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HomeMy WebLinkAbout24 - Newport Beach Brewing Company - Use Permit 3485CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item 24 May 13, 2008 TO: Honorable Mayor and Members of the City Council FROM: Planning Department James Campbell, Senior Planner (949) 644 -3210 iampbell (a)-city.newport- beach:ca.us SUBJECT: Newport Beach Brewing Company Use Permit No. 3485 2920 Newport Boulevard (PA2006 -177) RECOMMENDATION 1. Hold a public hearing 2. Adopt the attached draft resolution amending Resolution No. 2008 -57 by amending Condition No. 6 and adding Condition No. 28 to Use Permit 3485 (Attachment #1). INTRODUCTION On August 14, 2007, City Council adopted Resolution No. 2007 -57 amending the conditions of approval of Use Permit No. 3485 (Attachment #2). The Newport Beach Brewing Company filed suit contending that the action was inappropriate. City Council and the Brewing Company entered into a settlement agreement earlier this month, which includes a stipulation that the City Council consider at a public hearing an amendment to Condition No. 6 and a new condition related to special events permits. In the August 2007 action to amend the conditions of approval, Condition No. 6 was changed to read as follows: "6. The net public area of the restaurant1brewpub, which is devoted to daytime use prior to 5:00 p.m. shall be limited to 1,500 square feet daily. The balance of the net public area shall be physically closed off to the public by a fixed barrier and shall not be used until after 5:00 p.m. daily." Newport Beach Brewing Company May 13, 2008 Page 2 of 3 Pursuant to the Settlement Agreement, Condition #6 should be changed as follows: 6. The net public area of the restauranUbrewpub, which is devoted to daytime use prior to 5:00 p.m. shall be limited to 9,500 square feet daily Monday through Friday. This restriction specifically excludes Saturday and Sunday when parking spaces devoted to office uses are not necessary. The balance of the net public area shall be physically closed off to the public by a fixed barrier and shall not be used until after 5:00 p.m. daily Mondav through Friday (the Weekday Closure Area "). Distilled spirits shall not be served within the Weekday Closure Area on Saturday and Sunday before 5:00 p.m. From a parking perspective, the change to the condition should not prove to be an issue with the offices on the second floor of the building closed on weekends. The limitation on the service of distilled spirits on Saturday and Sunday within the portion of the brewery that is closed before 5:00 p.m. during the week is a new limitation acceptable to the Brewing Company. Pursuant to the .Settlement Agreement, City Council agreed to consider the following additional condition: "28. Newport Beach Brewing Company may apply for at least three special event days per calendar year. City shall not be obligated to approve such special events permits, but if the City does approve a special event permit, the approval of the special event permit(s) shall not require the approval of an amendment to this permit." This condition acknowledges that the Newport Beach Brewing Company may request a special event permit and is in conformance with the Municipal Code. Environmental Determination: The modification and addition to the conditions of approval as described above are exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the Guidelines for the Implementation of CEQA as it involves operational alterations of an existing facility where no expansion of the use occurs. No expansion of the use occurs with changes to the conditions as proposed. Conclusion: Staff believes that a finding can be made such that the modification of Condition No. 6 and the addition of Condition No. 28 as described will not be detrimental to the public health, safety and general welfare. Alternatives: The Council can decline the proposed changes to the conditions of approval and seek a modified settlement agreement with the NBBC. Newport Beach Brewing Company May 13, 2008 Page 3of3 Public Notice: A hearing notice indicating the subject, time, place. and location of this hearing was provided in accordance with the Municipal Code. Notice was published in the Daily Pilot, mailed to property owners within 300 feet of the property (excluding abutting roads) and the site was posted a minimum of 10 days in advance of this hearing. Prepared by: ln.j Cpvw'oYr/(/� James Campbell, Senior Planner ATTACHMENT Submitted by: David Lepo, Pla g Director 1. Draft resolution amending Resolution No. 2007 -57 and Use Permit No. 3485 2. Resolution No. 2007 -57 3. Settlement Agreement RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH MODIFYING RESOLUTION NO. 2007 -57 TO AMEND CONDITION NO. 6 AND ADD CONDITION NO. 28 TO USE PERMIT NO. 3485 FOR THE NEWPORT BEACH BREWING COMPANY LOCATED AT 2920 NEWPORT BOULEVARD (PA 2006 -177). WHEREAS, on August 14, 2007, after a duly noticed public hearing heir!"! : 10, 2007, City Council adopted Resolution No. 2007 -57 modifying as. +a adw; q',. conditions of approval for Use Permit No. 3485. WHEREAS, on May 13, 2008, City Council held a duly noticed pubiic; consider amending Condition No. 6 and to add a new condition (Condition provided for in a Settlement Agreement between the City and the Ne -,por Brewing Company. The notice was published, mailed and posted a minimum in advance of the hearing in accordance with the applicable regrrirerrer[�: Municipal Code. Evidence both written and oral was presented to and cor5rc ,f >ci t; r, r City Council. WHEREAS, amending Condition No. 6 to allow use of the net public ar'e�, 5:00 p.m. on Saturday and Sunday will not create a significant parking confhcft office uses located on the second floor of the building are typically closed Thy, r „13 r Beach Brewing Company has also agreed to limit the service of distilled =_> Saturday and Sunday within the portion of the restaurant/brewery that is Jo s& 5:00 p.m. during the week. Allowing these changes to the conditions of approva� ,;,;ii be detrimental to the public health, safety and general welfare. WHEREAS, adding Condition No. 28 acknowledges that the Newpr rs: Brewing Company may apply for special event permits and that the City is und, ; obligation to approve any applications. It also acknowledges that should the City ;ho; s:,: . to approve a special event permit, the approval of the special event permits; require the approval of an amendment to Use Permit No. 3485. This corsditir! consistent with the Municipal Code. WHEREAS, the modification and addition to the conditions of apprc v.:,: :.i^, described above are exempt from the provisions of the California Environmentai Qir, ^; Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the Guidelines c Implementation of CEOA as they involve operational alterations of an existing Far_:ill.' where no expansion of the use occurs. No expansion of the use occurs with cha! r, »; h:,. the conditions as proposed. ATTACHMEH 7 -- NOW, THEREFORE, BE IT RESOLVED Section 1. City Council Resolution No. 2007 -57 is hereby amended by amending Condition No. 6 to read: "6. The net public area of the restaurant/brewpub, which is devoted to daytime use prior to 5:00 p.m. shall be limited to 1,500 square feet Monday through Friday. This restriction specifically excludes Saturday and Sunday when parking spaces devoted to office uses are not necessary. The balance of the net public area shall be physically closed off to the public by a fixed barrier and shall not be used until after 5:00 p.m. Monday through Friday (the "Weekday Closure Area "). Distilled spirits shall not be served within the Weekday Closure Area on Saturday and Sunday before 5:00 p.m." Section 2. City Council. Resolution No. 2007 -57 is hereby amended by adding Condition No. 28 to read: "28. Newport Beach Brewing Company may apply for at least three special event days per calendar year. City shall not be obligated to approve such special events permits, but if the City does approve a special event permit, the approval of the special event permit(s) shall not require the approval of an amendment to this permit." Section 3. This resolution shall take effect immediately upon adoption. Passed and adopted by the City Council of Newport Beach at a regular meeting held on the May 13, 2008 by the following vote to wit: AYES, COUNCIL MEMBERS NOES, COUNCIL MEMBERS ABSENT, COUNCIL MEMBERS ATTEST: CITY CLERK T,F -RIN 7 5 RESOLUTION NO. 2007 -57 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH MODIFYING THE CONDITIONS OF APPROVAL OF USE PERMIT NO. 3485 FOR PROPERTY LOCATED AT 2920 NEWPORT BOULEVARD (PA2006 -177). WHEREAS, on September 27, 1993, the City approved Use Permit No. 3485 subject to findings. and conditions of approval authorizing a restaurant/brewpub with a Type 23 Alcoholic Beverage Control (ABC) license to operate at 2920 Newport Boulevard within the Cannery Village area subject to findings and twenty -nine (29) conditions of approval. A Type 23 license allows a small beer manufacturer (brewpub or micro - brewery) where a brewpub is typically a small brewery with a restaurant. The restaurant and brewpub began operations in 1994 using the business.name of Newport Beach Brewing Company. referred to hereto as "NBBC" after . the issuance of Coastal Development Permit (CDP) No. 5- 93-137 issued by the California Coastal Commission (CCC). WHEREAS, the NBBC represented to the City that the primary use would be a restaurant and that the brewery and alcohol sales would be secondary to the primary use. This fact is supported by the administrative record from the hearings conducted by the City.in 1993: Condition No. 10 was imposed requiring the operation of the brewery and the service of alcoholic beverages to be, ancillary to the primary food service operation of the restaurant. WHEREAS, on September 27, 1993, the City Council rescinded its March 8, 1993 approval to allow the purchase and use of in -lieu parking spaces. within the Cannery Village municipal parking lot prior to 5:00 PM in association with Use Permit No. 3485. WHEREAS, in 1999, the NBBC requested and received approval of an amendment to