Sloan's Lake Citizen's Group

Primer on Liquor License Application Hearings in Colorado

Liquor License Application Hearings in Colorado

PRIMER ON LIQUOR LICENSE APPLICATION HEARINGS IN COLORADO

PERMISSION TO REPRINT

The undersigned is hereby granted permission from the Colorado Bar Association to reprint the following work, which was published in The Colorado Lawyer and more particularly described below.

TITLE: A PRIMER ON LIQUOR LICENSE APPLICATION HEARINGS IN COLORADO, Author KURT G. STIEGELMEIER , Volume, Month, Year, and Page Nos.: Vol. 31, No. 9, pp. 11-21
A Primer on Liquor License
Application Hearings in Colorado

by Kurt G. Stiegelmeier

This article covers administrative hearings for issuance of a liquor license in Colorado.

This article was written by Kurt G. Stiegelmeier, Assistant County Attorney for Douglas County¡X(303) 660-7414. Mr. Stiegelmeier previously served as an Assistant City Attorney-Senior for the City of Denver, advising the Denver Liquor Licensing Authority.

The general practitioner who wishes to handle a liquor license hearing, either for the applicant or the opposition, faces a difficult task preparing for the hearing. The Colorado Liquor Code1 and Regulations2 are a jumbled collection of licenses, requirements, authority, and prohibitions. Case law in this area is voluminous and does not discuss application hearings in a comprehensive way. This article provides a foundation for the general practitioner to prepare for liquor license hearings. It discusses the nature of the hearing, parties, elements of a prima facie case, and defenses to issuance of the license.

NATURE OF THE HEARING
Liquor license application hearings for restaurants, taverns, liquor stores, and similar establishments are held before local liquor licensing authorities, such as a city council or board of county commissioners, not the Colorado Department of Revenue. The hearings are administrative and quasi-judicial in nature.3 However, the Colorado Administrative Procedures Act does not apply to these hearings.4 A hearing must be held on the application, even where there is no opposition, and a license cannot be granted by default.5
While the hearing is less formal than judicial proceedings, the hearing can be adversarial in nature, especially if neighbors who oppose the license or the liquor licensing authority are not satisfied that the requirements for the license have been met. Counsel for the applicant should avoid the casual attitude that the hearing is a perfunctory matter and that the liquor licensing authority will fill any gaps in the evidence. The burden of proving a prima facie case is on the applicant¡Xfailure to make a prima facie case will result in denial of the license.6 Once a prima facie case has been made, the burden of proof shifts to the opposition to show why the license should not be issued.7 If the opposition fails to present evidence sufficient to justify denial of the license after a prima facie case has been made, the license must be issued.8
As in other administrative hearings, the evidence presented need not comply with the Colorado Rules of Evidence (¡§Rules¡¨).9 Evidence is controlled by statute, regulation, case law, due process, and custom. Relevance remains a primary constraint. Other concepts in the Rules apply in a more relaxed form. Hearsay is admissible if it is reasonably reliable hearsay, given various indicia of reliability.10 In general, evidence is admissible if it has probative value commonly accepted by reasonable and prudent persons.11 If requested, the liquor board or hearing officer will take administrative notice of the application file.12 This doctrine allows the applicant to bring the entire file into evidence, thereby avoiding the need to introduce parts of the file into evidence.
In some jurisdictions, the board of county commissioners or the city council sits as the local liquor licensing authority and hears the matter itself.13 In other jurisdictions, the governing body appoints a liquor board to serve as the local liquor licensing authority, and the board hears the matter.14 In still other jurisdictions, including the City and County of Denver, the liquor licensing authority is an executive department of the city.15 In Denver, the director of this agency appoints a hearing officer to conduct the hearing, who then makes a recommendation to the director. The director considers the hearing officer¡¦s recommendation and any objections to the recommendation, and then enters a final order.16
At least five days before the hearing, the local licensing authority issues a set of written findings from its investigation.17 These findings constitute the local licensing authority¡¦s preliminary findings that the applicant appears to be qualified for the license. However, a finding, for example, that the applicant appears to be a person of good character, record, and reputation does not preclude any party from raising the issue at the hearing. The findings also sometimes outline issues that the applicant needs to touch on at the hearing.
The way the hearing is conducted varies greatly from jurisdiction to jurisdiction.18 The procedure, level of formality, order of proof, evidentiary customs, and other matters can be different in each jurisdiction. Many jurisdictions have their own local policies and rules of procedure. Because the statutes, regulations, and case law are sketchy as to application hearings, custom and practice become significant. For these reasons, counsel for the applicant or opposition should review the local rules and policies and attend a contested hearing in the local jurisdiction. Counsel also should confer with a representative of the local licensing authority well in advance of the hearing to ensure that the file is complete, to review procedures, and to determine what issues may arise at the hearing.

