Have You Thought About … Denver Restaurant Reopening Guidance?

Have You Thought About … Denver Restaurant Reopening Guidance?

Jun 10, 2020

Client Alert

Brownstein Client Alert, May 29, 2020

Updated June 10, 2020, to include more information about alcohol delivery and retail takeout

General Restaurant Reopening

Governor Polis announced on May 25 that Colorado restaurants may begin to reopen for in-person dining on May 27, 2020. Below please find some important requirements which restaurants need to be aware of when considering reopening:

  • Beginning May 27, 2020 restaurants may reopen with 50% capacity for in-person dining. Note – the guidelines do not provide guidance for outside seating. Some counties have taken the position that this restriction does not apply to outside seating, but the Governor’s orders do not provide clarity on this matter.
  • Parties are limited to 8 people or less.
  • Parties must be 6 feet away from each other, including in outdoor dining areas.
  • All employees must wear masks.
  • Employees should also wear gloves whenever possible during meal preparations. Gloves should be changed in between tasks.
  • Bars must remain closed to in-person patrons.
  • Outdoor dining should be encouraged.
  • Restaurants should use maximum ventilation by opening windows and minimizing air conditioning when possible.
  • Reservations should be encouraged and ideally required.
  • No self-service, buffets or seat yourself options are allowed.
  • People may not sit at the bar if it is being used to prep food or drinks.
  • One employee per shift should be in charge of ensuring staff and patrons comply with the rules.
  • Customers must wear face masks when not eating or drinking.
  • Tablecloths should not be used unless they are single-use or removed, replaced and washed between parties.
  • Disposable menus should be used. Alternatively, the use of online menus is encouraged.
  • Bathroom capacity should be reduced to allow for 6 ft distancing.
  • https://drive.google.com/file/d/1_yyWSUnb40TKDBk9EcvYcSkOzhCDV8NA/view

 

Denver’s Temporary Program to Expand into Other Areas

https://www.denvergov.org/content/denvergov/en/covid-19/support-services/business-assistance/temporary-outdoor-business-operations-.html

Denver recently announced a new program to allow restaurants to expand into additional outdoor areas in order to allow restaurants to increase their capacity, while still maintaining social distancing. The new program is a way to streamline the approval process, as opposed to having to apply and obtain approval from multiple different agencies. The current advice is to apply as soon as possible for the right to expand into new outdoor areas. The city will then work with each applicant in order to find the best solution for the specific restaurant and space. Below please find some additional details regarding this program:

  • 1 page application form: denvergov.org/restaurantpermits
  • The program will run from May 27, 2020 to September 7, 2020.
  • Streamlined, parallel tracks with less regulatory red tape and fees.
  • This will be tailored to each restaurant, but restaurants should apply now to enter the queue.
  • Eligible Establishments – restaurants, cafes, fast food outlets, coffee ships, bars, taverns, brew pubs, breweries, microbreweries, distillery pubs, wineries, tasting rooms. Note – Food trucks and other mobile establishments are not allowed.
  • The expanded areas may operate until 10pm Sunday through Thursday and 11pm on Weekends and Holidays. These hour restrictions do not apply for indoor or outdoor space already approved for food services, such as patios.
  • 16th Street Mall – Still need to apply through the Downtown Denver Partnerships Cluster Permit with the BID and submit an individual application.
  • Restaurants are not allowed to share space, but if they are looking to close a street they are encouraged to apply together for the street closure.
  • Insurance will be necessary if the expanded space is in a right of way.
  • What is allowed:
    • Expansion into parking lots, streets and sidewalks – private areas and public right of way (subject to the Zoning restrictions listed below)
    • Sit-down dining
    • Customer pick-up
    • Carry-out service
    • Temporary tents, railings, benches
  • What is not allowed
    • No standing areas
    • No live entertainment or games
    • No amplified sound
    • No encouragement of congregation
  • The current health orders do not make it clear what the capacity requirements are for outdoor areas of the restaurant.
  • Restaurants must post notice for 5 days, if there are more than 15 complaints then a hearing will be held regarding the use of the expanded space.
  • Restaurants must have a use agreement with the City or the neighbor’s property they are using.
  • Liquor License Requirements - The space must be contiguous to the premises and the property owner must consent
  • Zoning Code
    • “Most private property is zoned under the Denver Zoning Code (DZC). These properties can expand outdoors on their own property or on a neighboring property (with permission from the other property owner), including using any number of off-street parking spaces.”
    • “If your property is zoned under the Former Chapter 59 zoning code (FC59), you can only use outdoor area on your own property and you can only occupy off-street parking spaces that are above and beyond the minimum number of spaces required by code.”
  • Takeaway – Apply now for the potential right to expand. If there are multiple options a restaurant is considering, those should all be included in one application. The City is ready to work with restaurants to find the solution that works best for all parties. Once a business applies, they will be issued a process coordinator to help with the application and permitting process.
  • https://www.denvergov.org/content/denvergov/en/covid-19/support-services/business-assistance/temporary-outdoor-business-operations-.html