Use Permit No. 3485. The amendment allowed the restaurant and brewpub to operate with a Type 75 ABC license and the amendment was subject to findings and additional and revised conditions of approval (twenty -nine [29] in total). A Type 75 license authorizes the sale of beer, wine and distilled sprits at a bona fide eating place plus the brewing. of beer. WHEREAS, the NBBC represented to the City that the primary use would bee restaurant and that the brewery and alcohol sales would compliment and be secondary to the primary use. This fact is supported by the administrative record from the proceedings conducted in 1999. Condition No. 9 was imposed requiring the operation of the brewery and the service of alcoholic beverages to be ancillary to the primary food service operation of the restaurant. Condition No. 10 was imposed that provides, 'The approval of this use permft is for a restaurant1brewpub and shall not be construed as the approval of a bar, cocktail lounge, or other use serving alcoholic beverages during hours not corresponding to regular meal service hours (food products sold or served incidentally to the sale or service of alcoholic beverages shall not be deemed as 4 Mf (114fe7i /r WZ, � constituting regular meal service) nor as the approval of a cabaret, nightclub, or other use with the principal purpose of providing live entertainment and/or dancing." Additionally, the closing hour on Friday and Saturday nights was changed from 2:00 AM to 1:00 AM. WHEREAS, in January of 2006, the City received a complaint from The Cannery Village Concerned, a local group of residents, property owners and business owners, alleging-that the Newport Beach Brewing Company was violating the conditions of Use Permit No. 3485. Alleged violations included, among other things: operating a bar rather than a restaurant in violation of Condition No. 10; alcohol sales in excess of food sales in violation of Condition No. 9; opening the entire dining area on weekends before 5PM in violation of Coastal Development Permit No. 5 -93 -137, trash in the parking lot in violation of Standard Condition E; failure of the establishment to curb unruly patron behavior outside the establishment in violation of Standard Condition D; and inadequate training of the owner and employees in responsible methods and skills for serving and selling alcoholic beverages in accordance with Standard Condition F. Neighbors contend that patrons create noise, fight, cause property damage, urinate, defecate, and fornicate during the late evening and early morning hours on and in. the vicinity of the project site and that the operator was unable or unwilling to discourage or correct these objectionable conditions. Based upon the complaints received, Use Permit No. 3485 was referred to the Planning Commission on May 4, 2006, for review. WHEREAS, on May 4, 2006, the Planning Commission discussed the operation, took input from the neighborhood and directed an official review of the Use Permit. At the May 4, 2006, meeting, testimony was given to the Planning Commission supporting the following facts: a) Jerry Kolbly, General Manager, NBBC represented that. the establishment's emphasis was on being a restaurant. He also noted that the kitchen is opened during the hours of alcohol service with the late night menu (pizzas and appetizers) from 10:00 PM to closing. In addition, Mr. Kolbly noted that "service from 11:00 pm and 1 am is about 90% alcohol (55% liquor and 45% beer and wine) and 10% food. (See, Planning Commission Minutes dated May 4, 2006). Operation of the brewery and the service of alcoholic beverages shall be ancillary to the primary food service operation of the restaurant pursuant to Condition #9 and this testimony would support a finding of a violation. Condition #10 prohibits a bar and based upon these representations, staff believes that the limited menu after 10:00 PM and relationship between the sale of alcohol to food violated both Condition Nos. 9 and 10. b) Jerry Kolbly also testified that his staff had received certified alcohol training in- 1999, but due to staff turnover, the-training had since lapsed. (See, Planning Commission Minutes dated August 17, 2006). No record of completion of a certified alcohol sales training course is in evidence required pursuant to Condition F. Failure to properly train the owners and staff who serve alcohol' in accordance with Condition F would constitute a violation of the condition. On September 6, 2006, the majority of NBBC staff successfully complete the State Department of Alcohol Control Board administered License Education on Alcohol 1 and Drugs (L.E.A.D.) training program. If this course had been completed by all staff members, NBBC would have been in compliance with Condition F that requires training of owners, staff and employees on responsible alcohol sales. They may have previously. been in violation of this condition, if there were employees serving and/or selling alcoholic beverages who had not undergone a certified training program. All employees have since received the LEAD training. and the NBBC is believed to be in compliance with Condition F. c) Bruce Low, a 29th Street resident, testified for a group of concerned citizens, noting that: i) They do not wish to close the Brewery as it brings value to the neighborhood provided it is operated in accordance with the conditions of approval. ii) There is a discrepancy between the Use Permit . conditions and the condition of the Coastal Development Permit related to the size of the dining .room on the weekends. iii) The Brewery turns into an obtrusive bar operation after 10:30 PIN and they have bouncers, what restaurant has bouncers? iv) The operators have made strides but the more serious issues still remain nuisances to the neighborhood as outlined in the January.2006. d) Joe Reese, 30th Street resident, testified that patrons have to show their identification to get into the establishment It is not a restaurant, not with bouncers and serving only appetizers after 10:00 p.m. This operation between 10:00 PM and 1:00 AM is nothing. more than a bar. This area is out of control and he is disturbed by the noise in the early mornings. e) Drew Wetherhault, 30th Street resident, testified that he supported the prior speakers and he stated that the restaurants and bars need to comply with their use permits. f) Came Stade, 29th Street resident, testified she has been awakened with noise and victimized by patrons. g) Stephanie Rosanelli, resident of Cannery Village, noted the noise at night and that she cannot leave her windows open. She too has had her home vandalized by tagging. h) Christine Andros, 30th Street resident, testified the challenges are the noise and patron activities (nuisances) in the parking lot. This establishment operates as a bar. She has spoken to the bar operator on several occasions to inform him of disturbances in his parking lot. 1) Tony Shepherdson, 31st Street resident, testified his agreement with previous speakers and stated any help would be welcomed. j) Kevin Weeda, the owner of a business located in the area, testified his agreement with the previous speakers and .asked that this item be brought back for formal review. k) The net public area of the establishment is no more than 1500 square feet Monday through Friday before 5:00 PM and the net public area exceeds 1500 square feet before 5:00 PM on Saturday and Sunday in violation of. Special Condition No. of Coastal Development Permit No. 5 -93 -137. 1) The site was found to be generally free of litter and not in violation. of Standard Condition E. At the conclusion of the discussion, the Planning Commission determined that there was sufficient information to indicate that the use was operating in violation of the. conditions of approval .and. in a manner that may have been detrimental to the reasonable peace and quiet of the neighborhood. The Commission also found that there was sufficient information to consider potentially modifying the conditions of approval to alleviate the problems reported by neighbors. The Commission requested and the Planning Director determined pursuant to Section 20.96.040 of the Municipal Code that a review of Use Permit No. 3485 was required. WHEREAS, On August 17, 2006, the Planning Commission held a public hearing regarding the alleged violations of and potential modifications to the conditions of approval of Use Permit No. 3485. The hearing was noticed in accordance with Chapter 20.92 of the Municipal Code and the operator of the Newport Beach Brewing Company was also mailed a notice of the hearing. The following facts were considered by the Planning Commission: a) A Code and Water Quality Enforcement Officer conducted a site visit on February 10, 2006. It was a Friday night, and the officer noted that there was in fact a line to get into NBBC and the officer noted that some individuals were screaming at each other and a high noise level was being emitted from the premises. This would constitute a violation of the nuisance provision in Condition D. (Planning Commission Minutes dated August 17, 2006). b) At the Planning Commission Meeting, Mr. Kolbly, the General Manager of NBBC, acknowledged that the line to get into the establishment could reach up to thirty people. Additionally, John Date, a patron of NBBC noted that the establishment "does a great job with security at the door." (See, Planning Commission Minutes dated August 17,.2006): . C) At the Planning Commission meeting, Jill Markowitz, owner of a property near NBBC contended that individuals were urinating in public (she did not specify that the individuals came directly from NBBC). She also complained that, in general, there were loud noises coming from the establishment and the parking lot. (Planning Commission Minutes dated August 17, 2006). The noisestdisturbances would be in violation of the nuisance provision in Condition D. d) Billy Steed testified that the establishment is nice until after 9:00 p.m. when it can get out of control. Noise, public urination and fights coming out of the bar disturb the peace..