Posts about Liquor Licenses
Shaw's Tavern closed last week because the restaurant has not yet been granted a liquor license. Several commentators blamed DC's liquor license regulatory system. But Shaw's could be serving alcohol already if the management had done a little legwork.
The tavern got into trouble with the Alcoholic Beverage Regulation Administration (ABRA) for allegedly serving alcohol without a license during a charity event, and even altering documents to mislead alcohol suppliers into believing Shaw's had the necessary permission.
Facing this, ABRA refused to provide a license until the ABC Board, which sets policies and rules on contested cases, can weigh in. It held a hearing on August 10th, and has up to 90 days to rule. Not making enough money from food alone, Shaw's closed its doors and laid off its staff.
Megan McArdle and Matthew Yglesias blame the government. Yglesias says that there's plenty of demand for bars and lots of vacant storefronts, but ABRA policies are "a sign to would-be entrepreneurs everywhere that their potential investments are much riskier than a superficial read of market conditions would suggest." McArdle says,
Punishing a restaurant owner for a liquor license violation with an open-ended maybe-we'll-give-you-a-license-maybe-we-won't delay is equivalent to giving someone the death penalty for a parking violation. Moreover, it punishes the neighbors and the employees right along with the owner.Their arguments, though, ignore management's responsibility for the pickle they're in, and instead push the idea that the city should turn a blind eye to the situation rather than acknowledge any infractions. McArdle, Yglesias, a number of City Paper commenters, and others seem to believe we should simply let bygones be bygones and give Shaw's its license.
We'd like to see Shaw's obtain a liquor license. The building it occupies was vacant for years, and was an eyesore on Florida Avenue. Today, it's a handsome façade on the edge of the Shaw and LeDroit Park neighborhoods. And there's no doubt the restaurant struggled to stay open without a license. But the fact remains that the ownership is solely at fault for the delayed licensing.
To gain insight to the liquor licensing process, we spoke with Matt Ashburn, who owns Capital City Diner in the Trinidad neighborhood. Ashburn has had extensive experience dealing with city agencies to get his restaurant up and running. He's not afraid to speak his mind regarding problems that come from dealing with the city, but has nothing bad to say about ABRA.
Ashburn says they are the most professional, straightforward city agency he has dealt with, and challenged us to find one more customer-friendly. He described the agency as one that's "run like a business," and that the process to obtain a "stipulated" liquor license, which is the temporary license that an establishment can get if there is no community protest, is quite fast and simple.
ABRA employees are available to walk you through the process if you need help, and the 20-page application form (PDF) is only that long because of the helpful, step-by-step instructions embedded in it to make the process as simple as possible. Capital City Diner received its stipulated license by going before the local ANC (5B), requesting a letter of support, and then filing the application. The restaurant was able to legally serve beer after a 3-day turnaround.
Is Ashburn's experience typical or is ABRA's process an impediment? When it comes to fights with neighbors, Phil Lepanto has said ABRA is too reactive instead of proactive, and Natalie Avery argued ABRA needs to work to be more collaborative. But in this case, neighborhood opposition was not an issue.
Shaw's Tavern is located within ANC 2C. The minutes of their April meeting report a unanimous vote to provide a similar letter of support for the tavern.
It's not clear what happened between the April meeting, when the ANC gave their blessing for a stipulated license, and the July 16th "soft launch" that got Shaw's in hot water.
More than 3 months passed with no license, while Capital City Diner got one in just 3 days. What did the management do regarding the license in that 3 months? Why didn't they have a stipulated license as quickly as Capital City Diner did?
Since then, the ABC Board had a hearing on August 10th, with the understanding that a ruling would come down regarding the license within 90 days. In the end, we don't know how the ABC board will rule regarding the restaurant's liquor license.
If we had to hazard a guess, we'd wager that they'll be given a slap on the wrist and a license. All of the hand-wringing we're reading and writing about now could be a small bump on the road when looking back in a few months. But make no mistake, as chef John Cochran told Eater, "All I can tell you is that the alcohol board was making their decision and they had every right to take their time. Shaw's was in the wrong."
Are liquor moratoriums the only way to address issues of peace, order, and quiet in certain neighborhoods, or are there more creative and more effective ways to address noise and traffic issues without stifling commerce or customer choices through public policy?
Dupont Circle has been struggling with this issue for over 20 years. It instituted the first liquor license moratorium on 17th Street in 1990. There are now also moratorium zones in Georgetown, West Dupont (P Street), and Adams Morgan.
A moratorium zone limits the number of liquor licenses in an area. These were first established to ensure peace, order, and quiet. To a a lesser extent (though equally important to many people), they also address traffic and parking issues and ensure affordable retail space can exist.
Moratorium zones were originally considered temporary. What happens when a moratorium ends?
After over twenty years of experience dealing with moratorium zones, neither the City Council, local Advisory Neighborhood Commissions (ANCs), the Alcoholic Beverage Regulatory Administration, nor the Department of Transportation have moved to implement any rules or adjust fees to prepare for lifting any moratorium.
