ORDERS:
This matter comes before the Administrative Law Court (“ALC” or “Court”) for a contested case hearing pursuant to S.C. Code Ann. §§ 1-23-310 et seq. (2005 & Supp. 2007), 61-2-260 (Supp. 2007), 61-4-525 (Supp. 2007) and 61-6-1825 (Supp. 2007). JOK, Inc., d/b/a The Tavern on Greene (“Petitioner”), seeks a renewal of its on-premises beer and wine permit and liquor by the drink license for its location at 2002 Greene Street, Suites B, C, and D, Columbia, South Carolina (“location”). Protestant Larry W. Phipps filed a protest to the application with the South Carolina Department of Revenue (“Department”). Because of the protest, the hearing was required.
A hearing in this matter was held on March 4, 2009, at the offices of the ALC in Columbia, South Carolina. Both parties and the Protestant appeared at the hearing. Evidence was introduced and testimony was given. After carefully weighing all the evidence, I find that Petitioner’s request for a renewal of its on-premises beer and wine permit be granted with restrictions set forth below and liquor by the drink license be denied.
FINDINGS OF FACT
Having observed the witnesses and reviewed the exhibits presented at the hearing and closely passed upon their credibility, and having taken into consideration the burden of persuasion by the parties, I make the following Findings of Fact by a preponderance of the evidence:
1. Jeff Keeney (“Mr. Keeney”) seeks a renewal of an on-premises beer and wine permit and liquor by the drink license for Petitioner JOK, Inc., d/b/a The Tavern on Greene, located at 2002 Greene Street, Suites B, C, and D, Columbia, South Carolina. The location is situated inside the city limits. Mr. Dozier maintains 100% ownership of Petitioner JOK, Inc., d/b/a The Tavern on Greene.
2. Mr. Keeney is over the age of twenty-one (21) and of good moral character. He is a legal resident of the State of South Carolina and has maintained his principal place of abode in this state for at least thirty (30) days prior to making this application.
3. Notice of the application was lawfully posted at the location and in a newspaper of general circulation.
4. The location is situated on the first floor of a five-story building. In addition to Petitioner, other occupants of the first floor are the restaurants Blue Cactus and Pita Pit, AT&T, a telephone company, and a convenience store. The remaining four floors consist of residential condominiums.
5. The location is operated as a restaurant and bar. Petitioner’s normal hours of operation are from 4:00 p.m. to 2:00 a.m., Monday through Wednesday and Sunday; on Friday and Saturday, its normal hours of operation are from 4:00 p.m. to 4 a.m. Petitioner’s hours of operation may vary during special events such as St. Patrick’s Day in Five Points and the “Five Points After Five” fall series.
6. The restaurant’s menu includes corndogs, pizza, and cheeseburgers. There is seating in the restaurant for approximately forty (40) people. Mr. Keeney testified that food sales accounted for 10-20% of gross sales at the location.
7. The location is situated in the heart of Five Points in Columbia. There are numerous commercial establishment in the immediate vicinity of the location, including restaurants, bars, and retail stores. There are also residences in the immediate area.
9. Mr. Keeney currently leases the location. Landmark Resources is the management company of the complex.
10. Mr. Keeney is the Manager of the location. Generally, he works in the location on Monday, Wednesday, and Friday nights until closing time.
11. Mr. Keeney also employs three individuals to assist him in operating the location: a doorman, a bartender, and an additional employee.
11. There is adequate parking at the location: patrons may park along Greene street and also in Andi’s Deli’s parking lot, which is located directly across Greene Street from the location.
12. There is adequate lighting at the location. In addition, because the location is situated within the City of Columbia, officers with the police department can quickly respond to any disturbance in the area.
13. It is Petitioner’s policy that reasonable measures are taken to prevent any intoxicated person from leaving the location and driving a motor vehicle. It is also Petitioner’s policy that reasonable measures are taken to prevent the sale of alcohol to underage persons. Mr. Keeney stated that all individuals’ driver’s licenses, or other acceptable forms of identification, are checked at the entrance to the location to ensure that alcohol is not sold to underage persons. Also, it is Petitioner’s policy that the bartender must check an individual’s identification if he questions that individual’s age.
14. Petitioner’s patrons are permitted to take alcoholic drinks purchased inside the location outside. Generally, these patrons are outside to smoke.
15. Music is played inside the location through a stereo system. There are four (4) speakers located throughout the inside of the establishment. No music is played outside at the location.
