Committee Hearing, March 13, 2006

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON LEGISLATIVE OVERSIGHT - - - Room 400, City Hall Philadelphia, Pennsylvania Monday, March 13, 2006, 1:25 p.m. - - - PRESENT: COUNCILMAN JAMES KENNEY COUNCILMAN JACK KELLY COUNCILMAN MICHAEL NUTTER Resolution No. 051029 V A R A L L O Incorporated Litigation Support Specialists 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2 Legislative Oversight - 3/13/06

Good afternoon, ladies and gentlemen. Thank you very much for waiting. I apologize for being late. This is a hearing of the Legislative Oversight Committee to take testimony on Resolution No. 051029, which is a resolution authorizing City Council's Legislative Oversight Committee to hold public hearings for the purpose of investigating the presence of an overwhelming number of violations present in and around licensed liquor establishments. Thank you all for coming to what I believe is a very important public hearing to address nuisance bars and stop-and-go's located within our city. My participation in the Act 39 liquor takeout permit process along with meeting with constituents affected by nuisance liquor establishments has opened my eyes to destruction by allowing these noncompliant and sometimes dangerous establishments to operate. I recognize that there is not an easy fix to these 3 Legislative Oversight - 3/13/06 problems. However, I know that with the proper training, resources, and collaboration, nuisances surrounding licensed liquor establishments can be dramatically decreased. As you will hear, the commitment to address these issues is already present and I appreciate and commend the dedication of both state and local levels to manage liquor establishment issues. However, no 12 one can deny that more is needed. Today we will identify what the current issues are plaguing our communities, what steps have been taken to resolve specific issues, and what resources are needed to address the issues that remain. From these discussions, I hope the proper adjustments and actions will be taken on both the state and local level to properly address these destructive nuisances in our communities. Let me state from the outset this is hopefully a hearing that will bring us up to date on what is going on 4 Legislative Oversight - 3/13/06 and what the government -- various levels of government are doing to try to address the problems. There's no attempt to assign any blame or criticism to anyone. I think the nuisance task force has done a great job in identifying issues and moving forward to try to resolve them, but I do think at some level in the state liquor code there probably needs to be some adjustments to allow the city more autonomy and take into consideration some urban issues that affect licensing liquor establishments as opposed to rural issues and suburban issues. I think the city has a specific problem that is not always shared throughout the rest of the Commonwealth and that liquor laws in the state don't always reflect the needs that we have here in Philadelphia. So I'd like to thank everyone for coming here today. We'd like to hear from the District Attorney first giving us an update on just what's going on. Your Honor, thank you for 5 Legislative Oversight - 3/13/06 coming and please identify yourself for the record. A. ABRAHAM: Good afternoon, Mr. Chairman and members of the City Council and their staffs who are here on this important issue. I'm pleased to be with you today. And seated to my right, your left is Michael Erdos, the chief of my public nuisance task force. As you know, a little bit of history may be in order to complete the record. Almost 13 years ago, we started a public nuisance task force in the District Attorney's office as part of my commitment to community prosecution. It started out with David Castro, who came to our office through Pepper, Hamilton & Sheetz, and we teamed up with the Philadelphia Bar Association and they loaned us lawyers to help in our efforts at closing nuisance bars. We established ourselves in that era and then went on to create the full-blown unit where on a geographic basis assistant district attorneys are 6 Legislative Oversight - 3/13/06 assigned to work with and through City Council people, state legislators from both sides of the aisle, community groups, and other interested officials and people who want to address the issue of nuisance bars.

With the help of our partners, law enforcement, the Philadelphia Police Department, the department of licenses and inspection, the health department, the fire department, other city departments, and with our state cooperation from the LCE, which does the investigations, and the LCB, we have effectively closed more than -- and this is a conservative estimate, more than 2,000 properties. Some of the largest clubs, some of the most terrible stop-and-go's and corner delis and the like in neighborhoods that are across the city of Philadelphia. And closing down these businesses, confiscating liquor licenses, and/or seeing that the board does not renew a liquor license is a hallmark of our work. 7 Legislative Oversight - 3/13/06 We do this, of course, always through and with the help of the community organizations and groups. And we are prepared to go anyplace and do anything within the law as we know it, including but not limited to attempting to change the law when that needs to be done either through City Council ordinance and/or through state legislation. Community leaders, whether they're civic associations, elected officials, or other are our first line of defense at identifying who the nuisance or what the nuisance establishments are, the houses, the bars, the stop-and-go's, the brothels, the after-hours clubs, and the other establishments that helps us to get started. We obviously use the participation and collaboration of L&I, which does administrative inspections. Working with the City's law department, we can issue citations and cease operations orders. And, of course, cease operations orders can be appealed to the 8 Legislative Oversight - 3/13/06 courts, the Common Pleas courts. Sometimes our luck is really good and our evidence is clear, and sometimes even with clear evidence our luck is bad because the judges don't believe that a liquor establishment ought to be shut down. We would respectfully suggest that even though knowing that there is a separation of powers between the legislative branch and the judicial branch that it might be helpful for this body or some people working with this body to go to court and monitor what happens when we go to a court with cease ops to find out exactly what's going on. It's the best way to see how the system either works well or to somebody's judgment may not work well. We are sometimes mystified why a court does not keep a cease op in effect. And once that has happened, the cease operations is lifted, because there is not an exhaustion of remedies that yet we can see, the place opens up and, you know, 9 Legislative Oversight - 3/13/06 that's the way it goes. But we do have tremendous amount of success with many of the establishments and many of them either are shut down, liquor licenses confiscated through the courts, buildings sold, or the other avenue which is negotiating with the liquor licensee and the establishment to bring them into compliance. And this is done with and through the community. We are in the midst of working on a very difficult bar up in the northwest section of Philadelphia, a place where at least four murders have been committed, numerous other crimes and horrible situations presented to the neighbors. And we believe that with the kind of cooperation we have received from neighbors, the hallmark to our success in addition to police and other investigations, we have a better chance of winning. And I think it's important that your hearings are being held because if there's anything we can do to encourage 10 Legislative Oversight - 3/13/06 community involvement, we rely on the community and they must in turn be willing if necessary to go to court and testify to what they are experiencing.

It's good that they call the police and it's good that the police come, but sometimes by the time the police get there, depending on the night of the week and the priority of the phone call or the message, the information that they may have been given may have ceased by the time the police arrive. So this is important when you have a community group and individuals working in tandem with us and the Philadelphia Police Department. We do have -- and I think this is important for the record that we do have very good working relations with City Council and their members and other bodies. It is essential that I mention here that obviously we are always at the mercy of our resources and we have consistent with our budget cuts have had to cut down on our public nuisance task 11 Legislative Oversight - 3/13/06 force staff giving fewer lawyers greater geographic areas to cover. And it's extremely labor intensive, requires hundreds and hundreds of hours at community meetings, always at nighttime, plus going out during the day, going to court, doing things that need to be done administratively and legally to make sure that the cases are properly handled. And I might also mention Mike Erdos, the chief who's sitting next to me and from whom I think you'll be hearing, does a fabulous job of going out and visiting hundreds and hundreds of communities throughout the city helping his attorneys and my attorneys do a good job for the community. We have cooperated with City Council's liquor task force chaired by Council President Verna and we've used the Old City liquor code task force as a model in helping us resolve some of those issues. We also are participating in the managing director's office working group where we have nuisance bar information, 12 Legislative Oversight - 3/13/06 abatement strategies, sharing of information, discussing amongst relevant law enforcement agencies what we can do, what our plans are, how we can best effectuate the best possible outcome for the community without at the same time trampling on any licensee's rights. We are obviously looking to more cooperation from communities as we go forward. And we have entered into productive dialogues with the Liquor Control Board. We know that we have no 14 authority over the board. They on the one hand have begun to be more responsive to us, although we need to make them more responsive to us and not to renew liquor licenses that we believe and that community groups believe with proof, sufficient proof, ought to not be renewed. We understand this is a matter of administrative law judges that they may claim they don't have any money for, but the Liquor Control Board does have the authority to do this and it's not 13 Legislative Oversight - 3/13/06 beyond the realm of possibility, Councilman, that you and I can talk to the governor about providing additional funding or removing some of the funding that the board has from one place and perhaps considering hiring more administrative law judges. It shouldn't take two years to not renew or to renew a license. And it takes a long time to not renew a license and to get a license taken away. We have begun to see better cooperation and understanding with the LCB with our recommendations and we are grateful to them for that, but we need to have a bigger clout in making sure that when we produce the evidence that the board does not renew. We are, however, satisfied that resources aside the LCB and the LCE have been responsive to the communities, but there are only a few agents on the LCE, 22 I think, to cover four big counties. And it's a lot to ask of 22 agents to cover thousands of 14 Legislative Oversight - 3/13/06 establishments in Philadelphia plus the surrounding counties. So we are very much committed to working with people like yourself.

We've been working with Councilwoman Blackwell and Darwin Beauvais of late of her staff to do more work on the stop-and-go's, which we think we're making some progress on, but we need to have obviously additional resources and additional manpower and need to make sure that we're working in tandem and closely with you and your constituents to make sure that the whole package is neatly and effectively tied up so that we can serve the community better.

Thank you very much for your testimony. Michael, you're going to offer testimony?

No. 23

A question I have is have your staff been able to kind of evaluate what needs to be changed 15 Legislative Oversight - 3/13/06 in the Pennsylvania liquor Code That would better enable you to be responsive and to get some of these licenses either revoked or nonrenewed? Is there specific changes you would recommend in the state liquor code? D.A. ABRAHAM: I think Mr. Erdos and I have discussed this and I'll be happy to have him answer.

Please identify yourself.

Michael Erdos, E-R-D-O-S. Good afternoon, members of Council, Councilman Kenney. One of the working groups in the City Council nuisance bar and stop-and-go task force is a legislative subgroup and through that group we have a package of three bills which we're hoping to pass through the legislature in Harrisburg as soon as possible which may have an impact here. Two of them deal directly with issues pertaining to renewal or transfers of licenses. One of those bills would 16 Legislative Oversight - 3/13/06 require that every time the Liquor Control Board objects to the renewal of a license and lists that establishment to undergo a renewal hearing that the establishment has to post on their establishment the same way they do with the orange placards now when there's a transfer pending that there's going to be such a hearing. What we found is while we have law enforcement documentation on a lot of these places, the thing that would really round out the testimony and make our case much stronger is community testimony. After all, they're the ones that work and live nearby on a daily basis. Yet often times they're hard to identify from our standpoint who are they, are they willing to come to court. And by establishing the requirement to post, that would go a long way. Another of the bills we have in mind would require that the LCB not transfer any license to an establishment that hasn't undergone all the requisite 17 Legislative Oversight - 3/13/06 city checks: fire, electric, health, zoning, city tax, state tax. Right now the state law only requires a state tax clearance and health check, but if a place doesn't have its own shop in order with respect to the city code, we really can't expect them to have much of a shot when it comes to the state laws. And I believe there's one other law pending as well that would give the community greater rights when it comes to protesting a transfer. Right now it's very difficult to protest what's called a person to person transfer. You can only do that successfully if the applicant has a bad reputation. It's often difficult to produce that type of evidence at a hearing. But if we change the law to make it parallel to place to place transfer where a community member can say here's the adverse impact this transfer would have, a liquor license would have here in our neighborhood, then the community has greater rights and this 18 Legislative Oversight - 3/13/06 might lead to either the outright denial of a transfer of a license or to conditional licensing where there are additional restrictions placed on the license. So that's a package that we have that I think would go a long way. It won't solve all the problems but would put the community in a better situation and put law enforcement in a better position as well. D.A. ABRAHAM: If I could add just one last thing, one of the things we've been discussing is we don't -- I don't know personally how well enforced the tax on drinks is being aggressively collected. And obviously if Council saw fit to impose that tax, I'd be curious to know how many bars are being made to pay up. I get the sense that there's something missing there. One of the revenue-producing possibilities is that that may be a method or a mechanism by which we could fund or help to fund not only the work that parts of the city 19 Legislative Oversight - 3/13/06 government are doing, but it also tends to make people more responsive when they have to cough up that tax. So the bill 5 is good. Like everything else, it's the enforcement.

In your enforcement efforts, do you find that the records provided by the police are sufficient in your attempt to build a case that a particular establishment is, in fact, a nuisance? I know anecdotally myself when I've called to get a premise history for a bad bar or takeout beer deli often there is no premise history because even the complaints of the community have not been written up in a proper way so that it can be directly related to the establishment that's causing the problem. And, therefore, when you guys go to court or the LCB, there's no real premise history from the police on those establishments. Do you find that there should be better training or more understanding as to how to write 20 Legislative Oversight - 3/13/06 up these 48s and other reports? D.A. ABRAHAM: That would be helpful but it is difficult. For example, if I was a neighbor calling in loud noise or fighting on the highway or something at a bar, and depending on what the police officer is doing at that moment, if the officer's nearby and doesn't have something of a higher priority than that, then the chances are better that the officer will come up at the very time that something is happening, especially if it's a part 1 crime, a robbery in progress or a shooting, homicide or something like that. The chances are better. However, when it's loud music, disturbance on the highway, public urination, fight on the highway, and the officer is busy doing part crimes, by the time the officer does arrive, assuming the officer arrives, and notes the call, loud music, the loud music may have stopped or the question is how loud is loud and what 21 Legislative Oversight - 3/13/06 hour of the night is it. So loud music at o'clock may not be the same as loud 4 music at o'clock. And sometimes if you have a case and you call the officer back three months, four months, six months later when the case is all ready, you say, officer, how loud is loud? I don't remember because, you know -- so it's really difficult. It's putting the officer -- no disrespect intended to the officer's ability to observe -- at a terrific disadvantage if you have a whole string of 48s with of them being loud music and you can't say how loud is loud or what the music was or what was the effect on the neighbor and there's no 18 neighbor out there to identify himself or herself to the officer, say, officer, I'm the person who made that phone call, please use me. I live across the street and I'll be happy to testify. Pretty much it's the officer out there by himself or herself. And that's the important part of the community Legislative Oversight - 3/13/06 involvement.

Let me ask you a question about enforcement from the police department side. I've never been able to understand why in the area of liquor enforcement there seems to be this major wall. We as Philadelphia -- our police enforce state law all the time. The murder is a state statute, robbery statute. They're all state statutes. Why would not then the Philadelphia Police be able to enforce the liquor laws because they're also state statutes? We wouldn't be asking them to do anything beyond their scope of responsibility. If they're sworn officers in the County of Philadelphia and Commonwealth of Pennsylvania, why are the liquor laws seem to be this specialty that only the state police can deal with? D.A. ABRAHAM: I'm going to let Mr. Erdos do that, but I really must make an observation. It's not that the police officers can't or don't or won't. It's 23 Legislative Oversight - 3/13/06 strictly a matter of how many boots are on the street sometimes and what else they have to do and the evidence that's presented to them when they go there. It's not in my judgment a lack of willingness on the part of the police.

I'm talking more to conduct the investigations that the state police -- I mean, we have 11 state troopers doing this in a 12 four-county area. What makes the 13 Philadelphia Police in a different status 14 that they couldn't conduct surveillance 15 or underage drinking stings or anything 16 else that other states' sworn officers 17 do? 18

Well, the liquor 19 code -- 20

I don't 21 mean to interrupt, but it would seem that 22 a large number of a particular district's problems emanate often from nuisance establishments and, therefore, it's all crime and quality of life related. 24 Legislative Oversight - 3/13/06

A couple points to make. First of all, I think the police are doing a much better job now in helping with enforcement of alcohol establishments. Even if they're not trained or able at this point to write the actual liquor code citations, I think they now understand the importance of doing a great job of at least writing up the police incident report in a way that will allow the LCE to write the citation. And through their legal counsel, the police are forwarding those incident reports. So they are playing a critical role in enforcement. As far as whether they could actually participate in the citation process, if they get called on a 9-1-1 call and find a minor in there, could they just write a citation the same way they write a summary citation, I think the answer lies with the statute, the liquor code. The language seems to be a little gray. I haven't reviewed it 25 Legislative Oversight - 3/13/06 recently, but my recollection is it gives the authority to do those types of task to the Bureau of Liquor Control Enforcement and so it sort of begs the question of whether the police could also participate. And them I'm sure their counsel may have an opinion that as well as the LCE.