In 2009, when the East Dupont (17th Street) moratorium was last renewed, several members of the Alcoholic Beverage Control Board stressed that moratoriums were not designed to be a permanent solution to peace, order, and quiet, traffic and parking, and retail space issues. Board members implied that this last three-year extension of the Dupont East moratorium would likely be the last, and that the Dupont ANC should take other proactive steps to address noise, traffic, and economic development issues.
Below are some measures that city agencies, the Council, and the ANC could pursue to address the issues that led to the moratorium zone in the first place. This list is by no means exhaustive, and not all are politically (or financially) viable. But in Dupont, many would like to address the true issues that led to enacting these blanket moratoriums so that we are prepared when a moratorium is eventually, and inevitably, allowed to expire.
- Install additional Capital Bikeshare stations and personal racks to provide alternatives to cars, which produce traffic and parking issues.
- Direct the Homeland Security and Management Agency to study alternate emergency routes to reduce siren noise (if a re-designation would have no adverse effects on safety).
- Designate the main thoroughfare as a "No Buses" route to reduce heavy traffic and noise.
- Designate former moratorium zones as "retail incubation zones" and provide a tax credit for hard-goods retails or retail service providers, which would put non-licensed establishments on a more even financial footing with more profitable liquor-serving establishments.
- Increase the fees for endorsements (including entertainment endorsements, sidewalk cafe/summer garden) and overall license fees in post-moratorium zones. Utilize the revenue for additional ABRA inspectors. Post-moratorium fees could gradually reset to the normal fee after five years or so.
- Increase the fees for outdoor cafes in post-moratorium zones. Increased fees could go to more inspectors, or to install additional bike racks or other alternative transportation measures, such as spaces for Zipcars. Post-moratorium fees could gradually reset.
If successful, similar plans could be instituted in other moratorium zones around the city, bringing retail diversity, quieter streets, and consumer choices while addressing actual problems without a one-size-fits-all moratorium approach.
Many of DC's boards and commissions have deep-seated problems, like the Taxi Commission. The liquor license agencies, ABRA and the ABC Board, represent another serious case of dysfunction.
So many cases generate community-splitting free-for-alls leading to pseudo-Solomonic decisions that that businesses and communities become desperate, not knowing what could possibly happen.
Moreover, ABRA relies too heavily on complaint-driven "gotcha" enforcement. This creates a perception of uneven and unfair enforcement of rules and laws.
As an analogy, let's imagine if the fire department operated like ABRA.
In most of our minds, the fire department is made up of guys that wear heavy coats and helmets and rush into burning buildings to save lives and use big hoses to put fires out.
But if that is all our fire department ever did, we'd probably have a lot more deadly fires. Our fire department also has fire inspectors. These are the guys that visit buildings when they are being built to make sure that there adequate means of egress, firebreaks between floors, and appropriate fire suppression systems.
Even more, they visit existing buildings regularly to make sure that extinguishers and alarms are functioning properly and they encourage people to practice fire safety and fire escape drills. And when buildings burn down, they show up and do studies to determine what went wrong so that they can learn how to prevent similar fires from breaking out in the future.
If we applied the ABRA structure to the fire department, it might be something like this:
A call comes into the fire department that there is a fire. They send someone out to see if there is a fire. They prepare a report that they saw a fire. On Wednesdays, the Fire Board meets to review reports of fire.
If the board determines that there is a recommendation that there is a fire, they create an order that says the fire should be put out. The firefighters then return to the scene and put out the fire.
The board then calls the building owner in to discuss how the fire happened. At this hearing, the building owner shows up and a local group of residents show up who think that bicyclists caused the fire. The board focuses on what the building owner can do to keep the bicyclists from starting more fires and gets him to agree to mitigating the threat of arsonist bicyclists.
Now, at the board's direction, a firefighter might occasionally drop by to see that all the bicyclist arson measures are in place and if they aren't he might write a ticket. So, in this building, bicyclists aren't allowed to have candles on their tables or order flambéed desserts. Meanwhile, two doors down, there is a bar called "The Rolling Torch" where bicyclists are encouraged to juggle burning tires and set off fireworks but since no one has ever complained about that, no one ever realizes it might be a problem.
4 weeks later, the building catches fire again. At the hearing this time, a bunch of neighbors show up to complain that the problem has nothing to do with arsonist bicyclists, but the fact that the owner keeps running his gas supply line under a giant replica of a flaming Olympic cauldron. But the board refuses to listen to them because they didn't file the appropriate paperwork with the fire board and therefore don't have standing in the hearing.
ABRA's mission is broad and vague
If an establishment requires an alcohol license of any kind, ABRA and the ABC Board have great latitude and control over that business' operations. These two government entities are essentially the primary regulators for every business that sells alcohol.
