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Home My WebLink About3E Supplemental - Sweet Spot PPTCONSIDERATION OF REVOCATION OF THE BUSINESS LICENSE CERTIFICATE NO. 13709873 THE SWEET SPOT CLUB CITY COUNCIL MEETING DECEMBER 15, 2022 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 2 On August 16, 2016, an application for a CUP (Case No. CUP 16 -217) was submitted by Sweet Spot Club, LLC for a “Private Members Only Social Business Club”. Applicant’s Statement of Use (see Attachment 2) for the private club as part of their CUP application . Conditional Use Permit (CUP) Statement of Use Except 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 3 Floor plan (see Attachment 3) for the private club as part of their CUP application. Conditional Use Permit (CUP) Conference Room 1 Conference Room 2 Main Room w/ Seating Bar 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 4 On August 15, 2017, the Planning Commission adopted Resolution No. 2707 (see Attachment 4), approving a CUP for Private Members Only Social Business Club with 25 conditions of approval. Conditional Use Permit (CUP) California Secretary of State 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 5 The Statement of Information filed on October 18, 2021 (see Attachment 5), for the Sweet Spot, LLC, lists Social Club as the type of business ABC License 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 6 On August 11 ,2021,ABC licensing staff raised a concern with City staff due to the CUP approval for a private club and the applicant intending to operate the business as being open to the general public. City staff responded that “the property is zoned ‘Downtown,’which allows for this type of establishment,and the City supports the project being open to the general public.” On October 28,2022,the Development Services Director sent a letter to ABC (see Attachment 6)clarifying that the email sent in August 2021 was incorrect. ABC License 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 7 On August 24, 2021, the Sweet Spot, LLC, was issued a Type 48 License for the business Sweet Spot Café at 73338 Highway 111, Palm Desert (see Attachment 7). This type of license is an “open to the public establishment,” which corresponds to a bar use, not a private club. City Business License 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 8 On July 13, 2022, the Sweet Spot Club, LLC, applied for a business license certificate/certificate of use for a membership-only private club at 73338 Highway 111, #O, Palm Desert, with www.sweetspotclub.net listed as the business’s website (see Attachment 8). Additionally, the application indicates that no live entertainment will be provided. On July 13, 2022, the City issued Business License No. 13709873 (see Attachment 9) to the Sweet Spot Club for a Private Membership Club, consistent with the approved CUP. Statement of Facts –Approvals & Licenses 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 9 1.Business Owner applied for a CUP for a Private Members Social Club. 2.The Planning Commission approved a CUP for Private Members Social Club. 3.Business Owner filed a Statement of Information with the California Secretary of State. for the Sweet Spot, LLC, with Social Club identified as the type of business. 4.Sweet Spot LLC applied for a business license for a membership-only private club. 5.The City approved and issued a business license for a P rivate Membership Club. 6.Business Owner applied for a Type 48 License (Bar, Nightclub) through ABC intending to be open to the public not as a private club. 7.ABC issued a Type 48 License to Sweet Spot LLC for the business Sweet Spot Café. 8.Sweet Spot Café is not a licensed business in the City Palm Desert 9.Sweet Spot LLC does not have a Sweet Spot Café as a dba/fictitious name filed with Riverside County. Media Coverage 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 10 Step inside the blacked-out doors at 73-338 Highway 111 in Palm Desert and you’ll find yourself in a large cocktail lounge that feels a bit like a dance club. Adjoining rooms branch off from the space with an office for meetings, a card room, a TV lounge and a massage room. Gottlieb said drinks ordered for the hostesses at Sweet Spot will be champagne cut with water —a standard practice at similar clubs in Asia to avoid workers getting drunk on the job. In addition to buying the hostesses drinks, Gottlieb said the members will be expected to tip the women for their time. The massage room, located away from the main space through a door at the end of the card room, will be available for members to book sessions with a dedicated professional masseuse, according to Gottlieb. The club owner said none of the hostesses or other staff would be involved in the massages. Media Coverage 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 11 Media Coverage 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 12 Cease &Desist Letter 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 13 On November 9,2022,the City Attorney’s Office issued a Cease and Desist Letter (see Attachment 12)to the Sweet Spot,LLC,listing the violations of the CUP conditions,in addition to operating in violation of the current business license and the Palm Desert Municipal Code (PDMC). Cease &Desist Letter 