Registrar, Alcohol and Gaming Commission of Ontario v. Da Factory Inc., 2008 CanLII 91792

ALCOHOL AND GAMING COMMISSION OF ONTARIO

IN THE MATTER OF The: Liquor Licence Act, R.S.O. 1990, c. L.19, as amended

BETWEEN:

Registrar, Alcohol and Gaming Commission of Ontario Registrar

-and-

Da Factory Inc. intending to O/A Da Factory Applicant

-and-

Cambridge Suites Hotel Objector

-and-

James Sturdy Ron Newman Resident Objectors

DECISION

Panel: Joan Lougheed, Board Member Eleanor Meslin, Board Member

Decision Date: July 24, 2008 Hearing Location: Toronto, Ontario

Alcohol and Gaming Commission of Ontario 90 Sheppard Avenue East, Suite 300 Toronto ON M2N 0A4 Phone: (416) 326-0366 Fax: (416) 326-5566 Toll Free In Ontario: 1-800-522-2876 Website: www.agco.on.ca

Appearances

Registrar, Alcohol and Gaming Commission ) Dan Alakas, Representative Applicant Da Factory Inc. ) David Winer, Representative Cambridge Suites Hotel ) Mark Schwass, Representative Parties to the Proceeding ) James Sturdy and Ron Newman, on their own behalf and on behalf of the objectors Condominium Corporation Number 1148 ) Russ Makepeace, Representative

Authorities

Juke Box Live, [2006] O.A.G.C.D. No. 222 1752193 Ontario Inc. (Bar 244), 2008 CanLII 16823 (ON A.G.C.)

The Application

1The Registrar of the Alcohol and Gaming Commission of Ontario issued a Notice of Proposal number 16263 dated May 9, 2008 to review an application for a liquor licence from Da Factory Inc. (the "Applicant") intending to operate as DA FACTORY, 75 Victoria Street, Toronto, Ontario, M5C 2B1. A hearing of the Application was held on June 5, 2008 and July 7, 2008 in the City of Toronto.

Decision

2After considering all the evidence and submissions, the Board APPROVES the application, with conditions to be attached to the licence as set out below. Reasons follow.

Preliminary Matters

3Mr. Dan Alakas appeared on behalf of the Registrar. He advised that the Registrar took no position on the application.

4Mr. Newman is a neighbouring resident and objects to the Application for licence. He stated he was speaking on behalf of the homeowners of Condominium Corporation 1148.

5Mr. Russ Makepeace confirmed that he has been retained to speak on behalf of Condo Corp 1148, which includes residential and commercial units. His client, Condominium Corporation 1148, objects to the licence. He stated that Mr. James Sturdy, who had been granted party status, was not able to be in attendance.

6Mr. Mark Schwass, representing Cambridge Suites, is appearing on his own behalf, as an objector, for a hotel adjacent to the site of the Applicant.

7Further to the Hearing of June 5, 2008, it was confirmed that:

• Drawings and details for the proposed business have been forwarded to the Objectors for review.
• A list of concerns has been forwarded from Mr. Newman to the Applicant. Mr. Newman stated that this list represented resident concerns but was not an official document from the Condominium Corporation.

8All parties agreed that they were prepared to proceed.

Resident Objectors' Evidence

9Mr. Newman indicated that he is an owner of a condominium unit at 105 Victoria Street and he submitted his statement on behalf of the homeowners in the building. He stated that the homeowners do not object to a bar or restaurant operation, but they do believe this is not the intent of the Applicant since the drawings show a capacity of 602 patrons but only 17% are seated. Noise and crowding cause concern and residents do not feel this type of use is suitable in their community which has a hotel, restaurants, young children and a housing co-op close by. He requested that the application not be accepted. He asked that if the operation was to receive a licence, that conditions be applied to the licence to address the late night noise concerns.

10On cross-examination, Mr. Newman indicated that he had lived at this address for 14 years. The condo has 102 units and 2 commercial units. He confirmed that he was speaking on behalf of all the owners who had filed written objections.