PARTIES TO THE HEARING
The ¡§parties in interest¡¨ at the administrative hearing19 and those entitled to sign petitions, present evidence, and cross-examine witnesses20 include: the applicant,21 adult residents of the designated neighborhood, the owner or manager of any business located within the designated neighborhood, and the representative of any school within 500 feet of the proposed license.22 The representative of any organized neighborhood group within the designated neighborhood may present evidence, but may not cross-examine witnesses.23
When the boundary line of a city or county passes through a designated neighborhood, parties in interest include the residents, business owners, and managers in the other city or county, but within the designated neighborhood.24 Persons who do not reside in or own or manage a business within the designated neighborhood are not parties in interest and cannot sign the petition or testify to their own needs and desires.25 Persons who have relevant and admissible testimony, but who are not parties in interest, may testify, but their needs and desires are not relevant.26 The parties in interest may be represented by counsel or they may elect a spokesperson.27 However, such a spokesperson cannot present arguments or submit pleadings on behalf of others.28
Residents of the designated neighborhood include residential owners and lessees.29 Owners and managers of businesses include businesses located within the designated neighborhood that will be competing with the applicant if the license is granted.30 Persons who own or manage non-profit institutions, such as schools and churches, qualify as managers of businesses.31 Because the statute states that an ¡§. . . owner or manager of a business¡¨ is a party in interest, only the owner or the manager of each business should be allowed to testify, not both.
Who qualifies as a ¡§manager¡¨ of the business has been controversial for many years.32 The City and County of Denver has taken the position that merely having the word ¡§manager¡¨ in the witness¡¦s job title is not sufficient, nor is merely managing one or more aspects or departments of the business. To be a ¡§manager¡¨ within the meaning of the statute, the witness must have overall managerial authority of the business, policy-making authority, and authority to make major decisions on behalf of the business.33 For example, the manager of a marketing department or an office manager is probably not qualified to testify on behalf of a business.
The law is unclear whether patrons and travelers who do not reside within or own or manage a business within the designated neighborhood can sign a petition or testify to needs and desires. Patrons and travelers are not included within the statutory list of ¡§parties in interest.¡¨34 However, in some cases, the Colorado Supreme Court has held that the testimony of patrons35 and travelers36 is acceptable or such testimony was admitted without objection and the Court did not find plain error. In other cases, the Court has held that the desires of patrons are irrelevant.37 As the Court has stated, its ¡§. . . cases in this area are not easily reconciled. . . .¡¨38 One way to harmonize these ostensibly inconsistent decisions is to draw a distinction between needs of the neighborhood and desires of its inhabitants. Patrons and travelers form a regular, though transient, part of the neighborhood. While these persons are not parties in interest, their needs are part of the needs of the neighborhood.39 However, because patrons and travelers are not inhabitants, their desires are not relevant.
The liquor licensing authority may limit the number of witnesses to prevent the presentation of cumulative testimony.40 In some jurisdictions, including the City and County of Denver, this is accomplished by taking the testimony of similar, numerous witnesses ¡§en masse.¡¨41
In addition to the parties in interest, the local liquor licensing authority is usually represented by a city or county attorney. Counsel for the local liquor licensing authority makes motions and objections to ensure that the statutes, regulations, and case law are observed; that all admissible evidence is admitted; and that inadmissible evidence is excluded. Counsel for the local liquor licensing authority also may take a position on propriety of the location, possession of the premises, character of the applicant, and whether a prima facie case has been made. However, the licensing authority¡¦s counsel does not usually take a position on needs and desires because these issues are primarily matters for the neighborhood. Finally, the liquor board itself may have counsel advising it on the law to be applied in making its rulings. The attorney representing the city or county and the attorney advising the liquor board can be from the same governmental office, but due process prohibits using the same attorney to perform both functions in adversarial matters.42

ELEMENTS OF A PRIMA FACIE CASE
In order to obtain a liquor license, the applicant must present a prima facie case. Failure to do so will result in denial of the license. The necessary elements and methods for proving the case are described below.

Notice of the Hearing
Was Properly Posted
The Colorado Liquor Code requires that notice of the hearing be posted in a conspicuous place on the premises visible to the public not less than ten days before the hearing.43 The notice must state the type of license applied for, date of the application, date of the hearing, name and address of the applicant, and other information to apprise the public of the nature of the application. Posting must be in the size and manner specified in the statute.44 The statute requires the licensing authority to perform this posting.45 However, in practice, some licensing authorities require the applicant to perform this function.
Although the statute requires posting only for ¡§not less than 10 days,¡¨ local licensing authorities sometimes have policies requiring posting for as long as thirty days and through the date of the hearing.46 Failure to post notice, as required in the statute and local policies, is considered a jurisdictional defect because it deprives potential opponents of the opportunity to contest the application. Failure to post notice properly usually results in a denial of the license or a continuance of the hearing so that proper posting can be completed. Proper posting can be proven by testimony of anyone who observed it, along with a sample of the language contained in the posting. Photographs showing that the posting was in a conspicuous place visible to the public are sometimes used to supplement this testimony. Some jurisdictions permit an affidavit attesting to these facts in lieu of such testimony.

Notice of the Hearing Was Properly Published
The Colorado Liquor Code requires that notice of the hearing be published in a newspaper of general circulation not less than ten days before the hearing.47 The published notice must contain the same information as the posted notice.48 The statute requires the local liquor licensing authority to perform this function. However, since this element also is considered jurisdictional, and failure to properly publish the notice will result in a denial of the license or a continuance, counsel should ensure that the notice is properly published. Proper publication is usually proven by presenting a publisher¡¦s affidavit attesting to the publication.

There is a Need and Desire For the License in the
Designated Neighborhood
The Liquor Code requires the local licensing authority to consider the ¡§reasonable requirements¡¨ of the designated neighborhood for the type of license at issue and the ¡§desires¡¨ of the adult inhabitants of the designated neighborhood.49 This element is usually described in the case law as ¡§the needs and desires of the neighborhood.¡¨50 This element is usually the main issue in the application hearing.
The relevant neighborhood for determination of needs and desires typically is designated before the hearing by the local liquor licensing authority.51 In some jurisdictions, there is a preliminary hearing at which the boundaries of the designated neighborhood are determined. In designating the neighborhood, the local liquor licensing authority should consider the terrain, natural boundaries, and artificial barriers defining the neighborhood.52 In some local jurisdictions, the neighborhood is presumptively specified as a certain radius or other area around the proposed licensee, which can be modified by motion.53
Once the neighborhood is designated, its boundaries are specified on a map, which is then used in petitioning. In still other jurisdictions, the neighborhood is not designated until the hearing itself.54 In determining the needs and desires of the designated neighborhood, the neighborhood must be viewed as a whole. The fact that a sector of the neighborhood needs or desires the license is not relevant; the needs and desires of the neighborhood as a whole controls.55