I'll ask them that question too, but I could see in a problem district where you have two or three or four problem establishments to put undercover officers in there to do an underage drinking sting. I mean, they know the area. They know who the people are. I think historically what has happened is because the liquor code was always enforced by the LCB and then transferred to the state police and recently you think it's changing, but there seems to be this this is not our area of enforcement because the state deals with that. And, again, with 22 state troopers, it's a pretty difficult Legislative Oversight - 3/13/06 task to get them to do all the things they need to do. So I'm just wondering whether we could at some point press the envelope and test what the status of the Philadelphia police officer or detective is when it comes to enforcement of the liquor code. D.A. ABRAHAM: I don't speak, neither does Mr. Erdos speak for the Philadelphia Police Department, but I am going to make an observation at the risk of passing this over for somebody in the police department. I'm sure there's somebody here who will speak for the police department. It seems to me that in addition to the legal question, which we may want to address, is that like everything else that we want to do well, it's a matter of resources and manpower. If you have 6,300 police officers and you have some off duty, some on vacation, and you have X number of officers on duty, with better and higher expectations in cases where the police are going to be 27 Legislative Oversight - 3/13/06 required to do more work, more paperwork, more detail work, photographs, films, tapes, and all the other things, if you want police in addition to be capable of and arm them with the ability to do liquor control -- and I understand they're life quality. I'm not passing that up for a moment. I appreciate it as you do as extremely important to the health and vitality of the city -- you need to have far more police officers than we do with dedicated funding to do a specific task. There's no doubt that for a police officer working undercover let's say in a narcotics sting in a bar where the officer also has the ability to see minors being served, fights, and all the other business going on, there's no doubt that that liquor establishment can be put out of business with relative ease. But with everything else being asked of our Philadelphia Police, it's going to take a lot more monetary commitment and more boots on the street to be able to do that 28 Legislative Oversight - 3/13/06 and also most likely a change in our legislative picture.

Again, I just know that in certain districts the nuisance establishments are the core of all the crime -- most of the crime issues. D.A. ABRAHAM: No doubt.

And to be able to have a captain or inspector be able to mobilize Philadelphia Police to take out that place would probably free up some of the time that they -- D.A. ABRAHAM: I agree. If you read the papers and see how our homicides are happening, while there are many out on the street and many in homes, some emanate in bars, drug sales, prostitution, fights, robberies, disturbances, you name it and it's in and around the bar. And the bartender or the barkeep or the manager says take it outside, well, that's great. Now it's not only in the bar and endangering 50 or 29 Legislative Oversight - 3/13/06 75 people or 100 people in the bar, now it's destroying the rest of the neighborhood on top of everything else. So you're right that sometimes in a neighborhood it's just that festering sore, but it's going to take a lot more manpower intensive labor to get this under control. We can do it. There's no 10 doubt we can do it.

Councilman Kelly.

Thank you. First of all, I want to commend you, Madam District Attorney and Mr. Erdos, because of the fine work that you've been doing with the Burholme community. I know you've closed two really terrible, terrible bars up there and I know I can speak for the community up there that it's much, much better since you took action on that. I just want to put that out. D.A. ABRAHAM: Thank you very much. 30 Legislative Oversight - 3/13/06

You mentioned in your testimony it takes two years to close a bar. Could you tell me why it would take that long?

Well, I believe the District Attorney was referring to the renewal process. Renewals come up every two years in Philadelphia and the Liquor Control Board will process applications for renewal license. And they're here and they can speak to that. There are other mechanisms we use to try to abate an alcohol nuisance. Some of those take far less than two years. But even with respect to a court case, by the time we gather all the evidence and take it to court and have a final hearing, sometimes that's pushing a year or more as well. But every case is different. So if there's a bar that's selling drugs under the watchful aye of the owner and we're able to file a forfeiture petition and seize it, we can shut that place down within a matter of weeks and sometimes 31 Legislative Oversight - 3/13/06 keep it closed indefinitely. But in other situations when we're relying on the renewal process or the liquor code injunction process, it can take anywhere between a year and two years.

Well, the renewal process, you would have to go back and see what the history was as far as do you have any previous infractions and whatnot or strikes against that bar, then you would make a decision on whether you're going to fight it or not?

The Liquor Control Board has the ultimate and final authority as to which licenses will be renewed. However, the different law enforcement agencies within Philadelphia in conjunction with the Liquor Control Enforcement, LCE, we provide our recommendations to the Liquor Control Board of dozens and dozens of bars that we think are causing nuisances to the neighborhood. And the LCB factors our recommendations into the equation, but 32 Legislative Oversight - 3/13/06 they're the ones who ultimately schedule the hearings, object to the renewal of licenses, and make the final determinations.

How many members of your task force did you lose over the last two years? D.A. ABRAHAM: We're three people short because of the budget cuts last year.

How many members do you have?

We have eight total, six who are working on the drug house alcohol.

So you lost three then? D.A. ABRAHAM: And three people -- because these assistant DAs do nothing but nuisance bars related to drug sales, alcohol, fights, sometimes homicides and other infractions, it's a big loss to lose three people.

What was the 33 Legislative Oversight - 3/13/06 cost reduction in that? D.A. ABRAHAM: Let's see. The year before last we lost 1,300,000. Last year we lost a million 200 some thousand. So we're down about 2.3 million as of last I calculated.

Two and a half million over the last two years. D.A. ABRAHAM: Close to two and a half million over the last two years. And with no money put in our budget this year it's not going to get any better, probably going to get worse.

Thank you.

Thank you. Just one final question, Your Honor. Do you find in general or your people find in general there's a disconnect or lack of experience when it comes to understanding the problems of an urban environment and liquor issues as it relates to the rest of the state? I've always felt -- and it's very subjective -- that the LCB is run out of 34 Legislative Oversight - 3/13/06 Harrisburg, it's a statewide entity, it deals with counties throughout the state with varying degrees of population. I just feel that there's a little lack of a lack of understanding not with the LCE actually on the ground doing the work but just kind of the overall issue of the urban environment is a different environment and whatever happens that affects all of us affects us more because we're so compact and so close together. D.A. ABRAHAM: Well, there's no 14 question in my mind that because we are the largest city in the Commonwealth even though we've lost population that we have more problems, more complex problems, more issues to deal with than anybody else. And there may be some either subtle or not so subtle feeling from the center of the state, i.e., Harrisburg, that Philadelphia has so many problems they can't quite deal with it. I don't want to say a disconnect because I don't want to -- because I don't think I really 35 Legislative Oversight - 3/13/06 want to go there. That's more of a political issue than anything else. But obviously it's impossible in my judgment to deal with the problems of Philadelphia with state troopers who are also doing 7 work in other counties. I think by far 8 because of the number of liquor 9 establishments we have and also the 10 nature of the infractions, for example, I 11 have a club and now I'm permitting nude 12 dancing in my club. I don't have a 13 license. People object to it. There's 14 all kinds of stuff going on there, 15 enforcing closing hours, the liquor tax, 16 the L&I issues, fire code, health, 17 safety, seating, the whole issue of what 18 establishments can open up in a 19 neighborhood. So I think the problems 20 are so many and so varied in Philadelphia 21 and we need a lot of attention. We need 22 more resources that sometimes there may be a tendency to look at us and say, well, we always have our hand out. And you know what, we always do, but our 36 Legislative Oversight - 3/13/06 needs are greater than almost anyplace else. If I were in Pike County or Crawford County or Forrest County, I can guarantee you we wouldn't have the problems in Forrest County we have in Philadelphia. So if there's one rod and gun club that has trouble, the sheriff or local police chief would make a stop at the club and say, you know, guys you, you got to tone it down and that would be enough. In Philadelphia with thousands of establishments and thousands of other issues, it's really difficult to get that kind of responsiveness given the nature of the problems.

Thank you very much for your testimony. No other questions. Thank you for coming. We had allowed the District Attorney to go first because she had a prior engagement. What we wanted to do with the hearing was do a little something different than we usually do and that is hear a little bit from the 37 Legislative Oversight - 3/13/06 community first so the people who come to the table to respond either from the state police or L&I or Philadelphia police or liquor board can address the issues in context of what the community presentation is. So I know they have specific testimony they've submitted, but we want to go a little bit with the community so we can kind of frame this so the people responding know what to respond to. So with that, I'd like to ask Laura Siena and then Rich Horrow and then Tracey Gordon and the Reverend Brown, Vivienne Crawford, and Bonita Cummings will do a presentation. So please identify yourself for the regard.

I'm Laura Siena, executive director of West Mount Airy Neighbors Association.

Please proceed.

Thank you. I'm grateful to Councilman Kenney, thank you, 38 Legislative Oversight - 3/13/06 and all of City Council to be asked to testify on this subject. I do so not only representing West Mount Airy Neighbors but also East Mounty Airy Neighbors, Mount Airy USA, and the other organizations and individuals who came together to take advantage of the unique opportunity afforded us last fall by Pennsylvania Act 39 to rid Mount Airy of a long-term nuisance. Act 39 was a Godsend to our community because it gave us an organizing principle and a set of deadlines which enabled us to marshal community support and action against a long-term public nuisance in our neighborhood, the Corner Deli. Corner Deli, 6643-45 Germantown Avenue, at the corner of East Horter Street, had long been a thorn in our community's side. Its takeout beer license was used to promote a host of ills. It was the locus of public drunkenness, drug dealing, loitering, and public urination. Patrons of Corner Deli 39 Legislative Oversight - 3/13/06 harassed passersby, including students from the nearby Project Learn School who had to walk by regularly on their way to Lovett Library. m. until the 7 wee hours of the morning. Several years 8 ago there was a shooting at the Corner Deli. For many years, neighbors tried to do something about this nuisance but were thwarted by a lack of coordination among the various agencies which have jurisdiction over establishments of this type. Although Corner Deli had changed hands a couple years ago, any hopes for a community-minded business were dashed when the new owner, Adam Xu, continued to sell takeout beer and malted beverages to the same clientele as before, nor did he discourage loitering and other antisocial behavior which characterized this establishment for many years. He also did not respond to the overtures of our community development corporation, Mount Airy USA, with offers of grant funding to 40 Legislative Oversight - 3/13/06 improve his store but instead installed even more bulletproof glass to the point that a customer could not even purchase a bag of potato chips without having them handed to him by the man behind the glass. Needless to say, this didn't build the image of a business which wanted to be a good neighbor and an integral part of our community. Along came Act 39 and community leaders quickly gathered to take advantage of this great opportunity. Of the eight businesses licensed to sell beer and malted liquor for takeout in Mount Airy, which is the 19119 Zip Code, community leaders only targeted one for denial under Act 39. That's Corner Deli. The others are good neighbors and good businesses. We formed a coalition, which included Councilwoman Donna Reed Miller and her staff, Project Learn School, East Mounty Airy Neighbors, Mount Airy USA, St. Michael's Lutheran church, and Pelham Town Watch. When the date of our hearing 41 Legislative Oversight - 3/13/06 came, we were ready. Not only did each group testify, but we heard from 14th district police and Jerry Mondesire, owner of the Philadelphia Sun newspaper, whose office is a few steps away. All in all, of us testified. We were very 8 ably assisted by Steven David Masters of 9 City Council staff who served as our 10 Council. Six hours later we felt we had 11 finally told the whole story of how 12 detrimental the Corner Deli had been to 13 the overall fabric of our community, to 14 our economic revitalization and crime 15 prevention efforts, and to our desire to 16 show our children good and neighborly 17 behavior on the part of all our citizens. You can imagine our delight when just a week or so later we heard the Corner Deli had been denied a license to continue selling beer for takeout. The story didn't end there, however. Corner Deli appealed and continued to sell illegally during and after the appeal process.

We distributed 42 Legislative Oversight - 3/13/06 the contact information for the state police's office of liquor enforcement, the nuisance bar program of the Pennsylvania Liquor Control Board, and L&I's public nuisance task force widely on these little handmade postcards all around the neighborhood and encouraged residents to call when they witnessed violations. Finally, after several weeks the business closed. Today no one is loitering outside. We don't see drug deals being made and passersby are no 15 longer being harassed. What we learned from this experience is that community groups can be successful in working together to rid the neighborhood of a bona fide nuisance if they have a galvanizing factor such as what was given to us through Act 39. This enabled us not only to come together effectively but to draw on the knowledge, resources, and accountabilities of the police and state police as well as some city agencies. 43 Legislative Oversight - 3/13/06 Leaders in Mount Airy have taken the new energy and organization that flowed from this success to identify other businesses which are a nuisance, although they don't have all liquor licenses, and encouraged Councilwoman Miller to name parts of Mount Airy a local nuisance task force area. We are much better positioned to take advantage of any new initiatives which presumably will be forthcoming from the testimony today which will streamline city agencies working together and with the neighborhood groups for effective action on these matters. What is needed now we believe are more tools which will enable us to match our coordinated effort with the coordinated efforts of all the city agencies and state agencies which can have a role in eliminating these nuisance businesses from our community or at least getting them to change their ways and become good neighbors. In order for this to happen, nuisance businesses need to be a priority for the Mayor and 44 Legislative Oversight - 3/13/06 each member of City Council. The hearing today as well as other efforts underway demonstrate that the opportunity exists right now to make real headway on this issue. The interest that City Council members are taking in this issue is deeply appreciated and will go a long way to bringing us to a better places neighborhoods. Thank you again for giving me the opportunity to testify on behalf of all Mount Airy institutions and residents who worked on this.

Thank you for your testimony. Do you know what the disposition of the license is from the Corner Deli? You said they closed, but do you know whether or not they transferred the license to another location or they put it in safekeeping? Do you have any idea?

Steve Masters would probably be a little more up on what the latest is than I am. Hadn't they transferred it to the brother-in-law or 45 Legislative Oversight - 3/13/06 tried to? I think that was --

The establishment's closed; correct?

It's currently closed. It's on sale apparently.

Please identify yourself.

Sure, Steven David Masters, attorney for City Council. Good afternoon. This business had -- we denied this business the takeout beer permit. They appealed to the Common Pleas Court. They sought a stay. They were denied a stay. They appealed that to Commonwealth Court. We were able to get the Commonwealth Court to knock their appeal out for lack of jurisdiction. And at that point they closed their doors. Now, as the Council, we only said that they can't sell beer for takeout. We didn't regulate at all their ability to sell potato chips or anything else inside their establishment. They've closed and they haven't given us any formal 46 Legislative Oversight - 3/13/06 information as to how long the closing is for.

And you don't know that there's any movement to transfer the license to another location or you're not aware of it?

No, we're not aware of anything like that. Apparently, what I just heard recently was all five of the establishments that had appealed to Commonwealth Court and we had prevailed on have closed. And I believe that it could be an attempt to create an argument that we've created a hardship on their businesses when, as we know, we haven't restricted at all their ability to conduct business other than the takeout sale of beer.

Councilman Nutter.

Thank you, Mr. Chairman. Mr. Masters, and I know all of this is recent, but is there some other 47 Legislative Oversight - 3/13/06 provision -- I could possibly be confused on this. Is there some provision that causes a license possibly to go into safekeeping if an establishment has not conducted business for a certain amount of time?

Yes.

What's the time frame?

The attorneys for the LCB are here who would be able to answer it in much more detail. I believe it is something in the neighborhood of 30 days. If you cease business for the most part for a certain period of time, then you must put your license in safekeeping.

Exactly. Okay. We'll get into that when they come up.

Thank you very much. Any questions for this witness? (No response.)

Thank you 48 Legislative Oversight - 3/13/06 very much. Rich Horrow and then after that -- please identify yourself.

Good afternoon, Councilman Kenney and members of the Legislative Oversight Committee. My name is Rich Horrow and I'm president of the Old City Civic Association. Today I would like to testify on the issues our community faces in dealing with the over 95 licensed liquor establishments in Old City. The vast majority of these establishments are concentrated in a small area of Old City stretching from Market to Chestnut and from Front to 4th Street. The density of these licenses is so great that Old City is second in the country to only Bourbon Street in New Orleans in terms of having so many licensed establishments in such a small area. With this backdrop, the sheer volume of liquor licenses severely affects the quality of life of Old City residents and businesses. 49 Legislative Oversight - 3/13/06 The problems relating to the proliferation of these licenses fall into two categories. First, we have had to deal with specific establishments whose behavior is so bad as to create a public nuisance. These businesses seem to go out of their way to flaunt the rules and thumb their nose at the community. They serve minors, create an environment where fighting and disorderly conduct among patrons is a regular occurrence, get caught with patrons with concealed weapons and drugs, and other nuisance activities such as noise and trash. We consider these establishments to be our problem children. Second, the large number of licensed establishments has in effect created an entertainment district in Old City. This entertainment district brings thousands of people to Old City on Friday and Saturday evenings, which overwhelms our streets and taxes the city resources dedicated to control it. The consequence of this fact creates a 50 Legislative Oversight - 3/13/06 spillover effect on the quiet residential areas of our community such as the area north of Market Street where on a given Friday or Saturday night there is a huge swell in noise, trash, vandalism, gridlocked traffic, and parking problems. These problems cannot be traced to any one establishment but, rather, exist as a result of the large concentration of licenses. Considering the overwhelming nature of these problems, I'm pleased to report that we have been making some progress in dealing with them. First, we are now able to be proactive in controlling the number of liquor licenses and the type of liquor establishments we allow into our community. This is a direct result of legislation enacted by City Council in 2004 extending our zoning overlay prohibiting new restaurants south of Market Street. And for that we would like to thank Councilman DiCicco and the rest of City Council for passing this 51 Legislative Oversight - 3/13/06 important piece of legislation. We have also been assisted at the state level by the ability to require new operators to enter into conditional licenses with the Liquor Control Board that prohibit certain activity that exacerbates these problems. With the use of these legislative tools, the Old City Civic Association board created a separate liquor committee to review all applications for license transfers within Old City as well as new applications. This committee's work is proving to be very effective in enabling us to get a handle on the number of licenses which prior to that point were spiraling out of control. Just as important has been the use of conditional licensing to make sure that good restaurants don't flip into nightclubs overnight when their business falls off. Secondly, and just as importantly, we have been aided in the enforcement of nuisance bars by the creation of the Old City liquor task 52 Legislative Oversight - 3/13/06 force. For the past several years, this task force has met bimonthly to address enforcement in licensing issues in Old City. Its work has been exemplary and is a testament to the level of cooperation between its participants.

