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Home My WebLink About50A - ORD - MORATORIUM CYBER CAFEREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: OCTOBER 16, 2018 TITLE: URGENCY ORDINANCE ADOPTING A 45 - DAY TEMPORARY MORATORIUM ON THE APPROVAL, COMMENCEMENT, ESTABLISHMENT, OPERATION, RELOCATION OR EXPANSION OF CYBER CAFES AND INTERNET ACCESS BUSINESSES WITHIN THE CITY PURSUANT TO GOVERNMENT CODE SECTION 65858 {STRATEGIC PLAN NO. 5, 4} MERMW!/, i RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 161 Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt an urgency ordinance by a minimum of four/fifth (4/5) vote establishing a 45 -day temporary moratorium on the approval, commencement, establishment, operation, relocation or expansion of cyber cafes and internet access businesses within the city pursuant to Government Code Section 65858. As in other cities in California, there has been a proliferation of cyber cafes and internet access businesses within the City of Santa Ana. Customers purchase online time in exchange for opportunities to win chances at internet/network based sweepstakes prizes and money. The State Bureau of Gambling Control has issued a law enforcement advisory in which it determined that in some circumstances, the sweepstakes aspect of these businesses constitutes illegal gambling. Following this advisory, there have been numerous complaints of these businesses that act as fronts for illegal gambling operations throughout California. Even where cyber cafes and internet access businesses utilize lawful sweepstakes features, these businesses have created adverse impacts on public health, safety and welfare, including a dramatic increase in violent crimes, loitering, illegal drug use and sales, burglaries, assaults, fights, theft, robbery, public intoxication, vandalism, property damage, weapons offenses, and other criminal activities in and around cyber cafes and internet access businesses. Other impacts include increased pedestrian traffic, noise, parking violations, and other nuisance activities. These 50A-1 Urgency Ordinance Adopting Moratorium on Cyber Cafes October 16, 2018 Page 2 businesses have also resulted in a tremendous increase and demand for police and code enforcement services. The current provisions of the Santa Ana Municipal Code allow cyber cafes and internet access businesses in the C1, C2, C4 and C5 Zones. Since January 2018, the Planning & Building Agency has received an increase in applications for approval of cyber cafes and internet access businesses in the City. Public concerns and complaints received regarding these establishments include allowing people to congregate and/or loiter while waiting for a computer, adversely impacting surrounding businesses and neighborhoods. Code Enforcement has also received complaints pertaining to "cyber -like" uses in other establishments such as restaurants, smoke shops, and even residential properties. Code Enforcement and the Police Department are currently monitoring 28-33 properties regarding these concerns. Crime statistics and calls for service in the City of Santa Ana and neighboring cities where cyber cafes and internet access businesses are located are significantly higher since these establishments opened for business. The Santa Ana Police Department identified 460 incidents occurring between January 1, 2018 and September 2018 at various locations throughout the city. These incidents have included criminal arrests that include possession of firearms, possession of narcotics, possession of a stolen vehicle, and parole/probation violations. City staff recommends adoption of the attached urgency ordinance by a minimum of a four/fifths (4/5) vote of the council. The urgency measure proposes an interim ordinance which is effective for 45 days. The purpose of the interim ordinance is to promote the public health, safety and welfare during the time that City staff analyzes and prepares a study on cyber cafes and internet access businesses and provide an enforcement plan. The study will include options and recommendations to regulate these businesses within the city. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #5 - Community Health, Livability, Engagement and Sustainability; Objective #4 (Support neighborhood vitality and livability). FISCAL IMPACT There is no fiscal impact associated with this action. Minh Thai Executive Director Planning and Building Agency ANA Exhibit: 1. Urgency Ordinance D id-Val6tin Chief of Police Santa Ana Police Department 50A-2 LS 10.16.18 ORDINANCE NO. NS-XXXX AN EMERGENCY ORDINANCE OF THE CITY OF SANTA ANA ADOPTING A 45 -DAY TEMPORARY MORATORIUM ON THE APPROVAL, COMMENCEMENT, ESTABLISHMENT, OPERATION, RELOCATION OR EXPANSION OF CYBER CAFES AND INTERNET ACCESS BUSINESSES WITHIN THE CITY THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES ORDAIN AS FOLLOWS: Section 1. The City Council of Santa Ana hereby finds, determines and declares as follows: A. As in other cities in California, there has been a proliferation of cyber cafes and internet access businesses in the City of Santa Ana. Customers purchase phone time in exchange for opportunities to win chances at internet/network based sweepstakes prizes and money. B. These types of businesses purport to sell phone time or time on computers connected to the internet. However, these businesses also provide customers with sweepstakes entries or credits that are usually worth one cent per credit. The amount of the credits received is usually based on the phone time or computer time purchased, although sometimes credits may be provided free of charge. The customer has the option to select several gambling themed games on the computers to see if they have won additional credits. Customers who win additional