Needs of the Neighborhood
¡§Needs¡¨ and ¡§desires¡¨ are two different, but overlapping things. The reasonable requirements or ¡§needs¡¨ of the neighborhood refer to the need for sale of alcohol beverages of the type and in the manner allowed under the license sought among adults who reside in the neighborhood or among the owners or managers of businesses in the neighborhood. The desires of the applicant business itself and its owners are not relevant.56 The issue is not whether there is a need for a restaurant or club in the neighborhood offering certain food, entertainment, service, or atmosphere. Further, it is not relevant whether the establishment would be good for the neighborhood, stimulate economic development, provide employment, or generate tax revenue. The liquor licensing authority does not license restaurants, entertainment, food, service, or atmosphere. The licensing authority does not exist to promote neighborhoods, diversity of dining experiences, economic development, employment, or tax revenues. Instead, the issue is the ¡§thirst needs¡¨ of the neighborhood, that is, the neighborhood¡¦s need for further sale of alcohol beverages.57 However, the need for service of food, entertainment, service, or atmosphere can become relevant if it is closely tied to the sale of liquor. For example, if residents of the designated neighborhood testify that they desire that type of food, atmosphere, or service and need a beer or a glass of wine to enjoy these things more fully, the need for the food or entertainment may become tangentially relevant.58

Desires of the Neighborhood
The desires of the adult inhabitants of the designated neighborhood are broader in scope than needs. A person¡¦s desire for or against the license can be based on anything,59 not just the desire for or against additional alcohol beverages. Thus, a teetotaler cannot testify as to needs because he or she has none with respect to alcohol, but can testify that he or she personally desires that the license be issued or denied for other reasons. A person who has a general abhorrence of alcohol cannot testify to either needs or desires because a general opposition to alcohol is contrary to state policy, as expressed in the Liquor Code.60

Proving Needs and Desires
Needs and desires for the license are usually proven through live testimony at the hearing and through petitions. Both methods are important. Live witnesses are critical to give a human face to the needs and desires element. Petitions provide the bulk numbers necessary to show a need and desire in the neighborhood as a whole. Counsel should call witnesses who are parties in interest, over 21 years of age, and who consume alcohol beverages. These witnesses should testify that there is a need in the designated neighborhood for the license and the alcohol beverages available under the license and they plan to patronize the establishment. These witnesses should also testify that they desire that the license be issued because, for example, they like the food, music, and atmosphere.
Petitions should be circulated in the designated neighborhood for or against issuance of the license.61 Petitions should be circulated in the form, manner, and during the time frame provided in the jurisdiction¡¦s local rules and policies.62 Petitions should be signed only by ¡§parties in interest,¡¨ as defined above. Moreover, petitions must be circulated properly. The petitions should not be left lying around the applicant¡¦s establishment or the neighborhood association offices for people to sign casually. Instead, a single circulator should be assigned to each petition. The circulator should: (1) ensure that each signatory meets the qualifications for signatories; (2) ensure that each signatory reads the warnings on the petitions; and (3) witness each signature. The circulator should not: (1) attempt to persuade signatories to sign for or against the license; (2) make positive or negative statements about the licensee; or (3) distribute any propaganda with the petition. Signatures, or at least the printed name of each signatory, should be legible. Petition circulators should be present at the hearing to testify that the petitions were circulated properly. Without this foundation, the petitions may not be admitted in some jurisdictions.
Some jurisdictions have a local rule permitting petitions to be admitted on the affidavit of the circulator if they are filed a certain time before the hearing.63 Failure to observe petition formalities may result in exclusion of the petition for violation of local rules or as simply unreliable. Because the petition is a major component of the evidence showing a need and desire for the license, or the absence of the same, exclusion of the petitions may be fatal to the application or opposition. If the client can afford it, counsel should use a professional liquor licensing petitioning firm that is familiar with the process.64 In this author¡¦s opinion, these petitioning firms almost always do a much better job than nonprofessionals. These firms also can assist counsel with posting, publication, and other matters. The numbers for or against the license shown in the petitions are critical. While case law holds that numbers for and against issuance of the license are not controlling,65 they can be persuasive. The party with the higher numbers frequently prevails based on the numbers alone.
Existing Similar Liquor
Licenses in the Designated Neighborhood are Not
Adequate
When the designated neighborhood contains existing liquor licenses of the same or similar class, the applicant must show that the existing licenses in the designated neighborhood are not adequate to meet the needs and desires of the designated neighborhood.66 This element is separate
from the needs and desires element, and failure to prove this element requires denial of the license.67 The fact that the applicant is or would be the only establishment in the designated neighborhood providing a particular type of food or entertainment does not alone establish that the existing outlets are inadequate.68 Instead, the applicant must show that the existing establishments are inadequate to serve the ¡§thirst needs¡¨ of the designated neighborhood as a whole.69
This requirement only applies to licenses of the same or similar class serving the same type of alcohol beverages. Thus, an applicant for an on-premises consumption license must show that existing licenses of the same type in the designated neighborhood are inadequate, but such an applicant is not required to show that liquor stores are inadequate.70 However, liquor licenses of a different, but similar class can be considered.71 For example, in considering a beer and wine license, existing hotel and restaurant licenses are relevant because they serve the same types of alcohol beverages.72 Liquor licenses outside the designated neighborhood cannot be considered.73 On the other hand, liquor licenses within the designated neighborhood, but located in another jurisdiction, must be considered.74
Inadequacy of existing licenses is usually proven through the testimony of witnesses at the hearing. The witnesses must be parties in interest, over 21 years of age, and must consume alcohol beverages, as discussed above. The witnesses should testify that they are familiar with the other licensed establishments in the area, but that existing establishments do not meet their needs for one reason or another.75 Some of the reasons that existing licensed outlets may be inadequate include: closure;76 inadequate hours or inaccessibility;77 recent population growth in the designated neighborhood;78 long waits for a table; the crowd or the atmosphere is undesirable; the establishment does not serve the type of liquor desired; the establishment is too expensive;79 or the location is inconvenient.80

