effective date of this Use Permit. 19. Records of each owners, manager's and employee's successful completion of the required certified training program shall be maintained on the premises and shall be presented upon request by a representative of the City of Newport Beach. 20. Loitering, open container, and other signs spaded by the Alcoholic Beverage Control Act shall be posted as required by the ABC. 21. This use permit may be reviewed, modified or revoked by the Planning Commission or City Council should it be determined that the conditions of the use permit have been violated or that the proposed uses or conditions under which it is being operated or maintained is detrimental to the public health, welfare or materially injurious to property or improvements in the vicinity or if the property is operated or maintained so as to constitute a public nuisance. 22. The applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in connection with the use may be cause for revocation of this permit. 23. Should this business or either alcohol license be sold or otherwise come under different ownership or control, any future owners, operators or assignees shall be notified in writing of the conditions of this approval by either the current business owner /operator. Future owners, operators or assignees shall submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations, restrictions and conditions of approval.of this Use Permit. 24. Any changes in operational characteristics, hours of operations, expansion in area, or modification to the floor plan, shall require an amendment to this Use Permit or the processing of a new Use Permit. 25. This approval was based on the particulars of the individual case and does not in and of itself or in combination with other approvals in the vicinity or Citywide constitute a precedent for future approvals or decisions. 26. The applicant or operator of the facility may provide valet attendant service for the use in conjunction with the Lido Marina Village parking garage. The applicant or operator shall prepare a valet operated parking plan to be reviewed and approved by the City Traffic Engineer prior to the commencement of the valet service use. 27. Delivery vehicles shall not park within the public right- of-way of Via Lido and Via Oporto. SSq City of Newport Beach Planning Commission Resolution No. _ Page 7 of 7 28. Trash receptacles for patrons shall be conveniently located both Inside and outside the proposed facility. 28. Trash generated by the business shall be screened from view from adjoining properties except when placed for pick -up by refuse collection agencies. 30. All signs shall conform to the provisions of Chapter 20.67 of the Municipal Code. 31. No temporary "sandwich" signs or similar temporary signs shall be permitted, either on -site or off-site, to advertise the establishment. 32. The applicant is required to obtain all applicable permits from the City Building and Fire Departments. The construction plans must comply with the most recent, City - adopted version of the California Building Code. Adequate access and exiting must be provided in accordance with the Building Code. 33. The operator of the facility shall be responsible for the control of noise generated by the subject facility. The noise generated by the proposed use shall comply with the provisions of Chapter 10.26 of the Newport Beach Municipal Code. 34. Upon evidence that noise generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code, the Planning Director may require that the applicant or successor retain a qualified engineer specializing in noise /acoustics to monitor the sound generated by the establishment to develop a set of corrective measures necessary in order to insure compliance. 5 W, EXHIBIT NO.2 LETTER FROM PROPERTY OWNER DATED JUNE 30, 2008 5�( June 30, 2008 Councilman Mike Henn City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Dear Councilman Henn_ Enclosed is a copy of a letter of intent from HOM Real Estate Group of Newport Beach. This business is in negotiations with us regarding the lease of our property at 3400 Via Lido Newport Beach, Ca. HOM is an established business in the City of Newport Beach and 3400 Via Lido will be their new satellite location. It will be an asset to the Lido Marina Village area and the community of Newport Beach. We expect to execute this lease agreement in the very near fixture. In the unlikely event that the negotiations are not brought to fruition, we will attend the July 17 Planning Commission Hearing to defend our Use Permit for 3400 Via Lido so we can operate our business as we did between 2002 and 2005. We have not submitted an application to the Planning Departmexrt - City of Newport Beach for a restaurant Use Permit because of our negotiations with HOM. We wflIxIontact you when the negotiations arc completed with HOM. Please call us if you require additi nal de this matter. S' ly,�` C���+Gite µt!Jbd �tU Dennis an a Overstreet Property Owners 3400 Via Lido Newport Beach, CA 92663 949 -378 -7271 Enclosure: as stated 6 0- EXHIBIT NO. 3 LETTER OF INTENT FROM HOM REAL ESTATE GROUP OF NEWPORT BEACH 50 Dennis and Christine Overstreet C/O John Pomer Grubb & Ellis Company 4675 MacArthur Court, Suite 1600 Newport Beach, CA 92660 Re: Letter of Intent to Lease 3400 via Lido, Newport Beach for Professional Office Use This letter is to formally confirm the intent of loom Real Estate Group of Newport Beach to and convert 3400 Via Lido into a professional real estate office. Horn Real Estate Group, and Christine Overstreet (Landlords) are working on finalizing a Was agreement which should be fully executed by both parties in the very near future. This letter shall not constitute a formal and binding offer or agreement and shall riot create any legal rights or obligations between the parties. Ali legal rights and obligations between the parties will Come Into existence when a definitive lease agreement is signed and delivered by both per• Please call if you have any questions. t SORRONANNO HOM I President 1b NEWPORT CENTER DRJVE, SUM 100 Nrw RT RRACH, CALIFORNIA 9E "0 T 949.554.1 WO F 949.554•a4� EAf VSI" A FIL1ATE 0 CN119Tl E'S GREAT ESTATE: 5�1 Material(s) received after the Planning Commission packets were distributed, or received at the meeting. These material(s) were distributed to staff, Commissioners and made available to the public. 6�5 Page I of I Varin, Ginger From: Denise MacMurray [dmacmurray@bremerandwhyte.com] Sent: Thursday, July 17, 2008 11:10 AM To: arbums@harperbums.com; eaton727@earthlin k. net; rhawkins@earthlink. net scottpeotter @taxfighter.com; sbaWland@earthlink.net; bhillgren @highrhodes.00m; emodaniel@metropacificbank.com; cwunsworth@roadrunner.com; Varin, Ginger; jailin @awattomeys.com; Alford, Patrick; Lepo, David Cc: christineoverstreet@mac.com; Christopher Thomas Subject: 3400 Via Lido Use Permit Attachments: Aiiin- Bums001 with attachments.pdf Attached please find correspondence from Christopher Thomas regarding the use permit at 3400 Via Lido. Denise Macmurray Bremer Whyte Brown & O'Meara, LLP 20320 S.W. Birch Street 2nd Floor Newport Beach, CA 92660 949.221.1000 949.221.1001 fax BWBO is going Green! We prefer communication and attachments via a -mail. BREMER ' HYTE wHTMHonig. &0?MAMUY CONFIDENTIALITY NOTICE: This E -mail may contain confidential information that is legally privileged. Do not read this e-mail if you are not the intended recipient. This e-mail transmission, and any documents, files or previous e-mail messages attached to it may contain confidential information that is legally privileged. If you are not the intended recipient, or a person responsible for delivering it to the intended recipient, you are hereby notified that any disclosure, copying, distribution or use of any of the information contained in or attached to this transmission is STRICTLY PROHIBITED. If you have received this transmission In error, please Immediately notify us by reply e-mail, by forwarding this to oostmaster(Mbremerandwhvte.com or by telephone at (949)221 -1000; and delete the original transmission and its attachments without reading or saving in any marmer. Thank you. IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any advice relating to a Federal tax issue contained in this communication (including in any attachments) is not intended to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code, or (2) promoting, marketing, or recommending to another party any transaction or matter addressed herein. Note that our letters and a -mails are not intended to meet the "Covered Opinion" test. * Please note, this statement shall not be construed as an agreement to accept service of court documents/filings or discovery related items via electronic service. 07/17/2008 560 r 1IMP WO • a -AA«AA," I-0 -;tWr I L1 a j /-*-P- Exhibit A Letter to Counsel June S. Aihn, Esq. dated July 17, 2008, A -1 thru A -3 from Chrism her L. Thomas Letters of Support from: Exhibit B Gondola Company of Newport B -1 thru Bjt A Square LLC Charlie's Locker D. Kruse Exhibit C Email Correspondence from Arthur Stockton to Christine C -1 thru C-4 and Dennis Overstreet Exhibit D Conditional Use Permit Compliance Efforts D -1 thru D -19 Exhibit in 2002 CUP Proceedings: Exhibit E Overstreefs Wine Bar Menu E-1 thru E-11 Exhibit F CA Department of Alcoholic Beverage Control License F -1 thru F -2 S - Sojour LLC Exhibit G Notice of Final Approval CUP Amendment and G-I thru G -7 Conditions, dated 12/9/2002 State Bar (CA, A2) Information: Exhibit H Arthur F. Stockton H -1 thru H-6 Carolyn C. Stockton NV Secretary of State Information: Svelte Body Centers, Inc. 50 mrx a ewaL' lAY \ID(01�1®lAl' kIMY,pV¢wM�' iID1iK Tn.eS0.0mBlUYSIt' M'TRRAII' �M6YP 1® ®K ME44011 /LIEN 16RBAYSlOIP1iM OAVpQnnLA�4Y lE1MRTOdiY vo: WAaAr.' SME,IKMYr9Ff NONIWBRLP11.11• s1L;VAANr.M.�ORL' ORHOORTl -A' F� MlDItSWTCiMlml" MA511AASAST SgISITLtaWM OWSIYPI®tLlEOTA} .MICA K'i'P Al4pIRM®!EY' 1dNi® R° Q@I1KSULa° SSCMA Y. Wx' {®1TL80dW{II Y[Ni®.A ®IIQK RE i*EWMBPQWN,& Q'M A,LLP: June S. Ailin, Esq. ALESHIRE WYNDER,LLP 1515 west 190th Street Suite 565 Gardena, CA 90248 ATFORNHYS 20020 S.W. BIRCH SrRBRT SECOND FLOOR NEWPORT BEACH, CALIFORNIA 92660 (99)221 -1000 (99)221 -1001 FAX Waw.4mmt 'dNIryt%a July 17, 2008 Allen R Burns HARPER & BURNS, LLP 453 South Glassell Street Orange, CA 92866 Re: 3400 Via Lido Newport Beach Planning Commission Agenda Item No. 4 July 17, 2008 B &W Client: Dennis & Christine Overstreet B &W File No.: 3506.001 Dear Ladies and Gentlemen: lF/t tNHi1iM1 eun sores no 110WI.tt10IrRL4GYAfl P W TsTm nIgV1LTm MK AMEN, gill! CA0 !AtlO4UQ GflIq qIT LAmR y1TL6KIl fA][ m1OHIYlY1 C1YV1 LIT{1NW SnmSO; GLY/ wnssrmt wlliMSi11 TA% 311T Y<tli t BBHI®S:GEIp ogW4w u"'FAx idp �lLYR SIRIS Lf wreay.wuAlrAnar rM FAX ASewi NMisrl•riusAx PM20Ylfp� Ow-i11T In reference to the above, we represent Christine and Dennis Overstreet, the owners of 3400 Via Lido, Newport Beach. This property was leased to Arthur Stockton dba Sejour European Bistro and Lounge by the Overstreets. As the owners of the property, the Overstreets had nothing to do with their tenants alleged violations of the use permit which brought us to the point of this modification hearing. In fact, the modification of the instrument which takes away the amendment allowing the sale of [ W June S. Ailin, Esq. Allen R. Bums BWB &O File No,_ 3506.001 July 17, 2008 Page 2 distilled spirits is in essence a revocation of the permit As you know, the Oversteeets object to the revocation of the Type 47 license. It is their position that they were given no notice in a timely manner of the alleged violations which would have allowed them to go to their tenant and remedy the situation. The Ovetstreets operated the 3400 Via Lido location for 3 %a years without any citation from the City for any violations. It is unfortunate that this entire situation was brought about by a tenant who is no longer operating in the property. In substance there is no reason for a modification or a revocation of the permit, as it is no longer in use. It would be an unjustified negative stigma to the Overstreet& As you are aware, the Overstreets have been very active in negotiations to attempt to lease the property as office space. They have also been attempting to in good faith to reach some resolution of this matter with the City Planning Department We have been involved in active discussions with David Lepo and Patrick Alford, We received your proposed findings of fact, and if the matter cannot be resolved short of a full revocation hearing, then we would object to any such findings. Finally, I tun enclosing the exhibits which we have distributed which we think are relevant to the issues in the event of the hearing. Thank you very much for your professional courtesy and cooperation. Very truly yours, t rr + t ethomas@;bremerandwhyte.com CLT:dsm HA35D6WI Cac"Iin- BiwaWIAoa 50 Ii �jt January 17, 2008 To Whom It May Concern: GONDOLA COMPANY �OF NEWPOR >: We have been merchants In Lido Marina \AIlage for 15 years. We have no objection to the Overstreets operating a quiet wine bar across the street from our offices in accordance with the use petmet. When they first opened, their business, Overstreet's Wine Bar, was an asset to our area and there were no problems with their patrons. It was only when they ceased their operation and new operators turned the establishment into a barin€ghtclub that big problems began In our area: vandalism, loud music, unruly crowds, fights, etc. As tong as the use permit is not amended to allow the building to be fumed into a nighiaiub•again, we would support the continuation of the existing -use permit. �inoerety, . James Mahoney Gondola Co. of Newport & . Gondola Romance (949) 6754730 C_ lido Marina Vilbage •3400 Via Oporto, Suite 103 • Newport Beach, CA 92663 * 949 - 675 -1212 - Fax 949 - 675 -8812 E -mail: gondolaNB@aol.com Web site; www.Sondoiss.com 9-1 N City of Newport Beach Newport Beach, CA 92668 Attn: City Manager BD: Overstreefs Wine Merchant & Bar Dear Sir, We welcome the opportunity to embrace Overstreefs Wine Merchant & Bar in our community once again. Durhug the- name than three year C: period m winch the Overstreer's operated thehr facility as our nest door neighbor we never bad any issue with them, the staff or their customer's: We firequented their store alien and recommended it b%W to famii�y,• Wends and customers. C. The same cannot be said for 5ejom - Good Riddance? Sincerely, 44-4� DYan&Thonas Managing Member B-2 5,b- I f,/ mA coo"16 ?Z) i A 0-110'e-I 7 AEIW- a VIA' 7-ff,� 6F /4.aE-t- Lie- 14 k/17-,4 7-HE Ar 7-#P- fi t, 5CY- Ae AN P6 cT 7-o 34'OV'o Lida -Ne%PoltBOOC'�%CA92663 • 9,4967"230 Fox: 94967-�,6335 13-3 C. . AESIDEXTIAI & CAYYEP[IAi IPiEAIDP AE516X To*mtmauwml Ithas aAme to my an mum tllotthe c4apbNpmt Beodl aq MMm UMMOpY& Pow the awstmo WMVaft. ldftft*M Mt hW7heftMSWfthMb= Em«ssa PW RMyeasIMMtifoff qL MmWmb= NeffasUaC3 WtatbeElethblTEhWatmly time. aee MI'es� 11 lip 0 "'Iffilur, bill B4 5)`. Christine Overstreet i F Arthur Stockton [arthursEOdcWasbcplobal.not] i Tuesday, September 27, 2005 856 AM aww*eeb@adelphia.net I , Chris: one other quick note, I do not and have not in any way queationed your integrity. In, fact, I found both of you quite refreshingly honest and that is.a major incentive for me to move forward, as nobody can ever anticipate all the issues which might arise in a transaction and the good faith and integrity of 'the parties is ultimately what makes a transaction successful. 'I did receive the use permit. I stmply believe that Renatta's interpretation of it is (as it should be when she.represents you) aggressive. Paragraph 10 requires any liquor license transferee to notify the City that they accept the terms of the Use Permit as amended. !?a terns of the permit specifically reference the locations in what is designated Unit A -1 and A=L as to separate the retail store from the'bar. Then the permit says any c ge n the character of occupancy requires approval. Given that the permit is for a_Retail Wine store prims{ily with the on -site oonsuaption limited and adjunct, putting the medical practice in the retail wine store space and combining the retail wine/ bar into one is likely a change in the character of occupancy requiring approval;, while we all believe it would be approved as the business is downsizing, you don't have the time for us to pursue this before we sign a lease. without pursuing this, we cannot covenant to maintain the -liquor licenses if the City pulls the use permit and we cannot compromise so far to maintain the permit that the issue prevents us from doing our core•businesd. our solution is that we will purchase. the Liquor Licenses but if the City pulls the permit and/or makes the requirements to maintain it such that we cannot do our core business (this is a space issue), then we would no longer have the obligation to maintain the liquor licenses and you have the right (but not the obligation) to buy them.back. I hope - this helps you understand what the issue was and I hope the solution is satisfactory. etta will advise you accordingly. c j s i i [ - C -1 S�)5 Chrisdne Overstreet Eeom: Arthur stoddon jartluusioddonClsboglobal.net) /\ t: Saturday, October 01, 200511:21 AM ccverstreet @edelph s.net Subject: landscaping Dear Chris and Dennis: In getting ready for the 15th, would it be alright if we had our people (at our expense) address the overgrown landscaping? In addition to normal trimming, we would like to trite' back the trees out fron-E­55"zd'=- &xj56se the sign. Also, we xay eventually want to put nice flowers whore the existing non - flowering green foliage is along the side. Further, who owns /maintains the pots along the sidewalk? Once again, we would like to upscale the flowers, etc. (and maintain them in good condition at all tines) if that is possible. Fxaukly, we would like to upscale the pots toot Also, if we wanted to use acme other decorative pots along the sidewalk on the street side, is that possible] One other. thing we are examining is o t ior:7j3htUig. tie might want to wash the walls (artistically) with very upscale lighting, and outline the roof perimeter in fine white band lighting. we are having a lighting expert look at the situation and give us an illustration/ proposal. I just wanted you to be thinking about it. Again, everything is being considered on a Rctz- Caileton type of approach. The general idea of all of this is to make the exterior appearance and maUtenance every bit as important as the interior. The signs have been.ordered and will be ready on the 15th. They will just replace the existing.signs so they will qo up in just a few minutes. Unfortunately {or fortunately) entire canvas out front had to be replaced for the new signs. At least everything will And look brand new. I am also now understanding that there is no stove in the Jcttchea. Of course, we have to serve some kind of food to maintain the liquor license and I have.no problem purchasing a stove for this purpose. However, there is no r vent. Again, we have no problem installing a hood or vent, but is there a reason why �"sn't one now, i.e. it is not permitted,. -etc.? Thanks and I hope you are 'experiencing some relief now. Jamie is being very helpful and appears to be capable of maintaining the status quo while we work out the logistics and pex_=lt.issues so that we can o de thr- LrndeTM.52 gS �-- .5usiness. My contacts at Me City are advising me to move _cautio' ?ga3L g13F�: &pt ma era ante t"1;e current pg� rations un�t�i� we t aiia a 'feel for For the City's attio'we wli"not'ite' putting up a sg o'Y z the Endarmologie );us�xxass -tma City's arm confident in our position. Because we want to guard your reputation zealously, and people may ask about the change, what would you like us to say to anyone who might 'inquire? Art - • i.f^ �Ft t I G2 5 1 I RESOLUTION NO. 1579 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH APPROVING AMLNDII TO USE PERMfT .NO. 2001 -005 MA2002 -167) FOR PROPERTY LOCATED AT 3400 VIA LIDO UM t A t .� &9110111 . An applimdon was filed by Dennis and Christine Overstreet with respect to property located at 3400 Via lido and legally described as Lot 2 of Tract 1235, requesting approval of Amendment to Use Permit No. 2001 -005 pursuant to the Alcoholic Beverage Outlet Ordinance (AB O) to authorize a Type 47 ABC license for on -site consumption of general alcoholic beverages, live entertainment and expansion of hours of operation. Won'2. A public hearing was held on November 7, 2002 in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, Califomia. A notice of time, place and purpose of the aforesaid wing was given. Evidence, both written and oral, was presented to and considered by the Planning Commission at this meeting. Section 3. The Planning Commission finds as Mows: 1. The proposed location of the alcoholic.safes establishment needing this use permir, and the proposed conditions under which it would be operated or maintained, is consistent with the General Plan and the purpose of the district in which the site is lopated; will not -be detrimental to the public bealth, safety, peace, morals, comfort, or'weifare of persons residing or worting in or adjacent to the neighborhood of such use;. and will not be detrimental to the properties or improvements in the vicinity or to the general welfare of the city. The - structure that the proposed use will occupy is legal, nonconforming with respect to the maximum floor area ratio, however, the proposed changes in the use do not increase the gross floor area of the building. The amended use permit pertains to the on -site consumption of alcoholic beverages in conjunction with retail alcoholic beverage sales in a building that is designated and zoned for this activity. The use has been conditioned in such a manner to minimize the impacts associated with the sale of alcoholic beverages. The plans, as conditioned, meet the design and development standards for alcoholic sales. 2. The operational characteristics of the proposed use, including the hours of operation, are consistent with Municipal Code requirements. Any change in the operational characteristics, including a change in the hours of operation, would require an amendment to the Use Permit, reviewed by the Planning Commission. 3. The proposed project is consistent with the purpose and intent of Chapter 20.89 of the,Municipal Code (Alcoholic, Beverage Outlets ,Ordinance) for the following reasons: a The convenience of the public can be served by the sale of desired beverages in conjunction with 9 +.M- '2140wa yip 4hat is complementary to surrounding 5'l � City of Newport Beach Planning Commission Resolution No. 1574 Pam 2 of 6 uses within the Lido Village area. Alcohol service is typical and expected by the public in a;�t41t'tg b. The crime rate in the police reporting district and adjacent reporting districts is not likely to increase as a result of the proposed use provided that the use is operated as an eating and drinking establishment, with the on-ite consumption of alcohol incidenta to C. The number of alcohol licenses within the report districts and adjacent reporting districts is high given the nature of the land uses in the district and when compared with County -wide data, but the change in the license classification of a Type 42 to a Type 47 will not result in an increase in licenses within the report district. d. The percentage of alcohol - related arrests in the police reporting district in which the project is proposed is higher than the percentage citywide. However, on -site consumption is not expected to increase alcoholic related crime in that the use is incidental to the use of the site as an eating and drinking establishment. e. There are, no sensitive uses such as residences, day care centers, schools, or park and recteadon facilities in the vicinity of the project site. 4. The Projed has been dewed. and it qualifies for a categorical exemption pursuant to the California Environmental Quality Act under Class L OAinor alteration of existing structures). Section 4. Based on the aforementioned findings, the Planning Commission hereby approves Amendment to Use Eetmit No_ 2001-005, subject to the Conditions set forth in Ex obit "A." action 5 . This action shall become final and effective fourteen days after the adoption of this Resolution unless within such time an appeal is filed with the City Clerk or this action is called for review by the .City Council in accordance with the provisions of Tree 20, Planning and Zoning, of the Newport Beach Municipal Code. PASSED, APPROVED AND ADOPTED THIS 7th DAY OF NOVEMBER 20M r. _t M r Secretary NOES: Npne k-17.& City of Newport Beach + - Planning Commission Resolution No. 1579 Page 3 of 6 E CMrr "A" CONDITIONS OF APPROVAL USE PERMIT NO. 2001-005 1. The development shall be in substantial conformance with the approved plot plan, floor plan, and elevations dated January 22, 2001. 2. This Use Permit for an alcoholic beverage outiet granted in accordance with the tems'of this chapter (Chapter 20.89. of the Newport Beach Municipal Code) shall expire within 12 months from the date of approval unless a license has been issued or transferrmd by the Callifornia State Department of Alcoholic Beverage Conbtol prior to the expiration date. 3. That any change in operational characteristics, hours of operation, expansion in area, or operation characteristics, or other modification to the floor.plan shall require an amendment to this Use Permit or the processing of a new Use Permit 4. 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 a$$put Future owners, operators or assignees shall submit, within 30. days of transfer or sale of take business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. S. The applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in connection with the use will by cause for revocation 6f this permit. 6. This use• pemmit may be reviewed, modified or revoked by the Planning Commission or City Council should they determine that the proposed uses or conditions under which it is being operated or maintained is detrimental to the public health, welfare or materially injurious to property or improvements in the vicinity or if the property is operated or maintained so as to constitute a public nuisance. 7. Trash generated by the business shall be screened from view fmni'adjoining properties except When placed for pick -up by refuse collection agencies. Trash receptacles for patrons shall be conveniently located both.inside and outside the proposed facility. S. No outdoor loudspeaker or Paging system shall be permitted in conjunction with the operation. 9. Ail signs shall' conform to the provisions of Chapter 20.57 of the Municipal Cade. No temporary "sandwich" signs orsunilar temporary signs shall.be permitted, either on -site or off-site, to 10. The alcoholic beverage oudet'is defined as a retail esttiblishment for the sale of general a0holic beverages for offsite consumption as the primary and principal use of the project site. On -site consumption of alcoholic beverages shall be accessory and subordinate to the principal retail use and alcoholic beverages sates for on -site constitxrption shall not exceed 20 percent of gross sales for the business. The applicant or operator shall maintain adequate records to determine � r City of Newport Beach Planning Commission Resolution No. 1579 Pa e6of6 29. A handicapped' assessable public restrooms are. required. The mstrooms must be in compliance with the Uniform Plumbing Code and all applicable Uniform Building Code requirements. 30. The ownedoperator of the use shall enter into an agreement to provide and maintain a m0IM;MII + of 21 parking spates within the Lido Marina Village parking garage to be wxesMble at all times during the operation of the use. 31. The applicant or operator of the fatality may provide valet attendant service for the use in conjunction with the Lido Marina Village packing garage. The applicant or operator shall prepare a valet operated parking plan to be reviewed and approved by the City Traffic Engineer prior to the commencement of the valet service use. 32. Delivery vehicles shall not pads within the public right -of- -way of via lido and Via Oporto. 33. The operator of. 11" v i shall be responsible for the control of noise generated by the subject facilityogenerati9il by the p�� use shall comply with due provisions of. Chapter 1026 of the Newport Beach'Municipal Code: The maximum noise shall be limited to no more than depicted below for the specified time periods Unless the ambient noise level is hig =. 34. Upon evidence that noise .generated by the project exceeds the noise standards established by Chapter 20.26'(Community Noise Control) of the Muniaipa( Code, the Planning Director may require that the applicant or sucreMr retain a qualified engineer specializing in noise/acoustics to monitor the sound generated by t st t,fs *X-ASdevelop a set of corrective measures necessary in order to insure comphauce. J�0 )Between the hours of Between the boors of 9:OQAM and 10:00PM 7- and 10:00PM Location Interior Exterior interior I?auedor Residential. 45dBA 55dBA 40dBA ' 50dBA Residental property located within IDD feet of a conueercial 45dBA 60dBA 45dBA SOdBA to Mue0 use 1z0 1 45dBA 6DdBA ' 45dBA 5WBA Commercial FroE- Perty I NIA 65dBA NIA 6WBA 34. Upon evidence that noise .generated by the project exceeds the noise standards established by Chapter 20.26'(Community Noise Control) of the Muniaipa( Code, the Planning Director may require that the applicant or sucreMr retain a qualified engineer specializing in noise/acoustics to monitor the sound generated by t st t,fs *X-ASdevelop a set of corrective measures necessary in order to insure comphauce. J�0 , City of Newport Beach Planning Commission Resolution No. 1579 Pace 4 of 6 compliance with this condition and shall provide the City said records when requested The time period for the purposes of conducting this review shall be in accordance with Alcoholic Beverage Control Board standards. 11. The sale of distilled spirits for off -site consumption shall not exceed 15 percent of gross receipts of all off -site alcohol sales, The sale of distilled spirits for on -site consumption shall not exceed 10% of the total sales for on -site consumption of all alcoholic beverages. The applicant or operator shall maintain adequate records to detannine compliance with this condition and shall provide the City said records when requested. The time period for the pntposes of conducting this review shall be 6 months. 12. Gross receipts shall be reviewed by the City for purposes of compliance with the requirements of the Zoning Code and Use Permit if the tree is believed to be operating in non- complisom If the sales percentages review finds that the applicant is hot in compliance, this application shall be brought forward to the Planning Commission for review. 13. Approval .does not the *premises o operate as an eating and drinking establishment, v tsstavrant, bar, tavern, a urge or night club.as defined by the Municipal Code,. unless the Planning Commission first approves a Use Permit. 14. The interior area authorized .for on -site alcoholic beverage consumption in conjunction with a Type 47 license shall be limited to 1;263 sq, ft. as delineated on the approved floor plans as "Unit A2" with a maximum of 29 seats. The inetitior area authorized for the retail sales for general alcoholic beverages for off-site consumption shall be limited to 1,328 sq. ft as delineated on the approved floor plans as "Unit Al" with a maximum of 3 scats. OnIsite consumption of alcoholic beverages shall be prohibited In Unit Al. Substantial changes to the floor pleas shall requite prior approval by the Planning Commission. Any increase in area of either .Unit Al or Unit A2 shall be deemed substantial for the purposes ofmquiting review by the Planning Commission. 15. Hours of operation shall be from 10.00 AM to 11:00 PM, daily for the retail portion of the project, and. I:00-PM to 12 :00 midnight Fridays and Saturiiays and 1:00 pan. to 11:00 p.m. Sunday- through 'Thursday for the eating and drinking portion of the project. Organized educational seminars shall not be conducted more than 3 days per week. 16. Live entertainment may occur subject to the approval of a Live Entertainment Permit and dancing is prohibited. Live entertainment shall not occur more than 3 days per week. Music shall be limited ,to indoor areas only and all windows and doors shall remain closed during performances except for incidental'ingress and egress of patrons. Management of the business shall make every effort to keep the doors closed during performances. 17. The sale of beer, whether for on -site or off -site consumption, shall be prohibited. 18. A Special Events Permit is required for any event,oi promotional activity, outside the normal operational characteristics of this retail business that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. Jul City of Newport Bach ' Planning Commission Resolution No. 1579 Page 5.of 6 19. 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. 20. The alcoholic beverage outlet operator'shall take reasonable steps to discourage and correct objectionable conditions that constitute a nuisance in panting arras, sidewalks and arras stumnndutg the alcoholic beverage outlet and adjacent properties during business hours, if directly related to the patrons of the subject alcoholic beverage outlet If the operator falls to discourage or correct naisancea, the Planning Commis m may review, modify or revoke this Use Permit in accordance with Chapter 20.96 of the Zoning Code. 21. Alcoholic beverage sale from drive-up or walk -up windows shall be probibited. 22. Any event or activity stiged by an outside promoter or entity; where the business owner or his employers or representatives share in any profits, or pay any percentage or commission to a promoter or any other person based upon money collected as a door, charge, cover charge or any other, form of admission charge, including minimum drink orders or• We of drinks is prohibited I 23. Loitering, open container. and other sits specified by the Alcoholic Beverage Control Act shall be posted as required by the Stets Deparmment of ABC. 24. All owners, managers and employees mAWg alcoholic beverages shall undergo and a mmsstirily complete a certified. training program in responsible methods and skills for selling alcoholic beverages. The certified program must meet the standards of the California Coordinating Council on Responsible Beverage Service or other certifying4icensing body, which the State may designate.-The establishment shall comply with the requires of this section within, 180 days of the issuance of-the-certificate of occupancy. Records of each owner's, manager's and employee's successful completion of-the required certified training program-shall be maintained on the premises and shall be presented upon request by a representative of the City of Newport Beach. 25. The applicant is required to obtain all applicable permits from the City Building and F'ue -Departments.. The construction plans must comply with the most recent, City-adopted version of the California. Building Code. Adequate access and exiting m;W be provided in accordance with the Building Code. 26. The facility and related off - street parking shall conform to -the requirements of the Uniform Building Code. The project shall comply with State Disabled Access requirements. 27. Wliere.grease may be introduced into, the drainage systems, grease interceptors shall be installed on all- fiftures as required by the Uniform Plumbing Code, unless otherwise approved by the Building Department and the Utilities Department. 28. Health Department approval is required for any changes to the kitchen and other portions of the building that require a Building Permit Page 1 oft ChrkWne Qveratreet From:, Arthur Stockton jsdhurstoWonQsbcglobsl.net] Sent. Tuesday, October 04,20M 10:45 AM To: coverstreet@adelphie.net Subject: PAK more Again, thanks for the ittfenm tdon. You can drop off at the post office until we get a dedicated fax in. The funny thing is that we have a fax at the house, but these computers semch phone lines for fax totes and before you know it someone has taken ova your fax for their own personal adlverdsm& Then I wonder why they do it, because I am so otlbnded that I would never buy their products. Anyway, we Can turn on the fax manually if you want to call me. I am at home this am -.949-675-6074. I was hoping we could keep the old phone number so that we might be able to book some of the private parties you mentioned if they became available. Jame ihousixt it important At the same time I understand and do not want to preclude any of the opportunities you earned and built there. Maybe you could send us any evens thxtyou cannot handle at your new places. Likewise, I hope we can feed catstore as to your new restaurants as well. We wall just have to evaluate the efficacy /advisability of the cooking situation. We will likely reach the same conclusions you did. I do stall want the names ofilxose pew* helpers you mentioned. I remain quite paranoid about changing ANYTH NG without the City in the loop and happy. It would be nice to Save Someone help us who is wired mw the politics. We will change tho.locks to secure eveayt>>Jimg. We use Balport as wdL Have You had au theft problems with the wine over the years? I would appreciate any input you have on any theft issues - bar or Witte. We remain interested in purchasing the building. I know you have a lot on your plate and, as I told you before, nobody understands your position better than Carolyn. To this very day she has not forgiven me for the position I put her in with the businesses when the kids were young. She was beside herself most of the time and I made it worse with my travel schedule. Worst of all, I missed a lot with the kids when they were growing up. I don't think any amount of money is worth that and I would do things quite differently if given another chance. If at would be helpful and your plate has room, would you and Dennis like to discuss the sale of the building? . FI The pot around the perimeter are taken care of by Lido Marine Vltlage. They betong to them. donne Is your ccrtact. The phone number is one the wall directly across Vie Oporto. She hardes all of the leases 'for the waterfront and manages the MRage. Sotry, I don't recall her phone number. Fine of the Olive Trees C -3 10/4/2005 5�3 Page 2 of 2 Yes SBC Is the phone line. We will arrange to remove our phone numbers as of 10114. We will keep our main line and refer our customers to our Beverly Hills store since we have a lot of overlap r between stores. Yes, KY19 Is confidential in Jarhle. Thank you. Kyle leaves for Maui on Thursday anyway. How do you want me to gal the information to you siren you don't he" a fait Shall f drop k at your mail box on Riveretde? Hood - we looked at it and didn't want to deal with a Grease Trap so we dropped the matter. Video Taping on Saturday 10115 is fine with ma I'll -video tape on Friday 10114 when my kids are in school. I Are you charging the locks? Relport to familiar with the Building. H you don't want to you can amply change the entry codes on the Alarm System which is Bay Security.' Contact is Janet Ganrgar 850 -WW. As mentioned, the coat is $345.00 per months which is pretty reasonable. They also send you a monthly report . of lrftA per code. You can have. up to 6 Individual codes. C Ctsts 0. it i 1 C-4 10/412005 S�, `f NEWPORT BEACH ADrimv STR&Trvr sERvICES May 15, 2007 SVQM LLC 3400 Via Lido Newport Beach, CA 92560 The City of Newport Beach does hereby authorize live entertainment aetivib es to be conducted at 3400 Via Lido, Newport Beach, CA, 92560 attel this permit must be posted at the location, This Permit is issued to Sejoar, LLC and is not transfersbte to another location or entity. The approval of this permit is contingent on the compliance with the regulations for operation as defined by Newport Beach Municipal Code Section 5.28 041 and the following specific conditions: 1) Hours of live entertainment shall be limited to: 1:00 p, rr to 11:00 p.m. T7itn. 1:00 p.m, to 12:00 a.m. Fri., Sat, & Sun. 2) Live entrxtein=t is permitted, Fridays. Saturdays and Sundays. On alternate weeks, Thursdays, Fridays and Saturdays: 3) The live entertainnent shall be limited and confined to the intaior of the structure. 4) Dancing is prohibited in oonjwm ion with this facility. . 5) Comply with all conditions of the Use Permit. . 'This permit may be revoked for any of the fallowing reasons: 1) Failure to comply with the above stated conditions, 2) Tlte'permitae has ceased to meet the requirements.for issuance of the permit, 3) The establishment has been operated in an illegal or disorderly manner cr in violation of any of the regulations set forth in Sectiem 5.28.04. 4) Music or noise from the evtsblishrnent for which the permit was issued interferes with the . peace and quietness of the neighborhood. 5) The permittee or any person associated with bim as principal or partner, or in a position or capacity involving total or-partial control over the establishment for which this permit is issued, has been convicted of a criminal offense involving motel turpitude. Approved by� `-•.