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HomeMy WebLinkAbout7470 - ADMIN Resolution - City Council - 1983/09/19r 1 REPLACEMENT RESOLUTION NO. 7470 A RESOLUTION RELATING TO THE APPLICATION OF DANNY H. STEVENS FOR THE TRANSFER OF AN ON -SALE INTOXICATING LIQUOR LICENSE BE IT RESOLVED, by the City Council of the City of St. Louis Park as follows: Finding s 1. Danny "H. Stevens has applied for the transfer of an on -sale liquor license presently held by Bunny's Liquors, Inc. for the liquor establishment located at 4730 Excelsior Boulevard in St. Louis Park. Mr. Stevens intends to purchase all of the stock of Bunny's Liquors, Inc. and continue operation of the establishment as the company's sole shareholder. He intends to be the general manager. 2. Mr. Stevens' employment history has primarily been in the entertainment business. He is presently self-employed in entertainment promotion. 3. Mr. Stevens has previous experience in the ownership and operation of a liquor establishment. In 1969 he became a partner with Mr. Allan Fingerhut in the ownership of the Depot at 7th Street and First Avenue North in Minneapolis. The Depot closed, and reopened as Uncle Sam's. Mr. Stevens sold his interest to Mr. Fingerhut in 1976. During the operation of the establishment as the Depot, numerous arrests and disturbances took place causing complaints from the Municipal Court judges and Minneapolis city attorneys because the number of arrests at the Depot was larger than other similar establishments and overloaded the court system. Additionally, in May, 1971, supervisors in the Minneapolis Police Department felt compelled by the numerous arrests and incidents at the bar to prohibit police officers from working off-duty at the Depot. In April, 1972 that order was rescinded upon the understanding that the management of the Depot had changed. 4. When applying for the license transfer, Mr. Stevens completed the standard City application form and submitted the required personal financial statement. These documents contained the following material misstatements and concealments of fact: -2- a. Mr. Stevens' failed to report that he had an outstanding loan at the National City Bank which was seriously delinquent. In November, 1973 National City Bank made an unsecured loan of $20,000.00 to the applicant and his wife. After attempts at collection, the bank wrote off $18,000.00 plus accrued interest on September 21, 1979 as a bad debt. The bank continued its efforts to, collect the note. In 1980 Mr. Stevens made additional principal payments reducing the loan balance $9,376.72. Numerous collection activities were undertaken in the years 1981, 1982, and 1983. When City staff learned of the loan and asked about it, Mr. Stevens stated that he had forgotten the loan but indicated that there had been no concerted collection activity by the bank. b. In response to the question, "Have you or your spouse ever been arrested or convicted of any misdemeanor, felony, or liquor law violation in this or any other state?" Mr. Stevens replied "no". A check by City staff with the Minneapolis Police Department found five arrests and three convictions of Mr. Stevens between 1963 and 1975. The arrests were as follows: Date Of Offense Arresting Agency Criminal Charges 07-13-63 Minneapolis Police Warrant: Assault Department 08-03-67 Minneapolis Police Simple Assault Department 01-01-70 Minneapolis Police Warrant: Assault Department 11-11-73 Minneapolis Police Assault Department 05-26-75 Minneapolis Police Breach of Peace/ Department Profanity in Public The convictions were as follows: Date Of Offense Criminal Charge Disposition 07-13-63 Assault 10 days, stayed six months, Judge Estrom 01-01-70 Assault Amended to breach of peace, paid $100 fine, Judge Riley r -3- Date Of Offense Criminal Charge Disposition 11-11-73 Assault Plead guilty to breach of peace, $100 fine, 10 days, stayed one year, Judge Lebedoff Mr. Stevens' explanation for the failure to disclose these events on his application was that all the charges had been dropped and that he believed he was never arrested. This explanation is improbable in light of the number and nature of the incidents. Later in the application review process, Mr. Stevens explained that he thought the questions referred only to the previous five years. c. Mr. Stevens stated in his application that he had been involved in operating only one prior liquor establishment. Investigation by City staff revealed that he had purchased stock in a corporation which held a liquor license in the City of Minneapolis. Minneapolis Police Department liquor investigation files showed that Mr. Stevens purchased stock in Arnco, a corporation which owned Diamond Lil's in October, 1969. At the end of October, 1969, Mr. Stevens applied for a transfer of the liquor license from Diamond Lil's to Time Square, Inc., of which he was president. When asked about this information, Mr. Stevens replied that he didn't actually own the license or consider himself owning it and that he did not remember applying for the transfer of the Diamond Lil's liquor license. d. Mr. Stevens stated on his personal financial statement that he had never gone through bankruptcy or had a civil judgment against him. Investigation by City staff revealed that two civil judgments had been entered against Mr. Stevens. Payment of one required execution against his bank account. e. Mr. Stevens reported in his personal financial statement that he had $170,000.00 cash in the bank. Investigators were able to confirm only $123,000.00 at Midwest Federal Savings and Loan. When confronted with this information, Mr. Stevens