The Applicant is a Person Of Good Moral Character
The applicant must establish that he or she is a person of good moral character, record, and reputation acceptable to the local licensing authority.81 In the case of a hotel and restaurant liquor license or a tavern license, the applicant also must show that the registered manager for the establishment is a person of good character, record, and reputation.82 When the applicant is an entity, any person holding a 10 percent or greater interest in the entity must be a person of good moral character, record, and reputation. Finally, any person lending money or providing any other form of financial assistance to the applicant must be a person of good moral character, record, and reputation.83
A criminal record does not necessarily disqualify the applicant. A misdemeanor offense is grounds for denial of a license only if the offense is a crime of moral turpitude, has some relationship to the sale or service of alcohol, or tends to show that the applicant cannot comply with his or her duties under the Liquor Code.84 Even where a felony, a crime of moral turpitude, or a crime demonstrating that the applicant is unlikely to comply with the Liquor Code is involved, the applicant is not disqualified if he or she can demonstrate rehabilitation.85 Crimes likely to disqualify an applicant, unless a convincing showing of rehabilitation is made, include felonies and any crime involving sale or service of alcohol. Misrepresentations of material fact on the liquor license application also are likely to disqualify the applicant.86
In the absence of a criminal conviction or previous administrative liquor license sanctions, an applicant is presumed to meet the good character, record, and reputation requirements, unless the liquor licensing authority¡¦s preliminary findings indicate a problem, something else in file creates an issue, or the issue is raised by a party. Nevertheless, it is good practice for counsel to have the applicant or another witness testify that the applicant is a person of good character, record, and reputation. If the applicant has held liquor licenses in the past, the applicant should testify that there were no criminal or administrative violations at that licensed
establishment. If counsel is aware of anything in the file that might cause the liquor licensing authority some concern about the applicant¡¦s character, counsel should present additional evidence to allay that concern.
The applicant also should show that he or she is likely to demonstrate good character, record, and reputation in the future by complying with the Liquor Code and Regulations. The applicant should testify that he or she is familiar with the requirements of the Liquor Code and Regulations, especially the prohibitions on serving visibly intoxicated and underage persons, and has taken steps to ensure compliance. Applicants sometimes introduce company policies, procedures, and standards for employee discipline relating to alcohol. The applicant also should testify that he or she has trained all managers and employees on these requirements. Evidence that the managers and employees have completed a recognized alcohol server program would be helpful.87
The applicant should show that he or she intends to comply with the food requirements for the particular license involved. For a hotel and restaurant license, the applicant should show that the establishment will meet statutory requirements by providing ¡§full meals¡¨ from at least 8:00 A.M. to 8:00 P.M. and sandwiches and light snacks until closing. The applicant also should state that the establishment will derive at least 25 percent of the establishment¡¦s gross sales from food and soft drinks.88 For a tavern or beer and wine license, the applicant should show that sandwiches and light snacks will be served at any time that alcohol beverages are served.89 This requirement is usually proven through testimony and by introducing the menu into evidence.
Finally, the applicant must not be a person who is statutorily prohibited from holding a liquor license. This prohibition includes persons less than 21 years of age, sheriffs, deputy sheriffs, police officers, prosecutors, and the inspectors and employees of the Colorado Division of Liquor Enforcement.90 However, the families and spouses of these persons are not prohibited as licensees.91

The Applicant Has Possession of the Premises
In Colorado, liquor licenses are tied to a specific person or entity at a specific location. The Liquor Code requires that the licensee obtain and maintain possession of the premises.92 The applicant must show that he or she presently has possession of the premises to be licensed or will have possession of the premises by the time the license is issued. The applicant must show possession by ¡§ownership, lease, or other arrangement for possession of the premises.¡¨93
No case law has been decided under this provision of the Liquor Code, and there are no regulations providing guidance. The Colorado Supreme Court has defined ¡§possession,¡¨ as used with reference to real property, as a general holding and occupancy, dominion, and control of the property, along with the right to exclude others.94 If the application is for a hotel and restaurant liquor license, the applicant must have possession of premises containing a kitchen and a dining room.95
Contractual arrangements that merely give the licensee the right to be present on the premises with permission to sell alcohol, without also giving the licensee the right to control the premises and exclude others, may not meet the possession requirement. Revocable permits for sidewalks and other public property are usually sufficient. Concession agreements and other contractual arrangements may or may not meet the possession requirement, depending on the exact language of the instrument. Counsel should ensure that the instrument gives the applicant enough possession and control of the premises to fulfill the licensee¡¦s responsibilities under the Colorado Liquor Code and Regulations, including the obligation to control entertainment and conduct on the premises.96
The possession requirement is usually proven by submitting a copy of the deed, lease, revocable permit, or other instrument granting the applicant possession of the premises as part of the application. Counsel then should ask the hearing officer or board to take administrative notice of the file. Alternatively, counsel may elicit testimony from the applicant that he or she has possession of the premises through a lease or deed and introduce the same into evidence.

The Premises are Suitable For the Requested License
The applicant must submit detailed plans and specifications of the premises.97 This requirement is mandatory and cannot be waived by the liquor licensing authority.98 Failure to file such plans is fatal to the application.99 The floor plan and specifications must show a building in existence or to be built.100 The liquor-licensed space must be enclosed and contiguous.101 For a hotel and restaurant license, the applicant must show a kitchen, sufficient kitchen equipment to prepare full meals, and a dining room.102
The local licensing authority may impose additional requirements on the plans and specifications.103 The floor plan should show these and all other major features as they are actually built or will be built. The licensing authority will inspect the premises before the license is issued to ensure that the as-built premises are the same as the drawings submitted at the time of the hearing.104 Moreover, any change in the premises from the floor plan submitted at the hearing may be construed as a modification requiring approval of the liquor licensing authority and an additional hearing.105

