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SP Star Enterprises, Inc. v. City of Los Angeles

April 28, 2009


APPEAL from an order of the Superior Court of Los Angeles County, Dzintra Janavs, Judge. Affirmed. (Los Angeles County Super. Ct. No. BS106993).

The opinion of the court was delivered by: Klein, P. J.


Appellant SP Star Enterprises, Inc. (Star) holds a certificate of occupancy from the City of Los Angeles (the City) permitting Star to operate an adult club featuring nude entertainment in a two-story, 7,000 square-foot converted warehouse/manufacturing facility zoned M3-1 on Ducommon Street north of Little Tokyo. Star also holds a franchise to operate a Penthouse branded adult cabaret. This case involves Star's application for a conditional use permit for the sale and on-site consumption of alcohol at the club.

The City's Zoning Administrator granted Star's application for one year.

The Los Angeles Hompa Hongwanji Buddhist Temple (the Temple) and the Fukui Mortuary appealed the approval to the City's Central Area Planning Commission (APC). The appeal was supported by the Los Angeles Police Department, two city council members, the Central City East Association and numerous private citizens who argued the proposed use is not compatible with the religious and community uses in the area or the redevelopment of the area north of Little Tokyo.

Star responded its upscale business would improve tourism in the area as Penthouse cabarets had in other cities and would have no adverse impact on the neighborhood. Further, Star already was licensed to offer fully nude dancing and issuance of the conditional use permit would trigger Alcoholic Beverage Control (ABC) regulations which limit adult entertainment to topless dancing on stages at least six feet from the nearest patron.

The APC conducted a public hearing at which it upheld the appeal, resulting in the denial of the conditional use permit. Star then sought a writ of mandate. The trial court denied Star's writ petition, indicating it would uphold the APC's ruling whether it applied a substantial evidence or a de novo standard of review. This appeal followed.

The thrust of Star's attack on the APC's ruling and the trial court's denial of its writ petition is that Star is entitled to preferential treatment because it engages in a disfavored form of protected expression. Thus, the standards under which the APC operated must be strictly scrutinized to avoid giving the APC unbridled discretion to regulate speech. Star also contends the APC's findings were a pretext for discriminating against disfavored speech and were not supported by substantial evidence.

We conclude the case does not involve free speech but the right to sell alcohol, which is not a protected activity and does not involve a fundamental vested right. (Yu v. Alcoholic Bev. etc. Appeals Bd. (1992) 3 Cal.App.4th 286, 297.) Thus, the standards under which the APC upheld the appeal need not reflect the " 'precision of regulation' " required when a municipality regulates protected activity. (Burton v. Municipal Court (1968) 68 Cal.2d 684, 691.) Rather, because the standards applied by the APC are not vague or arbitrary and the APC's decision finds substantial support in the record, we affirm the trial court's order denying Star's writ petition.


1. Star is Granted a Conditional Use Permit; the Temple and Fukui Mortuary Appeal

Star initially obtained a building certificate from the City to convert a two-story warehouse/manufacturing facility into a gentleman's club with seating for 177 patrons, 133 parking spaces, and hours of operation from 11:00 a.m. to 2:00 a.m. daily. The City thereafter granted Star a certificate of occupancy permitting it to offer nude entertainment.

Star then sought a conditional use permit for the sale and consumption of a full line of alcoholic beverages with live entertainment consisting of clothed and topless dancing. The application discloses the club will have no kitchen and Happy Hour from 4:00 to 7:00 p.m. daily.

The Zoning Administrator (ZA) conducted a public hearing and thereafter granted Star's application for a conditional use permit for one year. The approval letter stated the site is a corner parcel with 150 feet of frontage on the north side of Ducommon Street and approximately 138 feet along Vignes Street. The property is improved with a warehouse building with rooftop and interior parking accessed via Commercial Street. Surrounding properties are characterized by commercial/industrial buildings occupied by perishable food cold storage, food processing operations and a City maintenance yard.

The Temple and the Fukui Mortuary appealed the approval to the APC, which conducted a public hearing on the matter.

2. The Public Hearing Before the APC

a. The Zoning Administrator's Explanation of the Approval

Zoning Administrator Albert Landini approved Star's application because ABC guidelines for this census tract permit one on-site license for the sale of alcohol and one off-site license and, at the current time, there are no licenses. The area had a low crime rate and, although it had been claimed there were two artists lofts nearby, no residential properties had been identified and residential use in the area clearly was in the minority. Landini noted Star voluntarily had agreed to conditions on the signage of the building, the site has a large amount of parking and construction of the club has been completed. Landini noted the permit had a life of one year and Star had accepted this condition based on its substantial belief in the nature of its business.

