This is a special review request to allow the location of a beer & wine license with gaming in a CC zone on Lots 1 through 8 (including Lots 6 & 7 of C/S 1716), Block 15, Central Heights Subdivision 5^th Filing in Suite 14, a 2,000 square foot tenant space (currently vacant Hawaiian BBQ). The property is generally located at 111 South 24^th Street West and is known as the Rimrock Mini-Mall. The proposed business will be Jackrabbit Red’s Casino.  The property is within 600 feet of Central Heights Elementary School and will require a waiver of this separation distance. The owner is Rimrock Mini-Mall, LLC and the agent is Blueline Engineering.  The Zoning Commission conducted a public hearing on July 2, 2013, and is forwarding a recommendation of denial on a 4-0 vote.

The Planning Division reviewed the requested waiver of the separation distance to Central Heights Elementary School and the special review request and recommended denial to the Zoning Commission. The Zoning Commission concurred with this recommendation. The view of the building is not entirely obstructed from the elementary school and there is direct pedestrian access between the school and the Rimrock Mini-Mall property.
 
Before a recommendation of approval or conditional approval can be made, each special review request must demonstrate conformance with three primary criteria: 1) The application complies with all parts of the Unified Zoning Regulations, 2) The application is consistent with the objectives and purposes of the Unified Zoning Regulations and the 2008 Growth Policy, and 3) The application is compatible with surrounding land uses and is otherwise screened and separated from adjacent land to minimize adverse impacts. This application conforms to the first criteria in so far that it is within a CC district where on premise consumption of alcoholic beverages may be allowed by special review approval.
 
The application does not conform to the second and third criteria. The zoning regulations adopted by the City Council have designated several zoning districts where on premise consumption of alcoholic beverages with gambling may be allowed. The proposed location however is within 600 feet of Central Heights Elementary School to the east. The view between the uses is not entirely blocked by buildings and there is direct pedestrian access between the properties. The location has not been licensed to serve alcoholic beverages.  To the north on Central Avenue is a casino that was approved by the City Council in 1989. The Council granted the waiver of the 600-foot separation from the elementary school and from Mt. Olive Lutheran Church to the north. In 1989, the code did not have specific criteria for granting or denying waivers of the 600-foot separation requirement.   
 
The proposal is not consistent with goals of the 2008 Growth Policy, specifically the goal of encouraging uses that are compatible with the character of the adjacent land use patterns. South 24^th Street West is a principal arterial street and the subject property is on the east side of this north /south arterial. East of the subject property is a mature single family neighborhood with an elementary school and a community park. The Central Heights neighborhood is bounded by arterial streets where commercial zoning and neighborhood services have developed over the past 35 years. Many of those businesses are compatible with the adjacent residences. The potential impacts from allowing an alcoholic beverage license in this neighborhood cannot be adequately mitigated by conditions of approval. A recent approval of an alcoholic beverage license in the Gorham Park neighborhood resulted in unmitigated impacts to the neighborhood including a robbery at the casino, a car crash into the building entry, and at least 3 thefts and burglaries in the past 6 months. These impacts cannot be mitigated through imposing conditions of approval on the special review request. The subject property is across a 20-foot alley from existing single family homes on Pueblo Drive. The existing businesses in the Rimrock Mini-Mall have typical business hours and generally do not have late night hours of operation. A location with a liquor license can stay open until 2 am daily.

Approval or denial of the special review request should have no foreseeable financial impact on city finances. If the special review is approved, a building permit may be necessary for interior remodeling of the tenant space but the fees charged would be commensurate with the service provided. If approved, the business would require a city business license but the fee charged is also commensurate with the service provided.

This is a special review request to allow the location of a beer and wine license with gaming in Suite #14 of the Rimrock Mini-Mall at 111 South 24^th Street West. Suite #14 contains approximately 2, 000 square feet and would be remodeled for the proposed tenant if the special review is approved. A previous restaurant – Hawaiian BBQ – was the tenant in this space. The owner has applied for a zone change for the north half of the Rimrock Mini-Mall property from NC to CC to allow this special review to be considered. The City Council approved the zone change on first reading on June 24, 2013.