16. Because Petitioner is located in the heart of Five Points and near other restaurants and bars, individuals often congregate in front of the location to smoke and socialize before moving along to other establishments in the area. Mr. Keeney estimates that there have been five to six fights in this area within the past ten years. However, he testified that if he or his employees notice the crowd becoming rowdy, the individuals outside are asked to move to another location. Mr. Keeney also stated that police have been called to the location because of noise complaints; however, he stated that he has not been cited for any of the noise complaints.
17. Petitioner’s employees take out the trash at the location on a nightly basis. Also, its employees check outside at the front of the location after it is closed to ensure that no trash is left by its patrons or others. In addition, Petitioner’s employees wash the dishes, restock inventory, and take up the bar stools nightly. Prior to opening each day, Petioner’s employees sweep, mop, and generally clean the location before opening it at 4:00 p.m.
18. On March 22, 2007, the Department issued a citation to Petitioner for a violation of S.C. Code Ann. Reg. 7-401.3. In the citation, the Department alleged Petitioner was not primarily and substantially engaged in the preparation and service of meals, did not have a proper kitchen and kitchen equipment necessary to demonstrate it engaged in food service, and did not have a menu or a listing of food readily available to its patrons. Based upon the violation, the Department sought to have Petitioner’s permit and license revoked.
A hearing was held before the Court on December 6, 2007 with regard to this violation. On December 20, 2007, the Honorable Carolyn C. Matthews issued an order in which the Court found that Petitioner was not primarily or substantially engaged in the preparation and serving of meals in violation of S.C. Code Ann. Reg. 7-401.3. The Court imposed a five hundred dollar ($500.00) penalty against Petitioner for violating S.C. Code Ann. Reg. 7-401.3.
19. Adam Shloan (“Mr. Shloan”) appeared at the hearing and testified on behalf of Petitioner. His family owns Andy’s Deli. Generally, he works there Monday through Friday between the hours of 9:30 a.m. and 5:00 p.m. Mr. Shloan stated that he has never noticed a problem with noise, trash, or fighting at the location. Further, he stated that Greene Street is a high traffic area because of the various establishments in the Five Points area. He noted that Greene Street is one of the major thoroughfare roads leading from the University of South Carolina campus to Five Points.
20. John Thrash (“Mr. Thrash”) also appeared at the hearing to testify on behalf of the Petitioner. Mr. Thrash is employed by Pita Pit. He stated that he does not hear any music or people talking from within the business. Christopher Gullard (“Mr. Gullard”), an employee of the Petitioner, appeared at the hearing. Mr. Gullard bartends at the location four days a week and stated that the music is turned down in the later hours of operation.
21. Protestant Larry Phipps (“Mr. Phipps”) has resided in the condominiums located directly above the location since February 2001. Mr. Phipps is sixty years old, runs a janitorial service and is self employed as a magazine publisher. Mr. Phipps stated that the noise from the location, including congregating patrons is disruptive. Mr. Phipps also stated that in addition to the noise, tenants of the condominiums are fearful of using the front entrance of the building. The protestant is concerned about the adverse affect the location has on property values as well as general safety. Mr. Phipps has filed numerous police reports in conjunction with the noise and activities at the location during its hours of operation.
22. At the conclusion of the hearing, the Court requested Petitioner provide documentation to substantiate any food purchases it made for use in food preparation. On March 13, 2009, Petitioner sent to the Court an affidavit signed by Christopher Harrell, manager at the location, which had attached the last two menus for the location, as well as receipts for food purchased since December 15, 2008. The total amount of food purchased was $363.62. The documentation reflects that during the month of January 2009, Petitioner had gross proceeds from all sales of $14,055.92. The record further reflects that during the same month, Petitioner spent a total of $31.73 on food supplies. The record reflects that for the month of December 2008, Petitioner’s gross sales were $15, 695.53, and its food purchased for the same month were $98.14.
CONCLUSIONS OF LAW
Based upon the above Findings of Fact, I conclude the following as a matter of law:
1. S.C. Code Ann. § 1-23-600 (2005 & Supp. 2007) grants jurisdiction to the Administrative Law Court to hear contested cases under the Administrative Procedures Act.
2. S.C. Code Ann. § 61-2-260 (Supp. 2007) grants the Administrative Law Court the responsibility to determine contested cases matters governing alcoholic beverages, including beer, wine and liquor.
3. S.C. Code Ann. § 61-4-520 (Supp. 2007) sets forth the requirements for the issuance of a beer and wine permit. Included in the criteria is the requirement that the proposed location be a suitable one.