Our organization, the Old City district, the police, the District Attorney's office nuisance task division, the law department, licenses and inspections, the managing director's office, the state liquor control enforcement, and spearheaded by Councilman DiCicco, Senator Fumo, and Representative Lederer. As part of the task force, I'm very proud of our accomplishments and the level of our cooperation from our elected officials, community and city and state agencies. We discuss real problems. We share information. And we come up with real solutions. And I think our model of cooperation and effectiveness can clearly be the model for other city neighborhoods with significant problems resulting from 53 Legislative Oversight - 3/13/06 its liquor establishments. Examples of our effectiveness has been the task force work in dealing with nuisance bars in our community through the filing of 611 actions such as the one against Club M, which has since closed, and our pending case against Suede Lounge. I would also like to add that the problems of stop-and-go establishments addressed by Resolution 12 051029 is not prevalent in Old City. We have approximately 12 liquor establishments licensed for takeout beer and malt liquor. These businesses are long-time relatively good citizens in our community and do not create problems. For these reasons, we are not protesting their applications under Act 39. Even with these successes, there are still areas that need to improve significantly in Old City. What is needed are greater resources to handle the weekend problems that overwhelm our community and diminish our quality of 54 Legislative Oversight - 3/13/06 life. Although the police working in the 6th district do a fantastic job in our community, there is simply not enough of them to handle the problems created by the volumes on Friday and Saturday night. We continue to need help in addressing these problems and I would echo the testimony of the District Attorney in this regard. On the whole, however, I think our work in Old City shows how important community input is to solving liquor-related problems. We are now involved in every step of the process from licensing to enforcement. In conclusion, for these reasons, we wholeheartedly endorse Resolution 051029 and ask that Council pass it. Thank you.

Thank you for your testimony. One of the issues that I would like L&I to address and we've had come to light in our discussions prior to the hearing is that one of the issues when it comes to permitting or granting a license to sell 55 Legislative Oversight - 3/13/06 liquor, the state does not take into consideration our zoning laws. So it's kind of done almost like in a total environment that has nothing to do with the reality of what you're living with in Old City or in other parts of the city. So one of the things we are hoping to recommend or try to deal with is allowing the state or requiring the state to take into consideration local zoning when it comes to the granting or not granting of a new license even or a transfer. So that's one of the issues that is kind of in a disconnect between urban living and urban reality and the bureaucracy of the state.

I would add that it does create confusion at times, but I think we look at it that we take it as a positive and we say that there's a two-pronged approach, that we have two bites of the apple to prevent a bad establishment from coming in both with zoning and both with the conditional 56 Legislative Oversight - 3/13/06 licensing, but definitely I think better coordination would make the process simpler.

Thank you. Councilman Kelly.

Thank you, Mr. Chairman. Mr. Horrow, you mentioned something in your testimony that pending your case against the Suede Lounge. Could you tell me what that's about?

Well, I believe their address -- I don't quite recall offhand. It's at 2nd and Market between Front and 2nd and Market.

Is it operating now?

Yes, it's operating. It has fortunately calmed down. I think that might be from a lack of business and just that they're not putting any more money into the place. And there have been rumors that it's up for sale. But there have been a number 57 Legislative Oversight - 3/13/06 of problems since they opened. And unfortunately this was an establishment -- and this is typical of what happens in Old City is they come in and they claim that they're a full service restaurant. And, you know, they march all these people in who say -- they bring the chef in, bring the partners, we're good people, we're going to put a nice full service restaurant. And they might start serving food and before you know it the food has diminished, the kitchen size has diminished, and it becomes a nightclub. Now, unfortunately, in this situation the conditional license that was created with them was really before we got a foothold in dealing with the conditional licenses and it was certainly before the zoning overlay came in, but these particular operators seem to -- they didn't care what was in their conditional license. I think at one point when we were looking through the task force we were looking at their 58 Legislative Oversight - 3/13/06 conditional license and they might have violated six out of ten provisions right off the bat.

How are they operating now then, as a nightclub or restaurant or --

They claim to be a restaurant, but I believe it's mostly as a lounge/nightclub. But, again, the problems -- there was some bad times there for a while and I think it's calmed down based on just the nature of their business. But when the weather gets warm, we're always very, very cautious. And I think that the location of this particular business was severely harmful to Old City because it was so close to the residential component and the tourism that it really created a much greater problem.

You mentioned something about this Club M that presently it's closed? How long has it been closed? 59 Legislative Oversight - 3/13/06

I believe it's been closed -- I think one of the other gentlemen from the city agencies would be better able to say, but I believe it's been at least a year.

Okay. And you have no idea where the license is at this point, do you?

No, I don't believe I know.

Was that a conditional license?

No, that was not a conditional license.

And that was operating as a club evidently; right?

That was operating as a club. And I believe there might have been a prior incarnation of it. We go through so many of these things. They actually closed not necessarily because of success with the 611 action, although I think that pressured some of the parties, but they had a landlord-tenant 60 Legislative Oversight - 3/13/06 dispute that actually closed them down.

Thank you.

Thank you very much for your testimony. Since she's from Old City also, Ms. Philo, since we're consistent in testimony relative to neighborhoods, if you could just come up and please identify yourself. And since you've heard Mr. Horrow's testimony, if you could touch on some new areas, that would be helpful. Please identify yourself.

Thank you. I'm Cynthia Philo. I'm the executive director of the Old City District. Philo is P as in Peter, H-I-L-O. As executive director of the Old City District, just to give you a background, it's a municipal authority that's been operating I guess almost eight years now. Primarily, we are endowed with doing clean and safe programming throughout the 22 square block Old City District area. We also do economic development. Old 61 Legislative Oversight - 3/13/06 City is an amazing neighborhood. We have as Rich mentioned I think actually I was counting while he was giving testimony, over 110 restaurants, over 137 boutique retailers, 40 art galleries, and what I think should be over 4,0000 residents at some time very soon all within this 9 square block area. As the director of 10 the Old City District, probably about 11 three years ago a group of us got 12 together to form the Old City liquor task 13 force. And one thing that I have to 14 emphasize and I can't emphasize it enough 15 is cooperation. The Old City liquor task 16 force has had cooperation of the Liquor 17 Control Enforcement, with Lieutenant 18 Comerer, L&I with Dominic Verdi and his 19 fabulous staff, Senator Vince Fumo, 20 Representative Marie Lederer, as well as 21 Councilman Frank DiCicco. I'd also like 22 to mention that Carl Engelke has been very instrumental in keeping this group focussed on what any type of liquor task force should be focused on and that 62 Legislative Oversight - 3/13/06 really is the quality of life issues that a potential liquor license establishment can cause to a community. I also served as an Act 39 hearing judge, but today I am here focusing on the Old City emphasis. The Mayor's managing director's office also has been involved in this particular task force. As I said before, the community really needs to be involved. And as you heard from Mount Airy, it has to be a coordinated effort. It can't just be a community who decides that on an individual basis their morality doesn't like a particular business because in Philadelphia and in Old City and as part of the Old City District, we want businesses to thrive. I mean, when you talk about entertainment district, we have probably the first place in Philadelphia tourists come to. They come to Old City. They want to see the bell. They want to see the hall. And they want to go out and eat and drink and have a 63 Legislative Oversight - 3/13/06 wonderful time. So we want to promote those good businesses there. So if the community is looking to get rid of an establishment that is not working well with the community, they also have to do their homework and become prepared and have all of the documentation behind them. One thing I have to mention, without the work of the 6th district police force and Captain Brian Korn and lieutenant -- or Sergeant Frank Millilo, I don't believe that we would be able to make sure that our calls from the community to the police force were put on a priority. And that is one thing I know that the DA had mentioned, that a lot of times quality of life issues are not considered a priority because there are other crimes out there that obviously are much greater in their scope. However, when you have enough people calling enough times over and over again, quality of life can really disrupt a 64 Legislative Oversight - 3/13/06 neighborhood, not just residential but business community. And in our situation, when we were talking about the Club M incident, with that particular establishment, which I believe is at 126 Chestnut Street, it really was the businesses that spearheaded that closure of that particular business because people were saying we don't want to come down to Old City because there's fights that go on from this club, we heard all sorts of bad things. And other businesses that operate on a good basis, and we're talking about restaurants, which happen to have liquor licenses, don't want that.

So you really have to engage the entire community as well as the residents to make things go. The other thing I would like to mention is that I think that -- in a different role, I'm also the vice chair of the Pennsylvania Downtown Center and we deal with main street programs throughout the entire Commonwealth. And 65 Legislative Oversight - 3/13/06 you had mentioned something about whether or not other communities, maybe smaller communities that may be a city but obviously not as big as Philadelphia or Pittsburgh, are dealing with issues similar to what we have. And they may not be dealing with them in scope, but they are dealing with them in the quality of life issues in the same way that we are. The difference is a lot of them want to have the liquor licenses there because they want to have the businesses grow so their tourism element can grow and different things like that. We in Philadelphia have so many of them, and obviously we've capped at a level, but the problem is they transfer back and forth into different communities. And I think one of the things that as the director of the Old City District, and I'm sure that Rich Horrow as the president of the civic association would back me on this, unless you're coordinating, you know what's going on, a 66 Legislative Oversight - 3/13/06 lot of times when someone transfers something, you have no clue that that transfer's happening. And unless there's some type of posting, which I believe that Mike Erdos had mentioned they're trying to get through as to a state law, something to let the community know what is going on, if they maybe don't have an organized group at first, there needs to be something there for them to see. And I think that that is very important and can go a long way to helping some of these communities deal with these problem issues. Let me just see if there's anything else I wanted to add to that. No. Just on the end of this, I just wanted to thank you very much, Councilman Kenney, as well as Councilman Kelly for having time here and letting us talk to this particular issue.

Thank you. Thanks for coming in. Tracey Gordon, Reverend Brown, 67 Legislative Oversight - 3/13/06 Vivienne Crawford, Boninta Cummings, however you want to set it up. Greg, do you want to come up with this panel or -- okay.

Good afternoon Councilman Kenney, Councilman Kelly, oversight committee chair or oversight committee. Reverend Jesse Brown's projection presentation is going to reflect the unity and solidarity of communities, more, quote/unquote, urban communities and how we do work collectively to show how hard it is for the type of establishments that end up in our community. Unlike maybe some of the other, quote/unquote, Center City neighborhoods, we face a totally different type of business liquor license business establishment. Actually, if we get one more, we're at a riotous proportion. So the focus today is to try to help the Liquor Control Board understand that we have a need for them to take a look at reducing and/or even 68 Legislative Oversight - 3/13/06 eliminating some of the licenses they have given us in our community. These pictures that you are about to see are the degradated conditions that our children witness on a daily basis by being served in establishments that they should no longer or should not at all be allowed into. The seating, the loitering -- and as you can see, the seating is chained. There is no 12 invitation for even a social environment. Our children are being trained to be animals. Taverns were designed to promote social behavior, social conduct. Neighbors come together to have a social and good time. As you can see, these establishments as they set up in our urban neighborhoods are not your good deli, have a nice beer type of establishment. These are establishments that promote addiction where malt liquor is the primary source of sale. The regulation violations in this particular shot is there is not even 300 square feet 69 Legislative Oversight - 3/13/06 of space there. As you can see, there's only one or two chairs. It's so narrow in that location that it's not even conducive to being pleasant as you would be a patron in this type of establishment. It's conducive to making you angry and want to be violent. As you can see, the gentleman really has space to move. He's kind of sideways trying to place his order.

So the service window is to the left of the screen?

Yes.

Is that glass covered?

Glass, right. And most of the floor space is, as you can see, taken up by the rearrangement of that location, which is always the Plexiglas. This type of location here, this location here is in the 2200 block of North Bouvier Street. This is how they service patrons, with debris atop 70 Legislative Oversight - 3/13/06 tables. Those tables are also chained. Our children witness this type of scenery as they go into these locations to stand behind drunkards to purchase chips or lollipops. They witness these types of conditions, as you can see, broken down chairs, very filthy, dirty conditions here, cardboard boxes stacked atop the tablets. This location the tables and chairs are chained down. There is no 12 invitation here in this location to have a social time, to even sit down. The real objective of these businesses is to stop and go. There is no sit down invitation in these locations. Excessive advertising, as you can see, is inside and outside. Reverend Jesse Brown will speak more to the excessive advertising. Again, these are various establishments throughout the North Philadelphia community and these are the conditions that we experience in our neighborhoods. This is a graffitied door, again debris stacked in the corner. There are only 71 Legislative Oversight - 3/13/06 three chairs when there should be 30 seats to tables. That is not happening. We are not sure how these establishments continue to be licensed as this visual shows that there is in most cases definitely not at least 30 seats to tables. There is no extra window for our children so they go into bar establishments or licensed alcohol establishments and are waited on like an adult where they stand behind adult patrons. They are fondled and in some cases witness lewd and lascivious behavior from drunks that are in front of them in line. And if Reverend Jesse Brown wants to talk about the excessive advertisement, I'll turn it over to him.

Good afternoon. My name is Tracey Gordon. I'm representing today Southwest Philadelphia Concerned Citizens. First of all, I'd like to thank Councilman Kenney. We met with you as a coalition several months ago and we asked and begged that you 72 Legislative Oversight - 3/13/06 would hold a type of hearing of this structure whereas the community would be able to make testimony before the Liquor Control Board because we found in the last five testimonies that, you know, normally they would come in and testify and leave and not hear the community. So I think that you're setting a precedence if that's the word and I would hope that the other councilmanic members will follow suit in the way you did this. This is brilliant. Thank you. The only thing is, is the health department here?

No. L&I is here. I don't believe the health -- Dominic, the health department's not there; right? Any questions we have for the health department will get transcribed.

Very good because the health department needed to be here basically for that testimony to see. You know, I'm really glad that Old City and 73 Legislative Oversight - 3/13/06 Mount Airy went first because you'll see and you'll hear that in the urban settings of South Philly, Southwest, West Philly, North Philadelphia, we have different problems. And although it was courageous with Act 39, you'll hear from Attorney Steve Masters, who, by the way, thank you, he really helped me testify in behalf of certain establishments that I wanted closed in our area. The unfortunate part about his testimony that's going to come up was out of the 870 liquor licenses that's in the city, 723 of these establishments was automatically approved due to lack of any protest by the community surrounding the premises. And we will tell you that the protests, the 140 protests actually came from just a few of us sitting in this room, had to take off from work. Most of the community didn't even know about Act 39. It was not advertised as if you advertise when it's time for reelection. I felt that in the future there should be 74 Legislative Oversight - 3/13/06 ads in neighborhood papers as well as in the Daily News as well as even taking media ads out in that regard because just because 723 did not protest is because the community really are not empowered to really know that they could protest. And we're saying these particular ones she shot in Philadelphia that you can come to West Philly, Southwest Philly, parts of Germantown, and any of the urban or poor areas and you will see the same type of disrespect with the chairs. So my basic testimony is another thing, communication. I understand there's supposed to be a task force in the second councilmanic district. I don't even know who it is. I don't even know if it's really established. I told Sara that. It puzzles me that, you know, even though I'm not on the task force, how if I'm the one coming out, taking off, gathering people to protest, no one even told me about a task that exists, who's the on 75 Legislative Oversight - 3/13/06 the task force, where it's located, how I might be able to take and give some literature to the community so they can know there's a task force. If you see like these advertisements, these are illegal. They're not supposed to have advertisements in windows that's within 300 feet of a school, a day care, a recreation center, a park, a church. And all of these corner stop-and-go's there's always going to be a church, a restaurant -- I mean a church, a day care, a school. And the particular two stop-and-go's that I protested against and got the neighbors to come out, one is on the corner of 60th and Chester Avenue. A man was going in there with his daughter, bumped into one of the loiterers, was beat to a coma. He died a couple weeks ago to the extent that the family had to be moved out of the neighborhood because they found the boy who beat him to death in front of the 76 Legislative Oversight - 3/13/06 stop-and-go. And then that's still open now. Every time I go out into the community, people are coming up to me, Councilman, saying what's up, you know, we came, we signed, what's going on, why are they still open? And not only that, they are still operating in the same manner. It's like they didn't change. The only thing that I can honestly say that I may see is a trash can out there. As far as like them covering up -- like in that store covering up the windows, if you look at this community guide to enforcing drug and alcohol nuisances that Lynne Abraham said, there's so many violations, lighting conditions, and there's no clean ones in our areas, in our particular neighborhoods. So the reason why I'm really kind of upset with the Liquor Control Board is because they have a beautiful web site and it's very clear. It's precise. And I quote one of their 77 Legislative Oversight - 3/13/06 quotes.

