Economy blamed for zoning fouls

ALLOWED TO KEEP OPERATING: Cosmos Cafe on Rea Road in Ballantyne is among Charlotte restaurants accused of breaking zoning laws after inspectors determined it was operating as a nightclub because it provided entertainment. Fortunately for Cosmos, it was granted a variance to allow it to continue to offer entertainment. Photo by Tara Ramsey

Charlotte’s restaurants have given the city’s zoning officials something to chew on this year.

Eateries next to residential areas have been busted for bringing in entertainment, such as disk jockeys, which puts them in violation of their zoning. As a result, the city has had to revisit the ordinance — in particular, whether and how the definition of a nightclub can be clarified.

Violators have been raided in the wee hours of the morning as Mecklenburg County code inspectors and officers from the Charlotte-Mecklenburg Police Department conduct surprise inspections. In some cases, the media report on the violations, resulting in negative attention to the business owners.

Despite the risk of getting caught, restaurants are adding illegal entertainment as a way to stay alive in a brutal economy, restaurant experts say.

“It’s really simple. It’s economics,” said Paul Stone, president of the North Carolina Restaurant and Lodging Association in Raleigh. “They’re looking to survive, and they need to be creative and think of how to bring in revenue on a daily basis.”

Fred LeFranc, president of Charlotte-based Results Through Strategy, a firm that provides consulting services for restaurants and other businesses, agrees. Whenever a restaurant offers entertainment, it’s always an attempt to bring in more customers, he said.

“It gives guests a reason to show up,” LeFranc said. “Entertainment does cost something, but if you get a good following it does help sales.”

Generally, alcohol sales increase over food sales if a restaurant opts to stay open later and offer entertainment, said Tom Stroozas, regional director of the Charlotte chapter of the North Carolina Restaurant and Lodging Association. He said it’s a lot easier to be profitable with alcohol than with food.

“We don’t like government to get into the business of our members,” Stroozas said. “As long as the noise ordinance is adhered to, there shouldn’t be any issue. The restaurant operators in these areas should try to work as close as they can with residents and neighbors to develop an understanding locally so that it doesn’t get to the point of getting zoning involved.”

‘Day-to-day challenge’

There are approximately 1,800 restaurants in Mecklenburg County, resulting in a $3.7 billion impact to the county in 2009, Stroozas said. The state’s restaurant association has 2,000 members, of which 275 are in the Charlotte area.

Stone said the restaurant industry is a reflection of the overall economy; while the industry has seen improvements since a year ago, it has a long way to go, he said.

“People are still going out. But instead of three times, they might go out once,” he said. “Instead of steak, they will get hamburgers. Instead of three beers, they get one. It’s better than it was a year ago, but not a lot better. It’s still a day-to-day challenge for most people in the industry.”

Stone said that although it’s easier for a restaurant to be profitable with entertainment, most restaurant owners aren’t going to add bands or disc jockeys, stay open later and complicate their business structure unless they need the additional revenue to survive.

For one, staying open later and serving more alcohol involves more staff training to ensure that they are not serving customers who are underage or intoxicated, Stone said. Also, it costs to book bands and disc jockeys, he said.

And while adding entertainment to a restaurant can increase revenue, Stroozas said the existing clientele could be chased off.

“All of a sudden, now you can lose your reputation as a nice place to go eat,” he said. “Now you become a bar. Restaurant operators need to figure out what type of business they are in, a restaurant or a club.”

Nightclubs vs. restaurants

That’s what Charlotte’s zoning officials are trying to determine, too.

Under the city’s zoning ordinance, a restaurant that serves alcohol becomes a nightclub if it has entertainment.

The ordinance defines a restaurant as any establishment designed, in whole or part, to accommodate the consumption of food and beverages. Nightclubs are defined as a commercial establishment serving alcoholic beverages and providing entertainment, including bars, lounges and cabarets.

The city’s zoning laws prohibit nightclubs from being within 400 feet of a residence.

This year, Gold Palacios Mexican Restaurant and Bar at 6736 N. Tryon St. and Cosmos Café at 8420 Rea Road, both in Charlotte, received notices of violation for operating as nightclubs too close to a residence.

After being told by the city that her business was in violation, Gold Palacios owner Eva Martinez said the restaurant would not survive if forced to operate only as a restaurant. She applied for a 155-foot zoning variance that would allow the restaurant to operate as a nightclub, but the Charlotte Zoning Board of Adjustment voted 3-2 to deny the request in September.

During the variance hearing, neighbors complained to the board, saying the business caused noise late at night and cars were speeding through their neighborhood.

Cosmos Café also applied for 275-foot and 50-foot variances to allow it to operate within 400 feet of two residential areas following a notice of violation in August. In October, the board voted 4-1 to grant the business a variance. According to a police officer’s testimony to the board on 911 calls, there had been only one noise complaint since the restaurant opened in May 2009. No neighbors attended the hearing to oppose the variance.

‘We know it when we see it’

The board, which hears appeals of zoning violations, has been struggling with the definition of a nightclub during its monthly meetings.

Katrina Young, Charlotte’s zoning administrator, has told the board that the current interpretation of the zoning is “We know it when we see it.”

Young said a citizens advisory group will be formed early next year to identify concerns about zoning definitions.

“The current definitions are broad, which sometimes leads to conflicting interpretations by staff with citizens, business and property owners,” she said. “We hope to provide language to clarify and reduce confusion.”

She said the city’s planning department hasn’t noticed a trend of what she calls a restaurant-nightclub hybrid and the city doesn’t have evidence of a large number of violations. Code inspectors assume restaurants are in compliance unless there is evidence to show otherwise, she said.

Clarifying the ordinance has been on the city’s to-do list for several years, she said.

Tara Ramsey can be reached at [email protected].