11In answer to further questions, Mr. Newman stated that he had been a patron of the previous establishment and the occupancy was around 458 persons. He would not object to a similar operation.

12In describing the building he advised that he lived on the 13th floor of a 14 story building. The building is air-conditioned, brick with extensive glass and balconies and windows that open. His unit and others overlook an open parking lot and are about 200 yards from the premises of the Applicant.

Objector – Condominium Corporation 1148

13Mr. Russell White stated that he was a member of the Board of Directors for the Condominium Corporation and has lived there for 5 years. He presented Exhibit #1, a drawing of the floor plan, stating he had reviewed the drawing and visited the site, which looked much as it had been before, and renovations had not been started.

14The witness stated his concerns related to:

• This heritage building being able to accommodate 600 seated patrons.
• The area was changing and becoming more residential.
• Late night noise would be disruptive to the sleep of community residents.

15The witness stated that he did not object to a restaurant and that there had been 2 previous establishments. However, if there is late night dancing, he felt this would contribute to late night noise in the area.

16On cross-examination the witness outlined his experience, particularly as a volunteer running special events, and catered meals for large groups but had no experience in running a restaurant.

17In response to questioning, he stated that Mr. Barbosa, the principle of the Applicant, had stressed to residents that it would be a restaurant and bar and he would be targeting the movie industry for special corporate events.

18Residents' counsel called witness, Tom Davidson – constituency assistant to City Councillor Pam Connell. Mr. Winer objected to the Board hearing this witness as he represented the City and the Applicant was not told that the City intended to be an objector. The Board ruled that the City of Toronto had not applied to be a party to the proceedings and therefore this witness, speaking as an employee of the City, did not have party status and therefore was not allowed to testify.

19Mr. Mark Schwass, representing Cambridge Suites, the hotel adjacent to the Applicants premises, presented his statement stating he had these concerns:

• "Feels the business location has had a quiet neighbourhood which makes his clients, especially the female customers feel safe".
• Significant portions of the building and suites face Da Factory.

20Mr. Schwass stated that he is not concerned if the restaurant serves higher-end clients as the Applicant has stated, but is concerned if it operates as a party place and there is noise after 11:00 p.m.

Applicant's Evidence

21Counsel for the Applicant, Mr. Winer called Billy Barbosa, the owner of Da Factory as a witness. On questioning, he indicated his age and position as owner and sole shareholder.

22The witness stated that he has hired an architect, Pedro Pimentel Architect, and obtained permits to "sharpen up the place". He indicated that the work had not yet begun.

23Mr. Barbosa stated he was a university athlete and has a degree in business. He outlined the operation, stating that he was the sole shareholder of the business that would be a restaurant, specializing in corporate events. He has hired an experienced food manager, Nick Delio. He felt that Mr. Delio has many contacts and would be an important asset to the business.

24The witness provided further clarification of the planned operation stating that the business would:

• Accommodate about 650 people; 500 to 600 would be a comfortable number for corporate events
• Not be seeking outdoor licensing
• Not be using the patio
• Not have a cover charge at the door
• Have live music, for events that requested it
• Have a dance floor available for these events
• Never be operated as a nightclub

25Mr. Barbosa stated that the he would be willing to accept conditions that stated the doors and windows would remain closed at all times and that there would be no music on the patio or outdoors. He stated he did not object to conditions that required a sign being posted, and having a contact person and number available to neighbours. He indicated that it was important to him to build up a good relationship with the neighbours.

26In response to questions, Mr. Barbosa further described the corporate event format, stating that there would be buffet tables and a hot section. Servers would carry trays of finger foods to clients who would be networking.

27When asked to identify the hot table on the floor plan, Mr. Barbosa indicated that it was the area marked 'bar' on the plan. As well, foods would be placed on table tops for corporate events. The tables would be moved to accommodate various event formats. He would not support fixed tables which would limit flexibility.

28In response to questions, he stated that the type of sound system had not been determined at this time but that there would be no amplified speakers. He would object to a condition to stop serving earlier than 2 a.m. Events would likely start at 6 p.m. and continue through to closing at 2 a.m.

