South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
William Henry Thompson, d/b/a Fun City Cafe vs. SCDOR

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
William Henry Thompson, d/b/a Fun City Cafe

Respondents:
South Carolina Department of Revenue
 
DOCKET NUMBER:
97-ALJ-17-0029-CC

APPEARANCES:
For the Petitioner: W. Andrew Arnold, Esquire

For the Respondent: Arlene D. Hand, Esquire
 

ORDERS:

ORDER AND DECISION

STATEMENT OF THE CASE


This matter comes before the Administrative Law Judge Division (Division) pursuant to S.C. Code Ann. §§61-9-320 (Supp. 1995), S.C. Code Ann. §§1-23-310 et seq. (Rev. 1986 and Supp. 1995), and S.C. Code Regs. 7-96 (1976) for a hearing pursuant to the application of William Henry Thompson, d/b/a Fun City Cafe (Applicant or Petitioner) for an on-premise beer and wine permit (AI 109142) at 101 South Hudson Street, Greenville County, Greenville, South Carolina (location).

In the case captioned Shenice L. Kirksey, d/b/a Hudson Street Cafe v. South Carolina Department of Revenue and Taxation, Docket No. 94-ALJ-17-0182-CC, the Honorable Stephen P. Bates, Administrative Law Judge, by Order dated July 27, 1994, found this location unsuitable for the grant of an on-premise beer and wine permit based upon the residential nature of the community, the presence of children in the area, and the revitalization efforts of the community. Petitioner is now alleging that material changes in the location have taken place since the hearing before Judge Bates (July 25, 1994) sufficient to warrant the Department to process the application. Thus, the sole matter for consideration is whether material changes have taken place at the location since the prior denial.

As in the prior case, various individual members of the community and organizations have filed protests. Wesley E. Arrowood, Director for Miracle Hill Ministries, which consists of the Greenville Rescue Mission, Miracle Hill Children's Home, Palmetto Boys Shelter and Shepherd's Gate; Mrs. Inez Sanders, President of the Brockwood Elderly and Handicapped Housing Apartments Resident Association; Mr. Bruce Whitehead, a nearby resident; and the Rev. J. M. Fleming, Executive Director of the Southernside Community Center filed protests to the application, contesting the processing, grant and/or issuance of the permit to Petitioner. Respondent South Carolina Department of Revenue and Taxation (Department) refused to process the application, relying on Regs. 7-96, which states that an application for an on-premise beer and wine permit at a location previously found unsuitable will not be processed until the Applicant can affirmatively show that some material change with respect to the location has occurred.

A hearing was held on March 14, 1997, at the Spartanburg County Courthouse, Spartanburg, South Carolina.

After having carefully reviewed all the documentary evidence, having given due consideration to the testimony of the witnesses, and having personally viewed the proposed location and the surrounding area, the request that the Department process the application is denied.

ISSUES

(1) Does Petitioner's application seek a beer and wine permit for a "location" that was previously found unsuitable by Order of Administrative Law Judge Stephen P. Bates on July 27, 1995?

(2) If the location is the same, have there been sufficient material changes with respect to the location since the prior decision of unsuitability which would require the Department to process the application?

POSITIONS OF THE PARTIES

The Department argues this application cannot be processed because the prior denial by Judge Bates precludes its processing unless Petitioner can affirmatively demonstrate some material change has occurred since the Order in that case was issued. Petitioner argues that material changes have occurred since the prior Order, that the application should be processed by the Department, and that the on-premise beer and wine permit should be issued.

EVIDENCE

Without objection, those certified copies of documents forwarded to the Division by the Department from its file were made a part of the record. At the hearing, Petitioner sought the placement of a video into the record. Leave was given by the court to the Department to review the video and, if it had any objection, to make such in writing to the court. The Department did object.

The Department placed into the record without objection the sketches of the proposed location and the surrounding area as prepared by the State Law Enforcement agent for introduction in the prior hearing and for this hearing.

FINDINGS OF FACT

After consideration and review of all the evidence and testimony and having judged the credibility of the witnesses, by a preponderance of the evidence, I make the following findings of fact:

1. This Division has personal and subject matter jurisdiction.

2. Notice of the date, time, place and nature of the hearing was timely given to all parties, including the protestants.

3. The Applicant, William Henry Thompson, d/b/a Fun City Cafe, filed an application with the Department on May 29, 1996 for an on-premise beer and wine permit for a short-order restaurant/ sports bar at 101 South Hudson Street, Greenville, Greenville County, South Carolina.

4. The South Carolina Law Enforcement Division completed its investigation of the proposed location and of the applicant on September 19, 1996, and gave notice to the general public of the application by posting at the location for the period from July 3, 1996 through July 18, 1996.

