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2. Discussion on CasinosREPORT TO: IImilm SUBJECT: Citv of Kalispell Post Office Box 1997 • Kalispell, Montana 59903-1997 • Telephone (406) 758-7700 • FAX (406) 758-7758 Honorable Mayor and City Council PJ Sorensen, Zoning Administrator Chris Kukulski, City Manager Casinos MEETING DATE: February 14, 2000 (workshop) BACKGROUND: At the present time, there are 28 casinos and other facilities with gaming machines within the city limits of Kalispell. The distinction between "casinos" and "facilities with gaming machines" is critical because the zoning ordinance draws such a distinction, which leads to a problem that we are trying to address through a housekeeping amendment to the zoning ordinance. "Casino" is presently defined as: An establishment whose primary use or activity is gambling, either in the form of gambling machines (video poker, keno, etc.), card games, or other licensed gambling activity. A casino will normally have beverage and restaurant facilities as ancillary uses. In all instances, an establishment will be considered a casino for the purpose of these regulations if any one of the below characteristics apply: (a). The establishment is referenced as a "casino" by signage or by name; (b). More than one card table is on the premise; (c). Fifteen or more gambling machines are on the premise; or (d). The predominant source of income is from gambling revenue. Generally, an establishment will not be considered a casino when the premise contains no live card games, has less than six (6) gambling machines, and the gambling devices are clearly incidental to the primary use of the establishment. A "casino" may be located within the B-2 and B-4 zones with a conditional use permit. The definition has created numerous problems and loopholes. First, all someone needs to do is put up signs for "GAMING/POKER/KENO" and leave "casino" out of the name to avoid subsection (a). Subsections (b) and (c) are easily circumvented, either intentionally or not, by starting operation with one number of machines and then adding more later. Subsection (d) is next to impossible to apply in practice since it would require access to tax forms or bookkeeping records. Furthermore, the exclusionary language at the end of the definition only serves to further complicate the matter. Since bars are allowed in not only the B-2 and B-4 zones, but also in the B-3 and B-5 zones as permitted uses and the I-1 as a conditional use, many businesses which most people would label as casinos are not under the definition. Rather, we have applied the label "accessory gaming facility" when a bar operates with 14 machines as opposed to 15. Since it would not be a casino per se, the bar could operate the gaming machines in the B-3, B-5, and I-1 zones. Once in place, it is not uncommon for the business to then add machines and have a full blown casino. It is fairly simple for them to do so because the state license will allow up to 20. The present definition is convoluted and very difficult to apply in practice. Therefore, we proposed a housekeeping amendment to change the definition. The planning board recommended approval. We have since drafted a proposed ordinance which would change the definition to "An establishment that offers any form of legalized gambling authorized under Title 23, Chapter 5, Parts 1 through 6, Montana Code Annotated, either as a primary use or as an accessory use." The new definition eliminates the machine -counting and sign references in favor of a more straight -forward definition: if there is gambling, it is a casino. The change would also place more control over the spread of gaming into the hands of the council because an establishment with any gambling would be reviewed as a conditional use, which leads to the second proposed amendment to the zoning ordinance. If the definition is changed without any further amendment, new gaming machines would only be allowed in the B-2 and B-4 zones. At present, in addition to those two zones, gaming machines are allowed in the B-3, B-5, and I-1 zones subject to the problematic limitations resulting from the current definition. The gaming use is allowed in those situations because it would be accessory to a bar, which, as previously stated, is a permitted use in the B-3 and B-5 zones and a conditional use in the I-1. Thus, we have also proposed a change in the zones in which casinos