No Injunctions for Waterside Bars

In these consolidated cases that pit two entertainment businesses in Waterside Festival Marketplace against Norfolk City Council, the Norfolk Circuit Court says the city is entitled to injunctions to prevent the two businesses from operating as “Entertainment Establishments” and serving on-premises alcoholic beverages.

The parties contest numerous issues respecting whether Norfolk 102 LLC and Norfolk 302 LLC t/a Have a Nice Day Café (“Bar” and “Hand”) lawfully may operate on and after Aug. 18, 2009, as Entertainment Establishments serving on-premises alcoholic beverages (“alcohol”) in the spaces leased by them and located in the Waterside Festival Marketplace in Norfolk.

The city of Norfolk seeks injunctive relief prohibiting Bar and Hand from providing entertainment and serving alcohol in the aftermath of Norfolk City Council’s actions Aug. 18, 2009, when it revoked a “blanket” special exception permitting business in Waterside to operate as entertainment establishments and denied Bar and Hand’s individual applications for special exceptions to conduct such operations.

Bar and Hand seek injunctive and declaratory relief to prohibit Council from interfering with their provision of entertainment and serving of alcohol on their premises, declaring Council’s Aug. 18, 2009, action to revoke the blanket special exception to be “unlawful, invalid, void and violative of constitutional rights” and further declaration Bar and Hand each possess “vested and grandfathered rights.”

The court finds that as of Aug. 26, 1997, the city made clear that no business entity could operate as an Entertainment Establishment in the D-1 District without first obtaining from Council a special exception entitling it to do so. From that date until the present time, the absence of an applicable special exception renders any such land use prima facie unlawful.

Months after Bar and Hand opened in Waterside, on May 11, 1999, council enacted Ordinance No. 39,579, granting an adult use special exception authorizing the operation of an Entertainment Establishment on property located at 333 Waterside Drive. The 1999 ordinance did not mention the 1983 ordinance and did not, by its terms or within its title, purport to amend, alter, repeal or supersede any other ordinance. The 1999 ordinance’s special exception applied to both Bar and Hand.

The court finds that from the time council enacted Ordinance No. 38,880, on Aug. 26, 1997, the definition of Entertainment Establishment included an intent to permit, yet regulate, the serving of alcohol to patrons upon the facility’s attaining ABC licensure to do so. The court further holds that council’s 2010 amendments to the definition of Entertainment Establishment did not change that term’s pre-2010 meaning as to regulating alcohol sales to patrons of such establishments.

On Aug. 18, 2009, council revoked the terms of the 1999 Ordinance by which it had granted the blanket special exception for Waterside Entertainment Establishments. Council denied both Bar’s and Hand’s applications for individual special exceptions.

When Hand opened its doors Aug. 18 it provided entertainment and served alcohol to patrons. Representatives of the city, including law enforcement officials and members of the city’s Bar Task Force and representatives of Waterside’s owners, entered the premises, expelled its customers and forcibly shut down and padlocked the facility. When Bar opened for business on Aug. 19, an identical result ensued by the same methods of intervention. Bar and Hand remain closed to this day.

The court finds, as a matter of law, that the 1999 Ordinance did not supercede the 1983 Ordinance. The court’s conclusion stems directly from the controlling legislative language of Va. Code § 15.2-1426 regarding the form necessary for municipal ordinances. Nothing in the 1999 Ordinance would indicate any intention to repeal or amend the 1983 Ordinance, therefore, it did not do so. The record contains no evidence that council ever repealed or amended the 1983 Ordinance and the court concludes the general use permit granted by it remains in effect. By contrast, the 1999 Ordinance terms applied to Waterside from the date of its adoption, May 11, 1999, until the date and time council acted on Aug. 18, 2009, to revoke the special exception granted by it.

Still possessing its original sub-use permit, Hand’s corporate owner-operator continues to enjoy the benefit of the 1983 Ordinance’s use permit to sell alcoholic beverages within this limited area. However, this holding does not entitle Hand to injunctive relief against the city.

Further, the court finds Va. Code § 15.2-3-2307 provides no basis for a claim of vested rights.  Nor do the establishments have any vested rights under Code § 15.2-2311(C).

The court concludes council did not violate Bar’s or Hand’s procedural or substantive due process rights so as to entitle them to constitutional-based relief. The city is entitled to injunctions against Bar and Hand prohibiting them from operating as Entertainment Establishments and serving on-premises alcoholic beverages at Waterside. Bar and Hand are not entitled to common law injunctive relief against the city, or declaratory relief that council acted unlawfully on Aug. 18, 2009, in revoking the blanket special

Exception. The BZA correctly ruled that Bar and Hand possess no vested rights to operate as Entertainment Establishments at Waterside, that Bar possessed no vested right to serve on-premises alcoholic beverages at Waterside, except, however, as to the small area of Hand’s floor space still subject to the general use permit of the 1983 Ordinance.

City of Norfolk v. Norfolk 102 LLC  and Norfolk 302 LLC (Thomas) No. CL 09-5362(L), Dec. 14, 2011; Norfolk Cir.Ct.; Bernard A. Pishko, City Att’y; Marshall A. Winslow Jr. for the parties. VLW 011-8-229, 28 pp.