Memorandum
City of Lawrence
Legal Services
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TO: |
Toni Wheeler, Interim Director of Legal Services
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FROM: |
Scott J. Miller, Staff Attorney
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Date: |
December 21, 2006
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RE: |
Entertainment Venue Licensing |
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Introduction
Earlier this year, I authored a memorandum discussing several measures that might improve the safety of our downtown area and other places of public assembly. It is my understanding that at this time the Governing Body wishes to consider one of those options – a licensing scheme for entertainment venues.
There are many ways to implement such a scheme that may positively impact safety, and a myriad of policy decisions that must be made to tailor such a scheme to the requirements of the City of Lawrence. The factors that must be balanced in each city are unique and while other cities’ efforts provide some guidance, what looks good on paper does not always function well in practice. Before proceeding with analysis of specific options, then, it is important to discuss why we need legislation to address these concerns, what such a proposal might accomplish, and what it will not achieve.
The obvious first question regarding entertainment venue licensing is why these concerns cannot be addressed through the liquor licensing scheme as they are in many other cities and states? After all, virtually every entertainment venue has a liquor license, and the perception is that venues that serve alcohol are more likely to be problem locations than those that do not. The answer is that liquor control laws differ markedly from state to state, and in Kansas those laws vest authority to control establishments that sell liquor by the drink in the hands of the State, and not local, government.
The City does license drinking establishments, but the ability to suspend those licenses is given to the Kansas Secretary of Revenue by K.S.A. 41-2611. Because the City has no independent ability to make licensing decisions, the City’s fee for a license is essentially a license tax authorized under K.S.A. 41-2622(b). This contrasts directly with cereal malt beverage licenses because the City is given direct authority over these licenses. Most entertainment venues, however, are licensed as drinking establishments as opposed to maintaining a cereal malt beverage license.
That is not to say that the City has no ability to influence the Secretary of Revenue’s licensing decisions. Liquor licenses typically must be renewed on an annual basis, and the City receives notice of the licenses up for renewal 45 to 60 days before they are scheduled to be renewed. The governing body of a City is allowed to request a hearing before the Department of Revenue at that time, and it may provide testimony urging that the Department of Revenue refuse to grant or renew a license. K.S.A. 41-2652 directs that any such testimony be considered in a licensing decision. Ultimately, however, the decision regarding whether to grant, deny or revoke a license is left to a state agency. This falls short of substantial and immediate local control over problem establishments.
In light of the fact that liquor licensing is not within the City’s control, are there any other means to attempt to mitigate the harms attributed to some establishments? Taking a step back and reframing the issue suggests that the answer to this question is yes. Although the use of alcohol clearly inhibits one’s inhibitions and sometimes fuels crime and neighborhood problems, at a more fundamental level these problems may occur at any public place held open for people to gather for entertainment. Therefore, if a city may not affect the problems in question through liquor licensing, might it combat the same problems with a licensing scheme for entertainment venues. The answer most likely is yes, provided that progress is measured by realistic goals. Licensing schemes work very efficiently when they are used to provide operational rules and procedures aimed at addressing specific problems. For example, minimum equipment and security requirements, the training of venue personnel in appropriate means of defusing hostility, hours and methods of operation, and many other things may be addressed with such a scheme, and each will be discussed below in turn. As a general rule, the more concrete and specific a goal is, the more easily it may be achieved by regulatory efforts.
While venue licensing is good at meeting a wide range of specific and concrete goals, it has many limitations. Often, one of the immediate goals of this sort of licensing scheme is to mitigate the effects of an entertainment venue on the surrounding properties and neighborhoods. To the extent that the problems at issue can be addressed by specific steps that are clearly within the power and responsibility of the venue owner or operator, the regulatory scheme is very powerful. To the extent that the problems at issue are occurring within or very close to the entertainment venue, the regulations may produce very efficient results. On the other hand, there are no easy answers regarding what the exact responsibility of an entertainment venue operator is regarding his or her patrons’ behaviors, and when those responsibilities begin and end.
Just as every City’s response to its unique problems requires a unique solution, that solution will provide a wide variety of unique challenges that must be navigated successfully if the law is to have the positive effect that is desired. It is my opinion that entertainment venue licensing cannot resolve every ill that sometimes results when people gather together for socializing or entertainment. Neither can it fully salve the wide variety of citizen frustrations that are caused by having some entertainment venues in their neighborhoods or in their city. For the licensing scheme to have the most impact, it must be used to address specific problems in conjunction with a sufficient police presence dedicated to enforcing existing Kansas and Municipal criminal law. Legislation without an adequate enforcement mechanism is unlikely to be successful.
Laws of Other Cities
Although I believe that the City of Lawrence would be best served by drafting its own ordinance based upon our local conditions, other cities’ attempts to enact a licensing scheme are illustrative. I have included the ordinances of several cities as an attachment to this document for comparison purposes. A review of the ordinances shows that they focus on the safety issues inherent in many types of entertainment venues, and attempt to make certain that entertainment events are conducted in a safe and legal atmosphere.
