Winners & Losers: How Conditional Use Permits Lead to Disparate Impacts on Black and Latino Businesses

by | Oct 27, 2022


Three alcohol-based Conditional Use Permits are coming before City Planning Commission tomorrow, so we dove deep into the weeds. We found unclear processes, vague definitions, and selective enforcement patterns that are disproportionately hurting Black and Latino businesses in Norfolk. Disparate 


While reviewing the three CUP applications set for Thursday’s docket, we noticed one particular conditional clause. We found the exact same language in many alcohol-related conditional use permits in the City of Norfolk, including these three new applications. It reads: “Neither the establishment nor any portion of it shall be leased, let, or used by any third party to stage an event for profit. No outside promoter shall be permitted to use, operate, rent, or host any event on the premises.” 


Violating this clause could allow the City of Norfolk to revoke your Conditional Use Permit. That’s the small business death blow. 


The problem is that this clause leaves much to be desired regarding clarity. When pressing the City of Norfolk for a definition of an outside promoter, this was their response: 

“There is no codified definition for “outside promoters.” Sometimes city staff will refer to these entities as “third-party” promoters, which in some ways might be more accurate. The unofficial umbrella description I can provide is to consider these to be events in which the promotions (i.e., advertisements, ticket sales, etc.) are performed by some person or company other than the operator of the establishment or by someone not employed by the establishment.”


What this clause means in action is unclear. We’ve spoken to several different CUP holders and professionals who have different interpretations of this rule, but they mostly agree it’s a grey area and the City of Norfolk has a lot of room to enforce it as it sees fit. 


Here’s the most straightforward breakdown:

  • Is a separate business from the permit holder actively hosting, planning, or promoting an event? 
  • Does the third-party business stand to profit from the event?
  • Did the third-party promote the event?

Answer yes to all three questions, and it looks like you violate the rules of your Conditional Use Permit. 


What would that look like in non-legalese? Given the enormous ambiguity in interpretation, all of these could be seen as breaking the third-party promoter clause. 


  • A local yoga studio charges $5 bucks for an early morning yoga class at a local business and shares it on Instagram. That’s all three. 
  • A food truck pulls up at a brewery on a Tuesday and posts Taco Tuesday specials to a Facebook group for foodies. That’s all three.
  • An entrepreneur with a new baked goods shop wants to do a popup at a coffee shop to test the market and shares her launch on LinkedIn. That’s all three.
  • The bookstore down the street holds its monthly book club meeting at your brewery and makes a funny video for TikTok. That’s all three.
  • You support local media by hosting an upstart outlet with a merch shop for a day; they post about it literally everywhere. (oh hey, that’s Norfolk Currents. #disclosure) 


In 2018, The City of Norfolk cited three violations of this clause as reasons for denying Granny’s Country Cookin’ a request for extended hours. So this is a rule on which the City is issuing CUP violations. 


Writing this almost feels like snitching on hundreds of local businesses for their involvement in these near-everyday occurrences. These little partnerships make up a thriving small business community. We want those folks to be safe from the threat of revocation, so we’re not explicitly naming them. 


We’re sharing this because the outside promoter rule is just one of typically more than two dozen conditions found on CUPs. And the ambiguity in definitions is just a part of the problem. The enforcement of these CUP violations is not uniform either. 


With the definitions provided by the City, it looks like there are hundreds of CUP violations each year. Yet, just a small number of businesses were heavily scrutinized and had their permits revoked. So far, the four businesses brought in for revocation hearings were all Black and Latino-owned businesses. Even if the enforcement did not overtly target Black and Latino-owned businesses, the actions are having a disparate impact on these communities. Discrimination does not have to be intentional to be present and illegal.


The dramatic series of permit revocations this fall showed us how CUP violation enforcement has been selective, but we have yet to see a new business attempt to get a fresh/renewed CUP. This week three applications for Conditional Use Permits are coming to a formal City Planning Commission docket, allowing us to see what policies guide new permit approval. 


Each of the three new applications has more than 27 clauses, like the “Third-Party Promoter” rule outlining the different conditions of the permit – i.e., the rules you can’t break. All three businesses are asking for different combinations of CUPs and conditions within those permits. 


City of Norfolk staff has also made recommendations for each, giving us a window into how the city thinks about these types of establishments. It’s essential to recognize that the staff recommendations are only some of the final say on these applications. Appointed members of the City Planning Commission will vote on the applications before they go to City Council, and City Council (elected by Norfolk residents) will have the final vote on approval/disapproval. However, the staff recommendations reflect policy set at the Planning Department level and likely the City Manager’s office. 


