SalemNews.com, Salem, MA

Local News

September 27, 2012

Heard around town: How to make money without really trying

PEABODY — Trader Joe’s has good reason to be confident about tonight’s City Council meeting.

That’s the word from

Chandra Allard, spokeswoman for Massachusetts Treasurer Steve Grossman, whose department OKs license transfers, including the one proposed to go from Martino’s New York Deli on Route 1 to Trader Joe’s on Route 114 at a cost of $205,000.

It’s a windfall for Martino’s, which only recently received the all-alcohol license from the city at a nominal cost and has spoken of now returning to the Peabody Licensing Board to get another, a beer and wine license for the deli. A key component of the deal involves Trader Joe’s obtaining a special permit from the council to sell alcohol.

The whole arrangement has raised the hackles of a lot of officials and caused some to wonder if the inflated price paid by Trader Joe’s disadvantages small businessmen who want a license.

But, Allard says, “It’s legal.” What’s more, she recalls a recent instance in Boston where a license was sold for a price in the vicinity of $450,000. A large establishment, she explains, with all their infrastructure in place, will gladly pay a high price just to have that license and open the doors. “And (the law) does not prohibit this. There’s no way we can say you cannot sell your license.”

Allard cautions that at different stages the license transfer, like the original award of the license from the city, must be approved by various boards, including the local licensing board, the state’s Alcoholic Beverages Control Commission and the treasurer. But each of these is bound by the rules, and the business seeking the license can appeal any unfavorable decision to the courts.

Thus, Allard says, the boards are bound to follow the law and allow the sale.

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