PURPOSE:

This report requests City Council authorization for the City Manager to file a protest letter on behalf of the City of Burbank to the State of California Department of Alcoholic Beverage Control (ABC) on a pending alcohol license transfer application at 260 East Magnolia Boulevard (Gitana).  In addition, this report requests Council authorization to send additional protest or comment letters to ABC regarding this establishment should additional licenses or transfers be requested in the future, but only when determined appropriate by the City Manager.

BACKGROUND:

On September 30, 2003, the City Council adopted Resolution No. 26,561 to revoke Conditional Use Permit (CUP) Nos. 98-18 and 99-34.  These CUPs allowed Gitana to operate a nightclub, sports bar and cigar lounge, and billiard parlor.  Upon revocation of the CUPs, Gitana was allowed to operate only as a restaurant with incidental alcohol pursuant to the Burbank Municipal Code[1] and the terms of Planned Development No. 95-1, in which the business is located.

Business Tax Registration

Shortly after the CUPs were revoked, the operation of Gitana was apparently transferred from the owner and CUP applicant ADRD, Inc. to Dany Georges, owner and operator of the now-closed Middle East Connection restaurant on Burbank Boulevard.  On October 27, 2003, Mr. Georges applied for a business tax registration/business permit as the new owner of the business to operate a restaurant with incidental alcohol.  On the application, he listed the starting date of the business under his ownership as November 1, 2003.  Mr. Georges verbally told city staff that he has actually been operating the restaurant portion of the business for two years.[2]  The Planning Division will not approve such an application without first approving a floor plan of the business that demonstrates compliance with the code requirements for a restaurant with incidental alcohol.  Although Mr. Georges produced several floor plans, none were found by Planning staff to be consistent with the code requirements for a restaurant with incidental alcohol.  Staff provided written and verbal guidance to Mr. Georges and his architect regarding the plans and how best to meet the code.

An acceptable plan was never submitted, and the business permit application was ultimately denied.  Mr. Georges has continued to operate Gitana without a valid business permit.  The original business owner, ADRD, Inc., does not appear to be on site or involved in the operation of the business, and has surrendered the ABC license pending transfer to Mr. Georges� father (see below). 

Alcohol License

Gitana has continued to sell alcoholic beverages since its �transfer� to new ownership on or about November 1, 2003.  On December 9, 2003, the City received notification from ABC of an application by Joseph Georges, Dany Georges� father, for a person-to-person transfer of Gitana�s ABC license.  It is a violation of the California Business and Professions Code for an individual to sell alcoholic beverages without a license.  ABC is currently investigating this and other potential violations of the Business and Professions Code by both Gitana�s previous and new owners.  In addition, charges have been filed against a bartender at Gitana for serving alcoholic beverages to two minors.

Business Operations

Since the CUP revocation, Gitana has failed to abide by the BMC requirements that alcohol sales be incidental to the restaurant.  It appears that any restaurant operations are actually incidental to the alcohol sales.  Staff has notified Mr. Georges several times that the floor plan layout and fixtures of the business are not consistent with the requirements of a restaurant with incidental alcohol and must be modified.  These directions have been ignored.  The bar area continues to occupy more than the allowed 15 percent of the floor area of the establishment and the furniture and seating arrangements reflect a bar or lounge rather than a restaurant.

Staff is also aware that Gitana continues to allow and promote dancing in violation of the Burbank Municipal Code and Planned Development No. 95-1.  City staff have witnessed the so-called �VIP Lounge� area (formerly the billiards area) being utilized as a dance floor.  In December, Gitana held a heavily-publicized special evening event that included a disc jockey and a cover charge, similar to a typical nightclub or bar business.  The following excerpt is taken from Gitana�s web site, and clearly shows the intent to operate the business as more than a restaurant with incidental alcohol.  While live entertainment is permitted in restaurants, the web site discusses activities far beyond just live entertainment in a restaurant setting (emphasis added):

Don't be mistaken, we are not only a restaurant; on the contrary dinner is only the beginning! Make plans to stay the evening. There is a five-man band playing all the latest hits to keep you dancing all night. For those who like to watch rather than participate, they also have the top dancers from all over the Middle East putting on a variety of shows. Gitana has hosted many functions, and we have catered for everything from concerts to private parties. We have brought in many infamous performers from all over the Middle East, arranging for them to perform at places like the Universal Amphitheatre and the historical Palladium.

