DEARBORN — City officials have denied the owners of Signature Cafe, a hookah bar and restaurant located on Warren Ave. and Chase Rd, an exemption to a six month hookah moratorium, forcing the business to a halt in trying to secure a hookah license from the state. 

The owners of Signature Cafe claim they had been trying to obtain a Tobacco Specialty Retail Store (TSRS) exemption from the state since they took over the location, which included two suites, Arabica and Lushi’s Smoking Lounge, in August 2012.

The previous owner of the location did not sell his TSRS to the new owners once it was converted over to Signature Cafe. The new owners also signed a purchase agreement allowing them to use the old owner’s certificate of occupancy (C of O) until January 2013. The establishment has since been running without a C of O.

In recent years, the state had put a cap on the number of TSRS exemptions allocated to businesses statewide. In order for a new business to obtain the license, it would have to purchase it from another business. Currently, there are more than 50 businesses with the license in Wayne County and close to 140 statewide. 

Obtaining a license can be a very strenuous and costly process for a business owner. They run anywhere north of $40,000 and must be renewed by January 31 of every year. If a business owner cannot present a C of O upon purchase, then their TSRS will lapse and go to other bidders after January 31.

Earlier this year, the owners of Signature Cafe were able to obtain a license as part of the business’ plan to remodel and restructure the property to meet both state and city guidelines. The owners had been serving both food and hookah under one roof despite prohibitions established by a smoke free air law in 2009. 

That law had made it mandatory for business owners to separate food service from tobacco and hookah services, unless they obtained a TSRS from the state that allows patrons to consume food in a smoking establishment under strict guidelines. Those guidelines included allocating a separate establishment where food would be prepped and served apart from the establishment where smoking takes place. 

Hookah bar owners in Dearborn took various approaches with the new law once it was established. Several business owners converted their properties to comply with the new rules and have since followed the strict guidelines; while others chose to neglect the laws once loopholes were discovered in the state and county’s compliance system.  

Business owners continued to blatantly break both health and food handling rules with the inclusion of smoking and food under one roof. Several of these establishments received a small violation fee upon inspections by the county— viewed as nothing more than a slap on the wrist by business owners, who continued to neglect the laws.

In 2014, city officials in Dearborn grew weary of the influx of hookah lounges that continued to open and operate without a TSRS. Concerns included underage smoking and fears that hookah lounges were beginning to dominate all of the city’s business districts.

In August, the city council passed a heavily debated six-month hookah moratorium in an attempt to study smoking facilities and potentially draft an ordinance that would regulate hookah businesses in the same manner as a bar with a liquor license. The moratorium meant that no business, new or established, would be able to obtain a TSRS without petitioning the city.

At the city council meeting on Tuesday, November 25, the council denied Signature Cafe an exemption from the hookah moratorium in a 5-2 vote. Council President Susan Dabaja and Councilman Mike Sareini voted in favor of exempting the business from the moratorium. 

Local attorney Amir Makled, a representative of The Law Offices of Cyril Hall, pled Signature Cafe’s case to the council. He said the business owners had been communicating with the city’s zoning department and had begun remodeling the establishment to meet guidelines.

Makled noted that if the council were to deny the owners the exemption, they would lose more than $75,000 in costs they’ve already put forth to remodel the facility. The owners had planned to section off hookah smoking into a separate suite once they officially obtained a hookah license. 

However, the majority of the council members weren’t in favor of cutting Signature Cafe a break. They questioned why it took the owners so long to obtain a C of O from the city, as well as a TSRS exemption. 

“Two years and three months later, you’ve been operating with no certificate of occupancy and you’ve been selling tobacco with no license in your name,” said Councilman Robert Abraham.  

Councilman Tom Tafelski put some blame on the city, questioning why it allowed the business to stay open without a C of O for so long.

“My question falls with the city and enforcement…why are they even operating?” Tafelski asked.

 A representative from the Buildings and Permits Department replied that the city “isn’t quick to shut a business down.”

“But two years?” Tafelski asked. “They aren’t necessarily the best corporate citizens, but they are operating a business. I emphasize with the petitioners in some respect because they got away with it for a couple of years, but now they are to this point where we are in the moratorium phase.”

Councilman David Bazzy, who had been communicating with state officials, said that there were a number of concerns in the operation of the business that needed to be addressed.

Signature Cafe received a violation from the state just a few weeks earlier for serving both food and hookah to patrons. Bazzy noted that the business continues to operate in the same fashion regardless of the violation. 

“Not only are you in violation of smoking hookah without the license, but you are also in direct violation of the Doctor Ronald Davis Law from 2009, by allowing food and hookah to be served at the same time and that’s an even a bigger problem that I have,” Bazzy said, referring to the Michigan Smoke Free Air Law. 

Makled argued that it’s not the city’s job to penalize business owners who are breaking hookah guidelines, as that falls back to the state.

 “The state of Michigan is the policing body for tobacco section violations and we understand them,” Makled said. “They are the ones that are obligated to police that activity. The city of Dearborn’s role in this whole situation at this point is to determine if this is going to be an applicable zoning issue.” 

Sareini, who has been vocal against the moratorium since it was drafted earlier this year, stated that city officials haven’t made much progress since the ban was approved in August. During the meeting, he claimed the city had yet to hold one study session in relation to the matter.

Being denied the exemption now means Signature Cafe will lose the opportunity to be classified as a hookah establishment in 2015. If the city were to pass an ordinance in the future that prohibits businesses from serving hookah without a license, the business would be forced to stop serving hookah. According to the owners, hookah brings in 50 percent of the business revenue.

The council did however approve an exemption for Nar Bar, a new business set to open in West Dearborn this month at the former location of Chelios Bar.

Described as an “upscale sports bar”, the owners of Nar Bar have obtained a TSRS, a liquor license and a food handler’s license to operate the two-story facility. City officials approved their C of O because the business owners followed the rules “by the book.”