This
matter comes before this court pursuant to S.C. Code Ann. § 61-2-260 (Supp.
2007) and S.C. Code Ann. §§ 1-23-310 et seq. (2005 & Supp. 2007) for
a contested case hearing. Petitioner Negash and Mengesha, Inc., seeks renewal
of an off-premises beer and wine permit for its convenience store, L&M
Quick Stop, at 701 East Whitner Street in Anderson, South Carolina. Respondent
South Carolina Department of Revenue would have granted the permit but for the
protest filed by the City of Anderson through its police department, regarding
the suitability of the proposed location and outstanding withholding tax
liabilities. On April 2, 2008, the City filed a motion to intervene in this
case in opposition to Petitioner’s permit application, and, by order dated April
9, 2008, this court granted the City leave to intervene in this matter. After
timely notice to the parties, a hearing of this case was held on April 25, 2008,
at the South Carolina Administrative Law Court (ALC) in Columbia, South Carolina. Based upon the applicable law and upon the evidence presented regarding
the suitability of the proposed location, I find that Petitioner’s renewal application
for a beer and wine permit should be denied.
FINDINGS
OF FACT
Having
carefully considered all testimony, exhibits, and arguments presented at the
hearing of this matter, and taking into account the credibility and accuracy of
the evidence, I make the following Findings of Fact by a preponderance of the
evidence:
1. On
November 14, 2007, Yisihak A. Mengesha submitted a renewal application on
behalf of Negash and Mengesha, Inc., to the Department for an off-premises beer
and wine permit for the premises located at 701 East Whitner Street in Anderson, South Carolina. The application and the Department’s file are hereby
incorporated in the record by reference.
2. Negash
and Mengesha, Inc., of which Mr. Mengesha is the sole shareholder, is a South Carolina corporation, incorporated on December 23, 2003, and currently in good standing
with the South Carolina Secretary of State.
3. Mr.
Mengesha is over twenty-one years of age and has no delinquent federal taxes. The
corporation has outstanding state withholding tax liabilities of $171.98 for
the June 2007 period and $542.02 for the September 2007 period. The
corporation also has two months of failure to file 6% sales taxes for December
2007 and January 2008. The South Carolina Law Enforcement Division (SLED)
completed a criminal background investigation of Mr. Mengesha that did not
reveal any criminal arrests or convictions, and the record does not indicate
that Mr. Mengesha has engaged in acts or conduct implying the absence of good
moral character.
4. Notice
of Petitioner’s renewal application was published in the Anderson
Independent-Mail, a newspaper published and circulated in Anderson, South Carolina, once a week for three consecutive weeks, and proper notice of the renewal application
was posted at the proposed location for fifteen days.
5. This
court takes judicial notice of prior proceedings concerning the off-premises
beer and wine permit at this location. See Rule 201, SCRE. In docket
number 04-ALJ-17-0106-CC, I previously denied the requested permit in an order
filed on July 26, 2004, based upon testimony from the police department about
this location being in a high-crime area. Moreover, others had testified that
the area had previously gone downhill but that they later noticed a marked
improvement when the location was not permitted to sell beer and wine. I take
judicial notice of the findings of fact therein, which are incorporated herein
by reference as correctly representing the suitability of the location in
2004.
However,
in docket number 05-ALJ-17-0412-CC, another Administrative Law Judge (ALJ), the
Honorable John D. McLeod, granted the permit with restrictions based on a
consent order between Mr. Mengesha and the Department. In that case, Petitioner
submitted the permit application in May 2005. Lt. Bracone then wrote a letter
to the Department outlining the prior permit denial and the police department’s
concerns. The Department initially denied the permit based on this court’s
July 26, 2004 order finding the location to be unsuitable. Petitioner
requested a contested case hearing on the denial, but the City, through its
police department, did not seek to intervene in the contested case. The
Department moved for summary judgment on the grounds of res judicata and
collateral estoppel. Judge McLeod denied the motion, holding that suitability
of location is ever-changing. Subsequently, the parties entered into a consent
order filed on January 12, 2006, to grant the permit on the conditions that
Petitioner would: (1) not sell chilled beer or wine; (2) install video
recording equipment inside and outside upon the police department’s request;
and (3) maintain the video recordings for one week for review.