What happens after your interest form is received:

No liquor license and no expansion into right-of-way

Yes liquor license but no expansion into right-of-way

Yes liquor license and yes expansion into right-of-way

  • Customer will be referred to Community Planning and Development for confirmation/approval of the expansion         
  • Excise and License will request additional documentation and paperwork for liquor license expansion
  • Five-day posting required
  • Inspections

 

  • Site visit with Department of Transportation and Infrastructure and Excise and License MAY be required.
  • DOTI will request additional information including an E-permit account, Street Occupancy Permit application, site plan including traffic control measures and insurance documentation
  • Excise and License will request additional documentation and paperwork for liquor license expansion
  • Five-day posting required
  • Inspections

 

 

Lease Considerations – Items that Should be Considered Before Expanding Business Into Public Areas

Many tenants are requesting to use space outside of their rented premises in order to allow for curbside pick-up, to-go food or as additional restaurant space. Below are some items which must be considered by both landlords and tenants prior to using this additional outdoor space:

  • Many leases prevent the use of sidewalk sales or outdoor sales.
  • Many leases have protected areas that allow for larger tenants to prevent certain activities within specific areas. This often includes the sale of goods outside.
  • Many shopping areas are controlled by Declarations which may prevent outdoor sales or sales in public/common areas.
  • Some shopping areas have Reciprocal Easement Agreements which could prevent the sale of goods or provision of services outside specified areas.
  • Leases that use percentage rent should consider if sales in an expanded area will be considered part of the gross receipts for percentage rent.
  • Landlords should consider how to deal with the possibility that multiple tenants will want to expand into the same area. Under the current guidelines the expanded restaurant areas must be entirely separate.
  • Takeaway – Tenants and landlords should consult the lease and any recorded Reciprocal Easement Agreements or Declarations for any specific restrictions. Tenants should also seek their landlord’s approval before implementing any sales in expanded areas.

 

Colorado’s Alcohol Delivery and Retail Takeout SB20-213
  • SB20-213 was introduced 6/2/2020 to allow for businesses licensed to sell alcohol for consumption on the premises to sell alcohol for consumption off premises through takeout or delivery orders.
  • To be eligible, businesses must have a manufacturer or wholesaler license and a sales room, beer and wine license, hotel and restaurant license, tavern license, brew pub license, club license, vintner's restaurant license, distillery pub license, lodging and entertainment license, or fermented malt beverage on- and off-premises retailer license (retailer).
  • Beverages must be in a sealed container that complies with state licensing authority rules.
  • Customer must be 21 years of age or older.
  • If the governor has not declared an emergency:
    • Order may contain no more than 750 milliliters of vinous/spirituous liquors and no more than 72 fluid ounces of malt liquors, fermented malt beverages, and hard cider; alcohol may be sold by the drink or multiple drinks; and
    • Retailer must have a permit to sell takeout or deliver alcohol beverages.
  • If the governor has not declared an emergency or the retailer is not a wholesaler or manufacturer that operates a sales room, retailer must derive no more than 50% of its gross annual revenues from alcohol sales through takeout and delivery orders.
  • Delivery must be made by an employee who is 21 years or older and who has satisfactorily completed seller and server training under the responsible vendor program.
  • The bill directs the state licensing authority to adopt rules:
    • Specifying the types of containers to be used;
    • Creating a permit for retailers to engage in takeout and delivery of alcohol beverages;
    • Setting fees for takeout and delivery permits; and
    • Concerning any other matters necessary to implement the bill.
  • The new rules will not apply to caterers who are licensed to sell alcohol.
  • The change in rules will expire July 1, 2022.
  • Note – The specifics of the bill may change as it continues through the legislative process. This bill has not been signed into law.

Information is changing daily and some of the content included in this alert may have changed or been updated since publication.

Click here to read more Brownstein alerts on the legal issues the coronavirus threat raises for businesses.

This document is intended to provide you with general information regarding Denver restaurant reopening guidance. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions.

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Elaine N. Bailey Associate T 303.223.1282 ebailey@bhfs.com
Tal Diamant Shareholder T 303.223.1235 tdiamant@bhfs.com
Cecily S. Sweet Associate T 303.223.1296 csweet@bhfs.com
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