29He also agreed to revise the number of patrons requested from 650 to 602 and to a garbage pick-up condition between 7:30 a.m. and 9:00 p.m.

30Mr. Joseph Ieradi, the landlord for the property stated that he has owned the building for 2 years and is anxious to have a tenant. He is not prepared to enter into a 25 year lease, since he hopes to redevelop the property.

Objectors' Submissions

31Residents' Counsel, Mr. Makepeace stated that his clients continued to be concerned that the drawings for the business, with large unfurnished areas and small drink tables, seemed to propose that the business may be a nightclub or a "hybrid". He stated that the voice of other objectors is not frivolous since the hotel has bedrooms facing the establishment and the condominium units have windows and balconies facing the premises. Both are directly opposite and have an unobstructed line to the premises.

32Mr. Makepeace emphasized that each witness said they would welcome a licensed restaurant, but are opposing issuance of the licence for the proposed use because it seems to present as a nightclub. He asked that if the licence is granted, conditions be imposed to ensure compliance with the nature of business, ensuring that it operates as has been suggested by Mr. Barbosa.

33Mr. Makepeace stated that Mr. Barbosa agreed to number of conditions, but objects to a few of them and he felt that these responses support the position that this proposal may be "morphing" into a nightclub.

34In his summation, Mr. Makepeace asked that the following conditions be imposed if the licence is granted:

• There is a time limit on service of alcohol, Mon – Thursday until 11p.m. and Friday and Saturday until 12 a.m. and all service be removed within 45 minutes;
• signs posted inside and outside asking patrons to respect the neighbourhood;
• premises not operate as a nightclub or "hybrid" (restaurant that becomes a nightclub) after 10:30 p.m.;
• no amplified sound from the premises causing audible noise to surrounding residences after 11 p.m.;
• licensee to ensure there is a seat available for every patron, alternatively that a ratio be established to ensure there are 3 seats for every 4 patrons;
• there be no cover charge;
• there be no dance floor;
• doors to patio be only fire doors and patrons not have access to the patio;
• a designated employee at all times to address noise concerns;
• garbage collection occur only between 7:30 a.m. and 9:00 p.m.;
• outdoor line ups not permitted;
• no DJ or live music be allowed on the premises or as an alternative, that music be allowed only at specific times as arranged by a corporate client for a special event and that the music end at 11:00 p.m.; and
• if the Applicant transfers or change conditions, notice be given to local councillor and objectors.

Applicant's Submissions

35Mr. Winer, representing the Applicant cited 2 Board decisions Juke Box Live and Bar 244 to the Board. He stated that under the Liquor Licence Act the Applicant is entitled to sell liquor. He pointed out that under section 6(2)(h) of the LLA the onus is on the objectors to prove that issuing a liquor licence is not in the public interest and that there must be a genuine rationale given to support their concerns (paragraph 71- Juke Box Live).

36Mr. Winer expressed that neighbours were having a negative reaction to the name of the business since they could not provide any valid evidence to support their concerns. He stated that his client has made efforts to address their concerns, giving neighbours a tour and hiring a professional architect and food manager. It is Mr. Barbosa's intent to run the establishment as a bar and restaurant. Previous restaurants at this location never had these restrictions.

37Mr. Winer stated that noise had not been a concern previously and there had been no expert evidence offered that because there was no buffer between the establishment and the condos and hotel, noise would be a problem. In addition, his client is not planning on using the existing patio. He stated that the occupancy of the building will be determined by the space needed for washrooms, exits, and mechanical systems. As well, the restaurant seating would be determined through his application to the City of Toronto. His client will be complying with all city by-laws relating to the renovations and operations of the business.

38Mr. Winer indicated that his client objects to:

• A seat for every person on the premises;
• a prohibition of a dance floor;
• a condition that would prevent live music or a DJ; and
• fixing the existing tables to the floor

39He has not canvassed his client about control of outdoor line-ups, but felt it was a difficult condition and would not recommend that his client accept this. He also stated that this is a public process and therefore it is not necessary to have a condition to notify the ward councillor or objectors of any changes.

