DOCKET NO ORDER

Transcription

1 DOCKET NO TEXAS ALCOHOLIC BEVERAGE COMMISSION, Petitioner/Protestant CITY OF CORPUS CHRISTI POLICE DEPARTMENT, Protestant vs. MACAW'S INC. D/B/A MACAW'S INC., Respondent/ Applicant PERMITS MB217682, LB, AND PE NUECESCOUNTY,TEXAS (SOAH DOCKET NO ) BEFORE THE TEXAS ALCOHOLIC BEVERAGE COMMISSION ORDER CAME ON FOR CONSIDERATION this the 30th day of May, 2017, the above-styled and numbered cause. After proper notice was given, this case was heard by the State Office of Administrative Hearings (SOAH), with Administrative Law Judge Holly Vandrovec presiding. The hearing convened on February 17, 2017 and the SOAH record closed the same date. The Administrative Law Judge made and filed a Proposal for Decision containing Findings of Fact and Conclusions of Law on April 12, The Proposal for Decision was properly served on all parties, who were given an opportunity to file exceptions and replies as part of the record herein. No exceptions were filed. After review and due consideration of the Proposal for Decision, I adopt the Findings of Fact and Conclusions of Law of the Administrative Law Judge that are contained in the Proposal for Decision and incorporate those Findings of Fact and Conclusions of Law into this Order, as if such were fully set out and separately stated herein. All motions, requests for entry of Proposed Findings of Fact and Conclusions of Law, and any other requests for general or specific relief submitted by any party are denied, unless specifically adopted herein. IT IS THEREFORE ORDERED Respondent's supplemental application for the above permits is GRANTED. Page 1 of 3

2 This Order will become final and enforceable on the 27th day of June, 2017, unless a Motion for Rehearing is filed by the 26th day of Juue, SIGNED this the 30th day of May, 2017, at Austin, Texas. CERTIFICATE OF SERVICE I certify that the persons listed below were served with a copy ofthis Order in the manner indicated below on this the 30th day ofmay, Holly Vandrovec ADMINISTRATIVE LAW JUDGE State Office of Administrative Hearings 300 W. 15th Street, Suite 504 Austin, TX VIA FACS/MJI,E: (512) Martin Wilson, Assistant General Counsel Texas Alcoholic Beverage Commission Macaw's, Inc. d/b/a Macaw's Inc. RESPONDENT 3002 Twin Creek Drive Corpus Christi, TX VIA FIRST CLASS MAIL, CMRRR # Les Cassidy ATTORNEY FOR RESPONDENT 814 Leopard Street Corpus Christi, TX 7840 L VIA FIRST CLASS MAJL, CMRR # ,f AND VL4 FACSIMILE: (361) AND VL4 les.cassidy(itgmail.com Page 2 of 3

3 Mike Markle, Chief of Police Corpus Christi Police Department PROTESTANT P.O. Box 9016 Corpus Christi, TX VIA FIRST CLASS MAIL, CMRRR# David Duncan ATTORNEY FOR PETITIONER T ABC Legal Division VIA david.duncan@tabc.texas.gov Page 3 of 3

4 SOAH DOCKET NO (TABC Case No ) TEXAS ALCOHOLIC BEVERAGE COMMISSION, Jurisdictional Petitioner/Protestant CITY OF CORPUS CHRISTI POLICE DEPARTMENT, Protestant v. MACAW'S INC. d/b/a MACAW'S BAR SUPPLEMENTAL APPLICATION MB217682, LB, PE, Applicant BEFORE THE STATE OFFICE OF ADMINISTRATIVE HEARINGS PROPOSAL FOR DECISION The staff (Staff) of the Texas Alcoholic Beverage Commission (TABC) and the City of Corpus Christi Police Department (Corpus PD and together with TABC, "Protestants") 1 brought this protest action against the supplemental application 2 (Application) of Macaw's Inc. d/b/a Macaw's Bar (Applicant) for a Mixed Beverage Permit, a Mixed Beverage Late Hours Permit, and a Beverage Cartage Permit (Permits) for the premises known as The Nest located at 6534 Yorktown Blvd., Suite 116, Corpus Christi, Texas. Protestants protested on the grounds that Applicant or Applicant's agent, servant, or employee may conduct Applicant's business in a manner contrary to the general welfare, health, peace, morals, and safety of the people and the public sense of decency in violation of Texas Alcoholic Beverage Code (Code) ll.46(a)(8). 3 After considering the arguments and evidence presented by the parties, the Administrative Law 1 Mario and Sandra Serrano of the Texas Driving School were also protestants; however, they settled their issues with Applicant and did not participate in the hearing. 2 Staff explained that a supplemental application is not an original application or a renewal, but results when the holder of a current permit elects to move to a new location. 3 TABC Ex. 1 at 2.