•C• • Permit Conditions Acknowledged cc: City Manager .,Police Department Date: Date:.s 3300 Newport Boulevard • post Office Box 1768 • Neurfort Beech, Cedifornia 92658 -8915 Tbleplime: (9491644-3141 - Fax: (949) 644-3073 - wWw.ctty.newport•beach.ca.us D-1 F)r'yrhl hd- — MyffJL R) �P' Crff OF NEWPORT BEACH... RECREATION & SENIOR SERVICES Wes Morgan, Director May 17, 20017 Sejour /Arthur Stockton 3400 Via Lido Newport Beach, CA 92663 Mr. Stockton, On Wednesday, May 16e you submitted 3 Special Event Perntits for events planned on May 17, May 18, an May 19u' at Sejour (3400 Via Lido). You had beea'previousiy . advised that Lavel I Special Event Permits are required to besubmitted a minimum of 6 calendar days prior to the event dates. Th+afom the permits you submitted for May 17th, I and 19th, 2007 are hereby denied and you are not authorized to hold thcae events. In the future, we WW be happy to pm mss your pan*.requesta if they are submitted with at least 6 calendar days notice. If you should have any questions, you can aont8ot our office at (949) 644 -3151. Sincerely, � Z :... u Sm 1.evh4 Recratim ✓Wedwendent Jay Garcia, Senior Planner Pai ick Alford, Senior Planner Charles Seance, Code a od Water Quality D-2 a WW Newport Boulevard • Poet Of lce B=1768 • Newport Beach. CaWornia 92658 -8915 Telephone•. (949) 644-8151 • Fare (949) 644 -3155 • www.city.newport- beach.cams I I -1 Page I of I Christine Overstreet From: Arthur Stockton [sut@sejau.usj Sent: Friday, June 15, 2007 2.49 PM To: ooverstree4adelphiamet Subject: illy Wien Permit Dear Dennis and Christine: i plan to file for a Use Permit Amendment on Monday. Writ either of you be available for a signature as property Darner on Monday? We are going to file, for the.ab ility to have an integrated retall wins, store and restaurant. We will work our way back from there. Business oontlnues to be vary strong. Unkwkr *, we are tuning away more than 100 people per weekend because of our operating limb. Everyone at the City seems to have a good attitude. t am optimistic Batt we can get most of what we need. i continue to appreciate your indulgence in this dff"A time. Art C.. 2!25!2008 A-3 5W i J Christine Overstreet From: Arthur Stoddon [art@sejour.usj Sent Friday, June 29, 20071:96 AM To: coverstraseadelphbl.nel SubJect Miscellaneous Items Hi Dennis and Christine: We will have the rent check on Mmxiey. We will put It in your madbmr across the 3trest unless otherwise instructed. have received several notices now of a pending Forcible Entry and.Deiainer in Orange Cor arty Superior Court In my conversation with Christine last Friday, she bud me it had been withdrawn. I am operating In reliance on that statement. The roof Is SIM an open Wn that roads to be addressed. The roof has leaked every time it has reined sires we took possession or the building. Acoordingiy, we are not responsible for these repairs or consequence& The roof stlll leaks in the women's reatroorn and lately "even leaks when the air cortd (loner sweats. The drywall also needs to be repaired on the ceiling. I am Simply too busy to address these items and need you to take care of k I wiB make myself available to meet the repairman. It is my strong opinion that the roof creeds to be replaced. The damages that oould ensue if it keeps leaking are considerable, Also, there is a strong risk of black mold. Finally, I should have the use permlt amendment finalLred thls coming week. i was able to pet the'radlus map and address labels. i Wig try to have this to you Monday or Tuesday and would lice to Ste with the City by Fdday. CIt appears that the worst is behind us_ Business Is very strong, even though we are operating with our hands tied oehihd our backs. C. Sinoerely, Arthur Stockton 7/1/2007 A-4 50 3 1 se�our, LLC 3400 VIa Lido Newport BewA CoMmuia 92663 (949) 310-698 Aug= 1, 200'7 Planning Dot . '-.;: City of Newpod Beata 3300 Newptut Soukvwd Nswpmt Beach, Cam=is 92658 RS: to Use Pamnit Nu.b, 2001-005 —3400 Via Lido T.adiea and Qom; - - Y Attached is the proposed gbmdmeM to the ahovo- -we pwnt Bacaus am no phydod dkm� WhOKOM PWosed to the strums we are meat to'mh m't compieoe sets of blu6ri ft be waived 9Ve have enci�ed Me whtoh Arek be adequate ibr on imes as'vmn as as y mostsem decwk. making 1 As You already kaovv, thin u 1mb been a vwY &Mcta bleghuaiesa We wuW app a fu out this Pmss to the wheat our busine ss-bas the hest chance to smvim pos�ble sa that S' F. Stockton HIM Crr3f OF NEWPORT BEACH COMIXI YK AND SWX0bnC DEVUOPMKP PtaxratroDEPARTIOW 3%o x WPO1it' BDULLVMD l l- NEWPORT BEACH. CA 41658 (94M 644-3MO. FAX (949) 660 -3230 PART I: Cover Page ,,. APPLICANT Application: ❑ Use Permit No. ❑ Planning Director's Use Permit No. ❑ G.P.AJAmendinentft ❑ Variance No. �- —_ - -. -- _ FEES: CONTACT PERSt N (if dii%atl �"t rpur LLL Mailing Address 3`i o0 ej2Gpst��3 Phone: ( 4$310 - 74 I'S 'Fax (J`i+l) 4--7S-- Property Owner (ifdiffcrent Sour above): Mailing Address:_ Z 2 Mailing Address: � � - t-- Phone: ( ),''• Fax { PROJECT ADDREM.- 3 U V �.w '. d •y Project Description (If applying for a variance, also complete attached form for required findings.): PROPERTY OWNEWS AFFIDAVIT (1) (We) . property(ies) involved in this applieadm (I) (We) t'Lrd answers honein contained and the information herewith knowledge and belief. SignaGtre(s) depose and say that (7 am) (we are) the owner(s) of i der penalty of perj , that the foregoing statements a An all resper.KS ttyoo coprwA m the best of (my) (ot J NO'T'E: An agent may sign for the owner if written authorizatiea fmta (I a record owner is filed with the application. D-6 3 i I t J v f DO NOT C'QNf LVM APPLICATION BELOW THIS LINE FOR PLANMNG DEPARTMENT USE ONLY: Indicate Previous Modificat am, Use Permits, Specialty Food Service Permits, etc. Goal Plan Designation: — — Zoning District: Coastal Zone: YES or t ata# aaatrtatt��aastasr* asaar�ssaasasatsas .�rtaaaataaxa # #trata *sssttaatat Date Piled: Fee Pd: Date Deemed Complete: Hearing DaW, - Pwting Date: Mailing Date: Planning Directur Action Data APIA P.C. Hearing P.C: Action Date Appeal C.G. Hearing_ C.C. Action -- D7 6( G i f 1 C: PART H: Project Data sheet. Project Comoon Name: Appikatioa Number(s): Project Addresr/camtion Assessors Poree►Number(s): Lagal Description (Attatb on separate sheet, H uecassry) Lead line: Proposed Land Usm Zoning District: Land Use Designation 3 M L �jl P.skting Daretoplowed Proposed Deydopmout Zonlars Code RatIdbuseat ' Lot Area (st) Lot Wk t6 (ft) Lot Depth (ft) Setback Yards . Front (ft) Side (ft) Rear (ft) Gross Floor Area (sf) Flow Area Ratio Building Covmpt (4L) Building Height (ft) LuWwaping (94) pw4ft M N/A Porumg Number wf EaTtoyees Howl of Operation Number of seats . Dwelling Units 3 M L �jl PART JIM Plans - Each application shall be accompanied by 20 sets of plot plane, floor plans, and elevations; 8 sets shall be drawn to scale on 24 inch by 36 inch sheets with margins not less than 112 inch and 12 sets l . shall reduced to I1 inches by 17 inches. The required number of plans to be submitted for a Planning DirectWa Use Permit application is 12 sets; 4 sets drawn to scale and 8 sets reduced All plans shall be collated, stapled and folded to a size of 8%" by 14 ", rnaa9mum. v i : of T I r �� M L.1 _T-9 75 i ti •:7i I_LIT� A. not Plan Plot plans shall be hilly dimensioned and show the following irdormation on the subject property and to a minimum of 20.6mi on contiguous properties: r Vicinity Map. • North arrow. • . Scale of the plan • Existing and proposed property lines • Required and proposed yard setback lines. + Locations, names, dimensions, and descriptions of ail existing and proposed right of way lines, dedications and easements. C + Locations ofmistitg and proposed structures, additions, utilities, driveways, walks, and open spaces-. • Any stmatures to be relocated, removed or demolished. • Locations, heights, and materials of existing and proposed walls and fences. ' • Locations, dimensions and descriptions of parJang areas. • Location, heights, size and materials of signs, • Existing and proposed grade elevations and any signiftent natural features. • An Information block containing the name and telephone number of the contact person and calculations m tabular, form showing compliance wilt. applicable property developnuent.regulatiops (Le., density, floor area limits, height, parking, etc.) D -9 5q i x i r� C H. Floor Plus Floor plains shall be folly dimensioned and shove the following inforcuat'ton: • Overall building and individual room dimensions, including square €ootagei calculations. • All proposed . interior walls aid partitions. • Room idMOUCation. l , ... . .�: C. Elc°vaat q@3 Elevations shall be filly dimensioned and show the following information: • Exterior wall openings. • Exteriormatesials and finishes. • Roof pitches. .• Ali roof amrited equipment and screening. • Heights above grade of all floors, eaves, and ridges. D. Ootlgoal llfatariais • Materials board (specifications and samples of type; ootor aad texture of proposed coasyiution xtisterials). • Color pbotug Whs of the subject and adjacent properties. Part lV: Ot¢er Wormafion add lfaferiais Each opplication shall be accompanied by the following: A6 RrWtitt e& List and &Wm --es Parcel Maas I. One set of gummed address bbds ( Avery " 5160 or equivalent) containing the names and adder of owners of the subject property and properties within a radius of three hirudrad (300) feet of the exterior boundaries of the subject property (exclud &I, oads Md wa tvays . for Mm n dal oronertiss onlyl shall be submitted. The list shall also contain the addresses of occupants of residenliaRy -weed property within the req=ed.presctlbed radius Mule if the Planning Department makes the determination that the project is of significant public interest Additional sets of gummed labels shah be required if the proposed development is appealed or tailed up far review. Z. An assessor's parcel map(s) indicating the 300 -foot radius line and the subject property sha11 also be submitted_ D40 ? This information a6 a be prepened by a title co g bttsiaess m Oran qty, utilizing frames and addresses �thee last o ownership sting service ro loin � recent assesses equalized assessment ro4 and utilizing the maps, or alteanativeiy, from such other records as contain more recent names, .. addresses or maps, The iafbrmatiom shall be verified by the title companY or and be tuxampanied by a written affidavit. ownership listing service ! $. Prefectl)um o andjusfiliration , A statement describing the proposed project in detail. This will serve as the formal statement to the rrJevant ginfda7nation which' Project. is and why it should be approved. Please include any No information to fie application. Particu ar attention should be given Maim& ! atry dings that must be made in order to approve the applio oa (see table I below). ' nca®gw1�= irGlRaaC 20.!M:040 Establishment of wade hY the Ptewing CwMkSiou 2045.030 (B-3) sit Exception Femdts 20:67.045 (B) Accmory Outdoor Dining 20.82.050 (B) . waiveroflotadon,MWWOm f e arms 2087025 (B) Crb�en� 20.82020 (B) Modlfkwioa I MaOts ( Gwawmmo 20.93.040 For cwsdorami m conversions ' 20.83.025.20.83.035 (B). Use Pamir; (Gaw4.. 20.91.033 (A} To ezeeed.Uase dervelopadent a0ocatfwts 20.63.040 (a of C) To alitiw meted use developments with toss d= 023 FAR far couvuacial development 2U.63.04U (b) . To rcsnOm Of CIUMOW or Degrayed 20.62070 Conversion of a mmannum FAR use to a Base FAR use orto a ReducW FAR me. or 20,63.050 (B) conver- Sion of a Base FAR me to a Reduced FAR use To trat!rmeqI avelopmettt intensity, 20.63.080 (1) IToadm waive of off -street parking and g =a" 20.66 100 (A) Far her s and cocktalt Inunges I 20.82020 (B) Fora° 20.82.020 (C) �Varimtces (See page a ofapplica0onj .. 20.91.035 {B) e �W e Enrgnmental Information Form: The Environmental Information Form is intended to provide the basis information necessary for the evaluation of your pwjeet to determine its potential environmental eflec -'Phis review provtdes the basis for determining whether the project may have a significant effect an the environment, as required by state law_ Aft this information has been evaluated by the Funning Department, a detea umbon will be made regarding, the appropriate etvironmental documentation for your 4 project- D -12 69 Variances: R&Mgndy Qs: 1. That because of special circr� applicable to the property, inclitdmg sip, shape, topography, locatk m or surrounding, the strict application of this code deprives such property of privileges enjoyed by other property in the vicinity sad under identical zoning classification. 2. That the granting of the application is necessary for the preservation and enjoyment of substantial property rights of the applicant. 3. That the granting of the application is consistent with'the proposes of this code and will not constitute a grant of special privilege inconsistent with the imitations on other prgmh w m the vicinity and in the same zoning district 4. That the granting of such application will not, under the citcurmstamces of the particular case, materially affect adversely the health or safety of persons residing or working iu_ the neighborhood of the property of the applicant and will not under the circumstances of the particular case be materially detrimental to the public welfare or injurious to property. or improvements in the neighborhood. To aid staff in determining that the .finding can be made in this particular caw please answer the following questions with regard to your request (Please attseh'on separate shear, if necessary.) I. What exceptional circumstances apply to the property, including size, shape, topography, location or surroundings? 2. Why is a variance necessary to preserve property 3. Why will the proposal not be detrimental to the neighborhood? i .y Ui' ice^_- }l V!.91 ;-1111177.10 The purpose of this amendment is to permit Seyom to operate as a f ttly integrated Art Gallery, Wine Store, Tapae, Wine and Max" Bistro. The principal goal of the amumdmesgt is to peanut Sejoame to utiiimm its nature fatality for these.pmposes, ma&w than Lave the space apportioned far these was as y exists uoda Use Permit No. 2001 - W5 - C;ondttiomofAppwvaL The proposed operation is illustrated on Exhil9t A attached berrRo. Sejo r is nearly two pears old and anchor the comer of Ildo Mar ma Village. The VIDW currently is in staff of deterioration. It is hoped that there w>til be redevelopment, t, be lire thft is far from certain and sdll may be five years away In the the ViBage is no Trager a aigniffiwtut pedestrian destinaaa .A iy. after five years of effort bath by the prior owner and Sgorr, the operation as currently pernitbed has beea uoproftble. Howevet .what has been generally sumeadtl and has bolstered retail sales of wore, cordiale and acmagoriea has been to the acility as a roman evening destination as weD as Eon special evens focusing on wine, cor&ais, umartinK scotches aced tba like as cmftwoes. 'These even mobide food ) bmAg wens, went partres, corporate events, wedding reoeptl00% birtlmday parties, ed<anmblt events. eta. &me of these events occur is coajmxdc 'whh harbour cruises wW& od&ube in the Viler. Sea}our is a very desirable low hr these everts due to its onque, Eampean amboa ce, which will ninny be enbenced by the integration of a fine art gallery. under the mama use peanut. however, Seilomr is wt allowed to serve alcohol or food in the largest moms most logical fur theft evearts. Spedfically. S40M . is the fallowing a4ustments to the Conditloms of Approval fame Use Pe rr ait No. 2WI -005 (ariacbed hereto as limit By 1. Ravine c odiden nmsambec 10 to give equal emphasis to wt -site end off -site alcohol sales. 2- Revise aoad don number 11 to read tbat do majority (500 of on -silt and off -site sales wiih be wine_ I Revise tondition nuribw I3 to permit Sejour to operat6 as a fully integrated Art Gallery. Wine Store, Tapas, Wien and Martian Bistro . 4. E6i»>ii cmi tion number 14 segregating space strictly fer retwL 5. Revise coedit m number 15, to reflect integrated homes of operation from 11:I)o AM until MdaW Suimday through Wednesday and firm 11:00 AM until 1:00 AM ThusdW — Saturday and on any day before a fedamlly ieoognized holiday_ 6. -Mkfiuft Condition 17 prohibiting do sale of beer. 7.- flinninah Condition 18 and permit Sejoues occupancy w be increased to the n>aximmin number of people allowable as determined by the Mdmg Department (recently csfimftd by Me fire department to be about 85 people). D-14 50 it is our sixtem beii6f thst SOJOUr WJU IMMUM M asset to the CM=Mty and Lido Marina VMqV =der these oanditmos. It is also our sincere boWffid these is more then adequom parking aymItWe in the wasting p airing Wrap and m=oundmg arm to accomirmideto Sejotes nerds vi*M being a burden to the 9mmunding oormunity. Sojour can obtain additional pmctmg • from theprogs depending on the occupancy detcriniustions described above D-15 �xo _y Exlu'i it A operation Hhmpriat C. I D -1b �O I { r C i r � yhtj m14 1N 3PrR . o..� su,r.pft an , 0 � a 1 t 0. IZv'�-eati I Ic�S;r -o� h Sp «eel Evck -H, Roar, L <�L° . 6 4y, Zo D-17 (fib E�h►'bit B { Um Pon* 2ool -005 CmMxm of Approval P -1S Page I of Christine Overstreet i 1, From: Arthur Steckler [aRhucaEoc�dan�6bc721obat.nafl Sent Thursday, August 02, 200710:23 AM To: coverstreet@adelphis.net Subject:. Re: Check and Use Permit Amendment Attachments. Project Description and Jus;tifmudlon.doc Hi Christine: I have the rant check and the completed Use Permit Amendment- Would 00 to coordinate with you and drop off today. !Leff you a phone message, You can reach me M (949) 310 -7898. If at all possible, would Wks to get your signature and possibly file this today. Attached is the project description attached to the Use Pernik Please let me know if you have any suggesbons or revisions. Thanks, Art X65 r Overstreet's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 366 -9463 The, Menu at Overstreet's tk�.�� �n6 a Wben food and wine fad a parkat marriage, it's a magical moment, ea ortfa p%abie sm4W axpe Wce. -Dmnb Overstoad Overstreer'sNow McOafde Small Plates Malpeque Oysters on the Half-SheA 1 champagne mignonette /flew de sel 125each Cured Olives / candied walnuts / coriander / lemon 3.00 Olive Tapenade / shallots / ezame, fsaiche /toasted baguette 4.00 Croque Madame / bacon -onion marmalade / gruyere / field gtoens 6.00 Wild Mushroom Santee / creamy polenta / bleu cheese'/ balsamic reduction 10.00 5—a lads Grilled Rgs I bleu cheese f parsley f shallots. 6.00 Kenter G reens Salad / sherry vinaigrette / pine nuts / parmeshn 6.00 English Cucumber Salad / cherry tomatoes / basil /balsamic vinegar 6.00 Heirloom Tomato Salad / basil / chevre / citrus vinaigrette 7.00 Chicken Aneho Chile Grilled Chicken / sweet corn salad / red onions / parsley 9.00 Five Spice Chickeu I coconut steamed rice / ginger broth! bamboo shoots 9.00 ' Pan Roasted Chicken Breast / wild mushroom / cous sous / pine nuts 9.00 E-2 t6 I I I t C. 14 Oversrreer s Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 566-9463 From Sea Cold Smoked Tasmanian Salmon / dill a6me fraiche / vodka / mesclun mix s X00 Steamed Mussels /.white wine/ garlic/ shallots 9.00 Ginger -Soy Marinated Prawns / star anise pans -oo to / scalli,=s 10.00 Ahl Tuna Tartare / Asian aioli / guarsmola / ponzu sauce 12.00 Pan Roasted Alaskan Halibut / fava beans / tomatoes / Fn&h peas 12.00 Pan Seared Sea Hass / celery root Pume / English pea emulsion / black sesame 12.00 Traditional 1oz. Service of Caviar/ chives / egg / shallots / capers / toast points Sevraga 55.00 Ossetra 65.00 Beluga 75.00 Frorn The. Land, Roasted Lamb Chops / cranberries /couscous / mustard jus. 14.00 Seared Foie Gras / caramelized figs / baisamic gastrique / frisce 22,-00 For - 21Srt All Desserts, 7.50 Berry Trifle / raspberries / blackberries / whipped cream Fran f elico -infused Chocolate Mousse / singic- estate chocolate / whipped cream Black & White Sundae / chocolate sauce / marshmallow cream / vanilla bean ice- cream_ Tapioca Brulee / caramelized sugar / mint / blueberries &3 VI I i 1 C -. Overstreet's Wine Bar - 3400 Via Lido, Newport Bank CA 42660 (949 }566.9463 The Cheese Qgaustation. There are more than 2,000 cheeses in the world. Here, Chef Jason has selected a few of his current favorites. What's more, to frilly explore the cheese's full range of flavor, he has paired each cheese with key mpkiients. Much like wine, cheese can be described in term beyond the obvious. Seldom does someone say, ``his wine tastes tyke grapes." More often one hears, "This wine Idndu tastes like... grasslvaala/wood/smoke/pears The same can be said for cheese. Close your eyes, take a bite and ... enjoyi Our Current Compositions Goats MUk Gouda, raspberries peppery I tangy / from Holland Pave du Morin, Whisky- smoked pecans —soft / refreshing / creamy (cream is actually added!) French cow's milk Point Reyes Blue, walnuts, honey — California's only classic-style blue cheese Rochebarou, candied cashews, blackberries soft French cow's milk cheese / swathed in ash Crottin de ChavignoI, peach, balsamic reduction - -salty yet sweet French goafs cheese One Cheese Composition 7.00 Three Cheeses 12,00, Artisan Cheese Board, the entire selection'of Five cheeses 15.00 Please Note: All cheese served at Ovastreet's Wise Bar can be purchased at our retail counter. Take home a little wedge of heavenl �6 Ovestraet a WfifeBar 3400 Via Lido, Newport Beach, CA 93660 (949)566-9463 The Prix Fixe The Prix Fixe menu is the crux of the OvestreWs. mission. Here, we've paired some of our favorite plates with wines that offer both balance and symmetry. Cratsin pairings help to accentuate or highlight a'flavor, while other pairings are simply to counteract or tame an unruly ingredient. Always changing and always fun, the OversuuVs Prbt Fixe is a total- dinbrg- experience. Xick up 'ye' heels and settle int Prix Fixe # 37 77rrse Courses Paved Wrh Yhrm Glosses of wine 45.00 English Cacti mbar Salad // Chateau Haut Rim Bordeaux Ahi Tuna Tartara // Toni Mar, Pivot Blanc Cheese Compaeldon. Pave du Morin, whisky- smoked pecans!/ Dehase Gego Prix Rite 1112 Three Courses Paired Whir T kw alassas of Wine Kanter Greens Salad !I Teruai & Puthod, Tatra di Tull Glaget-Soy Marinated Prawns // Gerhard, Riesling Cheese Composition: Roehebaroo, cashews and blackberrias // Bafleyana, Pivot Noir Prix Flxa #82 Five Courses Paired With Five K Glasses of Wine 65.90 Heirloom Tomatoes d Bouvet Pan Roasted Chicken // Chateau Montelarab Chardonnay' Grilled Figs # Byington "Apiage," Californian Bordeaux style blend Cheese Composition: Crotdn de Chavignol, peach and balsamic reductioal/ 8cheverria• Berry Tripe I/ Chateau Coutet, Barsac Prix Fixe #61 Five Courses Paired With Flve Y, Glasses of Wine 65.00 Yenter.Greens Salad # Colombelle Cold Smoked Tasriranian Salmon // Sokol Blosser, Evolution #9 Roasted Lamb Chops # Dowaing Family, Cabernet Sauvignon. Cheese Composition: Point Reyes Blue, walnuts and honey /I Fusee, Syrah { Tapioca Brulec // Chateau Coutet, Barsac `- Please Note: Prix Fixe dlrmere are carefully planned for your anjoymeat. Please, No Substitutions. MI A �'6y i Y - Dv�.rtreat's A'fna.8m 3400 Via Lido, Newport Beach, CA 92660 (944)566.9463 C ..,bubbles. Wine is the world', most intriguing beverage,. It bogots sn endlessly festinating conversation do. involves mathematics, science, art, musio, opinion, romance, speculation, desire... .. Denntt O►�errtrtar Overstreer',r New fr"we Guide MUM „ - NV Bouvet, IAdubay Signature, 141ro Valley, France 4.00 11.00 delicate, perfume, vWU96 candy. roses 199 Varichou & Clero, Brat.Blano dq Blanca, Frame 6.50 20.00 poignant, lively, creamy, toasty, c'rirvs . NV Piper- fteldsieelt, Brut Champagne, France (split- bottle w /straw) 14.00 electrifying, fin. oyster shell, hazelaut, toast NV Lansou, Brut Champagne Black Label, France 12.00 50.00. proud, consistent, dough, honey, pepper NV Nlumm do Craa=t, Brut,Blanc de Blsucs, Champagne, France 20.00 65.00 determined, solid, crisp sinus, rare mineral '93 Dom Perignon, Brut-Champague, I?mnoe 100.00 dignified, chic, toast, coffee, baselnut. '55 Uals Itooderer, Crlstal, Champagne, France 150.40 dazzling, opulent, rich, citrus, dough Don't see anything yea like? Just askt Our salon and tsllar is Mod with the best the world bas to offer. Overstredt's Wine Bar bottle prices are based upon on -site ooasttruption oily. Wines from the salon a ad collar may requiie a $15.00 t orltage fee. Ask your server for details. lcl( _j 3 i Oversfrew Is MM Bar 3400 Via Lido, NwgwrtBeaA CA 92660 `r (949) 566 -9463 .:.white rne!g[urri demi 2W 12DI& 2.25 550 20.00 '01 Chateau Haut Man, Bordeaux, France 3.00 101 Colombefle, Cotes d6 Gascogne, France 1.25 3.50 15.00 vivid, appealing, green peach, lemon, mineral NV Sokol - Blower, Evolution No. 9, Oregon 3.25 640 25.00 100 Heather Ranch, Chardonnay, Russian River Valley 3.75 7.50 25.00 brooding, smoky pear, toast, butterscotch, melon "get in my belly," butter, pear, citrus, monkey elbow '00 Torsi Mor, Pinot Blanc, Oregon .5.00 10.00 25.00 Va.om%l, peach, pear, melon, spioo 7.00 20.00 rne!g[urri '99 Teruzzi & Puthod, Terre dl Tuft, Italy 2.25 550 20.00 '01 Chateau Haut Man, Bordeaux, France 3.00 6.00 20.00 Csurprising, rogue, grass, nuts, fivit NV Sokol - Blower, Evolution No. 9, Oregon 3.25 640 25.00 401 Gabriel Meffre, "Fat Bastard" Chardounay, France 3.25 6.50 20.00 "get in my belly," butter, pear, citrus, monkey elbow Don't see MAIDS You like? Just askl Our saran and cellar Is filled with the best the world has to offer. 102 Isabel, Sauvignon Blanc, New Zealand 340 7.00 20.00 waif- mnwaY-ahvt, peer, grapefruit, ce16ry7 '99 Kamen River, Chardonnay, New Zealand 7.50 15.00 45.00 debonair, refined, apple, spice, peach 11� '99 Teruzzi & Puthod, Terre dl Tuft, Italy 2.25 550 20.00 gracoM, darling, lemon, apple, vanilla '00 Gerhard, Riesling- Kabinett, Germany 3.00 6.00 25.00 brilliant, dense, nectarine, mineral, passion NV Sokol - Blower, Evolution No. 9, Oregon 3.25 640 25.00 uncanny, complex, floral, sweet, dry '00 Chateau Montelena, Chardonnay, Napa Valley 4.00- 8.00 28.00 stalwart, oak,'aprioot, fig, vanilla Don't see MAIDS You like? Just askl Our saran and cellar Is filled with the best the world has to offer. Ovaraneer'a Wine Bar botch prices are based upon no-sits consumption only. Wines from the salon and cellar may require a S15.01) corkage fee. Ask your server for details. lr7 s 1 ObwVreel'r One Bar 3400 Via Lido, Newport Beach, CA 92660 (949)566.9463 ...red W,)- '98 Pascal Avril, Cabernet Frane, Chinob, Loire Valley, France 3.50. 7.00 20.00 gentle, velvety, plains, spice, leather - '99 Beileysim, Plat Noir, Edna Valley . 4.00 8.00 30.00 silky, suave, cherry, plum, Gaga '00 Elk Cove, Pinot Noir, WOlamette Valley 5.00' 10.00 32.00 prize- fighter, symmetric, strawberry, vanilla medium C. 100 Bodeg" Toresnnas, Debesa Gago, Tore, Spain 225 aggressive, wild, Plum, blackberry, rustic spice 4.50 20.00 '98 Chateau 'CMzesu,Pessac- L6ognan 4.50 9.00 32.00 berry, leaf, cbocolat% tobaoe% suede Puma's 09 Canoe Ridge, blerlot, Wasbington smooth, cht'll"m', black cherry,' currant, chocolate 4.75 9.50 35.00 full '99 Byington, "Alliage," Sonoma county' 4.00 8.00 30.00 steadfast, blackberry, cummt, smoke, mint NV Fusee,.Syrah, California 4.00 8.00 30.00 shotgun blast, truckload of fire; currant, pepper, meat '99 Rex WA Plant Noir, WIiiamette Valley 4.25 8.50 35.00 leaky- fNsb-fly, raspberry, chocolate, mingling licorice '99 Downing Family, Cabernet Sauvignon, Rutherford Valley 5.50 11.00 35.00 Inky, aniSe, black currant, moeba, bees knees '98 Virgisie de VelandrandiSt.- EmMon, Bordeanz. kinky, 9.00 18.D0 70.00 ` smoky, vaniUe chocolate love, berries . Don't see anything you like? Just ttaki Our salon and cellar is filled with the best the world has to offer. Oversbeer'a Ware A� bottle prices are based upon onaite consumpti0n obly. cellar may require a SIS.OD oorlmge Ore. Ask your server for detalls Wines from the salon and >ra W,)- Oversrree!'s Wine Bar 3400 Via LW, Newpcd Beach, CA 92660 (949)566.9463 1 ...confection The only probletn'with so-called dessert wines, in my opinion, is dessert. Hemingway is supposed to have said that-say man who eats dessert is not drinking enough •,lay McInerney f Bacchus &.Me, Advenpdes in the Wine Cellar r '00 Rebert Mondavi Winery, Moscato d'Oro, Napa Valley anstoM simple, sweet, litchi, pear NV Osbourn, Ruby Porto, Portugal poised, lengthy, caddy, dancing ne ncies> gorilla NV Bodegas Dios Baco, Sherry- "Oiaroso," Spain dapper, rich, hazolout, semi - sweet, olel 197 Chateau Coittet, Barsae, France siren- esque, boundless, lemon, pfneapple, honey NV Jean Filiious, Pinean des Chareates, France esoteric, heavenly, almond, caramel, a sweet bite Dou[ bottle 6.50 28.00 8.00 30.00 8.00. 30.00 14.00 50.00 14.00. 50.00 Don't see anything you like? Just ask! Our salon and teller is Shed with the best the world has to offer. Overstreer's Wine Bar bottle prices are based upon on -site consumption only. Wines from the salon end cellar may require a $15.00 corkage fen_ Ask your server for details. m .0verstreet'z Wine Bar 3400 Via Lido, Nawport Beath, CA 92660 (949)$66.9463 ,..flights three 2.5oz. pours 1. Chardoncay; A lesson In tarrair (climate, mlcroelirrtate, and soli cmposidon) 15104 -A diverse grape variety that from one wine to the next, shows a complex range of character. The wines of this flight are all made from the exact same grape, but you'll soon taste the differences in climate, soil, and winemaking. Most interesting will be the major differences between the two Caldbra!an wines (a and a) a. '00 Heather Ranch, Chardonnay, Russian River Valley b. '99 Kuam River, Chardormay, New Zealand c. '00 Chateau Mdntelena, Chardontwy,Napa Valley 2. Picot Noir. Terroir with the world's most finicky grape. 15.00 Just when things couldn't gat say more difficult ... Pinot Noir comes alongi Not only does the vlgneron (winemaker) have to deal with terroir, but also he or she must contend with a grape variety that doesn't follow the rules! This genetically unstable grape has problems at every stage. Offspring (gapes are often nothing like their parents. And due to a rare presence of 18 different amino acids, the grape can "act up" during its sometimes vielent fermentation. All this being true...a great Picot is like no other wine in the world! AM The sexy rewardsof complexityl a. . '9/,9 Baileyana, PinctNoir, Edna Valley b. '00 Elk Cove, Pint Nov, Willamette Valley. c. '99 Rex Hill, Picot Noir, Willamette Valley 3. Bordeaux and Bordeaux - styles It's all about the blendingl 19.40 - France's Bordeaux region has long been at the pittaaole of Winemaking excellence. Simply, in 1855 France built a classification tier for all of the major Chateaux; fast through fifth growths. The Chateaux of the premier taus (first growths) prodoce the most sought after wines in the world. The "Big Red - Guns:" Lafite- Rothschi7d, Mamoru. Latour, Haut- Brion, Mowon- Rothschild But beyond the history, beyond the terrotr, and beyond the hundreds ofyears.of knowledge... then is the blending. Usually, Bordeaux -style wine is driven by one of two grapes: Merlot or Cabomet Sauvignon. Then the'two are balanbed and rounded by several other grapes, namely Cabernet Franc, Petit Verdot, and Malbec. In this flight we offer one New World Bordeaux (a.) and two true Bordeaux's (b and c.), from one of the most famous St- Emillion estates, and a lesser known but respectable Pessac-Uognan offering. a. 199 Byingtoa, "Alliage," Sonoma County b. '98 Chateau Cruzeau,Pessao- Lhognan c. '98 Virginie de Valandmud, St- Emilion Bordeaux 4. Build your own fllghti Use our by- the -glass list to create your own tasting! Varies Don't see anything you Oka? lust ask! Der salon and cellar is filled with the beat the world has to offer. Ovemsraw's Wtne Bar bottle prices are based upon oc-site consumption only. Wines from the salon end cellar may require a $ 15.00 courage tire. Ask your server far Malls. •E-10 4 _ 1 I l pverstreet's Wine Bar 3400 Via Lido, Newport Sracb, CA'92660 (949) 566 -9463 ..limbed engagement Throughout the course of the week the staff wildly cracks open random bottles for the sake of "education and evaluation." - (Ahem.) The wines here will eveaNally.run out, but while the bottle is cracked... we thought we'd be nice and share. All Pours, 55.00 . to . 799 Tahbilk Estate; Marssnne, Australia '01 Nautilus, Sauvignon Slane, New Zealand' 701 Sereah Sauvignon Blanc, Now Zealand 100 Wairau River,'Sauvingnon Blanc, New Zealand. '01 Livio FODU$k Pivot Grigio, Italy 100 Coastal Ridge, Chardonnay; California ow '0l Chateau De Segries, Rhone 100 "Fat Bastard," Shiraz, Prance 199 Cecchetti Sebasdani, Merlot, Italy '00 Ross Estate, Australia . 'Don't sea anything you tike? Just ask! Our salon and cellar is filled with the best the world has to offer. Overstreet Is fte Bar bottle prices am based upon on -site consumption only. Winos from the salon and cellar ntay requite a Si 5.00 corkage ttx. Ask your server for datalls. M .Plm THIS PA P, LEFT BLAht� 4TEP '"ALLY THIS PAGE LEFT BLANK INTENTIONALLY d. Calffornia Department of Alcoholic Beverag6 Control o" as of 39012008 'cease Information' icense Number: 433267 Status: ACTIVE rima Owner: SEJOUR LLC C Office of A Iication: SANTA ANA nsiness Name oia Bnsiaess As: SEJOIJK usiaess Address ddress: 3400 VIA LIDO Census Tract: 063. i :NEWPORTBEACH Coca :ORANGE ate: CA Zi Code: 92663, icensee Information icensee: SEJOCTR LLC Ca O errn arnlation Of ricer: STOCKTON OLYN CHRI MANAGING N4E2vi13ER .e T es 1 icense Tvok 47 - ON-,ALE GENEFLAL. EATING PLACE Licens $ta : ACTIVE States JAN -2006 Term: Month (s) Original Issue Date: 30- JAN -2006. kx iration Date: 31- DEC -2008 Master: Y Da Hente: 0 Fee Code: P40 Condition: OPERATING RESTRICTIONS Lice�e 4ras starred On: From: 2 License e: 21- =ALE GENERAL Li : ACTIVE Sta : 30- JAN -2006 Term: Montle s Oriziaxl Issue Date- 30- JAN -2006 gMirstjort Date. 31 -DEC -2008 Master: Y Duplicate: 0 Fee Code: NA Condition: OPERATING WTRICT'IONS License T e was Transferred On: From: 3 License Tyw 30 - TEMP O'RARY PMU-v PI' License Tyne Status: ISSUE Status Date: 28 -OCT -2005 Team: Mon s KOri ' al Issue Date: Expiration Date: . Aaster: Y Duplicate- 1 Fee Code: NA Fu�rreniffisciofinary Action No Aclive Disci l' Action olord , . . rage. F -I 1A } bisdplinary History C. . No Disci Ii Hfato d .. , old 7nforw!! ft F-aCHICA92660 to Active Holds ound .. . ow: CENTRAL ESCROCN INC 20 CORPORATE PLAZA DR 150 NEWPORT End of -Rgort - - - For a definition of codes, view our glom. C_. ttp:// www. abc. ce. gov /datDort/LOSDatn.A,rn?Tn=')M "7n4nn7 Yagc F -2 0 i i i i I a 1 i 1, .� WPpRT CITY'OF NEWPORT BEACH P.O. BOX.1768, NEWPORTBBACi-, CA 92659 -1768 PLANNING DEPARTMENT (949) 644 -3210 OflCE O FINAL APPROVAL DATE.' December 9, 2D02 TO: Dennls'Oversfreet and Christine Overstreet FROM: Planning Director SUBJECT: UP2002 -W4 (PA2002 167) FILE COPY Please be advised that UP= -034 (PA2002 -167) was reviewed and approved by the Planning Cammisslon'at Its meeting of November 7, 2002 and became effeattve November 21, 2002. Any deviation Vom the opptications and plans on file anning Department may require an In the Pl amendment to the app8catton(s) mentioned above for the project. Applicant: Dennis Overstreet and Christine Overstreet Location: UDD Via Udo Description: Request for an amendment to a previously- approved use permit to inctuda the sale ' of distilled SPLI is (Type 47: beer, vine & spirits) for on -site consumption, to permit Ave entertainment, and to expand the hours of operation' from 1I.-OD pm 2'D to 1O rnldnight on Fridays and Saturdays cit an existing retail Alcoholic Beverage Ouryet located In lido Village. Should you have any questions, please contact our office. Very truly yours.. PLANNING DEPARTMENT Patricl L Tempi Director . . By l �✓is4d4L . GAiger Varin Executive Secretary Manning Commisslon Enclosure: 0 Approved Resolution wNh Findings and Conditons of Approval ❑ Approved Planning Commission minutes with Final Findings and Conditions of Approval cc: Properly Owner (if not applicant) 0var'DTIanC0MMWeefT1pc. doe G RESOLUTION NO. 1579 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH APPROMG AMENDMENT TO USE PERMIT NO. 2001 -005 (PA2002 -167) FOR PROPERTY LOCATED AT 3400 VIA LIDO THE PLANNING CONUM$SION OF THE CITY OF NEWPORT BEACH HEREBY FINDS, RESOLVES AND ORDERS AS FOLLOWS- Sectlon L An application was filed by Dennis and Christine Overstreet with respect to property located at 3440 Via Lido and legally described as Lot 2 of Tract 1235, requesting approval of Amendment to Use Permit No. 2001-005 pursuant to the Alcoholic Beverage Outlet Ordinance (ABO) to authorize a Type, 47 ABC license for o"te consumption of general alcoholic beverages, live entertainment, and expansion of hours of operation. Section? A public hearing was held on November 7; 2402 in the City Hall Cotmci] Chambers, 3300 Newport Boulevard, Newport Beach, California A notice of time, place and purpose of the aforesaid meeting was-given. Evidence, both written and oral, •was presented to and considered by.the Planning Co mission at this meeting. Section 3. 'The Planning Commission finds as follows: I. The proposed location of the alcoholic.sales establishment needing this use permit, and the proposed conditions under which it would be operated or maintained, is consistent with the General Plan and the purpose of the district in which the site is lowed; will not be detrimental to the public health, safety, peace, lmorals, comfort, or'welfam of•persons residing or working in or adjacent to the neighborhood of such use; and will not be detrimental to the properties or. improvements in the vicinity or to the general welfare of the city. The structure that the proposed use will occupy is legal, nonconforming with respect to the maximum floor area ratio, however, the progosed changes in the use do not increase tqe gmss floor area of the building. The amended wse permit pertains to the on -site consumption of alcoholic beverages in conjunction with retail alcoholic beverage sales in a building that is designated and zoned for this activity. The use has been conditioned in such a manner to minimize the impacts associated with the sale of alcoholic. beverages. The plans, as conditioned, meet the design and development standards for alcoholic sales. 2. The operational characteristics of the proposed rue, including the hours of operation, are consistent with Municipal Code requirements. Any change in the operational characteristics, including a change in the hours of operation, would'requiie an amendment to the Use Permit, reviewed by the Planning Commission. 3. The proposed project is consistent with the purpose ind intent of Chapter 20.89 of the Municipal Code (Alcoholic Beverage Outlets Ordinance) for the following reasons: a. The convenience of the public can be served by the sale of desired beverages in conjunction with a full- service, sit -down restaurant that is complementary to 'surrounding C City of Newport Beach .Planning Commission Resolution No. 1579 Page 2 of 6 uses within the Lido Village area. Alcohol service is typical and expected by the public in a full- service restaurant setting. b. The crime rate in the police reporting district and adjacent repotting districts is not likely to Increase as a result of the proposed use provided that the use is operated as an eating and drinking establishment, with the on -site consumption of alcohol incidental to the restaurant use. . c. The number of alcohol licenses within the report districts and adjacent repotting districts is high given the nature of the land uses in the district and when. oompated with County -wide data, but the change in the license classification of a Type 42 to a Type 47 will not result in an increase in licenses within the report district. d. The percentage of alcohol- related arrests in the police reporting district in which the project is proposed is higher than the percentage citywide. However, on -site consumption is not expected to increase alcoholic related crime in that the use is incidental to the use of the site as an eating and drinking establishment. e. There are.no sensitive uses such as residences, day care centers, schools, or park and recreation facilities in the vicinity of the project site. 4. The project has been reviewed, and it qualifies for a categorical exemption pursuant to the C . California Eavirohmental Quality Act under Class 1 Minor alteration of existing structures). . Section 4, ' Based on the aforementioned findings, the Planning Commission hereby approves Amendment to Use I?ermit No. 2001 -005, subject to the Conditions set forth in Exhibit' ' Section S. This action.shall become final and effective fourteen days after the adoption of this Resolution unless within such time an appeal is filed with the City Clerk or this action is called for review by the City Council in accordance with. the provisions of Title 20, Planning and Zoning, of the Newport Beach Municipal Code. PASSED, APPROVED AM ADOPTED THIS 7th DAY OF NOVEMBER 200L , Chairman Secretary AYES: Agaiaruan, Gifford, Kiser NOES: McDaniel, Selich. Toerae ands cker i-';� City of Newport Beach Plating Commission Resolution No. 1579 Page. 3 of 6 -s E}i1MIT "A" CONDMONS OF APPROVAL I USE PERMIT NO. 2001-065 1. • The development shall be in substantial conformance with the approved plot plan, floor plan and elevations dated January 22, 2001. 