They say they hold sessions with these liquor license establishments that, quote, create a team atmosphere which focuses on a group approach to effectively deal with those establishments that degrade communities and harm their citizens. Now, Councilman Kenney, in those establishments that you just seen, and we're not going to show you all of them, when did they hold these sessions with them? They also said that -- this is on the Liquor Control Board web site -- the legislature has generally limited the number of licenses for the retail sale of malt or brewed beverages and liquor to one license for each 3,000 inhabitants in any county. Can they define that? Because you can go on certain blocks and there's three or four of them in a block. So 3,000 inhabitants, does that include the children? I mean -- and also another thing that their web site says, this is another thing too. Now, if -- you know, 78 Legislative Oversight - 3/13/06 the DA testified and you know, Councilman Kenney, because when we had the last hearing, you was like really it's a no-brainer what's going on here that one of the main -- most of the crime goes on in the evening; right? Really in the evening like midnight. That's on the corner of a residential block. That's not supposed to be open past o'clock. 11 They're still open. I talked to Commissioner Sylvester Johnson. He didn't even know that. And then I talked to a police officer who I know in my community and I happened to see her posted outside the stop-and-go, a half a block from the stop-and-go that I testified against on 60th and upland. She had to be posted outside the stop-and-go because it was like -- I guess it was like a high crime area because every time you go by there they have the teddy bears, you know, like memorials when people die. And so, therefore, now we're talking about 79 Legislative Oversight - 3/13/06 overtime for police. If the police have to do a 24/7, why do they have to do a 24/7 when the establishment's supposed to have been closed o'clock? Honest to 6 God, Councilman Kenney, the police do not 7 know that these establishments are 8 supposed to be closed at 11 o'clock. 9 That's the law. Councilman Clarke passed 10 that law. 11

Well, when the government panel comes up, and they're listening now, they can comment on what the issues of hours and advertising and those kind of things.

Okay. And finally one thing else what the Liquor Control Board said, which, you know, we should move them to Philly. They should -- I don't know where their office is. They need to come to Philly because they said -- we need for the Pennsylvania control board to review the law that allows minors to enter the licensed premises without parents because they 80 Legislative Oversight - 3/13/06 have gross sales of food and nonalcoholic beverage equal to 50 percent of more of combined sales of both food, alcoholic beverages that minors are permitted on the premises. This is the Pizza Hut law. Now, on their web site, this is what the Pennsylvania Liquor Control Board says, they have delivered a no 10 alcohol use or zero tolerance message to all citizens under the age of 21. No way in the world if the Liquor Control Board comes by those stop-and-go's and see those naked woman smoking the cigarettes with the 40 of malt liquor in their hand, that is not promoting a positive message to our youth, one. Then they say on their web site promoting responsible alcohol beverage services and practices amongst licensees and persons that serve alcoholic beverages in Pennsylvania. Every last one of the stop-and-go's in our area -- that's nice. Flip back to some of them, the naked ones with the women with the blunts. And when 81 Legislative Oversight - 3/13/06 you go into their establishment, they have Plexiglas, which I believe is illegal, and they have the shelves, right, and so they have all the blunts -- like blunts is used -- they're cigars. They get the tobacco out and put marijuana in them. They have the blunts next to potato chips and sunflower seeds. Then they have like the malt liquor in the same freezer with the juices, little juices for kids. And every last stop-and-go, like even that one, children go in there without adults. They do not enforce it. Most of them have barbed wire around there. Now, the last time I testified they were selling loose cigarettes for 50 cents. Now they 75 cents. They went up. Then also they don't sell straight shooters no more. That's the only thing they changed. The areas is so dirty in all these restaurants it's just an absolute mess. That's the only reason why we came back to you because we refuse to go 82 Legislative Oversight - 3/13/06 away, Councilman Kenney. We respect Act 39, but when Steve Masters come up and just tell you of all of them got stays, it's like one of the things I wanted to ask the DA is how many stop-and-go's have she closed down, the number, not just like a general we close down bars, how many stop-and-go's -- you see the little hug with the kids on the seat? It's really just a mess. I know, you know, it's a nice thing that came from Old City and everything, but what's going on in our community, the quality of life is a strong issue. We're supposed to be the up and coming city. Every periodical and e-mail I get Philadelphia is just this is the new city to move into, but yet we have these horrible neighborhood transformations never address these stores. These stores even remain where the old Richard Allen where they got the new pretty houses, they still have the same ugly crazy stop-and-go with the boys hanging out. 83 Legislative Oversight - 3/13/06 Thank you for letting me testify and hopefully you'll be able to ask the Pennsylvania Liquor Control Board to address why they're not fulfilling their mission statement.

Reverend Brown?

Thank you, Councilman Kenney.

Please identify yourself for the record.

I'm Reverend Jesse Brown, part of the North Philadelphia Community and Business Initiative. And we're dedicated to looking at quality of life issues within our neighborhood and improving those where we can. I'm just going to get the advertising issues to move on a loop here. And if you want to stop at any particular one for a closer look, we can do that at any time. The issue of advertising has always been a major issue. Of course, I've been working on 84 Legislative Oversight - 3/13/06 that now for more than 115 years here in Philadelphia and nationwide. In particular, the alcohol enforcement of the alcohol advertising standards have not been met and they continue not to be met even to this day. We have not found that the LCB or Liquor Control Board has been very receptive in being aggressive in fulfilling what the law says in those things. And quite frankly, Councilman, everything needs to be simply revamped. The ability to deal with the advertising issues are very cumbersome and they simply are outdated, outmoded, and have not been updated in any way in recent times, and I mean recent times, to adequately deal with the excessive amount of alcohol advertising in the windows. Not to mention that there are a hodgepodge of laws and a hodgepodge of agencies of which have some level of compliance or responsibilities that are not being met. Even this picture that I'm creating a hold on, we know that 85 Legislative Oversight - 3/13/06 these banners that are on the fences are not supposed to be there. Now, who has control over some of that? Is that the Liquor Control Board? Is that license and inspections? Who has responsibility? Should they get permission to do so, how do you do that? And most of these as you can see are primarily the alcohol industry and the tobacco industry. It is also apparent that both the alcohol industry and the tobacco industry have determined that since Philadelphia doesn't enforce the law, they might as well create advertising that breaks the law. That includes posters such as the little one right here that they sometimes put up even on telephone poles, which, of course, not supposed to be there as well. So there are a whole host of those things. I think the key testimony that I bring on this issue today is that the enforcement of alcohol advertising laws on both the state and local level have 86 Legislative Oversight - 3/13/06 not been addressed and I would strongly suggest that we, in fact, rewrite the law so they could, in fact, be addressed and rewrite the laws so that the community could have input or raise their concerns with due process. When the Liquor Control Board has addressed, I would like the opportunity if you will ask me back. There are a number of other issues beyond just the advertising issues that I would like to suggest to you that we may want to codify in law and that would even include the elimination of the transfer licenses all together and create a new situation where every application has to be re-investigated, complete background checks need to be done and that in, in fact, it's put up for public scrutiny every time that process so that you will never have to deal with the transfer of licenses again.

Ms. Crawford? And I'd like to ask the 87 Legislative Oversight - 3/13/06 community people to keep in mind at some point we're going to need the people who hopefully have some answers and updates as to what's going on to the table. Please identify yourself.

I will be very brief with my comments. The light's on but I'm not sure. I'll be very brief. The thing that happens is that we were here before and obviously we met with you, Councilman Kenney, and it was through your movement that we're even -- we've even gotten this far. And I'm grateful that the Pennsylvania Liquor Control Board is here because, of course, they never showed up. We would sit here and talk to each other about what the problems were. It's interesting that we would come on after two communities have had the opportunity to testify and they talk about how wonderful things are now in their communities. The thing that I want you to understand is I don't know who the hearing officers were. I 88 Legislative Oversight - 3/13/06 certainly went to the hearings on a number of occasions with Ms. Cummings and also with Ms. Gordon. And there were instances where places should have been closed, but they were granted to remain open. They were allowed to remain open with conditions. And, also, one of the hearing officers testified today and we had a very hard time convincing her when it was in North Philadelphia that something needed to be done. It's just interesting that in another area of the city she can be so vociferous. I would also ask that you look at attacking this problem from a new way and that is simply that when you hear these people talking about boots on the streets and increasing their budgets, it would seem to me there is a way we can get some workers out there to do what we need to do who might be otherwise engaged in doing services on behalf of the state. The blame game in some of these communities that some people didn't show 89 Legislative Oversight - 3/13/06 up to protest it I thought was interesting because you're actually blaming people who probably have less resources in terms of knowing what's going on. We all know that in certain communities there are problems, but getting the word out and getting those people and marshaling the forces to get them down here -- we are all three working people who have to take off to do this and we do it because we are concerned about the community, but there is no agency in Southwest or Strawberry Mansion that employs someone that could sit there and dot the Is and cross the Ts. And that's a problem. And I don't think it behoves us to say our community is more organized that that community. The problems exist. It spills over to other communities. And also we have to look at the fact that malt liquor being sold in these establishments is a drug. It really is because it's much stronger than beer and these folks smoke their 90 Legislative Oversight - 3/13/06 blunts and they want something cold to drink and drink malt liquor. The two things go hand in hand. Ms. Cummings actually asked what do we do if we can't get any resolution here and I told her I would speak to that because what is our redress? And certainly if the Pennsylvania Liquor Control Board is not following through and policing this and doing something about this problem in our communities, it would seem to me that we have to then look beyond that and talk about a governmental entity that would be able to do that. So either they straighten up and straighten this problem out and police these establishments or leave us in the position where we start marshaling. And I believe if we start to marshal the community to walk down to 6th and Market to do something, it would get done. This is not a threat. I appreciate so much you, Councilman Kenney, coming in and saying we're going 91 Legislative Oversight - 3/13/06 to do something about it, but I want the Pennsylvania Liquor Control Board -- I'll spell my name. I think it's written because I don't back down. It would be real easy for me to get some attorneys to volunteer and get people down to 6th and Market if they can't straighten up their shit.

Thank you very much.

I just wanted to add I focused on the presentation, but I would like to have it placed into its entirety into the record. But I also wanted to briefly give some statistics that I found very interesting as it relates to malt liquor also. I feel that the urban community is in a state of emergency and malt liquor is a drug. Therefore, if nonAfrican-Americans with 13 percent of the population but comprise 35 percent of drug arrests, 55 percent of drug convictions, and 74 percent of drug prisoners, government officials would 92 Legislative Oversight - 3/13/06 declare a state of emergency. Today there are approximately 1.3 million African-American males in jail. In 1980 the budget for the people system was $7 billion and just two decades later the budget for the penal system is $150 billion industry with malt liquor sales being a major contributing factor. There are some things that again as this testimony will be placed into its entirety in the record that we are asking for. And education is one of those aspects because right now there is no educational component in our neighborhood although they're proliferated with these establishments that educate our black males on what -- that malt liquor, first of all, is very addictive and that it contains petroleum, isobutanol, natural gas, sugar, alcohol, wood, and starch alcohol. And these poisons deteriorate the brain, sex organs, liver, pancreas, and lungs. And if black males were educated about this 93 Legislative Oversight - 3/13/06 information, they may choose not to kill their sex organs themselves or others. Also, shockingly to me through the investigations on the state Act 39 hearings is that parents or unsuspecting parents of Temple University freshmen are unaware that when they leave their children in the County of Philadelphia they can get alcohol in excess of 192 fluid ounces at USA Deli, Inc., 2234-38 North Broad Street, which is a violation of Title 47 401(a)407 442(a). And this business in particular is a chronic violator of the state laws. And, lastly, the Pennsylvania Liquor Control Board is considering at this present time a third alcohol location at 2836 Ridge Avenue, Philadelphia, which in good conscience is too close to two presently operating alcohol establishments at the same intersection. Granting this person to person transfer would hurt the residents of this neighborhood, thereby adversely 94 Legislative Oversight - 3/13/06 affecting the health, welfare, and safety of the residents of that community and giving that community three alcohol establishments less than 50 to 100 feet apart. This is in violation of the Pennsylvania Liquor Control Board's own good measure regulation of the footage alcohol establishments should be in proximity to one another. This building has not had any alcohol use for many, many years now. And we look forward to working or continuing to work with you, Councilman Kenney, the Pennsylvania Liquor Control Board, Governor Rendell, state and local officials regarding nuisance establishments to improve and resolve within the next 30 days the health, welfare, and safety for residents of Philadelphia. We've included in this testimony also that we could get right down to better conditions if we would incorporate the department of licenses 95 Legislative Oversight - 3/13/06 and inspections verification of compliance of existing laws form. There's already a process that they use that would check these businesses for more things than just their fire alarm. So we do thank you.

Thank you very much for your testimony. Could we just get the last three? I think there's three more community residents that would testify. Greg, could you please come? And I think there's two more. And we've heard testimony from the community. I'd like you to try to keep it without repeating what's been said, give us new information because I want to --

I have a video. I don't have to talk.

While she's sitting up her video, I'm Arlene Fields, executive director of Sunrise CDC and chair of the partnership zoning 96 Legislative Oversight - 3/13/06 committee. We're located in Hunting Park. What you see here in front of you, Councilman Kenney, this is one of the establishments which is literally across the street from an elementary school, Bethune Elementary School. And I have pictures for the Liquor Control Board if they want pictures. What you see here is this deli. And this is only a couple days after they agreed not to do what's being done. As you can see, in these photos right here in front of you is the name, Young Seafood Deli, but also you see the persons loitering on the outside. Now, they say they have seating for 30 people and that they have bathrooms for the public, but what you will see here is you see the sign liquor in the store window, that's where you can see the seating and the seating is -- 30 people will not be able to sit in there. And they're all pushed up against the door where the bathrooms are for the public. Also in the picture you see all the 97 Legislative Oversight - 3/13/06 advertising that's on the door and also inside underneath the counter on the counter and above, also one of the pictures with the gentleman with the blue hoodie on, they're standing out front drinking their beer right in front of the place. And then there's another picture you can see a better picture of the chairs or booths pushed all the way up. They said we have a certification saying we have seating for 30 people, but no one can get in and their bathrooms are not available. Also, what you'll see is another gentleman at the same time -- now, there is a sign in the window that says no loitering and the sign is 15 inches by 2 and a half inches that says no loitering as the gentleman men stand in front loitering and drinking there. And not only that, the day these were taken in November -- I mean October, what happened was the school across the street from there had a police 98 Legislative Oversight - 3/13/06 call and a young girl was propositioned by someone coming out of the deli. That's the only area, coming out of the deli. She was coming out of school. She was so frightened she ran back into the school. The vice principal wasn't able to attend because he was with the police talking to the young girl who was traumatized by someone coming out there. That's a constant thing someone's coming out of there and it's very nasty and dirty. The owners said, well, we clean up the park. That's only because they was coming before the committee to get their license. That's what's happening. Children are going in there. We know they're not supposed to be in there alone if they're under 18 years old. And when asked what do you sell in there and he says hugs, potato chips, the things children come in for. And if you look at one of the pictures there, you will see from the inside you can see where I took 99 Legislative Oversight - 3/13/06 the pictures and there's only one window and the glass goes all the way to the top so the children when they come in from Bethune Elementary School, which is literally across the street, less than a hundred feet across the street, they come in and stand there with the drunks on the outside and inside because there's nowhere for them to sit though they say there's 30 seats. And if you look, yes, there's seating for 30 people if you're a flat cartoon character that can slide in. It's the only way you're going to sit there. And I'm just very concerned that this is allowed to happen. And when they agree to provisions as far as them to continue operating, because we were notified very late about the hearings on Act 39, they cleaned up their act and brought a letter from the school, said see here's a letter from the school. So what?

