HomeMy WebLinkAboutMinutes - 01/23/2017 - Committee of the Whole (2)COMMITTEE OF THE WHOLE
MEETING
January 2% 2017
Mayor Low called the Committee of the Whole meeting of January 23, 2017 to order at 7:00
p.m. In attendance were Mayor Low and the following Aldermen: Santi, Glab, Schaefer, Curry,
Wimmer, Peterson and Condon. Absent: None. Also in attendance: City Administrator
Morefield, Deputy City Administrator Hobson, Director of Economic Development Martin,
Director of Community Development Polerecky, Director of Finance Lynch, City Attorney
McArdle and City Clerk Jones.
CITY OF MCHENRY MISSION STATEMENT
Mayor Low read aloud the Mission Statement of the City of McHenry.
PUBLIC INPUT SESSION
No one spoke at the Public Input Session.
DISCUSSION REGARDING CHAPTER 9 (DEVICES. COIN OPERATED). SECTION 9-10 VIDEO
GAMING TERMINALS OF THE MCHENRY MUNICIPAL CODE
Alderman Curry provided the Committee with a breakdown of liquor establishments in
the City that hold a gaming license from January 2016 to December 2016. The information
contained square footage of each location, amount played at each establishment, amount won,
Net Terminal Income, NTI Tax Rate, and the State and Municipal share of the income.
Director of Economic Development Martin provided Council and Staff with a recently
obtained copy of the Village of Westmont Ordinance creating a new classification of Liquor
License for video gaming cafes.
City Administrator Morefield stated that at the October 17, 2016 meeting, the Council
discussed amending the Municipal Code specifically to address concerns regarding gaming
cafes. Following the discussion, Staff and the City Attorney were directed to research similar
concerns and efforts in surrounding communities and to provide Council with the information
and recommendations to facilitate further discussion at a future Council meeting. City
Administrator Morefield stated the purpose of tonight's meeting is to provide Council with
another opportunity to discuss the information that Staff has gathered recommendations for
amending the Municipal Code to address the aforementioned concerns.
To date this City of McHenry has issued thirty (30) active video gaming licenses, which
include 134 video gaming terminals. Of the 30 active licenses, two are defined as Veterans
Organizations, the VFW and PLAY. Of the active license holders, three (3) can be identified as
Video Gaming Cafes," which have been established since July 2012: Lucky Poker, Betty's Bistro
and Stella's. There are an additional four business that have been issued a Liquor License and
are awaiting State approval for a gaming license: Addison's Steakhouse, BeerAbility, 3 Queens
and Lacey's Place.
Committee of the Whole Meeting
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January 23, 2017
Recently, Council approved a second Stella's location as part of the Ricky Rockets
development on east Route 120 and consideration is being given for a second Lucky Poker to be
located on east Route 120. The matter of the second Lucky Poker was tabled by Council in
October to be reconsidered at the January 16, 2017 Council meeting.
Therefore, there are currently a total of six (7) establishments that could be defined as a Video
Gaming Cafe:
1. Lucky Poker (existing);
2. Betty's Bistro
3. Stella's Place N. Richmond Road
4. Stella's Place (Ricky Rockets Development)
5. 3 Queens
6. Lacey's Place (Diamond Drive)
7. Lacey's Place (Front Street)
City Administrator Morefield informed Council that with the exception of the Village of
Lakewood, all McHenry County municipalities have adopted Ordinances allowing video gaming
within their respective city limits. Many communities have also adopted, or since amended,
Ordinances aimed at placing additional limitations on video gaming establishments. Therefore,
the Ordinances are as varied as the municipalities.
City Administrator Morefield stated that at the direction of Council, Staff contacted
thirteen municipalities, nine Home Rule and four non -Home Rule in McHenry County and Lake
County.
Grayslake, Highland Park, Libertyville and Lake Forest do not currently permit video
gaming. Lake Zurich, Round Lake, Round Lake Beach and Woodstock (all non -Home Rule) are
limited to the guidelines for permitting video gaming, as defined in the Illinois State Statutes,
and do not impose any additional local restrictions on location through business/Liquor
Licensing or special zoning requirements. However, each of these communities have a defined
number of Liquor Licenses available for the various classes and, as such, are able to utilize this
tool to manage, through the Liquor Licensing mechanism, the number of video gaming cafes
permitted.
Waukegan has no additional restrictions on the location of video gaming terminals in
regarding to business/Liquor Licensing and/or zoning, but does require a $1,000 per terminal
annual license.
Mundelein has no additional restrictions on the location of video gaming terminals in
regarding to business/Liquor Licensing and/or zoning, but has a somewhat cumbersome Liquor
Licensing process whereby a business seeking a Liquor License appears before a Liquor
Commission and the Commission then recommends whether or not to recommend that the
business apply for a Liquor License. There is a $150 per terminal annual license required.
