SalemNews.com, Salem, MA

April 14, 2014

New liquor licenses get committee OK

By John Castelluccio
Staff WriteR

---- — Three North Shore communities are one step closer to getting a crop of new liquor licenses.

A state legislative committee has voted to forward separate bills for Peabody and Danvers to the full House and Senate for approval, which is expected to come in the next few weeks. Gov. Deval Patrick also signed a bill to create four more licenses for Beverly.

All the licenses had been requested by local communities through home rule petitions to the Legislature, which must approve any new licenses above a city or town’s quota. That quota is based on population, and liquor licenses are often sold privately as business assets for anywhere from $30,000 to $250,000. Local officials say “mom and pop” operations are priced out of the market, because large chain restaurants can afford to pay more for licenses.

“I think the fact that we had a hearing so quickly and received a favorable response reflects the work [Peabody and Danvers] and the legislative delegation did in preparing the bill. It reflects the safeguards the Legislature has put it in place,” said Danvers state Rep. Ted Speliotis, who testified at Tuesday’s hearing at the Statehouse.

Salem Sen. Joan Lovely, who serves on the committee, also testified Tuesday, along with Peabody Rep. Leah Cole and local officials from Peabody and Danvers.

Under the Beverly bill, Larcom Theatre is slated to receive an all-alcohol license, and three beer and wine licenses are reserved for the former Happy Clam Seafood Cafe, the Half Baked Cafe & Bakery and Wicked Art Bar. Peabody seeks 10 licenses for restaurants — five for Northshore Mall and five for specific sites in the city’s downtown. Danvers wants six licenses to keep on hand as business proposals arise.

These “over quota” licenses are subject to special restrictions that would prevent license holders from flipping licenses after a short time and reaping large profits.

Once the licenses are issued by a city or town, they are tied to specific locations and must revert back to the municipality if the business closes within three years. After three years, the license can be sold but must remain at the same location. Local licensing authorities would need to approve all transfers.

“This is a major part of the revitalization effort [for the downtown],” said Peabody Mayor Ted Bettencourt. He said the city’s goal is to generate “nightlife” and “excitement” with new restaurants and pubs. The downtown is pretty quiet now after the workday ends, he said.

Peabody has identified parcels that city officials say are “high interest” spots for development, such as a city lot on Foster Street that Bettencourt wants to turn into a multistory parking garage with commercial and residential uses, and a hotel restaurant that’s also planned for Peabody Square.

Mark Whiting, general manager of Northshore Mall, informed local officials months ago that there was interest by two or three parties in opening new restaurants at the mall, but they needed to be able to serve alcohol. He also said the licenses would help the mall stay competitive with MarketStreet Lynnfield shopping center.

Danvers Selectman Gardner Trask said the town board intended to create a pool of licenses that could be distributed gradually as boutique restaurants or innovative proposals that would “enhance the town” emerged.

An oft-heard complaint from the business community, however, is one of fairness. Some businesses paid six figures for their licenses, but a new restaurant could now open next door and receive one from the city or town for a nominal fee. That’s exactly what happened in Salem a few years ago after the city received several licenses by home rule petition.

As might be expected, there was an uproar. City officials, however, realized in 2011 that seasonal licenses could be converted to year-round permits for a fee. Another home rule petition was passed for seven seasonal licenses, and the fees were $15,000 to convert a beer and wine license and $33,750 for full liquor.

Speliotis said that was the first time special fees were attached to over-quota licenses in many years. Now, Beverly officials are talking about instituting new fees on all new licenses, while Peabody will charge a $5,000 origination fee for each of its 10 licenses.

Bettencourt said he didn’t want to add an “onerous” obstacle that would discourage local restaurateurs, but he wanted some measure of commitment. He said there is no plan now to raise license renewal fees in Peabody, but that might be revisited in the future.

Trask however, said that the fact that people paid hefty prices for their licenses is not something the Board of Selectmen controls. He said he isn’t aware of any plans to raise annual fees in Danvers.

Speliotis said any fees on licenses created by special legislation need to be dealt with in the legislation. If a city or town wants to raise fees, it would have to be across the board.

Danvers currently charges $4,600 for a full liquor restaurant license, Beverly’s annual fee is $2,400, and Peabody charges $2,250.

You can reach John Castelluccio at 978-338-2527, jcastelluccio@salemnews.com or via Twitter at @SNjcastelluccio.