The Applicants:

  • Afterglow Brewery
    • A new brewery is potentially coming to the Railyards at Lambert’s Point. Neighbors to IP Configure and Sanctuary DMZ at 2330 Bowdens Ferry Road. 
  • Mermaid Winery
    • Currently located off 22nd Street in Ghent, they’re looking to move Downtown. They have a second location in Virginia Beach. The site is 101 Granby Street, the former home to the Norfolk Taproom, across from the Hilton Main and the World Trade Center. 
  • Slowdive Gallery
    • An existing business that frames itself as a “hub for the creative community.” It acts as a hybrid art gallery and late-night establishment with a diverse array of programming. The location is at 117 E. Princess Anne Road, next to the former Frank Spicer Restaurant Supply. 


The Permits

  • Afterglow Brewery is applying for two CUPS: one for producing craft beverages and one for hosting live entertainment. 
  • Mermaid Winery is applying for five CUPS: one each for operating a banquet hall, producing craft beverages, hosting live entertainment, being a restaurant with alcohol and extended hours, and the off-premises sale of alcoholic beverages. Mermaid Winery currently holds these permits at its existing location. 
  • Slowdive Gallery is applying to be a restaurant with alcohol and extended hours and the off-premises sale of alcoholic beverages. Slowdive Gallery previously held permits for both. 


The Permit Details

These CUPs include unique details for each permit based on the applicant’s request and what the city ultimately grants. Two businesses could each hold a CUP for live entertainment, but one CUP could allow only trivia nights, while another could allow only poetry readings. These details are what we need to look at closely. Here’s what each applicant requested:


  Afterglow Brewery Mermaid Winery Slowdive Gallery
Operating Hours 3 pm-9 pm on weekdays
2 pm-10 pm Friday
12 pm-10 pm Saturday
12 pm – 8 pm Sunday
Operating Hours: 11 am – 1 am daily
*An included document states they only want a 1 am closing time on New Year’s Eve, and intended hours are 12 pm – 9 pm on weeknights and 12 pm-10 pm on Fri/Sat.*
8 am – 2 am daily
Type of Alcohol Sales Beer only, via onsite production beer, wine, and mixed beverages / on-premise and off-premise On-premise only / Mixed beer/wine
Presence of Gaming Yes, shuffleboard table No Yes, game consoles and games of skill
Cover Charges only for special events with bands No Some events may be ticketed
Private Events Only the brewing area is for private tours Yes, dinners, showers, holiday parties, corporate events All or part of the venue may be available for private events
Third-Party Promoters Never Yes, non-profit only Yes, only for non-profits and special private events
Age-Limits Yes Never 18+ after 10 pm or special events
Occupancy  89 seated, 146 outdoors 101 indoor (seated and standing), 28 outdoor  38 seated, plus eight outdoors
Entertainment Trivia, karaoke, live band, comedy, yoga, or movies 5 member bands, DJs, Karaoke, and comedians. Only when closed for private events (weddings, receptions, etc.) Up to eight-member bands, karaoke, theater, poetry, comedian, cultural dance, singers, puppet show, magic, burlesque, orchestra, chamber music, and movies
DJs Not requested Yes, when closed to the public No
Dance Floor None Provided None


In Summary: 

Afterglow and Mermaid Winery only want to be open before 10 pm (9 pm on school nights). All three have yet to ask for publicly available DJs. All three have defined pretty narrow scopes of entertainment. 


In talking with other businesses who have been through this process in the past, the consensus is that it’s best practice to over-ask to avoid having to retrod the CUP process for a different request. However, it’s also best practice to consult with the Planning Department staff extensively before applying. Given the highly restrained applications we’re seeing, it is unclear if the staff has advised limited applications before applying or if the publicity of recent City Council actions has pushed them to apply for less. 


We can take a bit of insight from the included letter from Mermaid Winery. They insist that they would only ever want to be open until 1 am for New Year’s Eve and request “the privilege of allowing a DJ for our guests” during private events. They state, “we have never had any problems with DJs being part of a private event at either of our locations.” Given the language used, it appears that Mermaid Winery knows that the presence of a DJ on their application is going to cause higher levels of scrutiny. 


