Massachusetts better get over its problem with booze, and fast, before any more promising real estate projects stall out and jobs go south.
You can now smoke all the medical marijuana you want. And you may soon be able to gamble the night away as well. But if you want a liquor license to open a hot new restaurant and create a few jobs, you will likely need an act of the Massachusetts Legislature. Really.
Even as it embraces pot and gambling, Massachusetts remains stuck in the 19th century when it comes to alcohol, with a cap on the number of liquor licenses across the state that can only be amended by Beacon Hill.
And that’s left more than one developer cooling his heels, hoping to generate buzz for a big new project with a trendy new eatery or two or three, but faced with having to convince hundreds of legislators from across the state to weigh the merits of a liquor license in Lynnfield or Westwood or you name it.
But with a little luck, this silly, crooked system won’t be around much longer, with Gov. Deval Patrick, in his waning days in office, proposing to ditch the cap as part of a larger, economic development bill.
That is if a few players who have a lot to gain by maintaining a lucrative black market for scarce liquor licenses don’t spoil the party.
“We have heard stories … where the developer has all is local zoning approvals and state environmental approvals, but literally the construction is being held up because of the license,” said Greg Bialecki, the state’s housing and economic development czar.
The more one looks at how liquor licenses are doled out in the Bay State, the more completely ludicrous the current system looks. It’s not a fixed number, but a moveable cap, one that allows communities a certain number of licenses based on population. OK, that’s great if you are talking carving out legislative districts, but it makes absolutely no sense when dealing with something like liquor licenses.
Corruption, Then And Now
The cap, naturally, dates back to the Prohibition era. Booze haters were fearful that good-old-boy local officials would dole out liquor licenses right and left to their buddies and sundry shady characters, overrunning towns and neighborhoods with drunks and bars. So the Legislature was handed final say over whether a Salem barkeep or Somerville chef looking to start a new establishment can serve a few drinks with dinner.
I personally have doubts that the Great and General Court of the Commonwealth of Massachusetts was made up of saints back in the 1920s and ’30s, but the current lineup on Beacon Hill, which has set records for political corruption, serving as some sort of moral backstop to prevent liquor license shenanigans is something else.
The last House speaker is in jail, and two of his predecessors are convicted felons. The current House leader, Robert DeLeo, certainly seems like a nice guy, but is now enmeshed in the radioactive probation department hiring probe.
Patrick’s bill would turn over liquor license decisions to cities and towns across the state, with Boston, which has its own licensing system, granted additional licenses to work with.
I guess if the concern is corruption, I’d take my chances with the local guys, who at least are more likely to face the wrath of irate neighbors – and get booted out of office – should they turn their community into a distillery.
“You would expect a mayor or a city councilor to be more attentive than a state legislature,” Bialecki said. “Right now you have over 200 people voting on it in the Legislature, and some are 100 miles away” from the community that would be affected.
Economic Prosperity At Risk
But much more is at stake there than who gets to call the shots. We’re talking about billions of dollars in new development across Massachusetts that hinge, in one way or another, on whether there are enough liquor licenses to meet demand.
New restaurants have emerged as the anchor tenants of today’s mixed-use, mega developments. But without the ability to serve a few beers or a glass of wine or two, it’s a no-go.
Yet under the current system, it can take a year for the Legislature to give a green light for a new liquor license. Given our state’s already notoriously difficult local permitting process, it presents yet another obstacle, and a serious one at that.
In fact, some developers now depend upon a flashy new chef or restaurant to help seal a deal with their lender and move ahead with construction, Bialecki notes.
Westwood Station, Assembly Square and MarketStreet are just three developments that have run into problems under the liquor license cap.
“Twenty or 30 years ago, the most important question for creating some buzz for your project whether you could get the latest retail clothing store,” Bialecki said. “Now restaurants are the driver.”
Of course, this being Massachusetts, the proposal to junk the liquor license cap is one of those really great ideas that has been proposed before in the Legislature, only to go nowhere.
This time around, it’s made it through the House and the Senate as part that larger economic development bill, with the two chambers now set to meet to hash out their differences.
However, this being Massachusetts, you can expect lots of behind-the-scenes lobbying by players with a stake in the current system, perverse as it may be.
The cap has created a false scarcity, which, in turn, has pushed up the price of liquor licenses sold by restaurants or bars that no longer need them, into the hundreds of thousands of dollars range. There is a little cottage industry with a lot at stake – and probably a few friends in high places on Beacon Hill, or the cap would have been history years ago.
Some claim new restaurants that simply apply for a license at City Hall will have an unfair advantage over established competitors who shelled out $200,000 for the same privilege. Sorry, but you can cry me a river. It’s a crooked system that’s holding back development, jobs and progress. The faster it goes, the better.
Email: sbvanvoorhis@hotmail.com