(See, Planning Commission Minutes dated August 17, 2006). The noises/disturbances would be in violation of the nuisance provision in Condition D. E e) Joe Reese testified at the meeting that he had visited NBBC after 9;00 PM on August 5, 2005 to see how the NBBC operated. He testified that the security guard at the door said that after 9:00 PM the restaurant becomes a bar and that no one under 21 is allowed in or they would lose their liquor license. The restaurant had patrons standing and loud music was playing. We sat at a table and asked the waiter for food who told us the kitchen was closed and the only thing to order was drinks. There were no :chips, pretzels or popcorn being served. There were three. security guards inside the restaurant and another one Was outside. It was obvious that .this was acting as a bar, not a restaurant. Conversely, there was testimony given by Zach Stevens, a NBBC employee, on duty that night noting that waiters are told to push food even past 11:00 PM to increase sales and that the kitchen was open as evidenced by the sale of a %Z chicken salad at midnight. (Planning Commission Minutes dated August 17, 2006). Closing the kitchen thereby eliminating food sales with the continued sales of alcohol would constitute a violation of Condition #9 as the sale of alcohol would exceed that of food and a violation of Condition #10 by operating a prohibited bar. f) Robby Hogan -, a. manager in charge of the kitchen at the establishment, testified that he was on duty the.night of August 5, 2005 and the kitchen was open and is always open until. the establishment closes (Planning Commission Minutes dated August 17, 2006). g) Roberta Aley, resident, testified that she frequents the brewery and that she always has been able to get food after 12:00 PM and that she has not seen any of these problems. after 12 :00 PM that have been portrayed by previous speakers. (Planning Commission Minutes dated August 17, 2006). At the conclusion of the hearing, the Planning Commission directed staff to set Use Permit No. 3485 for possible modification and /or revocation given that the NBBC had not addressed issues of nuisance and strict compliance with all conditions of approval. WHEREAS,. on or about August 21, 2006, Newport Beach Police informed planning staff that the owners, staff and employees had successfully completed the L.E.A.D. training classes administered by the State Department of Alcoholic Beverage Control as required by Condition F. A violation of Condition F had occurred prior to successful completion of the training curriculum. WHEREAS, Condition #6 of Use Permit No. 3485 states: "The net public area of the restaurant/brewpub, which is devoted to daytime use Monday through.Friday (prior to 5:00 PM.) shall be limited to 1,500 square feet. The balance of the net public area shall be physically closed off to the public by a fixed barrier and shall not be used until after 5:00 PM daily."' WHEREAS, Special Condition #1 of Coastal Development Permit (CDP) No. 5- 93 -137 states :. °Prior to the issuance of a coastal development permit, the applicant shall execute a deed restriction, in a form and content acceptable to the Executive Director, which shall provided no more than 1,500 square feet of service area for the subject restaurant/brewpub. shall be open before 5:OOPM. This document shall run with W the land, binding all successors and assigns, and shall be recorded free of prior liens." On January 19, 1994, the property owner recorded a deed restriction pursuant to Special Condition #1 that restricts the use of the property in accordance with Special Condition 91. WHEREAS, on Sunday October 8, 2006, Newport Beach Police Detectives visited the NBBC, arriving at about 12:30 PM. They noted that the restaurant was completely open with patrons occupying tables in all areas with no sections being closed off. NBBC has admitted during the various public hearings that the NBBC does not limit the size of the dining room on weekends before 5:00 PM. WHEREAS, on January 4, 2007, the Planning Commission held a noticed public hearing on the possible modification of conditions and /or revocation of Use Permit No. 3485. Testimony and a staff report, including a report prepared by the Newport Beach Police Department, were considered by the Planning Commission: a) The Newport Beach Police Department investigation did not reveal any violations . of conditions or a significant law enforcement issue with the operation of the NBBC. The Department of Alcoholic Beverage Control was contacted and they reported that the Department did conduct an investigation that was closed due to a lack of evidence of a violation of license conditions. b) All NBBC had successfully completed the L.E.A.D. training classes administered by the State Department of Alcoholic Beverage Control abating past Violation of Condition F. c) The NBBC staff voluntarily offered the following physical and operational changes for consideration as amended conditions of approval: i) Construction of a trash enclosure cover. ii) Relocation the entrance from the parking lot side of the building to the Newport Boulevard entrance when a line of patrons forms to enter the establishment. iii) Discontinuation of the removal of condiments and menus from the tables. iv) Discontinuation of the late night bar menu while keeping the kitchen open at. all times with a full menu. v) Installation of signs requesting that patrons be respectful of the neighborhood. vi) Initiation of regular security sweeps of the parking lot. vii) Maintenance of a security presence at least %: hour after closing. viii)Implementation of a recycling collection program that minimizes noise generation. ix) Scheduling buildingibusiness maintenance. (waste disposal, deliveries, etc.) activities during hours less objectionable to nearby residents. d) Jerry Kolbly, General Manager of the Newport Beach Brewing. Company, testified that the. queue line location change has worked well. Instituting the full menu in the late evening and early morning has been advantageous from a business perspective. The LEAD training program has been a valuable experience they it� have undertaken. Every brewpub cards after 10:00 PM in order to protect their licenses and other restaurants do the same. The Brewing Company maintains a higher percentage of food sales than alcohol sales and have since day.one. e) Drew Wetherhault, a local resident, testified that there is a parking problem before 5:00 PM on the weekends. He also indicated his belief that the establishment operates as a bar. after 9:00 PM due to high alcohol sales. He noted his desire to see a reduction in the hours of operation on Friday and Saturday having them shut down at 11:00 PM like other restaurants to address nuisances. He also noted that the neighborhood is impacted by after hours activities in the parking lots south of the Brewery and not all . of them are. attributable to the Brewing Company's patrons. f) Joe Reese, local resident, testified that it is his belief that there is no doubt that the use was intended to be a restaurant and not a bar as alcohol was conditioned to be ancillary to food service. The Brewing Company has security guards at the doors and bouncers inside, it is a bar atmosphere. Every weekend he is awakened by people leaving.the drinking establishments. . g) Billy Staid, local resident, testified that in spite of the recent operational changes instituted by the Brewing Company, there are still problems with the operation principally with patron activity in the parking lot. He asked if the entrance could be moved to the Newport Boulevard side of the building during the week after 9:00 PM. h) Stephanie Rosanelli, local resident, testified that noise is a problem and .suggested that a restaurant would be a better business value. At the conclusion of the public hearing, the Planning Commission adopted. Resolution No. 1709 amending Use Permit No. 3485 by modifying the conditions of approval to clarify the meaning of the conditions principally recognizing that a brewpub was originally authorized and that there was no violation of. Condition No. 10 and to include the physical and operational changes offered by the NBBC. WHEREAS, the grounds for the modification or revocation of a use permit are established by Condition K of the Use Permit No. 3485, Section 20.89.060.0 and Section 20.96.040 of the Municipal Code, which provide: a) Condition K states that, "The Planning Commission may add to or modify conditions of approval to this use permit upon a.determination that this use permit causes injury, or is detrimental to the health, safety, peace, morals, comfort, or general welfare of the community! b) Section 20.89.060(C) provides that, "The Planning Commission, or the Planning Director, as the case may be; may revoke a use permit for an alcoholic beverage outlet upon making one or more of the following findings: That the permit was issued on the basis of erroneous or misleading information or misrepresentation. a 2. That the terms or conditions of approval of the permit have been violated or that other laws or regulations have been violated. 3. The establishment for which the permit was issued is being operated in an illegal or disorderly manner. 4. Noise from the establishment for which the permit was issued violates the Community Noise Control Ordinance (Chapter 10.26 of the Municipal Code). 5. The business or establishment for which the permit was issued has had or is having an adverse impact on the health, safety or welfare of the neighborhood or the general public. 6. There is a violation of or failure to maintain a valid ABC license. The business or establishment fails to fully comply with all the rules, regulations and orders of the California State Department of Alcoholic Beverage Control." c) Section 20.96.040 of the Municipal Code provides that, 'The Planning Director has the duty to schedule a discretionary permit for a noticed public hearing to consider its possible revocation provided there are reasonable grounds to do so. The body conducting the hearing shall revoke the permit upon making one or more of the following findings: .1. That the permit was issued on the basis of erroneous or misleading information or misrepresentation; 2. That the terms or conditions of approval of the permit have been violated or that other laws or regulations have been violated. 