One of our nearest neighbors with such a licensing scheme is the City of Olathe. Their regulations are found in Chapter 5.10 of their municipal code, and apply to “warehouse entertainment clubs.” Whether or not an entertainment club is a warehouse entertainment club depends upon its fire occupancy rating. Any commercial premises offering entertainment to its patrons with an occupancy rating of more than 350 is required to be licensed. The definition of entertainment is fairly broad and includes live performers, dancing to live or recorded music, and listening to a “DJ” or disc jockey, but there are many exceptions to the ordinance for incidental background music, movie theaters, other theaters, wedding receptions, and other similar events. At the time of application for a license, a written security and emergency management plan is required to be filed. Specific license conditions may be imposed that are necessary, based upon specific and articulable facts, to protect from criminal activity, prevent public nuisances, and to enhance fire protection, traffic control, crowd control, security lighting and emergency access.
A public hearing is held before the granting or renewal of a license for a warehouse entertainment club. The licensee is subject to many obligations, including the hiring of a specified number of licensed security personnel. Law enforcement officers have free access to the clubs for enforcement and inspections. A license can be suspended for many reasons, including if the establishment becomes proximate cause for a significant increase in criminal activity on the premises or in the immediate vicinity. A copy of the Olathe ordinance is included in the attachments to this memorandum.
In passing its ordinance, the Olathe City Council made several findings regarding the businesses it sought to regulate. These findings included the fact that warehouse entertainment clubs often cause a public nuisance such as excessive noise, litter and trash, traffic congestion and obstruction of emergency access. Further, the ordinance specifically cites the need for an increased police presence to keep the public peace at such establishments and the commensurate increase in costs to the public as reasons that justify the ordinance’s provisions. These concerns are some of the same concerns that are present in Lawrence as well. For example, there are times when virtually every available City of Lawrence police officer is in the downtown area handling an incident or emergency at an entertainment venue. Of course, this is just one in a list of potentially valid concerns, including the increase of criminal activity or nuisance behavior, that might suggest that it is appropriate to enact such an ordinance.
An important thing to realize, and something that the Olathe ordinance illustrates, is that failure to meet licensing requirements does not necessarily put a venue out of business. The actual consequence of a failure to obtain or maintain a license is that the business may not host entertainment, as that term is defined in the licensing scheme. This results because, as mentioned above, any ordinance of this type enacted in Kansas creates a bifurcated licensing system. The absence of an entertainment license does not have any effect on a drinking establishment license, and therefore the business may still remain open to dispense alcoholic liquor.
Olathe’s approach is not the only possible approach. As a review of the attached material indicates, cities take a wide variety of approaches in the licensure of entertainment venues depending on the targeted harms. Merely because something is contained in another city’s ordinances, however, does not guarantee that it is effectively enforced there, and it certainly does not guarantee that it would be enforceable here given the difference in state laws. That is why it is important to tailor the proposal to our community’s specific needs. The next section of this memorandum discusses some of the policy questions that must be answered to effectively implement a licensing scheme in Lawrence.
Policy Questions
Because of the breadth of policy questions that must be answered during the ordinance drafting process and the wide variety of techniques that may be used to combat the harms perceived to be associated with some types of entertainment venues, advance guidance from the Governing Body on the acceptable parameters of the licensing scheme would seem to be appropriate. While the list of questions discussed below is by no means exhaustive, direction on these issues would provide a basic framework that other provisions could be appended to.
1. What type of entertainment venues do we seek to regulate?
This is perhaps the most fundamental question that must be answered. Many things can be construed as entertainment. Concerts, plays, song and dance acts, patron dancing, motion pictures and video and the playing of recorded music are all examples of activities that some cities regulate. Clearly the more difficult question is whether we wish to regulate the same activities in some contexts and not in others. For example, some cities exempt the playing of recorded music in retail stores and restaurants from the licensing requirements, while regulating it in club settings.
One factor that cannot generally be used as a distinguishing factor in a licensing scheme is the content of the performance. For example, it would be generally impermissible to require a venue playing rock music to be licensed and allow an identical venue playing bluegrass music to be exempted from the licensing requirements. Exceptions should be based upon content neutral considerations.
2. Do we wish to only regulate entertainment venues above some certain occupancy? If so, what occupancy?
From a City resources standpoint, an argument can be made that at a certain level crowds get large enough to overwhelm the City’s ability to effectively respond to public safety emergencies and traffic problems associated with those crowds. This might suggest that it is more appropriate to regulate only the largest venues, as would the fact that larger businesses might be better able to accommodate the administrative overhead that is necessary to comply with a licensing scheme. On the other hand, venues of any size might create neighborhood problems that are could be addressed in a licensing ordinance. The question, then, is where to draw the line.