The police department was not a party to that case or consent order.
6. Petitioner’s
convenience store is located at the corner of Whitner and Dickens Streets in
the East Side community in Anderson, South Carolina. The proposed location has
been operated as a convenience store with a beer and wine permit under various
proprietors nearly continuously since the early 1970s. The location is
situated near several residences, across the street from a church, and three
houses down Whitner Street from the Anderson County Alternative School. This
neighborhood has gone downhill since the early 2000s and has now become a high-crime
area with gang activity. The convenience store is open Monday through Friday
from 9:00 a.m. to 9:00 p.m. and is closed on Sunday.
7. At
the hearing, Police Chief Martin Brown and Lieutenant Michael Bracone, an
officer in the vice division of the Anderson Police Department, testified
regarding the suitability of the proposed location. Given the history of
criminal problems and other disturbances in this community, they assert that licensure
of the proposed location for the sale of beer and wine would be detrimental to
the community.
Chief
Brown testified that in one year of calls for service, 2006-07, the police
department responded to this location fifty times, which is a high number of
calls. The offenses ranged from minor ones such as trespass, loitering, suspicious
persons, intoxication, and vandalism to assault, fighting, and shootings. There
is a pay phone outside the store from which fourteen calls originated. On two
calls, Mr. Mengesha was the victim of crimes: a burglary where the cash box was
stolen and vandalism with gang-related graffiti. On another occasion, officers
responded to a call on an assault that occurred in the L&M parking lot when
a patron was attempting to drive off and the assailant arrived. It is unknown
whether that incident was influenced by the sale of beer.
Within
a 300-foot radius of this location, there were nine gun and drug violations.
Within a 500-foot radius of this location, there were thirteen gun and drug
violations. Within a 1000-foot radius of this location, there were eighteen
gun and drug violations. These represent a significantly high number of such
violations. Chief Brown submitted a map showing the violations as Exhibit One.
No other stores are permitted or licensed to sell alcohol within that 1000-foot
radius. On July 4, 2007, a drive-by shooting occurred when a vehicle pulled up
beside the Quick Stop at 3:00 p.m. in broad daylight and fired thirty rounds
from an AK-47 into an apartment complex across the street, injuring one person
whose leg was later amputated. The area has rival gangs that generate violence
and shootings, with eleven or twelve distinct gangs identified, including the
Bloods, the Crips, and the Southside Boys.
8.
Chief Brown takes the position that any sale of alcohol in that
environment contributes to undesirables and illegal activity. He is also
concerned that the proximity of the sale of beer close to the church and school
exacerbates conditions for children growing up in an area that is already
considered high-risk and compromises the children’s safety. The Alternative
School is for troubled kids who are on their last strike before expulsion. As
the Quick Stop is located within 300 feet of the school, Chief Brown is
concerned that the sale of alcohol sends the wrong message to them.
9. During
a routine check to ensure that the store was not violating the prior consent
order by selling chilled beer, Lt. Bracone saw a row of single-can beers in the
same cooler with the soft drinks. He testified that they were cold to the
touch and that he took a picture of the cooler with the row of single-can beers
inside. When he instructed the clerk that the store was in violation of a
court order, the clerk said that he just worked there and did not know anything
about the order. Lt. Bracone is not authorized to issue an administrative
citation for selling chilled beer but notified the Department or SLED of the
violation. At the time of Lt. Bracone’s check, the nonfunctioning cooler where
beer is normally kept was empty. However, recently beer has been kept in only the
nonfunctioning cooler.
On
another occasion, Lt. Bracone noticed a Budweiser beer truck in the parking
lot. The next day, the inoperative beer cooler was stacked full. When Lt. Bracone
opened the glass door and felt the beer, he noticed the beer was “a little
chilled.” However, the cooler was not running and the light was not on. Lt.