The tenant spaces in the building have their primary entrances on South 24^th Street West. For this space, there is also an exit door from the kitchen to the alley. This door would not be a customer entrance. There is another exit door between the restrooms to the alley. This is a fire safety exit and is accessible to customers.

Central Heights Elementary School is within 600 feet of the site. School District #2 has sent a letter of objection to granting the waiver of the 600-foot separation for this location. The applicant states in a letter requesting the waiver that the building is partially obstructed from view by the residential dwellings on Pueblo Drive and describes the physical access between the school and Suite 14 as challenging for a pedestrian. The City Council will need to approve a waiver of this 600-foot separation requirement in order to approve the special review request. A waiver may be granted if a physical barrier exists between the uses such as an arterial street with no pedestrian crossing, buildings entirely block the view between the uses, or there is no physical access between the uses.

The Zoning Commission conducted a public hearing on July 2, 2013, and received the staff recommendation, testimony from the applicant's agent, Marshall Phil, P.E., Rob Veltkamp, manager of the Rimrock Mini-Mall, Stuart Ellison, owner of the proposed restaurant/casino, and several surrounding property owners and residents in the area.

Mr. Marshall Phil, stated he does not agree with the staff recommendation to deny the requested waiver and approval for the beer and wine license with gaming for this location. Mr. Phil stated the primary use in the tenant space will be a restaurant not a bar or a casino. The beer and wine license has gaming attached but this will not be the focus of the business. He stated the employees will use the exit door from the kitchen to take out garbage and to receive deliveries. Mr. Phil stated the fire exit door between the restrooms will be an emergency exit and is alarmed so if anyone does go out that door an alarm is triggered. Mr. Phil stated the homes to the east on Pueblo Drive and the mature landscaping and trees block view between the school and the back of the building. He stated if someone was on the sidewalk on Eldorado Drive near the north end of the mini-mall, you could not see the entrance to the restaurant. Mr. Phil provided photographs and a drawing showing the relative walking distances between the access doors on the school and the front door of the restaurant. Mr. Phil pointed out the closest walking distance is 780 feet to the west entrance of the school and the main entrance is 1,215 feet. He stated the photos show the view from Central Heights Elementary to the back of the mini-mall. Mr. Phil also pointed out  there is a direct unobstructed view of the Jackpot Casino at 2274 Central from the sidewalk on Eldorado Drive. Chairman Dailey asked Mr. Phil how the walking distances were measured. Mr. Phil stated they used a wheeled measuring device between school entrances and the restaurant entrances.

Mr. Veltkamp stated he was the manager of the Rimrock Mini-Mall and handles all the tenant lease agreements and maintenance. He stated the current owners have put in more than 1 million dollars in property improvements. He stated the reason for choosing this business is to have more restaurant and food choices in the mini-mall. Mr. Veltkamp stated the mini-mall now has Taste of Asia and the Baskin Robbins. He state the Hawaiian BBQ has been closed and vacant for 6 months and they have considered some potential applicants that would be more bar and casino than restaurant but the owners are very particular about the uses they want to allow. He stated the business will be called Red's Grill and Casino. He state the alley will only be used by employees for food deliveries and taking out garbage, He state the mall cleans the alley on a regular basis and the mini-mall has a security patrol through the property and alley at least twice each night. He stated there is a good barrier between the mini-mall and the elementary school. Mr. Veltkamp stated they disagree with the Planning staff recommendation and he has checked with all the other tenants in the mini-mall and no one has an issue with the proposed restaurant and casino.

Mr. Stuart Ellison is the owner of the proposed restaurant. He stated the business is now called Jackrabbit Red's Casino and is located at the Flying J Truck Stop in Lockwood. Mr. Ellison provided examples of the proposed menu at the new location. He stated the business would be called Red's Grill and Casino at the new location. Mr. Ellison said the lease at the Flying J Truck Stop was not renewed so they have been looking for a new location. He stated there is high traffic in this area and an intense commercial neighborhood. He stated he has run the business for over 50 years and requires all employees to be specially trained for alcohol service and to provide security for the business such as not allowing loitering. He state the floor plan is to have more seats for restaurant service than for gaming. He stated the Department of Revenue requires the installation of a bar only area for this type of license but the proposed bar only has 4 seats. He stated alcohol sales are not a big part of their income amounting to about $128.00 per month in their current location. He stated the biggest income comes from food sales and the casino. He stated his servers limit the number of drinks per hour for anyone gaming and not eating in the restaurant. He stated he will employ 15 to 20 people at the new location.

