North Carolina in the Office Of

NORTH CAROLINA IN THE OFFICE OF

ADMINISTRATIVE HEARINGS

CHATHAM COUNTY 02 ABC 1491

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CAROLINA SPORTS ARENA, L.L.C., )

T/A NORTH CAROLINA SPORTS ARENA, )

)

Petitioner, )

)

vs. ) DECISION

)

N. C. A.B.C. COMMISSION, )

)

Respondent. )

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Administrative Law Judge James L. Conner II heard this contested case on 17 and 19 December 2002, in Raleigh, North Carolina. Petitioner submitted a proposed Decision on July 30, 2003. Petitioner was represented by J. Sam Johnson, Jr., Attorney from Greensboro, N. C., and Respondent was represented by Timothy W. Morse, Assistant counsel, from Raleigh, North Carolina.

ISSUES

(a) Whether Respondent improperly denied Petitioner’s application for On Premise Malt Beverage permit pursuant to N.C.G.S. 18B-901 (c) (8), because the operation of the business would be detrimental to the neighborhood, based upon the objections of persons living in the neighborhood?

(b) Whether Respondent previously, on 26 April 2002, improperly denied Petitioner’s application for On Premise Malt Beverage permit pursuant to N.C.G.S. 18B-603 (a) (4) and G.S. 18B-1000 (6), because of alleged failure to qualify as being substantially engaged in the business of preparing and serving meals with gross receipts from food, nonalcoholic and alcoholic beverages? and

(c) Whether Petitioner is entitled to issuance of a permanent permit for On Premise Malt Beverage?

After hearing testimony from witnesses for the parties, and reviewing the documents and exhibits introduced in evidence, the undersigned makes the following

FINDINGS OF FACT

Procedural History

1. The application of Petitioner for On Premise Malt Beverage, after investigation by Respondent, was found to contain no deficiencies, and a temporary permit was issued to it for Carolina Sports Arena, located at 12365 U.S. 421, Goldston, North Carolina, in Chatham County, which temporary permit has been reissued for 27 months from September, 2000.

2. The method employed by Petitioner, of serving food and charging at the door in advance of being served, appeared unusual to Doyle D. Allen, Assistant Administrator of Respondent, and issuance of permanent permit was delayed for completion of an audit. Respondent’s personnel being inadequate to perform the audit promptly, temporary permits for Petitioner were extended when they were about to expire.

3. On April 26, 2002 Respondent denied Petitioner’s application for permanent permit, on grounds that it failed to qualify as being substantially engaged in the business of preparing and serving meals with gross receipts from food and nonalcoholic beverages being less than 40 per cent of the total gross receipts from food, nonalcoholic and alcoholic beverages. The primary dispute between the parties on this point had to do with interpretation of the cover charges made by Petitioner at the door.

4. Petitioner filed a contested case on 24 June, 2002, and issues had been joined when Respondent’s Mr. Alley changed his decision with regard to the method of food service at the location, and determined to amend the Notice of Rejection on 15 July, 2002, and not to proceed on the grounds stated in the original Notice of Rejection. After conferring with the Administrative Law Judge assigned to the case, it was determined to dismiss the first contested case, and to institute the instant case for decision on the grounds stated in the Amended Notice of Rejection.

Operative Facts

5. Mr. Alley began to hear of complaints from residents at property nearby the location of Petitioner sometime in the fall of 2001, which caused him to continue to delay issuance of permanent permit to Petitioner. These complaints concerned the sound made by bands playing music at the location on U. S. 421, and there were reports of confrontation between Mr. Ward, a principal in Petitioner, and some of these residents. Alcohol Law Enforcement Agent Chandler initiated an investigation. The Agent interviewed Respondent’s witnesses and others, who complained primarily about the booming sound of bass in the music from the location.

