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Former liquor chair's mistakes come back to bite Hank's

Hank's Oyster Bar owner Jamie Leeds has had about the worst time one can with the District's alcoholic beverage licensing process. A years-old fight, which she's essentially won, over outdoor seating popped back up last week and forced her to shut down half her patio during Pride weekend, one of the busiest of the year on 17th Street.


Photo by M.V. Jantzen on Flickr.

Sadly, Leeds lost out on a lot of business because former Alcoholic Beverage Control (ABC) Board chairman Charles Brodsky mis-applied the law. His decision letting Hank's expand its outdoor patio was overturned by the DC Court of Appeals, and until the board can re-hear the case, Leeds is stuck.

This all starts back in 2005 when Leeds wanted to open Hank's Oyster Bar at 17th and Q, NW in Dupont Circle. A number of residents, led by David Mallof and Lex Rieffel, opposed new liquor licenses and outdoor patios in the area, feeling that they created too much noise and other impacts to neighbors.

They went through the official process to protest a liquor license, which allowed them to negotiate a "voluntary agreement" with Leeds specifying various restrictions. ANC 2B, a party to the protest, wanted a standard set of limitations that it asks of all alcohol-serving establishments in Dupont's residential areas, such as a closing time of 11 pm on weeknights and midnight on weekends, says Mike Silverstein, an ANC commissioner and now member of the ABC Board. Other protestants, however, asked for further restrictions.

Critics of VAs say that these are not really "voluntary," and defenders of Hank's have used this case as an example. The ABC Board granted motions to postpone its hearing over several months while neighbors pushed for more concessions. Leeds, meanwhile, was losing money quickly while she couldn't open Hank's, and, as she said in a later hearing (page 164-165), she had no choice but to give in.

Hank's ultimately opened, it became a big success, and many residents enjoyed its great seafood and delicious brunch indoors or out on the patio. In 2098 2009, 17th Street's liquor moratorium came up for renewal. The ABC Board extended it, but also included 2 "lateral expansions" for establishments to grow. At the time, most neighborhood leaders expressed an expectation, and hope, that the expansions would go to Hank's and to Komi. They did; Hank's expanded into the ground floor of the building next door and Komi opened up Little Serow in the basement next to its restaurant.

For Hank's, expanding also required rezoning the property next door as commercial, and changing its voluntary agreement, which limited the amount of outdoor seating. It secured the rezoning, and in November 2010, the ABC board granted a motion to terminate the VA.

ABC board makes a curious move

According to the law, the board can terminate a VA if 3 criteria (one with 2 prongs) are met:

(4) The Board may approve a request by fewer than all parties to amend or terminate a voluntary agreement for good cause shown if it makes each of the following findings based upon sworn evidence:

(A)(i) The applicant seeking the amendment has made a diligent effort to locate all other parties to the voluntary agreement; or

(ii) If non-applicant parties are located, the applicant has made a good-faith attempt to negotiate a mutually acceptable amendment to the voluntary agreement;

(B) The need for an amendment is either caused by circumstances beyond the control of the applicant or is due to a change in the neighborhood where the applicant's establishment is located; and

(C) The amendment or termination will not have an adverse impact on the neighborhood where the establishment is located as determined under § 25-313 or § 25-314, if applicable.

The board, with Brodsky in the lead, granted the termination, but made a strange legal choice. Instead of securing "sworn evidence" on all 4 parts of this test, it disregarded part A, and argued that it didn't need to find evidence for all of the prongs to grant a VA termination.

Silverstein recused himself from this decision since he had been involved in the original case, but notes that he argued against such a practice in some other, similar cases.

Leeds went ahead and expanded her patio, and residents have now been able to enjoy even more outdoor seating at Hank's.

Mallof and Reiffel appealed, and on May 17, the DC Court of Appeals agreed that the board needed to make a finding on all parts of the test, not just some of them.

