As first reported by the Washington Business Journal yesterday, the ABC board is about to release four liquor licenses into the Georgetown moratorium zone. And one of them will be the coveted tavern licenses. But we’ve been down this path recently, and the result may leave many disappointed.
The heart of Georgetown is covered by a moratorium on new liquor licenses. There can be no more than 68 in total, including the inactive licenses being held “in safe keeping”. This moratorium has been in place since 1989, and it doesn’t look like it’s going to be removed any time soon.
There are benefits and drawbacks to the moratorium (that GM has written about here). But the primary impact is that if you want to open a new restaurant in Georgetown, you have to buy one of the inactive licenses on the secondary market. GM has heard from establishments that paid around $90,000 to buy one. This is a significant disincentive for new restaurants in Georgetown.
The Last Gold Rush
Several years ago when the moratorium was being renewed, ABRA and the ANC worked together to make seven new licenses available. This was an acknowledgement of the problem described above. It was hoped that quality restaurants would take the opportunity to snatch up the virtually free licenses.
As reported by WBJ last week, due to the former Saloun liquor license being allowed to lapse, a new tavern license is available in Georgetown. The Post reported yesterday that two existing venues, Gypsy Sally’s and Smith Point, were the first through the door to try to claim the new license.
Bit of background: There a several different types of liquor licenses in DC. Of relevance to this discussion are restaurant licenses and tavern licenses. A holder of a restaurant licences is required to get a certain portion of its revenues from the sale of food, and must regularly report its sales to ABRA to certify its compliance. A tavern license, on the other hand, comes with no food sales requirements. Thus tavern licenses are often viewed as desirable by bar owners.
Georgetown has been subject to a liquor license moratorium for several decades. That moratorium has both an overall cap, that applies to restaurants and tavern licenses combined, and a specific cap on just tavern licenses. No new tavern license may be issued until the number drops below six. (Which is different than saying there may not be more than six period. The moratorium limit of six was set at a time when there were more than six out there. Over time they’ve steadily been converted or abandoned.) Once Saloun failed to renew their license (which was, frankly, stupid of them) the number of taverns dropped below six and consequentially a new one may be issued. Continue reading
Recently, a group has been formed of U St. residents and business to fight a possible liquor license moratorium along the newly bustling corridor. The move to impose a moratorium was so nascent that for a little while the media had no idea who was pushing for a moratorium in the first place. Despite the small size of the effort, the reaction has been swift and strong.
LeDroit Park blogger Eric Fidler weighed in yesterday with a list of reasons why a moratorium would be bad for the greater U St. neighborhood, including:
- It makes no distinction between “good” establishments and “bad” establishments
- A moratorium on liquor license is in effect a moratorium on new restaurants period
- It will reduce the need to provide good customer experiences
- It unfairly rewards current businesses over future businesses
- It sets the cap at an arbitrary level
- It doesn’t address the supposed problems put forward by those advocating for a moratorium (loud crowds, vandalism, etc.)
- It’s difficult to administer
It’s probably useful to consider the Georgetown experience with the moratorium when considering if one would make sense for U St.
Georgetown has had a moratorium since 1989. Right now, only about 70 liquor licenses can be issued to Georgetown bars and restaurants (liquor stores and hotels are not subject to the moratorium). Here are some of the results attributed to the long standing moratorium:
- Opening a new restaurant in Georgetown is more expensive than opening one elsewhere. On top of the higher rent, you need to purchase a liquor license on the secondary market from a license holder who no longer wants it. This has reportedly driven the cost of such licenses close to $100,000.
- Georgetown restaurants are pretty boring. No new exciting restaurant has opened since Hook did, and it’s closed already.
- Drunken revelry is only a problem in certain spots around the neighborhood.
So some of Fidler’s predictions have already come true in Georgetown. The moratorium cannot be waived for particularly “good” restaurants, the quality of the restaurants has not kept up with the dining renaissance seen in other neighborhoods, and the cap seems arbitrarily set.
Some of Fidler’s predictions for U St. have not come true for Georgetown. Restaurants have opened in Georgetown without obtaining a liquor license. They are more likely to cater to a lunch crowd, but a restaurant is a restaurant. And it isn’t really difficult to administer. The zone basically is everything south of Q St. Continue reading
Yesterday, GM mentioned how the Mayor recently proposed to change the last call rules in DC to allow bars to serve alcohol to 3 am on weekdays and 4 am on weekends. GM briefly mentioned that a lot of Georgetown restaurants and bars wouldn’t be able to take advantage of that change since so many of them are subject to voluntary agreements that restrict the hours they may stay open, not withstanding what the law allows.
But some restaurants and bars aren’t subject to a voluntary agreement. Who are those establishments? This very question was answered in January 2009 when the city allowed bars to stay open till 4:00 AM over inauguration weekend. At that time, GM determined that the following establishments weren’t subject to a voluntary agreement:
- Cafe Bonaparte
- Don Lobos
- Georgetown Inn (may include Daily Grill)
- La Chaumiere
- Mei N Yu
- Miss Saigon
- News Cafe (now Thunder Burger)
- Taj of India
- Additi (now closed) Continue reading
Georgetown has a moratorium on new liquor licenses. So unlike the rest of the city (with the exception of the other moratorium zones) a restaurant or bar that wants to open up in Georgetown can’t simply go downtown, apply for a new liquor license, and pay a small fee. Rather, a new Georgetown restaurant or bar needs to buy an existing license off the secondary market. And for all intents and purposes, that means buying one of the licenses that are held by restaurants or bars no longer in business. The going rate for these licenses has reported to be as high as $75,000.
