Staff at the City of Reno have been working to update the city’s business license codes since March 2023, when City Council members approved updating the codes. At the time, Assistant City Manager Ashley Turney said, “Most of our codes are so old that they can legally rent a car without a surcharge.” 

Turney told council members that the licensing process was confusing for business owners and was inefficient for city staff. “That’s not the best way to be pro-business,” she said. 

Now, 16 months later, some business owners are concerned the city has gone too far with proposed changes to the licensing code. 

The draft code documents have expanded Reno Municipal Code Titles 4 and 5 from 24 chapters to 43, reorganizing some of the code and adding dozens of new provisions. The draft language, published on the city’s website, is raising ire among business owners and community members. 

Ryan’s Saloon owner Leigh Stafford posted on Facebook about the proposed updates, stating, “The new licensing provisions are bad!” Her comment was posted with a highlighted section of the draft code that states business license applications can be denied if the applicant or any key employees have been convicted of any crime other than minor traffic offenses or “suffers from a legal disability under state or federal law.” 

City of Reno spokesperson Landon Miller said the language was not meant to refer to a person with a disability.

“The term ‘legally disabled’ does not pertain to a person’s physical ability,” he said. “Rather, it refers to someone’s criminal past that could prevent them from holding certain business privileges. ‘Legally disabled’ only refers to a person’s criminal past and whether it ‘disables’ them from operating certain businesses. 

“A person’s physical ability will never be a pretext to deny a business license in the City of Reno,” he added. “We are working with the consultant group that assisted in drafting the proposed change to clarify this section and clean-up the language.”

Council member Meghan Ebert said it was a poor choice of words. She also said multiple bar owners contacted her, expressing frustration and concern with the proposed code updates. They were concerned about changes that dictate who they can employ and their hours of operation—”Rules about what owners can do in their businesses,” she said. 

An “overwhelming” revision

Despite what city staff described to the council as a code clean-up and update, the redline version of the existing code reveals extensive changes and additions. The clean draft of the proposed code bears little resemblance to the older code it would replace. 

Ebert said she was under the impression this would be more of an opportunity to update the code to remove conflicts with state regulations and other city codes and streamline the many changes made over the past few decades.  

“I did not think this was going to be a complete reworking of our code,” Ebert said. “This was a surprise to me to see how extensive the changes were.”

“A person’s physical ability will never be a pretext to deny a business license in the City of Reno.”

However, she quickly pointed out that the changes are “not destined to happen,” and the city is asking for feedback from business owners before proceeding. Ebert said she also asked for council members to be able to vote on portions of the code separately to give council members and business owners a chance to review what she called an “overwhelming” amount of material.

One business owner posted online: “The word ‘Nazi’ gets thrown around a lot nowadays, but this proposal certainly deserved it. It is a big document with a lot of parts.” 

The massive documents were drafted mainly by attorneys from Fennemore Craig, who specialize in business and regulatory matters. The law firm was hired to consult on the code changes following approval by city council members in December 2023. They were paid $62,500 for the work. 

The city’s Lance Ferrato, in December, said no scope of work was available for council members to review what the consultants would be doing. The process, he said, would include gathering public feedback and merging it with years of internal notes on updates that needed to be made, then sending all of that material to Fennemore Craig to draft revisions.  

At the time, Council member Jenny Brekhus said she opposed hiring the firm to work on the city’s policy because she said it seemed like the wrong approach. In addition to concerns about the cost, which Council member Naomi Duerr also expressed, Brekhus said she wasn’t convinced the attorneys had the expertise to update the code appropriately.

The City’s Landon Miller said the draft language would change based on community feedback.

“We want to hear from as many people as possible, so we are extending the feedback period,” he said. “We will soon announce another round of public meetings and engagement opportunities, and once we get those dates, we will share them with you to relay to your audience. In the meantime, the public can submit their feedback and suggestions to [email protected]. 

“The absolute earliest staff will bring forward a draft to Council is late December 2024; however, we are tentatively scheduling a presentation for January 2025. Information on the process and schedule is available here.“

What’s in the draft?

Ferrato said in July that the business license code has developed an “expansive set of definitions” over the years, and changes will provide more clarity.

“We have detailed specific requirements in each chapter as opposed to making it broad and not specific to each type [of business],” he said. “The draft gives more flexible measures to the department and to the director: the ability to approve payment plans, options to approve temporary interim licenses while investigations are ongoing and the ability to weigh background checks based on other jurisdictions’ investigations, if need be. Just some more elimination of red tape.” 