5. Notice of the application has appeared at least once a week for three (3) consecutive weeks in The Greenville News, a newspaper of general circulation in the local area where the applicant proposes to engage in business.

6. On November 6, 1996, the Department issued its final determination letter to the applicant. It found that no material change at the location had occurred at the location since the issuance of the prior order which was sufficient to warrant the processing of the application.



7. Applicant requested the Department reconsider its position. The Department reiterated its position and applicant then requested a hearing. The request for a contested case hearing was transmitted to the Division by the Department for filing on January 21, 1997.

8. Applicant is fifty (50) years of age.

9. Applicant, within two (2) years before the date of the application, has not had a beer or wine permit revoked.

10. Applicant is and has been a legal resident of the United States and the State of South Carolina for at least thirty (30) days before the date of application and has maintained his principal place of abode in South Carolina for at least thirty (30) days before the date of the application.

11. Applicant has previously operated two businesses which had on-premise beer and wine permits in Greenville, South Carolina with no history of problems or violations.

12. Applicant is of good moral character.

13. Applicant intends to serve food at the location and testified he intends to have a menu wth 50 items.

14. Applicant intends to operate the location between the hours of 5:00 p.m. and 12:00 a.m. to 1:00 a.m.

15. Mr. Thomas J. Brooks, a resident of Greenville, South Carolina for 54 years, has leased the location and is subleasing it to applicant. Mr. Brooks owns a video coin-operating business and has placed inside the location Class I, Class II and Class III video machines. He visits the location once a week during the afternoon to collect his share of the profits from the video machines. He provides service for the machines when necessary during the day and at night.

16. The location is situate in an area of Greenville, South Carolina which is zoned commercial. However, as a practical matter it is a mixed commercial and residential neighborhood.

17. Very few revitalization efforts are evident in the immediate vicinity of the proposed location. Also, there are fewer houses and residences in the neighborhood than at the time of the previous hearing.



DISCUSSION

I. The Proposed Location is the Same Location Previously Determined to be Unsuitable.

Applicant has requested a beer and wine permit for a convenience store to be located at 101 South Hudson Street, Greenville, South Carolina. Shenice L. Kirksey also requested a permit for a store at the same location. After examining the sketches of the SLED agent(s), it is clear that both permits were sought for the same location.

II. No Material Change has Occurred at the Proposed Location Since July 25, 1994.

S.C. Code Regs. 7-96 (1976) provides that an application for a location previously found unsuitable for a permit will not be processed unless and until the applicant can show that some material change with respect to the location has occurred. Because I have determined that this location is the same as the one deemed unsuitable in Kirksey, Applicant must meet the requirements of the regulation in order for his application to be processed. Although the definition of "material change" as used in the regulation has not been addressed by the courts of this state, the Division recently addressed these terms in Judy A. Haigler, d/b/a Club 21 v. S.C. Dep't of Revenue and Taxation, 96-ALJ-17-0100-CC. In his Order of May 20, 1996, Judge Stevens stated that "[a] material change with respect to a location is a change of a meaningful nature to a factor that was relevant to the original decision finding the location unsuitable for a beer and wine permit." S.C. Code Ann. §61-9-320(6) (Supp. 1995); S.C. Code Regs. 7-96 (1976).

I adopt the above definition as being a reasonable interpretation of what constitutes a material change at a location which would be sufficient to require the Department to process an application. According to that definition, no material change has taken place at 101 South Hudson Street, Greenville, South Carolina. In Kirksey, Judge Bates based his decision on three factors: (1) residents in the area are in fear for the safety of themselves and their children from persons under the influence of alcohol and/or other drugs; (2) the location has a history of being a meeting place for drug dealers and users, vagrants, and loiterers, with nearby residents complaining of noise , unruly crowds, and illegal activities; (3) the neighborhood is undergoing a revitalization effort with federal, state, and local assistance to build new homes and recruit businesses consistent with the residential setting of the area.

Applicant posits that sufficient changes have occurred since the prior hearing which are as follows: (1) the area is less residential, some of the houses having been torn down; (2) no revitalization efforts are evident in the neighborhood; (3) there are few children in the neighborhood because there are very few houses in the area; the closest park is some three streets away; (4) this applicant is dissimilar from Mrs. Shenice L. Kirksey since he intends to prohibit drug users and dealers from coming on the premises..

Having personally viewed the area, I do not find that any of the "changes" alleged by the applicant constitute a material change under the above definition. The general assembly, in authorizing the promulgation of Regs. 7-96, clearly intended that if a location is found to be unsuitable, then there must be some material change shown to the Department sufficient to cause it to process the new application. In this case, the neighborhood is basically the same; the destruction of run-down residences is the first step in their replacement. Further, the process of revitalizing a neighborhood is slow, particularly where federal and state funds are involved.

