Another 'I told you so'

Remember back when Toledo decided to issue a license to convenience stores? According to the politicians, those evil convenience stores were the source of all kinds of illegal and unsavory goings-on and needed to be controlled.

My point, then and now, was that a business owner shouldn't be responsible for the illegal acts of others. The entire problem was the lack of law enforcement in the neighborhoods that allowed such illegal activity in the first place.

As I said in my first post on the subject:

But understand this: if you've got crime in the neighborhoods, it's not because you have a store down the street. The solution to crime in the neighborhoods is increased police patrols to deter such activity and swift response when a crime does occur. It also means a commitment to the criminal justice system to fully prosecute and hold accountable those who commit crimes - and that may mean spending money for more jail space and prosecutors - and not flowers, lights on trees, nature education or secret shoppers.

But in Toledo, it's so much easier to regulate business than it is to address the true problems in the neighborhoods and city as a whole. And it gets better headlines, too.

And now, as a result of the lawsuit filed over the law, guess what? More police patrols. Except in this case, it's not being provided by the city. No, the convenience store owners are having to pay off-duty officers to do what they should be doing when on-duty.

So the solution, as I said all along, is to increase police patrols. As I wrote in my last post on the subject:

I still have a problem, though, with the city's dereliction of duty when it comes to safety. The agreement requires that the stores "develop a plan for a coordinated security patrol of member stores consisting of off-duty and laid-off police officers."

First of all, why must it be off-duty or laid-off police officers? Many companies use private security personnel for such purposes, so this can only be construed as the unnecessary interference of the city in operational aspects of a private business. Or perhaps this has more to do with helping the police unions and/or covering the city because they've so overspent in almost every other area that they had to lay off police. Regardless, this is wrong and I wish the settlement would have contained more generic language to be able to give the store owners as much flexibility as possible.

Secondly, this particular requirement is a bad precedent for the city to set. The reason this is needed - and the reason 'community development groups' and politicians wanted the law in the first place - is because of a lack of enforcement of existing laws. The original problem wasn't the stores, but the illegal activities that police were unable to address, either because of lack of numbers or low priority.

Rather than address the lack of policing, politicians did what they normally do - created a new problem in an attempt to 'solve' an old one, enacting a law for every single store of this type, despite the fact that only some of the stores were having a problem. What they should have done was increase the enforcement in and around those particular problem areas - but they didn't.

Now, the solution is not for the city to assume its chartered responsibility, but for store owners to pay additionally for that same service. And if the city can do it with one, it can do it will all.

This is what passes for logic in Toledo.

Previous posts on the convenience store licensing law in chronological order:

'Not business friendly - post #5'

Eye On Toledo interview with Rob Ludeman

Cheers and boos to Toledo City Council

'Not business friendly' - post #6

Convenience stores fight licensing law (thank goodness!)

FOIA Friday

Faulty logic???

'Not business friendly' Post #9 - convenience stores, again

Emergency injunction requested on Convenience Store Licensing Law

Convenience stores get injunction

City law applies to more than just convenience stores

'Not business friendly' Post #10 - if you don't like the law, close your business

Midwest Retailers lawsuit against Toledo continues

City ordered to pay attorney fees in convenience store licensing suit

Toledo to repeal convenience store licensing law

Toledo to repeal convenience store licensing law

Kudos to the Midwest Retailers Association (MWRA) on their huge win in the settlement of their lawsuit against the City of Toledo over the convenience store licensing law!

In 2007, the city passed an ordinance which required a 'license' to operate a convenience store - on top of all other licensing already required for such an operation. Included in the 'not business friendly' provisions were requirements to clean up debris and litter on other people's property as well as the threat that the license would be revoked if illegal activities happened upon the store grounds, regardless of the owners' efforts to stop them.

Fortunately, many of the store owners got together, hired an attorney and sued the city over the constitutionality of the law. They also filed an emergency request for an injunction to stop the implementation of the law, which was granted.

The city did repeal that version of the law and implement a new one - which was immediately challenged in court as an amended complaint as well. But not before the federal judge awarded MWRA $29,999.00 in attorneys fees for the first portion of the case (which was paid in March, 2009).

Since that time, the two parties have been in negotiations over a settlement. Council President Joe McNamara issued a press release explaining some of the terms of the settlement:

The proposed settlement agreement, which would need to be approved by Council, repeals the licensing ordinance. In exchange, the Midwest Retailers Association agrees to do the following:

* Adopt a code of ethical business practices for its member that includes:

1. banning the sale of items commonly used as drug paraphernalia,
2. establishing a zero-tolerance loitering policy
3. keeping stores clean and well-maintained
4. not generating any undue noise
5. selling healthy items like milk, fruit and vegetables

* Encourage store representatives to attend Block Watch meetings

* Develop a plan for a coordinated security patrol of member stores consisting of off-duty and laid-off police officers

* Meet quarterly with representatives of the Community Development Corporation alliance to review the relationship between the stores and their neighborhoods.