The board moved quickly to schedule a hearing, which will happen this Wednesday, where people familiar with the situation expect they will find that Leeds met part A as well and grant her petition once again.

Hank's has to close half its patio

But in the meantime, someone complained to the Alcoholic Beverage Regulation Administration (ABRA), the agency that manages liquor licenses, that Hank's was using its whole patio, and on Friday, ABRA forced Hank's to shut down half the patio to comply with the old VA.

In an email to the neighborhood, Leeds wrote,

We have our hearing on these last two issues next Wednesday before the ABC Board. We are confident we will prevail, because we did try to work this out with those opposed to us back when we first sought termination of the VA, but they refused to meet. Also, since the Court of Appeals decision was reached, we offered to address their concerns with a more limited VA, but they insist we cut our outdoor occupancy by 25%, even though there have been no complaints. As for changes in the neighborhood, I am sure they are well known to you. Of course, it could take months for the Board to rule.

Last night, as a result of a complaint by the protesters, we were visited by ABC investigators. We were told we cannot use half of our patio seating area, because of the Court of Appeals decision. This happened before we even have had a hearing before the ABC Board.

The board often takes up to 90 days to issue a ruling, but in this case, they may rule more quickly, Silverstein suggested, especially since this decision only requires rehearing a small part of the original case.

What's wrong with the process?

Leeds and her attorney, Andrew Kline, are primarily pointing the finger at the law that any group of 5 residents can file a protest over a liquor license. Silverstein noted that a citizen task force is more comprehensively reviewing liquor license laws right now, and that group may recommend limiting how far away someone can live and still protest in order to ensure that protests come from immediate neighbors rather than people from blocks away.

However, Silverstein noted, voluntary agreements aren't necessarily bad. Dupont's, which set a neighborhood-wide standard for closing outdoor patios at 11 pm or midnight, just set a "level playing field" for all businesses in mixed-use parts of the neighborhood.

Silverstein also noted that the board has fixed some of the problems since 2009, such as the long timeline for approvals. Leeds suffered because she had to negotiate with residents for months while the board put off hearing after hearing. "Justice delayed is absolutely justice denied," said Silverstein, "and justice delayed is absolutely favoring the protestant over the applicant." Since then, he added, the board has significantly sped up the process to create a "rocket docket" where very few applications are pending for more than 90 days.

Since then, Brodsky also no longer chairs the board, having resigned in May 2011 the day before he was arrested for impersonating a police officer. That's little comfort to Leeds, who is paying the price for his and his fellow board members' actions, but the board can at least minimize the damage by making a quick ruling and getting Hank's patio fully open this week.

David Alpert is the Founder and Editor-in-Chief of Greater Greater Washington and Greater Greater Education. He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He loves the area which is, in many ways, greater than those others, and wants to see it become even greater. 

Comments

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Moratorium was renegotiated in 2098? I hope to see that happen :)

by HeeHee on Jun 11, 2012 3:33 pm • linkreport

2098?

1. Whenever I see an argument saying "he got off an a technicality" you should see a red flag. Some things are technicalities and some are important. I don't know enough to say in this case, but it seems that the ANC didn't show anything on any of the four tests -- not just the procedural ones.

2. Why the fuck is anyone on 17th worried about closing hours? That place is a disgusting nightlife for after hours and hanks in probably on the nicer side. Hell, the constant buses and sirens are far far worse than drunk patrons. Don't get me started on the kickball league.

3. I doubt Hanks is in that much distress form not being to use half a patio. Is is not serving alcohol on the half, or not serving?

by charlie on Jun 11, 2012 3:38 pm • linkreport

The "Voluntary" Agreement system is ridiculous. I wish some resturant owner had the energy and cash reserves to challenge it in court. If, as Mr. Silversten says, they are a way of setting a "neighborhood-wide standard" or creating a "'level playing field' for all businesses in mixed-use parts of the neighborhood" then those standards should be clearly incorporated into the licensing law, so that business owners know upfront what standards and regs have to be met in order to open and run a business. If there are problems with bars complying once they're open, that should be an enforcement issue. The city should be taking the responsibility for both creating and enforcing the standards; the business owners should not have to enter into negotiations or agreements with private citizens.

by 17th St on Jun 11, 2012 3:39 pm • linkreport

The ABC board did find that B and C were met, and I am hearing that there was plenty of information that they tried to negotiate (part A), the board just didn't hear it.