DEFENSES TO ISSUANCE OF THE LICENSE
Opponents of a liquor license can defeat issuance of the license on several grounds. Presentation of the opposition in the correct format is critical.
Attacking the Applicant¡¦s Prima Facie Case
The best defense to issuance of a liquor license is a vigorous attack on the elements of the applicant¡¦s prima facie case. Attacks on the character of the applicant, possession of the premises, and suitability of the premises can be effective, if the opponent has evidence that the liquor licensing authority has not already seen. However, applicants who have character, possession,
and premise-suitability problems are usually denied by the liquor licensing authority before a hearing is ever set. Once a hearing is set, an attack on needs, desires, and the inadequacy of existing licenses is usually the most effective tactic. Unfortunately, most neighborhood groups do not have the resources, organization, or focused interest necessary to oppose a liquor license on these grounds.
In order to prevail, the opposition petitions must be in proper form, properly circulated, and produce numbers equal or superior to the applicant¡¦s petition. Inadequate or poor petitioning often is the
major reason for failure of neighborhood groups opposing the issuance of liquor licenses. If funds are available, the opposition should use a professional petitioning firm. The opposition also should produce live witnesses to testify on needs, desires, and adequacy of existing liquor licenses of the same or similar class in the designated neighborhood. These witnesses should be parties in interest.
Surprisingly, the nuisance effects that most annoy neighborhoods about liquor-licensed establishments are not grounds for denial of a liquor license at an application hearing.106 In fact, they cannot be considered at an application hearing. Neighborhood opponents frequently undermine their own case on needs and desires by testifying to these nuisance effects or by giving other irrelevant reasons for their opposition.
Testimony on nuisance effects is usually inadmissible on one of three grounds. First, opposition testimony is not admissible when based on speculation that the establishment will cause various nuisance problems in the area.107 Second, even when the concern about the nuisance effects is well-grounded and not mere speculation, most nuisance problems are not grounds for denial of a liquor license and cannot be considered. The liquor licensing authority cannot consider nuisance problems such as traffic and parking problems,108 littering and noise,109 or vandalism and disturbances.110 Third, opposition based on the argument that alcohol is evil, destructive, or should be discouraged in neighborhoods is inadmissible, because the General Assembly has already determined that alcohol should be regulated rather than prohibited.111 Thus, when neighborhood opposition is based on speculation, nuisance problems, or general opposition to alcohol, rather than the lack of a need or desire for further service of alcohol in the neighborhood, the opposition testimony is likely to be ignored or discounted. Instead, neighborhood opponents should focus on the needs and desires issue and avoid discussion of nuisance effects.
The Location of the
Licensed Premises Violates Legal Requirements
The Liquor Code itself contains several location restrictions. First, the licensed premises cannot be located within 500 feet of any location where a liquor license has been denied for lack of needs and desires within the preceding two years.112 This two-year restriction applies even when the applicant in the preceding denial had no relationship or privity whatsoever with the current applicant. However, this restriction applies only when the previous denial was for a license of the same class.113 Thus, this restriction can easily be overcome by applying for a hotel and restaurant license, then a tavern license, and then a beer and wine license, one right after another, and all at the same location. Determined applicants sometimes use this technique to frustrate and wear down neighborhood opposition.
Second, the Liquor Code prohibits the licensing authority from granting a new liquor license if the building housing the liquor licensed premises (not the parking lot)114 is located within 500 feet of any public or parochial school or the principal campus of any college, university, or seminary.115 Any faculty or staff club on the campus is an exception.116 For purposes of this section, school property is any building or land used for school purposes.117 This distance is calculated by direct measurement from the nearest property line of the school to the nearest portion of the building in which the liquor-licensed establishment is located.118 When determining which property line of the school is nearest, direct ¡§as the crow flies¡¨ measurement is used, without regard to the route a pedestrian would use.119 When measuring from that property line to the establishment, a route of ¡§direct pedestrian access is used.¡¨120 This restriction does not apply to an arts or club license. The city or county may waive or reduce the distance requirement by ordinance, rule, or regulation.121
The Liquor Code also incorporates local zoning and other restrictions. The license must be denied if the sale of alcohol beverages, as permitted under that class of license at the proposed location, would violate local zoning laws.122 In addition, the licensing authority must consider ¡§all reasonable restrictions that may be placed on the neighborhood.¡¨123 Although no cases have been decided under this section, presumably, a liquor license could be denied when the establishment would violate building and land use requirements, such as parking, landscape, and architectural requirements.

Undue Concentration Of Liquor Licensed
Establishments
A liquor licensing authority may deny a tavern license or a liquor store license if issuance of the license would cause an ¡§undue concentration¡¨ of the same class of liquor licenses resulting in the use of additional law enforcement resources.124 Colorado Liquor Regulation 47-301125 sets out a non-exclusive list of factors that the licensing authority may consider in determining whether an undue concentration would result. These factors include a comparison of the ratio of tavern or liquor store licenses to the population in the relevant county to the same ratio for the state. The Regulation authorizes a similar comparison of the ratio in the relevant census tract to the same ratio for the city or county. The Regulation also permits the use of published data on how the concentration of liquor licenses affects the need for law enforcement resources. It further allows neighborhood opponents to use studies showing a correlation between density of liquor licenses and crime, and permits law enforcement officers who have responsibilities in the relevant area to testify on these issues. There is no case law on undue concentration, and this defense remains generally unused.