* Waive any additional attorney fee or damage awards.

So the store owners will do what they probably would have done in the first place if just asked and the city repeals the law, which never should have been implemented to begin with. The city also gets out of paying any more attorney fees.

But the city is still out more than $30,000 with the payment of the first set of fees and the amount of time, effort, energy and wages spent on defending this case in court over the last two years, not to mention the negative publicity over the law and the 'not business friendly' message it sent to current and potential businesses within the city limits.

I still have a problem, though, with the city's dereliction of duty when it comes to safety. The agreement requires that the stores "develop a plan for a coordinated security patrol of member stores consisting of off-duty and laid-off police officers."

First of all, why must it be off-duty or laid-off police officers? Many companies use private security personnel for such purposes, so this can only be construed as the unnecessary interference of the city in operational aspects of a private business. Or perhaps this has more to do with helping the police unions and/or covering the city because they've so overspent in almost every other area that they had to lay off police. Regardless, this is wrong and I wish the settlement would have contained more generic language to be able to give the store owners as much flexibility as possible.

Secondly, this particular requirement is a bad precedent for the city to set. The reason this is needed - and the reason 'community development groups' and politicians wanted the law in the first place - is because of a lack of enforcement of existing laws. The original problem wasn't the stores, but the illegal activities that police were unable to address, either because of lack of numbers or low priority.

Rather than address the lack of policing, politicians did what they normally do - created a new problem in an attempt to 'solve' an old one, enacting a law for every single store of this type, despite the fact that only some of the stores were having a problem. What they should have done was increase the enforcement in and around those particular problem areas - but they didn't.

Now, the solution is not for the city to assume its chartered responsibility, but for store owners to pay additionally for that same service. And if the city can do it with one, it can do it will all.

Considering everything, this may be a win-win for the parties: the store owners get the law repealed and the city doesn't have to pay anything more in attorney fees.

However, there are other 'costs' to this settlement:

* the enforcement of the anti-business reputation of the city;
* the perspective that if business owners don't do what politicians want, laws will be passed to force compliance - also know as extortion, especially with the threat of reintroducing the law;
* the precedent of making certain businesses pay extra for police protection which should be a service available to all; and
* the negative message that if some members of a group (convenience store owners) are acting in a way that some do not like, all will be punished.

...and those 'costs' will be felt for years to come.

City ordered to pay attorney fees in convenience store licensing suit

U.S. District Court Judge James Carr has granted a motion for the payment of attorney fees in the lawsuit against the City of Toledo. The amount of the order is $29,999.00

Scott Ciolek is the attorney representing the Midwest Retailers Association who sued the city over the original law. The MWRA was granted a restraining order which prevented the city from implementing the law. Toledo then repealed the law and passed a new one, but has not yet implemented it, pending the outcome of the lawsuit.

The issues in the case are complex, but common sense dictates that this is not a business-friendly action on behalf of the city. Now, it's becoming expensive as well.

Having won the attorney fees for the first portion of the case, is it likely the MWRA will prevail on the amended complaint, especially because the revised law is essentially the same as the repealed one? And, if so, would Toledo and the taxpayers be better off if they didn't fight it?

The amended complaint is in the discovery phase, so stay tuned.

NOTE: I'll add the link for my WSPD Eye On Toledo interview with Scott Ciolek as soon as it's available.

'Not business friendly' Post #10 - if you don't like the law, close your business

The Convenience Store Licensing Law just keeps more onerous the more it gets explained.

As pointed out earlier, the law applies to more than just convenience stores. Coffee shops, ice cream parlors, health food stores - any retail business that sells food or beverages for home consumption and is smaller than 5,000 square feet are required to obtain a license to operate, install 24/7 cameras (of a certain quality), and monitor and prevent criminal activity on their property.

The law was 'intended' to help the city when they have trouble at places that sell alcohol when the state liquor control board allows them to keep their liquor license over objections from neighbors. That the state board might be following the law when making such decisions is completely beside the point. Some of the community development corporations (CDCs) don't like convenience stores and they think that if the store goes away, so will the people who do illegal things on or near the property. Yes, if you take away their source of alcohol, such people will no longer drink. If you close down the corner store, a prostitute will not longer offer her body for sale. You get the point.

As this was the whole point of the ordinance, why does it apply to ice cream parlors, gas stations, coffee shops and all the other types of businesses? Either it was intentional in order to get more money for the city, or it was extremely incompetent in that council didn't understand the ramifications of what they were doing. Both explanations are bad.