5 SOAR DOCKET N PROPOSAL FOR DECISION PAGE2 Judge (ALJ) finds that there is insufficient basis for denying the Application and recommends that the permits be issued. I. JURISDICTION AND PROCEDURAL HISTORY Notice, venue, and jurisdiction are not contested and are discussed only in the proposed Findings of Fact and Conclusions of Law. The hearing was held on February 17, 2017, before ALJ Holly Vandrovec at the State Office of Administrative Hearings (SOAH) offices in Corpus Christi, Texas. Staff was represented by David Duncan, attorney. David Blackmon, Commander at the Corpus PD, represented the Corpus PD. Applicant was represented by Less Cassidy, attorney. The record closed that day at the end of the hearing. II. LEGAL STANDARDS AND APPLICABLE LAW Pursuant to the Code, T ABC may refuse to issue a permit if it has reasonable grounds to believe and finds that "the place or manner in which the applicant may conduct his business warrants the refusal of a permit based on the general welfare, health, peace, morals, and safety of the people and on the public sense of decency." 4 Protestants have the burden of proof by a preponderance of the evidence. 5 III. SUMMARY OF THE EVIDENCE A. Background Applicant is owned by Neil Smith and his wife Marissa Smith. The Smiths previously operated a bar under the name Macaw's Bar located at 6410 Weber #21, Corpus Christi, Texas, beginning in The old location is now closed, but operated as a dance club catering to a 4 Code l l.46(a)(8). 5 1Tex. Admin. Code

6 SOAH DOCKET NO PROPOSAL FOR DECISION PAGE3 young crowd. The Smiths relocated to the cunent location on Yorktown approximately 5 miles from the old location. They also changed the name to The Nest and have been operating as a BYOB 6 establishment. The new location opened in mid-december 2016 and caters to an older crowd, featuring 1980s and 1990s music and live music by local singer-songwriters. B. Protestants' Evidence The Protestants' evidence consisted of seven exhibits, all of which were admitted without objection, and the testimony of four witnesses. Protestants generally argue that there were numerous issues with the operation of the old location (including TABC rule violations, noise complaints, arrests for assaults, gang-related activities, and minors consuming alcohol) that are indicative of how the Smiths will operate the new bar, which would result in a violation of Code 11.46(a)(8). TABC Agent Byron Smith works for T ABC and has been a peace officer for 8 years. He testified that he reviewed calls for service at the old location for the past two years. Agent Smith stated that the calls showed a high volume of complaints, inspections, and undercover operations at the old location. The undercover operation resulted in the discovery of a minor pe1mitted to consume alcohol. On cross-examination Agent Smith testified that the new bar is located within a strip center that includes a liquor store, a convenience store allowed to sell beer and wine is located on the same block, another convenience store allowed to sell beer and wine is located on the next block, and a bar called Riley's Pub is also located on the next block. 7 He also testified that the addition of The Nest to the area would not change the character of the neighborhood. Agent Smith confirmed that there is no pending enforcement action against Applicant. 6 BYOB generally refers to a situation where customers bring their own beverages rather than purchasing them from the establishment. 7 See also Applicant's Ex. I showing the location of the new location of Macaw's Bar and the other ~stablishments.

7 SOAH DOCKET NO PROPOSAL FOR DECISION PAGE4 TABC employee Lieutenant John Graham has been a peace officer for 17 years and testified that he was familiar with the TABC rule violations that occurred at the old location. 8 He stated that many of the violations are public safety violations that persisted even after he met with the owners on several occasions. Mr. Graham testified that Mr. Smith is a "hands-on" manager and in control of his bar and, consequently, he believes the new bar will be operated in the same manner with the same issues as the previous bar. He also testified that other clubs in town have had homicides at the venues and are still in operation. Commander Blackmon is a commander at Corpus PD. He testified that he has been familiar with the operation of the old location for the past 10 years. He described the old location as "manpower intensive" such that a disproportionate number of officers had been dispatched to the bar in comparison to other licensed premises in the area. The police attention to the old bar resulted in call delays in other areas and overtime expenses because many of the calls would come in at the end of the officers' shifts, requiring overtime to allow the officers to make arrests and prepare reports. Since the new location opened in mid-december, Commander Blackmon testified that 13 noise complaints have been made. Three citations have been issued, and the Smiths have taken measures to address the noise. All c9mplaints were anonymous. Captain Russell Sherman is the captain of a gang unit at Corpus PD and has worked for Corpus PD for 25 years. As part of his job duties, Captain Sherman manages a database of known gang members and documents gang activities. He testified that units were assigned to go to the old location at closing time and on busy nights because there were often problems in the parking lot, including fights. Captain Sherman also testified that the old location was a known gang hangout; however, he could not say which gangs gathered there or whether more than one gang gathered there. He also testified that all bars are prone to problems to some extent and that he was not very familiar with this case. 8 The violations are detailed in TABC Ex. 2.