Everybody else donated a turkey so they donated a turkey and felt that was fine enough to prove they were concerned 100 Legislative Oversight - 3/13/06 about the community. When asked how much of their percentage of the business, was 80 percent alcohol and, yes, it is and they're selling hugs and potato chips and everything is next to the blunts with different flavors now. And these children are involved in that. Then you're talking about elementary school children going in there because they know where they can go right across the street to get what they need. So I would really wish and hope that you would, Liquor Control Board and the license and inspection, please pay attention to this because our children are being affected by this every single day when they come out of school or when they go out of school because they're not open until 11:30 in the afternoon, so they get the children who run out for lunch and want to come in after school and they're not escorted by an adult 18 or over. They're in there piling to get their food that they're selling to 101 Legislative Oversight - 3/13/06 attract the children in.

Hi. Anna Rodrigus from East Civic Association and resident of this bar. I'd like to say that this bar has been a nuisance for many years. I have videotapes, audiotapes.

Is this a bar or takeout deli?

It's a bar. Actually, it's a club because they have bands that come in and they charge to get in. They charge $25 cover charge to get in. But this is my day yesterday. This did not stop until 2:30.

What's the location?

3651 North No. 20 5. We called the police seven times. You can't hear the loud music that pertains to it. I had tried to intervene in the person to person transfer and was told that I could not intervene unless I had personal knowledge of the person who 102 Legislative Oversight - 3/13/06 the license was being transferred to although this was already a nuisance. I called the police three times last night, illegally parked cars, loitering, people urinating, fits, auto accidents as a result of them coming off the pavement into the street. And they have no 9 respect for the police neither. The police come out there, tell them to lower it, they don't lower it. And I think the police are frustrated because their hands are tied in what to do. Neighbors stopped calling the police because they're not getting a response. So this bar continues and it gets worse and worse. As citizens, we have a right to live in peace in our homes. We're not having that right. And we're not afforded an out neither.

Excuse me. Where do you live from this --

Right across the street. And Erie Avenue is a four-lane highway or street. 103 Legislative Oversight - 3/13/06

How many other residences are there across the street, your neighbors?

About nine houses across the street and most of them are senior citizens.

Thank you. Thank you very much. Mr. Spearman, will you identify yourself for the record?

Greg Spearman.

Please proceed.

I just would like to give the LCB and all those associated with them an F on their efforts in trying to contain the problems we have in our community because I know of no liquor establishments they closed, what you call these here takeouts because under the LCB rules the only takeouts you have are liquor wholesale places and beer distributors. Takeout is a variance that is afforded to these here businesses so that patrons can take out a certain 104 Legislative Oversight - 3/13/06 amount of liquor out of their establishments, but the intent of these establishments is clear. One of the meetings that we had with Councilman Rick Mariano and Councilwoman Blackwell, we took a bus tour, offered it out to the representatives to come down from the state. Not near one of them accompanied us on the tour that we took up in West Philadelphia. We went down Lancaster Avenue to show the different variety of these type of establishments that they are operating in our community. They came up with a new one which I spoke about before where they stuck the deli on the front of a bar and got a bar in the back with the Plexiglas up to the bar where they feed the liquor through an opening just like they do in the deli. So the bartender and the patrons don't have any contact. They slide it through. They just reopened the place on the 5200 of Market Street. They actually built a 105 Legislative Oversight - 3/13/06 little room inside of the place where they put the 30 chairs. They have Plexiglas around that as well as a door which they keep locked, never see nobody inside of this place. And they showed you good examples of the other creative ways that they go about getting around the law. The intent on these here irresponsible businesses are clear and the lack of enforcement from the LCB is clear. And I ask you, Councilman Kenney, to team up with the other individuals, the other Council people that feel the way that you do and send them up in Harrisburg a clear statement that we're mad as hell and we're not taking it no 19 more. I ask you to do it. As you looked on there, you seen things that were violated by city ordinances. I ask you to enforce that as I would over Act 39. You got plenty of things they don't enforce. So now we have another act they're not going to enforce. And we got 106 Legislative Oversight - 3/13/06 to be realistic about it. When we went into these here establishments, it was clear violations. You have plenty of them that were outright dirty. You had other ones that had food on the floor. They were in containers, but there was food on the floor. And anybody that knows anything about L&I knows that you're not supposed to have food on the floor. The rest rooms are not accessible to the public. What was real good about the tour that we took, it showed at least four different type of establishments. Now, as we all know that I was on 55th and Larchwood for a few years and we did not include that in the tour. It was not necessary because we wanted to condense neighborhoods so you could see the different varieties of these type of establishments and how creative these here people get to try to get around the law. So I'm personally asking you 107 Legislative Oversight - 3/13/06 and the other Council people to do something from the city level. LCB requires the occupancy of liquor establishments, eat-in, drink-in liquor establishments to have 30 people for occupancy, seating for 30. City ordinance says over seats you supposed 9 to have a male and female. That doesn't 10 have nothing to do with them. They're 11 not going to do nothing. I'm already 12 settled with that. Whatever they got to 13 say means very little until they do 14 something. We should be able to enforce 15 that. It took me over a year and a half 16 to get the health department and L&I to 17 come out to do a visual on the men's room 18 in this establishment, an establishment 19 at 55th and Larchwood, a year and a half.

20 Let me give you a brief update 21 too on 55th and Larchwood. They are 22 presently closed. We had the hearing 23 October 31, the first day of the SEPTA 24 strike. We had already rented a bus. We 25 took a busload down to the hearing. And 108 Legislative Oversight - 3/13/06 approximately about three weeks after the hearing the judgment came out and they closed their doors. They haven't been back. We're still not satisfied that they won't come back so we're still posting, waiting, and patrolling. So at least that's done. I'm asking you, Councilman Kenney, to get down to the business of the city and represent us as we have been diligent and respectful in all the things that we have done and show them up in Harrisburg that they just can't neglect us and push us around. We watch how they jumped on all the authorities in Philadelphia, the School District. I mean, anything they want to do they can do, but it's obvious that they have no 20 real intent or desire from their previous actions that they want to solve this problem in our community.

Thank you very much for your testimony. I would ask Sergeant Davis, 109 Legislative Oversight - 3/13/06 Lieutenant Comerer, Lieutenant Healy, Jerry Waters, and Mr. Masters. And wherever there's not space, you can fill in some of the Council chairs so we have a microphone for you. Who would like to start off? Deputy commissioner, are you the ranking officer here?

That's the way it looks, Councilman.

Please identify yourself for the record.

Good afternoon. I'm Dominic Verdi deputy commissioner license and inspections. I have a short testimony to read into the record. Good afternoon, Councilman Kenney, and members of the committee. I'm Dominic J. Verdi, Deputy Commissioner for the Department of Licenses and Inspections. Also accompanying me here today is Kevin Daly, Director of Licenses and Inspections' Nuisance Task Force. I'm here to provide testimony on Resolution 051029, which 110 Legislative Oversight - 3/13/06 authorizes Council's Legislative Oversight Committee to hold hearings with regard to code violations associated with businesses operating as take-out delicatessens with beer or malt liquor sales. Since 1992, we've been a member of the citywide public nuisance task force under the coordination of the District Attorney's office and now most recently through the coordination of the managing director's office. The mission of the group is to assist residents and community groups in combating drug and alcohol related nuisances that plague many of our neighborhoods in this city. As part of this effort, the department of and license and inspections has abated or closed certain nuisance bars and convenience stores that have either presented an immediate threat to public safety or have been violators of The Philadelphia Code. The department performs zoning, building, and electrical 111 Legislative Oversight - 3/13/06 code inspections and where appropriate serves cease operations orders that closes the business until the violations are corrected. We work together with the city solicitor's office to immediately bring these cases before a judge who can impose further sanctions against the operators. In the area of enforcement related to the sale of malt liquor beer, as Council is aware, the City is preempted from enforcement violations related to such sales by state law. We have, however, worked closely with the health department, police department, law department, District Attorney's office, and the state's Liquor Control Enforcement unit to enforce local laws. This enforcement is documented and sent to the Liquor Control Board during the state's time for renewal of licenses that may be considered as part of the liquor license renewals. As an example of this effort, since 2004, we have closed 45 112 Legislative Oversight - 3/13/06 locations. Of this number, approximately percent have been permanently closed. 4 The remaining locations have been allowed 5 to reopen under strict controls imposed 6 on the business operator, subsequent 7 appearances in court, and at the 8 direction of the law department. 9 In closing, and notwithstanding 10 continuing concerns of Council and the community with regard to nuisance establishments that threaten the fabric of vitality of our neighborhoods, we are committed to continuing our efforts to aggressively enforce the laws under our authority and we will work with the governmental bodies wherever possible to achieve that compliance. Thank you for the opportunity to provide the department's testimony on resolution 051029. I'll be happy to answer any questions.

We'll let everybody give their testimony first, but of the 44 establishments that were 113 Legislative Oversight - 3/13/06 closed, how many were takeout beer delis?

If I'm not mistaken, Councilman, I think it was zero.

Is there a reason for that? Was it easier to close a bar or problem restaurant than it is a takeout beer deli?

In most cases, it is because there's more nuisance problems when you have 150 to 300 people congregating in one location than you do when you have an establishment where it's more or less an in and out operation.

Did you go after any of them.

Yes.

The stop-and-go's?

Yes.

And what was the reason why you couldn't establish for either the court or for the board a level of problem or what was the reason 114 Legislative Oversight - 3/13/06 why they were --

Most of the problems that occur in the stop-and-go locations are more of a state law or state liquor law problem. They don't fall under the jurisdiction of license and inspections. We can handle the issues with some signage. We can look at the zoning of the building. But the enforcement of seating, the enforcement of how the beer or the malt liquor is sold and the issue with minors at the location fall under the license itself. The problem that we have as we mentioned before with Council is to look into changes -- and Mike Erdos mentioned before. One of the bigger changes we'd like to see happen is the fact that local laws are taken into effect when these places go back for renewals and/or original licensing. At this point the only thing that is required from the city at this point is a food license. If the location is not zoned properly or the 115 Legislative Oversight - 3/13/06 fire code -- if there's fire code violations, things of that nature that do not comply, the city codes have no effect on whether that location's going to get its license or not.

Okay. Let me go to Lieutenant Healy and we'll work our way down and come back for some questions.

Good afternoon, Councilman Kenney and other members of the Legislative Oversight Committee. As you know, my name is Francis Healy and I'm special adviser to Commissioner Johnson and the nuisance bar liaison for the Philadelphia Police Department. First, on behalf of the Commissioner, I thank you for giving the police department the opportunity to testify at this hearing and chronicle all the work and cooperation that currently exists between the state and city agencies to address nuisance bars. More importantly, I thank you for exploring possible 116 Legislative Oversight - 3/13/06 legislative actions that could make our work more effective. As you know, for approximately the last five years the police department, L and I, law department, District Attorney's office, State Police Liquor Control Enforcement, and LCB have been working cooperatively during the liquor license renewal process in Philadelphia to target nuisance bars. We've met regularly to identify problem locations, combined and analyzed our data, and prioritized targets. Additionally, when new problems arise, each member of this task force is in constant communication with the other to coordinate our law enforcement resources. I must admit I believe this task force is probably the most effective I have ever been on. There are no hidden agendas or personality conflicts which detract from our mission. The task force is very effective, but regrettably the effectiveness is often clouded by misperceptions of the general public. 117 Legislative Oversight - 3/13/06 When the public complains about a bar, they want immediate action understandably. Regrettably, the nonrenewal process of a liquor license is not an immediate process. In fact, they are renewed every two years. While hundreds of complaints may be recorded and presented at nonrenewal hearings, the public doesn't understand why immediate action wasn't taken. Public perception is that nothing's being done. The sole reason for this misperception lies in the fact that the liquor license renewal process, while a great opportunity to review a bar's activity, was never meant to be a nuisance abatement tool in and of itself. While it is an excellent tool for long-term change in behavior through conditional licensing and offers and compromise, it does nothing to immediately stop the nuisance. Nevertheless, this does not mean by any stretch we are powerless. In fact, the actual tool that should be 118 Legislative Oversight - 3/13/06 better utilized is known as a 611 action. We've heard about them earlier today. This term refers to a provision in the liquor code that provides for immediate injunctive relief to abate a nuisance. It also provides for the ability to close an establishment up to a year. Historically, only the Attorney General or local DA or persons who lived or had a business within 500 feet of the alleged nuisance had actual standing to go to court. Thankfully, legislative changes were made several years ago that now authorize both the state police liquor control enforcement as well as local municipalities to also initiate such actions. Although the law has been changed for several years, regrettably here in Philadelphia the DA's office has remained the only entity actually initiating these actions. While Lynn Abraham has been extremely aggressive and passionate in this regard, her resources 119 Legislative Oversight - 3/13/06 like all agencies are limited. Our task force recently met with the LCB as we always do to discuss the upcoming renewal process. It was widely acknowledged we must all begin to share the burden of bringing more 611 actions. It's not solely the District Attorney's responsibility anymore. Accordingly, each member of the task force will in the very near future begin to initiate its own 611 actions. We all have able-bodied attorneys who are willing to step up and help.

The District Attorney's office is clearly the expert here and has graciously offered to counsel other task force members the proper procedures and protocol necessary. This is really great news. However, ironically the public isn't even aware. While I can't guarantee we will be filing hundreds of 611 actions, we will increase it percentagewise. If each member of the task force outside of the DA's office even picks up just a handful of cases, 120 Legislative Oversight - 3/13/06 the changes can be dramatic. This is our intention and the course we intend to follow. So in conclusion, please let me reiterate the state and local agencies necessary to abate nuisance bars have already formed a well-coordinated team constantly addressing these bars. We acknowledge more needs to be done. We need to work together to immediately abate these nuisances, not just collect complaints to be filed in some distant hearing. Thus, we intend to shift our tactics toward the 611 action. The LCB renewal process through no fault of its own or the LCB is truly an ineffective tool alone to fight the nuisances bars. With an aggressive 611 campaign, the renewal process working in tandem can become much more effective. In this fashion, the public will see immediate action and the LCB will be able to ensure long-term success in our abatement efforts. Equally important if not more, 121 Legislative Oversight - 3/13/06 other nuisance bar owners will see swift action by both the city and state and be forewarned. This concludes my testimony. It's been an honor. I welcome any questions.

Thank you very much. We'll come back to questions. Who's going to offer testimony from the state police? LT. COMERER: We have no 12 prepared statement, but we will be more than willing to answer any questions.

Thank you very much. Sir, could you please identify yourself.

Yes, sir. My name is Jerry Waters, W-A-T-E-R-S. And I'm the director of the Bureau of Licensing. To the Honorable James Kenney and members of the Philadelphia City Council oversight committee, good afternoon. My name is Jerry Waters and I'm the director of the licensing for the Pennsylvania 122 Legislative Oversight - 3/13/06 Liquor Control Board. I thank you for this opportunity to address Philadelphia City Council Legislative Oversight Committee on the issues of problems associated with the liquor establishments licensed by the board and the existing liquor license renewal process. As you may know, while the board issues all liquor licenses in Pennsylvania, the day to day enforcement of the liquor code is the province of the Pennsylvania State Police Bureau of Liquor Control Enforcement and not the board. Further, while Section 611 of the liquor code authorizes a Court of Common Pleas to padlock a licensed premises as a public nuisance for up to one year, only the Attorney General, the District Attorney, the city solicitor, the Pennsylvania State police Bureau of Liquor Control enforcement, and neighbors within 500 feet of a premises may avail themselves of the provision of this liquor code. Retail licenses such as 123 Legislative Oversight - 3/13/06 hotels, restaurants, and clubs are renewed every two years. Distributors and importing distributor licenses are renewed every four years. Section 470 of the liquor code authorizes this agency to consider the manner in which a licensed premises is operated when determining whether to renew the license in question. In 1990 the board bureau of licensing established a nuisance bar unit to ascertain whether any establishment licensed by the board is operating in an inappropriate manner. Specifically, the director of the bureau of licensing may object to and the three-member board may refuse a renewal application because of a licensee's or its officers, employers, or agent's criminal conduct, citation history, or operational history at this or another licensed premises. Again, however, the board can only take action when there is an applicant before it. And in the case of a renewal of a retail license, such applications are submitted 124 Legislative Oversight - 3/13/06 once every two years. Therefore, the day to day management of problems associated with licensed establishments is best addressed by such entities as the Bureau of Liquor Control Enforcement, the Philadelphia Police, and the Philadelphia District Attorney's office. On the issue of renewal, a licensee is strictly liable for violations of the liquor code. Strict liability means that licensees are held responsible for the activity in question even if they took reasonable steps to prevent it and even if they had no 16 personal knowledge or involvement in the activity. Examples of the liquor code violations which the board considers when determining whether to renew a liquor license include such violations as sales to minors or visibly intoxicated patrons, allowing amplified music to be heard off the licensed premises, and after hours operations. A license may also be held accountable for criminal activity that 125 Legislative Oversight - 3/13/06 occurs on the licensed premises if there is a pattern of such activity that the licensee knew or should have known about it, if the licensee failed to take substantial steps to prevent such activity. Examples of type of activity which the board considers include drug activity, disorderly conduct by patrons, fights, assaults, and other crime that affects the health, welfare, and peace of the surrounding neighborhood. If objected to, the licensee has the right to request a hearing before a hearing examiner appointed by the board. After the hearing, the hearing examiner makes a recommendation to the board. The board in turn then renders a decision either renewing or refusing the license in question.