Committee of the Whole Meeting
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January 23, 2017
Crystal Lake applies additional restrictions on signage Cl"d video surveillance. A business
must hold a Liquor License for 12-months prior to being eligible for application for a video
Dr license and required supplemental Liquor License. Additionally, video gaming must be
an incidental part of a bar or restaurant where the principal business purpose is the
consumption of food and/or alcoholic liquor on premises. Crystal Lake also restricts all
businesses to a maximum of three (3) terminals and imposes a $1,000 per year operator license
the operator is the company that provides the terminals) and a $500 per terminal annual
licensing fee.
Lake in the Hills recently amended their video gaming Ordinance to include that a
business must have a minimum of 1,500 square feet and regulates the number of VGTs based
on square footage. Lake in the Hills charges a $500 per terminal license fee and $300 for
fraternal organizations.
Huntley currently has a moratorium on the issuance of any new video gaming licenses
and is in the process of reviewing regulations. The main issue in Huntley appears to be,
specifically, the regulation of Video Gaming Cafes.
Algonquin recently amended their Video Gaming Ordinance to wholly restrict the
location of Video Gaming Cafes and establishing a criteria for what constitutes the definition of
Video Gaming Cafe. Algonquin collects a $1,000 per year terminal operator license and a $500
per terminal annual license.
City Administrator Morefield reiterated McHenry currently permits video gaming under
Section 9-10, Chapter 9, Devices Coin Operated, of the Municipal Code. He noted the language
in the city's Ordinance references conformance with the requirements of the Illinois Video
Gaming Act, defining eligibility for obtaining a video gaming license from the State of Illinois. As
adopted, the only additional language of the Ordinance includes the payment of an annual
license fee of $100 for each VGT or device, and a $2.00 transfer fee for a replacement license.
City Administrator Morefield further stated the McHenry currently approves liquor
licenses on a case -by -case basis, and upon approval, Municipal Code is amended. The City does
not hold "open" licenses and decreases licenses upon the closing of a business. This has for
many years provided a process whereby the City Council has the opportunity to manage the
issuance of liquor licenses and remain business friendly without the need to establish a
moratorium or predefined limitation on the number of liquor licenses issued in a specific
licensing category, as do many surrounding municipalities.
City Council made it clear at the October 17, 2016 meeting that they desire to more
closely manage the opportunities for the establishment of video gaming cafes in the City of
McHenry. With that direction Staff gathered information from other communities and offers
the following for Council consideration:
Committee of the Whole Meeting
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January 23, 2017
Option 41: Establish a moratorium on liquor licenses. While this would put a halt to the
establishment of video gaming eligible establishments, Staff does not believe it is the desire
of the Council to implement a moratorium on liquor licenses in all categories as this would
have the unintended consequence of limiting all new business opportunities.
Option #2: Control the location of video gaming cafes through land use restrictions
only. This would entail establishing a separate use category similar to the existing
tavern/bar use that would require Council approval for the location. This would provide the
opportunity for a video gaming cafe request to come before Council for approval and would
not necessarily limit the number of video gaming cafes. Staff was not able to identify that
any of the referenced municipalities contacted control video gaming cafes through land use
designation.
Option #3: Creation of a separate liquor license specifically for video gaming cafes and
establishment of a moratorium on the specific license. Given that the City of McHenry
already has approved video gaming cafes, should the Council desire to limit the number of
new establishments moving forward it is possible a new liquor license classification be
created for businesses defined as video gaming cafes with an established number of
available licenses. This could be a predefined number or a percentage of total liquor
licenses. These licenses would be available on a first come, first serve basis and available
only when a liquor license within this category becomes available. Establishing this option
would provide Staff clarity on the processing of liquor licenses for video gaming cafes and
provide Council with a maximum threshold for the number of video gaming cafe requests
that would come before Council. If no licenses are available, no requests would be
presented to the Council.
This option would require the definition of a "video gaming cafe," determining the number
of licenses available, and amending the Municipal Code to establish the new liquor license
classification. All existing businesses that meet the definition would be required to obtain
this new liquor license as part of the liquor license renewal process.
City Administrator said should Council proceed with Option No. 3, video gaming
cafes would still be required to obtain use permits as required. However these requests would
not be presented to the Planning & Zoning Commission and City Council if there are no video
gaming liquor licenses available.
City Attorney McArdle provided Council with an example of a definition fora "video
gaming cafe." City Attorney McArdle noted that the definition is somewhat arbitrary and would
be difficult to enforce.
Committee of the Whole Meeting
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January 23, 2017
City Attorney McArdle encouraged Council to provide Staff with direction regarding
what policies they want put in place regarding video gaming cafes however, he cautioned them
about non -conformity and "grandfather" issues adding the strongest point of law remains with
the liquor license.
Option #4: Increase video gaming annual terminal fees and introduction of a terminal
operator fee. Staff recommends Council consider implementing an increase to the annual
terminal license fee from $100 to $500 per terminal and the establishment of an annual
terminal operator fee of $1,000. Terminal operator is the company that owns and
maintains the machines. The increase for the annual terminal license is recommended for
private businesses only. The fee charged to fraternal organizations per terminal would
remain at $100.
City Administrator Morefield informed Council that the liquor license/video gaming
license renewal process begins in mid -February. He recommended that Council provide Staff
with direction prior to the beginning of this process.