Bracone expressed concern that, though the cooler appears to be turned off
during routine checks, the switch can be turned on to render the cooler
operable after the police leave.
10. Since
the issuance of the permit, Mr. Mengesha was charged with selling to an
underage individual, selling chilled beer, and having an illegal gaming machine
on the premises. He paid fines for the underage sale and chilled beer
violations and served a 90-day suspension for the illegal gaming machine. The
machine was seized and forfeited; it is in the process of being destroyed.
11. Mr.
Mengesha testified that he has only three or four regular customers who buy
beer because he is required, as a condition on his permit, to sell it unchilled
or warm. However, given the relatively extensive time and expense involved in
applying for a permit, I find that testimony implausible.
12. I
find that the location is not suitable for the operation of Petitioner’s
business with a beer and wine permit, given the fact that this is a known high-crime
area with gang activity.
CONCLUSIONS
OF LAW
Based
upon the foregoing Findings of Fact, I conclude the following as a matter of
law:
1. Jurisdiction
over this case is vested with the South Carolina Administrative Law Court
pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2007) and S.C. Code Ann. §§
1-23-310 et seq. (2005 & Supp. 2007).
2. S.C.
Code Ann. § 61-2-160 (Supp. 2007) prohibits the renewal of a license or permit
to sell alcoholic beverages unless the Department determines that the applicant
does not owe the State delinquent taxes, penalties, or interest.
3. “[T]he
issuance or granting of a license to sell beer or alcoholic beverages rests in
the sound discretion of the body or official to whom the duty of issuing it is
committed[.]” Palmer v. S.C. Alcoholic Beverage Control Comm’n, 282 S.C.
246, 248, 317 S.E.2d 476, 477 (Ct. App. 1984); see also Wall v. S.C.
Alcoholic Beverage Control Comm’n, 269 S.C. 13, 235 S.E.2d 806 (1977).
4. “[W]hile
some aspects of the application process may be streamlined for renewals, the
renewal process for a permit or license in South Carolina is essentially
similar to the process required for obtaining a new permit or license.” John D. Geathers and Justin R. Werner, The Regulation of Alcoholic Beverages in South
Carolina 96 (S.C. Bar CLE Div. 2007) (citations omitted). “[U]nlike other
states that have an automatic or perfunctory renewal process for alcoholic
beverage licenses, South Carolina’s renewal process is, in large part, similar
to the process for initially applying for an alcohol license.” Id. at 97.
5. Moreover,
courts in other jurisdictions have generally recognized that, absent statutory
language to the contrary, an applicant for the renewal of an alcoholic beverage
license must satisfy the licensure requirements in the same manner as an
applicant for a new license. This requirement that alcoholic beverage
licensees continue to satisfy all licensure criteria in order to renew their
licenses is consonant with the proposition that licensees do not have a right
to, or hold a property interest in, their licenses, but rather only hold the
licenses as privileges from the state that may be kept only so long as the
conditions governing their continuance are satisfied.
Id. at 101 (citations omitted).
6. S.C.
Code Ann. § 61-4-520 (Supp. 2007) establishes the criteria for the issuance of
a beer and wine permit. Included in the criteria is the requirement that the
proposed location be a proper and suitable one. See id. §
61-4-520(5)-(6).
7. Although
“proper location” is not statutorily defined, broad discretion is vested in the
trier of fact to determine the fitness or suitability of a particular location
for the requested permit. See Fast Stops, Inc. v. Ingram, 276
S.C. 593, 281 S.E.2d 118 (1981).
8. The
determination of suitability of location is not necessarily a function solely
of geography. Rather, 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); Schudel v. S.C. Alcoholic Beverage
Control Comm’n, 276 S.C. 138, 276 S.E.2d 308 (1981).
9. In
determining whether a proposed location is suitable, it is proper for this court
to consider any evidence that shows adverse circumstances of location. Kearney
v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985); Palmer v. S.C. Alcoholic
Beverage Control Comm’n, 282 S.C. 246, 317 S.E.2d 476 (Ct. App. 1984)
(citing Smith v. Pratt, 258 S.C. 504, 189 S.E.2d 301 (1972)). The
issuance or denial of a permit rests within the sound discretion of this court
acting as the trier of fact. Terry v. Pratt, 258 S.C. 177, 187 S.E.2d
191 (1972).