3. That there has been a discontinuance of the exercise or the entitlement granted by the permit for 180 consecutive days." WHEREAS, decisions of the Planning Commission under Section 20.89.060 may be appealed to the City Council pursuant to Section 20.89.070 and decisions of the Planning Commission under Section 20.96.040 may be appealed to the City Council pursuant to Section 20.96.040(H) and Chapter 20:95 of the Municipal Code. WHEREAS, on January 12, 2007, The Cannery Village Concerned filed an appeal of the Planning Commission's action in accordance. with Chapter 20.95 (Appeals) of the Municipal Code. WHEREAS, on March 27, 2007, the City Council held a public hearing on the appeal and the possible modification of conditions and /or revocation of Use Permit No. . 3485; however, the hearing was not properly noticed in accordance with the Municipal Code. The following information was presented and considered by the City Council: a) Bruce Low, local resident and representative of The Cannery Village Concerned, testified to his belief that the NBBC was violating Conditions #9 and #10 as 0 evidenced by the high alcohol sales admitted by the NBBC. He also testified to his belief that the Condition #6 was not properly modified in September of 1993 to be consistent with Coastal Commission conditions. b) Kevin Weeda, a resident and business owner operating a business on 30'" Street, said the group of concerned residents did not want to drive away the business, merely have the applicant comply with the use permit. Most problems occur late at night and he believed the business should be limited to an 11:00 PM closing. C) Jerry Kolbly, co- owner, Newport Beach Brewing Company, spoke about his establishment and" the fact that it had maintained the same social atmosphere for the past 12 years. He has attempted to work with adjacent neighbors and staff to resolve the issues. There is a security guard stationed at the rear door and patrons enter and exit only via Newport Boulevard on Friday and Saturday nights after 10:00 PM as a way to address resident concerns. He testified that the quarterly sales of food are 52% and 48% alcohol. He indicated that in the past, the kitchen was closed and that he has now opened the kitchen during all hours to boost food sales: He . also testified that there has been no significant operational change in the business since it first opened. Mr. Kolbly confirmed his earlier statements to the Planning Commission that nearly 90% of sales past 11:00 PM are alcohol; however, it was a guess and.it may be approximately 80 %; clearly more than food. d) Billy Steed, Cannery Loft owner, adjacent to the Brewery, said he has observed all types of nuisances in the Brewery parking lot and his belief that the NBBC has offered no solutions and it ignores complaints. e) Stephanie Roselli, Cannery Village resident, testified to the NBBC's parking lot being noisy. f) Joe Reese testified that he believed the intent of the 1993 and 1999 use permit approvals were Gear in that this establishment was to be a restaurant and not a bar. He was personally carded and denied food after 10:00 PM one evening in 2005 and he has observed individuals standing around drinking after 10:00 PM with no food service. He expressed his belief that this indicates that the NBBC is a bar and not a restaurant in violation of conditions. He asked for enforcement of the use permit. g) Kristen Andros testified that it is her belief that the use operates as a restaurant until 11:00 p.m. and thereafter it operates as a bar as evidenced by a queuing line and carding. h) There was conflicting testimony as to whether the nuisance incidents within the NBBC parking lot are attributable to patrons of the NBBC. The Council acted to modify the conditions of approval; however, the action was not implemented with the adoption of a written resolution in the light of the fact that inadequate notice of the hearing was provided. IA WHEREAS, on July 10, 2007, the City Council held a duty noticed public hearing regarding the potential modification or revocation of Use Permit No. 3485. The hearing was noticed as a "de novo" hearing and the subject, time, place and date of the hearing included in the notice. The notice was published, mailed and posted a minimum of 10 days in advance of the hearing in accordance with the applicable requirements of the Municipal Code. Evidence both written and oral was presented to and considered by the City Council. NOW, THEREFORE, BE IT RESOLVED, as follows: Section 1. The Recitals above are hereby declared to be true, accurate, and correct Section 2. The City Council hereby finds that the Administrative Record which was considered by the City Council in adopting this Resolution consists, without limitation, of all documents, correspondence, testimony, photographs, and other information presented or provided to the Planning Director, Planning Commission, City Council and City including, without limitation, testimony received at City Council and Planning Commission meetings, staff reports, agendas, notices, meeting minutes, police reports, correspondence, and all other information provided to the City and retained in the files of the City, Its staff and attorneys, and such is hereby incorporated by reference into the Administrative Record and is available upon request ( "Administrative Record "). Section 3. The City Council finds that notice of this hearing was provided in conformance with California law and. the Municipal Code of.the City of Newport Beach. .Section 4. The City Council finds that pursuant to Condition K of the Use Permit No. 3485, Section 20.89.060.0 and Section 20.96.040 of the Municipal. Code, the Administrative Record, the findings stated above, that sufficient grounds exist to modify and add to the conditions of approval for Use Permit No. 3485. Section 5. The City Council of the City of Newport Beach does hereby approve an amendment and modification of Use Permit No. 3485 as set forth in as Exhibit "A ". 1,5 Section 6. This resolution shall take effect immediately upon adoption. Passed and adopted by the City. Council of Newport Beach at a regular meeting held on the August 14, 2007 by the following vote to wit: AYES, COUNCIL MEMBERS Henn, curry, selich, Daigle, Gardner NOES, COUNCIL MEMBERS Mayor Rosansky ABSENT, COUNCIL MEMBE S Webb 6JAOR ATTEST; ,(. Exhibit A Use Permit No. 3485 CONDITIONS: The proposed development .shall be in substantial conformance with the approved site plan, floor plan and elevations, except as noted below. 2. That a covenant or other suitable, legally binding agreement:shall be recorded against the off -site parking lot assuring . that all of the requirements of Section 20.63.080 (1) of the Municipal Code,. will be met by the current and future Property owners. Said covenant. or agreement may include provisions for its future termination at such time as the development on the building site is removed or at such time as the floor area devoted to the restauranttbrewpub reverts back to a base FAR use. 3. The applicant shall provide a minimum of one parking space for each 50 square feet of net public area before 5:00 p.m. and. one parking space for each 40 square feet of net public area after 5:00 p.m. in conjunction with . the restaurant/brewpub. 4.. An amended offsite parking. agreement. approved by the City Council shall be maintained, guaranteeing that a minimum of 41 parking spaces shall be provided on property located on Lots 18-21 and portions of Lots 17 and 22, Block 230, Lancaster's Addition, for the duration of the existing and proposed uses located. on Parcel 1, Parcel Map 92-40 (Resubdivision No. 527). 5. The property owner shall pay for 29_ in -lieu parking spaces in the Cannery Village Municipal Parking Lot on an annual basis for the nighttime operation (after 5:00 p.m.). of the restauranttbrewpub use. as agreed upon by the Sales Agreement between the City of Newport Beach and the property owner. 6. The net public area of. the restauranttbrewpub, which is devoted to daytime. use prior to 5:00 p.m. shall be limited to 1,500 square feet daily. The balance of the net public area shall be physically closed off to the public by a fixed barrier and . shall not be used until after 5:00 p.m. daily. 7. The hours of operation for the restauranttbrewpub shall be limited to the hours between 6:00 a.m. and 11:00 p.m. Sunday through Thursday and between 6:00 a.m. and 1:00 a.m. on Friday and Saturday. 8. All employees shall park either in the privately owned off -site parking area or in one of the municipal parking lots in the area. 9. The operation of the brewery and the service of alcoholic beverages shall be ancillary to the food service operation of the restaurant (e.g. the brewery and the service of alcoholic beverages may not be conducted without the concurrent 11 operation of the restaurant during all hours the use is open for business). The quarterly gross sales of alcoholic beverages shall not exceed the gross sales of food during the same period. The -operator shall at all times maintain records which reflect separately the total gross sales of food and the total gross sales of alcoholic beverages. Additionally, the records shall indicate the percentages or unit volumes of food, beer and other alcoholic beverages sold by the hour from after 9:00 PM to closing on Thursday, Friday and Saturday nights. Said records shall be kept no less frequently that on a quarterly basis and shall be submitted to the Planning Director within 15 days of the end of the calendar quarter. 10. The principal use authorized by this Use Permit is a restaurant/brewpub. The accessory operation of a bar is permitted provided that the kitchen remains open for -the service of meals and that a full menu is provided. This Use Permit shall not be construed as the approval of a bar, cocktail lounge, or other use with the principal purpose of serving alcoholic, beverages during hours not corresponding to regular meal service hours nor as the approval of a cabaret, nightclub, or other use with the principal purpose of providing live entertainment and /or dancing. The kitchen of the restaurant/brewpub shall be. in operation to serve meals at all times that the business is open. A full meal menu (including the service of those meals ordered) shall be made available. Menus and condiments shall be available at the tables at all times. 