CONCLUSIONS OF LAW

Based upon the foregoing Findings of Fact, I conclude as a matter of law, the following:

1. The South Carolina Administrative Law Judge Division is empowered to hear this case pursuant to S.C. Code Ann. §61-1-55 (Supp. 1995) and Chapter 23 of Title 1 of the 1976 Code of Laws, as amended.

2. S.C. Code Ann. §61-9-320 (Supp. 1995) sets forth the criteria for the issuance of a beer and wine permit.

3. S.C. Code Ann. §61-3-440 (Supp. 1995) states that the Department shall not issue certain licenses to a place of business within a specific distance of a church, school or playground. Locations for which beer and wine permits are requested are not subject to those specific restrictions. Even so, the court may consider the proximity to churches, schools, or playgrounds in making its decision.

4. As the trier of fact, an administrative law judge is authorized to determine the fitness or suitability of the proposed business location of an applicant for a permit to sell beer and wine using

broad but not unbridled discretion. Ronald F. Byers v. S.C. Alcoholic Beverage Control Comm'n, 281 S.C. 566, 316 S.E.2d 705 (Ct. App. 1984).

5. Although "proper location" is not statutorily defined, broad discretion is vested in the trier of fact in deciding the fitness or suitability of a particular location. Fast Stops, Inc. v. Ingram, 276 S.C. 593, 595, 281 S.E.2d 118 (1981).

6. The determination of suitability of a location for issuance of a permit is not necessarily a function solely of geography. It involves an infinite variety of considerations related to the nature and operation of the proposed business and its impact on the community within which it is to be located. Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985). The proximity of the location to residences, churches, schools and playgrounds can be a proper ground by itself to deny a permit. Moore v. S.C. Alcoholic Beverage Control Comm'n, 208 S.C. 167, 417 S.E.2d 555 (1992).

7. On July 27, 1994, Administrative Law Judge Stephen P. Bates issued a Final Order and Decision denying Kirksey's application for an on-premise beer and wine permit on the basis that the location was unsuitable. The decision was based solely on the following factors: (1) residents in the area are in fear for the safety of themselves and their children from persons under the influence of alcohol and/or other drugs; (2) the location has a history of being a meeting place for drug dealers and users, vagrants, and loiterers, with nearby residents complaining of noise, unruly crowds, and illegal activities; (3) the neighborhood is undergoing a revitalization effort with federal, state, and local assistance to build new homes and recruit businesses consistent with the residential setting of the area. See Shenice L. Kirksey, d/b/a Hudson Street Cafe v. South Carolina Department of Revenue and Taxation, Docket No. 94-ALJ-17-0182-CC.

8. The proposed location is the same location found unsuitable by Judge Bates in Kirksey. See Moore v. South Carolina Dep't of Revenue and Taxation, 96-ALJ-17-0134-CC.

9. Where a proposed location has previously been determined to be unsuitable for the issuance of a permit, a future applicant must affirmatively demonstrate that a material change has occurred with respect to the location in order for the application to be processed. S.C. Code Regs. 7-96 (1976).



10. A material change with respect to a location is a change of a meaningful nature to a factor that was relevant to the original decision finding the location unsuitable for a beer and wine permit. Judy A. Haigler, d/b/a Club 21 v. S.C. Dep't of Revenue and Taxation, 96-ALJ-17-0100-CC.

11. A significant factor in determining whether a location is proper is the impact the proposed location will have upon crime and the need for police intervention. Fowler v. Lewis, 260 S.C. 54, 194 S.E.2d 191 (1973).

12. The fact-finder may consider factors that demonstrate the adverse effect the location will have on the community. Palmer v. S.C. ABC Comm'n, 282 S.C. 246, 317 S.E.2d 476 (Ct. App. 1984).

13. No material changes have occurred since July 1995 since the area of the proposed location is still partially residential in nature, the neighborhood is slowly beginning its revitalization effort, and the proposed location would tend to attract drug users and dealers and create law enforcement problems in the area.

11. Applicant's assertions of "material change(s)" do not alter the basis for the decision in Kirksey.

ORDER

Based upon the above Findings of Fact, Discussion, and Conclusions of Law, it is hereby:

ORDERED that Applicant's request for a hearing on his application for an off-premises beer and wine permit be denied.

AND IT IS SO ORDERED.

_______________________________

Marvin F. Kittrell

Chief Judge

Columbia, South Carolina

March 27, 1997


 

 

 

 

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