2. This Use Permit for an alcoholic beverage outlet granted in accordance with the tetras of this chapter (Chapter 20.89 of the Newport Beach Municipal Code) 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 elate I That any change in operational characteristics, hours of 'operation, expansion in area, or operation characteristics; or other modification to the floor plan, shall require an amendment to this Use Permit or the processing of a new Use Permit 4. 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 agent. Future owners, operators or assignees shall submit, within .30 days of transfer or sale of the business or alcohol license, a letter to the Planting Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit 5. The applicant -shalt comply with all federal, state, and local laws. Material violation of any of .those laws in.connection with the use will be cause for revocation df this permit. 6. This use permit may be reviewed, modified or revoked by the planning Commission or City Council should they determine that the proposed uses or conditions under which it is being Operated or• maintained is detrimental to the public health, welfare or materially injurious. to property or improvements in the vicinity or if the property }s operated or maintained so as to constitute a public nuisance. 7. Trash generated by the business'shall be screened from view from adjoining properties except when placed.for pick -up by refuse collection agencies. Trash receptacles for patrons shall be conveniently'located both inside and outside the proposed facility. 8. No outdoor loudspeaker or paging system shall be permitted in conjunction with the operation. 9. All signs shall conform to the provisions of Chapter 20.67 of the Municipal Code. No temporary "sandwich" signs or similar temporary signs shall be permitted, either on -site or off:site, to advertise the restaurant. 10. The alcoholicbeverage outlet is defined as a retail establishment for the sale of general alcoholic beverages for off -site consumption as the primary and principal use of the project site. On -site consumption of alcoholic beverages shall be accessory and subordinate to the principal retail use and .alcoholic beverages sales for on -site consumption shall not exceed 20 percent of gross sales for the business. The applicant or operator shall maintain adequate records to determine �, � -- City of Newport Beach Planning Commission Resolution No. 1579 Page 4 of 6 compliance with this condition and•shall provide the City said records when requested. The time period for the purposes of conducting this review shall be in accordance with Alcoholic Beverage Control Board standards. 11. The sale of distilled spirits for off -site consumption shall not exceed 15 percent of gross'teceipts of all off -site alcohol sales, `The sale of distilled spirits for on -site consumption shall not exceed 10% of the total sates for on -sits consumption of all alcoholic beverages. The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the City. said records when requested. `lire time period for the purposes of conducting this review shall be 6 months. 11 Gross receipts shall be reviewed by the City. for purposes of compliance with the requirements of the Zoning Code and Use Permit if the use is believed to be operating in non - compliance. If the sales percentages review finds that the applicant is not is compliance, this application shall be brought forward to the Planning Commission for review. 13. Approval does not permit the premises to operate as an eating and drinking establishmebt, restaur-aut, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, unless the Planning Commission first approves a:Use Permit. 14. The interior area anthorized for on�ite alcoholic. beverage consumption in conjunction with a Type 47 license shall be limited to 1,263 -sq. ft, as delineated on the approved floor plans as "Unit A2" with a maximum of 29 seats, The interior area authorized for the retail sales for general alcoholic beverages for off -site consumption shall be limited to 1,328 sq. ft. as delineated on the approved floor plans as "Unit Al" with a modmum of 3 seats. Dn;site consumption of alcoholic beverages shall be prohibited in Unit Al. Substantial changes to the floor plans shall require prior approval by the Planning Commission. Any increase in area of elther.Unit Al or Unit A2 shall be deemed substantial for the purposes of requiring review by the PlatmingCommission. 15. hours of operation shall be from 10:00 AM to 11.00 PM, daily for the retail portion of the project, and. 1:00 PM to 12:00. midnight Fridays and Saturdays and 1:00 p.m. to - 1.1:00 p.m. Sunday through 'Thursday for the eating and drinking portion of the project. Organized educational seminars shall not be conducted mote than 3 days per.week. 16. Live entertainment may occur subject to the approval of.a Live Entertainment Permit and dancing is prohibited. Live entertainment shall not occur more than 3 days_ per week. Music shall be limited to indoor areas only and all windows and doors shall remain closed during performances exoppt for incidental ingress and egress'of patrons. Management of the business shall make every effort to keep the doors closed during performances. 17. The sale of beer. whether for on -site or off - site "consumption, shall be prohibited. 18. A Special Events Permit is required for any event or promotional activity outside the normal operational characteristics of this retail business that would increase the expected occupancy C beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. 0- (P a3 City.of Newport Beach " Planning Commission Resolution No. 1579 Page 5 of 6 19. 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. 20. The alcoholic beverage outlet operator 'shall take reasonable steps to discourage and correct objectionable conditions that constitute a nuisance in parking areas, sidewalks and steps surrounding the alcoholic beverage outlet and adjacent properties dunng business hours, if directly related to the patrons of the subject: alcoholic beverage outlet. If the operator fails to discourage. or correct nuisances, the Planning Commission may review, modify or revoke this Use Permit in accordance with Chapter 20.96 of the Zoning Code. 21. Alcoholic beverage sale from drive -up or waWup windows shall be prohtbited. 22. Any event or activity stitged by an outside promoter or entity, where the business owner or his employees or representatives share in any pmfrts, or pay any percentage or commission to a promoter or any other person based upon money collected as a door, charge, cover charge or any other form of admissina charge, including minimum drink orders or. sale -of drinks is prohibited. 23. Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act shall be posted as required by the State Department of ABC 24. Ail owners, managers and employees selling alcoholic beverages shall undergo and successfully complete a certified training program in responsible methods and skills for selling alcoholic beverages. The certified program must meet the standards of the California Coordinating Council on Responsible Beverage'Service or other certifyintUcensing body, which the State may designate. The establishment shall comply with the requirements of this section within 180 days of the issuance of the-certificate of occupancy. Records of each owner's, in"er's and employee's successful 'completion of the required certified training program- slirdl. be maintained on the premises and shall be presented upon request by a representative of the City of Newport Beach, 25, The applicant is required to obtain all applicable permits from the City Building and' Fire Departments.1be construction plans must comply with the most recent, City- adopted version of the California Building Code. Adequate access and exiting most be provided in accordance with the Building Code. 26. The facility and related off - street parking shall conform to the requirements of the Unifoim Building Code. The project shall comply with State Disabled Access' requirements. 27. Where grease may be introduced into the drainage systems, grease interceptors shall be installed on all fixtures as required by the Uniform Plumbing Code, unless otherwise approved by the Building Department and the Utilities Department. 28. Health Department approval is required for any changes to the kitchen and other portions of the building that require a Building Permit. 1_ , (dl 'r 1 c r C City of Newport Beach Planning Commission Resolution No. 1579 Page 6 of 6 29. A handicapped assessable public restfooms. are .required. The restrooms must be in compliance with the Uniform Plumbing Code and all applicable Uniform Building Code requirements. 30. The owner•/aperator of the use shall enter into an agreement to provide and maintain a minimum of 21 parking spaces within the Lido Marina Wage parking garage to be accesslble at all tithes during the operation of the use. 31. The applicant or operator of the facility may provide valet attendant service for the use in conjunction with the Lido Marina Village patkCing garage. The applicant or operator shall Mom a valet operated parking plan to be.reviewed and approved by the City Traffic Bngineer prior to the . commencement of tie valet service rise. 32. Delivery vehicles shall not park within the public right -of -way of Via Lido and Via Cporto. 33. The operator of the restaurant facility shall be responsible for the control of noise generated by the subject facility. The noise generated by the proposed Use shall'vomply with the provisions of. Chapter 19.26 of the Newport Beach Municipal Code: Tice maximuan noise shall be limited to no more than depicted below for the specified time periods unless the ambient noise level is.higher: r r Location Interior ftterior Interior Exterior a 45dBA 3 40dBA t i Residential Property located within 100 feet of a commercial 'r 1 c r C City of Newport Beach Planning Commission Resolution No. 1579 Page 6 of 6 29. A handicapped assessable public restfooms. are .required. The restrooms must be in compliance with the Uniform Plumbing Code and all applicable Uniform Building Code requirements. 30. The owner•/aperator of the use shall enter into an agreement to provide and maintain a minimum of 21 parking spaces within the Lido Marina Wage parking garage to be accesslble at all tithes during the operation of the use. 31. The applicant or operator of the facility may provide valet attendant service for the use in conjunction with the Lido Marina Village patkCing garage. The applicant or operator shall Mom a valet operated parking plan to be.reviewed and approved by the City Traffic Bngineer prior to the . commencement of tie valet service rise. 32. Delivery vehicles shall not park within the public right -of -way of Via Lido and Via Cporto. 33. The operator of the restaurant facility shall be responsible for the control of noise generated by the subject facility. The noise generated by the proposed Use shall'vomply with the provisions of. Chapter 19.26 of the Newport Beach Municipal Code: Tice maximuan noise shall be limited to no more than depicted below for the specified time periods unless the ambient noise level is.higher: 34. Upon evidence that noise generated by the project exceeds the noise standards established by Chapter 20.26(Community Noise Conanl) of the Municipal Code, the Planning Director may require that the applicant or successor retain a qualified engineer specializing in noise/acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures . .necessary in order to insum compliance. 4,x- Between the hours of 7:ODAM and 10:0DPM Between the hours of 7:00AM and 16:00PM Location Interior ftterior Interior Exterior Residential 45dBA 55dBA 40dBA SOdBA Residential Property located within 100 feet of a commercial 45dBA 60dBA 45dBA SWBA Mixed Use Pro 45dBA 60MA ' I 45dBA 5AdBA Commercial Pro NIA 65dBA I NIA 60dBA 34. Upon evidence that noise generated by the project exceeds the noise standards established by Chapter 20.26(Community Noise Conanl) of the Municipal Code, the Planning Director may require that the applicant or successor retain a qualified engineer specializing in noise/acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures . .necessary in order to insum compliance. 4,x- State Bar of CA:: Attomey search , I 1 t `= 41 7 r .III 0 "" ThWVday, Mmah 20, 2008 Fkme> Alive" Saamh ATTORNEY SEARCH Page 1 of 1 Srate Bar Homo r� AHcrnsy Name or Bar Number ur F StDdd n - .- -- - --- I= Advanced Search e 0 Indude dniW y sounding names eird altatrrete spellings Your search for Arthur FStockton returned no results, Would you Ike to search for names stet sound Ike ArNmu F stoddon4 CoMOCt US Sit@Map Vdvsey FCltcy NoNcec 02008 The State aarOICalkorb http:// members .caibar.cagov /searcb/member search.a x?ms -Art uri- F.+Stocktnn 3/20/2008 49 (P C. Page 1 of t Mr. Arthur F Stockton Mailing Address: 9030 W Sahara Ave Suits 137 Las Vegas, NV 59117-0003 Talephonen • pelf: L&W Schools U OF Admitted to practices 1985 Admitted to AZ Bar. November 9, 1985 ]ralsdiction: ARMONA Profeaslonai Uabliity Insuranoas.HoY :muted to �mert SUtdi n Inactive Acevlty4: two' here to close ka= activity. Data Ar�vky Detail ___ Uy27105 r7 Membership Stabs Change . 11/29 /01 AGM& Membership Status Change 03/02/01 Redred Membership Status Change 1 This Web site dlsplays changes In membership status and dlsdppnary actions taken against a WoVer. It does not Include pendi g dlsdplinery proceedings. . This Web site does not display all lawyer sanctbns, such as Informal reprimands. Contact the State Bar of Athena at 602 -340 -7384 or use this yll11 MIDE!..f re to confirm the lawyer's entire record of activity. h4:/ /WWw.azb�r -Or AgaUlesourc S&T— Detail.cfm7ID -46325 &SearchPageoffset6l H4 3119/2009. w State Bar of CA:: Attorney Search Page l of l i _ Yhmsday, Pte2h 20, 2008 State aer Home �r i Home Mom"Saarah ATTORNEY SEARCH Atianxry Name or Bar Number _ n _C Stwhftn _ _ Advanced Search x lnc ude similarly sounding names and alternate spellings I Your search for Carolyn C Stockton returned no results. Would you Me to search for names that sound Ike Ceroyrr C Stomon7- Contact U9 Sife map Pdvasy Pocky tdotices D 2009 The Sale aaroi CeRbMA I f i i i i 1 hV:// members .caibar.ca.gov /searchhn mber semeh.aspx?ms= Cwolyn+C. +StoddDn 30=008 Page t of 1 Ms. Carolyn C Stockton Mailing Address: 31761 Pepperbee Send �~ San Juan CaplstrMo, CA 92675 Telephones 520 -476 -2200 Law School: ASU . Admitted to Practices 1985 Admitted to AZ Bars November 9, 1985 3urlsdictiorr•. ARIZONA Professional Uabglky Insurance; H2Lreouhad to reoart Statue! Retired . Aetlrity+l Lft hem to dose lawyer activity. Date Activity Detall OS/1a /05 Retired Membership Status Change 01/10/03 g Membership Status Change 03/07/01 Retired Membership Status Change 1 This Web site displays changes M membership status and disciplinary actions taken ageinst a lawyer, It does not include Pending disciplinary procaWhrgs. This Web she does not display all lawyer sanctlons, such as k torrrrai reprimands. Contact the State Bar of Arizona at 602 - 340.7384 ar use this 010MOtOd f2m to conlInn the kawyer's entire remrd of ac". f http;/ hvww.ozbar.Otg/LegalR.esowroes/W DeW.afm?ID= 40344 &SearchPageOffseNl 3/i912008 �P� I I C, ,E6ty Details Ser reuw of Nevada E Page Iof2 Resident Agent Information. Nam: ARTHUR F STOCKTON Address.. WSAHARAJ 1WW 37 Address 2: CrV. LAS VEGAS pm NV Zip Code. W12D 4 All, Fax Ernall. Resident Agent Information. Nam: ARTHUR F STOCKTON Address.. WSAHARAJ 1WW 37 Address 2: CrV. LAS VEGAS Stele. NV Zip Code. W12D Phone: Fax Ernall. MaIRM Addreawl: Mailing Address Z, Aid ng C.*F, mdhv staw Mailing Zip Coda: 18r this MSWFAd AOMA 5 11 11 Officers . U- Include Inactive President-ARTHUR STOCKTON Address 1: 2256 E SUNSET RD #WM Address 2: City: LAS VEGAS Slaw. w Zip Code: 89419 Country.. https://esos.state-mv.us/$OSSm-vices/AnonymousA=essJCorpSearcb]CorpDetags.aspx?IxS... 311912008 436 Entity Details - Secretary of State, Nevada Actians\Amendments You are ratrrsntly not logged in y Nmft Seaetaq otSmte. Ross toter. Copnight 20 7. A9 rjgtft msavM. 9 Page 2 of 2 https:tlesos. state. nv. us /SOSSm- vicWAnonymousA cceWCorpSearchICorpDetails.aspx ?1x8... 3119/2008. H Secreayry -ARTHUR SiOCKTON . Address 1: 2255 E SUNSET RD#070 -A ' Address 2- City: LASVEGAS Stan: w Zap Code: 89119 Counw. Sfahts: Act" Ernd- Treamm - ARTHUR STOCKTON Address 1: 2255 E SUNSET RD #2WM Address 2: Mr. LAS VEGuAS State: W Zip Code: 89119 Country: State:. ActWe. Eanaik Actians\Amendments You are ratrrsntly not logged in y Nmft Seaetaq otSmte. Ross toter. Copnight 20 7. A9 rjgtft msavM. 9 Page 2 of 2 https:tlesos. state. nv. us /SOSSm- vicWAnonymousA cceWCorpSearchICorpDetails.aspx ?1x8... 3119/2008. H AIR COMMERCIAL REAL ESTATE ASSOCIATION STANDARD INDUSTRIAUCOMMERCIAL SINGLE - TENANT LEASE -- NET (DO NOT USE THIS FORM FOR MULTI - TENANT BUILDINGS) Basic Provisions ("Basic Provislons "). 1.1 Parties: This Lease ( "Lease ") dated for reference purposes only Jul y 16 2008 Is made by and between Dennis and Chris Overstreet, individuals ("Lessor") and HOM Real Estate Group, a California corporation ("Lessee ") (collectively the "Parties.- or Individually a 'Party"). 1.2 Premises: That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, andcommonlyknownas 3400 Via Lido, Newport Beach located in the County of Orange . State of California and generally described as (describe briefly the nature of the property and, if applicable, the " Projeat", if the property is located within a Project) a freestanding, single - story-, 2,696 square foot, office /retail building ( "Promises"). (See also Paragraph 2) 1.3 Term:S years and -0- months ("Original Term ") commencing October 1, 2008 rn r ComencementDate ")andendingSeptember 30, 2012 rExptrationDate"). (See also Paragraph 3) 1.4 Early Possession: Seven (7) days prior to commencement ("Early Possession Date -). (See also Paragraphs 32 and 3.3) 1.5 Base Rent $10, 004.67 per month ("Saw Rent"). payable onthe first day of each month commencing October 1, 2008 or upon completion of tenant improvements, but no later than December 1, 2008 or no later than three (3) months after the issuance of city permits, whichever is sooner .(See also Paragraph 4) 0 If this box Is checked. Mere are provisions in this Leese for the Bass Rent to be adjusted. 1.6 Base Rent and Other Alonies Paid Upon Execution: 1.7 (a) Base Rent $10, 004. 67 for the period October 1 -31, 2008 (b) SecurityDeposit$44,000.67 ( "SecurityDeposir). (Sea aim Paragraph 5) period Wr for 'the (d) Other. $983.29 for October 1 -31, 2008 taxes and insurance (e) Total Due Upon Pxecultonof this Lease: $54 988.63 (see paragraph 55 of Addendum 1) Agreed Use: Residential real estate office (See also Paragraph 6) 1.8 Insuring Party. Lessor is the "Insuring Parry" unless otherwise stated herein. (See also Paragraph 8) 1.9 Real Estate Brokers: (See also Paragraph 15) (a) Representation: The following real estate brokers (the 'Brokers") and brokerage relationships exist In this transaction (check applicable boxes): a sepreronts LesmF s- ,lcluslvely r"6essec, BFekey B- - represe..�'-=eealwleisp illy ('Lessee% Broker^); or Z Grubb 5 Ellis represents both Lessor and Lessee ( "Dual Agency"). (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Broker the fee agreed to in their separate written agreement (or if there is no such agreement, •• n of er f ive (5) % of the total Base Rent) for the brokerage services rendered by the Brokers. 1.11 At6KJrmwrrta. Attarbarl haratn am thw MlWW" all nf,-h4-h nnn"abau a nod of thk 1 oaca• �03k upon all of the terms, covenants and conditions set forth in this Lease. Unless otherwise provided herein, any statement of size set font In this Lease, or that may have been used in calculating Rent is an approxtmatlon which the Parties agree is reasonable and any payments based thereon are not subject to revision whether or not the actual size Is more or less. Note: Lessee Is advised to verify the actual size prior to executing this Lease. 2.2 Condition. Lessor shall delver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs ( "Start Date"), and, so long so �ha required ------ -- Freesia dessOlied 'A POPOOF80h M(h) 19828W are obtained by Lessee and 1p affiest within thift days 1011"no the StaFt Date, warrants that the existing electrical, plumbing, fire sprinkler, fighting, heating, ventilating and air conditioning systems ("HVAC"), loading doors, sump pumps, it any, and all other such elements in the Premises, other than these COMI acted by Lessee, shall be in good operating condition on said date, that the structural elements of the mot, bearing walls and foundation of any buildings on the Premises (the "Bulldfng") shall be free of material defirob i, and that the Premises do not contain hazardous tevels Of any mold or fungi defined as toxic under applicable state or federal law. If a non-compliance with said warranty exists as of the Start Date, or If one of such systems or elements should malfunction or fag within the appropriate warranty period, Lessor shall, as Lessor's sole obligation with respect to such matter, except as otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity to nature and extent of such non- corpilance, malfunction or failure, rectify same at Lassoes expense. The warranty periods shall be as folbws 0) 6 months as to the HVAC systems, and (0) 30 days as to the remaining systems and other elements of the Building. If Lessee does trot give Lessor the required notice within the appropriate warranty period, correction of any such non - compliance, malfunction or failure shall be the obligation of Lessee at Lessee's sole cost and expense. 23 Compliance. Lessor warrants that to the best of is knowledge the improvements on the Premises comply with ire building codes, applicable laws, covenants or restrictions of record, regulations, and ordinances ( "Applicable Requirements`) that were in effect at the time that as& Improvement or portion thereof, was constructed. Said warranty does not apply to the use to which Lessee will put the Premises, modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee's use (see Paragraph 50), or to any Alterations or Utility Installations (as defined in Paragraph 7.31a)) made or to be made by Lessee. NOTE: Lessee Is responsible for determining whether or not the Applicable Requirements, and especially the zoning, are appropriate for Lessee's Intended use, and acknowledges that past uses of the Premises may no longer be allowed. If the Premises do not comply with said warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non- compllance, rectify the same at Lessors expense. If Lessee does not ghre Lessor written notice of a horn - compliance with this warranty within 6 months following the Start Date, correction of that non- compliance shall be the obligation of Lessee at Lessee's sole cost and expense. If the Applicable Requirements are hereafter changed so as to require during the term of this tease the construction of an addition to or an alteration of the Premises andror Building, the remedlat in of any Hazardous Substance, or the reinforcement or other physical modification of the Unit Premises arOor Building ( "Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows: (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee as compared with uses by tenants In general, Lessee shall be fully responsible for the reasonable cost thereof, provided. however that If such Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rem, Lessee may Instead terminate this Lease unless Lessor notifies Lessee, In writing, within 10 days after receipt of Lessee's temdnaton notice that Lessor has elected to pay the difference between the actual cost thereof and an amount equal to 6 months' Base Rent If Lessee elects termination, Lessee shall Immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure. (b) If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease, on the date that on which the Base Rem is due, an amount equal to 144th of the portion of such costs reasonably attributable to are Premises. Lessee shall pay Interest on the balance but may prepay Its obligation at any time. t, however, such Capiel Expenditure Is required during the last 2 years of this Lease or If Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lassoes termination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and fats to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest from Rent until Lessees shore of such costs have been fully paid. If Lessee Is unable to finance Lessees share, or If the balance of tie Rent due end payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days written notice to Lessor. (c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to non- voluntary, unexpected, and new Applicable Requirements. If the Capital Expenditures are Instead triggered by Lessee as a result of an actual or proposed change in use, change In intensity of use, or modification to the Premises then, and in that event, Lessee shall either. (I) Immediately cease such changed use or Intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete such Capital Expenditure at Its own expense. Lessee shall not, however, have any right to terminate this Lease. (see Addendum paragraph 57- Rider to Paragraphs, 2$) 2.4 Acknowledgements. Lessee acknowledges that: (a) it has been advised by Lessor andlor Brokers to salary itself with respect to the condition of the Premises (brdudirg but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities Act), and their suitability for Lessee's intended use, (b) Lessee has made 3.1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as Specified in Paragraph 1.3. 3.2 Early Possession. If Lessee totally or partially occupies the Promisee prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such early possession. All other terms of this Lease (including but not limited to the obligations to pay Real Property Taxes and insurance premiums and to maintain the Premises) shall be In effect during such period. Any such early possession gall not affect the Expiration Date. - 3.3 Delay In Possession. Lessor agrees to use its best oommerdshy reasonable efforts to deliver possession of the Premises to Lessee by the Commencement Date. If, desplte said efforts, Lessor is unable to deliver possession by such date, Lessor shell not be subject to any liability therefor, nor shall such failure affect the validlly of this Lease. Lessee shall not however, be obligated to pay Rent or perform is other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lasses would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession Is not delivered within 60 days after the Commencement Date, Lessee may, at its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which event the Parties shell be discharged from all obligations hereunder. If such written notice Is not received by Lessor within sold 10 day period, Lessee's right to cancel shall terminate. If possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease shah terminate unless other agreements are reached between Lessor and Lessee, In witting. 3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to Losses until Lessee compiles with its obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shat be required to perform at of its obligations under this Lease from and after the Start Date, including the payment of Rent. notwithstanding Lessors election to withhold possession pending receipt of such evidence of Insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied. 4. Rent. 4.1. Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent ( "Rent"). 4.2 Payment Lessee shall cause payment of Rant to be received by Lessor In lawful money of the United States, without offset or deduction (except as specifically permitted in this Lease), on or before the day on which It Is due. All monetary amounts Shell be rounded to the nearest whole dollar. In the event that any invoice prepared by Lessor Is inaccurate such inaccuracy shall not constitute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease. Rent for any period during the tens hereof which is for lees than one full calendar month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at Its address stated herein or to such other persons or place as Lessor may from time to time designate In writing. Acceptance of a payment which is less than the amount then due shall rot be a weaver of Lessors lights to the balance of such Rem, regardless of Lessors endorsement of any check so stating. In the event that any check, draft or other Instrument of payment given by Lessee to Lessor is dishonored or any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Lao Charge and Lessor, at its option, may require all future Rent be paid by cashiers check. Payments will be applied first to accrued late charges and attorney's fees, second to accrued Interest then to Base Rent and Common Area Operating Expenses, and any remaining amount to any other outstanding charges or coals. 4.3 Association Fees. In addition to the Base Rent, Lessee shat pay to Lessor each month an amount equal to any owners association or condominium fees levied or assessed against the Premises. Said hordes shall be paid at the same time and in the same manner as the Base Rent. 5. Security Deposit. Lessee shell deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retaln all or any portion of sold Security Deposit or the payment of any amount due already due Lessor, for Rents which will be due In the future, "or to reimburse or compensate Lessor for any (lability, expense, loss or damage which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or any portion of the Security Deposit Lessee shall within 10 days after written request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent Increases during the temp of this Leese, Lessee shall, upon written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the increased Base Rent as the initial Security Deposit bore to the initial Base Rent Should the Agreed Use be amended to accommodate a material change in the business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to increase the Security Deposit to the extent necessary, in Lessor's reasonable judgment to acceunt for any increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Lessee occurs during this Lease and following such change the financial condition of Lessee is, in Lessors reasonable judgment, significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be Sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change In financial condition. Lessor shall not be required to keep the Security Deposit separate from Its generar accounts. Within 90 days after the expiration or termination of this Lease, Lessor Shall return that portion Of the Security Deposit not used or paid applied by Lessor. No part of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for any mantes to be by Lessee under this Lease. (a) Reportable Uses Require Consent The term "Hazardous Substance" as used In this Lease shell mean any product, substance. or waste whose presence. use. manufacture. disposal. transportation. or release. either by itself or in combination with other materials expected to be on the Premises, Is either. (1) potentially Injurious to the public health. safety or welfare. the environment or the Premises. (ti) regulated or monitored by any governmental authority, or (Iii) a basis for potential llabltty of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shell Include, but not be limited to, hydrocarbons, petroleum. gasoline. andlor crude of or any Products. by- products or fractions thereof. Lessee shall not engage In any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with at Applicable Requirements. `Reportable Use" shell mean (1) the Installation or use of any above or balm ground storage tank. (if) the generation. possession. storage, use. transportation, or disposal of a Hazardous Substance that requires a permit from. or with reaped to which a report. Milos. registration or business plan is required to be fled with. any govemmemal'aut only. andlor (III) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing. Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use. ordinary office supplies (copier tourer. liquid paper. glue. eta) and common household cleaning materials. so long as such use Is In compliance with all Applcable Requirements. is not a Reportable Use. and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition. Lessor may condition Its consent to any Reportable Use upon receiving such additional reasonable assurances as Lessor reasonably deems necessary to protect half. the public. the Premises and/or the environment against damage, contamination. injury and/or liability. including. but not limited to. the Installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) arhd/or increasing the Security Deposit. (b) Duty to Inform Lessor. if Lessee knows. or has reasonable cause to believe, that a Hazardous Substance has come to be located in. on, under or about the Premises, other then as previously consented to by Lessor. Lessee shall Immediately give written notice of such fad to Lessor. and provide Lessor with a copy of any report, notice. claim or other documentation which it has concerning the presence of such Hazardous Substance. (c) Lessee Remedistion. Lessee shall not cause or permit any Hazardous Substance to be spilled or released In. on. under, or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, Comply with all Applicable Requirements and take all investigatory andlor remedial action reasonably recommended. whether or not formally ordered or required. for the cleanup of any contamination of, and for the maintenance. security andlor monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or Involving any Hazardous Substance brought onto the Premises during the term of this Lease. by or for Lessee, aF aqy w!Fd„any or by arty third party invitee of Lessee. (d) Lessee Indemnification. Lessee shall Indemnify. defend and hold Lessor. Its agents, employees, lenders and ground lessor. If any. harmless from and against any and all loss of rents andfor damages. liabilities, judgments, claims. expenses. penalties, and attomeys' and consultants fees arising out of or Involving any Hazardous Substance brought onto the Premises by or for Lessee. or any third party (provided. however. that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties not caused or contributed to by Lessee). Lessee's obligations shall include, but not be limited to. tie effects of any contamination or injury to person. property or the environment created or suffered by Lessee. and the rhea5onable cost of investigation. removal, remedhation. restoration andlor abatement. and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from Its obligations under this Lane with respect to Hazardous Substances, unless specifically so agreed by Lessor In writing at the time of such agreement. (See Addendum paragraph 57 - Rider to Paragraph 6.2d) (e) Lessor Indemnification. Lessor and its successors and assigns shall Indemnity, defend. reimburse and hold Lessee. its employees and lenders, harmless from and against any and all environmental damages. including the cost of remedlatlon. which result from Hazardous Substances which existed on the Premises prior to Lessee's occupancy or which are caused by the gross negligence or wilful misconduct of Lessor, its agents or employees. Lessors obligations. as and when required by the Applicable Requirements, shall Include. but not be lmted to. the cost of investigation, removal, rernediation, restoration andlor abatement, and shall survive the expiration or termination of this Loose. (See Addendum paragraph 57 - Rider to Paragraph 6.2e) (1) ImesUgations and Remedlatlons. Lessor shall retain the responsibility and pay for any Inveatgations or remedlation measures required by govemmerdal entities having judadiclon with respect to the existence of Hazardous Substances on the Premises prior to Lessee's occupancy. unless such remedistion measure Is required as a result of Lessee's use (Including'Ateradons', as defined In paragraph 7.3(s) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities at the request of Lessor. Including allowing Lessor and Lessors agents to have reasonable access to the Premises at reasonable times In order to carry out Lessors investigative and remedial responsibilities. (g) Lessor Termination Option. If a Hazardous Substance Condition (sae Paragraph 9.1(e)) occurs during the term of this Lease. unless Lessee Is legally responsible therefor (In which case Lessee shall make the Investigation and remedietion Hereof required by the Applicable Requirements and this Lease shall continue In full force and effect but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13). Lessor may, at Lessors option. either (I) investigate and remedhato such Hazardous Substance Condition. t required. as soon as reasonably possible at�(h 1 coc.,Ic ov.,o„oo .,. ..wi..l, m,onr rl.tr t en.n .b.0 ...- c......:.. c.a s..- ........w ..a..... ... r.:, u u.......n......� �.. •.. __ -n-.. ....� -... �w......�...,...w insurance underwilti r or rating bureau, and the recommendations of Lessors engineers and/or consultants which relate in any manner to the such Requirements, without regard to whether such Requirements are now In effect or become effective after the Start Date. Lessee shell, within 10 days after recalpt of Lessors written request, provide Lesser with copies of all permits and other documents, ant other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall Immediately upon receipt, nody Lessor in writing (with copies of any documents Involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or Involving the failure of Lessee or the Premises to comply with any Applicable Requirements. Likewise, Lessee shall immediately give written notice to Lessor at (1) any water damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (it) any mustiness or other odors that might indicate the presence of moll in the Premises. 8.4 Inspection; Compliance, Lessor and Leseor"s 'Lender" (as defined in Paragraph 30) and consultants shall have the light to enter Into Premises at any time, in the case of an emergency, and otherwise during bu6inees hours upon 24 hours prior notice at for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such Inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance Condition (sea paragraph 9.1) is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse Lessor for the reasonable cost of such inspection, so long as such inspection is reasonably related to the violation or contamination. In addition, Lessee shall provide copies of all relevant material safety data sheets ( MSDS) to Lessor within 10 days of the receipt of a written request therefor. 7. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations. (b) Service Contracts Liesasia shall, a! 60saea?a sale sr4)amsa, pfileure and maintain elintiviow. with esplas to 60960h In FOOMMS ilia NOW. UPGR Relies IQ Lessee, to pleeime and g-.Fvlse seRiniets, and Lessee shall Faimbuiso 6eassh upon 7.2 Lassoes Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of which obligations are Intended to be that of the Lessee. It is the Intention of the Parties that the lemis of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive the benefit of any statute now ((�� or hereafter in effect to the extent it Is inconsistent with the terms of this Lease. the electrical, plumbing, HVAC, and/or fie safety systems, and the cumulative oost thereof during this Lease as extended does not excised a sum equal to 3 month's Baca Rent In the aggregate or a sum equal to one month's Base Rent In any one year. Notwithstanding the foregoing, Lessee shall not make or pemut any roof penetrations and/or Install anything on the roof without the prior written approval of Leas". Lessor may, as a_precondidon to granting such approval. require Lessee to utilize a contractor chosen and!" approved by Less". Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Less" shall be presented to Lessor in written form with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i) acquiring ell applicable governmental permits, (11) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (Ill) compliance with all conditions of said permits and other Applicable Recluitrements In a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion fumish Less" with as -bullt plans and specifications. For work which costs an amount In excess of one {1) month's Base Rent. Less" may condition its consent u providing r q i upon Lessee rovidln a Ilan and completion bond in an amount equal t0 460% 1257 c i the estimated cost of such Alteration "Utility Installation and/" upon Lessees posting an additional Security Deposit with Less". (c) Lions: Bonds. Lessee shall pay, when due, all cralms for lab" or materials banished or alleged to have been furnished to or for Lessee at "for use on the Premises, which dalrtu are or may be seared by arty mechanic's or nateralmen's lien against the Premises or any Interest therein. Lessee shall give Less" not less than 10 days notice prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post notices of non- responsibility. If Lessee shall contest the validity of any such lien, dalm or demand, than Lessee shall, at Its sole expanse defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. B Less" shall require. Lessee shall furnish a surety bond In an amount equal to 480% 1250A of the amount of such contested lien. claim or demand, indemnifying Lessor against tiabilrty for the same. H Less" elects to participate In any such action, Lessee shall pay Lessors reagonabie attorneys' fees and costs. 