If the board refuses the renewal application, the licensee has the right to a de novo hearing before a judge in the Court of Common Pleas of Philadelphia. The liquor code specifically provides that the 126 Legislative Oversight - 3/13/06 board's decision to refuse a license is stayed once an appeal is filed in the Court of Common Pleas. At times the board agrees to renew the license under certain conditions. The licensee may offer to enter into an agreement with the board imposing additional conditions on the license and the premises in an attempt to address any issue that may have arisen as a result of the hearing. On other occasions, a licensee may be willing to get out of business altogether and sell its license in the arm's length transaction to a disinterested third party. Under the existing system, there are compelling reasons for both the licensee and the board to resolve the matter by entering into a conditional licensing agreement that imposes conditions on a license or an offer in compromise that allows the licensee to sell the license. For a licensee, a conditional licensing agreement may allow 127 Legislative Oversight - 3/13/06 it to address a problem at an establishment before it becomes even more egregious while at the same time allowing the licensee to continue to operate. An example may be a licensee who agrees to give up live entertainment because the noise and music associated with the live entertainment is adversely affecting the neighborhood. For a licensee with a more egregious operating history, an offer in compromise will allow it to recapture the value of the liquor license even as it agrees to no longer operate the premises. For the board, a conditional licensing agreement may allow it to immediately address an establishment whose operating history although worrisome does not merit nonrenewal of the license. An offer in compromise will typically close down a nuisance establishment much faster than protracted litigation. It is important to note that the Court of Common Pleas is not in any 128 Legislative Oversight - 3/13/06 way bound by the board's determination on whether to renew the license in question and there are quite a few Common Pleas judges as well as appellate court judges who are quite reluctant to take away a licensee's livelihood and the livelihood of its employees absent overwhelming evidence of egregious conduct and licensee's culpability for that conduct. To paraphrase the Commonwealth Court in Rosing versus the Pennsylvania Liquor Control Board, the board cannot require a licensee to act as a police officer even if the licensed premises is in a crime area. Further, the liquor code grants a licensee the authority to operate regardless of the board's decision until after the Court of Common Pleas makes its decision. This means that a nuisance establishment can operate for months or years unless a licensee voluntarily closes down. In Philadelphia, for the license renewal cycle that began on 129 Legislative Oversight - 3/13/06 November 1, 2004, the renewal process includes meeting with representatives from the Philadelphia Police Department, the District Attorney's office, the Philadelphia office of license and inspections, and the Pennsylvania State Police Bureau of Liquor Control Enforcement, collectively referred to as the Philadelphia nuisance bar task force or task force. The Philadelphia nuisance bar task force identified over three dozen licensed establishments as potential candidates for nonrenewal. In addition, letters requesting information on potential nuisance bars were sent to all representatives and senators whose district include any part of Philadelphia, to City Council President Verna, and to the director of the Pennsylvania Weed and Seed Program.

As a result, the board's nuisance bar unit further investigated approximately 74 licensees because of complaints received from the task force, elected officials, 130 Legislative Oversight - 3/13/06 neighborhood groups, citizens, and other sources. The Philadelphia Police Department provided this agency with hundreds of police reports, forfeiture petitions, and citation records. In the end, the board's bureau of licensing objected to 42 licensed establishments in Philadelphia. Some of those cases remain pending. Some resulted in renewal with a warning while others were resolved through a conditional licensing agreement or an offer in compromise or an outright refusal of the license or ancillary permit. When a matter is resolved through the conditional licensing agreement or an offer in compromise, the nuisance bar task force unit will typically contact the District Attorney's office, the police department, or other law enforcement official to ascertain their views on the proposed resolution. The board will be happy to provide whatever assistance it can both prior to and after this hearing to 131 Legislative Oversight - 3/13/06 facilitate this committee's understanding of the license renewal process. Please note that all retail licenses in Philadelphia will expire on October 31, 2006. If there are any particular establishments which you believe have demonstrated a pattern of abuse of their licensing privilege, please feel freely to bring them to our attention. Thank you for giving me this opportunity to explain the license renewal process. I will be happy to answer any questions you may have at this time.

Thank you very much. Are you -- same testimony? I was surprised to learn in the testimony that there is an investigative division of the licensing division. You have investigators that work for the licensing -- for the liquor board?

Yes, we have a division of investigation.

Is anyone from that organization part of the task 132 Legislative Oversight - 3/13/06 force?

Not at this time, sir.

Is there any reason why we wouldn't -- see, part of this -- as this unfolds, part of this is education, part of it is culture in that in many ways I think the LCB is a licensing entity that deals with the economics of operating a bar, employing people, you know, the economic benefit to that, the purchase of liquor from the state liquor system, taxes that they pay. It would seem from an education standpoint that somebody from their investigative division within the liquor board should be part of this so that they can become personally knowledgeable as to what's going on or not going on. I mean, do you disagree?

Councilman, I deal with a lot of different investigators when I do some of my work. They will reach out to me and we coordinate. 133 Legislative Oversight - 3/13/06

But I mean a formalized relationship to me seems -- what happened years ago because I was around when this happened is in an effort to stop what was perceived corruption in the liquor board, they separated everybody and that separation perhaps dealt with the ethics issues better, but I don't think it was effective in coordination and the kind of cooperation between LCE, LCB, and all you guys who have to do with this stuff here. I would recommend a formal request from the task force to have one of their people in that division as part of a permanent member of that board of the task force so we could have some direct experience and knowledge. I mean, I can understand reaching out and having some contact, but it's not the same as regular meetings.

Representative Kenney, I'd be happy to discuss that with Chairman Newmann and our chief counsel. I have here with me assistant deputy 134 Legislative Oversight - 3/13/06 counsel Ron Diaz to assure there's no 3 issues with crossover. And if that's the case, we'd be happy to put my eastern regional manager on that task force.

Thank you. Again, I appreciate you being here. I appreciate you all waiting and listening to what people had to say. You've seen some of the photos and videotape and other things. I mean, obviously there's a real serious concern that any rational person would have as to the operations, the advertising, the lack of lighting, seating, I mean, chained-up chairs, all those things that people live with every day. I mean, I can imagine without holding you for the record that when you view stuff like that there should be some concern as to how these people get relicensed again. Please identify yourself for the record.

My name is Rod Diaz. I'm as Jerry said, deputy chief counsel. 135 Legislative Oversight - 3/13/06

Is there something you want to add?

No. 5

Do you have a response just to the general view of how these people operate?

Councilman Kenney, to review the slide show that the Reverend presented and some of the other issues, again, when we license a location, they are in compliance. Once we leave the oversight of them, remaining in compliance is with the Pennsylvania State Police Bureau of Liquor Control Enforcement.

I understand that, but there's some areas of compliance they can't possibly be in compliance with. And some of places we've seen, for example, this very small hallway, I believe the license requires minimum 300 square feet --

300 for an E, 400 square feet for an R. 136 Legislative Oversight - 3/13/06

What are the takeout beer delis?

A deli is required to have an E license, 300 square feet. And the majority of delis are normally E licenses. However, there are licenses that operate as a deli which hold an R license and just don't use the privilege of selling liquor. Those locations when licensed, sir, are in compliance. They meet the requirements. What normally happens, it's been my experience -- you know, I lived in Philadelphia for many years, worked here for 12 years, and have family that remains in Philadelphia so I'm aware of some of the locations. And I have mother-in-law who's on me quite often about a location in her area. She lives in West Philadelphia. So I'm familiar with some of the locations and I'm sensitive. I became the director a year ago and I'm sensitive to those locations and have began to work under my directorship to look at our nuisance 137 Legislative Oversight - 3/13/06 bars. But to answer your question, those locations are in compliance when we offer or when we give the license, we certify the license. What normally happens is when we leave, they change the configuration. And when they change the configuration, there's no oversight that the board has. If that happens, the community needs to contact the Pennsylvania State Police Liquor Control Enforcement. And I will leave to the sergeant and lieutenant what their process is.

What you're telling me is when they investigate or they together investigate and that information is brought to the board, you're saying by law you can't do anything about it until the renewal period?

When who investigates?

When they 138 Legislative Oversight - 3/13/06 do an investigation or bring information to them and they report to the board that this place was licensed a year ago is no 5 longer in compliance because they've walled off the area, chained up the chairs, locked the bathroom --

The normal process is that if the BLC is notified, they do an investigation. If it's founded, they issue a citation. When that --

They issue the citation?

Yes, they issue the citation. When that citation finishes, goes through the adjudication process, we then get the information and we move and our division of investigation then handles an investigation, goes out and does the investigation. Normally, what's been the practice, what I've seen in practicality is that when enforcement cites them, they will bring that location back into compliance.

But this is 139 Legislative Oversight - 3/13/06 not a criticism of you or your office. My question is, is there something in the law that prohibits you from doing something to that license prior to the two-year period?

Yes.

That's what we need to know.

We can only act when there's an application before us. Once the application is approved, renewal is approved. If a concerned citizen were to send us this videotape, the only thing we could do at that point is refer it to the Pennsylvania State Police. And they have authority under Section 471 of the code to issue the citation.

So you're not able -- this is important because it's one of the recommendations that need to be made to change this. You can't do anything to that license until the renewal process starts two years later?

That is correct. 140 Legislative Oversight - 3/13/06

So that takes -- it's frustrating, but at least it's understandable as to why there seems to be the inability to respond quickly because even though neighbors complain, state police investigates, they issue citations, you can't reject or approve that license until two years after it's first instituted; correct?

That's correct.

Steve, you have something to add?

Steven David Masters, attorney for City Council. I'm hearing a couple things that I have questions about. One is that Mr. Waters says that all the establishments are in compliance when they're renewed, but we know that LCB and LCE never physically examine virtually none of the establishments, so it's simply impossible to certify that every one is in compliance when these renewals are basically a rubber stamp and there's no 141 Legislative Oversight - 3/13/06 accountability. The second thing is that there is a power for the LCB to place licenses in safekeeping and they can place the license in safekeeping at any time during the two-year existence of the license. Now, there's certain limitations as to when they can do that, but they don't have a completely hands-off posture up until the renewal process.

If I can answer, we look at the -- when there's an application again before us --

I'm sorry. Go ahead, please.

-- we will look to make sure that the applicant qualifies. So when that application was received from us, we will verify that they meet requirements. In addition, at renewal time, Mr. Masters is correct, at renewal time we don't send investigators to 2,000 locations to ascertain they still meet the requirements, but what we do do is if 142 Legislative Oversight - 3/13/06 there is a citation history, which includes something like not having enough tables and chairs, we'll look into it and see that they are in compliance. If they're not, then that's one of the objections we make. The other thing -- and I'm now a little confused -- there is a provision under the liquor code which allows a license to be placed in safekeeping. It doesn't authorize us to put a license in safekeeping. It requires the licensee to do so if they ceased operating within 15 days.

Excuse me. You said something about in compliance. What happens if they're not in compliance?

When we have the application before us for renewal, we'll object to that license on the basis they no longer meet the qualifications of be it a restaurant or hotel.

When you say 143 Legislative Oversight - 3/13/06 you object, would that necessarily mean the application would be denied?

No. It means that they have the right under due process to have a hearing. Now, if they don't meet the physical requirements, we typically will not give them operating authority until they do meet the physical requirements. So if there is evidence, for example, that there are no tables and chairs and we send an investigator out there as part of the investigation, the application process, and they still don't have any tables and chairs, we won't give them operating authority. We'll object and not give them operating authority. But as a practical matter, they then call us a couple days later, put the tables and chairs in, and they're in compliance.

But the other issue is how are you ever going to know whether someone's in compliance or not if you're not conducting an inspection? I understand there are 144 Legislative Oversight - 3/13/06 2,100, 2,200 some odd locations, but you're saying on the one hand if they're not in compliance you'll raise an objection, but how would you ever know whether they were in compliance or not?

Because if they're not in compliance, the entity that's in charge of enforcing the liquor code, the Pennsylvania State Police Bureau of Liquor Control Enforcement, will have issued -- hopefully have issued a citation.

How would they know? Do they inspect all 2,200 locations in the city?

Hold on a second. The purpose of this whole thing is to try to figure out -- because I think the law is what's at fault. I don't think there's a lot of human fault here. I think there's a lot of legal fault here that needs to be fixed. So what I like about this conversation is that I'm learning things that seem kind 145 Legislative Oversight - 3/13/06 of crazy, but it's crazy because the law's crazy. I want to make sure we're all on the same page. We're all trying to work toward the same goal. Even though there's been years of frustration and anger, I want to keep this on a conversational basis so we can get somewhere. I'm sorry. Please identify yourself. LT. COMERER: Lieutenant John Comerer, C-O-M-E-R-E-R, the Philadelphia office of the State Police Bureau of Liquor Control Enforcement averages approximately 80 inspections a month and has done so for the past three years. And during those inspections, if there are violations that are found during the inspection, then that establishment is cited. And they do continue on with the adjudication process.

One, I would I'm glad to hear that. Two, I think the quick math tells me that's the 960. 146 Legislative Oversight - 3/13/06 LT. COMERER: I'm sorry, sir?

I said the quick math tells me that's 960 establishments you might be able to inspect a year. LT. COMERER: That is correct.

We have 2,200; right? LT. COMERER: Approximately 2,400, sir.

2,400, okay. So we acknowledge up front they're all not being inspected. LT. COMERER: Every --

Excuse me. The councilman wants to know if the 2,400 include E and R license? LT. COMERER: They're both.

Thank you. LT. COMERER: That's all licenses, club licenses, distributors, the whole gamut. And they all have been inspected with rare exception in the past three years, they all have been 147 Legislative Oversight - 3/13/06 inspected, all 2,400, sir.

Okay. So you do an inspection. Any establishment has got to figure just playing the odds they might get inspected somewhere in the course of a three-year period. LT. COMERER: I can tell you this, sir? If you're a stop-and-go, you've probably been inspected three times in the past year alone. Obviously, we tend to inspect the licensees that have been in violation and have not been in compliance over the past several years. We're aware of for the most part, not always but we are aware of those that refuse to become compliant so they are inspected more so than others.

Well, not that I've been to every stop-and-go in the city, but most of them I mean just not to stereotype, but I think most certainly don't meet the 30 chairs out in the public area; right? LT. COMERER: I wouldn't say 148 Legislative Oversight - 3/13/06 most but there are quite a few.

Do they all get violations? LT. COMERER: Yes, sir.

And then what happens? LT. COMERER: They go through the adjudication process, before a hearing examiner, and then the process continues, appeals, whatever they want to do.

Let me ask this question: In the past year, to your recollection, how many stop-and-go's have been closed, license revoked? LT. COMERER: We don't close nor do we revoke. We go out and we cite.

Isn't that the end of the process, though? LT. COMERER: Closure?

Yeah. If you're just in total violation, if you've got all kinds of things going on, what's the end of the process? 149 Legislative Oversight - 3/13/06 LT. COMERER: The Pennsylvania State Police does not have the authority to close a stop-and-go.

No. You make the violation. It goes to court; correct? LT. COMERER: Correct, sir.

Then what happens? LT. COMERER: It goes through the process. They go before a hearing examiner. If they file an appeal, it goes to the Common Pleas Court. It continues on and --

Does the court take the license or does the LCB take the license? LT. COMERER: During the renewal period, that is looked at by the LCB.

I'm not talking about a renewal.

The license revocation doesn't take place, renewal or 150 Legislative Oversight - 3/13/06 revocation, until the two-year cycle.

Right, but there's a lot of life that goes on. There's a lot of disruption. There's a lot of madness during a two-year period.

There's no 8 process in the law if I understand it to take a license prior to the renewal.

If I can just interject for a second, and the state police can correct me, if a licensee is cited for not meeting the physical requirements under the liquor code, typically the penalty will consist of either a fine or suspension and the loss of operating authority until that licensee can establish that they are in compliance. So, again, if the licensee puts those tables and chairs in and they're now back in compliance, whatever suspension may have been in effect at that time goes away.

Which they could then remove the next day and go 151 Legislative Oversight - 3/13/06 back through the same nonsense.

They could, absolutely.

So, I mean, you're telling us -- and I mean this is quite revealing. One of the premier agencies in the entire government of the Commonwealth of Pennsylvania, absolute money maker, we appreciate it generating revenues for the Commonwealth, providing a legal service, you can issue a license over which you have no ability to revoke other than to deny renewal? Is that what this is?

Yes.