The Alcoholic Beverage Regulation Administration (ABRA) manages the administrative functions of handling paperwork, conducting investigations, and coordinating with the community. The Alcoholic Beverage Commission (ABC) Board works in concert with ABRA to evaluate issues about licensing.
As with the Taxicab Commission, mayors plug in politically-chosen appointees. This exacerbates our city's existing problems, many of which stem from councilmembers building ward-based fiefdoms, and the fact that political expediency often trumps good policy.
If an owner/operator has his or her license protested, the ABC Board hears the cases of the protestants and the licensee. If the owner/operator has an infraction of his or her license, the ABC Board will have a hearing to determine the severity of the issue and what should be done in response.
Working together, ABRA and the ABC Board control all aspects of an ABC license. Is it a restaurant, a tavern, or a nightclub? Can a retail store sell beer, wine, and liquor? What will be the hours of operation? Will there be dancing allowed? Can the establishment serve beverages outdoors? Can the establishment have entertainment? Has the licensee managed to get his trash removal vendor to come frequently enough?
These are all issues left to the discretion of ABRA and the ABC Board, and in many ways, it is astounding that an agency whose purpose is ostensibly to regulate alcoholic beverages has become such a dominant presence in our cultural and social landscape.
Broad calls for change
Laurie Collins, a long-time neighborhood activist and former ABC Board Member, proposed a set of reforms for ABRA and the ABC Board in a Georgetown Dish article. Specifically, she calls for removing ABRA from ABC Board supervision and making it accountable to the Mayor's office, establishing a professional arbitration panel within ABRA, and relying solely upon the agency staff to handle questions that arise with regard to licensing. She suggests that the ABC Board should exist in a capacity that serves as a venue for appeals that cannot be arbitrated by the staff panel.
She's right to call for reform. The structural deficiencies of the ABC Control Board that she describes in her article do indeed hamper the effectiveness and legitimacy of an important government agency. But reform needs to go even further.
As Natalie Avery pointed out, in addition to moving the ABC Board away from adjudication, ABRA needs to reorient itself to focus on mitigating and minimizing conflicts and negative impacts on the neighborhood or the community before they occur.
A high-quality urban environment requires a mix of commercial and residential uses. Invariably, the hospitality industry will be a component in a healthy neighborhood. Such businesses have an impact beyond the threshold of their establishments, whether it is the volume of music or crowds, transportation issues related to parking and sober travel, or the security of persons or property. Managing these impacts requires constant, professional engagement of regulatory agencies with stakeholders.
ABRA should grow and expand their outreach arm, which should connect business operators or prospective licensees with resources and training opportunities to help them better manage their impacts. Government can improve communication and facilitate conflict resolution when disputes arise.
There is a also a need for better coordination amongst agencies that play a role in managing and policing the hospitality industry, such as MPD, DDOT, DCRA, DPW, and FEMS. The proactive orchestration of agency, industry and community communication could go a long way toward reducing the need for a board with a heavy adjudicatory case load.
In addition, the community needs more centralized control from the Mayor's office so that city policy can be coordinated with the Office of Planning, other DC agencies that have planning roles, and economic development initiatives. The current ABC Board membership, which relies upon a political balance of Council proxies, ultimately creates an environment in which anything goes as long as no one complains too much.
There are areas of the city that are more appropriate for large crowds and late operating hours. There are also areas of the city where smaller crowds and more restricted operation is a better fit. Making those types of determinations is every bit as important as deciding on the placement of a bus-stop or a signalized crosswalk. In fact, such determinations are inherently interwoven, and yet our current approach decides on them piecemeal.
Fundamentally, we currently have in ABRA and the ABC Board a very strong regulatory body without a clear sense of purpose. It has led to an environment where businesses, residents and civic associations can't determine the likely outcome of any given decision.
Because of this, businesses and entrepreneurs can't manage the risk of opening without a liquor license; residents and civic associations feel that they must engage in an adversarial relationship in order to have their concerns addressed; and the agencies themselves must cope with a pseudo-judicial body that must weigh political concerns, as well as evidence and procedure.
There is no reason to have political appointees manage the hospitality industry. It can be effectively regulated simply by relying on professional staff, supported by arbitration panels. Moreover, ABRA is much more likely to have success in developing and maintaining a healthy and vibrant hospitality industry that can appropriately serve as a complement to locally oriented shopping areas, large entertainment districts, or tourist attractions by adopting a collaborative partnership with business, residents, neighborhood associations, and other government entities, instead of serving as an enforcement team serving at the beck and call of a politically established board.
Update: Councilmember Jim Graham asked for a response from ABRA director Fred Moosally. Here is Moosally's response:
ABRA's FY 2012 budget, with your Committee's leadership and support, contains a new community resource position intended to grow and expand ABRA's community outreach arm—
The Dupont Circle ANC (2B) has created some clear and sensible guidelines for liquor licenses and public space applications in that neighborhood. This approach is far superior to the ad-hoc protest opposition common elsewhere in the city, and DC's agencies should encourage such behavior by recognizing and respecting these guidelines.