10. “[A]
liquor license or permit may be properly refused on the ground that the
location of the establishment would adversely affect the public interest, that
the nature of the neighborhood and of the premises is such that the
establishment would be detrimental to the welfare . . . of the inhabitants, or
that the manner of conducting the establishment would not be conducive to the
general welfare of the community.” 48 C.J.S. Intoxicating Liquors §
121, at 501 (1981).
Fowler
v. Lewis, 260 S.C. 54, 194 S.E.2d 191 (1973), is instructive on this
point. In that case, a grocery store and launderette was seeking a retail beer
and wine permit. Local law enforcement officers testified that the store’s
parking lot, through no fault of the business owner, had become a place for
local residents to congregate and the site of frequent disturbances and other
criminal activity. The South Carolina Supreme Court upheld the Alcoholic
Beverage Control Commission’s denial of the permit on the ground that, as
“congregations of people on [the applicant’s] property are not infrequently
attended by some consumption of alcohol and disorder . . . .[,] the Commission
could reasonably have concluded that the situation would be worsened by making
cold beer immediately available.” Id. at 58, 194 S.E.2d at 193. Here,
selling unchilled beer would not make a significant difference in light of the
seriousness of the problems at and surrounding that location. Petitioner’s
convenience store has become a place of congregation not infrequently attended
by the consumption of alcohol and other intoxicants and by disorderly and
criminal conduct. Accordingly, I conclude that the condition of the community
surrounding Petitioner’s property would be worsened by making beer and wine
immediately available from Petitioner’s store.
13. This
court is mindful of the fact that Petitioner has invested significant time and
resources in attempting to secure the permit in question. Further, counsel’s
representation of Petitioner has been commendable. Nevertheless, there was a
sufficient evidentiary showing in the present case that the proposed location
is unsuitable for Petitioner’s intended operations and that renewal of the
requested beer and wine permit would have an adverse impact upon the
surrounding community.
14. The
issuance or denial of a permit rests within the sound discretion of this
tribunal as the trier of fact. Inherent in the power to issue a permit is also
the power to refuse it. Terry v. Pratt, 258 S.C. 177, 187 S.E.2d 191
(1972). Refusal of the requested permit in the instant case is compelled
because the issuance of the permit would be detrimental to the inhabitants of
the community surrounding Petitioner’s store.
15.
While this permit was previously granted by Judge McLeod with conditions,
that ruling was pursuant to a consent order between Mr. Mengesha and the
Department. Judge McLeod did not reach the merits of the application and made
no finding that the suitability of the location had changed since my original
denial of July 26, 2004. Moreover, while I acknowledge that suitability is
ever-shifting and that a prior determination is not necessarily binding on a
later application, there has been no evidentiary showing that the circumstances
indicating that the location is unsuitable have improved since the original
denial. Rather, this area remains a high-crime area, with Exhibit One showing
gun and drug-related police calls more concentrated around this intersection.
No other outlets are permitted or licensed to sell alcohol in this area. As
Police Chief Brown and Lt. Bracone testified, this is a high-crime area that
has continued to go downhill in recent years with a high volume of known gang
activity. The police department maintains a constant presence in the
neighborhood but still has difficulty adequately patrolling the area to control
the crime problems. In an area where a drive-by shooting with an automatic
weapon occurs in broad daylight, where drug and gun incidents are concentrated,
and where gang activity is rampant, the location is simply not suitable for the
sale of alcohol.
ORDER
Based
upon the Findings of Fact and Conclusions of Law stated above,
IT
IS HEREBY ORDERED that Petitioner’s application for renewal of its
off-premises beer and wine permit for the premises located at 701 East Whitner Street in Anderson, South Carolina, is DENIED. AND IT IS SO
ORDERED.
______________________________
June 12, 2008 JOHN
D. GEATHERS
Columbia, South Carolina Administrative
Law Judge