40In reply, the Resident's Counsel, Mr. Makepeace stated that past tenants were not a problem, but the indoor occupancy was "307" persons, much less than being proposed. He noted that the issue was not about this being a problem place, but rather, this being a problem plan.

Reasons & Findings

41The Board has carefully considered the evidence and submissions by all parties. At issue in this hearing is whether the granting of this liquor licence is in the public interest, having regard to the needs and wishes of the residents of the municipality in which the premises are located. The onus is on the objectors to establish, on a balance of probabilities that the issuance of the licence is not in the public interest. In determining whether the needs and wishes of the residents are bona fide, the Board will look at the totality of the evidence to evaluate whether the subjective concerns and fears of the residents are supported on a valid objective basis.

42There is no question that public interest hearings often raise difficult issues which require a delicate balance between the interests of those living in a neighbourhood and those earning a living there. The Board has heard from all parties who object to this application. Their primary concerns are the potential for noise, the possibility that this will be a nightclub, not a restaurant/bar and the impact this may have on their lives. Both the residents and Cambridge Suites expressed concern that the Applicant may be planning a nightclub and not a restaurant, as had been on this site previously. All objectors indicated that there were no problems with previous uses at this site and would not object to a liquor licence for a restaurant. Their concerns relate to a fear that the site plans reflect a nightclub use, rather than a restaurant and corporate event format. The objectors have worked together to put forward a thoughtful presentation about their opposition to this application and had toured the building, at the Applicant's invitation.

43However, the Board cannot make a decision based on conjecture and speculation about potential negative impact of a licensed premise. A change to the environment need not be negative. No concerns were expressed specific to a restaurant use or the proposed corporate events. Mr. Barbosa indicated his intention to be a good neighbour and to respond to concerns of residents and the hotel. The Applicant has indicated that he has hired an experienced food manager and an architect to design the building for both restaurant and corporate event use. He indicated that it is his intent to attract high-end clientele and to provide a flexible interior to accommodate events such as weddings. There is no evidence before the Board that the Applicant will not comply with the Liquor Licence Act and its regulations.

44The Board understands the concerns of the objecting parties and acknowledges that these concerns are very real to them. The Board also acknowledges that it was difficult for them to understand the layout and use of the floor space in the building, since the renovations have not begun. But given the circumstances of this case and the evidence presented, the Board FINDS that the objectors have not met the onus upon them that the issuance of the liquor licence is not in the public interest.

45However, in responding to the concerns about noise, which can be intrusive on neighbouring residents and guests of the hotel, the Board has concluded that it would be appropriate, especially given Mr. Barbosa's stated willingness to be responsive to some of the requests of residents and Mr. Barbosa's assurances that his intent is to offer a restaurant and corporate event facility, to attach conditions to the licence.

Order

46For the above reasons, the Board APPROVES the Application for a liquor licence made by Da Factory Inc. intending to operate as DA FACTORY, 75 Victoria Street, Toronto, Ontario, M5C 2B1, subject to compliance of all statutory conditions and municipal regulations.

47Further, the Board ORDERS that the following conditions be attached to the licence:

1. There will be no outdoor patio.
2. Doors and windows shall remain closed, and the doors shall be used only for ingress and egress. Doors shall be equipped with a self-closing device in order to contain the noise within the building.
3. All complaints of noise from residents to management will be investigated by management and a record kept by the licensee for viewing by police and liquor inspectors.
4. The Licensee shall ensure that there is a designated employee on duty at all times to ensure that exiting patrons are not causing a disturbance to neighbouring residents.
5. There will be no live or amplified music on the outside of the building.
6. There will be no cover charge for patrons entering the premises.
7. There will be a sign prominently posted at each exit door, advising patrons, leaving the premises to be considerate of the surrounding community.
8. Garbage collection shall take place only between 7:30 a.m. and 9:00 p.m.
9. Line-ups of patrons waiting to enter the premises will not be permitted after 10 p.m.

DATED AT TORONTO THIS 24th DAY OF JULY, 2008.