Ferrato said other changes include a defined license appeal and hearing process, elimination of the renewal grace period and immediate penalties if the license isn’t renewed on time.

“I can’t drink in my own bar in the United States of America.”

The draft licensing code includes new requirements for gaming, cannabis and adult entertainment businesses, bars, distilleries and liquor stores. One requirement is a background check and fingerprints — which each require an additional fee — for the business owner, key employees and, in some instances, all employees, who then must be given a “finding of suitability” by the director of the city’s licensing office and the Reno Police Department.

Other businesses, including secondhand dealers, massage therapists, pawnbrokers and arcades, would also require background checks for owners and key employees. Based on the draft code, it appears even Mayor Hillary Schieve and her key employees would need to submit to the investigative process to continue operating her clothing resale business—a secondhand dealer requiring a privileged license, according to the new definitions.

People who work at businesses with privileged licenses must also obtain work permits through the city. The process requires a fee, fingerprinting and a photograph. 

License denials could be issued if a person is found to have criminal convictions or a background check reveals “Negative information or inferences regarding probity, moral character, reputation for truthfulness, honesty or integrity.” That provision would mean former president and convicted felon Donald Trump wouldn’t even be able to hang his shingle in the city. 

Nonprofit policy think tank Rand estimated in 2021 that nearly 4% of small business owners in the U.S. have some form of criminal record—about 1.1 million business owners employing 1.7 million workers.  

“I don’t want people [who] are currently employed and doing well at their job to lose their job,” Council member Ebert said of the proposed code change. 

Bar owners said they were also frustrated by proposed language requiring alcohol establishments to have city-approved ID scanners for age verification and a hired security person on site. They are also opposed to a requirement that city staff can access security cameras at any time and the proposal that the city can prohibit owners or employees from consuming alcoholic beverages while working.  

“I can’t drink in my own bar in the United States of America,” a business owner said of the proposed language. 

“There’s an awful lot going on here, and I feel like your timeframe is extremely aggressive.”

Sarah Collins, a lobbyist with I3 Government Affairs, said some portions of the code for alcohol establishments aren’t business-friendly. However, she said electronic age verification for alcohol purchases is a good idea since it’s already required for tobacco and cannabis purchases.  

Short-term rentals could also face increased regulation

During an online feedback session in July, other community members expressed concern about different chapters of the draft code that would require short-term rental (STR) owners to obtain a business license. STRs are Airbnb and VRBO properties.

The city has lagged in regulating STRs the way Washoe County and other jurisdictions in the state have. In June 2020, city council members directed staff to develop an ordinance to address STRs; however, a community survey to gather feedback on the topic wasn’t launched until January of this year.  

Under the draft code, STRs would require a privileged business license similar to those of gaming, strip clubs and bar owners. The draft states that a license “is required for each STR unit, and may not be issued to any owner who holds a license for more than one STR unit.” 

Licensed STRs would also have occupancy limits, wouldn’t be allowed to use non-bedrooms — such as a sofa-bed — toward occupancy counts, couldn’t be rented by people under 25, and would need to be rented for at least two nights per booking. The draft code also requires the installation of exterior nighttime lighting and noise monitoring devices. There would also be time limits on when pools, firepits and hot tubs can be used. 

More feedback requested

“I think we need to get more engagement,” Council member Ebert said. “They’re recommendations from a consultant, but not necessarily things that I would support.”

Ferrato, during the July online community meetings, urged community members to provide feedback and ask questions to help city staff refine the draft.

“A lot of this language from this code was pulled from southern Nevada … local jurisdictions within Nevada, California, Midwest,” he said. “Not all of it applies to Nevada, and that’s the whole point of this is to say, ‘Okay, does it apply? Can it? Will it someday apply? Or is this totally off base? This is not a thing that happens in Nevada.’ We have codes that other places wouldn’t adopt either, because we’re different.”

He also defended some of the proposals for privileged business license requirements. 

“These are things that there could be worry about, be it public health, public safety, policing issues,” Ferrato said. “They maybe require a little bit more attention from the city. We need the seriousness of the operator. That’s not to say that all these will go in as privileged.”

During the July 17 virtual meeting, Debbie Block said she thought the process was moving too quickly without enough public input.

“There’s an awful lot going on here, and I feel like your timeframe is extremely aggressive when you’re dealing with these types of changes,” she said. “I feel like we need to slow this down and also figure out how we can reach more business owners because we weren’t aware of this until just recently.”