Senate OKs Proposal to Get Rid of Liquor License Caps

The move was part of an Economic Development bill that would give cities and towns the authority to issue the licenses at their discretion.

The Senate passed their version of an Economic Development Bill on Tuesday night that included language to relinquish the state’s control of the number of liquor licenses a city or town can issue to businesses, and put the authority back in the hands of municipality leaders.

Late last month Mayor Marty Walsh and 16 other mayors from around the state sent a letter to legislators asking them to do away with puritanical provisions that limit how many liquor licenses they can dole out. The legion of mayors were throwing support behind a bill floated by Governor Deval Patrick, which called for a lift on the liquor license caps statewide, giving local governing bodies the ultimate discretion when deciding how to distribute them.

Under state law, the number of liquor licenses a city or town can have is tied to the population. In order to exceed the cap, elected officials have to petition the legislature, a process that can take months at a time and cause frustrations for business owners looking to offer drinks to patrons.

“Restaurateurs, and the broader economic development which they unlock, are subject to the unpredictable, time-consuming process of petitioning the legislature for a new license,” the mayors wrote in their letter of support for Patrick’s proposal. “The governor’s proposal embraces the notion that local decision-makers are best equipped to make responsible decisions about liquor licenses in their communities.”

The passage of the language as part of the Senate bill is a step in the right direction for supporters of the measure, but since the House of Representatives did not include a similar request in their own version of the bill, the legislation will have to go to a conference committee who will come up with a compromise. The proposal would cover all cities and towns except for Boston, which would be granted a substantial amount of new licenses—150 in all—to be distributed over a three-year period.

While the idea to lift the liquor cap has seen strong support from many leaders across the Commonwealth—especially in Boston—rivals of the proposal claim that lifting the cap could be detrimental to current business practices, and put those who have spent thousands of dollars to obtain a liquor licenses at an unfair advantage.

In March, Bob Luz, president of the Massachusetts Restaurant Association, told Boston he’s excited by the prospect of bolstering the food and beverage industry’s economic development, but that protecting those who already hold licenses should be an important factor when considering the move.

Because of the cap, restaurant and bar owners have dipped deep into their pockets to pay upwards of six figures to obtain licenses, creating a cutthroat market that often ousts smaller operations from the playing field because of the steep prices. Luz believes those who have already forked over large amounts of money for licenses should be protected in some form. “There has to be thoughtful deliberation and consideration given to protect those existing owners who have paid a significant premium for a license and sometimes have even used that as a pledge-able asset with their lender to help build the business,” Luz said in a statement.

Others have agreed.

LiquorLicenseNews.com, a license broker, argued that “economic development liquor licenses may quickly create an un-level playing field, undermining existing establishments,” which in turn would defeat the claim that expanding the number of licenses would help local economies. “It’s obvious to us that the issuance of a liquor license does nothing to guarantee economic development. There are many more pieces to the puzzle that must be in place,” they wrote.

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