Georgetown Looks Set to Double Tavern License Cap, Will it Matter?

The cap on tavern liquor licenses in Georgetown looks set to double in the near future. But given the current trends, it might not make much of a difference.

First some law, then some history. Most liquor licenses in DC are issued as restaurant licenses. Since the licenses are meant to be for genuine restaurants, they come with a requirement that the establishment generate at least 45% of its revenues from the sale of food. Taverns, on the other hand, are meant to run as bars primarily. As such, they do not have any food sales requirements. From the perspective of an establishment owner, therefore, tavern licenses are more desirable for places that want to get most of their revenues from sales of beer, wine and liquor.

For that reason, for decades tavern licenses were cherished in Georgetown. This became even more the case when in response to the proliferation of rowdy college bars in the neighborhood, the DC Council adopted a cap on tavern licenses in Georgetown in 1994. No new tavern licenses could be issued until the total number of tavern licenses in the neighborhood dropped below six. Since there were well above six, this acted as a moratorium on new tavern licenses. And due to the effective moratorium, license holders held on to the tavern licenses all that more dearly. Even after a bar’s closure, license holders would store the licenses “in safe keeping” with ABRA, literally for decades in some cases, so that they could later re-use it or sell it.

(This is different from the overall liquor license moratorium, which was adopted in 1989 and ended in 2016. The tavern cap was not re-considered at that point mostly because unlike the moratorium, it is a product of legislation and could not be removed by simple ABC Board vote.)

As the rowdy nightlife scene in Georgetown started to fade early last decade, the six tavern license cap came back into relevance as tavern license holders finally gave them up. And by 2013, ABRA was able once again to issue brand new tavern licenses. That one went to Gypsy Sally’s.

Even with the end of the overall Georgetown license moratorium, Georgetown’s nightlife scene continued to dwindle, at least the rowdy side of it. So as of today, despite the six tavern cap, only five licenses are outstanding: Donahue (using Smith Point’s old license), Mr. Smith’s, Georgetown Piano Bar, the Sovereign, and the old Rhino Bar license, which is being held in safe keeping.

For that reason, the mayor proposed last year to simply 86 the tavern cap completely. But after pushback from the ANC, among others, the council redrafted the bill to double the cap to 12 instead. The ABC Board would be instructed to reconsider the cap after three years.

It’s really quite a turn-around for Georgetown. Where once neighborhood groups were up in arms against the bar scene, and the bar scene was hoarding licenses in response, now the neighborhood groups are mostly ok with the changes, and the tavern licenses are unlikely to be snapped up immediately.

The open question is whether this does anything to arrest the decline in the Georgetown restaurant and bar scene.

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