The guidelines, adopted in March, lay out a clear set of principles for what the ANC would and would not support for outdoor seating for bars and cafés.
They'd like all outdoor restaurant and bar seating to close by 11 on weekdays and 12 on weekends in residential areas, though they can keep serving patrons indoors if they put in sound-resistant windows and keep them closed. In areas like the Golden Triangle which are entirely commercial or where the only "residential" buildings are hotels, later outdoor hours are fine.
The ANC supports sidewalk cafés, but wants to see 10 feet of sidewalk space between any café and nearby treeboxes, light poles, etc. Permanently enclosed cafés are not appropriate, but temporary enclosures like awnings with plastic sheeting can be okay as long as they keep the open feel as much as possible.
Yesterday, Natalie Avery wrote about some of the problems with Voluntary Agreements (VAs), especially ones prohibiting certain types of music and other micromanaging restrictions. The pro-music group Hear Mount Pleasant still negotiated some VAs, however, and ANC 2B enforces rules like the neighborhood closing hours using VAs.
VAs still serve a purpose under our current regime. They're the only way to create consistent neighborhood-wide limitations that don't exactly match the citywide liquor license rules. It makes sense for different neighborhoods to customize their own rules, as long as those rules are reasonable and consistent, just as we don't have one single liquor license rule for the entire nation.
As I explained in a November post about the liquor license process, though, the current system for creating those VAs is flawed. A new restauranteur might look at the laws and just apply for the maximum allowed, not knowing what a neighborhood wants. Then the ANC has to formally "protest" the license, and start negotiating with the restauranteur. Some ANCs are unreasonable about it, but even the reasonable ones can seem adversarial given this process.
The Dupont ANC's guidelines suggest a better way. ABRA, the agency that regulates licenses, and its decisionmaking board the ABC Board could adopt these rules as a sort of nonbinding "neighborhood default." Anyone considering applying for a license in the boundary of 2B would get a copy of the guidelines before making the application.
ABRA and the ABC Board would give some weight to these guidelines, easing the process for applications which conform and giving extra scrutiny to those which don't. Someone could still try to ask for an exception, but they should need to convincingly explain to the ABC Board why a policy that generally works for the other establishments in the area shouldn't apply to them.
The ABC Board could also judge whether a blanket policy is a good one or not. If the Mount Pleasant neighbors wanted to set a general policy disallowing all dancing, like the old VAs, the ABC Board could (and should) refuse to adopt it as a general principle. But the Dupont ANC's guidelines are the reasonable kind.
Our agencies should reward such ANCs that do good work like this by trying to apply these policies. Then, neighborhoods could get the consistency and balance between residents and businesses they desire, while avoiding the ad-hoc and adversarial VA process.
The success of the Mount Pleasant Temporium and the battles to clamp down on liquor licenses in Mount Pleasant illustrate two opposite approaches to community development and commercial revitalization: one positive and constructive, one negative and limiting.
During the month of March, nearly 6,800 people, mostly from Ward 1, visited the Mount Pleasant Temporium, a "pop-up shop" featuring local artisans and performers and funded with a small grant from the DC Office of Planning. Volunteers organized the shop, planned events and promoted it through marketing. The 24-day pop-up shop rang up a whopping $31,000 in sales.
During the same period, the city's ABC Board, the body that grants and revokes liquor licenses, announced three landmark decisions. They released three restaurants from their "voluntary agreements" with a small group of activists, ending a six-year legal battle.
Mount Pleasant has housed an array of artists, musicians, bands, and arts groups. Why for so long did it seem that revitalization has passed Mount Pleasant Street by? The activism behind the now terminated-VAs represents part of the problem, and the Temporium represents part of the solution.
In both cases, a small group of motivated residents turned their attention to the neighborhood's commercial corridor. And in both cases, the city intervened to help them, but with vastly different results.
During the Temporium's 23-day run, over 50 volunteers donated a total of 850 hours of time to the month-long pop-up shop and program of events. Local businesses offered space, free advertising and supplies worth thousands of dollars. The Temporium's success delivered what the best marketing campaign couldn't buy: living proof that creative daytime retail can be successful in this off-the-beaten-path neighborhood.
The Temporium capitalized on a key quality of urban living and created an outlet for some of the more scrappy and local forms of culture and entertainment that happens in the city. Its organizers understood that people love living in cities not only because of the convenience of living close to downtown or because of bike lanes, green space, and transit, but because of the rich and multilayered social opportunities and cultural venues available close to home.
A 2008 Knight Foundation study found that most of its 46,000 respondents chose the availability of spaces for socialization and entertainment venues as the most significant qualities connecting them to their urban neighborhoods.
The Temporium organizers tapped into people's hopes for Mount Pleasant. It brought not only the kind of business mix they want to see, but the kind of community and local culture they want to foster. They partnered with restaurants to publicize and cross-promote the project and the neighborhood. Local DJs, performers and musicians were included and valued.
