(A) Definitions. For the purposes 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 who is tending bar or drawing or mixing alcoholic beverages.
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 food 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 priced meals are prepared and served primarily for consumption in such area and where not more than 40% of the gross revenue is derived from the sale of alcohol or alcoholic 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 serving of meals.
(B) License application requirements.
(1) Documentation. An applicant for a full-service restaurant on-sale license shall provide sufficient documentation to the city with an application form provided by the city to demonstrate 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 reports. With the renewal application, a full-service restaurant on-sale licensee shall submit an annual report for the preceding 12 months of operation or since issuance of the license for the first year whichever is less and supporting documentation to the city on forms provided by the city of the annual sales of the full-service restaurant, which includes 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 contain the annual gross sales of the licensee for the following 2 categories:
(1) Food and nonalcoholic beverage sales; and
(2) Alcoholic beverage sales.
(D) License renewals. When renewing a full-service restaurant on-sale license, the city shall condition the license renewal upon receiving documentation that not more than 40% of gross sales from the preceding 12 months of operation of the full-service restaurant is derived from the sale of alcohol or alcoholic beverages.
(E) Only retail, on-sale service permitted. 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) Smoking prohibited. No licensee that has a full-service restaurant on-sale license may allow smoking on the licensed premises.
(G) Full-service restaurant license fees.
(1) As required by state law, the license fee charged 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 city as measured by the last preceding decennial federal census.
(2) The license fee shall be initially established by resolution within 90 days of the initial adoption of this section. Subsequent changes in the license fee shall not be made for a period of 10 years from December 4, 2008, unless a population growth reported by the federal decennial census requires an increase in the fee.
(3) Fair market value for full-service restaurant licenses shall be established as follows:
(a) Within 90 days after December 4, 2008 and as required by state statute, each licensee within the city 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 of Vermillion Finance Department 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 license. 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 real or personal property may appeal the valuation adopted by the city to Circuit Court.
(b) For purposes of this section, the term CURRENT FAIR MARKET VALUE means 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 within the transaction.
(H) Registry of full-service restaurant on-sale licensees. The city shall maintain a registry of each full-service on-sale restaurant license that is being offered for sale and the city 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 in writing annually with the city that the full- service restaurant on-sale license is for sale. Requests to be removed from the registry shall be in writing.
(I) Issuance of new full-service restaurant licenses restricted. The city may only issue a new license pursuant to 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 division (G) above and on terms satisfactory to both the potential buyer and seller. The price of any on-sale license registered as “for sale”with the city shall be sold at the current fair market price set by the city pursuant to a resolution adopted in accordance with division (G)(2) above.
(Ord. 1190, passed 11-3-2008)