Do we want to revitalize downtowns, or do we want to severely restrict people from buying wine with dinner? Thanks to our still-Puritanical liquor license laws here in Massachusetts, opening a new restaurant is a major financial risk.
First, today’s good news: A restaurant is moving into a formerly run-down building on a prime piece of street-level property in downtown New Bedford, reports Auditi Guha:
A cozy Italian restaurant downtown is gearing up for a big move — into the entire first floor of the renovated historic Standard-Times building downtown.
The Licensing Board granted Portobello a full liquor license at Monday night’s hearing, pending other permits. Cafe Balena owners Pietro and Mairy Chessa said they hope to open a seven-day restaurant and offer a piano brunch on Sundays in the 3,200-square-foot space by February.
Now the shocking news: The price the restaurant owners are being asked to pay for the privilege of selling beer & wine to their customers – not to any government to fund police or schools, but to a private liquor license holder:
According to the licensing petition, the new business, via Columbus Group LLC, the developer of the old Standard-Times building, will buy a full liquor license for $65,000.
These business owners are putting their money on the line to help revitalize a city with an unemployment rate perennially stuck in double digits, and before they even open their doors, they’re out $65,000 just for the right to sell beer, wine & liquor. Another downtown New Bedford restaurant shut its doors and laid off its employees just two weeks ago, citing in part the absurdly high cost of a liquor license.
And that’s a bargain compared to Boston! “Based on online listings by license brokers and restaurant groups, a full alcohol license currently goes for no less than $250,000 in Boston,” reports Jessica Mendoza.
Who DOES the system work well for? “It works well for lawyers and brokers who’ve mastered the process, and for the elected officials to whom they contribute,” editorialized the Boston Globe. “Former state senator Dianne Wilkerson — whose district included Roxbury, a neighborhood long starved for economic development — took bribes in exchange for trying to steer a license to a local businessman.”
Communities should continue to have a say in where bars & restaurants are allowed to open, and be able to shut down troublemakers. But why should there be an additional, steep financial hurdle to clear – one where the funds don’t even go to taxpayers? Especially in a place like downtown New Bedford, why aren’t we doing everything we can to lure new businesses to serve new customers, hire new employees, and fill tax coffers?
Boston At-Large City Councillor Ayanna Pressley has been pushing to loosen restrictions on liquor licenses. If you care about revitalizing downtowns, it’s an effort you should get behind.
…is why a town, at least as I understand it, has to apply for a home rule petition everytime they want to issue additional licenses. There absolutely should be a licensing process, but it seems each community should decide how many to issue, how it wants to zone for this, etc.
Communities are small, and they border other communities. There’s no toll or fence at town borders. A regional approach is a reasonable one.
That’s not to say that I think the status quo is working; it ain’t. My town just recently asked the state for the right to issue more licenses, because, amongst other things, it noticed that the value of the license was ticking upward, suggesting pent up demand.
That written, of all the problems New Bedford faces, I don’t think a lack of enough bars is the cause of very many of ’em…
It’s a nice waterfront downtown in a nice post-industrial urban setting. You’d think that’d scream lofts, yuppies, with a neat maritime history and an easy commute to Boston. Investing in transit to those parts of the state and helping those communities get the resources they need to become attractive is incredibly important and something any governor should focus on. Making it easier-statewide-to buy booze is a key component of keeping young people in the state and ensuring the flourishing of businesses. This is one thing Chicago understands better than Boston. At least we finally got the T to stay open til 3am. Now we just need byob, easy licenses, grocery sales, and permitting beer gardens and open container on trains and in big parks during concerts. All things Chicago does right.
NB is a lot of things, but an easy commute to Boston is not one of them. Commuting to Boston from there won’t be bearable until it gets a train. That’s one of the big problems.
Though, really, the solution for New Bedford and other gateway cities like it across Massachusetts isn’t Boston. We need to get out of a completely Boston-centric view of Massachusetts — and develop key industries in these regions so they can stand on their own, be they industries different from what’s in Boston or offsprings of other efforts in Boston. That’s really the only way we can create a Commonwealth with shared prosperity across Massachusetts.