I am not sure but I believe that a VA applies to the whole operation with a liquor license, not just liquor serving. So they can't use half the patio at all.

by David Alpert on Jun 11, 2012 3:40 pm • linkreport

Also, fixed the date typo. It's 2009.

by David Alpert on Jun 11, 2012 3:41 pm • linkreport

@Charlie: #2 Drunk patrons indeed, but there are no buses that run on 17th St, at least not the commercial strip where Hank's is. There's the G on P St but that hardly ever runs, at least when I am waiting for it.

by What? on Jun 11, 2012 3:43 pm • linkreport

@what; yes, sorry, I meant the buses on 16th. In any case, that place is a quasi zoo already.

@DaveAlpert; how did the two plantiffs have standing?

by charlie on Jun 11, 2012 3:53 pm • linkreport

charlie: They were the parties to the VA that was terminated, so I assume basically the court treats this as reviewing a decision which dissolved someone's contract. The parties to that contract could challenge that.

Critics of VAs or at least the way VAs work now argue that it's not right to have a liquor license decision be an agreement between certain residents and the establishment.

by David Alpert on Jun 11, 2012 4:18 pm • linkreport

@charlie Why the fuck is anyone on 17th worried about closing hours?

Well geez dude, a bit of potty mouth?

by HogWash on Jun 11, 2012 4:34 pm • linkreport

Self-correction: sorry for referring to you as a dude.

by HogWash on Jun 11, 2012 4:35 pm • linkreport

@DAlpert; yes, I thought the VA was between the restaurant and the ANC, not with private parties. And the aggrieved individuals were members of the ANC. This insane little debate is hard to keep track of.

Of course, I understand this is all about externalities

But isn't this just like the Church of Christ (Scientist) where larger city insitutions should have as much deference as possible to NOT examine ANCs and other types of agreements.

by charlie on Jun 11, 2012 4:50 pm • linkreport

How ridiculous. I don't think there's anybody who can complain that the Hank's patio is out of keeping with the neighborhood. Thank you to Jamie Leeds for putting up with the ridiculousness of some of our neighbors.

by Adam L on Jun 11, 2012 4:54 pm • linkreport

charlie: Yes, it's hard to keep track of. The ANC was also a party to the VA, but at least from what I understand from Silverstein, the ANC was only pushing for these standard restrictions. Others, like Reiffel and Mallof, were pushing for more.

What I think happens is the people who are protesting sort of get together and negotiate together, but they might not all have the same interests. But in the end they all signed the VA. This came up when Leeds asked for the change, because the ANC and neighborhood association (also a party to the VA) were willing to grant the extra patio space while Reiffel and Mallof were not, I believe.

But basically, the ANC was not a problem in this case as far as I know.

by David Alpert on Jun 11, 2012 5:02 pm • linkreport

Critics of VAs or at least the way VAs work now argue that it's not right to have a liquor license decision be an agreement between certain residents and the establishment.

Individuals are parties to VAs? That's ridiculous. Individual citizens (acting as individuals, not in some official capacity) should not have that degree of involvement in or influence over municipal policy.