Mayor Low recognized that there have been a number of discussions regarding video
gaming cafes in the City of McHenry. She would like to reach consensus regarding the direction
Council would like to take regarding this issue. Mayor Low noted there has not been a single
police call relating to video gaming. She also said she recognizes the concerns expressed over
the video gaming cafes but not the concerns regarding bars that do not serve food. Mayor Low
opined the City already has a mechanism in place to control the establishment of video gaming
cafes by controlling the liquor licenses which come before Council and added she is in favor of
Option No. 4 raising the annual fees.
Alderman Condon stated she concurs with Mayor Low's statements and Staffs
recommendation in Option No. 4. If a new level of liquor license was established she would
support Option No. 3, grandfathering those establishments that already have a liquor license,
but limiting new video gaming cafe liquor licenses. Alderman Condon stated that if Option No. 3
were enacted a total of six video gaming liquor licenses seems adequate. However, Alderman
Condon stated she supports the status quo by controlling the establishments with Council's
control of the liquor license.
Alderman Glab opined that there is an outcry in the community regarding the number of
video gaming cafes being established. He stated he does not support a convoluted new
Ordinance that would be difficult to enforce and he is not in support of a new classification of
liquor license. He opined that whatever Council decides they should be consistent in their
decision. Alderman Glab stated his support of Option #4.
Alderman Curry stated that he supports Option #4 and that he would like to see "video
gaming cafe" defined by an Ordinance. Alderman Curry stated he also supports Option #3.
Committee of the Whole Meeting
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January 23, 2017
Responding to an inquiry from Alderman Curry regarding what would result if a business
owner misinformed Staff regarding the amount of revenue that was derived from gaming as
opposed to liquor, and could the liquor license be revoked; City Attorney McArdle answered
the only way to be certain about revenue is to audit a business's books.
Alderman Wimmer opined that he has no issue with Option #4 and he concurred with
Mayor Low and Alderman Condon. He stated Council currently has an avenue to limit
establishments through the issuance of a liquor license adding that he is not in favor of
establishing another tier of liquor licenses just for video gaming establishments.
Alderman Peterson concurred with Mayor Low, Alderman Condon and Alderman
Wimmer in his support of Option #4, adding it almost sounds as if Council is attempting to
regulate morality.
Alderman Santi said he is comfortable supporting Option #4 and he is not against video
gaming cafes, but would like to regulate the number of establishments. Alderman Santi and
concurred that a business's liquor license should be revoked if they are not in compliance with
the Ordinance.
Mayor Low opined that there are many people that like the atmosphere of the video
gaming cafe as opposed to a tavern or bar.
Alderman Schaefer stated that "video gaming cafes" need to be defined. Currently, it
seems that Council approves a Special Use then the applicant approaches Council for a liquor
license. Alderman Schaefer suggested the process be reversed. Alderman Schaefer stated that
he supports Options #4 and #3 that establishes a separate classification of liquor license for
video gaming cafes, with all current businesses grandfathered in.
Alderman Condon said that at the Community Development Committee meeting on
August 29, 2016, a number of ideas were put forth and discussed, but no one despite being
asked a number of times for specific direction, made any suggestions to Staff regarding change.
She stated that the Council's strength remains with the policy currently in place via the current
liquor license approval process and added she would like to see less video gaming signage.
Responding to Alderman Peterson's inquiry regarding whether some of the empty
structures in the City have been filled by video gaming establishments, Director of Economic
Development Martin answered yes.
Alderman Glab stated that constituents are not complaining so much about empty
buildings as they are about video gaming establishments.
Mayor Low again stated the Council currently has the ability to deny a liquor license to
an applicant. Staff should not be put in the position of "advising" a potential applicant
Committee of the Whole Meeting
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January 23, 2017
regarding whether or not to apply for a liquor license. Mayor Low acknowledged that the
Council has valid points however Staff requires direction. At this time Mayor Low requested a
show of hands regarding who is in favor of the status quo leaving the ability to approve or deny
a liquor license as is:
Status Quo: Glab, Wimmer, Peterson, Condon
Changing: Santi, Schaefer, Curry
The majority of Council agreed that the annual licensing fees should be raised.
City Administrator Morefield said the common theme throughout all of the
municipalities surveyed was control through the liquor license process.
Alderman Wimmer departed at 8:15 pm.
Alderman Curry expressed concern with clarity. He opined that with the establishment
of a new liquor license and limiting the number of licenses available, there would be more
clarity regarding the definition of video gaming cafes. A brief discussion ensued.
Mayor Low stated the majority of the Council has indicated their support regarding
raising the annual license fee and the majority of Council has chosen not to make any additional
changes to the Ordinance at this time.
ADJOURNMENT
Motion by Condon, seconded by Peterson, to adjourn the Committee of the Whole
meeting at 8:35 pm.
Voting Aye: Santi, Glab, Schaefer, Curry, Peterson, Condon.
Voting Nay: None.
Absent: Wimmer.
Motion carried.
The Committee of the Whole meeting adjourned at 8:35 pm.
Mayor' / \ / \ City Clerk