Unlawful Multiple Ownership and Interests
The Liquor Code regulates the number and combinations of liquor licenses or interests in liquor-licensed entities, direct or indirect, that a single person or entity can hold. Persons holding prohibited multiple ownership interests are usually denied a license before a hearing is ever set. However, licensing authorities usually do not have substantial investigative resources and rely primarily on the applicant¡¦s statement that he or she does not hold such interests. False statements on the application may result in revocation of the license.126 If an opponent discovers such an interest, this issue can be raised at the application hearing.
A separate statutory provision regulates multiple ownership for each type of license. The prohibitions that arise most frequently are those relating to hotel and restaurant licenses, taverns, liquor stores, and beer and wine licenses. A hotel and restaurant licensee cannot hold an interest in another liquor license, except another hotel and restaurant license, a brew-pub license, or an arts license.127 A hotel and restaurant licensee can hold an unlimited number of hotel and restaurant licenses. However, when the applicant already holds a hotel and restaurant license at another location, the liquor licensing authority must consider the effect that granting the new license would have on competition. The licensing authority must deny the license if the new hotel and restaurant license would restrain competition.128
A tavern licensee cannot hold an interest in any other type of license and cannot hold more than three tavern licenses.129 A liquor store licensee cannot hold more than one liquor store license and cannot hold any interest in any other license except an arts or public transportation license.130 A beer and wine licensee can hold only one beer and wine license and cannot hold any interest in any other type of license except an arts or public transportation license. An interest held by the applicant¡¦s spouse or other relative does not constitute an indirect interest that disqualifies the applicant.131 There is no case law on whether the corporate veil could be pierced to find that a single licensee actually held more than one liquor license in the guise of several corporate entities.

Unlawful Financial Interests
In addition to the multiple ownership interests discussed above, the Colorado Liquor Code also prohibits certain third persons from owning or holding a financial interest in any liquor license.132 Persons holding such interests are usually denied a license before a hearing is ever set. However, licensing authorities are not always able to ferret out such interests. If an opponent discovers such an interest, counsel can raise this issue at the application hearing.
Manufacturers and wholesalers of alcohol beverages and any person holding a financial interest in such entities cannot furnish property, equipment, or fixtures to a licensee, except signs and other promotional items.133 Similarly, a licensee cannot enter into an agreement whereby the licensee is influenced to carry a particular manufacturer¡¦s beverages.134 A liquor licensee cannot loan money to another licensee or own an interest in an entity that loans money to another licensee, except for banks and savings and loans.135 However, these restrictions do not apply unless the manufacturer, wholesaler, or other licensee controls or attempts to control the licensee¡¦s operation.136

CONCLUSION
Liquor license application hearings are unlike any other litigation in Colorado and vary greatly from jurisdiction to jurisdiction. The Colorado Liquor Code, Colorado Liquor Regulations, case law, and local regulations contain an array of requirements that can seem strange or archaic to the uninitiated. Counsel for the applicant should prove every element of a prima facie case and should be prepared to refute the defenses discussed in this article. Counsel for opponents also should focus the opposition case on these defenses. Counsel for both sides should ensure that petitions are circulated properly and that witnesses are qualified.