But that's not the worst of this. I thought that sending letters to convenience stores telling them they had to follow the law despite an agreement to not start enforcing the ordinance during the settlement phase of the lawsuit was pretty awful. But they sent the letters to stores over 5,000 square feet - so that was pretty bad as well. But their response to the temporary restraining order takes the cake.

The Midwest Retailers Association makes a claim of 'involuntary servitude' as one of their objections to the law. It's an interesting claim. Midwest explains that the law creates this condition “by transferring to selected business owners duties and responsibilities traditionally reserved for law enforcement personnel.” The law requires owners to 'stop' certain criminal activities that are happening on their property and if, despite their best efforts, the activity continues, they lose their license. Seems pretty clear that this is the job of the police.

The city, in their response, says that "not every situation in which an individual faces a choice between labor or legal sanction constitutes involuntary servitude." In fact, they liken the outcome of this law to certain scholarship recipients who do not perform their agreed upon public service upon completion of their schooling. That this was a contract willingly entered into by both parties - and is now being breached by one of them - must have completely escaped those fine legal minds in Government Center.

But it gets worse. Here is the city's conclusion on the claim of involuntary servitude:

Moreover, Midwest’s members have alternatives to performing the actions that the Ordinance requires. Midwest’s members can choose not to operate a convenience store to avoid the Ordinance. Midwest’s members can choose to alter the nature of their business by expanding to more than 5000 square feet or discontinue selling food and beverages for home consumption. Although these choices may not be appealing to Midwest’s members, this fact does not make the actions required under the Ordinance voluntary servitude.

Yep...the city says if you don't like the law, don't have such a business...or expand until it no longer applies to you. Like any business being faced with such a choice is going to even want to expand in this city!

When it comes to the cameras, the 'logic' is the same:

"Midwest’s members are free to use the cameras in any manner. If a member removes an installed high-resolution camera and he wants to continue operating the convenience store, he must replace the subject high-resolution camera with another. However, if a member does not want to continue operating the convenience store, no replacement is necessary."

Yep ... if you don't want to comply with the law, go out of business.

The arrogance and anti-business nature of these pleadings is astounding. Toledo is a city that is losing population and businesses and is raising fees and taxes. It's creating licensing laws and registration fees that drive businesses - and their owners - out of the city. What a wonderful environment!

To expect that a viable option to an onerous and disgusting law is to close up a business - just boggles my mind. Whatever happened to the concept of small businesses being the backbone of our economy? These convenience stores are primarily owned by families in the area and they've hired some non-family members to help with the operations. Aren't these the types of companies we want??? Why would the only other solution to a costly, and maybe unconstitutional, law be to suggest that they go out of business? Some would say that convenience stores are not the 'right' type of business to have in the city. But, considering the current economic condition of the city, can we really afford to drive anyone away? And just because some people don't like the businesses doesn't mean that everyone wants them gone. They obviously have a good customer base or they wouldn't still be in business!

This is certainly not business-friendly and I do hope that the Midwest Retailers Association prevails in their lawsuit as it would be the best thing for the Toledo. And it might finally send a message to our elected officials that they need to get out of being 'stuck on stupid.'

City law applies to more than just convenience stores

This just in from Scott Ciolek, the attorney for the Midwest Retailers Association, regarding the city of Toledo's response to their lawsuit over the 'convenience store licensing law.'

Today, the City of Toledo responded to the Midwest Retailers Association request for a preliminary injunction on the Toledo "Convenience Store" Ordinance. In its response, the City of Toledo explains to the "Convenience Store" Ordinance actually governs all Food and Beverage retail stores smaller than 5000 sq ft. of floor space and that only a portion of the establishments governed by the law have received their applications. The vast majority of these establishment are unaware of their impending obligations.

City of Toledo wrote... (page 8)

....the Ordinance defines "convenience stores" as a retail seller "of food and beverages for home consumption***with a floor area less than 5000 sq. ft." This definition is not vague. Midwest, however, assumes that this definition applies to some undefined subset of businesses that meet the definition of convenience store. Midwest bases its erroneous assumption on the fact that the City sent written notices and applications to less than all of the businesses to which the definition would apply. Midwest [wrongfully] concludes that only the businesses that received the written notice and application are subject to the Ordinance...

By the city's definition, a "Convenience Store" would include all restaurants, health-food stores, gas stations, fast-food shops, coffee shops, tea shops, state liquor stores, ice cream parlors, etc [less than 5000sq ft. of floor space]. This means that the owners of each business falling within the scope of the definition would have to purchase, install, and maintain high resolution video camera systems, record themselves at work, and provide the tapes to any city official upon request without a warrant. Moreover these owners would have to take on additional liabilities as outlined in the ordinance.