You cannot take a license away from someone, they can do whatever they want to do in a two-year window and when they come back, you cannot renew it?

That is correct for this agency. There are other -- again, enforcement bureau can issue citations and then it becomes whether the 152 Legislative Oversight - 3/13/06 tribunal -- the administrative law judge is authorized to revoke the license. The Common Pleas judge is authorized to revoke a license, but that is a penalty that --

Common Pleas or on up the chain?

Typically it's either going to be the administrative law judge or Court of Common Pleas which has the authority to revoke a license for any violation. I mean, the authority is there under Section 471.

All right. then let me ask you this question: How many licenses have been revoked in Philadelphia during the course of 2005?

That would not be a number I would be familiar with.

Is anybody else?

If I may explain, we're not involved in the revocation process. 153 Legislative Oversight - 3/13/06

I understand that, but you've been tremendously informative so I think we're going to generally be nice but I mean is there any -- I mean, do you have a quest for knowledge? I mean, wouldn't you want to know since you're the issuing agency, wouldn't you want to know on the back end how many of your issued licenses were taken away from people?

We can get that number for you. It's just not a number I happen to know off the top of my head.

I understand.

Councilman Kelly.

Thank you. I just want to go over the testimony. You're saying that you or your board issues all the liquor licenses in Pennsylvania. That includes all the stop-and-go's?

Everything. 154 Legislative Oversight - 3/13/06

Do you know how many stop-and-go licenses there are in Philadelphia?

I do not know how many licenses stop-and-goes are in the city, but I do know that there are 1,944 retail licenses and 130 --

But that includes restaurants and taverns and --

I'm just looking at the stop-and-go's and there seems to be some neighborhoods that are inundated with them, that have many more than what I think any average person using common sense would allow. And I don't know how in God's name you could allow all of these licenses to go in a certain community. And let me tell you something, for the life of me I don't know what these stop-and-go's do. I really don't. I think in my opinion I think we should close them all because I don't think they add anything to the community at all. I think if people want 155 Legislative Oversight - 3/13/06 to go into and get a beverage, a takeout beverage, there's ample good restaurants, beer distributors, taverns to go to to take this out. I don't know what they provide other than grief for the community activists. And I just wanted to know is there a cap, is there something that you look at before you issue a license of this type? I imagine it's a different type than a restaurant or tavern; is that true? No difference?

There are two types of retail licenses. What people keep referring to as stop-and-go's here, there's no stop-and-go license. There is a restaurant license which is authorized to sell beer and liquor for both on-premise consumption and beer for off-premise consumption up to 192 fluid ounces. To qualify for that license, you have to have a certain amount of square footage. You have to have tables and chairs and enough food to feed 30 people 156 Legislative Oversight - 3/13/06 at one time. E licenses or retail dispenser licenses are similar except the square footage is a little bit smaller and they only sell beer. So, you know, it's a term that people banter about, stop-and-go's. We don't have that designation. So when someone applies to us, they merely need to establish that they meet the minimum requirements. And what our Supreme Court has told us repeatedly is, liquor board, you can't refuse an application unless you can point to something specific in the code that this person is violating at the time of application. And that's --

Isn't there a cap, though? There is in the city of Philadelphia I believe that if you want to open up --

Isn't it to 3,000 people?

Councilman Kelly, when you talk about a cap, you talk about one license per 3,000, you have to 157 Legislative Oversight - 3/13/06 understand that that law has changed numerous times. And every time the law changed, okay, any licenses that were at the quota, okay, were grandfathered in. So Philadelphia is over quota. There's no doubt about that. There was legislation that was pending --

Is there anything we can do to reduce the numbers other than not renewing their license? And that just brings up another thing. How much input does City Council have in that process, if any?

In the process of?

Of renewing a license. In other words, if we sent a letter to you indicating that there are problems with someone who has a license and wants it renewed.

We will take the evidence when you send the information as we do during every renewal period. We will take the information and if there's substantial information to look at 158 Legislative Oversight - 3/13/06 objecting to that license, then I will so recommend that to the board.

If I could comment on that, in Mr. Waters' testimony, he related to you that the last renewal cycle, all of our enforcement agencies got together and came up with a list of the worst offenders of all the licensed establishments and the LCB only granted hearings on half of those. So our enforcement community said there were 72 that should not be renewed and they didn't even get hearings on half of them. Now, that's not the City Council writing a letter to the LCB. That's all the enforcement communities coming together and saying these are the problem places, and they haven't cooperated even to the extent of giving hearings for all of them. I'm hoping we're going to get more cooperation down the road.

What was that number again, Steve? 159 Legislative Oversight - 3/13/06

74 and 42.

Councilman, can I respond to that?

Who makes the decision on granting a hearing? Is it the board itself or staff or --

Under the statute, it's the director of licensing. And there's a criteria that we use. Generally speaking, and this is consistent with how Section 470 is written, if an applicant or employee or someone who has an interest in the license has criminal convictions, felonies obviously carry more weight than a misdemeanor, that is something we would look at. If they have a citation history of three or more citations typically which affect the public such as sales to minors during the last two-year cycle, or if there is a pattern of criminal conduct that has been occurring at the licensed premises which the licensee knew, should have known about, and failed to take 160 Legislative Oversight - 3/13/06 substantial steps to prevent that activity, then we take a look at that as well. What we do in Philadelphia and everywhere else is once we have places identified, we reach out. We testified about getting reports from Fran Healy of the Philadelphia Police Department. We will identify locations and they will identify locations and then they will -- in Philadelphia it's a little bit more elaborate because you do have more licenses. They're cad reports, Fran? Am I saying that right?

Correct.

We review those and ask for additional police reports. Mr. Healy provided those police reports to us. And then we did an evaluation of each of those locations trying to see whether there's a pattern of criminal activity that the licensee knew or should have known about and wasn't taking any 161 Legislative Oversight - 3/13/06 steps. And that's how you got from 72 to 42 because sometimes someone will say this is a problem, but there are no 5 incident reports associated with it for whatever reason. Sometimes there's a couple incident reports but there isn't really a pattern there. And we know what the law requires because the Rosing case is a great example which Mr. Waters testified to. No one disputed there was drug activity in the licensed premises. It's a bar in Pittsburgh. The police were making buys there. We refused a license. Common Pleas said no. The police can't stop this, how can you expect a licensee to? We took an appeal to Commonwealth Court which said exactly the same thing. They're not experts. They don't know what drug activity looks like. They didn't know you had police officers there buying drugs. So, you know, we know what the statute says. We also know what's going to fly and what's not going to fly. So 162 Legislative Oversight - 3/13/06 that in a nutshell is the process. And, again, if there are places you want us to look at, we'll be happy to look at them. It's just we only look once every two years. It's much more effective to maybe deal with some of the people who are also up here with the day to day questions.

Let me ask you a question. You had something you wanted to add?

One other thing, as deputy chief counsel said, we will be happy to look at any locations that are problematic, but if they do not have substantial enforcement information, it makes my job very difficult in objecting to those licenses. Okay?

Lieutenant Healy?

If I can, I'm not going to sit here and bash the LCB at this point. We worked as a team to coordinate this list. The first year we did it the District Attorney had its 163 Legislative Oversight - 3/13/06 list, I had mine, L&I had its, and it was over 200 bars. The problem was the LCB couldn't logistically handle that number and asked us to prioritize. That meant I had to prioritize one neighborhood over another. That was problematic. Some neighborhoods are clearly noise, public disturbances, and other neighborhoods are violence, drugs, shootings. You start to see all those nasty bars up in the top of the list but nonetheless those that have community problems no less hectic at the bottom.

Let me just ask as a question far as enforcement is concerned. Is it that clear in the liquor code that Philadelphia Police are not, specifically not permitted to write liquor code violations?

No. And this issue came up. Actually personally I was involved in it with Senator Fumo right after the first Mardi Gras incident in Philadelphia. 164 Legislative Oversight - 3/13/06

You have state police officers for four counties. They could use some help. So what keeps us from actually instituting it ourselves?

Historically in the 8 police department in the '80s there was 9 corruption around bars. The police 10 commissioner withdrew all police activity 11 and left it to the state. As a result, 12 when Police Commissioner Timoney came to 13 town, he said that makes no sense. We 14 need to get back involved in policing 15 inside bars. Some of the serious 16 violations under the liquor code, there's 17 a handful of them, are unclassified M 18 misdemeanors, which makes them an M3. 19 There's nothing in state law which 20 prevents the Philadelphia Police 21 Department from enforcing those 22 misdemeanors --

They're serving a visibly intoxicated person.

-- and we've taken 165 Legislative Oversight - 3/13/06 steps to do that.

Serving minors?

You can address minors two ways, one under the liquor code, one under the crimes code.

What I'm saying is in an effort to build a citation case, even if it's a two-year window we have, in order to build that case, why aren't our uniformed officers writing liquor violations now along with them --

We're mistaking two things. Liquor violations I have no 17 authority to write.

That was the question.

What specifically does not give you the right or prohibits you from having a uniformed officer go into a takeout beer delicatessen and cite them for not having the chairs, cite them for allowing a 166 Legislative Oversight - 3/13/06 minor on the premises, cite them for service of alcohol, cite them for overadvertising, which is against the liquor code?

The problem is we don't do administrative regulations. A lot of those you just mentioned are administrative regulations.

But what prohibits us from doing it?

We don't have authority under the charter.

Under what charter?

Philadelphia charter or state law. We enforce state law.

They're certified state police officials. Do our police officers have any different standing than they do? They're both state authorized law enforcement.

His office is authorized to enforce liquor code 167 Legislative Oversight - 3/13/06 administrative violations.

And ours is specifically prohibited?

We're not prohibited but we're not authorized.

Why wouldn't we want to do it?

We're not trained in their code.

We could have a training class. I mean, here's my point is that this hot potato keeps getting passed around.

See, that's where you're very much mistaken. We've come together to address these things.

I appreciate the efforts of the task force. What I'm saying is practically on the street day to day there's not enough of them, there's plenty of us.

Our units meet together and they go out together. Our police will make arrests. They work as a 168 Legislative Oversight - 3/13/06 team. They go out together on every other Friday night I believe it is and hit certain things. Because we can't do the administrative stuff, we tag up with the state police so they can.

Lieutenant, are you speaking about taverns, bars, or the stop-and-go?

Everything. Well, we don't separate a stop-and-go. It's a nuisance establishment, bar establishment, period.

We have had conversations as part of the City Council task force on coming up with strategies on how the city police and state police can dovetail and I think there is a willingness. There definitely was a willingness expressed from the state police to take incident reports from the city police and turn them into citations. So if the city police issued some kind of a citation in whatever they want to call it and transmit it to the state police, 169 Legislative Oversight - 3/13/06 they can change it to be an official liquor code citation and commence it.

Is that happening now?

Yes.

In other words, this would be a recommendation by the Philadelphia Police for the state police to write a citation? LT. COMERER: It's not a recommendation. They put down on their report the evidence of the violation. They forward it to us. We then based on information received we may further go out and investigate or based on what they gave us that may be enough to just do a citation at that point. And then we would cite administratively, which then later on they would have to come and testify if need be, the officers from the Philadelphia Police Department. But we've been doing that for quite some time. It's well beyond the City Council hearings. We've been doing that for 170 Legislative Oversight - 3/13/06 numerous years.

Including stop-and-go's; right? LT. COMERER: That is correct. If they see violations, they would forward it to us. Each district has representatives that do that.

How much such correspondence or requests have you guys had from our people? LT. COMERER: A lot, a lot.

That's one of the major initiatives happening with the task force and before that is that kind of communication. We also have discussions around the different policies and procedures for making citations or arrests for underage drinking. And apparently the state police can simply issue a citation like a ticket on the scene whereas our department it's more of a formal arrest procedure where they have to take the individuals back to the station and book them and it takes 171 Legislative Oversight - 3/13/06 several hours. And we were exploring whether our police department could change their policies and make it more like the state police of just issuing a ticket for underage drinking as opposed to a three hour ordeal they don't want to do and so we don't have a lot of underage drinking arrests.

Could you talk a little bit about the issue of minors on the premises? It is clear in takeout beer delis -- and I understand the -- what was the restaurant -- Pizza Hut stuff, kids are going in and out of these beer delis on a regular basis buying candy and potato chips and other things through the same window and box where there's alcohol. Isn't there some really clear violation that kids shouldn't be on that premises at all without being accompanied by an adult? Because even in the Pizza Hut thing you need an adult, don't you?

There are basically 172 Legislative Oversight - 3/13/06 five ways a minor can be on a licensed premises. I'll see if I get them all right here. With a parent or legal guardian, under proper supervision is a different way -- proper supervision simply means someone who's over the age of who's responsible for you. That 9 may include a licensee's employee if 10 they're not doing anything else if 11 they're having an underage night and 12 that's statutory. The Pizza Hut rule, 13 which is referred to -- 14

Again, I'm 15 trying not to be sarcastic, an employee 16 behind the bulletproof glass is a 17 responsible adult as it relates to a 18 minor in a -- 19

No, no, because he's 20 doing something else. He's selling 21 alcohol. This would be -- 22

Hold on. 23 So give an example of who this person 24 would be. 25

An example would be 173 Legislative Oversight - 3/13/06 perhaps an establishment that's having like a prom night or something where there are certain employees who are not doing anything but watching the kids or teachers --

But you would agree that none of those --

Most of our takeout beer delis don't have proms.

I can't see one of the areas you've talked about that would relate to a takeout beer deli or an R licensee acting as --

He's only gone through two.

I think deputy counsel is speaking in general to the rules relative to all licensed establishments and could be missing the point if I'm correct on -- if I'm not, please let me know -- what the three of you are at this time trying to drill down to and that's the stop-and-go's. Unfortunately, in the liquor code, a 174 Legislative Oversight - 3/13/06 stop-and-go is not identified. I know what a stop-and-go is and I would agree with you that there's an issue there. There is an issue there, Councilman Kenney. The issue is that in all likelihood these locations are out of compliance.

You're saying they can't meet the test.

I'm saying they cannot meet the test as to the way they are configured, no. The way they were configured when they were licensed and received the liquor license when an application was forwarded to us, they were in compliance, and over time, whatever that time period was, they've changed their configuration. And in all likelihood -- I don't know for a fact because I haven't investigated one of them -- they probably are not in compliance.

Now, if you had the ability through the state liquor 175 Legislative Oversight - 3/13/06 code to make a decision or to take away a license prior to the two-year period, you would avail yourself of that opportunity?

If the liquor code gave us that opportunity, surely we would avail ourselves to it as well as, you know, since Ms. Abrams or D.A. Abraham mentioned her resources, I think I would be lying to say that all our resources are at some degree whittled.

But you'd you need a change in state law?

Well, sure.

Lieutenant from the state police -- and I didn't catch your last name. LT. COMERER: Comerer, C-O-M-E-R-E-R.

Okay. I want to address you properly. In the testimony earlier and this has I think been consistent over some time, there are 22 state troopers covering the five counties? 176 Legislative Oversight - 3/13/06 LT. COMERER: That is incorrect. The State Police Bureau of Liquor Control Enforcement, the officers who work in the bureau with the exception of the district office commander and section commanders and the command staff are liquor enforcement officers. They are not troopers. They are LEOs. Sergeant Davis is the district office commander here in Philadelphia and I'm based out of Philadelphia as eastern section commander. Our complement is not 22. As in previous hearings, it was testified to that our complement for the Philadelphia office is 31. And that's not including support, clerical, and what not, which brings the number up over 40. In addition to that --

But in terms of the liquor enforcement officers, individuals who can write a liquor code violation -- LT. COMERER: 31, sir.

In 177 Legislative Oversight - 3/13/06 Philadelphia? LT. COMERER: 31 stationed in Philadelphia but --

What area do they cover? LT. COMERER: They cover Philadelphia, Chester County, and Delaware County. That's the district.

So Philly, Delaware, Chester Counties; right? LT. COMERER: Correct.

And how many liquor licenses are there in those three counties? LT. COMERER: I believe we're at approximately 3,500 total. I might be off by a few. I will tell you this, the majority, well above the majority of work is Philadelphia. Just don't tell the people in Delaware County and Chester County that.

I understand. You love all your children equally. I understand. So at least from 178 Legislative Oversight - 3/13/06 a numerical standpoint each liquor enforcement officer theoretically is responsible for a little over a hundred establishments; right? LT. COMERER: We don't break it down that way, but if you do the math, that would be correct. I mean, bear in mind a lot of those establishments, the 2,400 or so in Philadelphia, the vast majority of those establishments we can inspect them, work them for numerous complaints and they're always in compliance. Let's face it. Just like on the street when you're working as a police officer, it's the same crowd that always seems to get the most attention.