7.4 Ownership; Removal; Surrender, and Restoration. (a) Ownership. Subject to Lessor's right to require removal "elect ownership as hereinafter provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises. Lesser may, at any time. elect in writing to be the owner of all "any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise Instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of this Lease. become the property of Less" and be surrendered by Lessee with the Premises. (b) Removal. By delivery to Lessee of written notice from Lessor not earlier than 00 and not later than 30 days prior to the and of the term of this Lease. Lessor may require that any or all Lessee Owned Alterations" Utility Installations be removed by the expiration or termination of this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned Atieratiams or Utility Insialatons made without the required consent. (c) Surrender Restoration. Lessee shall surrender the Premises by the Expiration Date "any earlier termination date, with all of the Improvements, parts and surfaces thareof broom dean and free of debris, and In good operating order, conditlon and state of repair. ordinary wear and tear excepted. 'Ordinary weer and tear' shall not Include any damage or deterioration that would have been Prevented by good maintenance practice. Notwithstanding the foregoing. If this Lease Is for 12 months or lass, then Lessee shall surrender the Premises In the same Condition as delivered to Lessee on the Star Date with NO allowance for ordinary wear and leer. Lessee shall repair any damage occasloned by the Installation. maintenance or removal of Trade Fixtures. Lessee owned Alterations and/" Utility Installations. furnishings. and equipment as well as the removal of any storage tank installed by air for Lessee. Lessee shall completely remove from the Promises arty and all Hazardous Substances brought onto the Premises by or for Lessee, or by any third party invitee of Lewes er any - third -pally (except Hazardous Substances which were deposited via underground migration from areas outside of the Premises. "if applicable. the Premises) even if such removal would require Lessee to perform "pay for work that exceeds statutory requirements. Trade Fixtures shag remain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed on or before the Expiration Date "any earler termination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Less" as Lessor may desire. The fallure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Less" shall constitute a holdover under the provisions of Paragraph 28 below. a. Insurance; Indemnity. 8.1 Payment For Insurance. Lessee shall pay f" all Insurance required under Paragraph 8 except to the extant of the Cost atMbutable to liability Insurance carried by Lessor under Paragraph 8.2(b) In excess of $2, 000,000 per occurrence. Premiums for policy periods Commencing prior to "extending beyond the Lease term shell be prorated to correspond to the Lease term. Payment shall be made by Lessee to Lessor within 10 days following receipt of an invoice. 82 Liability Insurance. (a) Carried by Lessee. Lessee shall obtain and keep In force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily Injury, personal Injury and property damage based upon or arising out of the ownership, use, occupancy or maintenenca of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1.000,000 per occurrence with an annual aggregate of not less than $2.000.000. Lessee shall add Less" as an additional insured by means of an endorsement at least as broad as the Insurance Service Orgenaation's "Additional Insured - Manages or Lessors �M Crnm�cud CnAnroa.x.�M TA.....Ju... ..A..y ..M .•..M..i........ iM�.. I.........J ....J•.+1.......... A..F..��+ I +....�J + +�.. +.. +� •.�•.•.•.M..Y...... A.A +A..1• I.. J.. J.. more than the commercially reasonable and evallable insurable value thereof. if Lessor is the Insuring Party, however, Lessee Owned Alterations amt Utility Installations, Trade Fixtures, and Lessee'a personal properly shall be Insured by Lessee under Paragraph 8.4 rather than by Lessor. If the coverage is available and commorclally appmprlate, such policy or policies shall Insure against all risks of direct physical IM or damage (except the psdls of flood and/or earthquake unless required by a Lender), Including coverage for doWs removal and the enforcement of any Apptcable Requirements requiring the upgrading, demolition, reconstruction or replaternent of any portion of the Premises as the result of a covered toss. Sold policy or Policies shall also Contain an agreed valuation provision In lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an Increase In the annual property insurance coverage arnount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Promises are located. If such insurance coverage has a deductible clause, the deductible amount shall not exceed $1,000 per occurrence, and Lessee shall be liable for such deductible amount In the event of an Insured Loss, (b) Rental VakuL The Insuring Party shall obtain and keep in face a policy or policies in the name of Lessor with Ices payable to Lessor and any Lender, insuring the lose of the full Rem for one year with an extended period of Indemnity for an additional 180 days ("Rental Value insurance "). Said Insurance shag contain an agreed valuation provision In lieu of any coinsurance clause, and the amount of coverage shaft be adjusted annually to reflect the projected Rem otherwise payable by Lessee, or the next 12 month period. Lessee shag be gable for any deductible amount in the event of such loss. (c) Adjacent Premises. if the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Premises, the Lessee shag pay for any increase in the premiums or the properly insurance of such building or buildings if said increase 1% caused by Lessee's acts, omissions, use or occupancy of the Premises. 8.4 Lessee's PMPerty; Business Interruption Insurance. (a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations- Such Insurance shall be full replacement cost coverage with a deductible of rot to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal properly, Trade Fscores and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with written evidence that such Insurance Is In force. (b) Business Interruption. Lessee shall obtain and maintain loss of Income and extra expense Insurance in amounts as will reimburse Lessee for direct or indirect lose or earnings attributable to all perils commonly insured against by prudent lessees In the business of Lessee or attributable to prevention of access to the Premises as a result of such perge , provided that such insurance shall not exceed one (1) year of loss. - (C) No Representation Of Adequate Coverage. Lessor makes no representation that the limits or forms of Coverage of Insurance specified herein are adequate to cover Lessee's properly, business operations or obligations under this Lease. 8.5 Insurance Policies. insurance required herein shall be by companies duly licensed or admitted to transact business in the state where the Premises are located, and maintaining during the policy term a "General Polieyhoklers Rating" of at least A., VI, as set forth In the most current issue of "Best's insurance Guide, or such other rating as may be required by a Lender. Lessee shag not do or permit to be done anything which Invalidates the required Insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates evidencing the existence and amounts of the required Insurance. No such policy shag be cancelable or subject to modification except after 30 days prior written notice to Lessor. Lessee shag, at least 10 days prior to the expiration of such policies, furnish Lessor with evidence of renewals or insurance binders" evidencing renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shag be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least oche year, or the length of the remaining term of this Lease, whichever is less. if either Party shall fail to procure and maintain the Insurance required to be carried by It, the other Party may, but shag not be required o, procure and maintain the same. 8.0 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve Me other, and waive their entire right to recover damages against the other, for loss of or damage to its property arising out of or Incident to the perils required to be insured against herein. The effect of such releases and waivers Is not limited by the amount of Insurance carried or required, or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance carriers waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the Insurance Is not invalidated thereby. 8.7 Indemnity. Except for Lessors gross negligence or willful misconduct, Lessee shall Indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lassoes master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents andfor damages, liens, judgments, penalties, attomays' and consultants' fees, expenses ardfor liabilities allsdng out of, involving, or in connection with, the Use ardlor occupancy of the Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the foregoing maters, Lessee shall upon notice defend the same at Lessee's expense by Counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee In such defense. Lessor need not have first paid any such claim in order to be defended or indemnified. 8.8 Exemption of Lessor and Its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lassa nor its agents shall be liable under any circumstances for. (1) Injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, Invitees, Customers, or any other person In or about the Premises, whether such damage or Injury is caused by or results from fire, steam, etecbift gas, water or rain, indoor air quality, the presence of mold of from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, NVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Promisee are a part, or from other maintain the required insurance. Such Increase in Base Rent shall In no event constitute a waiver of Lessee's Default or Breach with respect to tha failure to maintain such Insurance. prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the Insurance specified in this Lease. 9. Damage or Destructlom 9.1 Definitions. (a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Promises, other then Lessee Owned Alterations and Utility Installations. which can reasonably be repaired in 6 months or less from the date of the damage or de$MC n. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage Is Partial or Total. Notwithstanding the Foregoing, Premises Partial Damage shaft not Include damage to windows. doors. andfor other similar items which Lessee has the rasponslbitity to repair or replace pursuant to the provisions of Paragraph 7.1. (b) "Premises Total Destruction" shall mean damage or destruction to the Premises, other then Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired In 6 months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within 30 days from are data of the damage or destruction as to whether or not the damage Is Partial or Total. (c) "Insured Loss" shall mean damage or destruction to Improvements on the Premises, other than Leases Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the Insurance described In Paragraph &3(a). irrespective of any deductible amounts at coverage limits involved, (d) 'Replacement Cost" shall mean the reaeorlable cast to repair or rebuild the Improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, Including demolition, debris removal and upgrading required by the operation of Applicable Requirements. and without deduction for deprecisaon. (e) 'Hazardous Substance Condition" shall mean the occurrence or discovery of a condition invoking the presence of, or a contamination by, a Hazerdorw Substance as defined In Paragraph 6.2(a), in, on, or under the Premises which requires repalr; narnediallon. or restoration. 9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that Is an Insured Loss occurs. than Lessor shall, at Lessors expense, repair such damage (lout not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease shall continue In full force and affect; provided, however. that Lessee shall, at Lessor's election. make the repair of any damage or destruction the total cost to repair of which is $10.000 or less, and, in such event. Lessor shall make any applicable Insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing. a the required Insurance was nut in force or the insurance proceeds are not sufficient to effect such repair. the Insuring Party shall promptly contribute the shortage in proceeds (except as to the deductible which Is Lessee's responsibility) as and when required to complete said repairs. In the event, however. such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost Insurance coverage was not commercially reasonable and available, Lessor shall have no ob(lgeUOn to pay for the shortage in Insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written notice of such shortage and request therefor. If Lessor recelves said funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect If such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days thereafter to: (I) make such restoration and repair as Is canmerdally reasonable with Lessor paying any shortage in proceeds, In which case this Lease shall remain In full force and effect, or pt) have this Lease terminate 30 days thereafter. Lessee shall not be entifed to reimbursement of any funds contributed by Lessee to repair any wall damage or destruction. Premises Partial Damage due to Food or earthquake shall be subject to Paragraph 9.3. notwithstanding that there may be some Insurance coverage. but the net proceeds of any such Insurance shell be made available for the repairs If made by elther Party. 9.3 Partial Damage - Uninsured Loss. If a Remises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lamar may either: (1) repair such damage as soon as reasonably possible at Lassoes expense, In which event this Lease shall continue in full toms and effect, or (t) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occur erhce of Such damage. Such termination shall be effective 60 days following the date of such notice. In the event Lessor elects to terminate this Lease. Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee's commitment to pay for the repair of such damage without reimbursement from Lessor. Lessee shell provide Lessor with said funds or satisfactory assurance thereof within 30 days after making such commitment. In such went this Lease shall continue In full force and effect, and Lessor shell proceed to make such repairs as soon as reasonably possible after the required funds are available. If Lessee does not make the required commitment, this Lease shall terminate as of the data specified Ingo termination notice. rri�pp I 9.4 Total Destruction. Notwithstanding any other provision hereof, a a Promises Total Destruction occurs. this Lem shall tem inete� 60 days following such Destruction. If the damage or destruction was caused by the gross negligence or willful mLsocnduat of Losses, Lessor shalt have the right to recover Lessors damages from Lessee. except as provided in Paragraph B.S. 9.5 Damage Near End of Term. If at any Ume during the fast 6 months of this Lease Mere is damage for which the cost to repair exceeds one month's Base Rent, whether or not an Insured Loss. Lessor or Lessee may terminate this Lease effective 60 days following the date of occurrence of such damage by giving a written termination notice to Lessee within 30 days after the date of occurenoe of such damage. which Lessee Is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration or such damage shall be abaiad in proportion to the degree to which Lessee's use of the Premises is Impalred, but riot to exceed the proceeds received from the Rental Value Insurance. All other obligations of Lessee hereunder shall be perforated by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein. (b) Remedies. If Lessor is obligated to repair or restore the Premises and does riot oommecece. In a substantial and meaningful way, such repair or restoration within 90 days after such obligation shall accrue. Lessee may, at any time prior to the commencement of such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessees election to terminate this Lease on a date not less than 60 days following the giving of such notice. If Lessee gives such notice and such repair or restoration Is not commenced within 30 days thereafter, this Lease shall terminate as of the date specified In said notice. If the repair or restoration Is commenced wghln such 30 days, this Lease shall continue In full force and effect 'Commence' shall mean ether the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs. 9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 62(g) or Paragraph 0. an equitable adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lesser shag, in addition, return to Lessee so much of Lessee's Security Deposit as has not been, or Is not then required to be, used by Lessor. 10. Real Properly Taxes. 10.1 Definition. As used herein. the term "Real Property Taxes" shall Include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than lnhedtance, personal Income or estate taxes): Improvement bond; and /or license fee Imposed upon or levied against any legal or equitable interest of Lessor In the Premises or the Project, Lessors right to other income therefrom, andkr Lessors business of leasing, by any authority having the direct or Indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a Jurisdiction within whloh the Premises we located. Real Properly Taxes shall also include any tax, fee. levy, assessment or charge, or any increase therein: levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease. 10.2 Payment of Taxes. In addition to Base Rent Lessee shall pay to Lessor an amount equal to the Real Property Tax installment due at least 20 days prior to the applicable delinquency date. If any such Installment shall cover any period of time prior to or after the expiration or termination of this Lease, Lessee's share of such Installment shall be prorated. In the event Lessee Incurs a late charge on any Rem payment, Lessor may estimate the current Real Property Taxes, and require that such taxes be paid In advance to Lessor by Lessee monthly In advance with the payment of the Base Rent. Such monthly payments shall be an amount equal to the amount of this estimated Instalment of taxes divided by the number of months remaining before the month In which sold Installment becomes delinquent When the actual amount of the applicable tax bill is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable taxes. It the amount collected by Lessor Is insufficient to pay such Real Property Taxes when due, Lessee shall pay Lessor, upon demand, such additional sum as Is necessary. Advance payments may be intermingled with other moneys of Lessor and shall not bear Interest In the event of a Breach by Lessee in the performance of Its obligations under this Lease, then any such advance payments may be beefed by Lessor as an additional Security Deposit 10.3 Joint Assessment If the Premises are not separately assessed, Lessee's Ifablllty shag be an equitable proportlon of the Real Property Taxes for all of the land and Improvements Included within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the respective valuations assigned in the assessors work sheets or such other Information as may be reasonably available. 10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lasses Owned Akeratans. Utility Installations. Trade Fixtures, furnishings. equipment and all personal property of Lessee. When Possible, Lessee shall cause Its Lessee Owned Alterations and Iftifrly Installatlons, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessors real property. Lessee shag pay Lessor the taxes attributable to Lessees property within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee's property. i1. Utilities and Services. Lessee shall pay for all water, gas. heat, light, power, telephone, bash disposal and other utilities and services supplied to the Premises, together with any taxes thereon. t any such services are not separately metered or billed to Lessee, Lessee shall Pay a reasonable proportion, to be determined by Lessor, of all charges jointly metered or billed. There shall be no abatement of rent and Lessor shall not be liable In any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility, or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's reasonable control or in cooperation with governmental request or directions. 12. Assignment and Subletting. 12.1 Lessor's Consent Required. (a) Lessee shall not voluntarily or by operation of law assign. transfer, mortgage or encumber (collectively. "assign or assignment") or sublet all or airy part of Lessee's Interest in this Lease or In the Premises without Lessors prior written consent. (b) Unless Lessee is a corporation and its stork Ispublicly traded on a national stock exchange, a change In the control of Lessee shall mnailhltA an aauinnmant ramririnn rnnhwnt Tha tmnefpr m A n,m,iln iva hash of OM 75% nr ran r of tha warn mntml of 1 camas shall noncurable Breach, Lessor may either: (f) terminate this Lease. or (g) upon 30 days written notice. increase the monthly Base Rent to 110% of the Base Rent then in affect. Further. in the event of such Breach and rental adjustment, p) the purchase price of any option to purchase the Premises held by Lessee shall be subject to similar adjustment to 110% of the price previously In effect, and (II) all fixed and nan -fixed rental adjusbnents scheduled during the remainder of the Lease term shall be increased to 110% of the scheduled adjusted rent f) Lessor may reasonably withhold consent to a proposed assignment or subletting If Lessee is In r110nEtaly Default at the time consent is requested. (g) Notwithstanding the foregoing, allowing a de minimis portionof the Premises, 10.20 square feet cur less, tube used by a third party vendor in connection with the Installation of a vending machine or payplwne shall not consthute a subletting. 12.2 Terns and Conditions Applicable to Assignment and Subletting. (a) Regardless of Lassoes consent, no assignment or subletting shall' (f) be effective without the express written assumption by such assignee or sublessee of the obligations of Louse under this Lease, (1f) release Lessee of any obligations hereunder, or Qif) alter the primary liability of Lessee for the payment or Rent or for the performance of any other obligations to be perfumed by Lessee. (b) Lessor may accept Rent or performance of Lessee's obligations from any person other than Lessee pending approval or disapproval of an assignment. Nefiher a delay In the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel of Lessor's right to exercise its remedies for Lessee's Default or Breach. (c) Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting. (d) In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for the performance of Lessee's obligations under this Lease. Including any assignee or sublessee. without first exhausting Lessors remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor. (e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessors determination as to the finandal and operational responsibility and appropriateness of the proposed assignee or sublessee. including but not limited to the Intended use and/or required modification of the Promises, if any, together with a fee of $500 as consideration for Lessors considering and processing said request Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested. (See also Paragraph 36) M Any assignee of, or sublessee under, this Lease shag, by reason of accepting such assignment, entering Into such sublease. or entering Into possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term, covenant. condition and obligation herein to be observed or performed by Lessee during the term of said assignment cur sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing. (g) Lessors consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by this Lease unless such transfer is spectIcaly consented to by Lessor In writing. (Sae Paragraph 392) 12.3 Additional Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed Included in all subleases under this Lease whether or Irot expressly Incorporated therein: (a) Lessee hereby assigns and transfers to Lessor all of Lessee's Interest In all Rent payable on any sublease, and Lessor may collect such Rent and apply same toward Lessee's obligations under this Lease; provided, however, that until a Breach shag occur In the performance of Lessee's obligations, Lessee may called said Rent. In the event that the amount oogected by Lessor exceeds Lessee's then outstanding obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent. be deemed liable to the sublessee, for any failure of Lessee to perform and comply with any of Lessee's obligations to such sublessee. Lessee hereby Irrevocably authorizes and directs any such sublessee, upon recelpt of a wrimen notice from Lessor slating that a Breach exists In the performance of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without arty obligation or right to Inquire as to whether such Breech exists. notwithstanding any claim from Losses to the contrary. (b) In the event of a Breach by Lessee, Lessor may, atits optlon,require sublessee toattom to Lessor. In which event Lessor shell undertake the obligations of the sublessor under such sublease from the thne of the exercise of said option to the expbatlon of such sublease; provided, however, Lessor shell not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor. (c) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor. (d) No sublessee shall further assign or sublet all or any part of the Pranlses without Lessors prior written consent. (e) Lessor shalldeliver a copyef anynhofiee ofDafault or Breachby Losses tothe sublessee who shell havethe rightto curethe Default of Lessee within the grace period, C any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee. 13. Default; Breach; Remedies. 13,1 Default, Breach. A 'Default" is defined as a failure by the Lessee to comply with or perform any of the terns. covenants, nnnrllfin t nr RNAR and RMIaafIMR „MW Min I aa¢a A 'R..,h. w AoflnoA aR tho Mn,nonro of ono nr m. of fits furl, .ri fib nua vM nhn constituting public or private nuisance, and/or an Illegal activity on the Premises by Lessee, where such actions continue for a period of J' S business days following written notice to Lessee. (d) The failure by Lessee to provide m sentrastt , (III) the rescission of an unauthorized assignment or subletting, (Iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure cOntinuss for a period of 10 days following written notice to Lessee. (a) A Default by Lessee as to the terns, covenants, conditions or provisions of this Lease, or of the hies adopted ruder Paragraph 40 hereof, other than those described in subparagraphs 13.1(a), (b), (c) or (d), above, where such Default continues for a period of 30 days after written notice; provided, however, that if the nature of Lessee's Default Is such that more than 30 days are reasonably required for its cure, than it shall not be deemed to be a Breach If Lessee mmmances such cure within said 30 day period and thereafter diligently prosecutes such cure to completion. (f) the occurrence of any of the following events: (t) the making ofany general arrangement or assignment forth@ benefit of creditors; (tit) becoming a "debtor' as defined in 11 U.S.C. §101 or any successor statute thereto (unless, In the case of a petition filed against Lessee, the same Is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially at of Lessee's assets located at the Premises or of Lessee's interest In this Lease, where possession is not restored to Lessee within 30 days; or (Iv) the attachment, execution or Other judicial seizure of substantially all of Lessee'a assets located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within 30 days; provided, however, In the event that any provision of this subparagraph is contrary to any applicable law, such provision shag be of no force or effect, and not affect the validity of the remaining provisions. (g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false. (h) If the performance of Lessee's obligationsunder this Lease is guaranteed: p) the death of a Guarantor, (g) the termination of a Guarantees liability with respect to this Lease other then in accordance with the terms of such guaranty, (15) a Guarantor's becoming insolvent or the subject of a bankruptcy filing, (Iv) a Guarantors refusal to honor the guaranty, or (v) a Guarentoes breach of its guaranty obligation on an anticipatory basis, and Lessee's failure, within 60 days following written notice of any such event to provide written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease. 132 Remedies. It Lessee fails to perform any of Its affirmative dudes or obligations, within 1 D days after written node (or In Case of an emergency, without notice), Lessor may, at Its option, perform such duty or obligation on Lessee's behalf, Including but not limited to the obtaining of reasonably required bonds, jnsuranoe policies, or governmental licenses, permits or approvals. Lessee shag pay to Lessor an amount equal to 715% of the reaeonable costs and expenses incurred by Lessor In such performance upon receipt of an Invoice therefor. In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor In the exercise of any right or remedy which Lessor may have by reason of such Breach: (a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall Immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (R the unpaid Rent.wtdch had been earned at the time of termination; (ti) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (lit) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided; and (Iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom. Including but not limited to the cost of recovering possession of the Premises, expenses of releting, including necessary renovation and aheration of the Premises, reasonable attorneys' fees, and that portion of any leasing commission paid by Lessor In connection with this Lease applicable to the unexpired term of this Lease. The worth at the dme of award of the amount referred to In provision (M) of the Immediately preceding sentence shag be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent Efforts by Lessor to mitigate damages caused by lessee's Breach of this Lease shall not waive Lassoes right to recover damages under Paragraph 12. If termination of this Lease is obtained through the provisional remedy of unlawful detalher, Lessor shall have the right to recover In such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof In a separate suit, If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1, In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the fallure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease emitting Lessor to the remedies provided for In this Lease and/or by said statute. (b) Continue the Lease and Lessee's right to possession and recover the Rent as it becomes due, In which event Lessee may sublet or assign, subject only to reasonable limitations. Ads of maintenance, eforte to releL and /or the appointment of a receiver to protect the Lessor's Interests, shall not constitute a termination of the Lessee's right to possession. 0 DL- (c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of the slate wherein the Premises are located. The expiration or termination of this Lease and/or the termination of Lessee's right to possession shell not relieve Lessee from liability under contemplated by this Lease. the exact amount of which will be extremely difficult to ascertain. Such costs Include. but are not limited to, processing and accounting charges. and late charges which may be Imposed upon Lesaor by any Lender. Accordingly. If any Rent shall not be received by Lessor Within 5 days after such amount shall be due, then, without any requirement for notice to Lessee. Lessee shall immediately pay to Lessor a one -time late charge equal to 10% of each such overdue amount or $100. whichever is greater. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will Incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected. for 3 consecutive Installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall. at Lessors option. become due and payable quarterly in advance. 13.5 Interest Any monetary payment due Lessor hereunder, other than late charges. not received by Lessor. when due as to scheduled payments (Such as Base Rent) or within 30 days following the date on which it was due for non - scheduled payment, shag bear Interest from the date when due, as to scheduled payments. or the 31st day after It was due as to non - scheduled payments. The {Merest ( "Interest") urged shell be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law. Interest Is payable In addition to the potential late charge provided for In Paragraph 13A. 13.6 Breach by Lessor. (a) Nodes of Breach. Lessor shell not be deemed in breach of this Lease unless Lessor fags within a reasonable dme.to perform an obligation required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shag in no event be less than 30 days after receipt by Lessor. and any Lender whose name and address shall have been fumished Lessee In writing for such purpose. of written notice specifying wherein such obligation of Lessor has not been performed: provided, however. that if the nature of Lessor's obligation Is such that more than 30 days are reasonably required For its performance, then Lessor shag not be in breach 9 performance Is commenced within such 30 day period and thereafter diligently pursued to completion. (b) Performance by Lessee on Behalf of Lessor. In the event that rreWmer Lessor nor Lender cures Said breach within 30 days after receipt of said notice. or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to perform such cure. provided, however, that such offset shag not exceed an amount equal to the greater of one month's Base Rent or the Security Deposit, reserving Lessee's right to seek reimbursement from Lessor for any such expense in excess of such offset Lessee shall document the cost of said cure and supply said documentation to Lessor. 14. Condemnation. If the premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively "Condemnation "), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or possession. whichever first occurs. If more than 10% of the Building. or more than 25% of that portion of the Premises nut occupied by any building. Is taken by Condemnation. Lessee may, at Lessees option. to be exercised In writing within 10 days after Lessor shag have given Leases written notice of such taking (or in the absence of such notice. Wthln 10 days after the condemning authority shag have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing. this Lease shall remain in full force and effect as to the portion of the Premises remaining. except that the Base Rent shag be reduced In proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be the property of Lessor, whether such award shag be made as compensation for diminution in value of the leasehold. the value of the pan taken, or for severance damages: provided, however. that Lessee shall be entitled to any compensation paid by Me condemnor for Lessee's relocation expenses, foss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and My Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor. In the event that this Lease is not termnated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation. 15. Brokerage Face. 15.1 Additional Commission. In addition to the payments owed pursuant to Paragraph 1.9 above. and unless Lessor and the Brokers otherwise agree in writing. Lessor agrees that (a) if Lessee exercises any Option, (b) if Lessee or anyone affiliated with Lessee acquires any rights to the Premises or other premises owned by Lessor and located within the same Project lf any. within which the Premises is located. (c) It Lessee remains in possession of the Premises, with the Consent of Lessor. after the expiration of this Lease. or (d) if Base Rent is increased. whether by agreement or operation of an escalation douse herein, than. Lessor shall pay Brokers a fee in accordance with the schedule of the Brokers in effect at the time of the execution of this Lease. 15.2 Assumption of Obligations. Any buyer or transferee of lessor's interest In this Lease shag be deemed to have assumed Lessor's obligation hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.9.15, 22 and 31. it Lessor fags to pay to Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such amounts shall acomo Interest. In addition. H Lessor fags to pay any amounts to Lessee's Broker when due, Lessees Broker may send written notice to Lessor and Lessee of such failure and If Lessor fags to pay such amounts within 10 days after said notice. Lessee shall pay said monies to Its Broker and offset such amounts against Rent- In addition. Lessees Broker shell be deemed to be a thirp party beneficiary of any commission agreement entered into by and/or between Lessor and Lessor's Broker or the limited purpose of collecting any brokerage fee owed_ 03 published by the AIR Commercial Real Estate Association, plus such additional Information, confirmation and /or statements as may be reasonably requested by the Requesting Party. (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate wi thin such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that (1) the Lease Is In full force and effect without modification except as may be represented by the Requesting Party, (0) there are no uncured defaults In the Requesting Party's performance, and (III) N Lessor Is the Requesting Party, not more then one month's rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the fads contained In said Certificate. (c) If Lessor desires to finance, refinance, or sell the Premises, orany part thereof, Lessee and all Guarantors shall within 10 days after written notice from Loam deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, Including but rat limited to Lessee's financial statements for the pest 3 years. All such financial statements shall be received by Lessor and such lender or purchaser In confidence and shall be used only for the purposes herein set forth. 17. Definition of Lessor. The term "Lessor" as used herein shall mean the owner or owners at the time in question of the fee rise to the Premises, or, If this Is a sublease, of the Lessee's Interest in the Prior lease. In the event of a transfer of Lessors two or interest In the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in rash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shag be relieved of a0 fiabfifiy, with respect to the 0bygedons ardfor covenants under this Lease thereafter to be performed by this Lessor. Subject to the foregoing, the obligations andhor covenants in this Lease to be performed by the Lesser shall be binding only upon the Lessor as hereinabove defined. 1s. Severabillty, The Invalidity of any provision of this Lease, as determined by a court of Competent jurisdiction, shag In no way affect the validity of any other provision hereof. - 19. Days. Unless otherwise specifaally indicated to the contrary, the word "days" as used In this Lease shall mean and refer to calendar days. 20. Limitation on Liability. The obligations of Lesser under this Lease shall not constitute personal obligations of Lessor or its partners, members, directors, officers or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse against Lessors partners, members, directors, officers or shareholders, or any of their personal assets for such satisfaction. 21. Time of Essence. Time Is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease. 22. No Prior or Other Agreements; Broker Disclaimer. This Lease Contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants to the Brokers that It has made, and is retying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party. 23. Notices. 