This approach to community economic development on Mount Pleasant Street stands in stark contrast to the activism behind the now-terminated VAs. Instead of building on their hopes for the neighborhoods, the small group of activists behind the VAs focused on what they most feared: "becoming another Adams Morgan."
Among their chief targets were business models that blurred the boundaries between restaurant, bar, and nightclub. The liquor license protest process provided a powerful tool, not so much to manage issues like noise and trash, but to preclude this allegedly "community unfriendly" hybrid business model.
The liquor license protest process enabled a few neighbors to impose rules through "voluntary" agreements which made it very difficult for most local establishments to operate legally outside the rubric of a traditional sit-down restaurant.
For example, some of the Mount Pleasant VAs strictly prohibited happy hours, even though few people find them disruptive. All Mount Pleasnt VA's also forbade places from offering live music and dancing. VA activists put these restrictions in place, they said, to protect "quality of life" and to keep Mount Pleasant Street from becoming a nightclub district.
But for many Mount Pleasant residents, neighborhood restaurants were much more than places to purchase meals or grab drinks. They were gathering places and cultural venues. The fact that these places blurred the lines between restaurant, bar, and club was what made them so valuable and what fostered such a strong sense of community in what was once DC's most economically and culturally diverse neighborhoods.
Therefore, a large number of people felt the VA restrictions, especially the ban on live music and dancing, cut them off from a unique aspect of Mount Pleasant community life they once treasured: evenings spent at little restaurants listening to mariachi bands and other local musicians.
Lilo Gonzalez performs at a Don Juan's family night, April 26th, 2011.
It's important to note that the whole effort was as much about creating more venues for music and culture as it was about building capacity among local operators to better manage potential negative impacts. Residents seeking to overturn the live music ban worked with businesses to help them plan proactively to minimize potential negative impacts, especially around noise and crowds. Those licensees who wanted out of their VAs conducted noise assessments and implemented sound management plans. Their staff attended extensive trainings in security and responsible alcohol service.
This is just one reason why there was poetic justice when the VA terminations and the Mount Pleasant Temporium coincided. Both show that there is a willingness to work on a civic agenda that's built on hopes for a neighborhood commercial strip as well as one that values, rather than fears, what "entertainment" and communities more traditionally associated with nightlife can bring to the table. The Temporium organizers tapped into this energy. The activists behind the VAs rejected it.
Moving forward, other agencies should follow the Office of Planning's lead and invest political capital into helping neighborhoods attract the kind of community-friendly investment and foster the civic energy that will make DC neighborhood's both more vibrant and livable. Instead of codifying the fears of self-selected neighborhood gatekeepers into the law, we need city leaders to invest in better ways to manage, plan and police mixed-use neighborhoods so they can be both vibrant and livable.
Residents who live near DC's border have Maryland residents as neighbors, but local laws often act as though nothing but desert lies beyond Western, Eastern, and Southern Avenues. In Ward 7's Deanwood community, residents are protesting a liquor license in their neighborhood, but any decision will ignore a critical element: Capitol Heights, Maryland.
Uncle Lee's Seafood and Carry-Out, located on the northwest corner of Sheriff Road and Eastern Avenue NE, has applied for a "Retailer A" liquor license, which would allow for the sale of beer, wine, and spirits. In a ward that has more than 20 times the number of stores with an off-premise liquor license than groceries stores, it is safe to say another doesn't rank on the list of community needs.
Even bigger than the issue of an additional license is that there are already two other liquor stores at that intersection on the Prince George's County side of Eastern Avenue.
Jock's Liquor, located on northeast corner, sells beer, wine, and spirits. Sheriff Carry-Out, on the southeast corner, sells beer and wine.
Despite the existence of these two liquor stores, the Alcohol and Beverage Regulatory Administration (ABRA) in DC is not required to consider their presence. Because they are located in Maryland, they will not be a factor at the April 13 hearing or ABRA's decision whether Uncle Lee's will receive a liquor license. In addition, Maryland residents across Eastern Avenue are not permitted to testify on the impact an additional liquor store will have on their quality of life.
All of this leads to a larger issue: When considering regulatory actions in communities near a jurisdictional border, should local government be required to engage the community outside their jurisdiction?
Using Uncle Lee's as an example, should the impact to Maryland residents be given "great weight" during the liquor license protest hearing? Should ABRA be required to consider existence of liquor license across the street in Maryland? What role, if any, should the Prince George's County government play in the process?
The issues are likely more complex than the above questions suggest, but there is a clear need for some level of inter-jurisdictional coordination. Maryland and DC have their boundaries, but quality of life issues do not.
Heated discussions rage over liquor licensing decisions in DC, and the process is part of the problem. Rather than battle over rules governing individual establishments within a legalistic, adversarial framework, ABRA and other stakeholders should proactively work with businesses to address impacts on nearby residents.
Most residents don't want to get embroiled in the legal battles around licensing. Nor do they want to get into the minutiae of how a business operates, what kind of music they play, what's on their umbrellas or where they seat customers. They just want businesses to operate lawfully and responsibly.