stated that he has approximately $15,000.00 or $20,000.00 cash on hand at his home at all times. Later in an affidavit submitted to the City Council, Mr. Stevens explained that he had included $40,000.00 from a line of credit which he has available from Dean Vending, Inc. However, that money has not yet been obtained by Mr. Stevens and converted into cash on hand, and he did not report the Dean Vending loan in his personal financial statement as an off -setting liability. -4- 5. An isolated oversight as to a minor matter in an application is not grounds for concern by the City, provided that its discovery results in a submittal of full, accurate information. In this application, the large number of omissions and misstatements, combined with the inconsistent and changing responses after omissions and misstatements were discovered, raise serious concern about the applicant's honesty and integrity. 6. Mr. Stevens has a recent history of involvement in assaultive/disorderly conduct behavior. He was involved in an altercation with another individual outside the Maximilian's Bar and Restaurant in the City of Richfield in May, 1979 and an incident outside the Stonewings Restaurant in Excelsior in the summer of 1982. In the latter instance Mr. Stevens threatened to get a gun and shoot two individuals. This type of behavior is unacceptable for a manager or owner of a liquor establishment where there is a strong need for rational and dispassionate control of altercations which may arise. 7. Mr. Stevens' personal financial history raises questions as to his honesty, integrity, and responsibility: a. Mr. Stevens told police investigators he "may not" have reported cash payments called "spiffs" to the Internal Revenue Service. Mr. Stevens subsequently denied this but provided no evidence to show otherwise. Summary sheets showing those payments were provided, but there is no indication that those were reported on Mr. Stevens' W-2 Forms or his tax returns. b. Mr. Stevens' income tax returns reveal that he deducted a greater amount for interest on his mortgage payments than the total of the payments themselves. c. Mr. Stevens' income tax returns reveal that he deducted a payment to his ex-wife as alimony when the terms of the divorce decree establish that that payment was a reimbursement for payments she had made for antiques that belong to Mr. Stevens. The decree stated that both parties waived their right to alimony. Mr. Stevens stated that he had taken the deduction based on the advice of his attorney, Phillip Gainsley. When contacted, Mr. Gainsley stated he never gave that advice to Mr. Stevens and would not have given that advice in light of the clear language in the divorce decree. d. Mr. Stevens told investigators that he had received large insurance settlements, particularly $160,000.00 in 1973, which remained in his account in the bank. However, Mr. Stevens reported no interest income on his 1978 and 1979 income tax returns. r 1 -5- e. Mr. Stevens failed to meet his obligations in the repayment of the National City Bank loan referenced above which at the commencement of the license application was considered by the bank to be seriously delinquent. 8. Mr. Stevens presented false information to the City Council in the course of this liquor license application review. On August 15, 1983, a letter from Mr. Paul Lindee to Mr. Ian Ball, dated August 8, 1983, was submitted to the City Council as rebuttal to the police investigatory report's summary of the incident at the Stonewings Restaurant in Excelsior. Mr. Lindee was the manager of the restaurant who had stated that Mr. Stevens had threatened to get a gun and shoot him. The letter stated just the contrary. When contacted by police investigators about the apparent inconsistency, Mr. Lindee stated that Mr. Ball had prepared the letter and asked him to sign it. Mr. Lindee told Mr. Ball that the substance of the letter was not true and that the letter would make him look like a liar. Mr. Ball told Mr. Lindee that the letter was solely for their file and would not be used publicly. Mr. Lindee signed the letter after feeling considerable pressure to do so. Apparently in recognition that the falsity of the letter had been discovered, the letter was withdrawn by Mr. Stevens. Mr. Stevens' explanation of the Stonewings incident appears completely unreliable. 9. The complete application proceedings, including the various investigative reports, viewed as a whole, reinforce the significance of the events set forth in the above findings. 10. Regulation of liquor establishments is an important function of municipal government to assure that the public health, safety and welfare are not threatened. The City of St. Louis Park has limited resources to police and regulate these establishments and must rely on the candor, reliability, honesty, and integrity of individual liquor license holders to assure that liquor establishments are responsibly and lawfully operated. The information presented to this Council and referenced above prevents the City from placing reliance on this applicant's honesty and respect for the law and his ability to responsibly and lawfully operate a liquor establishment in the City of St. Louis Park. It is, therefore, not in the public's best interest to grant a liquor license to this applicant. Conclusion The application by Danny Si;:Stevens is hereby denied. -6- Adopted 6- Adopted by the City Council on September 19, 1983. Attest: (2,...1;4git.401W.e.0-11011/ City Clerk Reviewed for Administration: ai,IMA.C,A diak.t.AmL,Ge.e- ty Manager Reviewed as to form and legality: G49' City Attorney 1 J