11. No outdoor loudspeakers or paging system shall be permitted in conjunction with the proposed location. 12. A washout area for refuse containers shall be provided in such a way as to allow direct drainage into the sewer system and not into the Bay or storm drains, unless otherwise approved by the Building Department. 13. Kitchen exhaust fans shall be designed to control smoke and odor to the satisfaction of the Building Department. 14. All mechanical equipment and trash areas shall be screened from surrounding public streets and alleys and adjoining properties. The existing trash enclosure shall be covered and the doors or gates to the enclosure shall be modified to be seif- closing and self- locking for security. 15. Deleted 16. Should prerecorded music be played within the restaurant facility, such music shall be confined to the interior of the building, and all doors and windows shall be kept closed while such music is played. 17. A special events permit is required for any event or promotional activity outside the normal operational characteristics of this restaurant business that would attract large crowdsi involve the sale of alcoholic beverages, include any form . of on -site media broadcast, or any other activities as specified in the Newport Beach Municipal Code to require such permits. 1� 18. Should this business be sold or otherwise come under different ownership, any future owners or assignees shall be notified of the conditions of this approval by either the .current business owner, property owner or the leasing company. 19. The parking lot entrance to the building shall not be used as an entrance or exit (except in the case of an emergency) after 9:00 PM daily. If a line to enter the building occurs prior to 9:00 PM, the door shall be closed immediately and not used as an entrance or exit thereafter and the line shall be relocated to the Newport Boulevard entrance. 20. The operator shall discourage loitering on site at all times the establishment is open or employees or owners are present. 21. The operator shall conspicuously post and maintain signs indicating to patrons to be courteous to residential neighbors while outside the establishment. 22. The applicant shall prepare a detailed security operations and property maintenance plan within 45 days of approval of this amendment to the Use Permit. The plan shall be subject to the review and approval of the Police Department and Planning Department. The plan shall include a full. -time security guard to be posted in the parking lot owned by the Brewing Company after 9:00 p.m. and through one half hour following closing on Wednesday through Saturday night, and Sunday through Tuesday night if the night falls on a holiday, or when a large crowd is anticipated due to a sports event or other promotional event at the Brewery. The property maintenance portion of the plan shall address activities including, and not limited to, trash pickup, recycling disposal and pickup, grease trap cleaning, cooking oil recycling, brewery servicing, deliveries, cleaning or general building maintenance. 23. Deliveries and exterior property maintenance activities shall not be c6nducted between 8PM and 8AM daily. 24. The use shall maintain a Type 23 or a Type 75 license to sell alcoholic beverages from the State Department of Alcoholic Beverage Control. No other license type shall be permitted without review and approval by the Planning Commission. 25. Live entertainment and dancing shall be prohibited without an amendment to this Use Permit and a Live Entertainment Permit and /or a Cafe Dance permit issued by the City.Manager's Office. 27. This use permit shall be reviewed by the Planning Commission at a noticed public hearing no later than July 31, 2008, to assess any nuisance issues and to determine whether the use operates within what was represented to the City when the use permit was originally granted in 1993 and when the use permit was amended in 1999. The Planning Director may schedule additional reviews of this permit if there is a determination that the. use directly causes or is fq contributing to conditions found to be detrimental to the community (ttli:e: provision shall not be construed to diminish the City's ability to enforce Yhi:;: (ast Permit or any aspect of the Municipal Code). STANDARD CITY REQUIREMENTS; A. The project is subject to all applicable City ordinances, policies, and standard- unless specifically waived or modified by the conditions of approval. B. Signs and displays shall not obstruct the sales counter, cash register, selier finfi` customer from view from the exterior. C, Loitering, open container, and other signs specked by the Alcoholic Bever= aas. -: Control Act shall be posted as required by.the ABC. D. The applicant shall take reasonable steps to discourage are,` i,,.ur' objectionable conditions that constitute a nuisance in parking areas, alleys and areas surrounding the alcoholic beverage outlet and properties must be taken during business hours if directly related to of the subject alcoholic beverage outlet. E. The exterior of the alcoholic beverage outlet shall be maintained fre : ;:,`: and graffiti at all times. The owner or operator shall provide for dally <:; ,.,,: ;: , r:•< trash, litter debris and graffiti from the premises and on all abuttinti; within 20 feet of the premises. F. All owners, managers and employees serving and/or selling beverages shall undergo and successfully complete a certified training, in responsible methods and skills for serving and selling alcoholic To qualify to meet the requirements of this section a certified progs"bn: rr.. js' meet the standards of the California Coordinating Council on Beverage Service or other certifying/licensing body, which the designate.. The operator shall provide proof of completion for ali o,.' :: managers and employees within 30 days of the approval of this arriendm�-a :r and new employees shall successfully complete the training within 30 days ?)i initially starting work. G. The project shall comply with the provisions of Chapter 14.30 of the Newper? Beach Municipal Code for commercial kitchen grease disposal. H. All signs shall conform to the provisions of Chapter 20.67 of the Municipal! Code. This Use Permit for an alcoholic beverage outlet granted in accordance with thl', terms of this chapter shall expire within 12 months from the date of appr+a; +::'. unless a license has been issued or transferred by the California Department of Alcoholic Beverage Control prior to the expiration date. J. Coastal Commission approval shall be. obtained prior to issuance of any building permits. . K. The Planning Commission may add to or modify conditions of approval to this Use Permit upon a determination that this Use Permit causes injury, or is detrimental to the health, safety, peace, morals, comfort, or general welfare of the community. STATE OF CALIFORNIA COUNTY OF ORANGE. CITY OF NEWPORT BEACH } I, LaVonne M. Harkless,..City. Clerk of the City of Newport Beach, California, do hereby certify that the "whole number of members of the. City Council is seven; that the foregoing resolution, being Resolution No. 2007x57 was duly and. regularly Introduced before and adopted by . the City Council of said City at a regular meeting of said Council, duly and regularly held on the .14th day of August 2007, and. that the same was so passed and adopted by the following vote; to wit: Ayes: Henn, Curry, Selich; Daigle, Gardner Noes: Mayor Rosansky Absent: Webb Abstain:. . None. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 15th day of August 2007 City .Clerk ` Newport Beach, California O p (Seal) sae THIS PAGE LEFT BLANK INTENTIONALLY BLANK 0 SETTLEMENT AND RELEASE AGREEMENT This Settlement and Release Agreement ( "Agreement ") is entered by and among the Newport Beach Brewing Company, Inc., a California corporation ( "Petitioner "), the City of Newport Beach, the City Council of the City of Newport Beach, Ed Selich, Michael Henn, Nancy Gardner, Leslie Daigle, and Keith Curry ( "City" or "Respondents "), and is effective upon signing by all of said parties ( "Parties ") to this agreement and approval by the City Council of the City in accordance with law. RECITALS A. Petitioner is a California corporation doing business in the City of Newport Beach at 2920 Newport Boulevard. B. Petitioner is the holder of Use Permit No. 3485 issued by the City of Newport Beach on September 27, 1993. Use Permit No. 3485 originally authorized the operation of a "RestaurantBrewpub" with the following requirements: (1) A Type 23 license issued by Alcoholic Beverage Control ( "ABC ") permitting the sale of beer; (2) closing hour of 2:00 a.m. on Friday and Saturday nights, and; (3) 1,500 square foot use restriction prior to 5 p.m., Monday through Friday. Use Permit No. 3485 was originally issued in conjunction and in coordination with Coastal Development Permit No. 5-93-137 (the "CDP ") issued to Petitioner by the California Coastal Commission on July 15, 1993. C. In 1999, Use Permit No. 3485 was amended by the City Council to permit Petitioner to operate a RestaurantBrewpub with a Type 75 ABC license, which authorizes the sale of beer, wine and distilled spirits. With the approval of a RestaurantBrewpub operating under a Type 75 ABC license, the City amended Use Permit No. 3485 to change the closing hour on Friday and Saturday from 2:00 a.m. to 1:00 a.m. D. In January 2006, a number of residents submitted a letter to the City alleging that Petitioner was operating the RestaurantBrewpub in violation of the conditions set forth in Use Permit No. 3485. E. Four months after receipt of the citizens' complaint letter, the Planning Commission conducted a review of Use Permit No. 3485 on May 4, 2006. On August 17, 2006, the Planning Commission held a second