23.1 Notice Requiremords. All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered In person (by hand or by courier) or may be sent W regular, certified or registered mafi or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and sha0 be deemed sufficiently given it served in a manner spedfied In this Paragraph 23. The addresses noted adjacent to a Party's signsture on this Lease shall be that Party's address for delivery or malting of notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice. A Copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as Lesser may from doe to time hereafter designate in writing. 23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shag be deemed given 72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone contimeedon of receipt (confirmation report from fax machine Is sufficient), provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 24. Waivers. ��`I RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE. 25. Disclosures Regarding The Nature of a Real Estate Agency Relationship. (a) When entering into a discussion with a real estate agent regarding a real estate transaction, a Lessor or Lessee should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Lessor and Lessee acknowledge being advised by the Brokers in this transaction, as follows: (1) Lessor's Agent. A Lessor's agent under a listing agreement with the Lessor ads as the agent for the Lessor only. A Lessor's agent or subagent has the following affirmative obligatlons: To the Lessor. A fiduciary duty of utmost care, Integrity, honesty, and loyalty In dealings with the Lessor. To the Laame, and the Lessor. a. Diligent exercise of reasonable sidle and care in performance of the agerd's dudes. b. A duty of honest and fair dealing and good faith. C. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Paroles. An agent is not obligated to reveal to aaher Party any confidential information obtained from the other Party which does not Involve the affirmative duties sat forth above. (g) L.e_ssee's — Agent An agent can agree to ad as agent for the Lessee only. In these situations, the agent is not the Lessor's agent, even if by agreement the agent may receive compensation for services rendered, either In fug or in part from the Lessor. An agent aging only for a Lessee has the following affirmative obligations. To tl3@ Lessee: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor. a. Diligent exercise of reasonable skills and care In performance of the agent's duties. b. A duty of honest and fair dealing and good faith. C. A duty to disclose an facts krown to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent Is not obligated to reveal to either Party arty confidential Information obtained from the other Party which does not Involve the affirmative dudes set forth above. (fii) Agent Renmeenting Both Lessor and Lessee. A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the. knowledge and consent of both the Lessor and the Lessee. In a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the Lessee: a. A fiduciary duty of utmost pre, Integrity, honesty and loyalty In the dealings with either Lessor or the Lessee. b. Other duties to the lessor and the Lessee as stated above in subparagraphs (I) or (iq. In representing both Lessor and Lessee, the agent may not without the express permisslon of the respective Party, disclose to the other Party that the Lessor will accept rent in an amount less than that Indicated in the listing or that the Lessee is willing to pay a higher rent than that offered. The above duties of the agent in a real estate transaction do not relleve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice Is desired, consult a competent professional. (b) Brokers have no responsibility with respect to any default or breach hereof by either Party. The Pardee agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one year after the Start Date and that the liability (including court costs and attorneys' fees), of any Broker with respect to any such lawsuit andfor legal proceeding shag riot exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. (c) Lessor and Lessee agree to Identify to Brokers as "Confidential" any communication or Information given Brokers that Is considered by such Parry to be confidential. 26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Leese. In the event that Lessee holds over, then the Base Rent shall be Increased to M% of the Base Rem applicable immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Learns. 27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. 26. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by. the parties bessee are both covenants and conditions. In construing this Lease, all headings and like are for the convenience of the Parties only and shell not be considered a part of this Lease. Whenever required by the context, the singular shall Include the plural and vice versa. This Lease shall not be construed as if prepared by one of the Parties, but rather according to Its fair meaning as a whole, as If both Parties had prepared It (see Addendum Paragraph 57 - Rider to Paragraph 28) 29. Binding Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal representatives, succesaom and assigns and be governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be Initiated In the county in which the Premises are located. G) 30. Subordination Attornment Non"Disturbance. � " ° the remainder of the term hereof, or, at the election of the new owner. this Lease will automatically become a new lease between Losses and such new owner. and (ip Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessors obligations, except that such new owner shall not (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership: (b) be subject to any onsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month's rent, or (d) be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new owner. 30.3 Non- Dlsturbartoo. With respect to Security Devices entered Into by Lessor after the sxewtlon of this Lease, Lessee's subordination of this Lease shag be subject to receiving a commercially reasonable non - disturbance agreement (a "Non-Disturbance Ageemenr, from the Lender which Non.Disturbanoe Agreement provides that Lessee's possession of the Premises, and this Lease, including any options to extend the term hereof, will not be disturbed so long as Lessee Is not in Breach hereof and attoms to the record owner of the Premises. Further, within 60 days after the execution of this Lease. Lessor shall, if requested by Lessee, use its commercially reasonable efforts to obtain a Non - Disturbance Agreement from the holder of any pr"xisdng Security Device which Is secured by the Premteea. In the event that Lessor is unable to provide the Non - Disturbance Agreement within said 60 days, then Lessee may, at Lessee's option, directly contact Lender and attempt to negotiate for the execution and delivery of a Nan - Disturbance Agreement. 30.4 Self-Executing. The agreements contained in this Paragraph 30 shell be effective without the execution of any fuller documents: provided. however, that, upon written request from Lessor or a LaMar In connection with a sale, financing or refinancing of the Premises, Lessee end Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attommeni and/cr Non-Disturbance Agreement provided for herein. 31. Attomeys' Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded In tort, contract or equity, or to declare Fights hereunder, the Prevailing Party (as hereafter defined) In any such proceeding, action, or appeal therm, shall be entitled to reasonable attormeys' fees. Such fees may be awarded in the same suit or recovered In a separate suit, whether or not such action or proceeding Is pursued to decision or judgment. The term. "P.revatling Party" shall Include. without limitation. a Party or Broker who substantially obtains or defeats the relief sought, as the case may be. whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attOMSYW fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse off attorneys' fees reasonably Incurred. IR seldition. Lessor shale be-- M-0-ad le a—m-ye, fees. seats and eVenses lAsumed in the prepwaart and sewlos @4 Fielless of DSIOW SAd GORGURNORS IR GORR88deR therewith. whetheF OF RGI 8 legal allgoll 05 SWISKILMANY GOMMG110901 iR GGMGGVGR 1401% 61.10h Defatlit OF1061 Mag- 32. Lessor's Access: Showing Premises; Repairs. Lessor and Lessor's agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times during buslneSS hours after 24 hours prior reasonable -pdec notice for the purpose of showing the same to prospective purchasers, tenders, or tenante, written notice of Sale and making such alterations. repairs. irrprvvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services. pipes and oonduhs through the Premises andfor other premises as Kong as there is no material adverse effect to Lessee's use of the Premises. All such activities shall be without abatement of rent or liability to Lessee. 33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessors prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction. 34. Signs. lessor may place on the Premises ordinary " For Sale" signs at any time and ordinary "For Lease" signs during the last 6 months of the term hereof. Except for ordinary 'for sublease" signs. Lessee shall not place any sign upon the Premises without Lessor's prior written consent. All signs must comply with all Applicable Requirements. 35. Termination: Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shag automatically laminate any sublease or lesser estate In the Premises: provided, however. that Lessor may elect to continue any one or all existing subtenancles. Lessors failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser Interest, shall constitute Lessors election to have such event constitute the termination of such interest. 36. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party Is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. As, contemplated In Paragraph 122(e), Lessee Shall pay Lessor a fee of $500 a6 consideration for Lessor's considering and processing Lcooee 5 request for congerrt w an assignment or Subletting pursuant to this, Lease. In the event Lessee presents Lc000r with a request for Lesoor to consent to the presence or use of a Hazardous 5ubotance at the Premises, Leseor'S actual reasonable coots and expenses (Including but not limited to attorileyS' and other consultants' fees) incurred in the coneideration of, or response to, ouch request, Shall be, paid by LeSSee upon receipt of an invoice and Supporting documentation therefor. provided that Lessee Shall riot reasons In writing and in reasonable detail within 10 business days follovAng such request 37. Guarantor. 37,1 Execution. The Guarontors, if any, shall each execute a guaranty in the form mast recently published by the AIR Commercial Real Estate Association, and sea such Guarantor shag have the same obligations as Lessee under this Lease. 37,2 Default It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide: (a) evidence of the execution of the guaranty, Including the authority of the party signing on Guarantor's behalf to obllgate Guarantor, and In the case of a corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) wri0an confirmation that the guaranty Is still In effect. 38, Quiet Possession, Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions an Lessee's Part to be observed and performed under this Lease, Lessee shag have quiet possession and quiet enjoyment of the Premises during the term hereof. 39. Options. If Lessee Is granted an Option, as defined below, than the following provisions shall apply: 39.1 Definition. "Option" shall mean: (a) the right to emend or reduce the term of or renew JWS Lease or to extend a reduce the term of or renew any lease that Lessee has on other property of Lessor, (b) the right of fast refusal or first offer to lease either the Premises or other property of Lessor, (c) the right to purchase. the right of first offer lo purchase or the right of first refusal to purchase the Premises or other property of Lessor, 39.2 Optiorre Personal To Original Lasses. Any Option granted to Lessee In this Lease Is personal to the original Lessee, and oah"M be assigned or exercised by anyone other than said adginal Lessee and only white the original Lessee is in full possession of the Premses anti, t requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting. 39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a leter Opdion cannot be exercised unless the prior Options have been validly exercised. 39A Effect of Defauff on Options. (a) Lessee shatlhave no right to exercise an Option: (i) during the period commerictrg wfththe giving of any no" of Default and continuing until said Default is cured, (II) during the period of time any Rent is unpaid (without regard to whether notice thereof Is given Lessee), (iii) during the time Lessee is in Breach of this Lease, or (W) In the event that Losses has been given 3 or more notices of separate Default, whether or not the Deft its; are cured, during the 12 month period immediatety preceding rte exercise of the Option. (b) The period of time withinwhkh an Option may be exercised shall not be extended or enlarged by reason of Lessees. insbigtylo exercise an Option because of the provisions of Paragraph 39.4(a).. (c) An Option shag terminate and be of no turther force or effect, notwiths}aMingLtzssee's due and t'mrelY exercise of the Option, ti, after such exercise and prior to the commencement of the extended term or completion of the purchase, (1) Lessee falls to pay Rent for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (It) it Lessee cornmits a Breach of this Lease. 40. Multiple Buildings. lithe Premises area part of a group of buildings controlled by Lessor, Lessee agrees that it will abide by end conform to all reasonable rules and regulations which Lasso may make from time to time for the management, safety, and care of said properties, Including the care and cleanliness of the grounds and Including the parking, loading and unloading of vehicles, and to cause Its employees, suppliers, shippers, customers, contractors and inv0ess to so abide and conform Lessee also agrees to pay its fair share of common expenses Incurred In connection with such rules and regulations, 41, Security Measures. Lessee hereby aclmrnvledges that the Rem payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lasso shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lasses, its agents and Invitees and their properly from the acts of third parties. 42. Reservations. Lessor reserves to %scut Me right, from time to time, to grant, without the consent or joinder of Lessee, such easemerfte, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably Interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions. 01 43. Performance Under Protest 0 at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money be asserted shall have the right to make payment "under protest" and such payment slag not be regarded as a voluntary payment and there shall survive the right on the part of said Party to Institute suit for recovery of such sum. If it shell be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereat. sold Party shall be entitled to recover such sum or so much thereof as it was not "My required to pay. A Party who does riot initiate suit for the recovery of sums paid "under Prat" with 6 months shall be deemed to have waived its fight to protest such Dayrtrent. together shall constitute one and the same Instrument 45. Conflict Any conflict between 81e printed provislons of this Lease end typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 46. Offer. Preparation of this Lease by either Parry or their agent and submission of same to the other Parry shall not be deemed an offer to lease to the other Party. This Lease is not Intended to be binding until executed and delivered by all Parties hereto. 47. Amendments. This Lease may be modified only in writing, signed by the Parties in Interest at the time of the modification. As long as they do not materially change Lessee's obligations hereunder, Lessee agrees to make such reasonable non- mcnetary modification; to this Lease as may be reasonably required by a Lender In connection with the obtaining of normal financing or refinancing of the Premises. 48. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 49. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation and/or Me Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease ® Is ❑ is not attached to this Lease. 50. Americans with Disabilities Act Since compliance with the Americans with Dlsabllilles Act (ADA) is dependent upon Lessee's specific use of the Premises, Lessor makes no warranty or representation as to whether or no the Premises comply with ADA or arty similar legislation. In the event that Lessee's use Of the Premises requires modificagons or additions to the Remises in order to be in ADA compliance, Lessee agrees to make any such necessary modifttions and/or additions at Lessee's expense. LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN. AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR' BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE. WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED. The parties hereto have executed this Lease at the place and on the dates speckled above their respective signatures. Executed at: M• Executed at: On: By LESSEE HOM Real Estate Group, a California corporation By _ r O' Name Printed: Bob B Tide: CEO BY: Attn: Oliver Fleener /John Pomer A«„ Title: vice President Address: 4675 MacArthur Court, Suite 1600 . areas; - Newport Beach, CA 92660 Telephcne:(2�9) 608 -2000 Facslmlle: {949) 608 -2003 Federal ID No. In P In NOTICE: These Fauns are oftam modified to meet changing requlremems of taw and industry needs. Always write or calf to make sum you are utilizing the most current form: AIR Commercial Real Estate Association, 800 W 8th Sheet, Suite 800, Los Angeles, CA 80017. Telephone No. (213) 687 -6777. Fax No.: (213) 6874818. ® Copyright 2001 - By AIR Commercial Real Estate Association. All rights,asaroed. No part of these works may he reproduced in any lone without permission In wrMag. e %Wnair\0lkw FlmnsA3400 Yls LIdoIHOM RE Group\Laaaa - ROM RE Group �qM ADDENDUM 1 ics STANDARD INDUSTRIAL/COMMERCIAL SINGLE - TENANT LEASE " NET DATED JULY 16, 2008 DENNIS AND CHRIS OVERSTREET, INDIVIDUALS ( "LESSOR ") HOM REAL ESTATE GROUP, A CALIFORNIA CORPORATION ( "LESSEE ") Lessor and Lessee agree that notwithstanding anything contained in the Lease t0 the Contrary, the Lease as modified by the provisions set forth in this Addendum No. 1 (the "Addendum ") represents the fully negotiated agreement of the parties, and the provisions of this Addendum will be deemed to be a part of the Lease and will supersede any contrary or conflicting provision in the Lease and prevail and Control for all purposes. This Addendum, together with the Lease itself, and all other Exhibits, Riders and Addenda attached thereto represents the fully integrated and binding agreement of the parties. All references in the Lease and in this Addendum to Lease are to be construed to mean the Lease as amended and supplemented by this Addendum. All terns used in this Addendum, unless specifically defined in this Addendum, have the same meaning as such terms have in the Lease. 51. Base Rent Schedule The initial monthly Base Rent on a NNN basis for the Premises. The Base Rent shall consist of $10,004.67 per month for the first twelve (12) months of the lease. The Base Rent shall be increased per annum thereafter by applying the national consumer price index with a minimum of three (3 %) percent and a maximum of six (6 %) percent increase. In addition to the Base Rent, Lessee will be responsible for its portion (as noted In section 1.6 (d) of the lease) of the CAM bill, which includes Taxes and Insurance. Lessor will provide true and accurate accounting of the calculation of the CAM bill, including copies of tax bills, insurance invoices and other back -up documentation to support the amounts calculated and invoiced to Lessee upon reasonable request. Lessor is responsible for the building maintenance, including the common area. Lessee is responsible for any interior lighting fixtures or light plumbing clogs (caused by tenant), janitorial and cleaning. In addition, Lessor is responsible for water and trash. Lessee is responsible for its own utilities. 62. Lessee Improvements Lessor shall deliver the Premises in'broomclean" condition and confirm that electrical, plumbing, and HVAC are all in good working order. In addition, this Lease is contingent upon Lessor delivering to Lessee, at Landlord's sole cost and expense, written evidence from the City of Newport Beach, County of Orange, and any other relevant authority that the Premises are zoned for, and permitted to be used as, office space, with both a useable square footage and a parking capacity acceptable to Lessee. Lessee Will construct the office area per a mutually agreed upon space plan with Lessors approval of such space plan not to be unreasonably withheld or delayed. Lessor will contribute a maximum amount of one hundred twenty -five thousand dollars ($125,000) (the "Tenant Improvement Allowance ") towards Lessee improvements, including but not limited to all construction, material, labor, planning, engineering, permitting required by Lessee for the Premises (the "Lessee Improvements) as well as any and all other costs associated with the Lessee Improvements. Lessee shall be financially responsible for any additional costs for Lessee Improvements in excess of the Tenant Improvement Allowance. Any improvements beyond those included in the space plan will require Lessor's prior written consent, which shall not be unreasonably withheld. Lessor shall promptly pay within thirty (30) days all invoices submitted by Lessee for the payment of portions of the costs associated with the Lessee Improvements. up to the maximum of the Tenant Improvement Allowance. In the event the cost of the Lessee Improvements is less than the allotted Tenant Improvement Allowance noted above, then Lessee's rent shall be reduced accordingly throughout term of this Lease to credit Lessee the difference between the full amount of the Tenant Improvement Allowance and the actual cost of the Lessee Improvements. 53. Security Deposit Bum -Off Concurrently with Tenant's delivery of this Lease, Tenant shall deposit with Landlord the sum as noted in �L paragraph 1.6(b). Notwithstanding the foregoing, provided Tenant has not been in default hereunder, J Landlord shall reduce the Security D6DOSit. and credit such reduction acainst the rent due hereunder. in JAMS/ENDISPLITE ('JAMS"), or its successor, with such arbitration to be held In Orange County, California, unless the parties mutually agree otherwise. Any demand for arbitration must be made to the other party and to JAMS. No demand for arbitration may be made after the date on which the institution of legal proceedings based on the claim or dispute is barred by the applicable statute of limitations. Within ten (10) business days following submission to JAMS, JAMS shall designate three arbitrators and each party may, within five (5) business days thereafter, veto one of the three persons so designated. If two different designated arbitrators have been vetoed, the third arbitrator shall hear and decide the matter. If less than two (2) arbitrators are timely vetoed. JAMS shall select a single arbitrator from the non - vetoed arbitrators originally designated by JAMS, who shall hear and decide the matter. Any arbitrator proposed shall be a licensed attorney or retired judge with not less than ten (10) years experience in commercial leasing litigation. 6. The provision of this Section shall not apply to (i) Any unlawful detainer action instituted by Lessor as the result of a Breach or alleged Breach by Lessee pursuant to this Lease. (ii) Any specific controversy, dispute, question or issue as to which this Lease specifically provides another method of determining such controversy, dispute, question or issue and provides that a determination pursuant to such method is final and binding, unless both Lessor and Lessee agree in writing to waive such procedure and proceed instead pursuant to this Section. (iii) Any request or application for an order or decree granting any provisional or ancillary remedy (such as a temporary restraining order or injunction) with respect to any right or obligation of either party to this Lease, and any preliminary determination of the underlying controversy, dispute, question or issue as is required to determine whether or not to grant the relief requested or applied for. A final and binding determination of such underlying controversy, dispute, question or issue shall be made by an arbitration conducted pursuant to this Section after an appropriate transfer or reference to JDR upon motion or application of either party hereto. Any ancillary or provisional relief which is granted pursuant to this clause (ili) shall continue in effect pending an arbitration determination and entry of judgment thereon pursuant to this Section. (iv) Exercise of any remedies to enforce any judgment entered based upon a determination made by arbitration pursuant to this Section. C. The arbitration shall be conducted in accordance with the following: 0) There shall be a pre - hearing conference prior to the arbitration hearing. (ii) There shall be no mediation or settlement conferences unless all parties agree thereto in writing. (iii) Discovery shall be in accordance with the Code of Civil Procedure Sections 1283.05 and 1283.1 except that either party may take depositions without the arbitrator's consent. All discovery disputes shall be resolved by the arbitrator. (iv) All motions shall be in letter form and hearings thereon shall be by conference telephone calls. (v) Hearings shall require only twenty (20) days prior written notice. NO All notices in connection with any arbitration may be served in any manner permitted by the Lease. (vii) The arbitrator shall award to the prevailing party such party's reasonable expenses incurred In such proceeding, including fees and costs paid or payable to JAMS. (viii) As soon as practicable after selection of the arbitrator, the arbitrator shall �51 determine a reasonable estimate of anticipated fees and costs of the arbitration and shall deliver n ri..lam'.M {� ......L r.n..L. ....M:.�r C...JL {L..i ....N. J.. ..... w�{.+..L..n.. ..J ......L G.........d ......M C....L W The award rendered by the arbitrator shall be final and not appealable, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Except by written consent of the person or entity sought to be joined, no arbitration shall include, by consolidation, joinder or in any other manner, any person or entity not a party to the Lease unless (1) such person or entity is substantially involved in a Common question of fact or law, (2) the presence of such person or entity is required if complete relief is to be accorded in the arbitration, or (3) the interest or responsibility of such person or entity In the matter is not insubstantial. D. The agreement herein among the parties to arbitrate shall be specifically enforceable under prevailing law. Subject to the limitations of Subparagraph B, the agreement to arbitrate hereunder shall apply only to disputes arising out of, or relating to, this Lease, and shall not apply to the exercise of remedies to enforce any award or judgment made by an arbitrator pursuant to this paragraph. 66. Payment of Funds Upon Execution The amounted noted in paragraph 1.6(e) shall be paid per the following: one -third (113) ($18,329.54) upon Lease execution, and the remainder ($36,659.09) upon release of any Tenant Improvement Allowance funds or permits, whichever is sooner. 66. Option to Renew Lessee shall have the option to renew the lease for two (2) additional terms of five (5) years (the "Option Term "), provided Lessee is not in material or monetary default (subject to notice and cure periods) and upon first giving Lessor not more than twelve (12) months and not less than six (6) months prior written notice before the expiration of the Term. For the First Option Term of five (5) years (the 'First Option Term "), the base rent applicable during the first month of the First Option Term shall be increased by applying the national consumer price index, with a minimum of three (3%) percent and a maximum of six (6%) percent, to the last month's base rent of the original term, after all prior increases have been applied. The Base Rent shall then be increased per annum thereafter by applying the national consumer price index with a minimum of three (3%) percent and a maximum of six (6 %) percent increase for the remainder of the First Option Term. For the Second Option Term of five (5) years (the "Second Option Term ") to renew, the base rent applicable during the first month of the Second Option Term shall be based on the "Fair Market Rental Rate ". The term "fair market rental rate" as used in the Lease and any Rider /Addendum attached thereto shall mean the annual amount per square foot, projected during the Second Option Term, that a willing, non - equity renewal Lessee (excluding sublease and assignment transactions) would pay, and a willing, institutional Lessor of a comparable quality office building located in the Newport Beach Coastal area of California (the "Comparison Area ") would accept, in an arm's length transaction (what Lessor is accepting in then current transactions for the buildings located in the Project may be used for purposes of projecting rent for the Option Term), for space of comparable size, quality and floor height as the Premises, taking into account the age, quality and layout of the existing improvements in the Premises, and taking into account items that professional real estate brokers or professional real estate appraisers customarily consider, including, but not limited to, rental rates,, space availability, Lessee size, Lessee improvement allowances, parking charges and any other lease considerations, if any, then being charged or granted by Lessor or the lessors of such similar office buildings. All economic terms other than Monthly Basic Rent, such as Lessee improvement allowance amounts, if any, operating expense allowances, parking charges, etc., will be established by Lessor and will be factored into the determination of the fair market rental rate for the Option Term. Accordingly, the fair market rental rate will be an effective rate, not specifically including, but accounting for, the appropriate economic considerations described above. In the event where a determination of fair market rental rate is required under the Lease, Lessor shall provide written notice of Lessor's determination of the fair market rental rate not later than ninety (90) days after the last day upon which Lessee may timely exercise the right giving rise to the necessity for such fair market rental rate determination. Lessee shall have ten (10) business days ( "Lessee's Review Period ") after receipt of Lessor's notice of the fair market rental rate within which to accept such fair market rental rate or to reasonably object thereto in writing. Failure of Lessee to so object to the fair market rental rate submitted by Lessor in writing within Lessee's Review Period shall conclusively be ( �� deemed Lessee's approval and acceptance thereof. If within Lessee's Review Period Lessee reasonably �Y obiects to or is deemed to have disanomved the fair market rental rate submitted by Lassnr. Lessor and (a) Lessor and Lessee shall each appoint one (1) independent appraiser who shall by Profession be an M.A.I. certified real estate appraiser who shall have been active over the five (5) year period ending on the date of such appointment in the leasing of commercial (including office) properties in the Comparison Area. The determination of the appraisers shall be limited solely to the issue of whether Lessor's or Lessee's last proposed (as of the Outside Agreement Date) best and final fair market rental rate for the Premises is the closest to the actual fair market rental rate for the Premises as determined by the appraisers, taking into account the requirements specified in Section 1 above. Each such appraiser shall be appointed within fifteen (15) days after the Outside Agreement Date. (b) The two (2) appraisers so appointed shall within fifteen (15) days of the date of the appointment of the last appointed appraiser agree upon and appoint a third appraiser who shall be qualified under the same criteria set forth herelnabove for qualification of the initial two (2) appraisers. (d) The three (3) appraisers shall within thirty (30) days of the appointment of the third appraiser reach a decision as to whether the parties shall use Lessor's or Lessee's submitted best and final fair market rental rate, and shall notify Lessor and Lessee thereof. During such thirty (30) day period, Lessor and Lessee may submit to the appraisers such information and documentation to support their respective positions as they shall deem reasonably relevant and Lessor and Lessee may each appear before the appraisers jointly to question and respond to questions from the appraisers. (d) The decision of the majority of the three (3) appraisers shall be binding upon Lessor and Lessee and neither party shall have the right to reject the decision or to undo the exercise of the applicable Option. If either Lessor or Lessee fails to appoint an appraiser within the time period specified in Section 3(a) hereinabove, the appraiser appointed by one of them shall within thirty (30) days following the date on which the party failing to appoint an appraiser could have last appointed such appraiser reach a decision based upon the same procedures as set forth above (i.e.. by selecting either Lessor's or Lessee's submitted best and final fair market rental rate), and shall notify Lessor and Lessee thereof, and such appraiser's decision shall be binding upon Lessor and Lessee and neither party shall have the right to reject the decision or to undo the exercise of the applicable Option. (e) If the two (2) appraisers fail to agree upon and timely appoint a third appraiser, either party, upon ten (10) days written notice to the other party, can apply to the Presiding Judge of the Superior Court of Orange County to appoint a third appraiser meeting the qualifications set forth herein. The third appraiser, however, selected, shall be a person who has not previously acted in any capacity for either party. (f) The cost of each party's appraiser shall be the responsibility of the party selecting such appraiser, and the cost of the third appraiser (or arbitration, if necessary) shall be shared equally by Lessor and Lessee. (g) If the process described hereinabove has not resulted in a selection of either Lessor's or Lessee's submitted best and final fair market rental rate by the commencement of the applicable lease tens, then the fair market rental rate estimated by Lessor will be used until the appraiser(s) reach a decision, with an appropriate rental credit and other adjustments for any overpayments of Monthly Basic Rent or other amounts if the appraisers select Lessee's submitted best and final estimate of the fair market rental rate. The parties shall enter into an amendment to this Lease confirming the terms of the decision. (h) Lessee shall have ten (10) business days after the date that the final fair market rental rate is ultimately determined using the process described hereinabove to notify Lessor that Lessee is not satisfied with such final fair market rental rate, and thereby cancel Lessee's exercise of the Second Option Term. 57. Riders to Certain Paragraphs The following riders are hereby added to the Paragraphs as indicated: RIDER TO PARAGRAPH 2.3 Lessor represents and warrants to Lessee that as of the date hereof and as of the Start Date, (a) Lessor is the sole fee owner of the Building, the Premises and the Project; (b) there are no anrumhranran lions nnr rnants rmwnontc in aRoN+k, +%A -0 as —+ =. m11%3 ................... L. r...a RIDER TO PARAGRAPH 6.2(d) Notwithstanding anything to the contrary in the Lease, Lessee shall have no liability or responsibility with respect to any Hazardous Substances which: (1) were not caused or permitted by Lessee, its agents, employees, contractors, licensees or invitees; (ii) were the result of violations of any "Hazardous Substances Laws' (as hereinafter defined) relating to the Premises, the Building, or the Project (the Premises, the Building, and the Project shall be collectively referred to herein as the 'Property") which violations existed as of the Commencement Date, or (iii) were present in, on, under or about any part of the Property as of the Commencement Date, or that were brought into, onto, about, or under any part of the Property by anyone other than Lessee or its agents, employees, contractors, licensees or invitees. "Hazardous Substances Laws' shall mean and include all federal, state, and local laws relating to the environment or to Hazardous Substances, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 at seq.), each as amended from time to time. RIDER TO PARAGRAPH 6.2(e) Lessor represents and warrants to Lessee that Lessor has complied, and the Property is in compliance as of the date of the Lease, with all Hazardous Substances Laws, and no notice of violation of any Hazardous Substances Law with respect thereto, or any permit, license or other authorization relating thereto has been received, nor is any such notice pending or, to Lessor's knowledge, threatened. No underground or above -ground storage tanks or surface impoundments are located on or under any part of the Property. Except in compliance with Hazardous Substances Laws, neither Lessor, nor any prior owner, operator, tenant or occupant of any part of the Property, has generated, used, treated, spilled, stored, transferred, disposed, released or caused a threatened release in, at, under, into, from, to or on any part of the Property of any Hazardous Substances. Except as disclosed to Lessee, Lessor has not received any notice or claim to the effect that either Lessor or any part of the Property is or may be liable to any governmental authority or private party as a result of the release or threatened release of any Hazardous Substances. RIDER TO PARAGRAPH 28 Except for matters which will have an adverse effect on the (a) structural integrity of the Building, (b) the Building plumbing, heating, life safety, ventilating, air conditioning, mechanical or electrical systems, or (c) the exterior appearance of the Building, whereupon in each such case Lessor's duty is to act in good faith and in compliance with the Lease, any time the consent, approval, designation or satisfaction of Lessor or Lessee is required, the same shall not be unreasonably withheld, conditioned or delayed. Whenever the Lease grants Lessor or Lessee the right to take action, exercise discretion, establish rules and regulations or make allocations or other determinations, Lessor and Lessee shall act reasonably and in good faith. EXHIBIT "A" SPACE PLAN TO STANDARD INDUSTRIAUCOMMERCIAL SINGLE- TENANT LEASE - NET DATED JULY. 16, 2008 DENNIS AND CHRIS OVERSTREET, INDIVIDUALS ( "LESSOR ") HOM REAL ESTATE GROUP, A CALIFORNIA CORPORATION ( "LESSEE ") (To be provided) X55 1 z 3 4 5 6 7 a 9 l0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 29 Alan R. Burns SBN 70328 HARPER & BURNS LLP 453 South Glassell Street Orange, California 92866 Telephone(714)771 -7728 Facsimile (714) 744 -3350 Attorneys for Newport Beach Planning Commission IN THE MATTER OF THE MODIFICATION OF A CONDITIONAL USE PERMIT CITY OF NEWPORT BEACH In the matter of the Sejour European Bistro and Lounge; Overstreets r. IV b FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT i Having heard the evidence presented by the staff, owner and others, and having fully considered the evidence and the argument of the parties and their counsel, the Commission does hereby find and determine as follows: That the following CUP terms or conditions of approval have been violated or other laws or regulations have been violated: 1. CONDITION I The development was not operated in substantial conformance with the approved plot plan, floor plan and elevations dated January 22, 2001. 1 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT 2 3 4 5 6 7 a 9 io n 12 13 14 15 16 17 is 19 20 21 22 23 24 25 26 27 28 This condition was violated on the following occasions as documented by the following: Fenced -off patio across sidewalk • Ex 6 — 4/15/07 Doug Jones memo • Ex 7 — 4/20/07 Supplemental police report DR 07 -03722 • 4/19/07 Follow -up police report • Ex 8 — 4/28/07 Doug Jones memo • Ex 9— 5/01/07 Admin cite • Ex 14 — 5/26/07 Admin cite Installation of tables, booths • Ex 5 —Floor plan showing Unit AI and A2 • Ex 6 — 4/19/07 Follow -up police report • Ex 14 — 5/26/07 Unit Al bottle service • Ex 15 —11/13/07 booth with alcohol consumption Al (dancing) D3� 2. CONDITION 4 A V X06 u 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 agent. Future owners, operators or assignees shall submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. Overstreets submitted declarations that they submitted the use permit to Stockton as part i of the sale transaction. (Declaration of Dennis Overstreet) "Sejour LLC" in its submittal to the Planning Commission (not signed by anyone) vaguely states it was misinformed about the conditions. The condition was violated in that a letter was never submitted acknowledging receipt and acceptance of the conditions. 