*******

The city's response.

Convenience stores get injunction

Because of my schedule yesterday, I'm a bit late in posting the outcome of the injunction requested by the Midwest Retailers Association over the convenience store licensing law.

But they were successful, as Federal Court Judge James Carr ruled that the City of Toledo could not begin enforcing the law until July 1.

Uniformed Toledo police officers began delivering letters to convenience stores earlier this week. According to today's paper, Police Chief Mike Navarre said the letters were because only about 25% of required stores had applied for the license by the May 1 start date.

A hearing for the injunction will be June 20th.

Emergency injunction requested on Convenience Store Licensing Law

Yesterday, the Midwest Retailers Association (MWRA) filed a motion asking Federal District Court Judge Carr for an Emergency Injunction against the City of Toledo to prevent the city from enforcing the new 'convenience store' licensing law.

From Scott Ciolek, the attorney for the group:

If Judge Carr decides in favor of the MWRA the City of Toledo will not be able to enforce any aspect of the Convenience Store Licensing Ordinance. It is anticipated that Judge Carr will make a ruling on the Emergency Motion sometime today.

Over the past 3 days uniformed Toledo Police officers have been delivering letters from the Toledo Chief of Police to the owners and operators of Toledo convenience stores. The letter states, among other things, that if the stores fail to submit the applications for the license the store owners will be subject to 30 days in jail.

The motion for the Emergency Injunction is a response to this letter.

According to the temporary restraining motion, the city agreed to not to begin enforcement of the law on May 1 as planned, but to delay the enforcement in the hopes of settling the lawsuit. However, on May 27, uniformed Toledo police officers began delivering letters to convenience stores that detailed the criminal penalties for non-compliance with the law, and the administrative fines for not having camera monitoring systems.

By engaging in the conduct described above, Defendant has manifested clear intent to end settlement negotiations, and proceed with the enforcement of Ordinance 797-07. At the same time, Defendant has requested an extension for more time to respond to MWRA’s motion for preliminary injunction.

The letter does not explain the the law is currently the subject of a lawsuit, nor does it provide a deadline for making the required license application, indicating that failure of immediate compliance will result in criminal prosecution and imposition of substantial administrative fines.

Stay tuned - this is definitely going to get more interesting...

'Not business friendly' Post #9 - convenience stores, again

I just don't understand what the members of Toledo City Council have against convenience stores. They've already passed a licensing law for these types of stores (though the effective date has been postponed due to a lawsuit filed), and now they want to cut down on the 'proliferation' of such stores.

According to today's paper,

Councilman Joe McNamara has proposed an ordinance prohibiting a convenience store from operating within 2,000 feet of another convenience store, or within 1,000 feet of a school, public library, or other places established for minors.

Establishments that do not sell tobacco or tobacco products would not be affected, Mr. McNamara said.

"In 1993, spacing requirements were added to the Toledo Municipal Code and, in 2004, it was taken out as a comprehensive rewrite of the zoning code," he said.

"We are just going back to what we originally had since there has been a proliferation of convenience stores in the central city since 2004."

Yes - you read that correctly. We've got businesses starting in the city and now that's a bad thing that must be addressed through zoning restrictions to prevent it from happening. And they think the problem is in the central city, but the law will affect all areas of the city, equally.

It seems to me that there must be a need for such stores or they wouldn't be opening. And, with gas prices the way they are, it should come as no surprise to council members that individuals might choose to walk to a neighborhood store rather than drive elsewhere.

The supporters of such regulation are using the same arguments they used to support the licensing law:

"Supporters of stricter regulations argue that convenience stores have saturated Toledo and are attracting crime, alcoholism, prostitution, drug use, and other unsavory elements.

Critics say some Toledo stores stock drug paraphernalia, such as disguised crack pipes and small plastic bags for powder drugs."

Note that it's not the behavior they're trying to stop, nor are they calling for more police officers and better enforcement of laws against prostitution, drug use or loitering. No, they're trying to drive job providers out of the city.

Sidebar
Just because some drug addict finds a drug-related use for a normal grocery item like small bags does not mean the seller of the small bags is stocking drug paraphernalia. I use those small bags quite often and NOT for drugs!
Sidebar

Council members need to stop catering to the anti-business demands of these neighborhood groups and start looking at the real problem. If crime in these areas is the problem, the solution is not to drive business owners away - it's to increase police patrols, enforcement and prosecution.

Shutting down a business will not change the behavior of the people who patronize such establishments, but it might be an easier decision for politicians because then they can say they 'did' something - even if what they 'did' doesn't solve the problem.

Toledo can't afford more anti-business decisions, and calling the city a 'business friendly city of the future' doesn't make it so.