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RESOLUTION NO. 94-25 A RESOLUTION OF THE CITY OF MOSCOW, A MUNICIPAL CORPORATION OF THE STATE OF IDAHO, DENYING THE TRANSFER OF A LICENSE FOR THE RETAIL SALE OF BEER AND WINE FROM W.W.R., INC., DBA "XENON" TO JESSE F. JOHNSON, DBA "THE EDGE", WHEREAS, Jesse F. Johnson has applied for the transfer of a license for the retail sale of beer and wine from W.W.R., Inc., dba "Xenon" to Jesse F. Johnson, dba, "The Edge", and; WHEREAS, the City of Moscow has reviewed the qualifications of the applicant to determine if he possesses all of the qualifications and none of the disqualifications as defined by Idaho Code title 23, chapter I 0 and Moscow City Code title 9, chapter 6, and; WHEREAS, the matter was taken up before the Council on November 7, 1994, at which time evidence was considered. NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND THE CITY COUNCIL OF THE CITY OF MOSCOW AS FOLLOWS: That the application for transfer of a license for retail sale of beer and wine from W.W.R., Inc., dba "Xenon" to Jesse F. Johnson, dba "The Edge" is hereby denied for the reasons set out in the "Findings of Fact, Conclusions and Written Notice Pursuant to Moscow City Code 9-6-1 0" entered by the City Council in this matter. PASSED by the City Council and APPROVED by the Mayor this 21st day of November 1994 ATTEST: ·eL. Elaine Russell, Clty Je]i RESOLUTION Y/c Paul C. Agidius, PAGE 1 ---PAGE BREAK--- BEFORE THE CITY COUNCIL OF THE: CITY OF MOSCOW STATE OF IDAHO IN RE: The Application of JESSE F. JOHNSON, dba the "EDGE" For transfer of a beer and wine license from W.W.R., Inc. ) ) ) ) ) ) ) ) ) ) FINDINGS OF FACT, CONCLUSIONS AND WRITTEN NOTICE PU RSUANT TO MOSCOW CITY CODE 9-6- 1 0 An application for transfer of a City of Moscow license to sell beer and wine at retail was filed by the applicant, Jesse F. Johnson, on August 8, 1 994. The application was considered at the August 1 5, 1 994 , Special Meeting of the Moscow City Council. Action on the application was tabled by the Council because of the applicant's failure to obtain a valid Latah County license as required by Moscow City Code 9-6-1 0 as well as other deficiencies in the application. The matter was taken up by the Council at the September 1 9, 1 994. The applicant had provided a copy of a "Lease of Space in Building" to the City Attorney less than five hours prior to the Council meeting. Until that time the applicant had not submitted a copy of a lease as required by Moscow City Code 9-6- 1 0 A. It was noted, however, that in conjunction with applicant's application for a Latah County license, the applicant had submitted two documents titled "Contractor Management Agreement" and "Lease of Restaurant and Bar Facilities". These documents were obtained by the City from Latah County. The applicant was advised at that hearing that the Council, in order to comply with Moscow City Code section 9-6-1 0 the application must be approved or denied within 45 days, and the applicant was given the choice of waiving the 45 day time limit in order to allow the applicant time to amend his application and to provide time for a review of the just-filed documents, or proceed at that time. The applicant chose to proceed with the hearing. At that time the application was denied on the basis of the applicant's failure: I. To affirmatively show that he is the bona fide owner of the business to be licensed, as required by Moscow City Code section 9-6- 1 3 B: and 2. To identity the name of the business to be licensed: and 3. To provide a diagram of the proposed licensed premises as required by Moscow City Code 9-6-14. FINDINGS OF FACT,CONCLUSIONS AND WRITTEN NOTICE PURSUANT TO MOSCOW CITY CODE 9-6-10 Page 1 ---PAGE BREAK--- Written notice was provided to the applicant pursuant to Moscow City Code 9-6- l 0 E. In that notice the applicant was advised that to obtain the license, the applicant must: l . Follow the application procedures required by Idaho Code and Moscow City Code; and 2. Affnmativcly show that the applicant is the bona fide owner of the business to be licensed; and 3. Define the licensed premises and provide a diagram. The applicant then made a new application for transfer dated September 23, 1 994. The new application contained a diagram of the premises, defining the licensed premises as the main portion of the mezzanine level of the building, and the application properly identified the name of the business as the "Edge". The applicant also submitted a copy of the "Lease of Space in Building" which purported to show that the applicant was the bona fide owner of the business to be licensed. The matter was presented at the October I 7, 1 994 special meeting of the Moscow City Council. At that time the Council was presented with a motion to approve the transfer of the license, which motion was defeated in a tic vote. The Mayor was not present to vote on the issue and break the tic. A further motion was made to reconsider the vote at the next regularly scheduled Council meeting when the Mayor would be present. The motion passed unanimously. The matter was again brought before the Council on November 7, 1 994. The applicant Jesse F. Johnson and Benjamin Tassler, President of W.W.R., Inc. were present at the meeting and made oral comments in support of the transfer. Duncan Palmatier, Latah County Commissioner presented oral comments in opposition to the transfer. The Council considered the following evidence prior to making a decision: I. Exhibit a. Original Application for Transfer of Beer and Wine License to Jesse F. Johnson, dba "Xenon" from W.W.R., Inc., dba "Xenon"; and b. Idaho State Retail Alcohol Beverage License; and c. Affidavit in Support of Application and License Investigation Report; and d. Written Denial of Transfer of Beer and Wine License. 