2 bA_ fw� FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT �0 1 2 3 4 5 6 7 s 9 10 11 12 13 14 15 16 19 1s 19 20 21 22 23 24 25 26 27 26 4. CONDITION 5 ! The applicant shall comply with all federal, state, and local laws. This condition was violated on the following occasion as documented by the following: Building Code • Ex 17 — Occ. Exceeded, 11/28/07 NBPD report (120 not 99) ABC requirements • Ex 22 (ABC License) — hones, dancing • Exs 6, 15, 17 — no dancing Blockins sidewalk (NBMC 10.50.020) • Ex 6 — 4/15/07 Jones memo • Ex 14 — 5/26/07 Admin cite 11681 2 citations not annealed • Ex 9 — 5/01/07 Admin cite 0395 • Ex 14 — 5/26/07 Admin cite 11681 t� 5. CONDITION 11 P ),061.63 The sale of distilled spirits for off -site consumption shall not exceed 15% of gross receipts of all off -site alcohol sales. The sale of distilled spirits for on -site consumption shall not exceed 10% of the total sales for on -site consumption of all alcoholic beverages. 3 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT p' 1 1 2 3 4 5 6 7 s 9 to Il 12 13 14 15 16 17 Is 19 20 21 22 23 24 25 26 27 29 This condition was violated as proven by the following (and there is no evidence that the business was ever in compliance with this condition): • Ex 10 — 5/04/07 Letter from Lepo asking for gross receipts for alcohol sales • Ex 16 — 11/13/07 Request for sales records • Ex 12 — 5/10/07 — Stockton write liquor constitutes 17% of sales • Stocktons (Sejour) contend need different ratios to be able to comply 6. CONDITION 13 '" V up poj -DL�a Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, unless the Planning Commission first approves a Use Permit. This condition was proven to have been violated by the following: • Ex 7 — 4/21/07 NBPD DR 07 -3722 — "full bar" in operation with restaurant menu, bottle service • Ex 14 — 5/26/07 Admin cite — private party • Ex 6 — 4/20/07 Report — full bar open • Ex 15 — 11/09/07 — bouncer at door, bottle service, amplified music; 11/13/07 — nightclub with hard alcohol, music, bouncer, dancing — o,-a. �peyly // // 4 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT 0 1 2 3 4 5 61 7 a 9 10 11 12 13 14 15 16 17 is 19 20 21 22 23 24 25 26 7. CONDITION 14 D 7 a 00; The interior area authorized for on -site alcoholic beverage consumption in conjunction with a Type 47 license shall be limited to 1,263 sq. $. as delineated on the approved floor plans as "Unit A2" with a maximum of 29 seats. The interior area authorized for the retail sales for general alcoholic beverages for off -site consumption shall be limited to 1,328 sq. ft. as delineated on the approved floor plans as "Unit A1" with a maximum of 3 seats. On -site consumption of alcoholic beverages shall be prohibited in Unit A1. Substantial changes to the floor plans shall require prior approval by the Planning Commission. Any increase in area of either Unit Al or Unit A2 shall be deemed substantial for the purposes of requiring review by the Planning Commission. This condition was proven to have been violated by the following memorializations: • Ex 6 — 4/20/07 Supplemental police report • Ex 14 — 5/26/07 Admin cite • Ex 15 —11 /09/07 Police report — drinking in Al, dancing in Al • Ex 17 —11 /28/07 NBPD report — drink orders being taken in Al, 20 -25 people with food /drink 8. CONDITION 15 U� Hours of operation shall be from 10:00 a.m. to 11:00 p.m. daily for the retail portion of the project, and 1:00 p.m. to 12:00 midnight Fridays and Saturdays and 1:00 p.m. to 11:00 p.m. Sunday through Thursday for the eating and drinking portion of the project. I // 27 // 28 // 5 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT W �u 1 2 3 4 s 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This condition was violated as reported as follows: • Ex 17 — 11/28/07 NBPD report — serving drinks after midnight 9. CONDITION 16 Live entertainment may occur subject to the approval of a Live Entertainment Permit and dancing is prohibited....Management of the business shall make every effort to keep the doors closed during performances. This condition was violated as described in the following reports: • Ex 6 — On 4/19/07 — 4/20 /07, NBPD DR 07- 322 observed/heard music from open doors, dancing • Ex 14 — 5/26/07 Admin cite — door open facing Via Oporto, dancing? 10. CONDITION 18 A Special Events Permit is required for any event, promotional activity outside the normal operational characteristics of this retail business that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. // // 6 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT �� 1 1 2 3 4 5 6 7 s 9 to 11 12 13 14 15 16 17 Is 19 20 21 22 23 24 25 26 27 28 This condition was violated as described in the following reports: • Ex 7 — 4/21/07 — roped off line • 11/09/07 NBPD • 11/30/07 NBPD 11. CONDITION 23 Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act shall he posted as required by the State Department of ABC. This condition was violated as described n the following report: • Ex 6 — NBPD — no signs posted DETERMINATION For all of the above reasons the PC finds that the CUP was violated. These violations also establish additional grounds of operating an establishment in an illegal manner, and violating ABC rules. These grounds are separate bases for CUP revocation/modification. Y Although Overstreets contend they are not responsible for the actions of their tenants, the Planning Commission finds that the owner of a CUP, which runs with the land, has certain responsibilities to investigate and make sure the permit is being operated in compliance with the 7 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT 1 2 3 4 5 6 7 a 9 10 n 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 terms and conditions of the CUP. Overstreets failed to supervise this operation as the owner of the CUP. For all of these reasons, the Planning Commission finds that grounds for modification have been established and does hereby impose such conditions which will return the premises to the original intended use. I Dated: By: Bradley Hillgren, Secretary By: Robert Hawkins, Chairman 8 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT o3 THIS PAGE EFT BLANK TNTIQNALLY �0 ATTACHMENT NO, H APPEAL APPLICATION ��5 THIS PA LEFT BLANK 66� CITY OF NEWPORT BEACK Use- permi r AppHeabon-No 5 Name of Appellant �"� or person filing: Denni 5 Qnxt ChreAn' e- Q Ve. f54ree� Phone: q - 7Z�'Q574 6 � « 111i I'sq q l Q 31 5` 5F(64 -* C New oat eead-I , C ZW 3 37$ -? Z71 cell Address'. Date of Planning Commission/ decision: Jul 7 , 20 �— Regarding application of: Use Permi + 2002 -o3 (PA' )— Rev( }ton for (Description of application filed with Planning Commission) 4& � \ 1?edoealton pndmo&� crxkmof\ o� Use PeKn -i 2002 -0 4 ( PA 2oo2 ICS tJ. Reasons for Appeal: U k M FOR OFFICE USE ONLY rM )ci5i S Date e/ ag X008 Date Appeal filed and Administrative Fee received: \ iJ� 20 Hearing Date. An appeal shall be scheduled for a hearing befor the City Council within sixty (60) days of the filing of the appeal unless both applicant and appellant or reviewing body consent to a later date (NBMC Sec. 20.95.060) cc: Appellant Planning (furnish one set of mailing labels for mailing) File APPEALS: Municipal Code Sec. 20.95.050(B) Appeal Fee: $340 pursuant to Resolution No. 2006 -4 adopted on 1- 10 -06. (Deposit funds with Cashier in Account #2700 -5000) August 6, 2008 Ms. Rosalinh Ung Associate Planner City of Newport Beach Planning Department 3300 Newport Boulevard Newport Beach, CA 92663 rung@city.newport-beach.ca.us Dear Ms. Ung: RECEIVED BY PLANNING DEPARTMENT AUG 06 29H CITY Of NEWPORT BEACH Thank you for the notice regarding the date for our appeal to the City Council regarding the revocation of Use Permit Nos. 2001 -005 & UP2002 -034 (PA2002 -167) for property 3400 Via Lido Newport Beach, CA 92663. We wish to request that the September 23, 2008 hearing date with the City Council be moved to Tuesday, October 14, 2008 as there is a conflict on September 23, 2008 for our attorney, Mr. Chris Thomas. We anticipate your reply in the near future. Thank you for your assistance. Dennis Overstreet 419 31 st Street # C Newport Beach, CA 92663 Email christineoverstreet @mac.com cc: Mr. Chris Thomas, Bremer & Whyte ��v NOTICE OF PUBLIC HEARING Sejour (PA2001 -005 & PA2002 -167) NOTICE IS HEREBY GIVEN that the City Council of the City of Newport Beach will hold a public hearing on the following item: An appeal of the Planning Commission's decision on Use Permit Nos. 2001 -005 (PA2001 -025) and 2002 -034 (PA2002 -167) on property located at 3400 Via Lido. The appeal was filed by the property owner. The Planning Commission of the City of Newport Beach amended Use Permit No. 2001 -005 and rescinded Use Permit No. 2002 -034 that permitted the sale of distilled spirits for on -site consumption, live entertainment and expanded hours of operation. This project has been reviewed and it has been determined that it is categorically exempt from the requirements of the California Environmental Quality Act under Class 21 (Enforcement Actions by Regulatory Agencies). This exemption applies to actions by regulatory agencies to enforce or revoke a lease, permit, license, certificate, or other entitlement for use issued, adopted, or prescribed by the regulatory agency or enforcement of a law, general rule, standard, or objective, administered or adopted by the regulatory agency. NOTICE IS HEREBY FURTHER GIVEN that said public hearing will be held on October 14, 2008, at the hour of 7:00 p.m. in the Council Chambers of the Newport Beach City Hall, 3300 Newport Boulevard, Newport Beach, California, at which time and place any and all persons interested may appear and be heard thereon. If you challenge this project in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice or in written correspondence delivered to the City at, or prior to, the public hearing. For information call (949) 644 -3200. z� LaVonne M. Harkless, City Clerk City of Newport Beach ��23�ihS1d 1rl uol l p a ®091 3AV 3ljege6 al zasill}B U TE 516 llleai W Ie Jed Paper for Easy F;� Z tiiv � ed q �ll�e; sa an All LIDO PARTNERS FAINBARGALLAN WREC LIDO VENTURE LLC 3425 VIA LIDO #250 2235 FARADAY AVE #O 3355 VIA LIDO NEWPORT BEACH, CA 92663 CARLSBAD, CA 92008 NEWPORT BEACH, CA 92663 WREC LIDO VENTURE LLC 3434 VIA LIDO NEWPORT BEACH, CA 92663 PRATO PAUL H 1999 TRUST 505 CLUBHOUSE AVE NEWPORT BEACH, CA 92663 DREYERDOUGLAS W 519 MARIGOLD AVE CORONA DEL MAR, CA 92625 OVERSTREETDENNIS & CHRISTINE 3400 VIA LIDO NEWPORT BEACH, CA 92663 WREC LIDO VENTURE LLC 3424 VIA OPORTO NEWPORT BEACH, CA 92663 WREC LIDO VENTURE LLC 3388 VIA LIDO NEWPORT BEACH, CA 92663 Bremer Whyte Brown & O'Meara Attn: Christopher L. Thomas 20320 S. W. Birch Street Newport Beach, CA 92660 WREC LIDO VENTURE LLC 3434 VIA LIDO NEWPORT BEACH, CA 92663 WREC LIDO VENTURE LLC 3428 VIA LIDO NEWPORT BEACH, CA 92663 BIRERJONATHAN 3410 VIA LIDO NEWPORT BEACH, CA 92663 WREC LIDO VENTURE LLC 3440 VIA OPORTO NEWPORT BEACH, CA 92663 PACIFIC COAST INVESTMENT TRUST 18201 VON KARMAN AVE # 150 IRVINE, CA 92612 OCRCENCUMBRANCE CORP 7 CORPORATE PLAZA DR NEWPORT BEACH, CA 92660 LE efiqu moquettes fadl ® d [A � � tan urr�i� @2 160 WREC LIDO VENTURE LLC 3444 VIA LIDO NEWPORT BEACH, CA 92663 WREC LIDO VENTURE LLC 3420 VIA LIDO NEWPORT BEACH, CA 92663 A SQUARE LLC 845 LIDO VIA NEWPORT BEACH, CA 92660 WREC LIDO VENTURE LLC 3432 VIA OPORTO NEWPORT BEACH, CA 92663 PACIFIC COAST INVESTMENT TRUST 18201 VON KARMAN AVE #150 IRVINE, CA 92612 B ur F. So 36 is ta Nev h, CA 92663 Sejour, LLC 3400 Via Lido Newport Beach, CA 92663 jaded =par 0�il%9ts 31 �� AFFIDAVIT OF POSTING On of eKzV ,� �� 2008, I posted the Notice of Public Hearing regarding: Sejour (PA2001 -005 & PA2002 -167) Date of Hearing: October 14, 2008 Authorized to Publish Advertisements of all kinds including public notices by Decree of the Superior Court of Orange County, California. Numbe{�Acfj2.L4�-� E I`/E D September 29, 1%1, and A -24831 June 11, 1963. I�.11 �(lJ' PROOF OF PUBLICATION 21118 OCT STATE OF CALIFORNIA) Cii� ) ss. COUNTY OF ORANGE ) I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the NEWPORT BEACH - COSTA MESA DAILY PILOT, a newspaper of general circulation, printed and published in the City of Costa Mesa, County of Orange, State of California, and that attached Notice is a true and complete copy as was printed and published on the following dates: October 4, 2008 I declare, under penalty of perjury, that the foregoing is true and correct. Executed on October 6, 2008 at Costa Mesa, California. Signat re AM 9. 36 ,F G' F °p E =t`uh xonaaruwcHERR s �PA2001 & PAM -164 NOTICE t EB Y GIVEN that the City Council of the City of Newport Beach will hold public hearing on the following item: An appeal of the Plde- nisi Commission's Permit Nos. 01 Use Permit Nos. 20and 002 -034 (PA2 and 2o prop - erty lot -167) on prop- erty located at Via Lido. The appeal was filed by the property owner- The Planning Commis- sion of the City of amended New- port Beach amended Use Permit 2001- 005 and rescinded Use Permit N 2e that permitted the sale the sale of distilled spirits for expanoed hours of op oration. This project has been reviewed and it has been determined that it is categorically exempt from the requirements of the California Envi- ronmental Quality Act under Class 21 (En- forcement Actions by Regulatory Agencies). This exemption applies to actions by regulatory agencies to enforce or revoke a lease, permit, license, certificate, or other entitlement for use issued, adopted, or prescribed by the reg. ulatory agency or an forcement of a law, gen- eral rule, standard, or objective, administered or adopted by the reg- ulatory agency. NOTICE IS HEREBY FURTHER GIVEN that said public hearing will be held on October 14, 2006, at the hour of 7:00 p.m. in the Council Chambers of the New- port Beach City Hall, 3300 Newport Boule ward, Newport Beach, California, at which time and place any and all persons interested may appear and be heard thereon. If you challenge this project in court, you may be limited to raising only those issues you or ,someone else raised at the public hearing described in this notice or in written cor. respondence delivered to the City at, or prior to, the public hearing. For information call (949) 6443200. Pilot October 4, 2008 Ss546 Harkless, LaVonne From: Ung, Rosalinh Sent: Thursday, August 07, 2008 10:50 AM To: 'Christine Overstreet; 'Christopher Thomas' Cc: Alford, Patrick; Lepo, David; Harkless, LaVonne; Frederickson, Tammie; Harp, Aaron; Parker, Kristy; 'June S. Ailin'; Vallercamp, Ron; Frizzell, Craig; Varin, Ginger Subject: Sejour - Council Appeal Hearing The Planning Department reviewed and accepted your request of October 14th hearing date. - - - -- Original Message---- - From: Christine Overstreet [mailto:christineoverstreet @mac.com] Sent: Wednesday, August 06, 2008 12:33 PM To: Ung, Rosalinh Subject: City Council Hearing Date - Use Permit Nos.2001 -005 & UP2002 -034 (PA2002 -167) LETTER ATTACHED CITY OF NEWPORT - ---- - - - - -- -- -- - - - - - -- - - - - -- -- - - -- Use- ermi - AtiorrNo.S or personflingl: Dennis andChrl56e- QVef4e4 Phorlec "l723'Q674 adal'ress" qlq 5rr &-f New&+ b,, CAg2(,63 q -37$ -12-71 cell Date of Planning Commission decision: Tu i V 17 20 `A Regarding application of- Use Perm) + 1002 -03q CAA ;�- Reyc (Description of application filed with Planning � nning Commissiion) owflr 1?eV000Lj60*f1 OL(N&rnodaV�Cz hon o-t Use Oex YN4 2002 -cP�LA ( PA zooz Reasons for Appeal : for i'v FOR OFFICE USE ONLY Date Appeal filed and Administrative Fee received: J i)/ \ 20 Hearing Date. An appeal shall be scheduled for a hearing be the City Council within sixty (60) days of the filing of the appeal unless both applicant and appellant or reviewing body consent to a later date (NBMC Sec. 20.95.060) cc Appellant Planning (fumish one set of mallhg kbels for maiUng) File APPEALS: Municipal Code Sec, 20.95.050(B) Appeal Fee: $340 pursuant to Resolution No. 2006 -4 adopted on 1- 10-06. 27005000 ZONING & SUBDIVISION F $340.00 TOTAL DUE: $340.00 CASH PAID CHECK PAID CHECK NO TENDERED CHANGE $.00 $340.00 15047,— NEWPORT CITY OF NEWPORT BEACH ADMINISTRATIVE SERVICES CASH RECEIPT � 3300 NEWPORT BLVD.. A fp c'46 /F00.NP P.O. BOX 1768, NEWPORT BEACH, CA 92658.8915 RECEIPT NUMBER: 01000087456 RECEIVED BY: PERRYI PAYOR: THE WINE CELLAR TODAY'S DATE: 07/29/08 REGISTER DATE: 07/29/08 TIME: 14:41:58 27005000 ZONING & SUBDIVISION F $340.00 TOTAL DUE: $340.00 CASH PAID CHECK PAID CHECK NO TENDERED CHANGE $.00 $340.00 15047,— $.00 b A fp d. . iR b 1a3. Jtl. �i MCOLA WRYne K6JTH O. 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Selich, District 5 Councilmember Nancy Gardner, District 6 Councilmember Keith D. Curry, District 7 3817 N0R'I'FIT ePRHBT B1A 18310 Pll($18X.AZ86e16 (W])n41LIN (con palms FAz lH� PALl109RYJm080N (107 -M RE: Overstreet CUP Revocation/modification & Modification of CUP 2001 -005 and CUP 2002 -034 Appeals Your Agenda, October 14, 2008 Dear Council members City of Newport Beach: We represent the interests of Dennis and Christine Overstreet. The Overstreets are owners of 3400 Via Lido Newport Beach, CA 92663, the property that is the subject of the above referenced CUP revocation/modification appeal. On July 17, 2008, the City of Newport Beach Planning Commission held a revocation /modification/modification hearing on CUP 2001 -005 and CUP 2002 -034. The Commission revoked 2002 -034, which permitted the owners to right to sell and serve distilled spirits, food and provide live entertainment. The Commission modified 2001 -005. (Please see the certified copy of the transcript of the hearing of July 17, 2008. Page 2, Letter to Council members, City of Newport Beach, October 9, 2008 We refer you to, and incorporate by reference, previous correspondence to the City of Newport Beach, dated March 20, 2008 and March 27, 2008 along with all enclosures included with those letters. Based upon the entire record the Overstreets appeal this decision, as it is contrary to law on both procedural and substantive grounds and is a violation of their vested rights. Summary Oanosition of Revocation/modification The Overstreets oppose the revocation/modification. As noted by the City's council, Alan Burns, the Conditional Use Permit ( "CUP ") created vested property rights. Footnote 2. As such, the property owner, here, the Overstreets, is entitled to due process of law in proceedings considering revocation/modification of their rights. While not conceding that there has ever been a violation of the provision of the CUP 2002- 034, footnote 3, the Overstreets oppose its revocation/modification on the following grounds: 1. The Planning Commission authored the conditions of and for Use Permit 2002 -034 and approved the Use Permit, including the approval of the floor p1an._aywroved the menu. With this Use Permit, the Overstreets secured a type 47 license from the Department of Alcohol Control Beverages State of California; designed and created the bar and seating area for the A2 section of the 3400 Via Lido Premises. The ABC The FINAL APPROVED USE PERMIT written by the 2002 Planning Commission has at least three ambiguous/poorly written conditions. These conditions have been inappropriately used by the City of Newport Beach Planning Staff, Planning Commission and appointed City Attorney representatives, implicating that the land owners violated conditions on the Use Permit, created a nuisance, did not cure and therefore the land owners will lose the Use Permit. Specifically, both the first use permit and the second use permit described and designated the 3400 Via Lido Property as two separated sections : Section Al for retail - off -sale of wine and spirits Section A2 as the space designated for tasting wine only for the first use permit and wine, spirits and food for the second use permit. The floor plan clearly designates these two sections. Please see Resolution No. 1579 stating that the ABC requires food service when alcoholic beverages are served to the public, reference Municipal Code 20.89. Exhibit A of Resolution No. 1579 Condition 11 specifically identities that the Use Permit allows for retail (off -sale) sales of wine and spirits, and also permits on- premised consumption of wine and spirits. Page 3, Letter to Counsel Members, City of Newport Beach, October 9, 2008 Condition 12 states that the City will request records of sales. The City never requested records from the Overstreets in 3 years, 5 months, because there was not reason to. The Overstreets operated under the terms and conditions of the Use Permits. Condition 13 is ambiguous and written incorrectly. The Planning Commission approved the floor plan with a bar, kitchen and 29 seats for service of alcoholic beverages and food. The Planning Commission approved the menu at the Hearing for Use Permit. Condition 13 was referring to section Al - that was the retail portion of the premises. Condition 14 specifically describes the Section Al and Section A2. Condition 15 which describes the increased hours of operation of the 2002 -034 Use Permit specifically says... "for the eating and drinking portion of the project" which is section A2. Condition 16 approved Live Entertainment for 3 days a week. The Overstreets had live Entertainment on Friday and Saturday evenings, with no more than 3 musicians and no amplification. One day a week, usually Wednesday or Thursday, a piano player would play music with no amplification. We have records of paying these musicians which shows the number of days they played per week at Overstreets. Condition number 13 is misleading, ambiguous and incorrectly written. This condition alone has cost the landowners more than $250,000.00 in lost rent and legal fees. 2. Revocation/modification requires Council members to show the business can be abated consistent with Nuisance law and that standard cannot be met, 3. Revocation/modification violates the Overstreets due process rights. 4. The City of Newport Beach is estopped from taking the action to uphold the Planning Commissions action to revoke the Overstreet's CUP 2002 -034 and modify the CUP 2001 -005. There was no basis for taking action against the Overstreets' vested property rights. We ask, therefore, that you find there are no current grounds for revocation/modification, and rescind the decision of the Planning Commission. These documents are in your staff provided materials. 2 See, INTRODUCTORY STATEMENT BY ATTORNEY BURNS, forwarded by email dated March 20, 2008, "Since the owners of the .. , property [here the Overstreetsl have a vested right to the CUPS, you must provide the ... property owner with due process before the right is taken away." Page 4, Letter to Council members, City of Newport Beach, October 9, 2008 Discussion 2. Revocation/modification requires a showing that the business can be abated consistent with nuisance law and that standard cannot be met This is not the case where the City can simply show permit violations to support revocation/modification and modification. Regardless of the current status of the Newport Beach Municipal Code, the City must establish that the grounds called out under the permit itself exist for revocation/modification. The permit is the basis of a vested right, as discussed below, and at the very least it can only be revoked by following its express terms. Those terms required the establishment of a public nuisance, and that cannot be shown here. Additionally, nuisance law clearly requires that a permit holder be given an opportunity to correct the alleged nuisance condition before a business can be terminated. The evidence clearly shows this requirement was not met. Therefore, the use permit cannot be revoked, and the Planning Commission's action should be reversed. a. The Revocation/modification is inconsistent with the use permit. The revocation/modification under Municipal Code section 20.96.040 is not supported by the terms of this particular use permit. Condition 6 of this use permit restricts the power to revoke its grant to what are essentially public nuisance circumstances. Specifically, Condition 6 states: The use permit may be reviewed, modified or revoked by the Planning Commission / City Council should they determine that the uses or conditions under which it is being operated or maintained is detrimental to the public health, welfare or Materially injurious to property or improvements in the vicinity or if the property is operated or maintained so as to constitute a public nuisance. [Emphasis added.] We recognize that current City code provides that a use permit can be revoked upon a finding that its conditions are violated. We take exception, however, with the application of that principal here. Revocation/modification based on such a finding alone would be contrary to the restriction in Condition 6 and inconsistent with due process as noted below. The evidence does not support a finding that there was a condition on the premises that was "detrimental to the public health, welfare or materially injurious to property or improvements in the vicinity." In fact, the evidence is undeniably, and indisputably to the contrary. First, it is clear from all of the evidence that the allegedly offending use was terminated. Sejour is no longer in operation. Thus, it is no longer a factor in this matter. 3. The use permit conditions are ambiguous and confusing. The police for example seem to have been under the impression that a restaurant use was not allowed, when in fact it is allowed but is simply restricted to Unit A2. For example, Condition 33 of the permit specifically references the Page 5, Letter to Council members, City of Newport Beach, October 9, 2008 operation of a "restaurant facility." (Staff materials, p. 99.) As such, the business is entitled to operate as an eating and drinking establishment contrary to staffs objections) Additionally, the evidence shows clearly that the properties in the vicinity of 3400 Via Lido premises are not injured by the use as contemplated by the use permit and, in fact, they seek the return of the use as operated by the Overstreets. Please see Exhibit C, letters from businesses in the vicinity of the premises that actively seek the return of the Overstreets' operations. For these reasons there was no evidence that a public nuisance existed that required abatement. b. Revocation/modification is inconsistent with notice requirements under Nuisance L Additionally, we agree with the City's outside counsel, Mr. Bum's analysis that public nuisance law provides the closest authority for addressing the issues here. In the first Matrix he provided on March 20, 2008, Mr. Bums identifies Mohilef v. Janovici, (1996) 51 Cal app. 4th 267, as the "closest appellate case" to this matter. Mohilef is a nuisance case. The Mohilef court held in effect that where a vested property right is at issue, a municipality cannot exercise its police power to summarily abate an alleged nuisance where to do so would terminate the vest right absent establishing the existence of a problem that would not otherwise be eliminated. In Mohilef the property owner's bird farming operations were administratively terminated by the City of Los Angeles in public nuisance abatement proceedings when all birds were ordered removed. The appellate court, however, reversed the decision. The court held that the administrative proceedings improperly terminated the operations because there was no evidence that the city first gave the property owner the opportunity to eliminate the alleged nuisance by curtailing operations and reducing the number of birds on the owner's property. (Mohilef, supra, 51 Cal. App 4th 267.) Thus from Mohilef, it is clear that, where a vested property right is at issue, a municipality must first give the holder of the right an opportunity to cure the alleged nuisance condition before the municipality can terminate the use. See footnote 4. Analogous City codes also support this position. City of Newport Beach Municipal Code 1- 50.040 requires that written notice of violation be given to the owner and time be provided for corrections. City of Newport Beach Municipal Code 20.89.030.A.2 requires that the owner /and or operator of an alcoholic beverage outlet (thus the owner of the permit right) must be notified of objectionable conditions and allowed time to correct the conditions before the premises can be found to constitute a public nuisance. Additionally, when an applicant is seeking a permit, the only means for staff to deal with anyone other than the land owner is for the land owner to designate an agent in writing. (Newport Beach Municipal Code, 20.90.030.0 [application must be signed by owner of record or lessee or authorize agent if written authorization from the owner of record is filed concurrently with the application] Exhibit "B," previously submitted by the Overstreets and in your staff materials, and Exhibit "J" hereto, show 5 businesses in the vicinity of the premises that actively seek the return of the Overstreets' operations by the Overstreets and in your staff materials, and Exhibit "J" hereto, show 5 businesses in the vicinity of the premises that actively seek the return of the Overstreets' operations. Page 6, Letter to Council members, City of Newport Beach, October 9, 2008 We recognize that some City code enforcement provisions allow for notice to be given to either the property owner or operator of the premises (i.e., here the lessee) 6 .These provisions, however, create an anomaly that simply cannot be justified under nuisance law and the dictates of procedural due process. The obvious problem with these types of code provisions is that there is a risk that the owner of the legal right, here a vested right to a use under a use permit, will not be given notice of alleged violations and will not be given the opportunity to remedy a problem. This risk deprives the owner of the chance to deal with a renegade lessee that is operating in violation of the owner's permit. This is the scenario that developed here. There is no evidence that staff ever gave the Overstreets, the owners of the permit, notice of the problems and opportunity to cure .them prior to beginning revocation/modification proceedings. While the Overstreets learned of the issues in June of 2007 through informal means, staff did not ever inform them that new problems had arisen later in the year. They only learned of the difficulties, again through informal means, after revocation/modification proceedings had begun. Thus the owners of the permits, here the Overstreets, were never given notice of the alleged violations and an opportunity to cure them as required by law prior to action to revoke their vested rights. 4. Other case authority also supports this position. See, Anderson v. Souza (1952 38 Cal. 2d 825 <no justification for closing a private airport where initial efforts to reduce operations with owner were not explored]; Leppo v City of Petaluma (1971) 20 Cal App. 3d 711 [finding that a city's administrative decision to demolish a landlord's building without considering other reasonable alternatives violated due process rights of the landlord and subjected the city to monetary damages]' Morton v. Superior Court (1954) 124 Cal. App. 2d 557 [closing down rock quarry without fast exploring mitigation measures improper].) ' Other case authority also supports this position. (See, Anderson v, Souza (1952) 38 Cal. 2d 825 [no justification for closing a private airport where initial efforts to reduce operations with owner were not explored; Leppo v City of Petaluma (1971) 20 Cal. App, 3d 711 [finding that a city's administrative decision to demolish a landlord's building without considering other reasonable alternatives violated due process rights of the landlord and subjected the city to monetary damages]; Morton v, Superior Court (1954) 124 Cal. App. 2d'557 [closing down rock quarry without first exploring mitigation measures improper].) 6Certain sections of the City's code addressing administrative citations and nuisance abatement allow notice to lessees alternatively to owners despite the fact that the owner's permit (which for the Overstreet's is a vested property right) may be in jeopardy. These code provisions are less clear in ensuring the owner is notified and given an opportunity to correct the problem to protect his or her enterprise. For example the City's code allows requests for corrections to be directed to either the owner or operator of the premises (which could be the lessee), (See City of Newport Beach Municipal Code, § 20.89.030.A.2 [ "...the owner and/or operator of the alcoholic beverage outlet has been notified of the objectionable conditions and allowed to correct.... "]; § 1.05.040 [administrative citations can be directed to "the responsible person to correct "]; §1.050.010 [ "Responsible person means any individual who is the owner or occupant of real property, owner or authorized agent of any business... who violates or maintains a violation "].) Page 7, Letter to Council Members, City of Newport Beach, October 9, 2008 Contrary to what is stated in Mr. Burns' last Matrix, without authority we might add, the above notice problems are compounded here since a landlord is not responsible for its,tenant's actions. It is well settled by the California courts that a landlord cannot be held liable for the problems that result from operations by a tenant if the problems were caused solely by the tenant's operations on the premises. {See Anderson v. Souza (1952) 38 Cal. 2d 825, 831 [citing numerous tenant nuisance cases and repeating the well -known rule landlords are not responsible for the misconduct of tenants].) Since a lessor and a lessee may have divergent interests, entrusting the responsibility to a lessee to correct permit violations caused by the lessee which place the lessor's permit in jeopardy is, in the very least, problematic. As noted below California law recognizes that many lessee's will enter into a lease of premises where no violations or problems with the premises exist at the commencement of the lease and thereafter the lessee will engage in operations that are without the lessor's consent. Before the lessor can be held liable for the lessee's operations, the lessor must have been provided notice of the operations. (See, e.g., Neuber v. Royal Realty Co. .(1948) 86 Cal. App. 2d 596, 616, (overruled in part by, Porter v. Montgomery Ward & Co. (1957) 48 Cal. 2d 846, 850).) As such the Overstreets cannot be punished for the alleged violations carried out by Sejour. This rule of law makes infinite sense. In the present situation, it was the tenanttlessee- Sejour that created operating conditions at the 3400 Via Lido. All of the evidence and allegations arise out of operations of Sejour European Bistro and Lounge, a business not associated with the Overstreets. All of the events occurred in 2007, a time when Sejour had possession of the premises pursuant to the lease. There simply is no evidence that shows the Overstreets themselves were involved in the operations that allegedly violated the use permit.7In fact, there is no admissible or credible evidence offered that shows the Overstreets ever operated the establishment in violation of the use permit's provisions.8 We submit as Exhibit "F" reports on the ABC licenses showing no violation, even while Sejour was operating the premises. 8 We note there is the vague reference by staff in the agenda materials to claimed four year old violations, but those claims are without substance or support. As noted in our previous correspondence, we object to the consideration of these statements by staff as vague, without foundation, hearsay, and outdated. It would be fundamentally unfair to allow statements such as these to influence this Commission's current decision, the Overstreets never having had the opportunity to address these allegations in a timely manner. Additionally, this rank speculation is rebutted by the letters submitted in Exhibits "B" and "J". The use permit conditions are ambiguous and confust'ng. The police for example seem to have been under the impression that a restaurant use was not allowed, when in fact it is allowed but is simply restricted to Unit A2. For example, Condition 33 of the permit specifically references the operation of a "restaurant facility." (Staff materials, p. 99.) As such, the business is entitled to operate as an eating and drinking establishment contrary to staffs objections. Page 8, Letter to Council Members, City of Newport Beach, October 9, 2008 It should also be noted that the Overstreets acted responsibly in their leasing to Sejour and the Stockton. They investigated the backgrounds of the Stockton and found them to be substantial and apparently responsible residents of Newport Beach. They Pave the Stocktons' notice of the CUP and its actual conditions before entering into the lease. The underlying record is comprised of a number of emails between the parties in the leasing transaction. These documents demonstrate the Stockton's were presented with the CUP prior to their leasing the premises. Additionally, the terms of the lease, provided to staff has multiple references to the use permit and requires the lessee to comply with all laws. (See e.g., pages 238, page 2, paragraph 1 of the lease, and paragraph 23, page 11, of the lease.) Additionally, Sejour, LLC, through its Managing Member Carolyn Stockton, accepted responsibility to operate in compliance with the requirements of conditional use permit, as well as in compliance with "all Federal, State and local laws, ordinances, regulations and orders." (Agreement of Purchase and Sale of Liquor Licenses, page 3, paragraph 7, part of the Planning Commission materials, but with unnumbered pages.) C. There is no longer a nuisance to abate There was no basis to continue an action to revoke the use permit since there is no nuisance to abate. The Overstreets' acted immediately to address the situation when they learned of Sejour's finther difficulties. Now the alleged problems with Sejour's operations have been completely eliminated. The Overstreets accommodated the City by immediately moving to resume, control of the premises. Therefore, under Mohelif, and the authorities cited in footnote 5 since there is no longer any nuisance to address, the City is without basis or authority to revoke the Overstreets' permit and revocation/modification should be reversed. 3. REv0CATJ0N/M0D1FJCATJ0N VIOLATED THE OVERSTREETS DUE PROCESS RiGBTS Y No statement to the contrary by the Stocktons is credible. We understand two civil complaints filed by Mr, Stockton are in the City's files and that some or all Planning Commissioner's have seen them. First we object to their consideration as lacking foundation and hearsay. Secondly, we point out that they do not have credibility in the face of the other evidence offered by the Overstreets. Nor do they have credibility in the face of the fact that the complaints themselves are drawn contrary to California law. The documents submitted in Exhibit "H" to our previous letter show that neither Mr. Stockton, nor Mrs. Stockton, are qualified to practice law in California, and surprisingly, are not even qualified to practice law in Arizona where they come from. Nor is Mr. Stockton's Svelte Body Centers, Inc. qualified to do business, either in California or Nevada, since its status was revoked June 1, 2007. These facts undermine the credibility of any statement by the Stocktons on these issues. Page 9, Letter to Council Members, City of Newport Beach, October 9, 2008 The failure to give the Overstreets notice of the alleged violations and an opportunity to cure them is a violation of due process. As admitted by City Attorney, Mr. Bums, the Overstreets have a vested right in their permits. (See, Goal Hill Tavern v. City of Costa Mesa (1992) 6 Cal. App. 4th 1519, 1527 [finding a conditional use permit associated with a bar owner's operation was a vested property right precluding its termination by a non judicial body].) As the Goat Hill Tavern case explains: Where a permit has been properly obtained and in reliance thereon the permittee has incurred material expense, he acquires a vested property right to the protection of which he is entitled. [Citations.] (Id, at 1530.) Based on the history, investment and use of the permit, combined with the reliance upon the permit to further pursue in connection therewith a Type 47 license, the Overstreets have a vested property right and are entitled to due process. As the Goat Hill Tavern court noted, when a permittee obtains a vested property right to continue its operations, taking away that right requires a higher level of judicial review than when the permit is initially issued and the power of a city to revoke the permit in such circumstances becomes limited. (Id, at 1530.) When a permittee has acquired such a vested right it may be revoked if the permittee fails to comply with reasonable terms or conditions expressed in the permit granted [citations] or if there is a compelling public necessity. [Citations.] [If] A compelling public necessity warranting the revocation /modification of a use permit for a lawful business may exist where the conduct of that business constitutes a nuisance. (Id at 1530 [internal quotes and citations omitted],) Thus, whether the staff seeks to proceed with plans to revoke the permit based upon nuisance allegations or to revoke the permit simply based on alleged violations of its terms, a "compelling public necessity" must be established. Yet there was no such compelling necessity in the present situation. Here the Overstreets, the actual permittees, were never given notice of the alleged problem nor the opportunity to make corrections. And, even more anomalously, when they did learn though happenstance of the difficulties, they took immediate action to correct the alleged problems by evicting the offending tenant. Further, drawing on the analogous authority in nuisance abatement cases discussed above, to revoke the Overstreet's permit and shut down their enterprise without first giving them notice of the problem and an opportunity to correct it, violates the Overstreets' due process rights. For these reasons, the revocation/modification of the permits was contrary to law. Page 10, Letter to Council Members, City of Newport Beach, October 9, 2008. 