You can move outside to your choice of two separate patios to enjoy a cocktail and a smoke. There is a cigar lounge offering you over 50 different types of cigars. And a Hookah bar with over 14 different flavors of tobacco to satisfy your curiosity.[3]

It is important to note that while the law enforcement problems are not nearly as severe as they were when the nightclub was in full operation, the business is still in violation of the BMC and the owners/operators do not seem inclined to correct their conduct.

License Process

When an operator applies to the ABC to sell alcoholic beverages within the City, ABC notifies the City of their pending application.  On certain licenses (like this request for transfer), the City has the opportunity to comment and/or object to the issuance or transfer of the license.  The City may request that certain conditions be placed on the license and the ABC may impose, reject, or modify those conditions.  This comment or protest letter, however, must be filed by the governing body, or their designee, on behalf of the City. 

City Protest

It is not often that the City protests or comments on alcohol licenses since the City controls the locations where alcohol may be sold through the Zoning Ordinance.  The City�s own CUP provisions usually enable the City to impose the necessary conditions on a particular business to ensure that it is not detrimental to the public health, safety, and welfare.  In this case, however, there is no pending CUP application, and commenting on an ABC license is not unprecedented.  In August 2003, the City Council authorized staff to send a comment letter to ABC regarding the transfer of an alcohol license for the business located at 237 East Olive Avenue.  Staff requested the ability to further impose conditions by way of the ABC alcohol license as an alternative to the long and difficult process of modifying or revoking the CUP for that business.

Gitana�s situation is different in that the existing CUPs have already been revoked by the City Council and there are no pending CUP applications.  The City�s concerns are primarily with Gitana�s apparent operation in direct violation of several sections of the Burbank Municipal Code and other state penal statutes.  Violations of most BMC sections are misdemeanors.  The City Attorney�s office is currently evaluating the facts and circumstances surrounding this business in order to determine the appropriate course of action in this regard.  Staff believes that in light of Gitana�s blatant disregard for the Burbank Municipal Code requirements both under the �previous� owner/operators and the �new� owner/operators, this information should be conveyed to and considered by the ABC in its evaluation of any transfer of the alcohol license. This process provides an additional avenue for ensuring that Gitana comes into full compliance with the Burbank Municipal Code and applicable provisions of state law.

DISCUSSION AND RECOMMENDATION:

Staff recommends that the City Council authorize the City Manager to file a written protest and request for denial regarding the transfer of the ABC license from ADRD, Inc. to Joseph Georges.  In the event that the transfer is approved, staff will request in the alternative that conditions be placed upon the license transfer.  These conditions would include the following:

Food preparation and sales: Although the ABC license in question is for a general eating place, there is no requirement that the food be offered at all times during operating hours nor is there a requirement that food be prepared on-site.  Adding a requirement to have food prepared on-site and available in all areas of the establishment during all operating hours will help to ensure that a full menu is readily available such that the business functions like a restaurant rather than a bar or club.

Advertising: Staff believes that there should be no advertising of drink specials or any discussion of alcohol in any advertising.  Specifically, the distribution of flyers identifying special drink nights or events is problematic and can draw large crowds seeking to consume alcohol.

Admission charge: Restaurants generate profit by selling food and beverages, and should not need to require a cover charge for customers to enter the business.  Cover charges are reserved for nightclubs and bars, not restaurants.  If Gitana was not able to charge a cover, it would be compelled to operate just as a restaurant.

Hours of operation: Restaurants are typically open during daytime and evening hours, five or more days per week, not just late at night or on weekends.  If Gitana is required to be open for both lunch and dinner hours at least five days per week, it would resemble a typical full service restaurant operation.

Dancing: Due to the revocation of its conditional use permits, Gitana is no longer able to offer dancing per the Burbank Municipal Code.  Staff believes that placing this as a condition on the ABC license would provide an additional means of ensuring compliance, and additional consequences for violation.

Live entertainment: No live entertainment should be permitted except for non-amplified musicians such as a guitarist or trio.  Any music allowed should be for background ambiance only and not the primary focus of the establishment, consistent with a restaurant atmosphere.  Amplified musicians, disc jockeys, and other such performers are typical for bars or nightclubs, not for restaurants.  Further, no promoters should be permitted who would bring in outside entertainers and advertise special events involving live entertainment.

Staff requests that the City Council authorize the City Manager or her designee to send a protest letter to ABC for a pending alcohol license transfer for Gitana at 260 East Magnolia Boulevard.  Staff further requests Council authorization to send additional protest or comment letters to ABC regarding 260 East Magnolia Boulevard should additional licenses or transfers be requested in the future, but only when determined appropriate by the City Manager.

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