Now, I may have missed it. I know I went over to the side for a second. This whole issue about what Philadelphia police officers can and cannot enforce under the liquor code, did that get resolved while I was away from the table? LT. COMERER: We're looking at 179 Legislative Oversight - 3/13/06 administrative charges that are -- the administrative process is conducted by the liquor enforcement officers, but the information that's furnished -- if the Philadelphia Police come upon a situation and they forward that information to us, which we do have that pathway going at this time, we can then take those reports and we can apply them to the administrative citation.

But are you also of the opinion that Philadelphia police officers cannot write an administrative violation to the liquor code? LT. COMERER: That is correct.

Why is that? LT. COMERER: That's just the way the law's written, sir.

Tell me the section. LT. COMERER: Off the top of my head, I don't have that information. 180 Legislative Oversight - 3/13/06

It's Section 471 of the liquor code authorizes the enforcement bureau and enforcement bureau only to issue civil citations giving a licensee a hearing before an administrative law judge. It's 471.

Now, would any amendment to that specifically authorizing police officers in the city of the first class to write such a violation, is that helpful to you? LT. COMERER: I don't see how it would be helpful to me only because if they forward us the information, we are writing them up. So I don't see the process being helped by that change.

So you can write up a violation for something that someone else wrote? LT. COMERER: On information received, that is correct, if, in fact, there's evidence supporting it. I mean, obviously, we need the evidence.

I just have 181 Legislative Oversight - 3/13/06 a followup question to that, Councilman, if I may. You said before that you take the information from the Philadelphia Police and you will write up a citation and then you will go out in some cases and investigate the complaint? LT. COMERER: That is correct.

What happens if the Philadelphia Police are authorized to write these citations? Would you still go out and investigate that citation? LT. COMERER: That is correct, sir. A lot of cases where the Philadelphia Police will go and investigate crimes that happened at an establishment, then we will open up an administrative investigation based on the information they forward to us so that not only -- when we go before the renewal process every two years, not only will we have the Philadelphia Police paperwork but we also have administrative paperwork and hopefully administrative citations 182 Legislative Oversight - 3/13/06 that come out of it. And then the totality of everything, when we present that, we have an overwhelming evidence that perhaps maybe there will be no 6 renewal. I mean, that's what we try to do with the problem places.

Let me go back to Mr. Waters. I'm going to assume that you were here when the video was on.

Yes, sir.

So I know we couldn't get the full effect from the sound, but the video was shot last night. If we take at full value the noise issues, in your testimony you mention on example of liquor code violations which the board considers when determining whether to renew a liquor license includes such violations as sales to minors or visibly intoxicated patrons, allowing amplified music to be heard off of the licensed premises, and after hours operation.

That is correct. 183 Legislative Oversight - 3/13/06

Now, you saw the video. You have individuals who shot it. I'm sure you can talk to them. Maybe it's a moot issue now as a result of our earlier discussion, but what you're basically saying is notwithstanding having seen that, there's nothing you can do about that at the moment?

That's correct. There is nothing I can do with that at the moment. If they want to present that evidence to be used, they would have to present that to the Pennsylvania State Police Bureau of Liquor Control Enforcement.

That's over on your side. Now, what do you guys do with that evidence? LT. COMERER: We'll take that evidence, which we've already spoken to her. When we got a copy of that, which she's promised to get us copies of that, based on that we might have to do some 184 Legislative Oversight - 3/13/06 further investigation, but for the most part based on that without question I think there would be a citation going out to that licensee.

Now let me go back for a second. Mr. Waters, do you get monthly reports of code violations?

No, I do not. Code violations from the -- I do not.

So you get just a big report at license renewal time and that's the first you know of what's going on with the licensee?

That is correct. What we do get, we have access to getting -- if there are cases that Bureau of Liquor Control Enforcement believes should come before us, they contact my nuisance bar unit, division, and they give us that information and we put that into a candidate pool. So at renewal time, we have the information. Let me at this time take an opportunity to say that I have been 185 Legislative Oversight - 3/13/06 working very closely with the other agencies here, enforcement agencies here and it has been an ongoing behind the scenes work team that started actually six years ago in trying to come together to come to the table to bring the stakeholders and enforcement together to try and work through this process to identify those locations. Have we failed in some areas? Probably so, but I think we've been productive in trying to use the liquor code and use the tools that we have before us, one, to get the enforcement agencies to understand what the director of bureau of licensing needs to be able to object, for the director to object to that. You know, Councilman, I've worked the investigative unit down here, was the division chief, so when I talk about six years ago, actually we go back to about 1996 when we came together and through the process and give and take we've tried to do the best we could.

Just a 186 Legislative Oversight - 3/13/06 couple last questions, Mr. Chairman. This issue regarding the number of the licensees apparently in response to their Act 39, it was testified to a number of them decided to close and have been closed for some time. Can you give us on the record what is the statute with regard to if you're out of business for any amount of time what happens?

There's nothing that happens to the licensee or to the license when they go out of business. They put their license into safekeeping or escrow and the board holds it for the statute says three years. And if they do not activate that, the license, or transfer it to another party within three years, effective February 7, 2007, that license would go out of existence. While it's held in escrow, that license as long as it's renewed or validated, that license is a good license. It can be brought out of safekeeping at any time as long as the location it's going to meets 187 Legislative Oversight - 3/13/06 the statute.

Are they required to put it in safekeeping?

If a license is not operable days, by law they must 7 place that license in escrow. 8

And do we 9 know if any of these licensees did that? 10

To my knowledge, I 11 don't have that information in front of 12 me. I can check on that. 13

Another addendum 14 on that is while we've been focusing on 15 the physical requirements for a location, there's also a requirement in the code that a location to be licensed has to be a location of good reputation, not just the people who run it but the place itself has to be a good reputation. And any location that has been denied a permit to takeout beer and then was selling it illegally while the appeals were going on and finally decided to close I would submit doesn't have a good 188 Legislative Oversight - 3/13/06 reputation. It certainly doesn't have a good reputation in the community. And it would be helpful to hear from the LCB whether they ever take that code provision into account and simply refuse to return a license in safekeeping if a establishment is not in good reputation or don't take that into account.

We do consider a licensee's reputation when we have, again, an application before us. There may be times when a license is coming out of safekeeping we're going to have an application because depending on how long it's in safekeeping, they may need to submit additional information. Our ability to do so wasn't made clear until the Pennsylvania Supreme Court decided a case called Street Road Bar and Grill about two years ago where we had objected to the transfer of license to individuals who we thought were not reputable based on their operating history at other locations. The Commonwealth Court had 189 Legislative Oversight - 3/13/06 said that we could not consider citation history and criminal history, that really the board had very little authority to look at people's past operating history when making a determination as to whether or not they're reputable, but the Pennsylvania Supreme Court said yes, we can. We've incorporated that authority under regulation. So if we have something we can base it on, we will consider reputation.

Last question. Is it a statutory requirement that all liquor licenses -- licensees, rather, have a valid health license issued by the local municipality?

It's a regulatory requirement, title 40.

Title 40?

Yes, which is regulatory. It is a requirement.

Putting aside the two-year renewal period, suppose a current licensee's health 190 Legislative Oversight - 3/13/06 license was revoked by the City of Philadelphia tomorrow. What would happen?

And we were notified?

Yes.

There's very little we can do because there's not an application before us, but we would refer it to state police.

You guys are killing me. You're just killing me. At what point do I just start banging my head on the table?

If we can be perfectly candid, there have been times in the past where we had an application before us and there seemed to be equitable reasons for us to refuse the license and the courts have categorically reversed those decisions. That's why that's a case called Chinese Gourmet, a series of cases where the court kind of tells us you can't consider that. 191 Legislative Oversight - 3/13/06

But if in the regs or the statute you must --

It's in the regs.

These are liquor control?

Title 40 of our regulations.

An establishment has to have a valid health license.

That's correct, but we cannot act unless an application is in front of us. And the only time an application is in front of us is during the renewal period. That's by statute.

Gotcha. Renewals come up in October of this year.

That is correct.

What happens if there's an application in front of you and the applicant has no 23 valid health license and you know it?

We do not issue the license. 192 Legislative Oversight - 3/13/06

Thank you.

We will object and not give them operating authority.

Okay. Thank you.

Thank you. Councilman Kelly has a few questions. I just want to let everyone know we're going to at some point in the next few minutes recess this hearing until April 6 at 1:00 p.m. That doesn't necessarily mean we're going to be back here, but I have to keep it alive without having to advertise it. We'll contact everybody, but it's been a long day and I want to bring some conclusion today and keep it open for further discussion.

As relates to the city, one of the complaints the community has made very clear and it's mostly in the takeout beer delis is the advertising and the illegal signage and the advertising of alcohol products on fences, on walls. Why can't we mitigate 193 Legislative Oversight - 3/13/06 that and just take that stuff down? Is there --

In some cases, we do take it down. I don't have it with me. I'll be happy to get it over to you. There was some issue with the courts approximately six months ago in reference to accessory signage. Unfortunately, and we don't agree with this issue, when you put up signs for Miller beer, Coors Light, Anheuser-Busch, they're accessories to your business.

Colt 45.

Based on the size and minimum requirements of these signs, they are in some cases not illegal. Some of the signs we saw there I'd like to get the addresses of those locations because the fence that was there is technically not a fence attached to that property. So, in other words, the fencing that's away from that property line is basically on the sidewalk, which I could have my people go out there and just remove every 194 Legislative Oversight - 3/13/06 signing along that fence. When it's attached to the building or within a window space of that building, it becomes a little more technical in nature as to whether that is allowable accessory signage or not. The only other thing I'd like to clear up --

Why do we err on the side of total caution and just not take the sign down?

We do in some cases. Other cases that we don't -- we do we normally get sued for.

We get sued all the time.

But we're working closely with the law department in amount of accessory signage. The other issue want to definitely clear up before we leave today is community testimony about locations being closed at 11:00 p.m. That law City Council passed is not in reference to liquor license 195 Legislative Oversight - 3/13/06 establishments. It's in reference to any business, not just restaurants, any business other than any beer or liquor license establishments that are open after 11:000 p.m. in areas more than 80 percent populated by residential occupancy. It doesn't mean areas such as Germantown area, Ridge Avenue. Any commercial corridor is not under that ordinance. And bars and stop-and-go's, whatever you want to call them, are not under that jurisdiction of that ordinance.

But don't they have a mercantile license giving us -- us giving them permission to operate and sell retail?

Yes. We look into different issues with the nuisance activity and again working closely with the state police and state LCE. But unfortunately that ordinance doesn't cover liquor license.

They're 196 Legislative Oversight - 3/13/06 exempted then?

From my understanding, it is. And the opinion that we have and I'll get the opinion to you is the fact that they are governed -- their license allows them 2:00 p.m -- 2:00 a.m. We can't -- our jurisdiction doesn't supersede the state's jurisdiction of 2:00 a.m.

In other words, they have the same license so, therefore, they're permitted the same hours as anyone else.

As the LCB said, there is no such thing as a stop-and-go license. It's either a restaurant or takeout location.

I understand. That was one of the questions I did want to ask that the Chairman already asked. An impression I received from all the testimony today is that there seems to be a better track record in regulating and controlling 197 Legislative Oversight - 3/13/06 taverns and restaurants than there are in the stop-and-go's. I'm just looking at the results and it's pretty frustrating because I'm looking at Mr. Masters, your testimony, you mentioned in it that you had 147 protests on these stop-and-go's and the bottom line is that it comes down to about only five of these businesses went out of business. And that's pretty frustrating for a community. And I think what I know the Chairman and Councilman Nutter and everyone else I'm sure is willing to do is to come together, all of us here, and come up with some new regulations or laws or something that's going to protect the communities in oversaturation of these stop-and-go's, making them tow the line as far as aesthetically and everything else. To me, I just shake my head and say my God, we're really getting frustrated in not being able to control this type of activity that's going on in our neighborhoods. And that's all I have to 198 Legislative Oversight - 3/13/06 say. Thank you, Mr. Chairman.

Thank you. Mr. Waters, is there any consideration given to the proximity of other licensed establishments around either a new licensee, for example, or transfer?

There is when we have an application before us. However, we take into consideration if there's -- let me say it like this: The other licensed establishments within 200 feet have a right to protest. And if they protest, we normally have a hearing on why they're protesting. The courts have not really been favorable to our decisions when we have denied a license, an application, the board has denied an application because they look at it as a free enterprise right. And deputy counsel may want to speak to the legalities of that.

As Jerry pointed out, a licensee within 200 feet is what 199 Legislative Oversight - 3/13/06 the statute says can form the basis for the board to refuse the application. The other thing is if it's a new application, if there is an adverse effect on the neighborhood within 500 feet, that is also the basis to refuse a license. And there have been situations where neighbors say, look, we're oversaturated, these are the problems. It's a very high standard in terms of what the courts want to see before they refuse this application. And the reason is it's perspective. You know, we don't know that this person's going to be a problem. We don't know because we haven't seen this person operate. What some neighborhoods in Philadelphia have done, and you had some of them testify, is they've become very proactive. They have filed petitions to intervene or protest when it goes to a new location. They've met with the licensee and they've entered into or have gotten them to agree to conditional 200 Legislative Oversight - 3/13/06 licensing agreements which they then send to us, and that puts additional conditions on the license. So it depends. Some groups we deal with all the time. Other groups we don't hear from at all.

Councilman Nutter?

Thank you, Mr. Chairman. Just two quick things. Mr. Verdi, one, do you know what the schedule is for renewal on a health license? Is that on a --

Yearly.

So it's a calendar year?

Calendar year.

Would you give some thought or consideration based on the conversation we've had -- this won't apply to all the food and beverage or at least food establishments all across the city, but we might want to give some consideration to changing the 201 Legislative Oversight - 3/13/06 cycle on the health license for those establishments that have liquor licenses. And one of the reasons I would recommend that is if they're getting their license on a calendar year, which I assume is a December 31 --

Councilman, if I'm not mistaken, it's March 1.

So March 1 to February 28?

Yes.

I think based on that kind of schedule, establishments will always have a health license when they go for renewal in October if they have one.

Not all the time. What we've been doing is together and with the LCE, when we revoke a food license for whatever reason, health department will contact our department in reference to revocation of a license. We automatically send a copy over to liquor control enforcement. Also, the 202 Legislative Oversight - 3/13/06 investigators that are dealing with LCB will contact us during times of renewal and request information on liquor licenses -- I mean on health licenses or food licenses. Our food licenses are not restricted to -- we don't have -- there's no way for me to pull out all good licenses and say which ones are tied into a liquor establishment or not.

I understand that, but the applicant -- I mean, I think there are at least a couple ways to get the information. One, you could require the applicant to tell you; right? I mean, they have to renew. Do you have a liquor license? Second, you can get a file from our good friends over at the LCB. They'll tell you.

Excuse me. Wouldn't that be selective enforcement?

I'm sorry? We have different licenses for different kinds of business. I mean, everyone has the same food license whether you have a 203 Legislative Oversight - 3/13/06 restaurant or you got a cart out on the street.

Exactly.

Generally, the guy or lady or whatever with the cart on the street probably doesn't have a liquor license. It's a different kind of establishment. It's a different kind of license. I mean, we can have this debate another time, but it seems to me that if the health license of those establishments, about 2,400 of them, are being reviewed at the same time that the gentlemen over there on a two-year basis are reviewing their liquor license, then sometimes you would end up with an applicant in front of the LCB on renewal that might not have a health license.

That's a question you have to ask the health department. My understanding, Councilman, there is no 23 inspection for renewal of the health license. That's a renewal yearly.

So you just 204 Legislative Oversight - 3/13/06 get it? I go to a lot of restaurants. That's a really comfortable thought.

Why do we want to do that?

Those licenses are renewable based upon application. I mean, the health department unfortunately is not here.

Unless there's a report somebody died?

How they inspect on these locations is not --

Right. Mr. Waters, one last thing. You said you know what a stop-and-go is. Based on your experience with the LCB, do you have any knowledge of this similar type of establishment proliferating all over the Commonwealth of Pennsylvania? Are there many other jurisdictions that have these types of entities?

The answer to you, Councilman, would be no. However, in all areas of the Commonwealth there are what 205 Legislative Oversight - 3/13/06 we could classify as stop-and-go's, but I guess I should use the word the proliferation of those establishments is unique to the city of the first class Philadelphia, sir.

We are quite unique place.

You are.

Thank you.

Thank you very much for your testimony and for your time. This committee will recess --

Can I make a request? I wasn't able to present my testimony. Can I just request it be put into the record?

Absolutely. The testimony has submitted for the record. We will adjourn until April 6 at 1:00 p.m. Thank you. - - - 206 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence, and objections are contained fully and accurately in the stenographic notes taken by me on March 13, 2006, and that this is a true and correct transcript of same. _____________________________ Kimberly A. Overwise Certified Realtime Reporter Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means unless under the direct control and/or supervision of the certifying reporter.)