A huge part of that effort is in creating communities people want to live and invest in, though, so I agree with you and green that things like affordable liquor licenses for locally owned restaurants is important.
i.e., regional approval, but it’s not how it is in practice.
My sleepy town is kind of a poster child for this whole idea, going from temperance dry, to beer & wine in restaurants, to a few liquor licenses, to package stores. No actual bars so far, but a few virtual ones.
We’ve become a food destination in the process. But there was no sort of regional oversight through legislative action on the various home-rule petitions.
Though I suppose there could have been, I don’t think it ever happens.
Is your town Arlington?
Though melrose does not really have a package store…
That’s one thing people don’t seem to get. By making existing liquor licenses extremely valuable and putting up legal barriers to opening a new bar and/or restaurant, you’re giving the existing grimy dives a huge artificial advantage. If you want to clean up a crappy downtown, one part of the solution is letting new non-crappy places open to drive the old dumps out of business.
And as someone who loves New Bedford, it’s just plain insulting to tell us, “Quit complaining about wanting nice new destination restaurants, you’ve got plenty of sleazy flophouses as it is!”
Davis and Union Square. Ease of access to liquor licenses was essential in this process. And I totally agree greenmiles, that too many people are forgetting about this cities and failing to see how revitalization can take place. And doing this at the regional or even the state level can really help streamline the process.
but I’m not so sure I buy it. There is restaurant turnover in NB, and more importantly, if anyone in the restaurant business thought that a nice new destination restaurant was going to be particularly profitable, he’d do exactly what happens in Boston now — buy some “sleazy flophouse,” apply the license to the new restaurant and anything else salvageable, and then just take the old tavern out of business.
I’m not defending the current liquor license practices. I just don’t really buy into the idea that it is the liquor license scheme, of all things, which is preventing the great comeback of my mother’s father’s people and their fair city (and/or haven).
But we are saying it’s a good first start. Trickle Up had a great point about how a sleepy and nice middle class town is now attracting a lot of urban professionals (priced out of Cambridge and Brookline) with it’s good schools AND surprisingly good restaurants. The old run down video store is now a microbrewery-one of the many crazy changes I witnessed during my last visit home.
I don’t see how New Bedford couldn’t experience the same rebirth-or other towns, and coming up with a broad, regional revitalization plan, is essential for the next Governor. And examining the licensing is part of a much larger process. Nobody is arguing it’s a panacea-we are arguing that the status quo is hindering rather than helping this process, and streamlining it would help immeasurably.
Now if only we get could booze on trains, in Trader Joes, and in grocers and drug stores…
I don’t understand, then, why liquor licenses have to have an independent existence. Why isn’t it that establishments are licensed for liquor or they are not? Why is the license a separable thing?
The system makes no sense. In a sensible system, a would-be restaurant owner would go to the city or town, say where the restaurant will be and why he or she should be allowed to serve liquor, and then the city/town would simply say yes or no. If the city/town thinks there are too many liquor-serving businesses in that part of town, they can say no. But why should they have to say no simply because some artificial, state-imposed cap has been hit?
it may be Puritanical, but it’s also one of the bedrocks of local government. The town is allowed to decide what type of establishments it wants.
So Somerville’s Davis Square, for example, can have a one-block area that, at times, looks like an outdoor drinking party. Arlington, the next town over, can decide not to do that.
I get that new restaurants struggle with the liquor license process, and the price does seem high. But they know that going in, no? If people like a restaurant they’re generally more than happy to bring their own wine. Any restaurant that closed because it couldn’t get a license probably had other issues. We set the restaurant bar high, for good reason. People eat there.
I don’t think many are suggesting towns shouldn’t be able to decide that, for example, they want to be dry… or don’t want a lot of restaurants. They’re free to zone out restaurants and other drinking establishments — that can be done wholly independent of the liquor license process and to great success.
Want your town to be boring? Just allow single family homes, almost no businesses or restaurants… and good luck with that.