hearing concerning Use Permit No. 3485. At the third and final hearing before the Planning Commission, on January 4, 2007, the Commission made various modifications to Use Permit No. 3485. F. The Planning Commission's unanimous action was appealed by City residents to the City Council. G. The City Council conducted a hearing for Use Permit No. 3485 on March 27, 2007. At the March 27, 2007, hearing, the City Council, by motion, modified Use Permit No. 3485 to limit the evening hours of sale for distilled spirits. A*' c46m&r-414, 3 NBBC v. City of Newport Beach Seftl.mt Agre mt.042808 H. On July 10, 2007, the City Council conducted another hearing on Use Permit No. 3485 following the March 27, 2007 hearing and moved to adopt modification of conditions to Use Permit No. 3485 similar to the March 27, 2007 determination (with the exception of the prohibition on the sale of distilled spirits). Additionally, the City Council approved a modification of Condition 6 of Use Permit No. 3485 which restricted the amount of floor space of the RestaurantJBrewpub that could be used on weekends before 5:00 p.m. I. On July 24, 2007, the City Council voted 4 -1 to approve Councilman Henn's motion to modify Use Permit No. 3485, as reflected in draft Resolution No. 2007 -57 set forth in the staff report. On August 14, 2007, the City Council amended Use Permit No. 3485 by the passage of Resolution 2007 -57. J. In or about October, 2007, Petitioner sent a request for public records to the City pursuant to provisions of the Public Records Act ( "PRA ") (Govt. Code §§ 6250 et eq.). K. On November 9, 2007, Petitioner filed in Orange County Superior Court a Petition for Writ of Mandate and Complaint for (1) Inverse Condemnation, (2) Violation of Equal Protection, (3) Denial of Procedural Due Process, (4) Deprivation of Civil Rights, and (5) Promissory or Equitable Estoppel, challenging the City's August 14, 2007, amendment of Use Permit No. 3485 (the "Action "). L. On or about January 22, 2008, the City filed a Motion for Judgment on the Pleadings, seeking dismissal of the entire Action with prejudice on the grounds that the entire action was filed beyond the statute of limitations. M. On February 28, 2008, Judge Andler granted the City's Motion for Judgment on the Pleadings but "with 15 days leave to amend as to every cause of action." N. On March 14, 2008, Petitioner filed a First Amended Petition for Writ of Mandate (C.C.P. §§ 1094.5, 1094.6) and First Amended Complaint for: Inverse Condemnation; Violation of Equal Protection; Denial of Procedural Due Process; Deprivation of Civil Rights; and Promissory or Equitable Estoppel. O. Each of the Parties denies that it or they have any liability with respect to the claims made in the Action. P. The Parties each recognize that litigation between themselves will require substantial time, effort, and expense unless the litigation is settled and terminated between them at this time. Q. It is the intention of the Parties to effectuate a complete and final settlement as to any and all claims between them and to reduce the full terms of their settlement to writing. . R. The City recognizes that the full terms of the settlement will confirm the existing physical environmental setting that was established in 1993 when the original Use Permit No. 3485 was approved by the City of Newport Beach and that there is no possibility that the settlement will result in a potential environmental impact. The terms of settlement will comply with the provisions of the California Environmental Quality Act ( "CEQA ") (Pub. Res. Code §§ NBBC v. City of Newport Beach Sml=m Age mt.042808 -2- a5 21000 et seq.) and the Guidelines for Implementation of CEQA (Title 14, California Code of Regulations, section 15000 etseq.) ( "CEQA Guidelines "). The terms of settlement are exempt from CEQA. (See CEQA Guidelines §§ 15301 (Class 1), 15125, 15323, Pub. Res. Code § 21065 (Common Sense Exemption). S. Upon execution, City Council approval in accordance with law, and performance of the conditions as set forth in this Agreement it is hereby agreed, by and between the Parties that all Parties to this Agreement will be released from any and all Claims arising out of the facts that gave rise to this Action. NOW THEREFORE, in consideration of the above recitals, covenants and agreements contained herein, the Parties hereto agree as follows: SETTLEMENT 1. DEFINITIONS. A. Claims. The term "Claims" means all claims, charges, liabilities, damages, obligations, costs, expenses (including without limitation attorneys' fees), rights of action and causes of action of any kind, legal or equitable, whether known or unknown, anticipated or unanticipated, past, present or future, contingent or fixed, existing, claimed to exist or which may hereafter exist under applicable common law, contract, tort or other federal, state, local, or municipal law or regulation, relating to the facts that gave rise to the Action and or pre -date the Action, including, but not limited to any un -filed claims under the PRA. B. Action. The term "Action" means the First Amended Petition for Writ of Mandate and First Amended Complaint filed by Petitioner in the Superior Court of California, County of Orange, Case No. 07CC01408, entitled Newport Beach Brewing Company, Inc. v. City of Newport Beach and including each and every cause of action set forth therein as well as any and all Claims that pre -date the filing of the Action, if any. 2. TERMS OF SETTLEMENT. City Obligations A. Nothing in this Agreement is intended to or shall have the lawful effect of contracting away the City's zoning authority or any other aspect of the City's police power. City Staff and the City Council have previously reviewed the terms and conditions of Use Permit No. 3485 as most recently amended on August 14, 2007, and have preliminarily concluded that pursuant to the City Municipal Code City Staff may lawfully present to the City Council for approval or disapproval, subject to a duly noticed hearing, modifications to Use Permit No. 3485, as amended on August 14, 2007, by Resolution No. 2007 -57 (the "2008 Use Permit No. 3485 "). The proposed modifications contained within 2008 Use Permit No. 3485 are set forth as Exhibit "I" attached hereto and incorporated herein by this reference. City Staff have further preliminarily concluded that no further CEQA analysis shall be required to be completed prior to the City approving 2008 Use Permit No. 3485. NBBC v. City ofNeWPW Beach Settlement Ageemeot002808 —3— B. The City Council shall immediately schedule the review of 2008 Use Permit No. 3485 for hearing at the next available City Council hearing. If the City Council fails to approve the terms of settlement and 2008 Use Permit No. 3485, then Petitioner may, at its sole and absolute discretion, terminate this Agreement within three (3) calendar days of the decision, at which time this Agreement shall be of no further force or effect. C. City shall not charge Petitioner any new fees or charges in connection with City's review and approval or disapproval of 2008 Use Permit No. 3485, and, at City's sole and absolute discretion, City shall timely file a Notice of Determination, Notice of Exemption, or other appropriate CEQA notice that has been reviewed and approved by Petitioner following the approval of 2008 Use Permit No. 3485. D. City shall pay Petitioner's attorneys' fees and costs in the amount of Fifty Thousand Dollars ($50,000.00) as specified below. Petitioner's Obligations A. Petitioner and each of its agents shall not oppose the City's approval of 2008 Use Permit No. 3485 and shall support, both verbally and in writing, if requested by the City, the City's .approval of 2008 Use Permit No. 3485 ( "Support Covenant "). Petitioner shall agree to abide by and operate in full compliance with the conditions of approval. B. Petitioner shall not file any lawsuits, administrative appeals pursuant to the City's Municipal Code, or take any other action whatsoever, in whatever shape or form, to challenge, appeal, or otherwise seek to influence in any respect, approval of 2008 Use Permit No. 3485 with the sole exception of the Support Covenant set forth in the immediate preceding paragraph, A. Petitioner shall defend, indemnify, release and hold harmless the,City from and against any and all claims, demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including without limitation, attorneys' fees, disbursements and court costs) of every kind and nature whatsoever which may arise from or in any manner relate (directly or indirectly) to Use Permit No. 3485 or 2008 Use Permit No. 3485, or the approval of 2008 Use Permit No. 3485 based on the City's CEQA determination and/or the City's failure to comply with the requirements of any federal, state, or local laws, including, but not limited to, CEQA, the Coastal Act, General Plan and zoning requirements. This indemnification shall include, but not be limited to, damages awarded against the City, if any, costs of suit, attorneys' fees, and other expenses incurred in connection with such claim, action, or proceeding whether incurred by Petitioner, the City, and/or the parties initiating or bringing such proceeding. C. Within (1) one calendar day following the City Council's approval of the 2008 Use Permit No. 3485, and payment in full to Petitioner of $50,000.00 in the attorneys' fees and costs above - referenced ("Final Approval Date'), Petitioner shall file a dismissal of its Action, with prejudice, in Orange County Superior Court. General Obligations of All Parties A. The Parties will use their best efforts and cooperate as necessary in performing and implementing this Agreement. NBBC v. City of Newport Beach Settlement Ageemmt.042808 -4 3. GENERAL RELEASE AND DISMISSAL. A. General Release and Discharge of Claims. In consideration of the terms and conditions called for herein, the Parties to this Agreement completely release and forever discharge one another, and their past, present, and future officers, officials, trustees, directors, stockholders, attorneys, agents, servants, representatives, employees, departments, agencies, subsidiaries, affiliates, partners, predecessors, successors -in- interest, participating insurance carriers, insurers, and assigns and all other persons, firms, corporations, departments or entities with whom any of the former have been, are now, or may hereafter be affiliated, of and from any and all Claims. B. Dismissal of the Action. Petitioner shall dismiss the Action with prejudice as to all Respondents within (1) one calendar day following the Final Approval Date. C. Waiver of Claims. It is the intention of the Parties, in executing this Agreement and receiving the consideration recited herein, that this Agreement is effective as a full and final accord and satisfaction and mutual and general release of all claims, debts, damages, liabilities, demands, obligations, costs, expenses, disputes, actions or causes of action, that each Party may have against the other by reason of any acts, circumstances or transactions relating to the Action and occurring before the date of this Agreement. In furtherance of this intention, the Parties hereby acknowledge that they are familiar with California Civil Code section 1542 and that they hereby expressly waive the protection of that section, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. The Parties each waive and relinquish any right or benefit that they have or may have under California Civil Code section 1542. That is, no Party hereto may invoke the benefits of California Civil Code section 1542, or any such similar law, in order to prosecute any claims released hereunder. In connection with such waiver and agreement, each Party acknowledges that they are aware that they or their attorney may hereafter discover claims or facts or legal theories in addition to or different from those which they know or believe to exist with respect to the Action, but that it is the intention hereby to fully, finally, and forever settle and release all of the claims, known or unknown, suspected or unsuspected, which do now exist, may exist, or heretofore have existed between the Parties by reason of any acts,. circumstances, facts, events, or transactions relating to the Action and occurring before the date of this Agreement. It is expressly acknowledged and understood by the Parties to this agreement that they separately bargained for the foregoing waiver of the provisions of section 1542 of the California Civil Code. The Parties to the Agreement consent that this release shall be given full force and effect in accordance with each and all of the express terms and provisions, including those terms and provisions related to such unknown and unsuspected claims, demands, and causes of action relating to or arising out of the Action. NBBC v. City of Newport Beach Settlement Agre me 042808 -5- D. Representations and Warranties. Each Party represents and warrants to the other that except as otherwise expressly provided in this Agreement, they are not relying on any representation whatsoever, whether express or implied, including without limitation, representations of fact or opinion made by or on behalf of the Parties herein. 4. MISCELLANEOUS PROVISIONS. A. Aside from the attorneys' fees to be paid by City to Petitioner as set forth in this Agreement, the Parties to this Agreement shall not be entitled to and shall not seek to recover from each other the costs of suit or attorneys' fees incurred in connection with this Action or the negotiations or preparation of this Agreement. Each Party shall bear its own costs, attorneys' fees, expert fees, and any and all other expenses. B. Except as otherwise specifically provided in this Agreement, the Parties will bear their own legal expenses, expert fees and attorneys' fees incurred to date. C. Petitioner warrants that there has been no assignment or other transfer of interest in the Action or any Claims relating to the Action to any other person, trust, or other entity who is not a party to this Agreement. D. This Agreement and each and all of the representations, warranties, and covenants of the Parties made herein is binding upon the successors, assigns, heirs, and representatives of the Parties and each and all of their heirs, respective successors, assigns, heirs, and representatives. In this regard, Petitioner and City each acknowledge and agree that Petitioner may assign, at its sole and absolute discretion, any rights and obligations Petitioner has with respect to this Agreement and Use Permit No. 3485 to a third party or third parties. Prior to assigning any rights or obligations Petitioner has with respect to this Agreement and Use Permit No. 3485 to a third party, Petitioner shall obtain written confirmation that such assignee shall be bound by the terms of this Agreement and that such Assignee shall also be entitled to receive the benefits of this Agreement and Use Permit No. 3485. E. The Parties to this Agreement mutually warrant and represent they have read and understand this Agreement and that this Agreement is executed voluntarily and without duress or undue influence on the part of, or on behalf of, any Party hereto. The Parties hereby acknowledge that they have been represented in negotiations and for the preparation of this Agreement by counsel of their own choice; that they have read this Agreement and have had it fully explained to them by such counsel; and that they are fully aware of the contents of this Agreement and of the legal effects of each and every provision thereof F. This Agreement contains the sole and entire agreement and understanding between the Parties with respect to the entire subject matter hereof, and any and all prior discussions, negotiations, commitments or understandings related hereto, if any, are hereby merged herein. No representations, oral or otherwise, express or implied, other than those specifically contained in this Agreement, have been made between the Parties. No other agreements not specifically contained herein, oral or otherwise, shall be deemed to exist or to be binding between the Parties. NBBC v. City of Nmpart Brach srmrmrm AFWMOuLO42808 -6- _ 1 G. This Agreement and the releases contained herein and the consideration referred to herein are done to save litigation expense and to effect the compromise and settlement of claims and defenses which are denied, disputed, and contested. Nothing contained herein shall be construed as an admission by any Party of any liability of any kind to any other Party. The Parties agree that each Party expressly denies that it is in any way liable or indebted to any other Party and no person interpreting this Agreement shall be able to infer that any Party has engaged in any conduct giving rise to liability to any other Party. H. This Agreement shall be construed in accordance with the laws of the State of California. In the event this Agreement must be enforced by a court of law, the Parties hereby agree that said action shall be tried in the County of Orange, State of California. I. This Agreement may be executed in one or more subparts or counterparts, each of which, shall be an original but all of which, together, shall be deemed to constitute a single document. J. The warranties and representations made in this Agreement are deemed to survive the execution of this Agreement. K. BY SIGNING THIS AGREEMENT, THE PARTIES CERTIFY THAT THEY HAVE READ IT, THAT THEY HAVE CONSULTED WITH THEIR LEGAL COUNSEL ABOUT ITS EFFECT, AND THAT THEY FULLY UNDERSTAND IT. [Signatures on next page] NBBC v. City ofNewpon Beach Settle t Agcement.042808 -7- IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date fast above written and their attorneys have indicated their approval as to fort by their respective signatures in the appropriate spaces below. PETITIONER: NEWPORT BEACH BREWING COMPANY, INC. By: . Name Title Dated: By: Name Title APPROVED AS TO FORM AND CONTENT: MILES • CHEN LAW GROUP, P.C. Stephen M. Miles, Attorneys for Newport Beach Brewing Company, Inc. Dated: [Signatures continued next page] NBBC v. City of Newport Beach _g_ SeltlemeotAgeemeot042808 % 1 RESPONDENT, CITY OF NEWPORT BEACH, CITY COUNCIL By: Edward D. Selich, Mayor RESPONDENT, CITY OF NEWPORT BEACH, CITY COUNCIL By: Michael F. Henn, Councilmember Date: RESPONDENT, CITY OF NEWPORT BEACH, CITY COUNCIL By: Nancy Gardner, Councilmember ATTEST: By: LaVonne Harkless, City Clerk RESPONDENT, CITY OF NEWPORT BEACH, CITY COUNCIL By: Leslie Daigle, Mayor Pro Tern RESPONDENT, CITY OF NEWPORT BEACH, CITY COUNCIL By: Keith D. Curry, Councilmember APPROVED AS TO FORM: CITY OF NEWPORT BEACH 0 Robin L. Clauson, City Attorney Date: APPROVED AS TO FORM AND CONTENT: RUTAN & TUCKER,.LLP By: John A. Ramirez, Attorneys for the City of Newport Beach NeBC V. City of Newport Owh Sealmoeot Agmmmt.042808 -9- Exhibit "1" Condition No. 6 to Use Permit No. 3485, as amended and approved on August 14, 2007, shall be amended as shown in redline and strikeout as follows: Use Permit No. 3485, Condition No. 6: 6. The net public area of the restaurant/brewpub, which is devoted to daytime use prior to 5:00 p.m. shall be limited to 1,500 square feet dai4y Monday through Friday. This restriction specifically excludes Saturday and Sunday when parking spaces devoted to office uses are not necessary. The balance of the net public area shall be physically closed off to the public by a fixed barrier and shall not be used until after 5:00 p.m. �B3'- Monday throu hhg Friday (the "Weekday Closure Area ") Distilled spirits shall not be served within the Weekday Closure Area on Saturday and Sunday before 5:00 p.m. Use Permit No. 3485, as amended and approved on August 14, 2007, shall be amended with New Condition No. as follows: "Newport Beach Brewing Company may apply for at least three special event days per calendar year. City shall not be obligated to approve such special events permits, but if the City does approve a special event permit, the approval of the special event permit(s) shall not require the approval of an amendment to this permit." NBBC v. City ofNewpon Be h Settlement Agcement042808 - -10- NOTICE OF PUBLIC HEARING NOTICE OF INTENT TO CONSIDER THE MODIFICATION AND ADDITION TO THE CONDITIONS OF APPROVAL OF USE PERMIT NO. 3485 AT A PUBLIC HEARING OF THE CITY COUNCIL FOR THE NEWPORT BEACH BREWING COMPANY LOCATED AT 2920 NEWPORT BOULEVARD (PA 2006 -177) NOTICE IS HEREBY GIVEN that the City Council for the City of Newport Beach will hold a public hearing to consider a modification of Condition No. 6 related to the net public area devoted to daytime use prior to 5:00 p.m. and the addition of a condition of approval acknowledging that the Newport Beach Brewing Company (NBBC) may apply for at least three special event permits per year. This hearing stems from a settlement agreement between the NBBC and the City wherein the City Council agreed to consider this modification and addition to the conditions of approval. A copy of the settlement agreement and files regarding this matter are available at the City of Newport Beach Planning Department. NOTICE IS HEREBY GIVEN that the modification and addition to the conditions of approval is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the Guidelines for the Implementation of CEQA as it involves operational alterations of an existing facility where no expansion of the use occurs. NOTICE IS HEREBY FURTHER GIVEN that said public hearing will be held on May 13. 