6. Some of the same people who were complaining of the bass sound had also taken their complaints to the Board of County Commissioners in Chatham County, and Chairman Phillips, a witness, went to the location to investigate for himself. He testified that he found nothing to substantiate the complaints, and thought that the complainants were motivated to complain against Petitioners by their dislike for Petitioner’s Hispanic customers. Mr. Alley testified that he discounted the complaints about squealing tires, littering, and fouling nearby property, as he found the location to be extraordinarily clean. Agent Chandler testified that Mr. Ward cooperated with him immediately as to every problem to which his attention was called.

7.  Mr. Ward went to the various residences of the witnesses and used a meter to measure the sound level emanating from Petitioner’s location. He also made a video recording of meter readings, which was reviewed in this hearing. The meter readings were well in compliance with the County noise ordinance limits.

8.  The Sheriff’s deputies monitored the noise levels on several occasions, but found no violations. No law enforcement entity has filed any charges against Petitioner for any violation of the noise ordinance. Petitioner was never charged with any violation of the Respondent’s rules and regulations.

9.  Charges arising out of Mr. Ward’s confrontation with a Mr. Harry Lytton were tried in court, and resulted in Mr. Ward being found innocent, and Mr. Lytton pleading guilty to four charges. None of these matters were directly associated with the consumption of alcohol. Although there were numerous calls to the Sheriff’s office about the complaints of the witnesses, the complaints of these witnesses are largely not credible, and were not caused by Petitioner’s conduct.

10.  The Arena location is situated in a rural area of the County, in a sparsely populated section, about 1½ miles from Goldston, a town of some 300 people. Highway 421 runs adjacent to the location, and generally in a northwest direction toward Goldston. Traffic noise from the highway is generally louder than sound from the Arena. There are other businesses on the highway between the Arena and Goldston. The citizens of Chatham County have elected not to have zoning ordinances which determine the usage of property. The operation of the Arena is in compliance with all ordinances of the county with reference to time of operation, and sound levels of music generated at the location.

11.  Prior to the present operation at the Arena, the location was occupied by a permittee who ran a restaurant and Arena, which served customers who came to attend country music entertainment. That business failed, and its owner sold to Petitioner. Many of the complaining witnesses in this case attended the musical events held there, because they involved a type of music that they enjoyed, and patrons who looked like them.

Upon the foregoing findings of fact, the undersigned makes the following

CONCLUSIONS OF LAW

1.  The Office of Administrative Hearings has personal and subject matter jurisdiction over this contested case.

2.  The parties received Notice of Hearing more than fifteen (15) days prior to the hearing.

3.  N.C.G.S. 18B-901 (c) (8) provides that the Commission shall, in determining whether the applicant and the business location are suitable for issuance of permit, consider any other evidence that would tend to show whether the applicant would comply with the ABC laws, and whether operation of his business at that location would be detrimental to the neighborhood. (emphasis added)

4.  Respondent has not proved, by the greater weight of the evidence, that the applicant has failed to comply with the ABC laws, or that the operation of its business at that location would be detrimental to the neighborhood.

5.  Petitioner has shown, by the greater weight of the evidence, that it has abided by all the ABC laws, and that its operation is in compliance with all laws related to its operation. The problems complained of by some neighbors about the sound of music are not more than the ordinary problems occurring with the presentation of live music. Petitioner has met its burden of proof in showing that Respondent erred in finding that the operation of the business at the subject location would be detrimental to the neighborhood.

DECISION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby decided that Respondent’s rejection of Petitioner’s application be REVERSED.

ORDER

It is hereby ordered that the agency serve a copy of the final decision on the Office of Administrative Hearings, 6714 Mail Service Center, Raleigh, N.C. 27699-6714, in accordance with North Carolina General Statute 150B-36(b).

NOTICE

The decision of the Administrative Law Judge in this contested case will be reviewed by the agency making the final decision according to the standards found in G.S. 150B036(b)(b1) and (b2). The agency making the final decision is required to give each party an opportunity to file exceptions to the decision of the Administrative Law Judge and to present written argument to those in the agency who will make the final decision. G.S. 150B-36(a).

The agency that will make the final decision in this contested case is the North Carolina Alcoholic Beverage Control Commission.

This the 11th day of September 2003.

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James L. Conner, II.

Administrative Law Judge