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 14 On November 9,2022,the City Attorney’s Office issued a Cease and Desist Letter (see Attachment 12)to the Sweet Spot, LLC,listing the violations of the CUP conditions,in addition to operating in violation of the current business license and the Palm Desert Municipal Code (PDMC). The letter outlined the following corrective actions : Cease & Desist Response -11/10/2022 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 15 Attachment 15 Attachment 13 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 16 On November 18, 2022, the City Manager suspended the business license for the Sweet Spot (see Attachment 16), pursuant to PDMC § 5.04.160(C) to preserve the peace, health, safety, or general welfare of the City and for their failure to comply with the following corrective actions outlined in the November 9, 2022, cease and desist letter. Provided notice of the Revocation Hearing Suspension of Business License 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 17 The Sweet Spot website on November 18, 2022, displayed the following: •The description on the ‘landing page’ advertising “an attached warm beautiful cigar room.” •Images of the massage table and the ability to make a reservation for a massage through the website. •Images of a card table depicting what appears to be a blackjack dealer pulling cards from a shoe and the ability to reserve a card table through the website. These images were still visible, and the ability to reserve a card table was still available on November 21, 2022, and November 30, 2022. •Ability to reserve a poker table through the website. This option was still available on November 21, 2022, and November 30, 2022. Staff has included screenshots of these items as Attachment 17. Website Screen Shots 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 18 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 19 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 20 Reservations for massage services (11/18/2022) 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 21 Reservations for poker table (11/18/2022) 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 22 Reservations for card table (11/18/2022) 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 23 Reservations available on 11/21/2022 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 24 Reservations for poker table (11/30/22) 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 25 Reservations for card table (11/30/2022) The card room at Sweet Spot Club in Palm Desert, Calif., Oct. 21, 2022. JAY CALDERON/THE DESERT SUN 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 26 ABC License 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 27 Staff received confirmation from the ABC Licensing Manager that as of 9:40 a.m. on November 17, 2022, they have not received an application from Sweet Spot Club, LLC, for a Type 57 license (s ee Attachment 18). Suspension Response 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 28 On November 18, 2022, the Sweet Spot provided a response to the suspension letter (see Attachment 19) 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 29 On November 21,2022,City staff met with Mr.Gottlieb and new Club Manager Mr.Joe Tufaro regarding the suspension. At that meeting,Mr.Gottlieb and Mr . Tufaro stated that they had submitted the ABC application to change to a Type 57 license and that the cigar lounge is a separate entity and could not understand why staff would think it was attached. Meeting with Sweet Spot –11/21/2022 Attachments 21 & 22 Meeting with Sweet Spot –11/21/2022 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 30 Additionally,Mr .Gottlieb stated at that meeting the cigar lounge was not part of the Sweet Spot Club,was separated by a wall, and had no direct access . He also stated he was being treated unfairly and could not understand where staff came up with the idea that the proposed cigar lounge was incorporated as part of the Sweet Spot Club. However,as stated above and provided in Attachment 13,the preliminary floor plan submitted for the Sweet Spot Cigar Lounge integrated the two uses . Attachment 17 Cigar Lounge 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 31 A Cigar Lounge is not listed as a permitted or conditional use within the D - Downtown zoning district. •Section 8.36.070 of the PDMC provides for an exemption to the smoking prohibitions for stores that deal exclusively in tobacco products and accessories. CA Labor Code section 6404.5(c) is a general rule that smoking tobacco products is prohibited in any place of employment or an enclosed place. •CA Labor Code section 6404.5(e) provides limited exceptions to the general rule. Cigar Lounge 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 32 CA Labor Code section 6404.5(e) provides limited exceptions to the general rule. For purposes of this section, “place of employment” does not include any of the following: … (2) Retail or wholesale tobacco shops and private smokers’ lounges. For purposes of this paragraph: (A) “Private smokers’ lounge” means any enclosed area in or attached to a retail or wholesale tobacco shop that is dedicated to the use of tobacco products, including, but not limited to, cigars and pipes. (B) “Retail or