4. THE CITY IS ESTOPPED FROM TAKING AmON TO REVOKE THE OVERSTREETS' CUP. The failure to give the Overstreets the opportunity to cure is compounded by the fact that they were taking immediate action to address the asserted violations after they inadvertently learned of difficulties Sejour was experiencing in May of 2007. As noted in correspondence to you dated March 20, 2008 City planning staff assured the Overstreets that the alleged violations appeared to be on their way to resolution and further assured the Overstreets that they would be notified if there were further difficulties. The Overstreets accepted those assurances and, in reliance on them, ceased taking action to terminate Sejour's lease and cooperated in other remediation activities. Yet, when further difficulties did arise, the City failed to give notice to the Overstreets of the difficulties. Instead staff moved immediately to revocation/modification proceedings, leaving the Overstreets in a compromised position without the ability to cure the alleged violations of their permits. Therefore, the City must be estopped from revoking the use permit and the decision of the Planning Commission should be reversed. CONCLUSION The property is in compliance with its permits, the Overstreets, took immediate action to end the practices that gave rise to the alleged violations of the permit. The Overstreets stand ready, willing, and able to resume operations consistent with the terms of the permit, having previously operated the property without citation or challenge to permit consistency. There were (and are) no current grounds available for revocation/modification of the use permit and revocation/modification is inconsistent with the law. We suggest that condition # 13 be amended to appropriately designate the two sections of the premises as the Use Permit 2002 -034 approved the floor plan and how the property was meant to be used to serve the public. For all of the above reasons, we ask this honorable Council to reverse the Planning Commission's revocation/modification of 2002 -034 and remove the modifications to 2001 -005, bringing the two permits back to original status, with the exception of the a correction to Condition # 13. Sincerely, Christopher L. Thomas for Bremer Whyte Brown & O'Meara LLP File No. 3506.001 EEI E, FTE ApEpD OFFICE LEASE SVELTE BODY CENTERS, LLC 3400 VIA LIDO NEWPORT BEACH, CALIFORNIA 92663 THIS LEASE AND ASSIGNMENT AGREEMENT ( "Lease ") is entered into on the date set forth in the Basic Lease Information attached hereto as Exhibit A and incorporated by this reference ( "Execution Date "), by and between Dennis Overstreet, a Married Man, as his Sole and Separate Property ( "Landlord ") and Svelte Body Centers, LLC, a Nevada limited liability company ( "Tenant "), with respect to 3400 Via Lido, Newport Beach ( "City"), California 92663, as hereinafter further described on Exhibit B attached hereto and incorporated by this reference herein (the "Leased Premises "). In. addition to.the, the Leased Premises in the Lease includes: A. Landlord's two (2) complimentary reserved parking spaces and rights to lease an additional twenty-two (22) spaces in the Lido Village Marina parking garage as set forth in the Parking Agreement dated March 26, 1973; the Off -Site Parking Agreement dated May 29, 1975 and the Assignment of Parking Agreement dated November 17, 1986, collectively the ( "Parking Agreement ") all attached hereto as . Exhibit C and incorporated by this reference herein; B. ..All Landlord's proportionate shares and rights (if any) of all Lido Marina Village non - assigned parking areas, roadways, landscaping, loading areas, hallways, restrooms, lighting facilities, (all hereinafter collectively referred to as "Common Areas "); and C. Certain personal property, fixtures, supplies and equipment (other. than inventory) located within the Leased Premises and associated with the operation of the Leased Premises as listed on Exhibit D attached hereto and incorporated herein by this reference. FOR AND IN CONSIDERATION OF.THE RENT AND OTHER COVENANTS AND AGREEMENTS SET FORTH BELOW, LANDLORD AND TENANT AGREE AS FOLLOWS: FAMAL104V4362001\Syck lease (d rv4 .doc 1. CHARACTER OF LEASED PREMISES: The business conducted on the Leased Premises shall be (i) a bar, restaurant and live entertainment business, (ii) a medical /professional practice initially specializing. in, but not limited to, medical, cosmetic, rehabilitative, preventative and therapeutic muscle and connective tissue technologies:. Tenant may change said use to any other lawful retail use permitted under the Use Permit and /or by the City; with Landlord's prior written consent, which consent shall not be unreasonably withheld. 2. TERM: The Initial Term of this Lease shall be for a period of 60 months ( "Initial Term ") beginning on the Commencement Date and ending on October "l 5, 2008, the ( "Expiration Date "), unless said Initial Term shall be extended as hereinafter provided. The Initial Term and any extensions or renewals.thereof shall hereinafter be collectively referred to as the "Term." a. Commencement Date. The obligation of Tenant to pay Rent (as hereina$er defined) shall begin on October 15, 2005 (the "Commencement Date "). The taking of possession of the Leased Premises by Tenant shall be conclusive evidence that the Leased Premises were in good and satisfactory condition when possession of the Leased Premises was taken. b. Annual Adiustment. Tenant shall have two (2) consecutive options to renew this Lease, ( "Renewal Option(s)"). Each Renewal Option shall be for an additional 60 -month term, ( "Renewal Term ") upon the same terms and conditions set forth herein except that the Rent shall be adjusted (increased or decreased) to reflect the prevailing market rate for similar space in the Lido Marina Village. C. With respect to the Renewal Options, on or before 360 days prior to each Expiration Date, Tenant shall send written notice to Landlord either (i) electing to terminate the Lease at the next ensuing Expiration Date in which case any remaining Renewal Option(s) shall lapse and this Lease shall terminate-on the applicable Expiration Date; or (ii) proposing to.renew this Lease and setting forth the proposed prevailing . market rental rate for the new Renewal Term. Within 30 days receipt of Tenant's written, notice to renew this Lease, Landlord shall send Tenant written notice either (i) accepting the Renewal Option to extend the Lease at the prevailing market rate set forth by Tenant in its written notice to Landlord, or (ii) proposing to submit any disagreement about the prevailing market rental rate of the Leased Premises for the applicable Renewal Term to a panel of three MAI appraisers qualified to determine prevailing market rental rates in Lido Marina Village. In such circumstances, Landlord and Tenant shall each immediately appoint an appraiser and the two appraisers shall jointly select a third appraiser to comprise the panel. The prevailing market rate shall then be determined by simple majority vote of the panel of three appraisers. Landlord and Tenant shall each bear their own costs of appointing their respective appraiser. and the cost of the third appraiser shall be borne equally by Landlord and Tenant. Upon determination of the prevailing market FAREALSW44367M l kin, 1., 1,6-1 -,A A.... rental rate by the panel of appraisers, Tenant shall have 30 days to give written notice either accepting the rate or notifying Landlord of its intention to terminate the Lease at the next ensuing Expiration Date. 3. MONTHLY RENT: Inconsideration of this Lease, Tenant, without prior notice or demand, agrees to pay to Landlord monthly Rent in the amount. of Six Thousand Dollars ($6,000) (referred to herein as "Rent "). Tenant shall pay Rent to Landlord on a .monthly basis, in advance on or before the first day of each calendar month, beginning on the Commencement Date, The Rent due for a period of less than a full month shall be prorated on the basis of a thirty -day month. The Rent shall be paid to Landlord in lawful money of the United States of America at the address designated herein or at such other place as Landlord may, from time to time, designate in writing. Tenant shall also pay, to Landlord with the Rent, as additional rent, any privilege, excise; sales, gross proceeds, rent or other tax now or hereafter levied, assessed or imposed, directly or indirectly; by any governmental authority upon any rent or other payments required by this Lease. For the purpose of this Lease, the term "Rent" shall include all amounts owed by Tenant to Landlord, whether it be monthly Rent or any other amounts owed by Tenant to Landlord as provided for in this Lease. 4. LEASED PREMISES OPERATING EXPENSES: It is the intention.of the parties that this Lease be a triple net lease such that Tenant shall be responsible for the procurement and payment of Direct Expenses, which are defined as all reasonable expenditures necessary in any given calendar year to maintain and operate the Leased Premises ( "Direct Expenses "). Direct Expenses include, but are not limited to, real property taxes and assessments, personal property taxes levied on equipment, fixture and other property located on the Leased Premises and used in connection. with the operation thereof, and any other taxes imposed by any federal, state, county, municipal or other governmental entity, whether assessed against Landlord and/or Tenant (except any income tax or estate, inheritance or succession tax payable by Landlord); water and sewer charges; insurance premiums of any type; utility expenses, including, without limitation, expenses for gas, electricity and water; janitorial expenses, expenses for landscaping and other services required to maintain, repair, and restore the Common Areas; Parking costs (if any) in accordance with the Parking "Agreement, Off -Site Parking Agreement and Parking Agreement Assignment included as Exhibit C; air conditioning maintenance and repair; the costs of supplies, materials, equipment and tools used in the operation of the Leased Premises; or.assessments of any type; whether or not now customary or within the contemplation of the parties.hereto, in.cluding.expenditures for.capital improvements including, subject to Article 7 below, those which are imposed or required by or which result from statutes or regulations, or interpretations thereof, promulgated by any Federal, state, county, municipal or other governmental body or agency of any type performing any governmental or other function (including but not limited to, the Environmental. Protection Agency- and the authority administering the Occupational Safety and Health Act, or any successor agencies performing the same or similar functions); provided, F:IREAL\894134362f101�sveJk leue (ckan) rv4.doc however, the cost of any capital improvements shall be amortized over the useful life to Landlord of such improvement according to Generally Accepted Accounting Principles, and only the portion of such amortization applicable to any calendar. year or, if applicable, any partial calendar year, shall be included as a Direct Expense for such calendar year or partial calendar year. 5. PERSONAL PROPERTY TAXES. During the term hereof, Tenant shall pay prior to delinquency all taxes assessed against and levied'upon fixtures, furnishings, equipment and all other personal property of Tenant (or leased to Tenant by Landlord) contained in the Leased Premises, and when possible, Tenant shall cause said fixtures, furnishings; equipment and other personal property to be assessed and billed separately from the real property of Landlord. In the event any or all of the Tenant's fixtures, furnishings, equipment and other personal property shall be assessed and taxed with the Landlord's real property, the Tenant shall pay to Landlord Tenant's share of such taxes within ten (10) days after delivery to Tenant by Landlord of a statement in writing setting forth the amount of such taxes applicable to Tenant's property, as well as copies of the appropriate tax bills. 6: LATE CHARGES. Tenant acknowledges that late payment to Landlord of Rent or other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which would be extremely difficult and impractical to ascertain. Such costs include, but are not limited to, processing and accounting charges, as well as late charges that may be imposed upon Landlord.by the terms of any mortgage or trust deed covering the Leased Premises.. Therefore, in the event Tenant should.fail to pay any installment of Rent or any other sum due hereunder after such amount is due, Tenant shall, upon demand, pay to Landlord as additional Rent, a late charge equal to ten. percent (10 %) of each such installment or other sum due and payable, plus any attorneys' fees incurred by Landlord by reason of Tenant's failure to pay such Rent and/or other charges when due or $25.00 per day said installment of Rent or sum due hereunder is past due, whichever is greater: Said late charge shall be assessed on the 10th day of each . month but shall accrue from the first day of the month. Ih addition to any other amounts due hereunder, Tenant shall be assessed a $150.00 charge for each check that is returned due to insufficient funds in Tenant's checking account. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs which Landlord will. incur by reason of late payment by Tenant. Acceptance of such late charge by Landlord shall in no event constitute a waiver of Tenant's default with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder. 7. GOVERNMENT FEES/REGULATIONS All fees due to the City of Newport Beach, County of Orange or the State of California, as the result of any inspection made on the Leased Premises by any officer thereof, shall be paid by Tenant, excepting any fees for building and planning inspections applicable to Landlord's non- FAEAL1894U436200hWelle lease (clean) "4.d« 4 1 compliance with applicable City. rules and regulations. Landlord hereby covenants that the Leased Premises are in compliance with all applicable City, county, state and Federal rules for its current operation. 8. SALE OF LIQUOR LICENSE. Landlord shall use its best efforts in the sale and assignment of the Liquor Licenses necessary for the current operation of the Leased Premises to Sejour LLC, a California limited liability company ( "Sejour ") concurrently and shall establish an escrow for such sale of the Liquor Licenses. Landlord shall promptly execute and deliver any instrument that Se-Jour may request to affect such sale and assignment. Subject to Article 9 below, Se-Jour covenants, at Se-jour's sole cost and expense, to use its best efforts to maintain the same in full force and effect for the first 36 months of the Lease Term. If, during the first 36 months of the Lease Term, Tenant is in Default as set forth in Article 13 of this Lease and as set forth in, a written notice to Se-jour (the "Default Circumstances "), Se-jour hereby grants Landlord the option to repurchase such Liquor Licenses for Thirty -Seven Thousand Dollars ($37,000). Se-jour shall promptly execute and deliver any instrument that Landlord may request to affect the return of all Liquor Licenses and permits originally transferred by Landlord to Sejour. In Default Circumstances, Sejour hereby irrevocably appoints Landlord as attorney -in -fact of Se-jour to execute and deliver such instruments on behalf of Se-Jour to affect the return to Landlord of all Liquor Licenses and permits originally transferred by Se-jour to Landlord should Se-jour refuse or fail to do so promptly after request. 9. USE .PERMIT COMPLIANCE /AMENDMENTS: If, for any reason, the . business to be conducted as set forth in Article I above, including the placement of the medical /professional practice in the portion of the Leased Premises referenced in the Use Permit as "Unit Al," is determined by the City of Newport Beach to be in violation of the Use Permit, Landlord, Sejour and Tenant hereby agree to jointly apply to the City of Newport Beach for an amendment to the Use Permit which still permits Tenant, in its sole discretion, to operate its core medical/professional :practice, while devoting minimum space to maintain the Liquor Licenses for the first 36 months of the Term of the Lease. If, in .Tenant's sole discretion, any City of NBwport Beach requirements or conditions threaten its core medical /professional practice, Se-jour's obligation to maintain the Liquor Licenses is hereby released. In such circumstances, Landlord shall have the option (but not the obligation) to repurchase the Liquor Licenses for Thirty =Seven Thousand Dollars ($37,000). 10: BUILDING HOURS / TENANT ACCESS: Landlord and Tenant agree that Tenant shall have access to the Leased Premises twenty -four (24) hours, seven (7) days per week. H. . LANDLORD / TENANT RESPONSIBILITIES• Tenant agrees to comply with all local, state, and Federal government laws, ordinances, regulations, and any other requirements throughout the Term of this Lease..Tenant shall not be required to make repairs or alterations which may be required by governmental rules, orders, or regulations 5 FAEAL1894U436200Vsve1te lase (clew ) M .doc unless resulting from the business operations maintained by Tenant within the Leased Premises. Landlord or Landlord's agents and representatives upon reasonable notice to Tenant shall have the right to enter and inspect the Leased Premises at any time during reasonable business hours upon reasonable notice to Tenant (except in an emergency in which case Tenant hereby waives notice) for the purpose of ascertaining the condition of the Leased Premises or to make such repairs, additions, or alterations as may be required to be made by Landlord under the terms of this Lease. 12. LANDLORD DISCLAIMER. Landlord shalt not be responsible for any delay or failure in the observance or performance of any term or condition of this Lease to be observed or performed by Landlord to the extent that such delays result from action or order of governmental authorities; civil commotion; acts of terrorism; strikes, fires, acts of God or the public enemy; actor default of any tenant in the vicinity of the Leased Premises; inability to procure labor, material, fuel, electricity or other.forms of energy; or any other cause beyond the reasonable control of Landlord, whether or not similar to the matters herein specifically enumerated. Any delay shall extend by like time any period of performance by Landlord and shall not be deemed a breach of or failure to perform this Lease or any provisions hereof. In the event of any default under this Lease by Landlord, Tenant, before exercising any rights that it may have at law to cancel this Lease, shall have given notice of such default to Landlord and shall have offered Landlord a reasonable opportunity to correct and cure the default. Tenant also agrees to give the holders. of any mortgages or deeds of trust ( "mortgagees ") by registered mail a copy of any notice of default served upon Landlord; provided that prior to such notice Tenant has been notified in writing (by way of Notice of Assignment of Rents and Leases, or otherwise) of the addresses of such .mortgagees. Tenant further agrees that if Landlord shall have failed to cure or commence to cure such default within the aforesaid time limit, then the mortgagees shall have an additional thirty (30) days within which to cure such default or if such default cannot be cured within that time, then such additional time as may be necessary if within thirty (30) days any mortgagee has commenced and is diligently pursuing the remedies necessary to .cure such default (including, but not limited to, commencement of foreclosure proceedings if necessary to effect such cure) in.which event this Lease shall not be terminated while such remedies are being so diligently pursued. 13. DEFAULT. In addition to any events defined elsewhere in this Lease as constituting a default of Tenant, any of the following shall be considered an "Event of Default" by Tenant hereunder: a. Tenant fails to pay any installment of Rent or other charges hereby . reserved and such. failure continues for a period of ten (10) days after receipt of written Notice from Landlord; FAREAL\894\34362001kvelle lease (clean 1 rv4 4nr 6 'v b. Tenant fails to comply with any term, provision, or covenant of this. Lease, other than the payment of Rent or other charges, and does not cure such failure within ten (10) days after receipt of written Notice, or as otherwise prescribed in this Lease; C. - Tenant makes a general assignment, or general arrangement for the benefit of creditors; d. The filing by or against Tenant of a petition to have Tenant adjudged bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed within ninety (90) days); e. A receiver or trustee is appointed to take possession of all or substantially all of Tenant's assets or of Tenant's interest in this Lease where possession is not restored to Tenant within sixty (60) days; f. The attachment, execution or judicial seizure of substantially all of Tenant's assets or of Tenant's interest in this Lease, where such seizure is not discharged within thirty (30) days; .g. The passage or other devolution of Tenant's interest in this Lease to any person or entity except that named as Tenant herein, by law or otherwise, without the prior written consent of Landlord; h. Tenant fails to occupy, deserts, or vacates any substantial portion of the Leased Premises as herein agreed; i. Tenant fails to comply with the provisions or reporting requirements of either the Subordination Clause, the Attornment Clause, or the Estoppel Clause contained within this Lease and such failure to comply continues for a period of ten (10) days after receipt of written Notice; and/or j. Landlord discovers that any financial statement given to Landlord by Tenant, any assignee of Tenant, any subtenant of Tenant or any successor in interest of Tenant (subject to the assignment and sublease provisions contained in this Lease), or any of them, was materially false. 14. REMEDIES. Upon the occurrence of any such Event of Default, Landlord shall have, in addition to the normal remedies provided by law, the option to pursue any one or more of the following remedies without any notice or demand whatsoever: a. terminate Tenant's right to possession of the Leased Premises by any lawful means, in which case this Lease shall terminate and Tenant shall immediately surrender possession of the Leased Premises to Landlord. In such event Landlord shall be i F:VtEAU894U43620011svdte leaze (Gcan) rv4 .doc entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant's breach or default, including, but not limited to the cost of recovering possession of the Leased Premises; .expenses of reletting, including the cost of necessary renovation and alteration of the Leased Premises, reasonable attorneys' fees, and any real estate commissions actually paid; the amount by which the total of the unpaid Rent and other sums due hereunder for the balance.of the Term hereof exceeds the total amount of any payments of like character to be received by Landlord from any subsequent tenant or tenants during the same period; b. maintain Tenant's right to possession, in which event this Lease and all obligations of Tenant hereunder shall continue in effect, except that Landlord, at its option, may give notice to Tenant that all of the Rent to become due during the Term hereof is due and payable immediately, in which event Tenant shall pay the sum within ten (10) days receipt of such NoticeI- C. re -enter the Leased Premises without terminating this Lease and relet the Leased Premises or any part thereof for such term or terms and at such.rental or rentals and upon such other terms and conditions as Landlord in its sole discretion may deem advisable, with the right to make alterations and repairs to said Leased Premises. Rentals received by Landlord from such reletting shall be applied as follows: first, to the payment of the cost of such reletting as. more specifically set forth in subsection (a) above; second, to the payment of the cost of any alterations and repairs to the Leased Premises; third, to the payment of any indebtedness, other than Rent, due hereunder, and the residue, if any, to be held by Landlord and applied in payment of future Rent as the same may become due and payable hereunder: Should such rentals received from such reletting during any month be less than that agreed to be paid during that month by Tenant hereunder, then Tenant shall pay such deficiency to Landlord. Such deficiency shall be calculated and paid monthly.. Tenant shall also pay to Landlord, as soon as ascertained, the costs and expenses incurred by Landlord in such reletting or in making such alterations and repairs. No such re -entry or taking possession of the Leased Premises by Landlord shall be construed as an election on its part to terminate this Lease unless a written Notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction. Notwithstanding any such reletting without termination, Landlord may at any time thereafter elect to terminate this Lease for such previous breach; d. exercise its option.by written notice to Tenant to repurchase any Liquor Licenses and permits as set forth in Article 8; and e. pursue any other remedy now or hereafter available to Landlord under the laws or judicial decisions of the State of California. 15. GOVERNING LAW. The laws of the State of California govern this Lease and any interpretations or constructions thereof. Further, the place of performance and . transaction of business shall be deemed to be in the County of Orange, State of California, and in the event of any litigation, the exclusive venue and place of jurisdiction also shall be the County of Orange, State of California. 16. LANDLORD'S LIEN AND UNIFORM COMMEKCIAL CODE. As security for payment of Rent, damages, and all other payments to be made by. Tenant as required herein, Tenant hereby grants to Landlord a lien upon all goods, wares, equipment, fixtures, and furniture of Tenant now or subsequently located upon the Leased Premises. If Tenant abandons or vacates any portion of the Leased Premises, or is in default of the payment of any Rent, damage or other payments as required herein, Landlord may enter upon the Leased'Premises, by force (to the extent permitted by applicable law) if necessary, and take possession of all or part of the aforesaid items. Landlord may sell all or part of the aforesaid items at a public or private sale, in one or successive sales, with or without notice, to the highest bidder for cash.: In addition, Landlord may, on behalf of Tenant, sell and convey all or part of aforesaid items to the bidder, and deliver to the bidder all of the Tenant's title and interest in said items. The "proceeds of the sale shall be applied by the Landlord toward the cost of the sale and then toward the payment of all sums then due by Tenant to Landlord under the terms of this Lease. The statutory lien for Rent is not hereby waived, the express, contractual lien herein granted being in addition and supplementary thereto, to the extent, if any, this . . Lease grants Landlord or recognizes in Landlord any lien or lien rights greater than provided by the laws of the State of California. At Landlord's option, this Lease may be intended as a security agreement within the meaning of the Uniform Commercial Code. Landlord, in addition to the rights prescribed in this Lease, shall have all the rights, titles; liens and interests in and to Tenant's property now or hereafter located upon the Leased Premises which are granted a secured party, as that term is defined under the Uniform Commercial Code, to secure the payment to Landlord of the various amounts provided for in this Lease and in compliance with same. 17. TRANSFER OF LANDLORD'S INTEREST. In the event Landlord transfers its interest in the Leased Premises (other than a transfer for security purposes . only), Landlord shall be relieved of all obligations accruing hereunder after the effective date of such transfer, provided that such obligations have been expressly assumed in writing by the transferee. 18. COSTS AND ATTTORNEY'S FEES. If it becomes necessary for either the Landlord or Tenant to employ an attorney due to the default or breach of a provision of this Lease, to gain possession of the Leased Premises, or to further protect its interest as granted per the terms and provisions herein contained, the non - prevailing party shall pay, in addition to its own costs and expenses, a reasonable attorney's fee and all costs and expenses expended or incurred by the prevailing party in connection with such default or action. 9 F:"AW9413436200l\svelte lease (clean 1 rv4.doc 19. ALTERATIONS. Tenant shalt not make any alterations, additions, or improvements to the Leased Premises (hereinafter collectively referred to as "Work ") without the prior written consent of Landlord, which consent shall not be unreasonably withheld. Any such Work shall be at the sole cost and. expense of Tenant and shall become the property of Landlord and shall remain in the Leased Premises and shall be surrendered as a part thereof at the termination of this Lease, without disturbance, molestation or injury. All Work shall be accomplished in a good workman -like manner and shall comply with all applicable governmental laws, ordinances and regulations. . Tenant shall promptly pay for the costs of all Work performed and shall indemnify and hold Landlord harmless for, from and against all liens, costs, damages, or expenses incurred in connection therewith, including attorney's fees, incurred by Landlord' if Landlord shall be joined in any action or proceeding involving such Work. Under no circumstances shall Tenant commence any such Work until Landlord has been provided with evidence that Tenant or the persons or entities performing such Work carry adequate worker's compensation as required by the State of California, that the persons or entities performing such work.are adequately bonded, and that the persons or entities performing such work carry public liability and builder's risk insurance in amounts deemed reasonably satisfactory by Landlord. 20. UPON LEASE TERMINATION. Tenant shall remove all alterations, additions, improvements, shelves, bins, equipment, trade fixtures, partitions and other Work erected or installed by Tenant.and restore the Leased Premises to its original condition, wear and tear excepted, if so desired by Landlord; otherwise, such Work shall be delivered to Landlord with the Leased Premises. All such removals and restorations shall be accomplished in a workmanlike manner so as not to damage the primary structure or structural qualities of the.Leased Premises or any other improvements situated on the Leased Premises. Provided there is no Event of Default as set forth in Article 13 of this Lease, upon Lease termination Landlord shall not rent the Leased Premises to.another medical /professional practice in the same business as Tenant for a' period of six months from the date of termination.. ° 21. SIGNAGE. For purpose of this Lease, "Signage" shall be defined as signs, placards, pictures, advertisements, names, notices lettering, door signs, window coverings, awning or other projections visible from the exterior of the Leased Premises. The cost of all Signage, including the maintenance, repair and removal thereof; shall be the sole cost and expense of Tenant. Tenant shall remove all Signage at the termination of this Lease and repair any damage or injury to the Leased Premises caused thereby, and if not removed by Tenant at the termination of this Lease, Landlord may have the same removed at Tenant's expense. Contingent upon City of.Newport Beach approval and the provisions set forth in the Use Permit; Tenant shall have the right to replace at its sole expense, all existing 10 FAREAL1894\343620071sveJte lease (ckw ) N4.doc '✓ Signage in any location situated on the Leased Premises. All Signage must at all times comply the City of Newport. Beach codes and ordinances. 22. MECHANIC'S LIENS. Tenant shall keep the Leased Premises free from any liens arising out of any Work performed, materials furnished or. obligations incurred by Tenant. 23. COMPLIANCE WITH LAWS. Tenant shall at. its own cost and expense, obtain any and all licenses and permits necessary for its business operations. Tenant, at its own cost and expense, shall comply with any law, statute, restriction, ordinance or governmental rule or regulation or any requirement of any duly constituted public authority now in force or which may hereafter be enacted or promulgated which is applicable to the peculiar nature of Tenant's use of the Leased Premises. Tenant's obligation to comply with laws, rules, and regulations applicable to the peculiar nature of the Leased Premises shall include the obligation to locate furniture and fixtures in accordance with the Americans With Disabilities Act (A.D.A.) and the rules and regulations adopted thereunder. Tenant shall promptly comply with all Landlord or governmental orders and directives for the correction, prevention, and abatement of nuisances in or upon, or connected with the Leased Premises, all at Tenant's sole expense. Tenant agrees to pay, on demand, costs for any damage or repairs to the Leased Premises caused by the misuse of same by Tenant, its agents, or employees. Tenant shall procure all insurance for the Leased Premises reasonably satisfactory to Landlord as further provided herein. Tenant shall not permit the Leased Premises to be used in any way,which would cause the cancellation 'of any insurance policy covering the Leased Premises, nor shall Tenant sell. or permit to be kept, used, or sold in or about the Leased Premises any articles which may be prohibited by the policy of fire or other hazard insurance in force for the Leased Premises. Any conduct of Tenant which is in violation . of recommendations by Tenant's or Landlord's insurance carrier, or failure by Tenant to promptly take any corrective action recommended by such insurance carrier(s) shall be a material Event of Default under this Lease and Landlord shall be entitled to all of the remedies. in Article 14 of this Lease. 24. TENANT IMPROVEMENTS 'AS-IS'/ POSSESSION. Tenant has inspected the Leased Premises and accepts the Leased Premises and all tenant improvements contained therein on an AS -IS basis, without warranty except as otherwise provided in Article 11. 25. LEASE ASSIGNMENT OR SUBLETTING. Landlord hereby consents to Tenant's sublease of the bar /restaurant portion of the Leased Premises to Sp-jour._ With respect to any other assignments or subletting, Tenant shall. have the right to sublease all or a portion of.the Leased Premises but only with the consent of Landlord, which consent shall not be unreasonably withheld. Tenant must remain liable for the performance of this Lease in the event of monetary or non - monetary default by any qualified or approved assignee, sub - lessee or transferee unless such assignee, sub - lessee or transferee provides F: IREAU894\34362001kvehe lease (clean ) M .doc. a financial statement to Landlord at the time of the sublease demonstrating financial resources greater than or equal to Tenant in which case Tenant will have no further obligations pertaining to the portion of the Leased Premises or this Lease that are the subject of the sublease. This Lease shall not be assignable by operation of law. If Landlord should consent to any one or more Transfers by Tenant, Landlord shall not be deemed to have consented to any subsequent Transfer. Tenant shall not change the ownership of its business in order to avoid this provision, and will, at the request of Landlord, provide whatever documentation is necessary to establish that Tenant is in compliance with.this provision. 26. INDEMNIFICATION: INSURANCE. Tenant agrees to indemnify Landlord and hold Landlord, the Leased Premises free and harmless for, from, and against any and all penalties, costs expenses (including attomeys' fees), claims, demands and causes of action, including claims based upon imputed negligence due to ownership of the Leased Premises arising out of or in connection. with (a) any accident or other occurrence in or on the facilities (including, without limiting the generality of the term "facilities", -stairways, passageways or hallways), the use of which Tenant may have in conjunction.with other tenants of the Leased Premises, when such injury or damage shall . be caused in part or in whole by the act or omission of Tenant, its agents, contractors, servants, employees, licensees, invitees, permittees, customers, clients or guests (b) the condition of, any defect in, the Leased Premises or any part thereof or any improvements thereof, (c) the condition of, or any defect in Tenant's. fixtures or equipment or any part thereof, (d) the use or occupancy of the Leased Premises by Tenant. or any tenant of Tenant, or (e) any breach or default in the performance of any obligation on Tenant's part to be performed under the terms of this Lease. . If any action or proceeding is brought against Landlord for any of the foregoing reasons, Tenant, upon notice from Landlord, shall defend the same at Tenant's expense by counsel satisfactory to Landlord. Landlord agrees to indemnify Tenant and hold Tenant free and harmless for, from, and against any and all penalties, costs, expenses (including attorneys' fees), claims", demands and causes of action arising out of or in connection with any accident, violation of applicable codes or laws at the Commencement Date or other occurrence in or on the facilities, caused in part or in whole by the acts or omissions of Landlord or Landlord's Agents or employees. If any action or proceeding is brought against Tenant for any of the foregoing reasons, Landlord, upon notice from Tenant, shall defend the same at Landlord's expense by counsel satisfactory to Tenant. Counsel selected by either Landlord or Tenant's insurer shall be deemed to be satisfactory counsel. to either Landlord or Tenant, as the case may be. 12 . Landlord shall not be liable for any loss or damage to any person or any property sustained by Tenant, or sustained by any other persons, which may be caused by the buildings, the Leased Premises or any appurtenances thereto. In addition, Landlord shall not be liable for any loss or damage caused by the bursting or leakage of any water, gas, sewer, or steam pipe, or by theft or by any act of neglect of any tenant or occupant of any buildings situated on the Leased Premises or on the adjacent property which shares utilities, ingress and egress and other services, or by any other cause whatsoever, unless said damage is caused by the willful neglect of Landlord. All personal property of any kind or description whatsoever in or about the Leased Premises or upon the Leased Premises shall be at Tenant's sole risk, and Landlord shall not be held liable for any damage done to or loss of such personal property or to the business of Tenant. Tenant shall at its own cost and expense procure and maintain during the entire Term, and any extensions thereof, workmen's compensation insurance as required by statute, as well as all risks coverage (Leased Premises, fire, casualty and comprehensive public liability insurance) covering the Leased Premises and their surrounding areas and naming Landlord as an additional insured in such amounts as Landlord may from time to time require. The initial liability coverage under such comprehensive public liability insurance shall not be less than Five Million (5,000,000) combined single limit, together with excess liability coverage of not less than One Million ($1,000,000) including fire damage, together with legal liability coverage and property /casualty insurance in an amount adequate to cover the cost. of replacement of the Leased Premises and its contents. Said comprehensive public liability insurance shall be an occurrence type policy and shall also contain cross liability endorsements and insure performance by Tenant of the indemnity provisions provided above. The limits of said insurance shall not, however, limit the liability of Tenant under this Article 26. The originals of all policies shall remain in the possession of Tenant; provided, however, Tenant shall provide Landlord a certificate of insurance confirming the coverage prior to the commencement of this Lease and at each subsequent insurance renewal. All policies of insurance shall name Landlord as an additional insured and shall provide that such insurance will not be canceled or subject to reduction of coverage or. other modification except after thirty (30) days written notice to Landlord. Tenant shall furnish policy renewals or binders to Landlord not less than ten (10) days prior to the expiration of any policy required hereunder. All insurance policies procured shall be issued by a responsible company or companies authorized to do business in the State of California. with a Best's rating of at least A -Nil and reasonably. satisfactory to Landlord. 