City Council

AGENDA Committee of the Whole Meeting April 11, 2016 5:00 p.m. A. Roll Call B. Items Also on the Regular Agenda C. Considerations 1. Policy Discussion Regarding Updates to City Liquor Code. D. Public Participation E. Recess for Executive Session of the City Council 1. Approval to Hold an Executive Session to Discuss Personnel as Provided for in 5 ILCS 120/2(c)(1). 2. Approval to Hold an Executive Session to Discuss Collective Bargaining as Provided for in 5 ILCS 120/2(c)(2). 3. Approval to Hold an Executive Session to Discuss Acquisition of Property as Provided for in 5 ILCS 120/2(c)(5). F. Adjournment Assistive services available upon request.  C-1 April 11, 2016 DATE: April 6, 2016 TO: Honorable Mayor John Rey City Council FROM: Anne Marie Gaura, City Manager Gene Lowery, Chief of Police Ellen Divita, Community Development Director Dean Frieders, City Attorney SUBJECT: Policy Discussion Regarding Updates to City Liquor Code:  Restaurant / Low ABV  BYOB Licensure  Hotel License I. Summary Based upon recent City Council discussions regarding proposed changes in the State liquor code, additional research has been done and recommendations presented regarding the City’s liquor control ordinances. II. Background The City Council recently engaged in a discussion of changes in State liquor control laws and their impact upon City Code. Based upon that discussion, three liquor control questions are posed for the City Council to consider at this Committee of the Whole Meeting. Additional questions will be presented at future Committee of the Whole meetings. Corresponding action items will appear on the same evening’s City Council Meeting. 1) Hotel License Scope: Under a recent change in State law, a hotel liquor license issued by the State can cover all liquor operations that the hotel undertakes, including room- service and mini-bars, and also including any bar or restaurant that is both located on premises and owned/operated by the hotel. On-premises establishments that are either owned or operated by a third party require separate licensure. Current City Code permits a hotel to operate with room service, mini-bars, and also to operate an on-premises bar area or hospitality area (conference room). If the Council supports the change, the license classification could be expanded to also allow an on-site restaurant. The primary difference between “bar” and “restaurant” under City Code is that a bar is for those 21 years of age or more (or with their parents/guardians) and can serve alcohol without any food, whereas a restaurant is for all  C-1 April 11, 2016 ages, and can only serve alcohol with a corresponding “real food” meal. Staff recommends making this update to the City Code. Staff has researched comparable college communities and has not found any communities that have yet adopted local regulations specifically addressing this change in state statute. However, it is nonetheless recommended to undertake this update. 2) BYOB Licenses: The City has had some restaurant licensees inquire regarding the potential of permitting BYOB (bring your own bottle) liquor service as a component of their restaurant liquor license (either full-service license or low-ABV (low alcohol by volume) license. Given that such licensure already permits the sale and consumption of alcoholic beverages, the Council may wish to allow establishments with restaurant licenses to obtain a supplemental BYOB license. Presently, the renewal fee for a BYOB license is approximately $254. The renewal fee for a restaurant license is $3,358 and the renewal fee for a low-ABV restaurant license is $2,290. Staff has researched comparable communities and has found great variety in the approaches of the communities, such that no trends are represented. Staff recommends permitting BYOB at any restaurant establishment. Expanding BYOB service to Bar licensees is not recommended, both because of a potential negative impact on Restaurant & Bar taxes, and because of the challenges it would pose for licensees to address patrons potentially seeking to bring in high-alcoholic content beverages. 