credits can cash in any winning, or use the credits revealed on the computer to attempt to win additional credits. Frequently, these games have the same/similar appearance as Las Vegas style games of chance, such as slot machines and keno. C. The State Bureau of Gambling Control has issued a law enforcement advisory in which it determined that in some circumstances the sweepstakes aspect of these businesses constitutes illegal gambling. Following this advisory, there have been numerous raids of these businesses that act as fronts for illegal gambling throughout California. D. It is not always clear under state law whether a particular cyber caf6 and internet access business is engaged in illegal gambling and/or unlawful promotional sweepstakes. E. Even where cyber cafes and internet access businesses utilize lawful sweepstakes features, these businesses have created adverse impacts on public health, safety and welfare, including a dramatic increase in crime including serious and violent Ordinance No. NS - Page lo—f6 crimes such as loitering, illegal drug use and sales, burglaries, assaults, fights, theft, robbery, public intoxication, vandalism, property damage, weapons offenses, and other criminal activity in and around cyber cafes and internet access business, as well as increased pedestrian traffic, noise, parking violations, and other nuisance activities. These businesses have also resulted in a tremendous increase and demand for police response. F. The resemblance of the games to casino style games, and the possibility of winning cash prizes, combines to create a gambling atmosphere, which appears to be a driving attraction for customers. These businesses are also likely to have large amounts of currency on the premises in order to pay out the cash prizes. Due to the similar atmosphere between a casino and a cyber cafe and internet access business, these businesses have similar potential to cause deleterious effects as gambling operations, such as loan sharking, robbery, and money laundering. G. The City of Santa Ana and neighboring cities have experienced serious adverse impacts due to the unique manner in which cyber cafes and internet access businesses operate the "sweepstakes" games. Customers may occupy a particular computer system for multiple hours, creating lines and people congregating or loitering while waiting for a computer. Parking availability may also be impacted due to extended periods of game playing, and such businesses have also resulted in increased demand for police response, as well as increased demand for maintenance of public streets and sidewalks. These late night gaming sessions which extend play beyond typical commercial business hours may cause noise and related impacts on the surrounding community as customers enter and exit these businesses during the late night hours. H. Crime statistics and calls for service in the City of Santa Ana and neighboring cities where cyber cafes and internet access businesses are located are significantly higher since these establishments opened for business. The Santa Ana Police Department identified 460 incidents occurring between January 1, 2018 and September 2018 at various locations in the city. These incidents have included criminal arrests to include the possession of firearms, possession of narcotics, possession of a stolen vehicle, and parole / probation violations. Since January of this year the Santa Ana Police Department has responded to noticeable increase of calls for service and officer generated activities. The Staff Report for this item, which is incorporated herein by reference, includes these statistics and calls for service. The Police Department reports its officers have spent a significant amount of time conducting surveillance operations around cyber cafes. This type of business appears to attract clientele involved in criminal activity. Several enforcement stops of customers entering or leaving such locations have yielded drug related arrests, evidence of drug trafficking, an influx of individuals on probation, parole, or wanted subjects. There is also the possibility of prostitution related activity gravitating to the parking lots and surrounding areas based on known subjects being contacted at such locations who either have prior arrests or contacts involving prostitution. Ordinance No. NS - _ Page 2 of 6 J. The City Council of the City of Santa Ana is also concerned with increased calls for service, increasing reports of violent criminal behavior and related detrimental neighborhood effects associated with cyber cafes and internet access businesses. The City of Santa Ana and neighboring cities have experienced criminal activity associated with cyber cafes and internet access businesses, such as loitering, illegal drug activity, assaults, fights, theft, robbery, public intoxication, vandalism, property damage, and other criminal activity such as gang and prostitution related activity. K. The current provisions of the Santa Ana Municipal Code allow cyber cafes in specific zones, and sets forth the operational standards for such businesses. The provisions of the Santa Ana Municipal Code require review, study, and possible revision in order to respond to recent concems relating to the impacts of these internet access businesses and cyber cafe uses in the City. L. Given these concerns, the City Council hereby requests that a study be undertaken of the current provisions of Chapter 41 of the Municipal Code to address cyber cafes and determine whether such uses should be permitted in the City, and if so, where such uses should be permitted and under what conditions. M. The proposed ordinance would put in place a 45 day moratorium on the approval, commencement, establishment, operation, relocation or