Two New Liquor Licenses Demonstrate Failed Policy

 

In June of 2010, ABRA released seven new liquor licenses into the Georgetown moratorium zone. This move was done to inject some life back into the Georgetown restaurant scene. Two years later, though, and we can see this was a failed policy.

There were several justifications given for adding licenses to the moratorium limit. On top of a desire to inject some life, the powers that be realized that since the beginning of the moratorium in Georgetown, seven licenses had been canceled. So we could add seven without exceeding the total that existed at the time the moratorium was created. Also, there was a recognition that getting a liquor license was a strong disincentive to new restaurants opening in Georgetown. Due to the moratorium, they were forced to buy the license off one of the license holders who were no longer using theirs. The going price for a license was in the high five figures. This action would provide new licenses without that ridiculous mark-up.

Seven entities jumped on the new licenses. However, this is what happened with them:

  • Bills Bar and Burger – Was supposed to go into the old Philadelphia Cheesesteak Factory building. Never did.
  • Zenobia Lounge – Coffee shop wanted to sell liquor. After obtaining license, they decided they didn’t want to live with the restrictions so they stopped selling liquor.
  • Tacklebox – Jonathan Umbel had been trying for years to get a liquor license for this restaurant. He finally did.
  • Puro Cafe – Another restaurant that was already open.
  • Hu’s Wear – The owners of Hu’s Shoes said they wanted to open a restaurant where Bartleby Books used to be. The bookstore was kicked out; the restaurant never moved in.
  • International House of Ping Pong – This was supposed to be a ping pong-themed restaurant in 1010 Wisconsin Ave. It never opened.
  • Paul Bakery – This restaurant was planned but not opened when they obtained the license.

So three restaurants were already open and one was going to open regardless. Three never opened. And of the three that never opened, despite never once selling a single beer, the owners still get to keep the licenses for as long as they pay the annual fee (Zenobia’s owners also get to keep their license). At around $1,000, it’s not a trivial annual fee but it’s a small price to pay to maintain an asset that could be worth up to $100,000 to the right buyer.

Recently two restaurants have applied for liquor licenses in Georgetown: Red Fire Kabob on M St. and Gypsy Sally’s, the planned new music venue on Water St. In both cases the restaurants had to purchase the liquor licenses in the secondary market.

Almost all the goals of the moratorium expansion have been thwarted. The expanded licenses did not attract new restaurants because they were snapped up either by restaurants that were already open (or planned) or by speculators whose plans were half-baked. The high price of a liquor license remains for any legitimate restaurant that wants to open in Georgetown.

The system is broken. Liquor licenses should be revoked if the restaurant never opens in the first place or closes within one year. Moreover, they should be revoked if they are unused for more than two years. Some of the liquor licenses being “held in safe-keeping” are from restaurants that haven’t been open since the 90s. This is a ridiculous situation that should be fixed with legislation.

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4 Comments

Filed under Restaurants

4 responses to “Two New Liquor Licenses Demonstrate Failed Policy

  1. Beer Fountains and Frat Dens

    Forgive me for being relatively new here, but why does Georgetown still even have a moratorium? Aren’t there enough ways for residents and neighbors to have input, ie, ANC, ABRA hearings, voluntary agreements, etc. Is there a fear that without a moratorium, raging beer fountains and frat dens would sprout up from every nook and cranny? Are those fears justified?

  2. charlie

    simple. But a one year limit on a license; if it isn’t used it revert back.

  3. Carol Joynt

    The moratorium has only hurt Georgetown. It drove away the booming restaurant scene. That and silly landlords.

  4. Dan

    The moratorium did what it was susposed to do. It stopped development in the restaurant/bar business and made the area what it is today – a wasteland of chain/retail stores with no character.

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