3) Low-ABV Restaurant and Real Food Requirement: The City has periodically received inquiries from restaurants holding a low-ABV license as to whether the City would consider removing the “real food” requirement under City Code. In short, under City Code, any restaurant licensee is only permitted to sell alcoholic beverages with a corresponding purchase of “real food”. Real food is defined by City Code to exclude snacks, chips, pretzels and similar items—and to include only true meals. In other words, a patron wishing to have an alcoholic beverage in any establishment with a restaurant liquor license (low-ABV or otherwise) can only have that beverage if they are ordering a meal. If the City eliminated the “real food” requirement for low-ABV restaurants, patrons could have just a glass of wine or a beer without a corresponding meal. It is not recommended to consider eliminating the “real food” requirement for all restaurants. The policy question presented here is limited to low-ABV establishments. Current low-ABV establishments include Burritoville, Haru of Japan, Hillside Restaurant, the House Café, Mediterraneo, Noodles & Company and Pizza Villa. Of note, Starbucks (on Sycamore Road) has presently applied for a Restaurant-Low ABV license. The City has historically maintained the “real food” requirement to prevent restaurants from morphing into bars. City Code permits bars to serve alcohol without food, but Page |2  C-1 April 11, 2016 restricts access into bars to persons over 21 (or those with their parent or guardian). Restaurants can have persons of all ages enter, but have historically been limited to selling alcohol with real food only. The benefits of removing the restriction would be to permit low-ABV licensees to engage in additional sales of alcoholic beverages (generating additional tax for the City), in a relatively constrained environment where only beer, wine and similar beverages are being offered. This concession would be responsive to inquiries from some establishments. On the other hand, undertaking this step would blur the boundary between bars and restaurants. In some environments, such as low-ABV licensees that are frequented by those under 21 during evening hours, this could potentially present an increased susceptibility to minors having access to alcohol. From a practical perspective, the “real food” requirement is challenging to enforce in the absence of specific liquor enforcement details or specific (and provable) complaints received by the City. With regard to a comparison to comparable communities:  Carbondale: Restaurants are licensed based upon their percentage of sales (with a requirement that at least 51% of their sales be foodstuffs, rather than alcoholic beverages). Liquor purchases are required to have a corresponding real food purchase, both for low-ABV licenses and full service licenses.  Macomb: Restaurants are licensed based upon percentage of sales (with a requirement that at least 60% of their sales be foodstuffs), but there is not a requirement that food be purchased with alcoholic beverages.  Edwardsville: There is not a requirement that food be purchased with alcoholic beverages.  Champaign: Restaurants are licensed in two separate categories. One category permits consumption of alcohol independent of other purchases. The second category requires liquor service to be incidental to the service of meals.  Urbana: Restaurants are licensed based upon percentage of sales (with a requirement that at least 60% of their sales be foodstuffs), but there is not a requirement that food be purchased with alcoholic beverages.  Bloomington: Restaurants are licensed based upon their percentage of sales (with a requirement that at least 51% of their sales be foodstuffs, rather than alcoholic beverages), but liquor purchases are not required to have a corresponding real food purchase.  Normal: There is not a requirement that food be purchased with alcoholic beverages. Page |3  C-1 April 11, 2016 As shown above, a majority of the university comparable communities do permit sale of alcoholic beverages without a corresponding purchase of real food. At this time, staff recommends an update to the City’s liquor code to eliminate the ‘real food’ requirement for Low ABV establishments. Staff does not recommend making any changes relative to restaurants that offer full-service liquor, as it is recommended to keep a significant distinction between full-service restaurants and bars, given the absence of age restrictions in restaurants. (Of note, based upon the Council’s request, age restrictions will be considered at a future Council meeting). III. Community Groups/Interested Parties Contacted These recommendations are being brought forth to the City Council for consideration at a Committee of the Whole meeting and also at a corresponding City Council meeting. IV. Legal Impact The City has the legal authority to adopt revisions to the City Liquor Code as directed by City Council. V. Financial Impact No financial impact is anticipated at this time. VI. Options Council may provide feedback and direction on the items listed above, or may describe a process that it wishes to utilize to solicit further public response. VII. Recommendation It is recommended to discuss the issues enumerated above and provide policy direction to staff. Page |4 Return to Agenda