This makes me particularly cranky because, as a fan of the now-defunct Commonwealth in Columbia Heights, I can only fondly remember the days when I had a Jamie Leeds establishment in walking distance. She apparently closed it (in part) because of the Hank's expansion - now the ingrates near Hank's are tryign to make it so we've been subjected to the mediocre Acre 121 for no reason at all. To paraphrase immortal Ferris Bueller, people with such screwed up priorities don't deserve sugh a fine restaurant in their neoghborhood. (I know it's just a few bad apples, but still . . . )

Is it true that the instigators behind this don't even live near Hank's?

by dcd on Jun 11, 2012 5:24 pm • linkreport

Happens all the time. Like most DC boards ABRA is virtually incapable of rendering a decision on anything that would survive a court challenge.

Protesting a license or zoning matter etc. is good for vetching but ineffective for much more. When someone is really determined to stop something they just have to appeal to the DC Court of Appeals (witness Wisc. Giant). In liquor cases tho the applicant can continue to operate while the appeal goes forward. In zoning matters they are usually stopped dead by financing requirements.

Why it's better to proceed in this or any other matter with consensus and leave controversy to the drama queens.

by Tom Coumaris on Jun 11, 2012 5:50 pm • linkreport

I don't much, but it seems the Board only required C, because it is the only one that that mentions termination. A & B mention only an amendment, not a termination. Also, why would you try to negotiate an amendment if you wanted termination?? That makes no sense.

by Bobby on Jun 11, 2012 10:35 pm • linkreport

Has anyone ever sued over the whole premise of a 'voluntary agreement'?

I'm curious about it's standing in actual case law.

Seems to me they are more often than not used as intimidation and retard a property owner's use of their property, often for no legit reason.

by Hillman on Jun 12, 2012 8:18 am • linkreport

I don't pretend to understand the nuances of all the laws and regs in the city, but I know loud noise when I hear it. When restaurants with outdoor seating and loud patrons encroach on a residential street, the neighbors have every right to complain. There is nothing sacred about a fish peddler's right to disrupt tax paying residents who have a right to expect some peace and quiet at night.

by JackM on Jun 12, 2012 9:41 am • linkreport

When restaurants with outdoor seating and loud patrons encroach on a residential street, the neighbors have every right to complain.

Because if there's one thing I associate with upscale seafood restaurants, it's loud, disruptive patrons.

And outside of, possibly, the immediate next door neighbors no one else has a real interest on this matter, given that it is a commercial street.

by JustMe on Jun 12, 2012 9:42 am • linkreport

@ JackM:tax paying residents who have a right to expect some peace and quiet at night.

Why the emphasis on the "tax-paying" residents? Do business owners not pay taxes? Do they not have rights? And where does the right to expect some peace and quiet come from? This is not rural Montana, this is the downtown area of a massive city.

It's a valid trade-off. In rural Montana, you get quiet and nothing close. In a city, you can no quiet, but things close by.

by Jasper on Jun 12, 2012 9:54 am • linkreport

[This comment has been deleted for violating the comment policy.]

by JackM on Jun 12, 2012 10:07 am • linkreport

A "fish-peddler?" Man, I'm surprised you didn't go with the stronger and more vicious "fishmonger."

[Deleted for violating the comment policy.] This is a city. There are lots of people, a good amount of noise, some crime, and in general, things happening.

Not to mention that the "residential street" you so fear is being "encroached on" is clearly some sort of dual mixed-use zone. Again, because this is a city.

by GWJ on Jun 12, 2012 10:13 am • linkreport

@Bobby; while I agree with your interpretation, the court applies some statory interperation rules and decided that it needed more tests.

Reading the actual case ,which appears to be written by a law clerk, I'd guess the court was very uncomfortable with lack of notice for the poeple who signed the VA. Basic rule: convince the court you're in the right and they will rule on techinical matters in your favor.

by charlie on Jun 12, 2012 10:19 am • linkreport

@JustMe: actually, Hank's is on Q Street which is laregely residential. Pretty much everything on Q between 19th and 15th is residential except the northeast, northwest and southwest corners at 17th.

by 7r3y3r on Jun 12, 2012 10:28 am • linkreport

NIMBYism like this makes me appreciate Mary Cheh that much more for her joke budget proposals:

6. Establish the Resident Relocation Fund, a new special purpose fund. Some residents simply are not well suited to live in a major city. They fear sidewalks, bicycles, traffic, noise, parking, and university dormitories. To address their growing list of concerns, we shall establish the Resident Relocation Fund, which will subsidize the costs of these folks moving outside of the District and include a complimentary municipal bond, untaxed, from the jurisdiction of the ex-resident's choice.