2. Exhibit a. "Contractor Management Agreement"; and b: "Lease of Restaurant and Bar Facilities". FINDINGS OF FACT,CONCLUSIONS AND WRITTEN NOTICE PURSUANT TO MOSCOW CITY CODE 9-6-10 Page 2 ---PAGE BREAK--- 3. Exhibit a. Findings of Fact and Conclusions of Law of Latah County Commissioners, dated August 16, 1994; and b. Findings of Fact and Conclusions of Law of Latah County Commissioners, dated September 16, 1994; and c. September 3, 1994 letter from Benjamin Tassler; and d. September 13, 1994 corporate minutes from Benjamin President, W.W.R., Inc.; and e. Certificate of Assumed or Fictitious Name, re: "The Edge"; and f. Certificate of Assumed or Fictitious Name, re: "Xenon"; and g. Letter from Idaho State Department of Law Enforcement, dated August 19, 1994. 4. Exhibit a. Application of Jesse F. Johnson, dba "The Edge" for transfer of Beer and Wine License from W.W.R., Inc., dba "Xenon"; and b. Floor plan Sketch of licensed premises and diagram; and c. Financial Affidavit in Support of Application; and d. 1994 State of Idaho Retail Alcohol Beverage License issued to Jesse Franklin Johnson, dba "The Edge"; and c. 1994 Latah County Retail Alcohol Beverage License issued to Jesse Franklin Johnson, dba "The Edge"; and f. Personal Affidavit of Applicant in Support of Application and License Investigation Report; and g. "Lease of Space in Building"; and h. Addendum dated September 6, 1994, and signed by Jesse Johnson, Lessee; and i. Power of Attorney executed by Benjamin R. Tassler; and j. Consent to Conditions Pursuant to Issuance of Beer/Wine License to Jesse Johnson, dba "The Edge"; and k. Minutes of Moscow City Council Meeting of October 17, 1994. FINDINGS OF FACT 1. That Moscow City Code section 9-6-21 states, in pertinent part: Licenses issued under this Chapter shall not be transferred from one person to another, either by contract or operation of law, or otherwise, or from one location to another location, without the prior approval of the Council. Application to transfer any license issued hereunder shall be made to the The City Council shall by resolution grant or deny the transfer of said license . FINDINGS OF FACT,CONCLUSIONS AND WRITTEN NOTICE PURSUANT TO MOSCOW CITY CODE 9-6-i 0 Page3 ---PAGE BREAK--- 2. That Idaho Code section 23-100 I defines "premises" as: the building and contiguous property owned, leased, or used under government permit by a licensee as part of the business establishment in the business of the sale of beer at retail, which property is improved to include decks, docks, boardwalks, lawns, gardens, golf courses, ski resorts, courtyards, patios, poolside areas, or similar improved appurtenances in which the sale of beer at retail is authorized under the provisions of law 3. That on September 23, 1994, Jesse F. Johnson made application pursuant to Idaho Code Title 23, Chapter I 0 and Moscow City Code Title 9, Chapter 6 for transfer of a beer and wine license (on premises consumption) from W.W.R., Inc. dba, "Xenon" to Jesse F. Johnson, dba "The Edge". 4. That a previous application by Jesse F. Johnson for transfer of the same license had been denied by the Council on September 19, 1994 for the reasons stated above. 5. That the proposed licensed premises are owned by W.W.R., Inc., in whose name the subject beer and wine license was originally issued. 6. That the diagram of the licensed premises submitted with the application denotes that the proposed licensed premises is the mezzanine area of the "Xenon" building, which is open to sight and sound of the main floor of the building, which, according to the applicant and Benjamin Tassler, President of W. W.R., Inc., is a non-alcoholic dance club open to persons under 21 years of age. 7. That the applicant submitted a "Lease of Space in Building" executed by W.W.R., Inc., and Jesse Johnson, which purports to "lease" the mezzanine area to Jesse Johnson for purposes of operating a bar. That the "Lease of Space in Building" appears to have been executed properly by W.W.R., Inc. That a filing of assumed business name was filed with the State of ldaho. 8. That the applicant has been issued current Retail Alcoholic Beverage licenses by the State ofldaho and Latah County. 9. That the application designates that the applicant is not operating as a partnership or corporation. 10. That Idaho Code section 23-101(2)(a) and Moscow City Code section 9-6-13B.I. require that the application must show that the applicant is the bona fide owner of the business which will be engaged in the sale of beer at retail and with respect to which license is sought. I I. That the "Contractor Management Agreement" and "Lease of Restaurant and Bar Facilities" previously filed with Latah County in application for a county license clearly FINDINGS OF FACT,CONCLUSIONS AND WRITTEN NOTICE PURSUANT TO MOSCOW CITY CODE 9-6-10 Page 4 ---PAGE BREAK--- delineate that the applicant, Jesse Johnson, was to be an employee of W.W.R., Inc., and not a bona fide owner of the business seeking the transfer of the license. 