By Philip Haldiman, Independent Newsmedia

Apparently 30 feet can be the difference between a bustling business and a struggling business.

Looking back, Mark and Patti Gaydosz admit they were green in the ways of running a restaurant and bar when they bought The Heights Sports Grill, 20783 N. 83rd Ave, Ste 112.

They took on an  establishment where they had a difficult time retaining a restaurant liquor license that requires at least 40 percent of gross sales to come from food sales.

The state will revoke the license in July because of their inability to keep this threshold.

But, they did not want to give up on their business so they started working toward a bar liquor license, which would allow them to sell alcohol without the food requirement.

However, Peoria staff informed them they could not apply for the license unless they  have a conditional use permit, which is granted by the city. So they started the planning process, but the couple said after more than two months of meetings and public notifications, the city did an about-face, stating the site does not qualify because the property sits less than 200 feet from a residential district. The Heights

Sports Grill is 170 feet from residential properties, a 30-foot difference.

“We could run it as a restaurant with zero alcohol, but that business model does not work in that location,” Mr. Gaydosz said. “There was an Italian and a Mexican restaurant in that location in the past and both failed after a couple years. Based on our customer base and our numbers, we would have the same fate in probably a shorter period of time.”

Peoria Planning Director Chris Jacques said unfortunately the staff planner working the case did not recall the full liquor license requirements, and did not communicate it sooner to the Gaydosz’s, causing the months investment in the project.

“But soon upon discovery, we communicated the finding to the applicant and promptly processed a refund,” Mr. Jacques said.

The relationship between the city and the business owners spans two years. The Gaydoszes bought The Heights Sports Grill in 2015 and immediately found difficulty meeting the food sales threshold requirement of their Series 12 liquor license, which is issued by the state of Arizona. This license is required for restaurants that sell alcohol, and at least 40 percent of its gross revenue must come from food sales. Failure to meet the 40 percent food requirement results in revocation of the license. The Gaydoszes were unable to meet this requirement, and their Series 12 liquor license will be revoked in July.

“We fully understand that the reason we are in the situation we are currently in is that we failed our audit with the Arizona Department of Liquor Licenses. It will be revoked because we failed our audit in July of 2016,” Mr. Gaydosz said. “Although there were many factors, much having to do with the unknown issues from the previous owner of The Heights Grill, we understand this was our responsibility and we failed.”

So they decided to look into applying for a Series 6 license, reserved for bars or taverns, which does not have a food sales requirement.

In 2015, city staff told the Gaydoszes the city would not support a Series 6 due to the need for area rezoning.

“Based on that information, we did not pursue it further with the city,” Mr. Gaydosz said.

However, the Gaydoszes in November 2016 said Cody Gleason, a member of the planning staff, told them after reviewing the zoning more closely, the property’s zoning would allow for a Series 6 license if the applicants could qualify for a Conditional Use Permit. The Gaydoszes said they filled out pre-application paperwork, and met with city staff twice to prepare for a Feb. 2, 2107 scheduled public meeting before the Planning and Zoning Commission, who could recommend their case to City Council for final approval.

As part of the requirement, the city sent out postcards to nearby residents alerting them of their request for a Series 6 license. There were zero responses from neighbors opposing the license request, clearing them to be heard by the Planning and Zoning Commission.

But just before the Gaydozses could post a notice of public hearing, including affidavit, outside their establishment, they received a call from Peoria’s planning department stating there was an issue.

“On the day the sign was to go up for notice of public hearing, we were informed that we had been taken off the docket for the Feb. 2 hearing and they instructed us not to put the sign up for notice of public hearing. We were told this change of course was due to a requirement that a bar needed to be more than 200 feet from a residential neighborhood,” Ms. Gaydosz said. “We then had to tell all the customers of The Heights that the hearing was off. Many of them were planning to come into the hearing on Feb. 2 to voice their support and let the city know they want The Heights in their neighborhood.”

After  this, Ms. Gaydosz said customers responded by making Facebook posts and sending emails to the city supporting The Heights.

Peoria has experienced compatibility issues with bars in proximity to neighborhoods, so the city adopted an ordinance in 2010 that prohibits bars within 200 feet of a residential zoning district. Mr. Jacques said the city is trying to balance the support of businesses with the protection of neighborhoods and preserve the peace and enjoyment they expect when purchasing a home.

He said The Heights Sports Grill was notified early-on about the 200-foot restriction and that the suite would not qualify for a Conditional Use Permit due to its location, but unfortunately the staff planner did not recall the requirement that was communicated in 2015 and therefore did not  advise them accordingly.

Mr. Jacques added a Conditional Use Permit is not an option for their suite, and the applicant and planner were in error late last year in not recalling the restriction.

“The Heights was notified early on about the 200 foot restriction and that the suite would not qualify for a bar due to its location. While the application should not have come in, it was caught and rectified early enough in the process.  This doesn’t negate the inability of the restaurant to meet the liquor license requirements with the state,” he said. “In short, (the Gaydoszes) were informed at the earliest possible time — at the 2015 pre-application meeting — and the city erroneously accepted the application in 2016.”

One option would be to relocate to a suite outside the 200 foot line and obtain a Conditional Uses Permit for a bar/tavern use.

Sometimes the city allows for a variance if a case has special conditions that  would  result  in  unnecessary  hardship. The  special  conditions  must  relate  to  the  land  or structure  in  question  and  generally  involve topography, shape, size, location or surroundings.

Mr. Jacques said a variance would be difficult to obtain and require meeting specific criteria, including demonstrating that a special privilege would not be conferred upon the applicant that is denied to other properties in the same zoning district.

“Given that this is a citywide standard, I don’t see how this criterion could be met.” Mr. Jacques said.
Another option is a text amendment to modify or reduce the citywide separation requirement of 200 feet, he said.

“The burden would be on the applicant to garner support and demonstrate reduction of separation will continue to provide adequate separation between the bar and neighborhood,” he said.

Lastly, Mr. Jacques said the applicant could seek to modify the PAD that pertains to the affected area, but added it is not the most appropriate vehicle to address this issue.

The Major PAD Amendment has the same public hearing process as the Zoning Text Amendment, he said.

“However, it is arguably not the best public policy to consider a deviation from a citywide requirement for a specific location,” he said. “It has the feel of using the PAD to try to get around a uniform standard for the benefit of a property; when this happens, it degrades and weakens the uniformity and integrity of the standard that was enacted to protect neighborhoods citywide.”

As the options involved approval from Council, the Gaydoszes said they spoke to Jon Edwards, the councilman who represents the area. The Gaydoszes claim he would not support a bar license for that location and would not vote for it if it came to the Council. As a result they are considering other locations for the bar.

“Jon Edwards has decided not to allow due process and not take any public opinion and make a call on his own as to what is best for the residents of Fletcher Heights community, with no one to answer to, and no explanation as to why,” Mr. Gaydosz said. “The question is why he will not allow a process for the citizens of his district to voice their opinion or to afford us the opportunity to try to convince the city that we are a business that is wanted by his constituents and good for his community.  We know it’s very possible that there could be other residents who would be against it and we may not be able to proceed, but that is what we want — a forum for the citizens and businesses he was elected to serve to be able to have their voice heard.”

Councilman Edwards said in a emailed statement he supports local businesses and want them to thrive in the Peoria community.

“Unfortunately, there is a misconception of the city trying to shut (The Heights) down and not supporting small business. These assertions are absolutely incorrect as the city never has taken action to shut down The Heights,” he said. “I’m hopeful that the restaurant will continue to work with the state, which is the entity responsible for the issuance and enforcement of liquor license rules.”