Getting a Liquor License in NYC – 3 Things You Must Know
Who can obtain a liquor license and where you can obtain a liquor license has to be most frequently asked questions in the liquor license practice area. Emerging and even seasoned restaurateurs and hospitality operators, are often surprised to learn the nuances to the archaic laws controlling the sale of alcohol in the state of New York.
Every consideration is important as operators depend
upon on liquor revenue to sustain and grow their businesses.
Principal Qualification – Who can obtain a license?
Let’s first define “principal” – any person or entity with ownership interest in the business to be licensed. In order for a principal to qualify for a liquor license under the Alcoholic Beverage Control Law, he or she must be 21 years old or older and be a U.S. Citizen or lawful permanent resident. However, even if over 21 years old and a U.S. Citizen or lawful permanent resident, a principal is disqualified from obtaining a license if he or she is a police officer, has a felony conviction, or holds an interest in a wholesale license.
Both the qualifications and disqualifications can be misleading. There are situations where a principal may not meet the citizenship or permanent resident qualification but is still eligible to obtain a license if the person holds a visa from a country with which the United States maintains a treaty of commerce and navigation – a long way of saying that both countries allow each other’s citizens to conduct business in their country. Likewise, a person may not have a felony conviction but has a long or recent history of misdemeanors that raises red flags in the eyes of the State Liquor Authority (SLA). The SLA carefully evaluates the character, fitness, experience, and responsibility of the principal to determine whether or not to issue a license.
Even a qualified principal must have a premise under his or her control by before receiving a license. This often leaves qualified principals searching for a qualified premise to obtain a license.
Premise Qualification – Where can you obtain a license?
The premise qualification can present a minefield of issues, both apparent and hidden. On the surface there are three main issues – the 200 Foot Rule, 500 Foot Rule, and zoning codes.
200 Foot Rule
The 200 Foot Rule restricts the SLA from issuing liquor licenses to establishments on the same street or avenue and within 200 feet of a building occupied exclusively as a school, church, synagogue or other place of worship. The 200 Foot Rule applies if it is a retail establishment where liquor will be sold for consumption on premises or an establishment where liquor and wine will be sold for consumption off premises. It's worth noting that the 200 Foot Rule does not apply to establishments seeking to serve only beer and wine.
As with all things liquor license related, there is always more under the surface. The 200 Foot Rule has qualifications – the school, church, or synagogue should be 1) an actual organizedplace of worship under the law and 2) must be exclusivelyused for the restricted purpose.
500 Foot Rule
Generally, no more than three on-premise liquor licenses are permitted within 500 feet of each other. This is commonly known as the 500 Foot Rule. Even still, there is a commonly used exception to the 500 Foot Rule known as the Public Interest Exception. As with the 200 Foot Rule, the 500 Foot Rule does not apply to establishments seeking to serve only beer and wine.
If the location is subject to the 500 Foot Rule, and no “grandfathering” or other exception applies, the license can be issued if the SLA makes an affirmative finding that it is in the public interest to issue the license. This finding is often supported by the applicant’s efforts (more on this later).
The 500 Foot Rule requires that the SLA consult with the municipality or Community Board and conduct a hearing to gather facts to determine whether the public interest would be served by issuing the license. This is commonly referred to as the “500 Foot Hearing.” While the 500 Foot Rule is not an absolute barrier to obtaining a liquor license, it can be a significant stumbling block if not planned for earlier on in the process.
Zoning is equally as important as the 200 and 500 Foot Rules and can be the deciding factor in many cases of whether 1) leasing a particular premise in advantageous, 2) applying for a liquor license is cost-effective, or 3) whether a license can be issued to a particular premise. Zoning should be taken into consideration for all on-premise licenses, including beer and wine licenses. Zoning refers to the allowable use of the building and floor the proposed business will operate from.
In every instance is it imperative to ensure that the premise is zoned properly for the type of restaurant, café, lounge or other on-premise operation and can legally contain the number of patrons anticipated by the business plan. In some instances, while the premise may meet all the requirements to apply for the liquor license, it is not in line with business model the applicant will employ. It is sometimes the case that a restaurant open and operates without a liquor license for a period of time without the necessity of checking the Certificate of Occupancy until a liquor license is explored. It can be devasting for an entrepreneur to sign a lease for a premise, invest substantial amounts of money and time in building the space out and marketing its business just to find out that the Certificate of Occupancy will need to be amended – a process than can take months working through the Department of Buildings and several thousands to complete.
The requirement amendments can range from a change in the maximum occupancy to changes in the use of the premise completely. This can completely stop any exploration of liquor license operation in its tracks. Careful consideration is always advised.
The liquor license process begins by notifying the local municipality of your intentions to apply. This is required for all on-premise liquor, beer, and wine applications. Throughout the majority of the state of New York, these “municipalities” typically refer to your local city, village, or township. In New York City, each borough has a set of organizations known as Community Boards who govern a select area of the community.
Meeting with the Community Board is one of the most important steps in the licensing process. The support, or lack thereof, of the Community Board can either fast track an application through the process or, worse, grind an application to a halt. While the Community Board renders only a recommendation to the SLA, the SLA considers input from Community Boards in all licensing decisions, especially in 500 Foot Law hearings. As I mentioned earlier, the SLA can issue a license where the 500 Foot Rule applies by making an affirmative finding that it is in the public interest to issue the license. The Community Board often plays the largest role in assisting the SLA is determining whether there is a public interest in issuing a license. Thus, your presentation to and relationship with the Community Board is often vital in showing that the license is in the public’s interest.
An application can still move forward without the support of the Community Board, but the process will take much longer. It is important to understand the character and nature of the community board that is responsible for the area so you undertake the preparations necessary for a successful presentation. In some instances, Community Boards will publish advisories stating their positions on allowing certain types of establishments in their neighborhood and as to what types of restrictions, if any, they will put on your liquor license if supported. In other instances, the Community Boards practices are only known from appearing before them regularly.
It is imperative to thoroughly analyze how your business model will be received in the neighborhood and what, if any, steps to proactively take to ensure the Community Board process is navigated seamlessly.
The James Firm is an NYC Law Firm helping businesses obtain liquor licenses so they can build multi-million dollar businesses. You may contact us by phone or email here.