Likewise, business operators don't want to fight with neighbors, the very people they would like to be their customers. Most are ready and willing to take reasonable steps to minimize impacts from noise, trash, and security, not just to resolve a protest against their license, but because it makes business sense.
Unfortunately, the current system is almost solely focused on a legal process which absorbs time, money and resources that could have been better spent on proactive planning and up-front investments needed to prevent problems in the first place.
Take the Hank's Oyster Bar case. After seven months, thousands of dollars in legal fees, hours of hearings before the Alcoholic Beverage Control (ABC) Board, and unproductive battles waged in blogs and meeting rooms, what's the result? The ABC Board granted Hank's application and ordered the owner to mitigate noise concerns of the abutting neighbor.
What has this process achieved? It has cost the business owner, protesters, and the government an inordinate amount of time and money. It has torn apart the community and discouraged civic participation. It has further discouraged innovative businesses going through the hassle of trying to open a place in the District.
It could have been different. What if instead of playing referee in the legal battle around licensing, the Alcoholic Beverage Regulation Administration (ABRA) had offered the resources and staff time to help restaurateurs like Hank's owner Jamie Leeds plan ahead to prevent problems like noise, trash and security? Agency staff could work with operators to understand risks, identify potential concerns, and plan solutions to minimize the impact on neighbors.
For example, in the case of Hank's, going through such a process would likely have focused attention on the noise impacts on the abutting property owner. ABRA staff could have given Leeds a list of referrals to sound engineers and architects who are experts in noise mitigation and connected her to peers who had successfully managed noise problems. In addition to helping her to manage noise, ABRA staff could have provided resources to address other important issues that affect neighborhoods, including security, staff and server training, waste management, and community outreach.
As an experienced operator, Leeds doubtless had plans to address concerns about noise, safety, and trash management. But ABRA could have helped her ensure she had what she needed to invest in those plans. Instead, ABRA's role was solely to play referee in a contentious battle, forcing her to react to legal challenges rather than focus on preemptive solutions.
Defenders of the current system often claim that the only way to get hospitality operators to respect nearby neighbors is through the protest process. They argue that "Voluntary Agreements" are the only mechanisms a community has to keep businesses in line and prevent the neighborhood from descending into chaos.
What this argument ignores is the fact that operating responsibly with minimal impact on nearby neighbors (often potential customers) makes business sense. Staying off of neighbors' radar by managing trash, noise, and crowds not only keeps hospitality operators in compliance, it also helps them build a strong and devoted customer base.
Many hospitality operators, especially those seeking to open in mixed-use residential neighborhoods, build their business models around being a neighborhood gathering place. Complaints and negativity generated by neighbors and broadcast on blogs and review sites can seriously undermine an operator's reputation and bottom line.
The current system ignores these inherent incentives and instead treats hospitality businesses as problems constantly needing correction and control through rules, restrictions, and enforcement. But by helping operators plan proactively, ABRA could prevent many of the nuisances that bother residents, clog up hearing schedules, and take investigators' time away from more serious issues. Most residents would rather maintain a peaceful, clean, and safe neighborhood than punish restaurants for causing problems. The fewer resources are invested in legal battles, the more resources can be spent on minimizing negative impacts on neighbors.
Local governments across the country face the same challenges as we face here in DC, especially as city living and mixed-use development in urban cores becomes more prevalent. Instead of treating hospitality businesses as potential problems, some cities view the hospitality industry as an asset.
Many of these forward thinking local governments have worked with the Responsible Hospitality Institute, an international organization dedicated to fostering a best practices approach to managing vibrant and livable cities. RHI brings together an array of stakeholders, including BIDs, transportation officials, regulators, law enforcement, venue operators, and community leaders, to identify potential problems and coordinate solutions.
For example, RHI initiatives have included training for venue staff on responsible service and security, providing venues with referrals to sound engineers and security professionals, coordinating transportation services, and working with law enforcement to manage crowds and nightlife issues.
Cities around the world have worked with RHI to develop successful programs to better manage hospitality zones and mixed-use areas. For example, San Jose and Philadelphia have created an orientation for nightlife businesses that guides operators through the licensing process and shares best practices for noise, trash and security management. Seattle and Providence have established government staff positions to reach out to at-risk businesses and help them solve problems before they reach the level of enforcement. Edmonton and Gainesville have worked with colleges and marketing firms to develop patron responsibility campaigns aimed at addressing negative behavior from the consumer side.
Some DC leaders are moving in a similar direction and exploring innovative programs from other cities that integrate business assistance, training, and collaborative problem-solving into the regulatory framework. For example, from April to November of this year, Councilmember Jim Graham (Ward 1) initiated an ABRA Noise Task Force, on which I served when I directed the MidCity Business Association. The committee, which included agency staff, residents, and business representatives, was charged with finding better ways to deal with the issue of noise from ABC licensees. Though there was some discussion about the adequacy of current regulations, most of the conversations focused on how best to solve problems related to noise in a more proactive way.
