SalemNews.com, Salem, MA

August 6, 2013

Concerns, support for increased liquor licenses

By Jonathan Phelps
Staff writer

---- — BEVERLY — Mayor Bill Scanlon’s push for more liquor licenses in the city was met with some concerns, but mostly support, by restaurant owners and city councilors last night.

City councilors discussed Scanlon’s proposal to seek the additional licenses by home-rule petition through the state Legislature for the first time last night. The matter will be brought before the Licensing Board and the council’s Committee on Legal Affairs.

Cities and towns face Prohibition-era limits on the number of licenses each community can have, based on population. However, they can petition for site-specific licenses.

The number of licenses to be requested is still up in the air, and there will be a public hearing before the home-rule petition is filed with the state, Scanlon said.

Scanlon said the plan for increased liquor licenses would boost the city’s economic development. But some current restaurant owners have raised concerns that too many licenses might bring about too much competition or they would create an unfair business environment if the new businesses don’t have to pay for the licenses.

Several businesses are interested in obtaining liquor licenses, including the Larcom Theatre on Wallis Street, which rents out space for functions, the mayor said. He would not mention any other business by name last night.

“At this time, the majority of parties seeking licenses are in pursuit of beer-and-wine licenses, not full alcohol licenses,” Scanlon said. “Personally, I don’t see that type of license as a major threat to existing licensees.”

Councilor Jason Silva said that adding such licenses with proper regulation would be the next step to attracting new businesses into the city.

“This is one vehicle that can do that,” Silva said. “It is an economic development tool. I think it absolutely needs to be done.”

Craig DeOrio, a Beverly resident and owner of Fibber McGee’s Bar and Grill on Cabot Street, said he is in favor of adding a “few more licenses,” but he asked councilors to proceed with caution in making their decision.

“I believe clear, concise and transparent regulations should be developed prior to adding new licenses,” he said. “This should not be rushed.”

He suggested limiting the amount of new licenses issued and charging a “substantial” fee to obtain a license. He noted that his liquor license was valued at $100,000 when he bought Fibber McGee’s about a year ago.

“Free licenses create an unfair competitive advantage. If current license holders paid upwards of $100,000, then these new licensees must pay a fee also,” he said. “A free license allows the new business to use that capital for other competitive advantages, such as a better build out, more marketing and advertising, lower prices, additional payroll, etc.”

The city now has 36 all-alcohol restaurant licenses and six beer-and-wine licenses.

Scanlon’s plan initially was to ask the state for three additional all-alcohol restaurant licenses, five more beer-and-wine licenses and another beer-and-wine package store license, but Scanlon said the number is now in flux.

Scanlon said he was originally seeking an “inventory” of licenses, which the city could then distribute through local regulations. But the Legislature told him that specific applicants and locations must be included in the home-rule petition, which will take more time, he said.

“We can do that. We just have to do the work here first,” he said.

Scanlon said there is always an opportunity to go before the Legislature for more licenses in the future.

In presenting the plan to councilors, Scanlon recommended a fee be attached to the licenses of at least $50,000. A request for proposal could also be developed for interested license holders.

Under the plan, businesses that are a “cultural attraction,” such as the Larcom Theatre, would have the fee waived.

Scanlon has previously said that the city’s restaurant business has more than doubled over the last five years, to more than $80 million per year. The city now brings in about $600,000 per year in meals taxes.

“We are trying to do this as openly as we possibly can,” Scanlon said, noting that no business has been promised a license.

Staff writer Jonathan Phelps can be reached at 978-338-2527 or by email at jphelps@salemnews.com. Follow him on Twitter at JPhelps_SN.