This barrier to entry has been frequently cited by restaurateurs as a significant reason not to open a restaurant in Georgetown. But GM’s hear to say: act now and this won’t be a problem!
You see, last year the ABC Board authorized the issuance of seven new liquor licenses in Georgetown. This was done partially in acknowledgement that since the moratorium was put in place, at least seven liquor licenses had left Georgetown, so the number of available licenses was actually lower than when the moratorium was put in place. Additionally, there was a sense that Geogetown’s restaurant scene has grown a little stale and that new licenses might inject a little blood back into the scene. Continue reading
Way back in June of last year, the city added seven new liquor licenses to the Georgetown moratorium cap. The idea was to address a perception that good restaurants were avoiding opening shop in Georgetown because the cost to buy an outstanding license was too high. Moreover, since about seven licenses had be forfeited since the moratorium was originally put in place, adding seven back to the mix would only bring us back to the original level.
So once those license spots became available, they were quickly snatched up by the following places:
- Puro Cafe,
- Zenobia Lounge
- Paul Bakery
- Bill’s Bar and Burger
- Hu’s Wear
GM was wondering recently what happened with all those licenses. His curiosity coincided with a new liquor license application, whose provenance GM was confused over. But first to the seven licenses: Continue reading
Last week GM reported the news that on top of the seven newly minted liquor licenses being issued to Georgetown establishments, two additional licenses that were held-in-safe-keeping were going to be also issued. The news was announced at the September ANC meeting by none other that ABRA head Fred Moosally. This is what GM had to say about the two applicants:
- Come To Eat – ABRA Director Fred Moosally was at the meeting last night. He spoke briefly about the moratorium and revealed that two licenses that were held in safe keeping were released. One of them will likely go to a restaurant called Come to Eat to be located in the mall. No details on what that would look like.
- Ma Maison – More excitingly, Moosally mentioned that the other license would likely go to a restaurant called Ma Maison, which would move into the old Hibiscus Cafe space on Water Street. GM could have misheard it, but he swears Moosally said that the same family behind Cafe Bonaparte would also run this restaurant.
GM was a bit wrong on each of these. Continue reading
In June, the Current reported that the seven establishments likely to be awarded the seven new liquor licenses in Georgetown had already been determined. They were:
- Puro Cafe
- Zenobia Lounge
- Paul Bakery (a new French bakery going in just south of Banana Republic)
- Bill’s Bar and Burger (a new place moving into the old Cheesesteak Factory)
- Hu Wear
The first four were no great surprise to anybody, and now it looks like they will be the first to get the new license. All four have had their applications approved to be placard and will each have a hearing with ABRA in September. They all will likely be protested by the ANC, which will lead into the inevitable “voluntary” agreement process. Assuming that goes as it normally goes, these establishments should be boozing it up by early winter at the latest. (Paul Bakery was supposed to open by November according to GM’s sources.)
The last two applicants were mysteries in June and they still are.
Yesterday, the Current alerted GM to the fact that the Mayor has proposed legislation that would address the problem of inactive liquor licenses.
If passed, the proposed Omnibus Alcoholic Beverage Regulation Amendment Act of 2010 would levy a fee on inactive liquor licenses, which are better known as “licenses in safe keeping.” In Georgetown, there are about fourteen such licenses. The existence of the Georgetown moratorium means that the only way to get a new license in Georgetown is to buy it from someone else (and since it’s unlikely that an actively used license will be sold, the only real source is the list of inactive licenses). This regulatory scarcity has caused the market rate for licenses to sky-rocket into the high 5 figures.
In fact, it was this specific problem that the ABC Board wanted to address when they authorized the issuance of seven new licenses last month. GM has argued that a more effective long term solution to the high market cost of obtaining a new license would be to charge a “use-it-or-lose-it” fee on those licensees who continue to sit on inactive licenses in Georgetown. Continue reading
Yesterday’s Georgetown Current contained an article discussing the decision by the ABC Board to expand the available liquor licenses within the Georgetown Moratorium by seven. ABRA officials had previously stated that the licenses would be issued on a first-come-first-served basis. The Current listed the seven parties who have applications pending and thus who are likely to take home the new licenses. Some are familiar faces, some are new, and others just left GM a little confused.
Bill’s Bar & Burger – 3347 M St.
That’s the old Philadelphia Cheesesteak Factory Building, so it would seem a new tenant has been found. It also seems that this is related to a bar with the exact same name in the Meat Packing District in New York. So like Serendipity 3, it would be a DC outpost of a NYC establishment. Given the lackluster appearance of the burger on the restaurant’s own website, GM is not too excited for this arrival.
Tackle Box – 3245 M St.
This is no surprise. Jonathan Umbell has been trying to secure a license for Tackle Box for quite some time. Hopefully you’ll be able to enjoy a beer with your lobster roll soon.
Puro Cafe – 1529 Wisconsin
A recent arrival to the upper Wisconsin Ave. neighborhood, Puro Cafe has received positive reviews. The only sticking point GM can foresee is if they want to serve drinks in their backyard late at night. Since that backs up to residences on Q St. and 32nd, those homeowners might object. Continue reading