The issue here is that even in cities where they zone to make opening restaurants relatively easy, the process of giving out liquor licenses is so backward and outdated that it’s very hard and incredibly expensive to get a liquor license. In some places, it’s borderline impossible…. unless you have deep pockets.
Since the most lucrative aspect of most restaurants is liquor — and the restaurant biz has a very low operating margin to begin with — this is all incredibly important stuff, and as greenmiles suggests, can do a lot of damage to the viability of neighborhoods.
What happens when a liquor license costs $250,000 or more in Boston? Some well-off neighborhoods have lots of places to choose from. Others don’t and are stifled from it.
Case in point: The North End has 99 liquor licenses in .2 square miles and Mattapan has 9 total — and the few liquor licenses that exist in places like Mattapan end up leading the restaurants to close and sell the license to some wealthy establishment downtown.
You don’t think there are more people in Mattapan who’d like to open up a restaurant or some entrepreneurs who would understand there’s plenty of people in Mattapan who’d like a restaurant? Of course there are — in both regards. The problem is that the liquor license is more valuable than whatever potential restaurant could be — purely for artificial reasons, since so few liquor licenses are available, they’re able to be sold like commodities and there aren’t zoning rules written in that guarantees every neighborhood at least their fair share of them.
So, should the bar for entry in the restaurant industry be having very deep pockets? Because ultimately that’s what your suggesting.
Some of the best restaurants are locally owned and started from people who didn’t have deep pockets. They should have a process available to them to obtain liquor licenses, too.
Merit? Political patronage?
The whole process of owning a restaurant is expensive, not just the liquor license. People focus on that because it’s tied directly to revenue (and that’s why it’s more expensive).
because they are in short supply. It’s like taxi medallions: if you limit the supply of a valuable commodity to the point that demand greatly exceeds supply, the price will tend to become very high. In the case of liquor licenses (and taxi medallions, for that matter), that seems to be a bad thing. If an establishment makes a satisfactory case for selling liquor to the local licensing authorities, why shouldn’t they be able to do so? Why should they have to (a) be lucky enough to hit the market when a license is available, and (b) have an absurd amount of cash to plunk down to buy the thing? Furthermore, why should the state legislature be in control of how many liquor licenses municipalities can give out? The whole system just seems ridiculous to me.
The licenses are in short supply because the government(s) want(s) it that way. They get bid up, and become expensive.
Bear in mind that $250,000 would not buy you a place to live in Boston. Or really any town that touches Boston.
I don’t know what a liquor license should cost, but I do think they should be substantial investments, given a) the outrageous profits and b) the considerable responsibility.
Why does having a ton of money & making substantial investments automatically make someone considerably responsible? I mean …
Is that even remotely what I said?
Your argument is that only people with the ability to make a very large up-front investment in opening a restaurant should be allowed to serve liquor, because of the “considerable responsibility” associated with serving liquor. Greenmiles’s argument is that the correlation might not hold in all, or even most, cases.
Not everyone who owns a restaurant is rich. Off the top of my elbow guess, I don’t think you’re opening a Boston restaurant for less than a million dollars. Have you guys ever heard of loans? Multiple investors?
Again, I don’t know what a liquor license should cost. But I’m completely comfortable with it costing more than many other aspects of the business, because it brings in more money, and changes the nature of the investment.
a city or town could, if it wished, set a high fee for a liquor license, for the reasons you suggest, or for other reasons. But as I argued upthread, it makes no sense to do that by artificially limiting the supply of licenses. What reason is there for the state to say to Arlington, or New Bedford, or anywhere else, that you cannot authorize more than x establishments to serve wine with dinner? [Spoiler: none]
But that’s not really true, is it. Municipalities have tried to wrest control of liquor license away from the state for years, so far without success. A big part of the problem is that towns are *not* allowed to decide what kind of, and how many, liquor-serving establishments they want.
We tried it for years to get the voting age lowered in Cambridge, and every time, in spite of the city council and our reps endorsing it, it fell on deaf ears when it came to the committee. Streamlining that process or reverting more of the home rule issues directly to the towns in the first place is another crucial reform.