NOTES
1. CRS ¡±¡± 12-47-101 et seq.
2. 1 Colo. Code Regs. ¡± 203-2.
3. Brass Monkey v. Louisville City Council, 870 P.2d 636, 639 (Colo.App. 1994).
4. Chroma Corp. v. Adams County, 543 P.2d 83, 85 (Colo. 1975); Continental Liquor v. Kalbin, 608 P.2d 353, 355 (Colo. 1980).
5. Board of County Comm¡¦rs v. Salardino, 318 P.2d 596, 598 (Colo. 1957).
6. National Convenience Stores, Inc. v. City of Englewood, 556 P.2d 476, 477 (Colo. 1976); Salardino, supra, note 5.
7. Southland Corp. v. Westminster City Council, 746 P.2d 1353, 1355 (Colo.App. 1987); Salardino, supra, note 5; Johnson v. Befort, 486 P.2d 450, 451 (Colo.App. 1971).
8. Southland Corp., supra, note 7; Befort, supra, note 7; Rais v. City of Gunnison, 539 P.2d 1328, 1330 (Colo.App. 1975).
9. C.R.E. 101 and 1101(b); see, e.g., McPeck v. Colo. Dept. of Social Services, 919 P.2d 942, 945 (Colo.App. 1996); Partridge v. State, 895 P.2d 1183, 1187 (Colo.App. 1995); Colo. Motor Vehicle Licensing Board v. Northglenn Dodge, 972 P.2d 707, 713 (Colo.App. 1998).
10. Industrial Appeals Comm. v. Flower Stop, 782 P.2d 13, 18 (Colo. 1989); Hamilton-Fieldman, ¡§A Refresher on the Use of Hearsay Evidence in Administrative Proceedings,¡¨ 27 The Colorado Lawyer 9 (Sept. 1998); Martin, Jr., ¡§Admissibility of Hearsay Evidence in Administrative Hearings,¡¨ 27 The Colorado Lawyer 65 (Nov. 1998).
11. Fueston v. City of Colorado Springs, 713 P.2d 1373, 1376 (Colo.App. 1985); McPeck, supra, note 9; Northglenn Dodge, supra, note 9.
12. Geer v. Stathopoulos, 309 P.2d 606, 610 (Colo. 1957); Savage v. State, 704 P.2d 328 (Colo. App. 1985).
13. See, e.g., White v. City Council of Gunnison, 515 P.2d 487 (Colo.App. 1973); Brass Monkey, supra, note 3.
14. See, e.g., McQuate v. City of Boulder Licensing Authority, 420 P.2d 823 (Colo. 1966); Bohning and Scott, ¡§Colorado Liquor and Beer Licensing,¡¨ 9 The Colorado Lawyer 207 (Feb. 1980).
15. Cover v. City and County of Denver, 211 P.2d 831 (Colo. 1949); Reed v. Blakely, 176 P.2d 681 (Colo. 1946).
16. Denver City Charter ¡± A9.10-1 and Denver Revised Municipal Code ¡± 32-21(b).
17. CRS ¡± 12-47-312(1).
18. Bohning and Scott, supra, note 14.
19. Note that these persons may not have standing to seek judicial review. See Kornfeld v. PerlMack Liquors, 567 P.2d 383, 385 (Colo. 1977) (competing business); Brass Monkey, supra, note 3 (competing business); CRS ¡± 12-47-307(1)(a)(VII) (neighborhood organizations).
20. Mobell v. Meyer, 469 P.2d 414, 416 (Colo. 1970).
21. However, the desires of the applicant business itself are irrelevant. See Canjar v. Huerta, 566 P.2d 1071, 1072 (Colo. 1977).
22. CRS ¡± 12-47-311(5).
23. CRS ¡± 12-47-311(5)(d).
24. Board of County Comm¡¦rs v. Bickel, 395 P.2d 208, 209 (Colo. 1964); Anderson v. Spencer, 426 P.2d 970, 973 (Colo. 1967).
25. Cloverleaf Kennel Club v. Board of County Comm¡¦rs, 319 P.2d 487, 490 (Colo. 1958); Page v. Blunt, 248 P.2d 1074, 1077 (Colo. 1952).
26. Southland Corp., supra, note 7.
27. Cloverleaf Kennel Club, supra, note 25 at 488.
28. Colo. State Board of Medical Examiners v. Boyle, 924 P.2d 1113, 1119 (Colo.App. 1996).
29. City of Colorado Springs v. Texas Southland Corp., 476 P.2d 577, 579 (Colo.App. 1977).
30. Kornfeld, supra, note 19; Brass Monkey, supra, note 3.
31. Southland Corp., supra, note 7.
32. Bohning and Scott, supra, note 14.
33. See, e.g., Denver Dept. of Excise and Licenses, Liquor Licensing Policies, Petitions, 1. Access liquor licensing policies and procedures online at http://denvergov.org, then click on Doing Business, then Excise and Licenses, then Liquor Licensing, and then Policies and Procedures for Liquor Licenses.
34. CRS ¡± 12-47-311(5).
35. Cloverleaf Kennel Club, supra, note 25; Board of County Comm¡¦rs v. National Tea Co., 367 P.2d 901, 910 (Colo. 1962); Southland Corp., supra, note 7.
36. Campbell v. City Council, 374 P.2d 348 (Colo. 1962) (admissibility conceded); Geer, supra, note 12 (apparently admitted without objection).
37. Canjar, supra, note 21; Tavella v. Eppinger, 383 P.2d 314, 315 (Colo. 1963); Potter v. McLearn, 467 P.2d 54, 56 (Colo. 1970).
38. Salardino, supra, note 5.
39. Southland Corp., supra, note 7.
40. CRS ¡± 12-47-311(c); Mobell, supra, note 20.
41. Bohning and Scott, supra, note 14; see, e.g., Denver Dept. of Excise and Licenses, Liquor Licensing Policies, Public Hearing, 5.
42. People ex rel. Woodard v. Brown, 770 P.2d 1373, 1376 (Colo.App. 1989); Horowitz v. State Board of Medical Examiners, 716 P.2d 131, 135 (Colo.App. 1985); Ransom v. Colo. Real Estate Comm., 713 P.2d 418, 420 (Colo.App. 1985).
43. CRS ¡± 12-47-311(1)(4).
44. CRS ¡± 12-47-311(2).
45. CRS ¡± 12-47-311(1).
46. See, e.g., Denver Dept. of Excise and Licenses, Policies, Posting, 2.
47. CRS ¡± 12-47-311.
48. CRS ¡± 12-47-311(3).
49. CRS ¡± 12-47-312(2)(a).
50. Bohning and Scott, supra, note 14.
51. See, e.g., National Tea Co., supra, note 35; Board of County Comm¡¦rs v. Thompson, 448 P.2d 639 (Colo. 1969).
52. See, e.g., Cloverleaf Kennel Club, supra, note 25; Hicks v. Capra, 416 P.2d 362 (Colo. 1966).
53. AWR Corp. v. Board of County Comm¡¦rs, 391 P.2d 675, 676 (Colo. 1964); Denver Dept. of Excise and Licenses Liquor Licensing Policies, Application Procedures, 4.
54. See, e.g., Bailey v. Board of County
Comm¡¦rs, 376 P.2d 519, 520 (Colo. 1962); Board of County Comm¡¦rs v. Johnson, 460 P.2d 770, 772 (Colo. 1969).
