(A) Restaurant license. For the purpose of this section, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
BAR. Any permanently installed counter within the restaurant area from which alcoholic beverages are regularly served to customers by a person which is tending bar or drawing or mixing alcoholic beverages.
CURRENT FAIR MARKET VALUE. The documented price of the on-sale license most recently sold between January 1, 2003 and January 1, 2008, through an arm’s length transaction, less the value of any real or personal property included with the transaction.
FULL-SERVICE RESTAURANT. Any restaurant at which a waiter or waitress delivers food and drink offered from a printed food menu to patrons at tables, booths or the bar. Any restaurant that only serves fry orders or foodstuffs such as sandwiches, hamburgers or salads is not a FULL-SERVICE RESTAURANT.
RESTAURANT. Any area in a building maintained, advertised and held out to the public as a place where individually processed meals are prepared and served primarily for consumption in such area and where at least 60% of the gross revenue of the restaurant is derived from the sale of food and nonalcoholic beverages. The restaurant shall have a dining room, or rooms, a kitchen, and the number and kinds of employees necessary for the preparing, cooking and servicing of meals.
(B) Confidential documents regarding primary source of revenue. An applicant for a full-service restaurant on-sale license shall provide sufficient documentation to the governing body upon an application form provided by the municipality to prove that the primary source of revenue from the operation of the restaurant will be derived from the sale of prepared food and nonalcoholic beverages and not from the sale of alcoholic beverages. The supporting documentation concerning the primary source of revenue submitted pursuant to this section is confidential.
(C) Annual report required. The full-service restaurant licensee shall submit on forms provided by the municipality an annual report. Forms shall include an oath verifying the validity of the information provided in the report. The report and the supporting documentation submitted pursuant to this section are confidential. The report shall include the annual gross sales of the licensee for the following two categories:
(1) Food and nonalcoholic beverage sales; and
(2) Total gross revenues.
(D) Renewal. When renewing a full-service restaurant on-sale license, the municipality shall condition the license renewal upon documents that at least 60% of gross revenue from the preceding 12 months operation of the full-service restaurant was derived from the sale of food and nonalcoholic beverages.
(E) On-premises consumption. A full-service restaurant on-sale licensee may only serve alcoholic beverages for on-premises consumption in the bar and dining room area of the restaurant.
(F) No smoking. No licensee that has a full-service restaurant on-sale license may allow smoking on the licensed premises. A restaurant that has a full-service restaurant on-sale license may only be advertised or held out to the public as primarily a food eating establishment.
(G) License fee charge. The license fee charge for a full-service restaurant on-sale license shall be at or above the current fair market value for such license as determined herein; however, any fair market value so established shall be a minimum of $1 for each person residing within the municipality as measured by the last preceding decennial federal census.
(1) The license fee shall be initially established by resolution of the City Council within 90 days of the adoption of this chapter; subsequent changes to the license fee shall not be made for a period of ten years from the effective date of this chapter, unless a growth in population reported by the federal decennial census requires an increase in the fee.
(2) Within 90 days of the effective date of this chapter, each licensee within the municipality who owns an on-sale license issued pursuant to SDCL § 35-4-2(4) or (6) as of January 1, 2008, and who purchased the license or had the license transferred to such licensee at any time between January 1, 2003, and January 1, 2008, shall report the amount originally paid for the on-sale license to the City Finance Officer on forms provided by the city. Any form submitted pursuant to this provision shall be signed under oath and shall include the documents establishing the amount originally paid for the on-sale licensee. If the transaction for the purchase of the on-sale license included real or personal property, the full market value of the real or personal property on the date of the original sale shall be deducted from the total transaction price to determine the amount paid by the licensee for the on-sale license. The burden of establishing the amount paid for the license shall be on the licensee. Any licensee contesting the fair market value of the license on the date of purchase may file an objection to the report. The objection shall be filed with the municipality within 30 days of the date the license fee is set. The determination of the governing board may be appealed to the Circuit Court.
(H) License registry. As required by SDCL § 35-4-118, the municipality shall maintain a registry of each full-service on-sale restaurant license that is being offered for sale and the municipality shall furnish a copy of the registry to anyone who requests a new full-service restaurant on-sale license. The existing full-service restaurant on-sale licensee is responsible for registering with the municipality that the full-service restaurant on-sale license is for sale.
(I) New restaurant license. The municipality may only issue a new license under this section if no on-sale license is on the registry or a person desiring to purchase an on-sale license listed on the registry provides documentation showing that the person is unable to purchase the on-sale license at the price established in § 111.03 and on terms satisfactory to both the potential buyer and seller. The price of any on-sale license registered with the municipality under § 111.03 shall be sold at the current fair market price set by the city pursuant to the resolution adopted in accordance with § 111.07.
(Prior Code, § 3A-08) (Ord. 1142, passed 9-9-2014)