are allowed. The planning board recommended that casinos (as newly defined) would be placed in the same category as "Bars, Taverns, Cocktail Lounges, and Clubs" with the new category being designated as a conditional use in the B-2, B-3, B-4, B-5, and I-1 zones. Since gambling is generally associated with bars, it makes sense to place those uses in the same category. Taken together, these two proposed changes will add much more consistency to the treatment of gambling uses, close off some gaping loopholes, produce a more practical and workable application of the ordinance, and provide more control to the Council over the manner in which new casinos are developed. There may be other ideas the Council may have in regard to casinos. Several good suggestions came up during previous work sessions. However, it is our opinion that the best method for approaching the issue is to focus on the definition and classification amendments first. Then, if the Council wishes to investigate other more specific requirements, we could add a third amendment. That amendment could add a section to Chapter 27.35 of the zoning ordinance entitled "Additional Requirements for Specific Conditional Uses." This procedure will allow us to clean up the problems with the present ordinance before reviewing more comprehensive changes. RECOMMENDATION: Both proposed ordinances should be placed on the agenda for the next council meeting for approval. FISCAL EFFECTS: There are not necessarily any direct fiscal effects of the change. Nevertheless, gaming is of substantial interest to the city due to the large amount of revenue it produces for the City. These changes provide the potential for some restriction of new machines in the future, which could have an impact on revenue. ALTERNATIVES: As suggested by the Council. ATTACHMENTS: Proposed Ordinance (definition change) Proposed Ordinance (classification change) Respectfully submitted, PJ Sorensen Zoning Administrator Chris Kukulski City Manager Report compiled February 10, 2000 ORDINANCE NO. AN ORDINANCE AMENDING § 27.37.010 (44), KALISPELL ZONING ORDINANCE, BY AMENDING THE DEFINITION OF CASINO AND DECLARING AN EFFECTIVE DATE. WHEREAS, the City of Kalispell has submitted a written request to amend § 27.37.010 (44) of the Kalispell Zoning Ordinance, by amending the definition of casino, and WHEREAS, the request was forwarded to the Kalispell City -County Planning Board and Zoning Commission by the Flathead Regional Development Office after having been evaluated under §27.30.020, and WHEREAS, FRDO evaluated the requested text amendment and recommended, per Report #KZTA-99-6, that the text of the Kalispell Zoning Ordinance, Definitions, be amended as to the definition of "casino," and WHEREAS, the Kalispell City -County Planning Board and Zoning Commission recommended that the text of the Kalispell Zoning Ordinance, Definitions, be amended as to the definition of "casino," and WHEREAS, the City Council has reviewed the FRDO Report and the transmittal from the Kalispell City -County Planning Board and Zoning Commission and hereby adopts the findings made in Report #KZTA-99-6 as the Findings of Fact applicable to this Ordinance. NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF KALISPELL, AS FOLLOWS: Section I. The City of Kalispell Zoning Ordinance, Ordinance No. 1175, is hereby amended to read as follows: Section 27.37.010. Definitions (44) Casino. An establishment that offers any form of legalized gambling authorized under Title 23, Chapter 5, Parts 1 through 6, Montana Code Annotated, either as a primary use or as an accessory use. Section II. All parts and portions of the Kalispell Zoning Ordinance not amended hereby shall remain the same. Section III. This Ordinance shall take effect thirty (30) days from and after its final passage by the City Council. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, MONTANA, THIS DAY OF , 2000. Wm. E. Boharski Mayor Ewmffil Theresa White City Clerk ORDINANCE NO. AN ORDINANCE AMENDING §§27.14.020, 27.14.030, 27.15.020, 27.15.030, 27.16.020, 27.16.030, 27.17.020, 27.17.030, AND 27.18.030, KALISPELL ZONING ORDINANCE, BY DESIGNATING "BARS, TAVERNS, COCKTAIL LOUNGES, CLUBS AND CASINOS" AS A CONDITIONALLY PERMITTED USE IN THE B-2 (GENERAL BUSINESS), B-3 (COMMUNITY BUSINESS), B-4 (CENTRAL BUSINESS), B-5 (INDUSTRIAL/ COMMERCIAL), AND I-1 (LIGHT INDUSTRIAL) ZONES AND DECLARING AN EFFECTIVE DATE. WHEREAS, the City of Kalispell has submitted a written request to amend the use classification of casinos in the Kalispell Zoning Ordinance, and WHEREAS, the request was forwarded to the Kalispell City -County Planning Board and Zoning Commission by the Flathead Regional Development Office after having been evaluated under §27.30.020, and WHEREAS, FRDO evaluated the requested text amendment and recommended, per Report #KZTA-99-6, that the classification of casinos be amended, and WHEREAS, the Kalispell City -County Planning Board and Zoning Commission recommended that `Bars, taverns, cocktail lounges, clubs and casinos" be designated as a conditionally permitted use in the B-2 (General Business), B-3 (Community Business), B4 (Central Business), B-5 (Industrial/Commercial), and I-1 (Light Industrial) zones, and WHEREAS, the City Council has reviewed the FRDO Report and the transmittal from the Kalispell City -County Planning Board and Zoning Commission and hereby adopts the findings made by the Kalispell City -County Planning Board and Zoning Commission as the Findings of Fact applicable to this Ordinance. NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF KALISPELL, AS FOLLOWS: Section I. The City of Kalispell Zoning Ordinance, Ordinance No. 1175, is hereby amended to read as follows: Section 27.14.020, Permitted Uses (10). Barber and beauty services. (i-211).Boat sales, new and used. Section H. The City of Kalispell Zoning Ordinance, Ordinance No. 1175, is hereby amended to read as follows: Section 27.14.030, Uses Which May Be Permitted By Conditional Use Permit (3). Assembly halls/coliseums/stadiums/convention hall facilities. (4). Bars, taverns, cocktail lounges, clubs and casinos. (45). Campground/RV Park. (�}-asino. (6). Community residential facilities for eight or fewer persons. (Ordinanace No. 1209) Section III. The City of Kalispell Zoning Ordinance, Ordinance No. 1175, is hereby amended to read as follows: Section 27.15.020, Permitted Uses (8). Barber and beauty services. ar, tavern; cockLaH IV tinge,clubs. (f09). Candy products manufacture, retail on premise. Section IV. The City of Kalispell Zoning Ordinance, Ordinance No. 1175, is hereby amended to read as follows: Section 27.15.030, Uses Which May Be Permitted By Conditional Use Permit (1). Apartments, accessory. (Amended Ordinance No. 1195) (2). Bars, taverns, cocktail lounges, clubs and casinos. (23). Community center/gym/swim pools -operated by public/quasi-public Section V. The City of Kalispell Zoning Ordinance, Ordinance No. 1175, is hereby amended to read as follows: Section 27.16.020, Permitted Uses (6). Barber and beauty services. (97). Candy products manufacture, retail on premises. Section VI. The City of Kalispell Zoning Ordinance, Ordinance No. 1175, is hereby amended to read as follows: Section 27.16.030, Uses Which May Be Permitted By Conditional Use Permit (5). Automobile service station (see definition). (6). Bars, taverns, cocktail lounges, clubs and casinos. (67). Bus passenger terminal buildings, transit terminals. (8). Drive-in banking facility. Section VIL The City of Kalispell Zoning Ordinance, Ordinance No. 1175, is hereby amended to read as follows: Section 27.17.020, Permitted Uses (13). Barber and beauty services. ki t). Bar, tavern; cocktail (f-514).Bedding/carpet/upholstery - manufacturing/cleaning/renovating. Section VHL The City of Kalispell Zoning Ordinance, Ordinance No. 1175, is hereby amended to read as follows: Section 27.17.030, Uses Which May Be Permitted By Conditional Use Permit (1). Assembly halls/coliseums/ stadiums/convention hall facilities. (2). Bars, taverns, cocktail lounges, clubs and casinos. (23). Bus passenger terminal buildings, transit terminals. Section IX. The City of Kalispell Zoning Ordinance, Ordinance No. 1175, is hereby amended to read as follows: Section 27.18.030, Uses Which May Be Permitted By Conditional Use Permit (3). Auto wrecking/junk yards (see definition). (4). . Bars, taverns, cocktail lounges, clubs and casinos. (5). Bulk storage of liquified propane and similar flammables. Section X. All parts and portions of the Kalispell Zoning Ordinance not amended hereby shall remain the same. Section XI. This Ordinance shall take effect thirty (30) days from and after its final passage by the City Council. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, MONTANA, THIS DAY OF , 2000. Wm. E. Boharski Mayor Attest: Theresa White City Clerk