The Drinks Are on Them

In dominating the city's liquor license scene, the law firm of McDermott, Quilty & Miller has lots to celebrate. The rest of us? Not so much.

By Jason Schwartz | Boston Magazine |

On a Wednesday morning in September, attorney Dennis Quilty stepped before the three members of the Boston Licensing Board on behalf of Noche, a Latin-themed restaurant planned for the South End. The board—a critical if often-overlooked part of city government—had to decide whether the restaurant would be able to serve liquor and stay open until 2 in the morning. On its face, the request seemed doomed. Noche wasn’t just located in a residential neighborhood, but also in a condo building, and neighbors tend to hate 2 a.m. closings, for all the obvious reasons: the noise, the mess, the drunken altercations. And because neighbors hate 2 a.m. closings, the licensing board typically hates 2 a.m. closings, too.

But the board did not hate this 2 a.m. closing. After chairman Daniel Pokaski spent a couple of minutes questioning Quilty and his clients, he asked if anyone was there to support the proposal. A representative from the mayor’s office stood up, followed by a rep from City Councilor Bill Linehan’s office. Finally, and most improbably, a rep from the Ellis South End Neighborhood Association, David Mundel, stood up. “We feel comfortable with this applicant and the relationship we’ve established,” Mundel told the board. Pokaski asked if anyone was there to oppose. Silence. Noche was granted its request.

To the uninitiated, this bureaucratic exercise might appear utterly humdrum. “Restaurant Gets License” is not exactly Herald headline fodder. Yet the licensing board affects Bostonians’ daily lives to an astonishing degree. Want a beer outside Fenway? The board has to okay the vendor. A late-night martini in the Theater District? Ditto. A glass of wine on a Newbury Street patio? You guessed it.

But the board’s power extends beyond determining who can serve booze. Because so few restaurants can make a profit without alcohol sales, the three commissioners effectively decide which establishments will be able to survive, and which will not.

The situation may be frustrating for would-be restaurateurs, but it’s been a godsend for one small law firm, the same group that represented Noche before the board that September morning: McDermott, Quilty & Miller. Nobody, it turns out, is better at getting a desired outcome from the Boston Licensing Board. In 2006, for example, when the state took the rare step of allowing the city to dole out 20 new full liquor licenses, nearly two-thirds went to their clients.

“They have the expertise,” says Robert Russo, a lawyer who has appeared before the licensing board frequently. “They have it down to a science.”

The state’s byzantine laws mean McDermott, Quilty & Miller also plays an outsize role in one of Boston’s most high-profile industries: In a very real sense, these lawyers are the arbiters of where, and how, we eat in this town.

State law dictates how many liquor licenses are allowed in each of Massachusetts’ municipalities. For most of the cities, provisions are in place to increase the number of permits as the population grows. Boston isn’t one of those places. In 1906—a time when the Yankees running state government mistrusted Boston’s Irish pols—the state decided its capital should have a hard cap. There are now 1,030 liquor licenses in Boston (675 full licenses; 355 for beer, wine, and cordials only), a number that hasn’t changed much over the past 100 years. And despite the fact that 55 new (albeit nontransferable) licenses were created in 2006, demand still far exceeds supply. Today, in most parts of Boston, a restaurant or bar owner can sell a full liquor license for $175,000 to $200,000. In the tony Back Bay, where licenses are at a premium, it can run as high as $450,000. Even the “cheap” licenses, for wine and beer, can cost $25,000 to $35,000—prohibitively expensive for many independent restaurant owners.

Even if a restaurateur has the money to buy a license, the process of procuring one takes three to four months (often longer, if a seller can’t be found immediately), which has made many an entrepreneur think twice about opening a restaurant in Boston.

Take, for example, the Leather District sushi spot O Ya, now regarded as one of the city’s best dining destinations. In the beginning, owners Tim and Nancy Cushman couldn’t afford a full license, but they didn’t dare try opening without one. “We knew it’d be the death of the business before we even started,” Nancy Cushman says. “If you go once and they don’t have [alcohol], you’re not going to come back.”

Instead, the Cushmans decided to delay opening while hemorrhaging cash on rent. Fortunately, they were launching at the same time that the 2006 batch of new licenses arrived—and they had good lawyers. They’d hired McDermott, Quilty & Miller.

