Title
Consider/Discuss/Act on the Six Month Probation on a Specific Use Permit for a Private Club (Dawgs N Hawgs), Approximately 0.11 Acres, Located on the South Side of Louisiana Street and Approximately 100 Feet West of McDonald Street
Summary
MEETING DATE: May 1, 2012
DEPARTMENT: Development Services - Planning
Finance
City Secretary
CONTACT: Jennifer Cox, AICP, Director of Planning
Rodney Rhoades, Finance Director
Sandy Hart, City Secretary
RECOMMENDED CITY COUNCIL ACTION:
· Council direction on continuation of specific use permit and City of McKinney alcohol permit.
ITEM SUMMARY:
· On April 17th, the City Council deferred this item until the May 1st. meeting.
· On October 18, 2011, the City Council granted a six month probationary period to allow the permittee to continue to operate under its SUP for a private club and to bring their food percentage into compliance with the City's Code of Ordinances.
o "Council unanimously approved the motion by Mayor Pro-Tem Ussery, seconded by Council member Harris, to close the public hearing and grant a six month probationary period for Dawgs N Hawgs and to authorize the City Manager to engage an auditor of the City's choosing to monitor the probationary period.
o Council unanimously approved the motion by Council member Kever, seconded by Mayor Pro-Tem Ussery to authorize the City Secretary to reinstate their alcohol permit during this probationary period."
· City Manager Gray appointed Finance Director Rodney Rhoades to conduct the monitoring of the monthly sales during the probationary period.
· During the six month probationary period their sales are as follows:
Food Sales Alcohol Sales % Alcohol
o October $ 838.31 $ 6,412.77 88.439%
o November $ 997.95 $ 8,650.87 89.657%
o December $2,282.82 $ 7,736.03 77.215%
o January $1,431.15 $ 7,429.97 83.849%
o February $3,944.14 $ 9,508.33 70.681%
o March $4,678.24 $14,156.01 75.161%
· Attached is a Summary of Sales during the six month probationary period compared to prior year alcohol sales.
· Ordinance 2010-06-015 provides that as a private club, the club shall be operated in accordance with Section 146-46 of the City's Code of Ordinances. Section 146-46(84)(d) provides that a private club special use permit holder is subject to the terms and conditions of Chapter 138, Article II. Therefore, as the holder of a SUP operating a private club, the club must comply with Section 138-22, which provides that "[n]ot less than 35 percent of the gross receipts of such establishment shall be derived from the sale of food consumed on the premises." Section 138-22 further provides that "[t]he holder of such permit shall provide audits at its expense".
· On September 20, 2011, the City received the club's 2010 financial report from its accountant stating that the club had food sales of $14,725 and alcohol sales of $91,416. This represents less than 14 percent of their 2010 total sales from food.
· Based upon the finance report provided by the club, the City has determined that the club is not in compliance with Section 138-22 and the Alcohol Permit for the club was revoked effective October 8, 2011, however the City Council must still conduct a public hearing and determine compliance or noncompliance with Dawgs N Hawgs' SUP for a private club during the 2010 audit year.
BACKGROUND INFORMATION:
· A Specific Use Permit for a private club allows a larger percentage (65%) of the sales receipts from the sale of alcohol than a typical Mixed Beverage Permit (which allows 50%).
BOARD OR COMMISSION RECOMMENDATION: N/A