1 2. That the applicant replaced the "Contractor Management Agreement" and "Lease of Restaurant and Bar Facilities" with the "Lease of Space in Building" submitted with the instant application. 1 3. That the "Lease of Space in Building" includes certain provisions which give rise to the inference that it is not a "lease", but evidence of some other form of relationship between W.W.R., Inc., and the Applicant: a. The "lease" creates a separate bank account for accounting of the gross proceeds of the bar business; and b. The "rent" for the proposed licensed premises is to be paid from the net proceeds of the business; c. "Lease" payments to Lessor, W. W.R., Inc., are not capped, while applicant's profit is capped at $ 1 ,000.00/month; CONCLUSIONS 1 . That a review of the diagram provided by the applicant shows the proposed licensed premises to be the mezzanine area of the "Xenon" building, which is open to sight and sound of the non-alcoholic, "under 2 1 " dance club. This dance club, although it is not proposed to be licensed by the applicant, is necessarily to be used by the applicant "as part of the business establishment in the business of the sale of beer at retail" as defined by Idaho Code 23-1 00 l Because of the configuration of the main floor and mezzanine area of the "Xenon" Building, and due to the fact that the two areas arc controlled by two allegedly separate entities, it is the conclusion of the Council that the licensed premises should include the main floor and the mezzanine area. 2. Because of the configuration of the main floor and mezzanine area of the "Xenon" Building, enforcement of the laws and ordinances regulating licensed beer and wine retail establishments is not possible, as the main floor is retained and controlled by W.W.R., Inc., and the mezzanine area is purported to be controlled by the applicant. It is arguable whether any action could be taken against applicant's license for activities occurring on the main floor which, if occurring on the mezzanine, would be grounds for revocation of the license. There are no terms in the "Lease of Space in Building" which would allow applicant to control the activities which occur on the main floor. 3. That the "Lease of Space in Building" submitted by applicant as required by Moscow City Code 9-6-1 OA., when taken in light of the previous "Contractor Management Agreement" and "Lease of Restaurant and Bar Facilities" fails to affirmatively show that the Applicant is the bona fide owner of the business which vvķll be engaged in the sale of beer at retail and with respect to which license is sought. The "Lease of Space in Building" and its predecessor documents indicates to the Council that this set of FINDINGS OF FACT.CONCLUSIONS AND WRITTEN NOTICE PURSUANT TO MOSCOW CITY CODE 9-6-10 Page 5 ---PAGE BREAK--- transactions was done for the purpose of retention of control by W.W.R., Inc., not to create a separate bona fide business enterprise by the applicant. THE APPLICANT, JESSE F. JOHNSON, IS HEREBY GIVEN NOTICE, PURSUANT TO IDAHO CODE SECTION 23-1016(2) AND MOSCOW CITY CODE SECTION 9- 6-1 OE: 1. That Idaho Code and Moscow City Code were used in evaluating your application; particularly the above-cited sections; and 2. That reasons for the denial of your application are contained m the foregoing Conclusions; and; 3. That actions you may take to obtain the desired transfer arc: a. The application procedures required by the Idaho Code and Moscow City Code must be followed; and b. You must amend the "Lease of Space in Building" to affirmatively show that you are the bona fide owner of the business to sell beer and wine at retail. Such amendments should include resolution of the issues of control of the "premises", including the main floor which are open to sight and sound of the proposed licensed premises, removal of any portions of the "Lease of Space in Building" that insinuate a partnership with W.W.R., Inc. You must affnmatively show that you are the bona fide owner of the business, and not merely the agent/manager for W.W.R., Inc. c. The licensed premises must include the main floor of the "Xenon" Building or it must be shown that the applicant has control over the activities occurring on the main floor of the building, thereby subjecting the applicant's license to sell beer and wine at retail to regulation for activities occurring on the main floor. DATED this 21st day of November, 1994. FINDINGS OF FACT,CONCLUSIONS AND WRITTEN NOTICE PURSUANT TO MOSCOW CITY CODE 9-6-10 Page S ---PAGE BREAK--- CERTIFICATE OF MAILING I HEREBY CERTIFY that on the_day of November, 1994, I served a true and correct copy of the foregoing FINDING OF FACT, CONCLUSIONS AND WRITTEN NOTICE PURSUANT TO MOSCOW CITY CODE 9-6-10 upon JESSE F. JOHNSON by mailing the same, postage prepaid by United States regular mail, addressed as follows: Jesse F. Johnson P.O. Box 8488 Moscow, Idaho 83843 FINDINGS OF FACT,CONCLUSIONS AND Elaine Russell, City Clerk WRITTEN NOTICE PURSUANT TO MOSCOW CITY CODE 9-6-10 Page 7