This week’s Boston City Council hearing on adding 150 non-transferable liquor licenses for underserved neighborhoods became heated as the ongoing COVID-19 pandemic could put many existing alcohol licenses on the secondary market from many restaurants expected to go out of business.
With all Massachusetts restaurants and bars ordered closed for on-site service as of March 17th, the economic impact felt upon the industry has been brutal. Despite this, the Committee on Government Operations headed by Councilor Lydia Edwards continued with this week’s hearing to discuss a petition to discuss the additional liquor licenses.
The reasoning behind the petition sponsored by Councilor Frank Baker, in Docket #0281, is to increase beyond the State cap on liquor licenses using nontransferable licenses specifically geared toward neighborhoods with a disproportionately lower amount of licenses.
“… I apologize, because part of what I’m going to say is going to come across as a little angry…” said Bob Luz, CEO/President of the MRR (Massachusetts Restaurant Association), expressing deep disfavor on the issue of additional licenses, citing a “lack of respect, given everything that’s going on and expecting proprietors to take time away to testify. He called the hearing a “slap in the face to everyone trying to get through their day-to day”.
With over 300K people in the industry unemployed, Luz called for a complete pivot stating: “The responsible thing to do is to focus on how we’re going to save this industry.” State legislation designed to potentially restore revenue by permitting the sale of alcohol to-go is only in effect until the end of the shutdown.
Josh Weinstein, owner of East Boston Tavern The Quiet Few weighed in – admitting that he and several of his colleagues had found themselves unprepared and very much “in uncharted waters”. Offering a counterargument, Weinstein wondered whether new licenses might actually help establishments that are desperately trying to remain revenue-positive with the option of offering alcoholic beverages with takeout/delivery.
Chief John Barros reported in on what the Department of Economic Development is working regarding small business relief and recovery efforts, acknowledging that it’s still too soon to say what things will be like once the dust settles.
With the Department surveying small businesses every ten days, current data projects 75% of all surveyed small businesses lost at least 50% of their revenues while 46% of small businesses are shut. Unsurprisingly accommodation and food services industries have been hardest hit – representing the largest percentage of workers filing for unemployment.
As a way to get around the State cap, the 150 new licenses proposed are non-transferable and revert back to the City (i.e., cannot be sold, have no resell value). In contrast, normal beer and wine licenses can fetch $200,000 while all-alcohol licenses are worth over $400,000 in the secondary market, at least pre-pandemic.
As proposed, the licensing board would be able to grant 15 licenses to each of the following ten ‘underserved’ neighborhoods over a three-year period starting in 2021: Dorchester, Roxbury, Mattapan, Hyde Park, Allston/Brighton, Roslindale, South Boston, West Roxbury, Charlestown and East Boston. Notably absent are the downtown neighborhoods including the North End / Waterfront, Beacon Hill, Back Bay, Downtown, Chinatown, Fenway, Kenmore and South End. In 2016, the licensing board rejected all-alcohol upgrades to North End establishments saying the neighborhood was “adequately served.“
In 2014, the State made 75 nontransferable licenses available in Boston, mostly outside downtown. Mayor Marty Walsh, has argued to expand that number.
At the hearing, Councilor Baker agreed to amend the legislation by significantly reducing the number of nontransferable licenses. Chair Edwards also spoke in favor of the licenses as a way to help the industry rebound, especially in lower-income neighborhoods. A follow-on working session with public participation is planned.