8 SOAR DOCKET NO PROPOSAL FOR DECISION PAGES C. Applicant's Evidence Applicant's evidence consisted of ten exhibits, all of which were admitted without objection, and the testimony of six witnesses. Edmond Ocanas is a radio personality and disc jockey and also works in the production and marketing of clubs, bars, and bands. He has hosted themed nights at many bars in the area, including the old location of Macaw's Bar. He testified that the Smiths had come to him about their plans for the new venue, which include catering to an older demographic, enforcing a dress code, a policy where only patrons aged 21 and up are allowed entry, promoting Texas country music and local rock bands, providing a nice interior with multiple large screen televisions, and hiring off-duty Corpus PD officers for security. Officer Jesus Saenz testified that he had been a Corpus PD officer for 26 years and that he had worked security for the Smiths for 6-7 years. He testified that when people were arrested or caused trouble at the old location, they were banned from the club. He testified that a change in format of the music from rap to local singer-songwriters would do much to influence the crowd that would frequent the new location. Neil Smith testified that he took over ownership and operation of the old Macaw's Bar in He argued that the new business will not be a relocation of the old one, but will be an entirely different operation because it has a new name, is located far from the old location, has a premium interior, will cater to an older crowd due to a change in the music format and higher priced premium drinks on offer, will have a dress code, and will have a 21 and older policy. He stated that he will continue to hire off-duty police officers for security. He also testified that, in response to the noise complaints at the new location, he has installed ceiling tiles and does not allow trash to be taken out the back door (which backs up to a residential area) so that the noise from the venue cannot escape from the back door. To settle the concerns of a former protestant (the Texas Driving School, which is located in the same shopping center), Mr. Smith agreed to

9 SOAH DOCKET NO PROPOSAL FOR DECISION PAGE6 install additional secmity cameras. Mr. Smith has also arranged to utilize a neighboring parking lot that is owned by the same owner as the shopping center. Leslie Lamon testified that she is a former employee of the Smiths who worked for them for 6 years and never observed any illegal activities or TABC violations or citations at the bar. Lisa Mo1Tis has a TABC license and has been in the bar and real estate business for years. One of the Smiths' sons worked for her for 4 years. She has a high opinion of the Smiths and their ability to own and operate a bar properly. IV. ANALYSIS AND RECOMMENDATION Protestants argue that patterns of past behavior can be used to predict futme behavior and that the new venue will simply be a continuation of the old venue under a new name, including T ABC violations, gang-related incidents, and other problems associated with the old venue. Protestants also question the Smiths' management skills and argue that the clientele of the old location, including gang members, are loyal to the Smiths and will follow them to the new venue. This will again result in a disproportionate use of community resomces to respond to issues at the new location. Applicant argues that the permit for the old location was renewed year after year and that there is no active enforcement action against it. Applicant also argues that Protestants presented no facts to back-up their allegations that more resomces were required at Macaw's compared to other clubs in town and asserts that the problems cited by Protestants are common to all clubs. Further, most TABC violations in the record do not have anything to do with operations, but are related to payments to providers. Protestants did not meet their burden of proof. All of Applicant's T ABC rule violations were resolved without enforcement actions seeking to revoke Applicant's license. Additionally,

10 SOAR DOCKET NO PROPOSAL FOR DECISION PAGE7 most violations do not relate to the place and manner of operations, but to cash and credit Jaws and tax issues. Although Protestants pointed to one specific violation of permitting a minor to possess or consume alcohol in January of 2014, Applicants could show no pattern of this violation or that any of the noise complaints or other issues with the prior location were any different than those issues common with any similar establishment. Finally, the location of the new bar will not change the character of the neighborhood. It is located in the same strip center as a liquor store, is within two blocks of two convenience stores that serve beer and wine, and is within two blocks of another bar. Therefore, Protestants failed to prove that "the place or manner in which the applicant may conduct his business warrants the refusal of a permit based on the general welfare, health, peace, morals, and safety of the people and on the public sense of decency," in violation of Code 11.46(a)(8). The Application should be granted. V. FINDINGS OF FACT 1. Macaw's Inc. d/b/a Macaw's Bar (Applicant) filed a supplemental application (Application) with the Texas Alcoholic Beverage Commission (TABC) for a Mixed Beverage Permit, a Mixed Beverage Late Hours Permit, and a Beverage Cartage Permit for the premises known as The Nest located at 6534 Yorktown Blvd., Suite 116, Corpus Christi, Texas (Premises). 2. TABC's staff (Staff) and the Corpus Christi Police Department (Corpus PD and together with Staff, "Protestants") protested the granting of the Application on the basis that Applicant or Applicant's agent, servant, or employee may conduct Applicant's business in a manner contrary to the general welfare, health, peace, morals, and safety of the people and the public sense of decency. 3. Applicant is owned and operated by Neil and Marissa Smith. The Smiths previously operated a club called Macaw's Bar approximately 5 miles away from the Premises that catered to a young crowd. 4. A number of TABC violations occurred at Macaw's Bar, including a violation for permitting a minor to possess or consume alcohol in January of Most of the TABC violations at Macaw's Bar while the Smiths operated it were for credit and cash law or tax issues. 5. The Smiths intend to operate the Premises to cater to an older crowd. The Smith's intend to take the following measures to do so: prohibit entry to patrons younger than 21 years

