ORDINANCE NO. 260613
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Sponsor: Councilmember Darrell Curls
Amending Chapter 10, Code of Ordinances, “Alcoholic Beverages,” by repealing and replacing Section 10-266 for the purpose of requiring notice be sent to inform neighbors and neighborhood organizations of a change in ownership to solicit feedback and input through existing licensing processes.
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WHEREAS, the City has an interest in promoting transparency and public awareness regarding ownership and operation of establishments licensed to sell alcoholic beverages in the City and desires to promote public confidence in the licensing process;
WHEREAS, changes in ownership of a licensed establishment may affect the surrounding neighborhood, nearby residents, businesses, and property owners who may have an interest in being informed of such changes;
WHEREAS, providing notice of ownership changes to neighboring property owners and occupants encourages communication between licensed establishments and the community and promotes informed public participation in local government processes without constituting a public hearing requirement and without conferring approval authority upon neighboring property owners; and
WHEREAS, the City recognizes the value of receiving comments, concerns or other feedback from members of the public regarding the operation of licensed establishments and believes that timely notice facilitates such engagement; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:
Section 1. That Chapter 10, Code of Ordinances, “Alcoholic Beverages,” is amended by repealing Section 10-266, and enacting in lieu thereof a new section of like number and subject matter, to read as follows:
Sec. 10-266. - Change in ownership of business.
(a) Any person intending to acquire any ownership interest in an existing business licensed under this chapter that is owned by an individual, partnership or limited liability company, as distinguished from a corporation, and any person intending to acquire ten percent or more ownership in a corporation that is a sole owner, a partner or member in a limited liability company that owns an existing business licensed under this chapter shall not acquire ownership in the business or participate in management or control of the business without first obtaining an approval therefor from the director. The owner of an existing business licensed under this chapter shall not allow a person to acquire ownership in the business or participate in the management or control of the business without first obtaining an approval therefor from the director.
(b) Any person intending to acquire any ownership interest in an existing business licensed under this chapter that is owned by an individual, partnership or limited liability company, as distinguished from a corporation, and any person intending to acquire ten percent or more ownership in a corporation that is a sole owner, a partner or member in a limited liability company that owns an existing business licensed under this chapter shall make application therefor to the director, in writing, and under oath and shall pay an application fee of $250.00 to the city treasurer to defray the cost of investigation and the application process. The application fee is not refundable.
(c) The application form and process for a change in ownership of a business licensed under this chapter shall follow all of the provisions contained in this chapter that apply to an application for an original license.
(d) The requirements that pertain to density, location, and neighbor notification, as outlined in sections 10-211, 10-212 and 10-214 of this chapter, shall not be applied to a change in ownership of a business if the change in ownership does not amount to a change in the control or majority ownership of the business, or if the business meets the following requirements:
(1) The type of business, including but not limited to a bar restaurant, tavern, hotel, bowling alley, grocery store, convenience store, remains the same as before the transfer and as previously approved by the director;
(2) The classification of liquor license(s), as outlined in article III of this chapter, remains the same as the liquor license(s) as before the transfer and as previously approved by the director;
(3) The type of live entertainment remains the same as the type of live entertainment before the transfer and as previously approved by the director, and the frequency of such live entertainment does not increase.
(e) As a condition precedent to the approval of an application for the change of ownership in an existing business licensed under this chapter that is owned by an individual, partnership or limited liability company, as distinguished from a corporation, and any person intending to acquire ten percent or more ownership in a corporation that is a sole owner, a partner or member in a limited liability company that owns an existing business licensed under this chapter, the existing owner of the business shall furnish to the director the following information:
(1) A written notice of intention to sell or transfer ownership in the business prior to the closing date of the change of ownership of the business; and
(2) An affidavit disclosing the names of the prospective new owners), the names and addresses of creditors of the licensee who are wholesale suppliers of alcoholic beverages, and stating that all the creditors have been notified in writing, by registered mail, or that the creditors have been personally served with notice of any proposed change in ownership.
(f) If upon investigation, the director verifies and is satisfied with the information presented, and if the applicant for the new license has complied with and met all of the applicable requirements of this chapter, then the director may issue a license to the new owner.
(g) If all of the applicable requirements, the investigation process, and approval of the change of ownership of an existing business licensed under this chapter are not complete by the time that the existing license is up for renewal, then the applicant shall be required to meet all of the requirements of this chapter for an original license unless the existing licensee renews the license for the next license year under all of the requirements for renewal under this chapter including the specified time periods.
(h) The director may refuse to approve or may delay the approval of an application for change of ownership of the business if the applicant or licensee is under citation by the city or by the state department of liquor control, if an alleged violation or matter has not yet been finally adjudicated, if the licensee is under an administrative suspension or revocation ordered by the state or the city's director or board, if the director determines that the change in ownership of the business occurred without notifying the director in the manner provided in this section, or if the licensee or the applicant, as the case may be, is not eligible under the provisions of this chapter. If the director disapproves the application, then the applicant may file a written request for a hearing before the board in the manner provided in section 10-62(a) of this chapter.
(i) Any application or request for approval of a change in the ownership of the business which is incomplete for a period of 90 days after the date of filing with the director may be disapproved by the director and the applicant may file a written request for a hearing before the board in the manner provided in section 10-62(a) of this chapter.
(j) Upon the director’s approval of a change in ownership, the director shall provide notice to eligible neighbors and eligible neighborhoods as defined under section 10-214(a) and section 10-214(b). This notice shall be issued for the purpose of notifying of the change in ownership and to provide an opportunity for eligible neighbors and eligible neighborhoods to submit any feedback and comments. Notification shall be in a form prescribed by the director, include a six-month feedback period, and shall invite feedback from recipients of the notification.
(k) Any approved change in ownership under this section is subject to the probationary period and criteria as outlined in section 10-242. At the conclusion of the licensee’s probationary period, the director shall review feedback and information submitted during the licensee’s probationary period by an eligible neighbor, city department, the Kansas City police department, and any other information that the director deems relevant in consideration of the criteria provided for in section 10-242. The director shall issue notice of the licensee’s successful completion of or failure to successfully complete the probationary period to responding eligible neighbors.
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Approved as to form:
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Nia Malone
Assistant City Attorney