Leaning back in his desk chair and talking softly in his native Long Island accent, Stephen Miller hardly seems like a restaurant godfather. He’s a bit round, his hair graying around the edges. On the day I meet him, he’s wearing a salmon-colored tie printed with dolphins.

Discussing how he got his start in liquor law, Miller points with pride to a framed 1988 Boston Globe article hanging above his desk. The headline dubs him “a rising star in restaurants,” and the story describes how, as a bottom line–minded owner, he had started up a string of profitable (if unadventurous) places. Essentially, he’d tried to turn restaurants into a science, analyzing the cost of every mozzarella stick and salt shaker down to the last penny. Despite the high praise, Miller got out of the business not long after the article was published. It was too time-consuming, and he wanted to be with his family more.

Having worked his way through Boston College Law School by tending bar at Daisy Buchanan’s, he’d already been taking on some liquor law cases on the side, so the natural next step was to dive into the practice full time. If he couldn’t turn the restaurant biz into a science, Miller figured, perhaps he could turn liquor law into one.

At various times throughout these early years, Miller came across Dennis Quilty, who had taken a more straightforward path into the business. After starting out as an attorney in the city’s law department, he got hooked up with nightspot magnate Patrick Lyons. As Lyons worked to open his club Zanzibar, Quilty handled the licensing. By the time the doors opened in 1987, Quilty had earned a good reputation—and some important connections. As his business grew, he increasingly found himself in direct competition for clients with another lawyer in town: Miller. “Eventually, it just made sense to sit down and talk,” Quilty says. In 1997 they formalized their partnership.

Both Miller and Quilty had long been politically active: Miller was once VP of the Massachusetts Restaurant Association lobbying group, and Quilty was president of the Neighborhood Association of the Back Bay and a twice-failed candidate for public office. So they understood from the start that the key to the liquor license process was getting in with neighborhood organizations—and with local politicians. The licensing board highly values those groups’ input when making decisions. Win the neighbors and the pols, and you win the board.

Winning the neighbors, however, is not particularly easy. They are the sassy sitcom grandma of the body politic: They don’t like noise, they hate it when people are out late, and their first instinct is to say no to everything—especially anything new. “If it’s something they don’t know, they always think of the worst case,” Miller says. Adds Quilty, “Sometimes their objections are reasonable and sometimes they’re not. There’s no other way to put it.”

But if such groups are gently walked through the process and made to feel important, they are much more likely to relent to an applicant’s wishes. After years in the business, Miller and Quilty have become better than anybody at this belly-rubbing. “They’re the ones who are most likely to call in advance and say, ‘I’ve got a guy who wants to do this, is there any chance this is going to fly?'” says Tom Clemens, who cochairs the licensing committee for the Beacon Hill Civic Association. The two lawyers say 
that if they don’t think they can win over the neighbors, they won’t take the case.

It’s Miller and Quilty’s involvement with local pols, however, that has attracted scrutiny. In 2001, for example, the Globe detailed their close ties to Tom Menino’s administration, noting that in the three previous years, members of the firm and their clients had donated more than $56,000 to Menino’s campaign fund, while at the same time the lawyers had scored significantly more meetings with key city officials than other firms’ attorneys. Though Miller was never accused of wrongdoing, his name popped up last year in connection with the Dianne Wilkerson scandal (Wilkerson sent him Ron Wilburn, the man who was allegedly bribing her, as a state senator, to help him win a liquor license). The Globe used the occasion to remind its readers just how politically wired Miller and Quilty are.

And they are wired. Since 2001, Miller has made more than $50,000 in local political donations, while Quilty has given more than $20,000. The firm has also helped raise thousands for candidates by arranging numerous fundraisers. The list of recipients is long and, aside from the mayor, includes state Treasurer Tim Cahill, Attorney General Martha Coakley, and state reps and senators of every stripe. In the past year, members of Miller and Quilty’s firm have also donated to eight of the 13 Boston city councilors—the same people who have make-or-break sway over all the proposals that come before the licensing board—including council president Mike Ross.

Not surprisingly, Miller, Quilty, and all the pols involved insist these contributions don’t affect the firm’s standing with the licensing board. “I’ve sent back checks [from restaurant and bar owners] if they have occurred before any kind of decision or in the middle of a process,” Ross says. “Whoever thinks that you can go out there and use that contribution to get what you want—to me, that’s bad public policy.” Still, Miller acknowledges that all the donations and fundraisers “certainly help you get access to [politicians]. And that’s the biggest thing you need, access to the public officials.”

