*** Before taking out a business loan, signing a lease, or applying for a business license, ensure that the site where you intend to operate is in an appropriately zoned area and that it complies with the current Chicago Municipal Code. The Code is frequently updated so a new owner needs to check current zoning and code regulations; do not assume the previous owner's designation applies. ***
The term “Public Place of Amusement” (PPA) includes but is not limited to:
A complete list of activities requiring a PPA license is available in Chapter 4-156 of the Chicago Municipal Code.
Step 1: Zoning
One of the most important things to do before investing in a business that requires a Public Place of Amusement license is ensure that the zoning designation of the business location permits the activity. A new PPA license will not be issued within 125 feet of an R1, R2, or R3 residential zoning district. Depending on your zoning, parking requirements may also apply for establishments over 4,000 sq. ft. You may find zoning information on the interactive zoning map, in text format on the Zoning and Reference Guide, or by asking a Business Affairs and Consumer Protection (BACP) consultant. Please note that different PPAs may have different zoning requirements (i.e. an outdoor PPA has different zoning requirements than an indoor PPA).
Step 2: Application
Along with the PPA license application, the following is required: business structure documents, Illinois Business Tax number, Federal Employers Identification Tax number, a lease, financial disclosure detailing the source of funds used to establish the business, an occupancy placard, a detailed floor plan, and a site plan. A criminal background check is required for any person with at least 25% interest in the business or 10% financial interest.
Step 3: Restrictions and Neighborhood Sentiment
In addition to zoning requirements, PPA licenses are not permitted within 200 feet of a church, school, hospital, or building used exclusively for educational purposes. This distance is measured from the nearest point of the business to the nearest point of the restricted facility.
When a new application for a PPA license is filed, BACP will mail a public notice within 5 days to the registered voters who reside within 250 feet of the business. The community is granted a 30-day public comment period and may object to the issuance of the license. A public hearing may take place when needed.
Step 4: Permits and Inspections
The Chicago Fire Department (CFD) – CFD is the department which ensures that fire safety and fire prevention measures are in place.
Business Affairs & Consumer Protection (BACP) – In addition to issuing business licenses, BACP is the department which handles General Grants of Privilege for the use of the public way. These applications are necessary when a business owner wishes to hang a sign or awning from a building, and the sign or awning hangs over the public way.
Step 5: Supplemental or Alternative Licenses
Indoor Special Event Class A. This license was created for temporary amusement events that are open to the public on a limited basis. The license applies to events that are offered in a venue with a gross floor area of at least 75,000 sq. ft. or a lot size of at least 2 acres. The license authorizes 30 events per year and is issued on a 2-year term for total of 60 events. The license is required if the premise does not have a PPA license.
Indoor Special Event Class B. This license was created for not-for-profit organizations offering temporary amusement events that are open to the public on a limited basis. It authorizes up to six, 3-day events per year and must be located in a B, C or M zoning district. The license is required if the premise does not have a PPA license.
Performing Arts Venue License (PAV). The PAV license was created to accommodate Chicago’s smaller theaters. This license is required for any establishment providing live theatrical or other live cultural performances in a venue with a maximum capacity of 500.
The maximum capacity may be up to 1000 persons if the theater is incidental to the use of a building that is primarily a church, school or other charitable organization.
Juice Bar License. A special “juice bar license” is required in lieu of a PPA license for places of resort that are intended to be used primarily by minors in entertainment or amusement involving music, music videos and dancing. Examples of such resorts include, but are not limited to, a dry dance hall, non-alcohol bar, “dry cabaret”, “juice bar” or “teenage cabaret”. No juice bar licensee may operate between the hours of 2:00 a.m. and 11:00 a.m. No premises requiring a juice bar license shall be eligible for a retail liquor license.
Step 6: State and Federal Compliance
In addition to the City of Chicago regulations outlined above, new PPAs may need to comply with State of Illinois and Federal regulations related to taxation, employment, and health along with other requirements.
Step 7: Recurring Inspections and Mandatory PPA Tax
Representatives for the fire commissioner or the buildings commissioner will make inspections of PPAs once every two years. This inspection will take place within 90 days preceding the deadline for renewal of the license.
With few exceptions, PPA operators are required to charge patrons a 9% tax. More details are available in Section 4-156-020 of the Chicago Municipal Code.