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5.5. SR 07-21-1997~ity of iver MEMORANDUM Item 5.5. TO: FROM: DATE: SUBJECT: Mayor and City Council Sandra Thackeray, City Clerk July 21, 1997 Newly adopted ordinance regarding number of premises permits per premises On June 16, 1997, the Council adopted an ordinance amendment allowing only one premises permit per premise. Since the adoption of the ordinance, it has come to my attention that there are currently two premises permits for pull tab operations at the Eagles Club. The permits are for the Eagles and the VFW. The VFW was granted a premises permit on December 18, 1995, to operate at the Eagles. At that time the Eagles indicated they would not be renewing their Premises Permit and had made arrangements with the VFW to sell pull tabs at the Eagles Club. On May 6, 1996, the Eagles appeared before the Council, with a request for a premises permit. The Eagles indicated they wanted to renew their premises permit to keep it active in case things did not work out with the VFW. I was under the impression that the Eagles were not selling pull tabs when the ordinance was adopted because the City has not received any gambling reports since April, 1995. (The Eagles have since submitted gambling reports from 6/1/95 to 6/30/97). Attached is a letter from the Eagles indicating their feelings on the issue. The Eagles state in their letter that although the VFW and Eagles both sell pull tabs at one location, they do not operate simultaneously. The Eagles sell pull tabs prior to 2:30 and the VFW sells after 2:30. Because the situation at the Eagles (2 premises permits) is now illegal, action must be taken by the Council to correct the matter. I have reviewed this matter with the City Attorney. City Attorney Kevin Johnson has offered three options for the Council to consider. They are as follows: 13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 OPTION 1 Make no changes to the previously adopted ordinance. Grandfather the Eagles and VFW, allowing them both to operate until one of the premises permits expire. At that time the Council may consider denying renewal of one of the premises permits, therefore, putting the Eagles Club in compliance with the ordinance. The VFW Premises Permit is up for renewal on December 18, 1997, and the Eagles Premises Permit is up for renewal on May 6, 1998. OPTION 2 Amend the previously adopted ordinance to allow two premises permits at one establishment providing that the organizations do not operate simultaneously. OPTION 3 Rescind the Council motion adopting Ordinance 97-12 which included language to allow only one premises permit per establishment. All gambling organizations have been notified that this issue will be considered by Council on July 21. I expect that there will be representatives present not only for the grandfather issue, but also to discuss the previously adopted ordinance amendment allowing only one premise permit per establishment. COUNCIL ACTION Option 1, 2, or 3 above. \\elkriver\sys\shrdoc\council\premmemo.doc FRATERNAL ORDER OF EAGLES 824 NI~ Railroad Drive Elk River, MN. 55330 July 10~ 1997 Ms. Sandra Thackeray, City Clerk City of Elk River 13065 Orono Parkway P.O. Box 490 Elk River, Mn. 55330 Dear Madam: Replying to your letter dated June 26, 1997 regarding two premise permits for pull tab gambling operations that are currently in effect at the Eagles Club. This is now in violation of the recently enacted ordinance amendment where only one premise permit is permitted per establishment Your June 12th memorandum indicated that the proposed amendment to the City Charitable Gambling Ordinance, would be considered by the City Council oh June 16, 1997. This memorandum was mailed on Friday June 13, 1997 and probably was delivered on Saturday June 14th. The mail wasn't picked up from our mail box until Tuesday June 17th. We feel that we should have received at least 2 weeks notice. We also take exception to the 3rd paragraph of your June 26, 1997 letter viz., "The Eagles indicated they~ wanted to re- new their premise permit to keep it active iln case things did not work out with the V.F.W.". We would, be interested to know just who from the Eagles verbally made this comment. When the V.F.W. took over gambling operations at the Eagles Club on March 1, 1997, we were forced to-give up our premise permit filed with the State Charitable Gambling Board as two different organizations can not retain a premise permit at the same location in the same establishment. We had to retain our Gambling License as we had money in our gambling bank account so monthly reports were still required to be filed with the state. At our April 24, 1996 Eagles meeting, it was decided to apply for a premise permit to sell pull tabs at the bar location. This was previously agreed to by the V.F.W., as we would only sell pull tabs when the V.F.W. Pull Tab Booth was closed. This premise permit application, with a sketch' indicatinq the bar location for our gamblinq operations, was presented to the City and approved at their May 6, 1996 meeting. Final approval was received from the State Charitable Gambling Board in Aug. 1996. FRATERNAL ORDER OF EAGLES 824 NW Railroad Drive Elk River, MN. 55330 Our Eagles Pull Tab operation is open only while the V.F.W. Pull Tab operation is closed down. We are open from 12:30 pm to 2:30 pm Monday through Friday, 9:00 am to 2:30 pm on Saturday and 12 Noon to 2:30 pm on Sunday. The V.F.W. opera- tion is open from 2:30 pm to closing or earlier if no busi~,ess warrants it. The Eagles Club wants to continue with their premise permit at their bar location, as net receipts can be used towards paying their property tax with monies left over for locally lawful purpose donations. The V.F.W. is in the process of developing a Youth Sports Complex in Otsego. Four Soccer Fields are completed and in use and a Youth Activity Building is in the process of being built. This project should be completed this fall. Future plans are to double the size of the Youth Activity Building and develop additional athletic fields as funds become avail- able. With the additional gambling site at the Eagles Club, they can complete these projects in a much shorter time span. We feel that it's not fair to enact a ordinance that benefits one local organization at the expense of two other local orga- nizations. The V.F.W. and the Eagles should either be grand- fathered in at the Eagles Club or the ordinance be further amended indicating that two premise permits at one establish- ment will be permitted, providing only one can be in effect during operating hours. Sincerely, President Elk River Aerie ~3264, F.O.E.