4. S.C. Code Ann. § 61-6-1820 (Supp. 2007) sets forth the requirements for the issuance of a restaurant liquor by the drink license. Section 61-6-1820(1) provides that an applicant may receive a license upon the finding that “[t]he applicant is a bona fide nonprofit organization or the applicant conducts a business bona fide engaged primarily and substantially in the preparation and serving of meals or furnishing of lodging.”
5. S.C. Code Ann. Reg. 7-401.3 provides that an establishment holding a restaurant liquor by the drink license must have menus readily available to its patrons and must prepare, for service to its patrons, hot meals at least once each business day the establishment is open. Food and snacks prepared off the licensed premises but sold thereon do not constitute a meal. The definition of “meal” is also limited by regulation to not include “[s]andwiches, boiled eggs, sausages and other snacks prepared off the licensed premises but sold thereon . . . .” 23 S.C. Code Ann. Regs. 7-401.3 (B)(1). Additionally, “primarily” is defined in 23 S.C. Code Ann. Regs. 7-401.3 (B)(3) as:
[T]he serving of meals by a business establishment constitutes a regular and substantial source of business to the licensed establishment and that meals shall be served upon the demand of guests and patrons during the normal "mealtimes" which occur when the licensed business establishment is open to the public and that an adequate supply of food is present on the licensed premises to meet such demand.
In Brunswick Capitol Lanes v. S.C. Alcoholic Beverage Control Comm'n, 273 S.C. 782, 260 S.E.2d 453 (1979), the South Carolina Supreme Court addressed the precise issue in this case of whether the appellant was “engaged primarily and substantially in the preparation and serving of meals.” The Court held that “a business which attributes only ten per cent of its gross revenues to food preparation and sale does not fulfill the ‘primary’ and ‘substantial’ requirement of the statute.”[6] 260 S.E.2d at 783. In this case, food service is a “very minor” portion of his business comprising less than 10-20% of his revenue. Therefore, Petitioner is not primarily or substantially engaged in the preparation and serving of meals in violation of Section 61-6-1820.
6. S.C. Code Ann. § 61-6-120 (Supp. 2007) provides that a liquor license shall not be issued to a place of business if:
the place of business is within three hundred feet of any church, school, or playground situated within a municipality . . . . Such distance shall be computed by following the shortest route of ordinary pedestrian or vehicular travel along a public thoroughfare from the point of the grounds in use as part of such church, school, or playground . . . .
23 S.C. Code Ann. Reg. 7-303 (Supp. 2007) clarifies how distances from the location to schools, churches, and playgrounds are measured:
With respect to a church or a school, the distance shall be measured from the nearest entrance of the place of business by following the shortest route of ordinary pedestrian or vehicular travel along the public thoroughfare to the nearest point of entrance to the grounds of the church or school, or any building in which religious services or school classes are held, whichever is the closer. The South Carolina Department of Revenue has determined that the grounds in use as part of the church or school is restricted to the grounds immediately surrounding the building or buildings which provide ingress or egress to such building or buildings and does not extend to the grounds surrounding the church which may be used for beautification, cemeteries, or any purpose other than such part of the land as is necessary to leave the public thoroughfare and to enter or leave such building or buildings. Only one entrance to the grounds of a church or school shall be considered, to wit: the entrance to the grounds nearest an entrance to the church or school building. Where no fence is involved, the nearest entrance to the grounds shall be in a straight line from the public thoroughfare to the nearest door. The nearest point of the grounds in use as part of a playground shall be limited to the grounds actually in use as a playground and the grounds necessary for ingress or egress to such grounds from the public thoroughfare.
(emphasis added).
7. The factual determination of whether or not an application is granted or denied is usually the sole prerogative of the executive agency charged with rendering that decision. Palmer v. S.C. ABC Comm’n, 282 S.C. 246, 317 S.E.2d 476 (Ct. App. 1984). As the trier of fact, an administrative law judge is authorized to determine the fitness of an applicant for alcohol permits and licenses using broad but not unbridled discretion. Byers v. S.C. ABC Comm’n, 281 S.C. 566, 316 S.E.2d 705 (Ct. App. 1984).