Kay Brown of 116 Pueblo Drive testified in opposition to the waiver and granting the special review. She state she does not want her home to be considered a barrier between this business and the school. She stated her children are her primary concern with the use. She stated right now when businesses close at 9 pm, they get their privacy back so they can enjoy their backyard. She stated if there was a business open until 2 am then her backyard would never have any privacy. She stated there are few stop signs in the neighborhood and no speed bumps to slow down traffic on Pueblo Drive. She stated there is a lot of school traffic in the area and would be concerned about impaired drivers from the business. She state her home has already experienced one break in and she would expect this to happen again and more frequently if a casino goes in the mini-mall. She state the north driveway at the mini-mall is right across from an entrance to Albertson's and people shoot across Eldorado without stopping. She stated the front of the mini-mall may look great but the back is not so good. She stated there are vagrants and transients in the alley now and some of the houses on Pueblo have no back yard fences. She urged the commission to not approved the request.

Jamie Gravney of 214 Pueblo Drive testified in opposition. She stated she has 3 children that attend elementary, middle, and high schools in the area. She stated all her children walk to school or cross 24th St West to catch the bus at Stewart Park. She stated her backyard fence is only 4 feet tall and is not really a privacy fence or a barrier to anyone. She said there is a cut through area where people can walk from the parking lot into the alley. She stated this type of restaurant was not appropriate across the alley from residences and so close to the elementary school.

Marjean Narum of 2248 Alamo Drive testified in opposition to the application. She stated there would not be adequate parking for this large restaurant and bar. She stated she is strongly opposed to the location because it would depress market values for homes in the area and was too close to the school. She stated the current zoning regulations were in place for a reason and waivers to those regulations should not be granted. She stated many children use the west entrance to the school and buses drop off kids all along Pueblo Drive and Alamo Drive. The residents on Pueblo have to share the alley with the mini-mall and this business would not be a good neighbor to those residents. She stated some of the potential customers would not be desirable to the existing neighborhood. She stated the playing field is used all day during the school year and in the summer, too. She urged the commission to recommend denial.

Darlene VIncelette of 140 Pueblo Drive testified in opposition. She stated she has lived on Pueblo since 1962 when there were only 2 businesses on 24th Street West. She stated it is ridiculous for the owner to say it will be mainly a food business if they are calling the business a casino. She stated there used to be a Montana State Liquor Store in the mini-mall and she said the alley was a mess with bottles and drunk people wandering around. She stated if the owners ever cleaned up the alley it was news to her since it always seems to be a mess. She stated there are enough casinos in Billings already. It seemed to her there were enough for each family to have their own private casino now. She urged the commission to deny the request.

Chairman Dailey asked the agent to provide rebuttal testimony concerning safety, alley use, traffic on Eldorado and the adequacy of parking. Mr. Phil stated the previous restaurant had enough spaces and this was approved by the city. The same number of spaces are required for restaurants regardless of whether they serve alcohol or not. He stated the existing traffic and drive approaches on Eldorado Drive have been in place for a number of years. He does not believe any added traffic from the new restaurant and casino would have an impact on this traffic. He stated safety and particularly the safety of children is a concern. He stated the new restaurant will not operate as a bar and casino but a restaurant mainly. He stated there are similar uses in the area that have not compromised the safety in the neighborhood. He stated the alley would only be used by employees and there would be no customers using the alley. He stated there may be some areas of the alley that get overlooked during the regular maintenance.

Commission member Dan Wagner made a motion to recommend denial of Special Review 908 and this was seconded by Mike Boyett. Commission member Barbara Hawkins stated she appreciated the exhibits and diagrams from the applicant but even the state law on separation distances between schools and on-premise alcohol service preclude this use in this location. She stated this not a good location for an alcohol service given the neighborhood traffic and the school. Chairman Dailey also pointed out the Superintendent of School District #2 sent a letter objecting to the waiver of the 600-foot separation distance so this an important issue. The Zoning Commission voted 4-0 to forward a recommendation of denial.

The consistency with adopted plans and policies is discussed in the Alternatives Analyzed section above.