expansion of cyber cafes and internet access businesses while City staff researches appropriate regulations. This ordinance will not affect the existing cyber cafes and internet access business located within the City, unless the business seeks further approvals from the City, or relocates or expands the business. The moratorium will not affect any existing internet cafes, intemet access businesses, or copy shops that do not offer customers sweepstakes gaming. N. Based on the foregoing, the City Council finds that issuing permits, business licenses, or other applicable entitlements to individuals wishing to use their property for the purposes of cyber cafes, prior to the City's completion of its study of the potential impact of such cyber cafes, would pose a current and immediate threat to the public health, safety, and welfare, and that a temporary moratorium on the issuance of such permits, licenses, and entitlements is thus necessary. O. If a cyber cafe use is permitted in the City without further review and potential regulation, it will pose a serious threat to the public interest, health, safety and welfare for the following reasons: (1) Adversely impact surrounding businesses and neighborhoods; (2) Adversely impact sensitive uses such as schools, parks, child care centers, churches, and places where children congregate; (3) Conflict with the requirements of the City's General Plan and zoning ordinance; (4) Be inconsistent with surrounding uses; and (5) Risk the public health, safety and welfare of the City Ordinance No. NS - Page : _ of 6 y ll P. Prevention of detrimental impacts to residents, the public interest, health, safety and welfare requires the immediate enactment of this ordinance. The absence of this ordinance will create a serious threat to the orderly and effective implementation of any code amendments, general plan amendments or specific plan amendments which may be adopted by the City; cyber cafe and internet access business uses may be in conflict with or frustrate the contemplated updates and revisions to the Code. Moreover, permitting such uses during said studies and implementation would create impacts on the public health, safety and welfare that the City Council, in adopting this ordinance, has found to be unacceptable. 0. The Request for Council Action for this ordinance dated October 16, 2018, and duly signed by the Executive Director of the Planning and Building Agency and/or Chief of Police shall, by this reference, be incorporated herein, and together with this ordinance, any amendments or supplements, and oral testimony constitute the necessary findings for this ordinance. R. The City Council finds, determines and declares that the current and immediate threat to the public health, safety and welfare of the city and its citizens necessitates the immediate enactment of the ordinance. The facts constituting such urgency are set forth in paragraphs A -P of this ordinance. Section 2. Any ordinance declared by the City Council to be necessary as an emergency measure for preserving the public peace, health and safety, and containing a statement of the reasons for its urgency, may be introduced and adopted at one and the same meeting if passed by the affirmative votes of at least four-fifths (4/5) vote of the City Council members. Further, California Government Code Section 65858 authorizes the City Council to adopt an interim urgency ordinance, without following the procedures otherwise required for the adoption of an ordinance, to protect the public safety, health, and welfare, prohibiting any uses that may be in conflict with a contemplated general plan, specific plan, or zoning proposal that the City Council, Planning Commission or the planning department is considering or studying or intends to study within a reasonable time. Section 3. This ordinance shall have no further force and effect forty-five (45) days from the date of its adoption; unless, however, after public hearing the City Council members, by four-fifths (4/5) vote, extend this ordinance for an initial period of ten (10) months and fifteen (15) days and subsequently, after public hearing, the City Council members, by four-fifths (4/5) vote, extend this ordinance one more year. Section 4. It shall be unlawful and a misdemeanor for any person to violate or fail to comply with any provision of the ordinance. The violation of any provision of this ordinance shall be punished as provided in Section 1-8 of the Code. Section 5. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would Ordinance No. NS - Page 4 of 6 y 1 M have passed this ordinance and each section, subsection, phrase or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared invalid or unconstitutional. Section 6. The Clerk of the Council shall certify to the adoption of this ordinance and cause the same to be published in the manner prescribed by law. Section 7. This ordinance is introduced, passed and adopted at one and the same meeting and is thereafter immediately effective. The City Council finds that this ordinance is necessary to protect the public safety, health and welfare. The reasons for the emergency are set forth in Section 1, paragraphs A -P, inclusive of this ordinance. ADOPTED this _ day of 2018. APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: Lisa Storck, Assistant City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: Miguel A. Pulido Mayor 50A-7 Ordinance No. NS - Page 5 of 6 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, Maria D. Huizar, Clerk of the Council, do hereby attest to and certify the attached Ordinance No. NS-XXXX to be the original ordinance adopted by the City Council of the City of Santa Ana on , 2018. Date: Ordinance No. NS - Page 6 of 6 Clerk of the Council City of Santa Ana y 1 m •