11 SOAH DOCKET NO PROPOSAL FOR DECISION PAGES of age; institute a dress code; offer more expensive, high-end drinks; and utilize a music format consisting of 1980s and 1990s music and local country and rock performers. 6. Operation of the Premises will not change the character of the neighborhood if the Application is granted. The Premises is located within two blocks of the following: two convenience stores that sell beer and wine, a liquor store, and another bar. 7. On October 13, 2016, TABC referred the matter to the State Office of Administrative Hearings (SOAH) for a contested case hearing. 8. Staff issued a Notice of Hearing on February 14, The notice informed the parties of the time, date, and location of the hearing on the Application; the applicable rules and statutes involved; and a short, plain statement of the factual matters asserted. 9. The hearing was held on February 17, 2017, before Administrative Law Judge Holly Vandrovec at the SOAH offices in Corpus Christi, Texas, and the record closed that day. Staff was represented by David Duncan, attorney. David Blackmon, Commander at the Corpus PD, represented the Corpus PD. Applicant was represented by Less Cassidy, attorney. VI. CONCLUSIONS OF LAW 1. T ABC has jurisdiction over this matter pursuant to Texas Alcoholic Beverage Code Chapters 1 and 5 and Section l 1.46(a)(8). 2. SOAH has jurisdiction over all matters related to conducting a hearing in this proceeding, including preparation of a proposal for decision with findings of fact and conclusions of law, pursuant to Texas Government Code Chapter Notice of the hearing was provided in accordance with Texas Government Code Sections and The hearing was conducted in accordance with Texas Government Code Chapter Protestants have the burden of proof by a preponderance of the evidence. 1 Tex. Admin. Code A preponderance of the evidence does not show that there are reasonable grounds to believe and find that the place or manner in which Applicant may conduct business warrants the refusal of the permit based on the general welfare, health, peace, morals, and safety of the people and on the public sense of decency. Texas Alco. Bev. Code 11.46(a)(8).

12 SOAH DOCKET NO PROPOSAL FOR DECISION PAGE9 7. Applicant's supplemental application for a Mixed Beverage Permit, a Mixed Beverage Late Hours Permit, and a Beverage Cartage Permit should be granted. SIGNED: April 12, HOLL VAl~DROVEC ADMINISTRATIVE LAW JUDGE STATE OFFICE OF ADMINISTRATIVE HEA.IUNGS

13 \ \ \ State Office of Adn1inistrative Hearings Lesli G. Gilm ChiefAdministrative Law Judge (RT=Crf~lED Ai"'K 1 7 ZOi7 t :; ~ r-:: r.t:f~ f.'"' :l~.....tjb ~-;;,.!~'(~ tj N April 12, 2017 Sherry Cook Executive Director Texas Alcoholic Beverage Commission 5806 Mesa Dr. Austin, TX VIA INTERAGENCY MAIL RE: SOAH Docket No ; Texas Alcoholic Beverage Commission & City of Corpus Christi Police Department v. Macaw's Inc. d/b/a Macaw's Bar Supplemental Application Dear Ms. Cook: Please find enclosed a Proposal for Decision in this case. recommendation and underlying rationale. It contains my Exceptions and replies may be filed by any party in accordance with 1 Tex. Admin. Code (c), a SOAH rule which may be found at Sincerely, HV/tt Enclosure Holly Vandrovec Administrative Law Judge xc David Duncan, Jr., Staff Attorney, Texas Alcoholic Beverage Commission, 5806 Mesa Drive, Austin, TX VIA INTERAGENCY MAIL Dina Powell, Offi ce of General Counsel, Texas Alcoholic Beverage Commission, 5806 Mesa Drive, Austin, TX VlA INTERAGENCY MAIL Macaw's Inc., 3002 Twin Creek Dr., Corpus Christi, TX VIA REGULAR MAIL Mike Markle, Chief of Police, Corpus Christi Po!ice Department, P.O. Box 9016, Corpus Christi, TX 7& W. ls'h Street, Suite 504, Austin, Texas 78701/ P.O. Box 13025, Austin, Texas (Main) (Docketing) (Fax)