2008, at the hour of 7:00 p.m. in the City Council Chambers (Building A) at 3300 Newport Boulevard, Newport Beach, California, at which time and place any and all persons interested in the matter may appear and be heard. If you challenge this project in court, you may be limited to raising only those issues you or someone else raised at the public hearing (described in this notice) or in written correspondence delivered to the City, at, or prior to, the public hearing. A copy of the settlement agreement and other relevant materials is on file at the City. For information call (949) 644 -3232. oar% LaVonne M. Harkless, City Clerk City of Newport Beach Easy Peel Labels Use Avery® TEMPLATE 51600 RONALD J MILLAR PO BOX 1162 NEWPORT BEACH,CA 92659 WILLIAM R HANSEN 3334 E COAST HWY #295 CORONA DEL MAR,CA 92625 fmI A See Instruction Sheet i aAVEW®5160® iFeed Paper for Easy Peel Feature j j KEITH CALLAWAY RESIDENCE NEWPORT 2212 PACIFIC COAST HWY 2824 NEWPORT BLVD HUNTINGTON BEACH,CA 92648 NEWPORT BEACH,CA 92663 RAYMOND HAWS 223 CASTELLANA N PALM DESERT,CA 92260 THERESA CAGNEY MORRISON THERESA CAGNEY MORRISON 23 CORPORATE PLAZA DR #205 23 CORPORATE PLAZA DR #205 NEWPORT BEACH,CA 92660 NEWPORT BEACH,CA 92660 OPERATING L P CATELLUS CITY OF NEWPORT BEACH 2235 FARADAY AVE #0 PO BOX 1768 CARLSBAD,CA 92008 NEWPORT BEACH,CA 92658 JON A SHEPARDSON BRASELLE PO BOX 2971 536 POPLAR ST NEWPORT BEACH,CA 92659 LAGUNA BEACH,CA 92651 THIRTY FIRST STREET LLC HAMPSHIRE PROPERTIES LLC 415 30TH ST 6034 W COURTYARD DR #307 NEWPORT BEACH,CA 92663 AUSTIN,TX 78730 DINO & ARDENIA CAPANNELLI THOMAS & JOAN DIXON 430 31 ST ST 428 31 ST ST NEWPORT BEACH,CA 92663 NEWPORT BEACH,CA 92663 POLIQUIN FAMILY LTD RENE ANDRE BARGE 18951 NEWTON AVE 408 31 ST ST SANTA ANA,CA 92705 NEWPORT BEACH,CA 92663 RENE A BARGE MARK S FAULCONER 408 31 ST ST 411 30TH ST NEWPORT BEACH,CA 92663 NEWPORT BEACH,CA 92663 BRIAN WESLEY RAY V C INTER VIVOS TAORMINA 425 30TH ST #10 PO BOX 485 NEWPORT BEACH,CA 92663 CORONA DEL MAR,CA 92625 Oquettes faciles h peler A Utilisez le nabarit AVERY® 51600 Sens de chargement MARVIN P ADLER 30123 SKIPPERS WAY DR CANYON LAKE,CA 92587 THERESA CAGNEY MORRISON 23 CORPORATE PLAZA DR #205 NEWPORT BEACH,CA 92660 THIRTY FIRST STREET LLC 407 31 ST ST NEWPORT BEACH,CA 92663 MICHAEL T & ROSEMARY K CARSON 3424 VIA OPORTO #204 NEWPORT BEACH,CA 92663 SUZANNE J FINAMORE 41931 ST ST #A NEWPORT BEACH,CA 92663 FRANK C MARSHALL PO BOX 540 NEWPORT BEACH,CA 92661 BARRY FAMILY INC 605 VIA LIDO SOLD NEWPORT BEACH,CA 92663 THOMAS E KEEFER 433 OGLE CIR COSTA MESA,CA 92627 MARY H WILLIAMSON 426 31 ST ST NEWPORT BEACH,CA.92663 Consultez la feuille www.averycom d'instrucdon 1 -800.G0 -AVERY Easy Peel Labels Use Avery® TEMPLATE 51600 JACKSONIJACKSON 420 LLC 51031 STST#A NEWPORT BEACH,CA 92663 1 A, See Instruction Sheet i /\VEW@516o® iFeed Paper � for Easy Peel Feature j ® j JENNY M GILCHRIST MINER 410 31 ST ST #A 365 VIA LIDO SOUD NEWPORT BEACH,CA 92663 NEWPORT BEACH,CA 92663 GREG & DEBORAH V GRISAMORE MARY ANNE TURLEY -EMETT FUNDING SOUTHERN 412 31 ST ST 25 BAY IS 419 30TH ST NEWPORT BEACH,CA 92663 NEWPORT BEACH,CA 92661 NEWPORT BEACH,CA 92663 ROBERT D FAINBARG GLASSMAN DREW M WETHERHOLT 14041 LIVINGSTON ST 215 30TH ST 217 30TH ST TUSTIN,CA 92780 NEWPORT BEACH,CA 92663 NEWPORT BEACH,CA 92663 STEVEN C NICHOLSON MARY A ROUSE KENNETH & MARY ROUSE 419 EL MODENA AVE 522 SEAWARD RD 522 SEAWARD RD NEWPORT BEACH,CA 92663 CORONA DEL MAR,CA 92625 CORONA DEL MAR,CA 92625 SCOTT L ROTH MARY EILEEN LEE DAVID L HAMMOND 217 29TH ST 219 29TH ST 10 CALLE CABRILLO NEWPORT BEACH,CA 92663 NEWPORT BEACH,CA 92663 FOOTHILL RANCH,CA 92610 DAVID L HAMMOND JOEL F FEITLER ROBERT D FAINBARG 10 CALLE CABRILLO 407 30TH ST #A 14041 LIVINGSTON ST FOOTHILL RANCH,CA 92610 NEWPORT BEACH,CA 92663 TUSTIN,CA 92780 KEVIN WEEDA THOMAS BLUROCK HOSMAN PROPERTIES 439 30TH ST 401 30TH ST 129 W WILSON ST #100 NEWPORT BEACH,CA 92663 NEWPORT BEACH,CA 92663 COSTA MESA,CA 92627 PENINSULA RETAIL PARTNERS LLC JOHN L WESTREM CYNTHIA KLAN IAN 415 29TH ST 10D6 E BALBOA BLVD PO BOX 8092 NEWPORT BEACH,CA 92663 NEWPORT BEACH,CA 92661 NEWPORT BEACH,CA 92650 CITY OF NEWPORT BEACH ARNOLD FEUERSTEIN VALLE BRETT H DEL ., 3300 NEWPORT BLVD 129 W WILSON ST #1 DO 415 29TH ST NEWPORT BEACH,CA 92663 COSTA MESA,CA 92627 NEWPORT BEACH,CA 92663 ! JILL S MARKOWICZ BRUCE J LOW JILL S MARKOWICZ 413 29TH ST 411 29TH ST 413 29TH ST NEWPORT BEACH,CA 92663 NEWPORT BEACH,CA 92663 NEWPORT BEACH,CA 92663 ftiquettes fadles A peler Consultez la feulfle wwwaveryeom Utlllsez le gabaritAVERY0 51600 Sens de chargement d'instructlon 1 -SM-GO -AVERY Easy Peel Labels Use Avery® TEMPLATE 51600 FINE ARTS BUCK 410 29TH ST NEWPORT BEACH,CA 92663 KATSUMI IMOTO 552 JADE TREE DR MONTEREY PARK,CA 91754 SAM & JOAN TROUT 2901 NEWPORT BLVD NEWPORT BEACH,CA 92663 PORT PROPERTIES INC PO BOX 485 LAGUNA BEACH,CA 92652 BRYAN M CHONG 131 PECAN LN FOUNTAIN VALLEY,CA 92708 DAVID FORTINI 222 30TH ST NEWPORT BEACH,CA 92663 EDVID NERSESSIAN 14545 FRIAR ST VAN NUYS,CA 91411 MICHAEL J JR BURNS 216 112 30TH ST NEWPORT BEACH,CA 92663 ® A See Instruction Sheet �gVERy 051600 i sit Feed Paper for Easy Peel Feature j j LAWRENCE C SCHNACK MARY LEE 3404 BRANDYWINE ST 219 29TH ST SAN DIEGO,CA 92117 NEWPORT BEACH,CA 92663 West Newport Beach Association Attn: Paul Watkins 6408 W. Oceanfront Newport Beach, CA 92663 FRANCES A BURY 106 VIA UNDINE NEWPORT BEACH,CA 92663 SALVO DESIGN GROUP INC 2817 NEWPORT BLVD NEWPORT BEACH,CA 92663 PORT PROPERTIES INC PO BOX 485 LAGUNA BEACH,CA 92652 FINE ARTS BUCK 410 29TH ST NEWPORT BEACH,CA 92663 JEROME J JR & KATHLEEN A REISS 1604 N SHAFFER ST ORANGE,CA 92867 JEROME JOSEPH JR REISS 214 112 30TH ST NEWPORT BEACKCA 92663 Newport Beach Brewing Company 2920 Newport Boulevard Newport Beach, CA 92663 SAM & JOAN TROUT 2901 NEWPORT BLVD NEWPORT BEACH,CA 92663 SAM & JOAN TROUT 2901 NEWPORT BLVD NEWPORT BEACH,CA 92663 BATLEY FAMILY TRUST 1501 W BALBOA BLVD NEWPORT BEACH,CA 92663 SAMMI A NIELSEN 220 30TH ST NEWPORT BEACH,CA 92663 ARINESS INC 27 SPLENDORE DR NEWPORT COAST,CA 92657 STACY NIELSEN 220112 30TH ST NEWPORT BEACH,CA 92663 Stephen Miles 9911 Irvine Center Drive, Suite 150 Irvine, CA 92618 IWquettes fadles A peler ♦ Consuttez la feuille www every aom Utilisez le Aabarit AVERY® 51600 Sens de chargement d'instructlon 11-800-GO-AVERY Authorized to Publish Advertisements of all kinds including public notices by Decree of the Superior Court of Orange County, California. Number A -6214, September 29, 1961, and A -24831 June 11, 1963. PROOF OF PUBLICATION STATE OF CALIFORNIA) ) ss. COUNTY OF ORANGE ) I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the NEWPORT BEACH - COSTA MESA DAILY PILOT, a newspaper of general circulation, printed and published in the City of Costa Mesa, County of Orange, State of California, and that attached Notice is a true and complete copy as was printed and published on the following dates: May 3, 2008 I declare, under penalty of perjury, that the foregoing is true and correct. Executed on May 5, 2008 at Costa Mesa, California. E 02c f Signabdre NO110E OF PUBLIC HEARING NOTICE OF INTENT 70 CONSIDER THE MODI- FICA7ION AND ADDI- TION TO THE CONDI- TIONS OF APPROVAL OF USE PERMIT NO. 3485 AT A PUBLIC HEARING OF THE CITY COUNCIL FOR THE NEWPORT BEACH BREWING COMPANY LOCATED AT 2920 NEWPORT BOULEVARD (PA 2006 -177 NOTICE IS HE FBT GIVEN that the Cdyl Council for the City of Newport Beach will hold a public hearing to con side, a modification of Condition No. 6 related to the net public area devoted to daytime use prior to 500 p.m. and the addition of a condi- tion of approval ac- knowledging that the Newport Beach Brewing Company (NBBC) may .apply for at least three special event permits per year. This hearing stems from a settle- ment agreement be tween the NBBC and the I City wherein the City Council agreed to con sider this motlBication and addition to the con-' ditions of approval. A copy of the settlement agreement and files re- availablehat Me City Of Newport Beach Planning Department. NOTICE IS HEREBY GIVEN that the modi- "Cation and addition to the conditions of ap- proval is exempt from the provisions of the California Enin.minen- tal Oualily Act (CEQA) of an existing facility where no expansion of the use occurs. NOTICE IS HEREBY FURTHER GIVEN that said public hearing will be held on May 13, 2008. at the hour of 7;00 p.m. in the City Council Chambers (Building A) at 3301 Newport Boulevard, Newport Beach. Califor- nia, at which time and place any and all per sons interested in the matter may appear and be heard. If you chal- lenge this project in court, you may be limited to raising only those Issues you or someone else raised at the public hearing (de- scribed in this notice) or in written corre- spondence delivered to the City, at. or prior to, the public hearing- A copy of the settlement agreement and other relevant materials is on file at the City. For information call (949) 6443232. LaVonne M. Harkless. City Clark City of Newport Beach Published Newport Beach/Costa Mesa Dally Pilot May 3, 2008 Sa488