Press Release: 2019-06-25

Banker & Tradesman: Bill Offers Big Projects Shelter from Liquor License Limits

Like a lot of what goes on in Massachusetts’ government, our 1930s-era system for doling out liquor licenses to restaurants makes absolutely no sense, yet it is all but impossible to get rid of. That’s because long ago, it morphed into a corrupt insider’s game in which the state-issued licenses to serve or sell booze are sold on the private market for hundreds of thousands of dollars. 

But while we may be stuck with our Depression-era liquor laws, we can at least prevent this archaic system from bottling up major development projects and the jobs and tax revenue they bring To that end, a pair of top real estate groups is pushing legislation on Beacon Hill that could both ease and speed the process under which major developments are able to obtain liquor licenses for bars and restaurants in their projects. 

Limited Licenses Hobble Major Projects 
The International Council of Shopping Centers and NAIOP Massachusetts, which represents developers across the state, have thrown their support behind a House bill that would create an “umbrella liquor license” for major projects. The proposal comes as restaurants have become traffic generators and anchors for new developments, from the Seaport in Boston out to lifestyle centers like 3rd Avenue in Burlington. 

“I think there is a sense of urgency surrounding liquor licenses in general,” said Anastasia Nicolaou, government affairs associate at NAIOP Massachusetts. “Economic development is so important to [Boston] and the state.” 

As it stands now, the limited number of liquor licenses for sale can be a major stumbling block as developers push ahead with plans for new mixed-use projects. Under our archaic and rather random system, the number of liquor licenses is capped in many cities and towns across the state, including Boston, even as some communities, like Cambridge, have no restraints at all. Go figure. 

Developers are forced to either buy existing licenses from restaurants or bars that are shutting down – an expensive process that can cost hundreds of thousands of dollars apiece – or petition the legislature for to raise the cap and add new licenses.

Either way, it throws added uncertainty – and a potential monkey wrench into the mix – as developers struggle to put together complex financing packages in order get projects off the ground. 

Proposal Seems Sure to Please 
Far from an afterthought, restaurants have become the anchor for new projects in the way department stores once were, and liquor licenses are a key component of this. 

Under the proposal by Rep. Tackey Chan, a Quincy Democrat, developers or real estate investors with plans for substantial projects featuring restaurants alongside retail, apartment, offices and other uses could work with local officials to obtain multiple liquor licenses. 

“We see the food and beverage industry becoming a key component for shopping centers and mixed–use development,” said Stephen Burm, a director of state and local government relations for the ICSC. “One of the more difficult things they have to deal with is a lack of liquor licenses in their communities.” 

However, in a key point, the licenses do not count towards the local cap or quota, nor would they be able to be resold on the black market, as is the case now. Basically, the proposal would let the rest of our state’s messed–up system for granting liquor licenses keep going on its merry, dysfunctional way without holding up major projects and economic development. 

Of course, just because it makes perfect sense doesn’t mean the bill will go anywhere at the State House. 

On the plus side, the proponents have worked hard to avoid antagonizing any potential opponents. In particular, the umbrella liquor license would only cover restaurants and bars, and not supermarkets like Wegmans. Package stores are locked in a heated battle to limit the encroachment of supermarkets on their turf. 

It’s not a fight supporters of the umbrella liquor license bill want to get dragged into. Of course, that doesn’t mean there isn’t someone else out there looking to keep the bill bottled up. 

Delays on Beacon Hill Threaten 
The bill’s biggest foe right now is probably legislative inertia, always a big problem on Beacon Hill and one probably exacerbated by the fact we are in the first year of a two-year session. 

State lawmakers have until July 31 to dawdle, delay and debate before bills that haven’t been passed or shuffled off to a study committee die. There’s a lot of happy talk out there about how the state lawmakers in Massachusetts take pride in being thoughtful and deliberate and how they like to take their sweet time and carefully craft legislation. 

Casino legislation is the classic example – it literally took decades to pass. But pride in deliberation, or whatever you want to call, it can also be a convenient excuse for inaction as well. Unlike gambling legislation, freeing up liquor licenses for major developments – something that is relatively innocuous – should not take years to pass. 

Here’s hoping it doesn’t take that long.