b. Position of the Proponents of the Appeal

Gerald Fukui, the fifth generation operator of the Fukui Mortuary on East Temple Street, testified the mortuary has been serving the Japanese-American community since 1918. They have a chapel which accommodates 150 people and is used for funerals and memorial services involving all faiths and religions. The mortuary conducts more than 500 services per year and many services continue into the night as is the Japanese-American custom. The mortuary is approximately three blocks from the site of the proposed permit. The sale of alcoholic beverages in such proximity to the mortuary would be disruptive, dangerous and contrary to the environment of grieving family and friends. Fukui indicated there already was a problem with Little Pedro's, a bar directly across the street from the Temple at First and Vignes Streets. Loud, boisterous patrons of Little Pedro's park and urinate in the mortuary's parking lot and act disrespectfully when passing the entrance to the chapel. Fukui noted the mortuary will be between the new cabaret and Little Pedro's.

On behalf of the Temple, Eric Kurimura testified the permit will create an unsafe environment for families congregating at the Temple. Kurimura feared disruption of numerous religious services and youth programs. Also, the increased sale of alcohol in the area would be adverse to the changing nature of the community. The Temple operates a day care center from 8:00 a.m. to 6:00 p.m. five days a week. The Temple also has funeral services, memorial services and weddings, most of which take place in the evening. The permit did not require Star to sell food and the Temple was concerned that intoxicated people leaving the cabaret would engage in boisterous conduct.

A member of the Temple noted the cabaret would be open when the children who attended the Nishi Center took monthly field trips and were dropped off on Vignes Street between Ducommon and Temple Streets. These field trips would occur during the hours of operation of the cabaret. Another member of the Temple expressed fear of cars racing on Vignes Street on Friday night when the Temple had approximately 100 children involved in their scout program.

Brandy Chappell, planning deputy for Council Member Jan Perry of the Ninth Council District, expressed concern that issuance of the permit would result in an increase in drunk driving in the neighboring residential communities. Chappell noted problems had occurred at the Grand Avenue Club and the Stock Exchange Club and concluded the conditional use permit was not in the best interests of Little Tokyo or the Arts District. Chappell noted the Little Tokyo community had opposed a conditional use permit for the Neptune project which was at Third and Alameda Streets and was not a cabaret. The opposition was based solely on alcohol use.

Jessica Wethington McLean, the planning director for Council Member Jose Huizar of Council District 14, testified the area is undergoing revitalization. The area had a "tremendous" amount of crime five to seven years earlier but it was "cleaned up, because we have a vision for this area." McLean noted a new Business Improvement District (BID) was scheduled to open in January and the City wanted to mix residential and light industrial uses in the area. The Fukui Mortuary is 18 feet beyond the 500 foot notification limit and the Temple provides religious services to the community, which was "burgeoning." McLean indicated an alcohol permit was not compatible with the Council's vision for the area or the long-term plan.

Estella Lopez, executive director of the Central City East Association which represents the interests of 1,500 property owners, supported the appeal on behalf of the residents of the Arts District, property owners and business owners who wished to eliminate nuisance uses. The Arts District was in transition with more residential use anticipated and the proposed use was wrong for this community at this time.

The owner of Heet Sound products, 150 feet from the proposed use, opposed the application based on increased noise and drunkenness in the evenings and on the weekend.

Los Angeles Police Lieutenant Tom Brosh indicated that based on 28 years of experience, when alcohol is combined with this type of establishment and late hours, it generally leads to "disaster." "And I can guarantee that I'm going to be out there on some Saturday night at 1:00 in the morning handling a murder, because it's just going to happen. That's just the way it is." Brosh predicted the crime rate would increase dramatically just when the area was undergoing a renaissance. Brosh noted a new multistory residential structure was being built at Temple and Alameda Streets, businesses were trying to revitalize the area and there were artist's lofts in the area. Brosh also noted the county jail was a few blocks away and people are released from the jail at all times of the day and night. Brosh predicted an increase in panhandling and crime. Brosh indicated that even if the cabaret provided security inside the club, problems arise when patrons leave.

Los Angeles Police Lieutenant Raymond Garvin testified the club was seven blocks from the skid row area and the contemplated use would attract the element the police are trying to abate under the Safer Cities Initiative.

c. Opposition to the Appeal

Counsel for Star indicated Star has invested more than $1 million in the property and Star's licensing agreement with Penthouse required Star to run an upscale club. Also, although the conditional use permit did not require the sale of food, Star's licensing agreement with Penthouse required Star to offer food. Counsel noted that, without a liquor license, the club could offer fully nude dancing. However, with a liquor license, ABC regulations limited the club's entertainment to topless and the performers were required to be on stages six feet from the nearest patron. Counsel noted the building is basically a concrete box which will emit no noise and all parking is on the interior and the roof of the structure. Counsel asserted there would be no need for customers to park on the street or walk in the neighborhood and the business would ...

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