27. DENIAL OF SUBROGATION RIGHT. Neither Landlord nor Tenant shall be liable to the other for any business interruption or any loss or damage to property or injury to or death of persons occurring on the Leased Premises, or in any manner growing out of or connected with Tenant's use and occupation of the Leased Premises or the 13 FAREA6894043620DIVvelte lem ,(ckm)rv4.doc condition thereof, whether or not caused by the negligence or other fault of Landlord or Tenant, or of their respective agents, employees, subtenants, licensees, or assignees. This release shall apply only to the extent that such business interruption, loss or damage to property, or injury, to or death of persons, is covered by insurance, regardless of whether such insurance is payable to or protects Landlord or Tenant or both. Nothing in this Paragraph shall be construed to impose any other or greater liability upon either Landlord or Tenant than would have existed in the absence of this Article. This release shall be in effect only so long as the applicable insurance policies contain a clause to the effect that this release shall not affect the right of the insured to recover under such policies. Such clauses shall be obtained by Landlord and Tenant in the policies of insurance required to be provided by either hereunder. 28. DAMAGE OR DESTRUCTION. Except as otherwise provided in this Lease, in the event the Leased Premises are damaged by fire or other casualty through no. fault of Tenant and covered by insurance, such damage shall be repaired by and at the expense of such insurance and this Lease shall remain in full force and effect, except that Tenant shall be entitled to a proportionate reduction of Rent while such repairs are being made, such proportionate reduction to be based upon the extent to which the making of such repairs shall materially interfere with Tenant's business income. In the event such repairs cannot, in the reasonable opinion of Landlord, be substantially completed within sixty (60) days after the occurrence of such damage (without the payment of overtime or other premiums), Landlord may, at its option, exercisable by giving written notice to Tenant within thirty (30) days after the occurrence of such damage, make such repairs within a reasonable time and Landlord shall proceed to make such repairs with reasonable dispatch. In such event, this Lease shall continue in full force and effect and the Rent payable by Tenant hereunder shall be determined as provided in the first paragraph of this Article if Tenant's business income is. materially impacted. In the event Landlord does not elect to repair the damage, as provided above, either Landlord or Tenant, by written notice given to the other . within ten (10) additional days, may terminate this Lease effective as of the date ofihe occurrence of such damage. In the event Landlord terminates this Lease pursuant to this Article, all proceeds of insurance applicable to the Leased Premises shall belong to and become the sole property of Landlord. In the event of damage to or destruction of all or any portion of the Leased Premises to the extent of five percent'(5 %) or more of the then insurable replacement value of the Leased Premises, as applicable, from any cause not covered by insurance, or in the event of a declaration of any governmental authority that the Leased Premises are unsafe or unfit for occupancy and would require repairs exceeding five percent (5 9/4) or more of the then insurable replacement value of the Leased Premises, Landlord shall have the right to terminate'this Lease by written notice io Tenant given within thirty (30) days after the date of such damage, destruction or declaration. Upon the giving of any such 14 Notice, this Lease shall terminate. In the event of damage to or destruction of all or any portion of the Leased Premises, as applicable, from any cause not covered, by insurance, or in the event Landlord does not elect.to terminate this Lease in accordance with this paragraph, the Lease shall remain in full force and effect except that Rent shall be proportionately reduced as provided above and the Leased Premises shall be repaired and rebuilt by Landlord at Landlord's cost with reasonable dispatch; provided, however, Tenant shall bear the cost of all fixtures, equipment, furnishings, draperies and other items within the Leased. Premises. Notwithstanding anything to the contrary contained herein, in the event the Leased Premises shall be damaged by fire of other casualty due to the negligent or willful acts of Tenant, its agents, officers, employees, contractors, servants, invitees, licensees or guests and the Lease is not terminated as hereinabove provided, then, without prejudice to any other rights and remedies of Landlord, there shall be no abatement of Rent. Landlord shall not be required under any circumstances to make any repairs to or replacements of any paneling, decoration,.office fixtures, railings, ceilings or floor coverings, partitions or any other property installed in the Leased Premises by Tenant. 29.. EMINENT DOMAIN. If at any time during the Term of this Lease, the entire Leased Premises or any part thereof shall be taken as a result of the exercise of the power of eminent domain or sold under threat of the exercise of such.power (a "Taking"), this Lease shall terminate as to the part so taken as of the date the condemning authority takes. possession or title, whichever occurs first. If all or any substantial portion of the Leased Premises shall be Taken, Landlord may terminate this Lease, at its option, by giving Tenant written Notice of such termination within thirty (30) days of such Taking. If all or a portion of the Leased Premises in excess of twenty percent (20 %) of the floor area thereof shall be taken with the result that Tenant's use of the Leased Premises is substantially impaired, Tenant may terminate this Lease at its option by giving Landlord written Notice of such termination within thirty (30) days of such Taking. If neither party terminates this Lease pursuant to this Article, this Lease shall remain in full force and effect except that the Rent payable by Tenant hereunder shall be reduced in the same proportion as the floor area Taken in the Leased Premises bears to the total floor area in the Leased Premises. Landlord shall be entitled to and. Tenant hereby assigns to Landlord the entire amount of any award or payment made in connection with a Taking; provided, however, that Tenant shall be entitled to any payment or award attributable to the Taking of removable personal property or trade fixtures belonging to Tenant, or attributable to the good will of Tenant, so long as the amount of any award to Landlord is not decreased or negatively affected thereby.. FWAL1894i3436200Bsyche kale (Mmj rv4.d" 15 i ` 30.. SUBORDINATION. This Lease, and all of the rights of Tenant hereunder, are and shall be subject and subordinate to any lien presently existing on the Leased Premises or to any sale of the Leased Premises and/or any lien of any mortgage hereafter placed on the Leased Premises or any part thereof, and to any and all renewals, modifications, consolidations, replacements, extensions, or substitutions of said sale and/or mortgage. Tenant agrees to execute any documents required to effectuate such subordination or to make this Lease subordinate to the lien of any mortgage, deed of trust, or ground lease, as the case may be. 31. ATTORNWNT. If a successor landlord under, a sale or the holder of the mortgage or deed of trust shall succeed to the rights of Landlord under this Lease; whether through possession or foreclosure action or delivery of a new lease or deed, then Tenant, upon the request of such successor landlord, shall attorn to and recognize such successor landlord as Tenant's landlord under this Lease, and shall promptly execute and deliver any instrument that such successor landlord may request to further evidence such attornment. Tenant hereby irrevocably appoints Landlord or the successor landlord as attorney -in -fact of Tenant to execute and deliver such instrument on behalf of Tenant, should Tenant refuse or fail to do so promptly after request. Upon such attomment, this Lease shall continue in full force and effect as if it were a direct lease between the successor landlord and Tenant, upon all of the terms, conditions, and covenants as set forth herein. 32. ESTOPPEL CERTIFICATES. Upon the request of either.Landlord or Tenant, at any time, and from time to time, Landlord and Tenant agree to execute and deliver to the other, within ten (10) days after such request, a written instrument, duly executed, certifying, but not limited to, the following: a. this Lease has not been modified and is in full force and effect; or if there has been a modification of this Lease, that this Lease is in full force and effect as modified, stating such modifications; b. the dates to which Rent and other. payments due under this Lease have been paid; C. whether, to the knowledge of the party executing such instrument, the other party is in default and, if such party is in default, stating the nature of the default; d. the Commencement Date and the Expiration Date of the Tetra of this Lease; and e. if options to renew the Term have been exercised. 16 8 VMEAI.\ M3436200 Nvelte lease clean 1 rv4 Am If Tenant fails to deliver such written statement within such ten day time period, any prospective purchaser or encumbrancer of the Leased Premises may conclusively assume: (i) that this Lease is in full force and effect, without modification, except as may be represented by Landlord, (ii) that there are no uncured defaults in Landlord's performance, (iii) that no Security Deposit has been paid in advance, (iv) that there are no existing defenses against enforcement of any provision of this Lease, and (v) that the Commencement Date and Expiration Date are as stated by Landlord. Such failure by Tenant to deliver such statement shall constitute a material default by Tenant under this Lease. If Landlord desires to finance; refinance or sell the Leased Premises, Tenant hereby agrees to deliver to any prospective lender or purchaser designated by Landlord such financial statement of Tenant as may be reasonably required by such prospective lender or purchaser. Such statement shall include the past three years' financial statements of Tenant. All such financial statements shall be received in confidence, shall be used only for the purposes herein set forth and shall be furnished by Tenant promptly upon request therefor by Landlord. 33. HOLDING OVER. Subject to any provision contained herein pertaining to assignment and/or subletting, should Tenant, or any of its successors -in- interest, with the written consent of Landlord, hold over the Leased. Premises, or any part thereof, after the expiration of the Term of this Lease, (unless otherwise agreed to in writing by Landlord), such holding over shall constitute and be construed as a tenancy from month -to -month only, at a base rent equal to 150% of the Monthly Base Rent paid during the last month of the Term prior to the holdover. Said tenancy may be terminated as provided by the laws of the State of California. During such tenancy, Tenant (or, subject to the subletting and assignment provisions contained in this Lease, any successor of Tenant) agrees to be bound by all of the terms, covenants, and conditions as herein specified in this Lease, to the extent applicable. 34. QUIET ENJOYMENT. Landlord warrants that it has full right to execute and to perform this Lease and to grant the estate leased, and, that Tenant, upon payment of the required Rent and performing the terms, conditions, covenants, and agreements contained in this Lease,.shall peaceably and quietly have, hold, and enjoy the Leased Premises during the full Term of this Lease, as well as any extension or renewal thereof. 35. MODIFICATION AMENDMENT, ADDENDUM Any amendments, addenda, exhibits, modifications, and/or other supplements, including Exhibits A, B and C attached hereto (collectively referred to as Addenda), are to be made a part hereof, and shall be binding upon the parties hereto, and if any provision.of said Addenda shall conflict in any manner with other provisions contained in this Lease, the Addenda shall. prevail. Neither Landlord nor Tenant shall be considered the drafting party of this Lease. Ambiguities (if any) contained in this Lease or any Addenda shall not be construed against Landlord or Tenant. 1 F[UtEA1.\894\343(,20H)Ilcve.lie le.mr (de r an 1 A Aw .. 7 y 36.. PARKING. For the Tenn of.this Lease, Tenant shall be entitled to the two (2) complimentary reserved as well as the rights to an additional twenty -two (22) reserved spaces (at Tenant's expense) in the Lido Marina Village parking garage as further provided in Exhibit C. 37. SERVICES. Tenant shall obtain, at its option and its own expense, janitorial and other maintenance services of the type customarily furnished to comparable buildings in Lido Marina Village. 38. LEASING BROKERAGE. Landlord.and Tenant each warrant to the other that neither.has had any dealings with any broker or agent in connection with the negotiation or execution of this Lease. Landlord and Tenant agree to indemnify each other for, from and against all costs, expenses, legal fees or any other liabilities pertaining to commissions or other compensation or charges claimed by any broker or agent in connection with this Lease. 39. LEASE MEMORANDUM / RECORDATION. At Landlord's sole option, Landlord and Tenant shall execute a Lease memorandum. Said memorandum shall be in recordable form and contain those Lease provisions as specified by Landlord. Said memorandum shall be recorded solely at Landlord's option and expense. Tenant shall not. record this Lease, or any provision hereof, without Landlord's express, written consent, which consent may be withheld at Landlord's sole and absolute discretion. 40. LEASED PREMISES RULES AND REGULATIONS Tenant agrees to abide by the rules and regulations of the City of Newport Beach and other applicable regulatory authorities in the operation of the Leased Premises. 41. INTEREST ON PAST DUE OBLIGATIONS. Any amount due Landlord not paid when due shall bear interest at Wells Fargo Bank prime rate plus 5% per annum from the date due or, if said rate is not a lawful one, the highest rate permitted by law. Payment of such interest shall not excuse or cure any default by Tenant under this Lease; provided, however, that interest shall not be payable on late charges assessed against Tenant. 42. PERSONAL PROPERTY. TAXES. Tenant shall pay when due all taxes assessed against and levied upon tenant alterations, tenant improvements, and any property of Tenant contained in, on or about the Leased Premises or any part thereof. When possible, Tenant shall cause all such taxes to be levied and assessed separately from taxes upon the /Leased Premises. 43. LANDLORD'S RIGHT TO CURE DEFAULTS. All covenants and agreements to be performed by Tenant under any of the terns of this Lease shall be at its sole cost and expense and, except as otherwise specifically provided herein, without any abatement of Rent..If Tenant shall fail to pay any sum of money owing to a party other r:UtEAL\894U436200Nvelte lean (clean ) M .doc 18 �� than Landlord and required to be paid by it hereunder or shall fail to perform any other act on its part to be performed hereunder; Landlord may, but shall not be obligated to and without waiving any rights of Landlord or releasing Tenant from any obligations of Tenant hereunder, make such payment or perform such other act to be made or performed by Tenant hereunder. Tenant covenants to reimburse Landlord for such sums and Landlord shall have (in addition to any other right or remedy of Landlord) the same rights and remedies in the event of the nonpayment thereof by Tenant as in the case of .default by Tenant in the payment of any sums due Landlord hereunder. All sums so paid or expenses incurred by Landlord and all necessary incidental costs together with interest thereon at the lesser of the rate of the Citibank prime rate plus .5% or the highest rate permitted by applicable law from the date of such payment by Landlord until paid shall . be considered as Rent owing hereunder and shall be payable to Landlord on demand or, at the option ofLandlord, may be added to any Rent then due or thereafter becoming due under this Lease. 44. LIMITATION ON LANDLORD'S LIABILITY. The obligations of Landlord under this Lease do not constitute personal obligations of the partners in Landlord or of the directors, officers or shareholders of any of the partners in Landlord, and Tenant shall look solely to the Landlord's equity interest in. the real estate that is the subject of this Lease and to no other assets of Landlord for satisfaction of any liability in respect of this Lease and will not seek recourse against the partners in Landlord or the directors, officers or shareholders of any of the partners in Landlord or any of their personal assets. for such satisfaction. 45. LIMITATIONS ON TENANT'S LIABILITY. The obligations of Tenant under this Lease do not constitute personal obligations of the partners in Tenant or of the directors, officers or shareholders of any of the partners in Tenant, and Landlord (except as provided in Paragraph 44 above) shall look solely to the Tenant for satisfaction of any liability in respect of this Lease and will not seek recourse against the partners in Tenant or the directors, officers or shareholders of any of the partners in Tenant or any of their personal assets for such satisfaction. ' Upon (30) days written notice to.Landlord and (i) provided that there is no Default as set forth in Article 13 or any other provision of this Lease, and (ii) the Leased Premises are returned to Landlord in as good repair as when Tenant obtained the same on the Commencement Date, normal wear and tear excepted pursuant to Article: 20, then Tenant may terminate this Lease upon payment to Landlord of Fifty Thousand Dollars ($50,000) or by crediting Tenant's Security Deposit of Twelve Thousand Dollars ($12,000) and, at the option of Landlord, by Tenant assigning the Liquor Licenses referenced in Section 8 above for a credit of Thirty -Seven Thousand Dollars ($37,000). 46. SECURITY DEPOSIT /GUARANTEE. As security for the performance of Tenant's obligations under this Lease, Tenant shall pay and Landlord shall hold (Twelve Thousand Dollars ($12,000) as a Security Deposit. Provided there has been no material. 19 FAREAU894i3436200Rsvelte lease (clean ) M .doc 91 1 default by Tenant during the first.Term of this Lease as noticed in writing by Landlord to Tenant, Landlord shall apply the Security Deposit to the last two months of the first term of this Lease. As further security for Tenant's obligations herein, Takoda Limited Partnership, an Arizona limited partnership shall guarantee the obligations of Tenant pursuant to this Lease. Provided that there has been no material Default as set forth in Article 13 or any other tetra of this Lease and as noticed in writing by Landlord to Tenant, such guarantee shall expire at the end of the 36th month of the first Term of this Lease. 47. ENVIRONMENTAL. PROVISIONS. Tenant represents and warrants to Landlord that Tenant will not generate, store, treat, use release, or dispose of any hazardous materials on or about the Leased Premises except in compliance with all environmental laws and any additional conditions imposed by Landlord. Tenant will not release or dispose of any hazardous materials in or on the Leased Premises without the express written approval of Landlord. Tenant shall obtain, comply with and provide Landlord with copies of all permits required in connection with the generation, storage, treatment, use, release, or disposal of hazardous materials. Tenant shall not install nor permit to be installed on or in the Leased Premises any substance containing asbestos and determined to be hazardous by any governmental authority or any friable asbestos. If any such substance or any.friable asbestos is determined to be in or on the Leased Premises as a result of the actions of Tenant, Tenant shall promptly comply with any applicable environmental laws (which may or may not require removal of the material), at Tenant's expense. In the event Tenant fails to perform any of its obligations under this Article 47 within thirty (30) days after the giving to Tenant 'by Landlord of written notice of such failure, or within a reasonable period of time not to exceed ninety (90) days after the giving to Tenant by Landlord of written notice of such failure if, due to the nature of such failure, such failure cannot be cured within a 30 -day period but is otherwise susceptible to cure within a reasonable period of time not exceeding ninety (90) days, or within a shorter period of time if prescribed by any environmental law, then, after expiration of such applicable period of time, Landlord may enter upon the Leased Premises and remove or cause to be removed such hazardous material or otherwise cause compliance with any applicable environmental law; provided, however, that Landlord may enter upon the Leased Premises and remove or cause to be removed such hazardous material or otherwise cause compliance with any applicable environmental law upon written notice to Tenant but prior to the expiration of the applicable time period, if Landlord determines that such action is necessary prior to:the expiration of the applicable time period (i) for the preservation or safety of the Leased Premises or the tenants in the Leased Premises, or other persons, (ii) to avoid suspension of a necessary service in, or with respect to, the Leased.Premises, (iii) for the preservation of the lien and grant of any deed of trust granted to any lender with respect to the Leased Premises or the priority of such lien and 20 FMLEALA94\343620ONvelte lease (clean ) tv4 An grant, or (iv) to assure the continued operation of the Leased Premises. The cost of any such removal or compliance shall be immediately due to Landlord upon demand as Additional Rent. Tenant shall, at Tenant's own expense, comply with all present and hereinafter enacted environmental laws affecting Tenant's activities on the Leased Premises or the Leased Premises. Tenant shall keep the Leased Premises free of any lien imposed pursuant to any environmental laws, except for any liens being contested by Tenant in good faith and at its own expense by appropriate action or legal proceedings, provided . that such actions or proceedings operate to prevent collection thereunder or realization thereon and the sale or forfeiture of the Leased Premises to satisfy the same, and - provided further that during such contest Tenant shall, at the option of Landlord, provide security .. reasonably satisfactory to Landlord assuring the discharge of Tenant's obligations in respect of the lien being contested and any additional interest, charge, penalty, or expense arising from or incurred as a result of such contest. As used herein; the term "hazardous materials" means materials defined as "hazardous waste or substances" under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et. seq., Resource Conservation and Recovery Act, 42 U.S.C. Section 6903 et. seq., including, without limitation asbestos, urea formaldehyde foam insulation, and any fluid containing polychlorinated biphenyls. As used herein, the term "environmental laws" means any one or all of the following; as they may be amended from time to time: the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Sections 9601 et. seq.), the Resource Conservation and Recovery Act (42 U.S.C: Sections.690.1 et seq.), the Safe Drinking Water Act (42 U.S.C. Section 300f et. seq.), the Clean Water Act (33 U.S.C. Sections 12151 et seq.),.the Clean Air Act (42 U.S.C. Sections 7401 et. seq.), the Toxic Substances Control Act (15 U.S.C. Sections 16 et. seq.),. the Solid Waste Disposal Act (42 U.S.C. Sections 3251 et seq.), and regulations thereunder and any .other laws and regulations now in effect or hereinafter enacted that deal with the regulation or protection of the environment, including the ambient air, ground water, surface water, and land use, including sub -strata land. Tenant shall be responsible for removing from the Leased Premises any hazardous materials put there by Tenant or its agents which either Tenant or Landlord is required by law to remove. In addition, Tenant shall be responsible for restoring the Leased Premises to their condition immediately prior to the time of such required removal. If Landlord is so required to remove any such hazardous materials put there by Tenant or its agents, Landlord shall promptly give notice thereof to Tenant. Tenant shall immediately notify Landlord, both orally and in writing of any of the following: F:%REAL%894043620ONvelte kale fckan 1 rv4.doc _ 21 _ a. Any emission, spill, release, or discharge into the environment of any hazardous material; b. Any correspondence or communication to Tenant or its agents regarding the, presence or suspected presence of hazardous materials on the Leased Premises or regarding the application of environmental laws to the Leased Premises or Tenant's activities.on the Leased Premises; c. Tenant's knowledge of any circumstances which could give rise to a claim that Tenant, Landlord, the Leased Premises may be in violation of environmental laws; and d. Any change in Tenant's activities on the Leased Premises that will change or has the potential to change Tenant's or Landlord's obligations or liabilities under environmental laws. Tenant shall indemnify and hold harmless Landlord,' its employees, and agents for, from and against any of the following which result from or which are related to any activity or operation of Tenant or its agents, contractors, employees, or invitees on the Leased Premises during the Term .of this Lease: any and all loss, damage, obligation, penalty, liability, litigation, demand, defense, judgment, suit, proceeding, cost, disbursement, and expense (including, but not limited to, reasonable investigation, remediation, removal, and legal fees and expenses) resulting from or arising from or in connection with, or alleged to have resulted or arisen from or in connection with, contamination of or adverse effects on the environment, the Leased Premises, or violation of any environmental law or other statute, ordinance, rule, regulation, judgment, or order of any government or judicial entity. Tenant's obligations and liabilities under this paragraph shall continue after the expiration of this Lease so long as Landlord bears any liability.or responsibility under the environmental laws for any action that occurred on the Leased Premises during the Term of this Lease. Tenant's failure to abide by the terms of this paragraph shall be restrainable by injunction. _ 48. SEVERABILITY CLAUSE If any clause or provision of this Lease is illegal, invalid, or unenforceable under present or future laws effective during the Term of this Lease, it is the intention of Landlord and Tenant that the remainder of this Lease ..shall not be.affected thereby. The caption of each article hereof is added as a matter of convenience only and shall be considered to be. of no effect in the construction of any provision of this Lease. 49, SURRENDER OF POSSESSION Tenant agrees to deliver, upon the surrender to Landlord, possession of the Leased Premises, along with al keys thereto, at the expiration or termination of this Lease, by lapse of time or otherwise, in as good repair as when Tenant obtained the same at the commencement. of said Term, normal wear and tear excepted, and except damage by the elements (occurring without the fault Zz F:IRHAL1894U436200Nvelte Jew fckan 1 rv4.doc of Tenant or other persons permitted by Tenant to occupy or enter the Leased Premises or any part thereof), or by act of God, or by insurrection, riot, invasion, or of military or usurped power. 50. ENTIRE AGREEMENT. Tenant acknowledges and agrees it has not relied upon any agreements, conditions, representations, statements, or warranties except those expressed and contained herein. Tenant acknowledges and agrees that no amendment or modification of this Lease shall be valid or binding unless expressed in writing and executed by Landlord and Tenant in the same manner as the execution of this Lease. 51. IMPLIED ACCEPTANCE / SURRENDER. No act or thing done by Landlord or Landlord's agents during the Term hereof or any extension thereof, shall be deemed an acceptance or a surrender of the Leased Premises, and no agreement to accept such surrender shall be valid unless in writing and signed by Landlord or its designated . representative. The delivery of.keys to any employee of Landlord, or to Landlord's agents, shall not operate as a termination of this Lease or a surrender of the Leased Premises. No partial payment of Rent by Tenant shall be deemed to be other than a payment on account, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction. Landlord may accept any such payment of Rent without prejudice to Landlord's right to recover the balance of any Rent due or pursue any other remedy available to Landlord. 52. SUCCESSORS. Subject to the provisions pertaining to assignment and subletting and except as otherwise expressly provided, the terms, provisions, covenants, and conditions contained in this Lease shall apply to, inure to the benefit of, and be binding upon the parties, hereto and upon their respective successors in interest and legal representatives. 53. GENDER. Words of any gender used in this Lease shall be held and construed to include any other gender, and. words in the singular number shall be held to include the plural, unless the context otherwise requires. J 54. TIME IS OF TI4E ESSENCE / CORPORATE AUTHORITY. Time is of the essence of this Lease Agreement and each and every provision contained herein. If Tenant is a corporation or limited liability. company, Tenant warrants that it has legal authority to operate and is authorized to do business in the State of California. Tenant also warrants that the person or persons executing this Lease and the Guarantee on behalf of Tenant has authority to do so and Tenant has the authority to fully.obligate Tenant to all terms and provisions of this Lease. Tenant shall, upon request from Landlord, furnish Landlord with a certified copy of resolutions of the Board of Directors or other governing authority authorizing this Lease and granting authority to execute it to the person or persons who have executed it on Tenant's behalf. 23 FAREAL\894\34362001kve1te lease (clean ) m4 .dm _ 55. NOTICES. Each provision of this Lease or of any applicable governmental laws, ordinances, regulation, or other requirements with reference to the sending, mailing. or delivery of any payment of Rent by Tenant to Landlord or vice - versa, shall be deemed to be complied with if and when the following steps are taken: a. All Rent and other payments required to be made by Tenant to Landlord hereunder shall be payable to Landlord at the address herein below set forth or at such other address as Landlord may specify from time to time by written notice delivered in accordance herewith. b. All payments required to be made by Landlord to Tenant hereunder shall be payable to Tenant at the address herein below set forth, or at such other address within the United States as Tenant may specify from time to time by written notice delivered in accordance herewith. All Notices required or permitted under this Lease shall be in writing and shall be deemed to be properly served if sent by personal delivery, special delivery, overnight delivery, certified mail, or by facsimile transmission. Notices to the Tenant and to the Landlord shall be to the address, as specified below. The effective date of any Notice shall. .be the date on the shipping invoice for all personal deliveries, special deliveries, or overnight deliveries, the date of the post mark stamped on the envelope by the U.S. Postal Service, or the date a facsimile transmission is sent. The parties hereto shall not refuse to accept delivery of said Notices. As of the effective date of this Lease, Landlord and Tenant's addresses are as follows: Landlord: Tenant: Christine & Dennis Overstreet 2816 La Fayette Avenue Svelte Body Centers Newport Beach, CA 92663 3400 Via Lido Newport each, California.92663 Approved Sublessee and Liquor License Purchaser Rjour LLC 177 Riverside Avenue, #17601 Newport Beach, California 92660 56. RIGHT OF FIRST REFUSAL. Tenant shall have the right of first refusal to purchase the Leased Premises. Tenant shall be given written notification when a prospective purchaser ( "Prospective Purchaser'.') has made a written offer ( "Purchase 24 F:VAEAU894134362001\svelte leue (clemi ) M4 .dDc 24 Offer ") on the Leased Premises which Landlord would like to accept. Tenant shall have seventy-two (72) hours from the date of receipt of Landlord's notification to give Landlord written notice whether Tenant intends to exercise its right of first refusal to purchase the Leased Premises on the game terms and conditions as the Purchase Offer. In the event Tenant does not exercise its right of first refusal and execute a purchase contract for the Leased Premises on all of the same terms and conditions of the Purchase Offer, then this right of first refusal to purchase is terminated without further notice to Tenant and Landlord is free to make amendments to the Purchase Offer.with the Prospective Buyer during escrow so long as the purchase price is not reduced by more than five percent (5 %) of the purchase price contained in the original Purchase Offer. In the event Tenant elects to exercise its right of first refusal to purchase the Leased Premises, then Landlord shall prepare a purchase contract for the Leased Premises, which purchase contract shall be on the same terms and conditions as the Purchase Offer of the Prospective Buyer. If Tenant does not exercise its right of first refusal to purchase the Leased Premises, and the Leased Premises are not conveyed to the prospective buyer, then this right of first refusal shall not terminate. 57. No Proprietary Right. Nothing in this Agreement shall be deemed by implication, or otherwise, to convey to Tenant any proprietary right, business goodwill. or interest in any information ( "Business Information ") or other business rights.of Landlord's business. The disclosure of Business Information shall not be construed as granting either a license under any right of ownership in said Business Information. FAREA MN343G200Mvdle Ieme fdeAn 1 r 4 dr. 25 1. . IN WITNESS WHEREOF, this Lease is to be effective as of the Execution Date specified in the Basic Lease Information attached hereto and made a part hereof. TENANT: SVELTE BODfin RS, INC., a Nevada corpo BY: Arthur F. Stockton ITS: President DATE:. 1 -.2 7— B APPROVED SUBLESSEE AND LIQUOR LICENSE PURCHASOR SbOUR LLC, a Calif 'a limited hab'lity company By: Carc#n Stockton Its: MManagi P9 Member Date: eilx7i 5 nc [e11"M "AWII to] tii TAKODA LIMITED PARTNERSHIP,.an Arizona limited partnership BY: Whitmore Holdings, L.L.C., a Nevada limited liability company ITS: G al Partner > BY: Lauren B: Stockton ITS: Managing Member DATE: 1 �� 7 21 EXHIBIT A BASIC LEASE INFORMATION 3400 VIA LIDO NEWPORT BEACH, CALIFORNIA 92663 This Lease (hereinafter referred to as the "Lease ") is entered into by Landlord and Tenant as described in the following "Basic Lease Information" on the Date which is set forth in the following Basic Lease Information. Landlord and Tenant agree: Basic Lease Information. In addition to the terms that are defined elsewhere in this Lease, the following defined terms are used in this Lease: Execution Date: Landlord: Tenant: Landlord's Address: Tenant's Address: Leased Premises Address Leased Premises: September 27, 2005 Dennis and Christine Overstreet Svelte Body Centers, LLC, a Nevada limited liability company. 2816 La Fayette Avenue Newport Beach, 92663 Svelte Body Centers, LLC 3400 Via Lido` Newport Beach, California 92663 3400 Via Lido Newport Beach, California 92663 The Leased Premises shown on Exhibit B to this Lease including the parking referenced in FN2FAUS94\34362ODNvelte Ieaw (clean ) M .doc 27 " 28 a'f3 FAREALM413436200Nvelte lease (clean ) rv4.doc Exhibit C and the personal property, fixtures and equipment listed on Exhibit D. Term: 60 months, beginning on the Commencement Date and expiring at midnight on the Expiration Date unless sooner terminated or extended pursuant to the Lease terms. Commencement Date: October 15, 2005. Expiration Date: 60 months, inclusive, from and after the Commencement Date unless sooner terminated or extended pursuant to the Lease terms. Security Deposit: $12,000.00 Monthly Rent: $6,000.00 28 a'f3 FAREALM413436200Nvelte lease (clean ) rv4.doc EXHIBIT B LEGAL DESCRIPTION Lot 2 of Tract No. 1235, in the City of Newport Beach, County of Orange, State of California. as shown on a map recorded in Book 47, Page 24 of Miscellaneous Maps, in the Office of the County Recorder of said County. 29 U The Overstreets operated at 3400 Via Lido for 3.5 years with no issues with the City. Sejour was tenant ❑ Oct. 2005 to Dec. 2008 and the Overstreets had no financial interests in their business operation. Condition # 6 of Use Permit Restricts the power of the City to revoke its grant what are essentially public nuisance circumstances. Revocation based upon violation of conditions is inconsistent with due process. Overstreets have a vested property right in the Use Permit. There was no notice to theOverstreets. They were given no opportunity to make corrections. Such notice, an opportunity to correct is required. Mohilef v. Janovici Newport Beach Municipal Code - Code Section 10.50.040 requires written notice of violations be given to the owner and that time be provided for corrections. The Overstreets, as the landlords, are not responsible for their tenant, Sejour's actions or operations, which resulted in violations if the violations were caused solely by the tenant. Anderson v. Souza There is no nuisance to abate as Sejour ceased operations in December 2007. The Overstreets have vested property rights in the Use Permits and in reliance incurred material expense for improvements. Taking away such rights requires a higher level of judicial review. Goat Hill Tavern v. Citv of Costa Mec +95- 10-14-08 Landowners Operated 3+ years without Issue • Dennis and Christine Overstreet, land owners of 3400 Via Lido, who made application to the City of Newport Beach for the 2 Use Permits - the subject of this Appeal - owned and. operated a business at 3400 Via Lido for 3.5 years - from May 2002 to 0 0 October 2005 - No issues No police reports No nuisance No violations of Use Permit No public complaints #1 • City did not notify land owners of any nuisance or problems regarding the Use Permits. • Even after, owner, Christine Overstreet went to the City and requested from City Code Enforcement Officer Charles Spence that the Overstreets be notified if there were any new or continuing issues regarding 3400 Via Lido. • The City never notified or attempted to notify the land owner to mitigate issues. #z • The Planning Department Staff based their findings and decisions to revoke and modify the Use Permits predominantly on one Condition - # 13. Condition # 13 contradicts the other 33 conditions on the Use Permit. • The terms "restaurant" and "eating and drinking" are used repeatedly (7 times) in the conditions embedded in the Final Approved Use Permit. ■s ■■ [I • If the Modification and Revocation is upheld - it will required the demolition and removal of fixtures and improvements (in excess of $300,000) with no compensation - forcing the Overstreets to destroy the very space approved by the Use Permit. This is a violation of due process. The Overstreets provided the "cure" and there is no nuisance or detriment to the surrounding public and community.