In November, we presented a set of recommendations to the ABC Board that drew on lessons from other cities and included programs pioneered by the Responsible Hospitality Institute. For example, the Noise Task Force recommended that ABRA implement a Hospitality Business Orientation and an Early Assistance Team, two programs that involve a business assistance approach like the one described above.
The Hospitality Business Orientation would guide new ABC licensees through the licensing process and give them information about the best ways to manage issues like trash, noise and security. The Early Assistance Team, coordinated by ABRA but including mentors from the business community, would work with at-risk businesses, helping them to solve problems before problems reached a level needing enforcement.
The Hank's case shone a spotlight on how dysfunctional and destructive the current system has become. The current ABC Board's apparent willingness to take a hard look at VAs is encouraging to those of us who've seen the harm they've done to businesses, community relations, and economic development in many neighborhoods.
But it's important to realize that the current system, as flawed as it is, came about for a reason. There was a time when the ABC Board was barely functional, when ABRA enforcement was almost non existent, and when affected residents had practically no recourse when licensees flagrantly violated even the most basic rules. The current protest process and the over-reliance on VAs emerged in response to extreme dysfunction.
Criticizing the flaws in the current rules/enforcement-focused system does not mean going back to the days of "anything goes." Far from it. Our city needs clear rules and robust enforcement to ensure that our neighborhoods' mixed-use commercial strips are lively, lawful, and livable.
Residents need and deserve a role in this process. But residents and businesses also need government to provide more tools, resources and best practices to address real concerns and solve real problems instead of just being told to work it out through the protest process. The ABC Board and the DC councilmember who has oversight of ABRA in the coming year must step into the breach with fresh thinking to address concerns about balancing vibrancy with livability.
Natalie Avery was the Executive Director of the MidCity Business Association from 2008 to 2010 and worked closely with hospitality operators in the 14th and U area to foster a best practices approach to managing nightlife issues. In 2010 she co-chaired the ABRA Noise Task Force. Currently she is a stay-at-home mom in Mount Pleasant, happy to be raising her children near a commercial strip with lots of nightlife and dining options.
A number of businesses' recent tangles with DC's liquor license process has clearly shown the need for reform. The long saga of Hank's Oyster Bar in Dupont Circle clearly demonstrates the flaws as well as some strengths of the current system.
Back in 2005, Jamie Leeds wanted to open a restaurant on Q Street NW just east of 17th Street. However, a number of residents oppose new liquor licenses on 17th. They fear, rightly or wrongly, that 17th could become entirely filled with bars, making it much noisier and pushing out other types of retailers.
Leeds negotiated a Voluntary Agreement with ANC 2B, specifying some limits. However, other residents weren't satisfied and wanted even stricter limits, and the ANC pulled out of the process. Leeds reached an agreement with a second group, and then yet a third pushed for even more, effectively "moving the goalposts" and stopping the restaurant from opening.
The Alcoholic Beverage Commission (ABC) Board, which adjudicates liquor license decisions, kept telling Leeds to continue negotiating with residents, as she explained at the ABC Board hearing (page 164-165). Her savings running out, she felt she had no choice but to agree to all of the demands, and finally opened the restaurant.
Today, Hank's is a very popular establishment that is almost always bustling and fills its patio in good weather with a mix of people having a good time and not causing trouble. Leeds secured the rights to expand into the vacant adjacent townhouse, but again faced the obstacles of the liquor license process.
The VA limited Hank's seating capacity, and some of the residents involved in the original VA weren't interested in allowing expansion. The ANC, on the other hand, didn't object to the expansion, and had previously endorsed the idea of some lateral expansions on 17th. The ABC Board had even extended 17th Street's liquor license moratorium only on the condition that up to 3 existing businesses be allowed to expand.
But in the VA process, any group of residents can force a hearing. After a months-long process, Leeds secured permission from the ABC Board to terminate the VA. All she had left to do was go through one more ABC Board hearing to actually modify the liquor license for an expanded business, and all would be well as far as most neighborhood residents were concerned.
However, another wrinkle suddenly appeared. In Dupont, the ANC habitually negotiates a VA with businesses in residential areas to end outdoor seating at 11 pm weeknights and midnight weekends, though they can stay open later indoors. This is a reasonable balance between the needs of residents and businesses; establishments can keep selling food and alcohol, but need to move inside to cut down on noise. This had been part of Leeds' VA.
The placards Hank's posted for its license renewal included the previous 11 pm and midnight hours. But when the ABC Board terminated the VA, they said Hank's hours could automatically revert to the maximum legal hours of 2 am weekdays, 3 am weekends as in their original 2005 application, and Hank's attorney Andrew Kline started suggesting the restaurant might stay open later. This threatened to undermine the neighborhood consensus in favor of Hank's expansion and the support of all those who had defended Leeds.