3. What are the primary harms that are being legislated against? Is the City worried most about criminal activity? The impact of having an entertainment club on the surrounding neighborhood? The safety of individuals within the club?
A licensing ordinance can be drafted to be most effective if there are a series of tangible and concrete harms that it is designed to protect against. The more general the harms, the more difficult it is to draft an ordinance that is sufficient to combat those harms, is enforceable in court, and passes muster under Fourteenth Amendment vagueness analysis. What harms do we wish to protect against in Lawrence?
4. Should security measures or other technical requirements be included in the ordinance? If so, what are appropriate levels?
Many licensing ordinances require licensed venues to maintain a written security and evacuation plan. Some mandate lighting requirements, the employment of licensed security officers, and specific training for some or all venue employees. Other requirements that may be imposed include the maintenance of a surveillance camera system that may be accessible to the police if an incident occurs in the licensed premises. On the other hand, it is possible to draft a licensing scheme that has none of these requirements.
5. Should closing times be specified in the ordinance? Should certain types of venues be age restricted?
These questions are fairly self-explanatory, but the modification of closing times or restricting the ages of the patrons that may be admitted to entertainment venues are both provisions that may be included in a licensing scheme.
6. What should be the penalty for noncompliance?
Should the substantial violation of licensing provisions result in the immediate suspension or revocation of an entertainment license, or might there be appropriate intermediate sanctions or restrictions that may be placed on a licensee? For example, would limiting the licensee’s occupancy, hours of operation, requiring other security measures or similar probationary requirements be more appropriate? The former options have the benefit of requiring very little City staff supervision to implement while the more detailed options require more involved compliance enforcement.
Also, would it be appropriate to impose criminal penalties not only for operating without a license, but also for other acts associated with the operation of the entertainment venue. For example, if an operator was limited so patrons of at least 18 years of age should there be criminal liability for admitting younger patrons similar to the liability imposed for serving alcohol to underage individuals?
7. To what extent should business owners be responsible for the impact of their business’ patrons on the surrounding community? How do we measure that impact?
This is without any doubt the thorniest issue from a drafting and enforcement perspective. It is relatively easy to impose liability on a business owner for things that occur on his or her business premises. The more difficult question is how and when liability can be imposed for actions by a licensee’s patrons before or after they have left the business in areas where the business owner has no direct control. There is a paucity of authority on this issue in Kansas. A search of the law of other states, however, demonstrates that a public nuisance theory has been used, from time to time, to prohibit certain businesses from operating due to the effect that those businesses have on the surrounding community.
A line of several Pennsylvania cases illustrates this reasoning. In Reid v. Brodsky, 397 Pa. 463, 471, 156 A.2d 334 (1950) the court ruled that:
Until the establishment of this restaurant in the area such offensive public conduct was unknown; it was the establishment of the business within this area which attracted these persons whose conduct so mortified and disgusted the residents of this neighborhood. The factor which introduced this conduct into the area was the establishment of this taproom-business with its attraction for undesirables from other areas; assuming arguendo, that appellants could not control the conduct of their patrons outside the premises, is that any excuse for the continuance in business of this establishment whose existence is solely and primarily responsible for the attraction of those persons into this neighborhood whose conduct so offends the morals of the property owners situated therein? Assuming that appellants could not control the conduct of their patrons, is this business which brings into the area by way of attraction those persons whose conduct is reprehensible to be permitted to be operated simply because it has been given an aura of respectability and legality by the issuance of a liquor license? The conduct which has disturbed the peace and quiet of this residential area and affronted the sensibilities of appellees endeavoring to maintain in this urban area a decent, clean and wholesome environment in which to live and rear their families directly resulted from the operation of this taproom-restaurant. The only practical manner in which this area can be protected from this unwholesome conduct is through a cessation of the operation of this business
The Pennsylvania courts have reaffirmed this reasoning in Commonwealth v. Graver, 334 A.2d 667 (1975), and Commonwealth v. J-D 201 Corp., 38 Pa. D. & C.3d 279, 1983 WL 1481 (Pa.Com.Pl. 1983).
Of course, whether identical reasoning would be adopted in Kansas is a question that still must be decided. Generally, nuisance analysis has been used for things that have happened on or perhaps have issued from a property, such as litter or noise. If this sort of theory is included in a licensing scheme, I think it is important to codify an objective means of measuring an entertainment venue’s impact on the surrounding area. An example might be the increase in crime rates in a neighborhood while a business is hosting entertainment.
Because of the lack of direct authority on this sort of issue, it is possible that a workable provision would need to be developed over time through careful experimentation. Finally, it should be pointed out that many cities that implement a venue licensing scheme do not extend any owner responsibility for conduct off of the business property.
Conclusion
If the Governing Body wishes to consider implementing an entertainment venue licensing scheme, I stand ready to draft an ordinance for discussion. For the sake of efficiency, answers to some of the questions posed above would prevent the presentation of an ordinance that grossly misses the mark when it comes to legislative intent. Please let me know if you have any further questions.