wholesale tobacco shop” means any business establishment, the main purpose of which is the sale of tobacco products, including, but not limited to, cigars, pipe tobacco, and smoking accessories. Cigar Lounge 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 33 On 12/2/2002 staff sent an application to seek a use determination pursuant to Section 25.18.040 & Section 25.72.020 to Mr. Tufaro, Sweet Spot Club General Manager. On 12/7/2022 A&P Desert Investments LLC representative Mr. Abraham Gottlieb submitted the Use Determination application by email. The application was deemed incomplete on 12/12/2022 for failing to provide the following submittal requirements: Follow up Email with Sweet Spot 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 34 On November 23,2022,staff sent a follow-up email (see Attachment 23)to Mr.Gottlieb informing him that ABC has confirmed that no application for the type 57 license has been received as of the close of business on November 22,2022. While the Business Owner stated they submitted the type 57 license application,Staff didn’t received confirmation from ABC until December 2,2022 that it was received ABC Official Warning Notice 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 35 Mr.Mathew Hydar,Supervising Agent in Charge with ABC,provided staff with a copy of the Official Warning Notice (see Attachment 24)that ABC issued to the Sweet Spot Club,LLC,regarding the licensee of the Sweet Spot Café at 73338 Highway 111 ,Palm Desert. ABC Official Warning Notice cont. 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 36 The warning notice outlines potential violations of their ABC license that involve the following: 1.An East Asian Hostess bar concept. 2.The service of alcoholic beverages to club members only. 3.Future plans to include a cigar bar and/or smoking lounge. ABC Official Warning Notice cont. 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 37 The warning notice outlines potential violations of their ABC license that involve the following: 1.An East Asian Hostess bar concept. 2.The service of alcoholic beverages to club members only. 3.Future plans to include a cigar bar and/or smoking lounge within the licensed premises . ABC Official Warning Notice cont. 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 38 Revocation Standard 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 39 PDMC 5.04.160 states that City Council, after a hearing, may revoke a business license for: 1.What it may deem good and sufficient reasons in order to preserve the peace, health, safety, or general welfare of the city; or 2.Upon receiving satisfactory evidence that the licensee thereof has violated any provision of other laws relating to the city, county, state, and federal government; or is 3.Conducting a business other than that for which licensed. Findings of Fact 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 40 To revoke a business license,the City Council must find that one or more of the above has occurred: 1.City Council must revoke the Sweet Spot Club’s business license to preserve the peace,health,safety,or general welfare of the city. Findings of Fact: A.The business licensee violated the CUP conditions of approval as provided in the staff report and as presented. Findings of Fact 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 41 2.Upon receiving satisfactory evidence that the licensee thereof has violated any provision of other laws relating to the city,county,state, and federal government. Findings of Fact: A.The business cannot operate or offer massages .Providing massage services requires a license pursuant to PDMC §5.87.050. B.The business violated California ABC law and the Rules and Regulations of the Department as outlined in the November 4,2022,Official Warning Notice. Findings of Fact 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 42 3.Conducting a business other than that for which licensed. Findings of Fact: A.The business is operating as a bar open to the public and not a private club. B.The business is licensed as the Sweet Spot Club;however,the ABC license is for the Sweet Spot Café. •Secretary of State LLC Filing lists the business as Social Club. •CUP was for Private Members Only Social Business Club. •Business License Certificate issued is for a Private Membership Club. •ABC license issued to the Sweet Spot Café,as being open to the general public . C.The business offers/offered massage therapy services. D.The business allows for the reservation of gaming tables,card tables,and poker tables. Staff Recommendation 12/15/2022 AGENDA ITEM 3.E -SWEET SPOT REVOCATION 43 1.City Council finds that this report,including attachments,and any additional evidence provided at the hearing,provides satisfactory evidence to determine that: A.Good and sufficient reasons have been provided to revoke the Sweet Spot Club’s business license to preserve the peace,health,safety,or general welfare of the city. B.The Sweet Spot Club violated city and state laws. C.The Sweet Spot Club is conducting a business other than that for which it is licensed. 2.Adopt a resolution revoking Business License Certificate No.13709873 for the Sweet Spot Club located at 73338 Highway 111 ,#O,Palm Desert,and making findings in support thereof (see Attachment 1).