To preserve this neighborhood policy, the ANC suddenly had to reverse course and "protest" the license. Now the ANC, formerly an ally, suddenly looked to be an opponent. Fortunately, Hank's agreed to keep its hours at the neighborhood standard, and the ANC expects to support that at a special meeting Wednesday.
What's wrong with this process? Fundamentally, it hasn't effectively handled this situation where most residents support the license or the change with some limited restrictions, while others want no change or no establishment in the first place.
Some think VAs should be abolished altogether. However, DC can help businesses secure their liquor licenses more smoothly without throwing out this tool which is often very useful. Here are some steps the DC Council and/or the ABC Board can take.
Combine hearings and speed them up. If it concludes soon, the entire Hank's process will have consumed an entire year and many, many hours of legal bills. Yet the current proposal is identical to the original one. It shouldn't take so long to make a change.
This process included a number of separate hearings on different segments of the process, such as first removing the VA and then making the change to the license itself. All of these steps could be condensed into a single step. The establishment can put up its required placards to notify neighbors of the proposal, give a reasonable amount of time for people to weigh in, and then have one hearing to listen to testimony and make a decision.
Don't wait for agreement before holding the hearing. The ABC Board back in 2005 hurt Leeds by delaying action on her application until all protesting residents could agree. The fact is that in many cases, there are a few people who won't go along with even an overwhelming consensus.
The board should schedule its hearing and encourage the applicant to work out agreements with others, but if they can't satisfy everyone, the hearing should happen and the board can judge protestants' arguments for themselves. To its credit, the ABC Board has been moving much faster in recent years.
Clearly limit the parameters of VAs. Hank's VA not only regulated hours of operation and seating, but also prohibited any lettering on umbrellas besides the restaurant's name, and demanded certain kinds of materials in tree boxes. These issues should be covered by historic preservation, if at all, not enforced by ABRA (the agency that enforces liquor licenses) and negotiated in the VA.
Elsewhere, some neighborhoods groups of residents or ANCs have asked for requirements that the owner attend certain meetings, join certain organizations, donate to certain local nonprofits, or not play certain kinds of music. ABRA should define a clear set of restrictions that VAs may or may not contain.
VAs are often very long. ABRA could create a very simple one-page form that has checkboxes and spaces to fill in specific parameters: hours inside and out, amount of sitting and standing capacity, whether amplified music can be played, etc. A fairly small write-in space can accommodate any other items, but the vast majority of VAs should be able to simply use this basic form.
Require more residents closer to an establishment to protest. Today, as few as 5 residents can file a protest, and they can live as far away as 600 feet (1.6 football fields). With Hank's, the lead protestants lived 280 feet away and others lived even farther, while two directly across the street spoke in support. Protests other than ones filed by the ANC should require a greater number of protestants from a more immediate radius.
Encourage ANCs to define neighborhood-wide principles for VAs. Today, an ANC has to formally "protest" every liquor license application if it wants to get a VA. This makes the process unnecessarily adversarial. It also has to make this decision on a case by case basis. New business owners often don't know ahead of time what the ANC will or won't protest.
Instead of having every decision made case by case, ABRA could work with ANCs to define a reasonable and general policy about which VA parameters they'd protest and which they wouldn't. This could become a sort of default VA. For example, in Dupont, the general principle could be that outdoor hours are limited to 11 and 12 north of N Street or New Hampshire Avenue, but not limited in the Golden Triangle.
Applicants would get this information when first contacting ABRA. They wouldn't have to follow it, but could know that if the application fits within these parameters, the ANC wouldn't protest and ABRA could move a license application more quickly. The ABC Board could make a point to be more deferential to applications that do comply with this general policy.
On the flip side, if an application doesn't conform to them, ABRA would automatically assume there needs to be a hearing and the Board could give that more scrutiny. Prospective restaurateurs would know what the ANC is probably going to support and what they probably would not, and could write a business plan with more confidence about what would get approval.
Of course, ANCs shouldn't be able to set up a guideline saying that there should be no establishments at all, and applicants could apply for anything they wanted just as they can now. But if an ANC sets up reasonable parameters and is willing to apply them broadly, the ABC Board should give that "great weight."
Require the board to consider residents' needs when terminating a VA. The current law is vague about how the ABC Board should weigh the impact on residents when canceling a VA, as in the case of Hank's and the late night hours. They are required to consider it when granting a license, but that language lies in a different section of the law than the part about removing VAs. The Council should clarify this.
In theory, the process DC has makes sense. An applicant must notify neighbors. Neighbors can then ask for a hearing. Before the hearing, they can come to an agreement, which ABRA will enforce. If they don't, the ABC Board decides what to do at the hearing. The local ANC gets a louder say than others, but still doesn't decide on its own.
The problems come not from this process but when it doesn't work properly. If the ABC Board doesn't listen to reasonable ANCs pushing for sensible compromises, or refuses to overrule unreasonable neighbors, or allows outrageous provisions in VAs, or if the process takes too long, it can hurt businesses and neighborhoods.
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