55. Anderson, supra, note 24.
56. Canjar, supra, note 21.
57. Board of County Comm¡¦rs v. Bova, 385 P.2d 590, 592 (Colo. 1963); Tavella, supra, note 37.
58. See Bova, supra, note 57.
59. Van deVegt v. Board of County Comm¡¦rs, 55 P.2d 703, 707 (Colo. 1936).
60. Ladd v. Board of County Comm¡¦rs, 361 P.2d 627, 630 (Colo. 1961); National Convenience Stores, supra, note 6.
61. See Bohning and Scott, supra, note 14.
62. See, e.g., Denver Dept. of Excise and Licenses, Liquor Licensing Policies, Petitions, 2.
63. See, e.g., id. at 7.
64. Bohning and Scott, supra, note 14.
65. Goehring v. Board of County Comm¡¦rs, 469 P.2d 137, 148 (Colo. 1970); Vigil v. Burress, 404 P.2d 147, 148 (Colo. 1965).
66. CRS ¡± 12-47-312(2)(a).
67. Board of County Comm¡¦rs v. Evergreen Lanes, 391 P.2d 372, 373 (Colo. 1964); Jennings v. Hoskinson, 382 P.2d 807, 809 (Colo. 1963); Tavella, supra, note 37.
68. Bova, supra, note 57; Tavella, supra, note 37.
69. Id.
70. Kerr v. Board of County Comm¡¦rs, 460 P.2d 235 (Colo.1969); Johnson, supra, note 54.
71. Bohning and Scott, supra, note 14.
72. Canjar, supra, note 21.
73. Board of County Comm¡¦rs v. Skaff, 340 P.2d 866, 869 (Colo. 1959); Johnson, supra, note 54.
74. Anderson, supra, note 24; Brentwood Liquors v. Schooley, 363 P.2d 670, 671 (Colo. 1961).
75. See, e.g., Southland Corp., supra, note 7.
76. Shoenbeck v. Fermented Beverage License Authority, 502 P.2d 1111, 1113 (Colo. 1972).
77. Londer v. Friednash, 560 P.2d 102, 105 (Colo. 1972).
78. Id.
79. Shoenbeck, supra, note 76.
80. Potter, supra, note 37.
81. CRS ¡± 12-47-307(1)(a)(II)(VI); McLarty v. Whiteford, 496 P.2d 1071, 1073 (Colo. 1972).
82. CRS ¡±¡± 12-47-411(11) and -412(4).
83. CRS ¡± 12-47-307(1)(a)(V).
84. Wadlow v. Hartmann, 545 P.2d 735, 737 (Colo.App. 1975), 551 P.2d 201 (Colo. 1976) (driving under the influence); Widener, ¡§Moral Character of the Liquor Licensee or Applicant,¡¨ 25 The Colorado Lawyer 79 (Feb. 1996).
85. CRS ¡± 24-5-101.
86. Fueston, supra, note 11.
87. These programs are offered by the Colorado Dept. of Revenue, Div. of Liquor Enforcement, several liquor manufacturers, and various trade organizations.
88. CRS ¡± 12-47-411(1)(a)(c)(5).
89. CRS ¡± 12-47-412(1).
90. CRS ¡± 12-47-307.
91. Brass Monkey, supra, note 3.
92. CRS ¡±¡± 12-47-301(3)(b) and -313(1)(b).
93. Id.
94. Concord Corp., 355 P.2d 73, 76 (Colo. 1960); see also U.S. v. Jackson County, 696 F.Supp. 479, 485 (W.D.Mo. 1988); Ford v. Oklahoma Tax Comm., 285 P.2d 436, 437 (Okla. App. 1955).
95. Harvey v. Schooley, 382 P.2d 189, 190 (Colo. 1963).
96. Colo. Liquor Regs. ¡± 47-900; 1 Colo. Code of Regs. ¡± 203-2.
97. CRS ¡± 12-47-309(3); Walker v. City of Thornton, 525 P.2d 1177, 1179 (Colo.App. 1974); Norris v. Grimsley, 585 P.2d 925 (Colo.App. 1978); Spero v. Board of Trustees, 529 P.2d 327, 330 (Colo. 1974).
98. Norris, supra, note 97.
99. Walker, supra, note 97; Harvey, supra, note 95.
100. Vigil, supra, note 65.
101. CRS ¡± 12-47-103(24).
102. Colo. Liquor Regs. ¡± 47-418; 1 Colo. Code of Regs. ¡± 203-2; Walker, supra, note 97; Norris, supra, note 97.
103. CRS ¡± 12-47-309(3); e.g., the City and County of Denver usually requires that the plans show a railing or some other physical barrier between patios and areas outside the premises.
104. CRS ¡± 12-47-312(4); Norris, supra, note 97.
105. Colo. Liquor Regs. ¡± 47-302; 1 Colo. Code of Regs. ¡± 203-2.
106. However, nuisance effects may constitute ¡§good cause¡¨ for denial at a renewal hearing under CRS ¡±¡± 12-47-302(1) and -103(9).
107. Southland Corp., supra, note 7; Mobell, supra, note 20; Rais, supra, note 8.
108. Mobell, supra, note 20; Geer, supra, note 12; Goehring, supra, note 65.
109. Johnson, supra, note 54; National Convenience Stores, supra, note 6.
110. Mobell, supra, note 20.
111. Ladd, supra, note 60; National Convenience Stores, supra, note 6.
112. CRS ¡± 12-47-313(1)(a)(I); Sixth Avenue Liquors v. Kalbin, 615 P.2d 56, 57 (Colo. 1980).
113. CRS ¡± 12-47-313 (1)(a)(I).
114. Harvey, supra, note 95.
115. CRS ¡± 12-47-313(1)(d); Londer, supra, note 77.
116. CRS ¡± 12-47-313(1)(d)(I).
117. La Loma, Inc. v. City and County of Denver, 572 P.2d 1219, 1220 (Colo. 1977).
118. CRS ¡± 12-47-313(d)(I)(II).
119. Moschetti v. Liquor Licensing Authority of Boulder, 490 P.2d 299, 301 (Colo. 1971).
120. Id.
121. CRS ¡± 12-47-313(1)(d)(III); see, e.g., Denver Dept. of Excise and Licenses, Rules Pertaining to Distance Restrictions (Sept. 1999).
122. CRS ¡± 12-47-313(1)(c); Crittenden v. Hauser, 585 P.2d 928, 929 (Colo.App. 1978); Goehring, supra, note 65.
123. CRS ¡± 12-47-301(2)(a).
124. CRS ¡± 12-47-313(2).
125. 1 Colo. Code of Regs ¡± 203-2.
126. Fueston, supra, note 11.
127. CRS ¡± 12-47-411(13).
128. CRS ¡± 12-47-301(2)(a).
129. CRS ¡± 12-47-412(1)(3); Frederics v. Wilson, 500 P.2d 384, 385, 386 (Colo.App. 1972).
130. Fishman v. Davis, 112 F.2d 432, 434 (10th Cir. 1940); Brass Monkey, supra, note 3.
131. Colo. Liquor Regs. ¡± 47-129; 1 Colo. Code of Regs. ¡± 203-2; Brass Monkey, supra, note 3.
132. CRS ¡± 12-47-308.
133. CRS ¡± 12-47-308(1)(a)(3)(a); Colo. Liquor Regs. ¡± 47-316; 1 Colo. Code of Regs. ¡± 203-2.
134. CRS ¡± 12-47-308(5).
135. CRS ¡± 12-47-308(4)(a).
136. Majestic Marketing v. Anderson Enterprises, 511 P.2d 943, 944 (Colo. 1973); Nobel, Inc. v. Colorado Dept. of Revenue, 652 P.2d 1084, 1085 (Colo.App. 1982). ????