Memorandum

City of Lawrence

City Clerk’s Office

TO:	David L. Corliss, City Manager
FROM:	Jonathan Douglass, Assistant to the City Manager/City Clerk
CC:	Toni Wheeler, City Attorney
DATE:	September 10, 2012
RE:	Proposed sidewalk dining and hospitality license changes

Executive Summary

The City Clerk’s Office administers sidewalk dining licenses pursuant to Chapter 6 Section 12 of the City Code. I would like to suggest a number of other changes for City Commission consideration to streamline the application process. The changes include:

• Eliminating the need to get adjacent property owner/tenant signatures for license renewals (new licenses would still need to obtain the signatures);
• Adding a 10% late fee for renewals paid after November 15 (payment is due November 1);
• Two less substantial administrative changes.

Adjacent Property Owner and Tenant Permission

The sidewalk dining and hospitality license regulations were amended in 2008 (see Ordinance No. 8274) to replace the 70% food sales requirement with a 55% food sales requirement (unless there is no alternative location for outdoor dining). At that time a new requirement was also added, that the license applicant obtain signatures from adjacent property owners and tenants for both new and renewal licenses, testifying that the neighbors do not object to the license.

In the ensuing four years, very few complaints from adjacent property owners or tenants have been received regarding sidewalk dining and hospitality areas. Meanwhile, the requirement to obtain signatures for every single renewal has proved very onerous on the businesses. This particular requirement has caused frustration to numerous applicants who have not found objection from neighboring property owners and tenants, but simply non-response. Adjoining property owners are sometimes non-local and difficult to contact and get a response. As a result, some sidewalk dining renewals have been difficult to process. When signatures cannot be obtained, a public hearing must be held before the license can be approved, taking up additional time and effort by staff, the applicants, and the City Commission.

Staff initially recommended keeping the requirement for signatures from adjoining property owners and tenants for the initial sidewalk dining and hospitality license, but eliminating the requirement for renewal licenses. This proposal was reviewed by Downtown Lawrence, Inc., and the board expressed misgivings about eliminating the need for signatures for renewal licenses. Staff has therefore amended the proposal to require the City Clerk to notify adjacent property owners and tenants at least 30 days prior to any sidewalk dining license’s renewal, and a public hearing would be held if objections are received. If no objections are received no hearing would be necessary. This amended proposal still ensures that adjacent property owners and tenants are notified each year before a license is renewed and offers them a chance to object or otherwise comment on the renewal. Staff believes this compromise will be more business friendly and city staff friendly than the current requirements, while protecting adjacent property owners and tenants. Suggested language to accomplish this change follows.

6-1202.1 (a)       The proposed sidewalk hospitality use shall be pursuant to the written permission of the record and equitable property owner for the applicant hospitality establishment. Further, the applicant for any new or renewal license shall submit a written statement from each adjoining property owner, and any tenant of each adjoining property expressing a lack of objection to the proposed sidewalk hospitality use. In the event that an adjoining property owner or the tenant of an adjoining property fails or refuses to sign such a written statement, or upon the request of the City Commission, a public hearing will be held by the City Commission to determine whether to grant the license. At such hearing, the City Commission will hear such testimony and receive such evidence as is necessary for it to determine whether it is within the public’s interest to approve such use and shall make findings of fact sufficient to support its decision. The applicant and all adjoining property owners shall be provided written notice of the date and time of such hearing at least ten days prior to its occurrence. Notice shall be provided by first class mail or delivered in another manner that is reasonably calculated to cause such notice to come to the attention of its intended recipient. In the case of mailed notice, the notice shall be deemed to be effective at the time that it is mailed.

(b)        No less than 30 days prior to the renewal of any sidewalk dining license, the City Clerk or designee shall provide written notice to each property owner and tenant adjacent to the licensed property that the license is due for renewal and soliciting comments regarding the issuance of the license. The notice shall be deemed to be effective at the time that it is mailed. If no objection or negative comment is received by the City Clerk within 30 days of the mailing of the notice, the license may be approved without a public hearing. If objection or negative comment is received by the City Clerk within 30 days of the mailing of the notice, a public hearing will be held by the City Commission to determine whether to grant the license. At such hearing, the City Commission will hear such testimony and receive such evidence as is necessary for it to determine whether it is within the public’s interest to approve such use and shall make findings of fact sufficient to support its decision. The applicant and all adjoining property owners shall be provided written notice of the date and time of such hearing at least ten days prior to its occurrence. Notice shall be provided by first class mail or delivered in another manner that is reasonably calculated to cause such notice to come to the attention of its intended recipient. In the case of mailed notice, the notice shall be deemed to be effective at the time that it is mailed.

Late Fee

Sidewalk Dining and Hospitality License renewals are due annually on November 1^st. The City Clerk’s Office sends out renewal notices and paperwork in September and follows up with licensees as the deadline approaches, and often, as the deadline passes without receiving renewal materials and payment. Staff often spends considerable time calling and writing to licensees who are delinquent. To encourage licensees to renew in a timely manner, I recommend establishing a 10% late fee for renewal payments received later than November 15.

6-1202.9            The applicant shall annually pay a fee for the use of the sidewalk which shall be $3.50 per square foot per year. The fee shall be paid at the time of license issuance, and on the annual anniversary renewal thereof. The fee shall be considered as a lease payment for the commercial use of the sidewalk. If annual renewal payment is received after November 15, a 10% late fee shall be charged in addition to the annual fee. Fees shall be non-refundable and not prorated for partial year licenses. 

Currently licensed sidewalk dining and hospitality areas have annual fees (based on a $3.50/square foot rate) ranging from $287.00 to $2,082.00. A 10% late fee could therefore range from $28.70 to $208.20.

Administrative changes

I also suggest two relatively minor additional changes to the sidewalk dining and hospitality code:

• Ordinance for alcohol on the right-of-way: The City Commission adopted Ordinance No. 8515 in 2010, which authorized the possession and consumption of alcohol on the public right-of-way pursuant to a sidewalk dining and hospitality license. Therefore, a small clean up item in the sidewalk dining ordinance is warranted, to remove the requirement for the applicant to pay the costs of an ordinance granting exemption to the prohibition of alcohol on public property, since such ordinances are no longer necessary.
• Insurance requirements: Current city code requires the licensee to carry an insurance policy insuring the licensee, and the City of Lawrence as an additionally named insured, in an amount not less than $500,000 single incident. Staff recommends changing the language to simply require proof of insurance and notification of any changes to the coverage, rather than having the city as a named insured. This change accomplishes better protection for the city for two reasons. First, the city currently does not know if insurance lapses or is changed after the proof of insurance is initially submitted. Second, naming the city as an additionally insured may suggest that the city accepts some liability for activities in the sidewalk dining and hospitality area.

Conclusion

I believe that the changes suggested in this memo will improve the regulation of sidewalk dining and hospitality areas, as well as streamline the application and renewal process to offer better customer service to license applicants.

ACTION:      Adopt on first reading, Ordinance No. 8780, regarding sidewalk dining and hospitality license regulations.