The Recommendations: 

Each CUP application staff includes several conditions upon which they would recommend the application for approval. Here are the standards they adhere to. The comprehensive analysis submitted with recommendation reviews is extensive, including studies on zoning, transit, historic resources, public schools, tax status, civic engagement, parking, and more. We’re going to focus on the conditions for which the City Planning Department staff recommends approval 


  • Afterglow Brewery: Approval recommended as applied for 27 conditions (A – AA), including
    • Never open outside of application hours
    • Security cameras are present, and footage available to city staff
    • No entertainment is permitted other than live bands, trivia, karaoke, comedians, yoga, and movies.
    • No dancing or dance floor
    • Always a (state) certified security guard if more than 99 guests, after 8 pm Fri/Sat, and any special event


  • Mermaid Winery: Approval recommended as applied for with 27 conditions (A – AA), including
    • Never open outside of application hours, with a specific exception for NYE
    • Never open to the public as a banquet hall (i.e., the only time DJs are allowed)
    • Banquet hall entertainment is limited to live bands, DJs, comedians, and karaoke
    • No outside promoters or third-party leases except 501C3s, government agencies, or parties receiving government grants
    • Security cameras are present, and footage available to city staff
    • Always a (city or state) certified security guard if more than 99 guests, after 8 pm Fri/Sat, and any special event 


  • Slowdive Gallery: Recommended for approval only with modifications to the application. 
    • City staff provides the following evidence for the recommended modifications:
      • Ten calls for service ranging from automobile accident to assault. Staff does not break down these calls for service or indicate their relation to Slowdive Gallery.
      • Complaints from nearby residents about noise from the outdoor dining area
      • The adjacent Frank Spicer building is under construction, adding several residential units. 
    • The modifications include 
      • No use of the outdoor dining area after 11:00 pm 
      • No amplified music outdoors. 
      • Hours of operation are modified to midnight closing time every day. Never open between 12:00 am and 8:00 am 
    •  Additional 31 Conditions (A – EE) including
      • 2-year expiration on the permit
      • Entertainment is limited to the listed items in the application (including a very detailed definition of “cultural dance”)
      • Never a DJ, dancing by customers, or a dance floor
      • Security cameras are present, and footage available to city staff
      • No outside promoters or third-party leases except 501C3s, government agencies, or parties receiving government grants 
      • Must notify the commissioner of revenue anytime they implement a cover charge or if an outside promoter uses the establishment


The Takeaways:

City staff is not inclined to recommend any CUPs for operating hours past midnight or allow an establishment to have a DJ as a form of entertainment. Whether these are blanket policy decisions is yet to be determined. The definitions of working hours and forms of entertainment leave zero room for change after the application is approved (that’s not new). 


If the City staff is showing preferences on the operating hours and DJ clauses in these applications, it is almost certainly leading to forms of discrimination, intentional or not. Hip-hop artists often require a DJ to perform live entertainment, whereas country, bluegrass, and rock do not. Operating hour restrictions almost certainly prefer white collar 9-5 workers over other shift workers. 


On November 17th, Cairo, an existing nightclub, comes to City Planning Council for CUP renewal, asking for closing times of 1:30 am and the presence of a DJ. Staff recommendations on the CUP have not yet been published. This application will give us much clearer insight into the policies guiding staff recommendations. 


Conditional Use Permits are wrought with ambiguity. What staff tells businesses before applying, how the staff makes recommendations for approval, the definition of clauses inside the permits, and how these permits are ultimately enforced create a system with a lot of room for bias and discrimination.  


The Open Questions: 

  • What qualifies as an outside or third-party promoter?
  • Why does staff recommend differences in security certifications for Afterglow and Mermaid Winery?
  • How much have these businesses modified their applications ahead of submission to adhere to the city staff’s preferences?
  • Under what conditions would a CUP for a business operating past midnight be recommended?
  • What holidays will the city staff honor, like New Year’s Eve at Mermaid Winery? Diwali? Chinese New Year? Thanksgiving? St. Patrick’s Day? Yom Kippur?
  • How does staff determine which businesses they will recommend a two-year renewal period?
  • How does staff determine the preferences of potential (but non-existent) new residents in a neighborhood? (see Frank Spicer building above)
  • Will new residents’ preferences always get priority over existing businesses?
  • Why does the city prefer non-profit and government outside promoters over small business promoters? 
  • Do unrelated calls for service count as enforcement incidents? Automobile accidents (presumably) on Princess Anne Rd were counted against Slowdive Gallery. How do they determine which automobile accidents are connected to the business? The same goes for pedestrian service calls. How much weight will be given to these data points without proof of connection? 


Paul Stetson Rice

Chelsea, NFK

Paul is the creator of He was born and raised in Norfolk, graduated from Virginia Tech, and narrowly avoided law school. Chat with him about economics, entrepreneurship, hip-hop, and hiking. When he's not working on five different projects, you'll catch him sharing a beer with friends at a local brewery.

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