I'd say there's a pretty good pool of people who would and should take advantage of this.

by GWJ on Jun 12, 2012 10:30 am • linkreport

@7r3y3r
That section of Q is commercial, Hank's is next to another restaurant with outdoor seating and directly across the street is a coffee shop with outdoor seating.

People do a disservice to the system when they protest and harangue businesses like Hank's that are close at reasonable hours and are not outdoor party decks.

by MLD on Jun 12, 2012 10:52 am • linkreport

actually, Hank's is on Q Street which is laregely residential.

Hank's is on the corner of Q and 17th, across from the "Java House" and sharing the corner with "Trio." It could not in anyway be mistaken for a residential area.

by JustMe on Jun 12, 2012 10:55 am • linkreport

Truth. Here's the corner of 17th and Q NW: http://i.imgur.com/0jiEy.jpg

by GWJ on Jun 12, 2012 10:59 am • linkreport

Floriana is on the northwest corner of 17th & Q, too. Unless my recollections of the food I've eaten at all these places were actually dreams of mine while I slept at each one, I hesitate to call 17th & Q "residential."

by worthing on Jun 12, 2012 11:13 am • linkreport

Without looking at the actual zoning map for 17th or for Q Street, it seems apparent that 17th Street is zoned for commercial use. Since that zoning is not just for one block it would go from the south property line on the cross street to the north property line on in this instance Q Street. Thus, the commercial building would round the corner. Same for the next block north and for the blocks on the west side of 17th Street.

More than a decade ago, I ate with my son, now 26, at Trio's, a handy, run down, fast service, plastic-covered-booth, dirty linoleum-floor extension of the restaurant that became the original Hank's. From the 1960's when I hung out with friends who lived on Q Street just west of 17th and had their newspaper office in a side door to a building facing 17th, to today, Q was and remains a residential street. The only reason some commercial wraps around on to the east-west streets just as it does on Connecticut Avenue, is that some corner properties zoned commercial along 17th had more than one commercial occupant, some with an entrance on the east-west street. I have vivid memories of Trio and of a Mexican restaurant on the corner and a popular Spanish restaurant, El Bodegon, next to it with its entrance on the east-west street, R, I think though it might have been Q.

Having a commercial strip, which is what 17th is and what Connecticut Avenue is in Dupont Circle, and what nodes of Connecticut and Wisconsin avenues are in the Woodley Park, Cleveland Park, Van Ness, Tenelytown, and Chevy Chase neighborhoods. Just because there is a commercial strip in the middle of a residential area does not make any of those neighborhoods mixed-use neighborhoods. That is a distortion of the term mixed-use.

A mixed-use neighborhood or a mixed-use development is where several uses (and not just apartments or offices with ground floor commercial) are developed and usually encouraged by the local governing regulations. Penn Quarter would be a good example of a mixed-use neighborhood with individual mixed-use developments that usually include three or more of these uses: offices, residences, cultural venues such as theaters, retail, and hotels either one on top of another (Market Square, The Lansburgh, Gallery Place, and The Lafayette are a few examples) or side-by-side (The Pennsylvania on Indiana Avenue and The Lexington/Market Square North are two examples). One could describe Dupont Circle as primarily a residential neighborhood with several streets on the southwest (P Street), middle (Connecticut Avenue) and east (17th Street) that bisect the residential areas and have commercial uses and some residences. You could not say this of Penn Quarter.

by Urbaniste on Feb 26, 2013 2:45 pm • linkreport

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