Such is the firm’s reach that politicians have even supported bids that don’t seem to concern them. When South Boston eatery Franklin Southie won a 2 a.m. full liquor license from the board last year, it enjoyed not just the backing of South Boston Councilor Bill Linehan, but also that of Ross, who wrote an endorsement to the board on official city stationery—even though the council president represents Beacon Hill.

But access is expensive. And those least able to afford it are most often the ones who represent the lifeblood of a city’s dining scene: the up-and-coming chefs sharpening their knives on the edge of culinary trends and the mom-and-pops trying to build something up in a developing neighborhood.

Take Felipe Duran, who came to America from his native Dominican Republic a decade ago. After spending five years working in the kitchen at Beth Israel Deaconess Medical Center, he opened a sit-down Dominican restaurant, Guira y Tambora, in January. With its bright walls, mini palm trees, and piped-in Caribbean music, the Roslindale restaurant is a decidedly cheery spot. “We don’t have many places in Boston with Dominican food, where you can go and sit down and share a moment with someone,” he said when I talked with him in October. “We’re trying to make something different.”

At the time, Duran was also trying to get a liquor license, in the hope of drawing badly needed customers. It had taken him several months before he finally had a line on a transfer. Just the week previous to our meeting, he’d been before the board, seeking to buy a beer and wine license from a restaurant elsewhere in the city. It was an expensive outlay (though Duran declined to say exactly how much it cost), but it was likely necessary to keep him in business. The previous operation at the site, a Mexican restaurant, folded because of its inability to obtain a license, he says.

Duran had his application in order with the neighborhood groups and officials, and a few days after our meeting he would learn that the board had approved his license transfer. As of press time, he was still waiting for the state Alcoholic Beverages Control Commission’s signoff (usually a rubber stamp, albeit one that takes several weeks). Even once Duran can serve alcohol, though, there’s no guarantee his business will be able to recover: Diners had nearly a year to form the habit of not showing up for dinner, and that’s a tough one to break.

I asked Duran if, knowing what he does now, he’d still have opened the restaurant. “I don’t think so,” he said.

According to Ross, situations like Duran’s point to why we need more licenses. “The city of Boston is growing. There are new neighborhoods on the horizon; there are old neighborhoods reinventing themselves,” he says. “Whether it’s Mission Hill or the South End or East Boston, as the caliber and quality of the retail restaurant experience improves, these neighborhoods grow and improve and strengthen. We have a need for additional licenses right now in virtually every neighborhood in the city.”

Alas, there’s little hope new licenses will be created anytime soon. For that to happen, the Boston City Council would have to make a formal request to the state legislature, which would then take up the matter and pass it on to the governor to sign. In doing so, all three political forces would have to overcome the vociferous lobbying of current license holders, who are loath to see the market flooded. As far as anyone can recall, the 2006 licenses are the only new ones ever issued in bulk in the city, and it took two years of hard politicking to get them through. It hasn’t helped that it was exactly this process that gave rise to the Wilkerson mess. For now, no politicians in their right mind will get anywhere near liquor license legislation.

As up-and-coming neighborhoods like Roslindale, Roxbury, and Dorchester continue to lose out, so do the foodies who frequent so many downtown haunts. Small operators like the Cushmans are the ones most likely to innovate, but they’re also the least likely to be able to afford a liquor license. That’s left us with an increasingly dull culinary scene. “The only restaurateurs that can afford a $250,000 license are big chain restaurants,” Nancy Cushman says. “I don’t think that’s what we want Boston to turn into.”

“That’s why a lot of [restaurateurs] boycott the city,” says Charlie Perkins, who brokers restaurant (and liquor license) sales as the head of the Boston Restaurant Group. “You have to pay $200,000 just to serve a drink. A lot of people go to the suburbs.” He says New York is also a more attractive place to do business because it has no cap on licenses and relatively few restrictions.

Of course, nobody’s doing much to improve the situation. And when you think about it, nobody has much motivation. Under the status quo, the city politicians retain their influence over the licensing board. The state politicians hold their leverage over the city. The neighborhood groups keep their tight grip on who can do what on their turf. The current restaurant and bar owners even get to keep the value of their licenses up. And McDermott, Quilty & Miller continues to be the go-to player in the liquor license game.

It’s enough to drive anyone to drink.

Source URL: http://www.bostonmagazine.com/2009/11/the-drinks-are-on-them/