8. The weight and credibility assigned to evidence presented at the hearing of a matter is within the province of the trier of fact. See S.C. Cable Television Ass’n v. S. Bell Tel. & Tel. Co., 308 S.C. 216, 222, 417 S.E.2d 586, 589 (1992); see also Doe v. Doe, 324 S.C. 492, 502, 478 S.E.2d 854, 859 (Ct. App. 1996) (holding that a trial judge, when acting as a finder of fact, “has the authority to determine the weight and credibility of the evidence before him”). Furthermore, a trial judge who observes a witness is in the best position to judge the witness’s demeanor and veracity and to evaluate the credibility of his testimony. See Woodall v. Woodall, 322 S.C. 7, 10, 471 S.E.2d 154, 157 (1996).
9. Although “proper location” is not statutorily defined, the Administrative Law Court is vested, as the trier of fact, with the authority to determine the fitness or suitability of a particular location. Fast Stops, Inc. v. Ingram, 276 S.C. 593, 281 S.E.2d 181 (1981). The determination of suitability of location 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 upon the community within which it is to be located. Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985). In determining the suitability of a location, it is proper for this Court to consider any evidence that demonstrates any adverse effect the proposed location will have on the community. Palmer, supra. It is also relevant to consider the previous history of the location. Smith v. Pratt, 258 S.C. 504, 189 S.E.2d 301 (1972); Taylor v. Lewis, et al., 261 S.C. 168, 198 S.E.2d 801 (1973). Furthermore, in considering the suitability of a location, it is relevant to consider whether the testimony in opposition to the granting of a license is based on opinions, generalities and conclusions, or whether the case is supported by facts. Id.
10. Unless there is sufficient evidence of an adverse impact on the community, the application must not be denied if the statutory criteria are satisfied. The fact that a Protestant objects to the issuance of a permit is not a sufficient reason by itself to deny the application. See 48 C.J.S. Intoxicating Liquors § 166 (2004).
11. Permits and licenses issued by this state for the sale of liquor, beer and wine are not property rights. Rather, they are privileges granted in the exercise of the State’s police power to be used and enjoyed only so long as the holder complies with the restrictions and conditions governing them. The Administrative Law Court, as the tribunal authorized to grant the issuance of a permit, is likewise authorized to revoke or suspend the permit for cause. See Feldman v. S.C. Tax Commission, 203 S.C. 49, 26 S.E.2d 22 (1943).
12. Furthermore, S.C. Code Ann. Reg. 7-200.1(I) (Supp. 2007) authorizing the imposition of restrictions on permits, provides:
Any written stipulation and/or agreement which is voluntarily entered into by an applicant for a permit or license between the applicant and the Department, if accepted by the Department, will be incorporated into the basic requirements for the enjoyment and privilege of obtaining and retaining the permit or license and shall have the same effect as any and all laws and any and all other regulations pertaining to the permit or license.
Knowing violation of the terms of the stipulation or agreement shall constitute sufficient grounds to revoke said license.
13. The Department may seek revocation or suspension of permits for the sale of beer and wine “on its own initiative or on complaint signed and sworn to by two or more freeholders resident for the preceding six months in the community in which the licensed premises are located or by a local peace officer, all of whom are charged with the duty of reporting immediately to the department a violation of the provisions of section 61‑4‑580 . . . .” S.C. Code Ann. § 61-4-590 (Supp. 2007). The Department may also seek to suspend or revoke a liquor by the drink license pursuant to S.C. Code Ann. § 61-6-1830 (Supp. 2007).
14. Based upon the testimony of the witnesses presented at the hearing as well as the documentation and evidence provided to the Court, I find that the Petitioner has met the requirements in order to qualify for a renewal of its on—premises beer and wine permit with restrictions. However, it is apparent that Petitioner is not bona fide engaged primarily and substantially in the preparation and serving of meals. According, the request for the renewal of Petitioner’s liquor by the drink license is denied.
ORDER
Based upon the above Findings of Fact and Conclusions of Law,
IT IS HEREBY ORDERED that the renewal of the on—premises beer and wine permit for the location at 2002 Greene Street, Suites B, C, and D, Columbia, South Carolina be GRANTED with restrictions.
IT IS FURTHER ORDERED that the renewal of the restaurant liquor by the drink license for the location at 2002 Greene Street, Suites B, C, and D, Columbia, South Carolina be DENIED.
AND IT IS SO ORDERED.
RESTRICTIONS
1. The location must close and all patrons must exit not later than 2:00 AM each day of
operation.
2. The front door must remain closed except when being used during normal business hours for entrance and exit purposes.
3. No music is allowed on the exterior of the location.
4. An employee from the location will monitor all activity of patrons outside the
entrance of the location and will prevent patrons from exiting the location with alcohol.
__________________________________
May 29, 2009 Marvin F. Kittrell
Columbia, South Carolina Chief Judge
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