Restaurant owners as rentiers: They don't want more people to get liquor licenses

The Globe talks to some current liquor-license holders who object to a City Council proposal to increase the number of liquor licenses in the city because it might affect their investments in licenses - something made possible by the state cap on the number of licenses in the city. Of particular concern: A proposal to make some of the new licenses available citywide, rather than in places such as Mattapan, and the idea of letting developers of large malls get an unlimited number of licenses.

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Yes, there is

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I think it depends on the number of seats, but it's something like $2,500 to $5,000 (but somebody correct me if I'm wrong).

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Great

So make someone getting a new one pay more to offset the costs of the existing holders for some period, say 10 years. If Dustin Pedrioa's Mongolian BBQ or whatever new restaurant gets a new license, they pay $5000-$10000/yr and Stephanie's gets a waiver for their yearly fee. And in 10 years, this has all be evened out and the existing rights holders won't have a case.

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Is this the compound-the

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Is this the compound-the-felony system of economic justice?

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No, it's practicality

The existing license holders have a fair amount of clout with the Beacon Hill insider cabal in my estimation - just see how easily the move to liberate Boston from state control was thwarted. So to get to the desired end point - equitable license distribution without undue limits, we need to do some horse-trading.

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Are you actually suggesting

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Are you actually suggesting that the rent-seeking incumbent businesses be allowed to get away with continuing to use the legal system in a baldfaced attempt to profit?

Better solution: Rent-seeking parasites can go $#@! themselves. Competition, deal with it. The state should switch to an unlimited licensing regime. Fill out a form, pay the fee, meet whatever inspection requirements there be; you get your liquor license. The licensing system is to be used for what it's meant to be - a public safety / consumer protection scheme - rather than a way for private businesses to profit off of the law.

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Lessons from Uber

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I realize it's not exactly the same thing, but it seems like we're not learning lessons from the Taxi / Uber fiasco. Taxi drivers derived too much of their value from their governemnt based monopoly, and then supposedly suffered when someone upset that monopoly.

A liquor license should be like a business license to ensure a restaurant is responsible and law-abiding when it sells a controlled substance. It should not be an asset in which to hoard value.

And I don't blame restaurateurs for being stuck in this game. The blame lies squarely with the Mass legislature for creating a convoluted system. (And I guess, the citizenry for allowing them to do so)

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Rep. Michael Moran, a Boston

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Rep. Michael Moran, a Boston-based state rep, has repeatedly voted against allowing Boston to have its own free will on this issue. If his constituents know what's best for themselves, they'll vote him out this November. In the meantime, blocking any liquor license transfers or new licenses issued in his district should cause enough of a stir - especially since his district includes Boston Landing. It's time for the city council to exert as much power as it has and start forcing the issue here.

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Did some homework.

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I expected to find big restaurants (or owners) as donors to Rep Moran. What I actually found among his top donors are a ton or realtors, a lot of construction companies, general business, and several beer/wind companies (listed below).

Suprisingly, nothing jumps out as too disturbing, but still worth a close look at how donations tie to a politicians' votes.

Boston Beer Company (Charles Koch and several others)
Martignetti Liquors (Several donors)
M S Walker Liquor Distributor (several donors)
Ruby Wines (several donors)

Here's the link. I'm not getting the html to render correctly on the site for whatever reason.

https://www.ocpf.us/Reports/SearchItems?PageSize=5..." title="OCPF Michael Moran">

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This is the same racket as

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This is the same racket as cab medallions. Someone will come up with an Uber for liquor licenses (maybe someone delivers liquor directly to the dining patron somehow?) and bust the model up.

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BYOB?

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Is Mass still working on a BYOB law? I know it works pretty well in cities like Philly who allow it.

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BYOB in Boston

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We have it now (Adam reported on it) but I don't know how common it is. Having lived in Philly, I agree it works well there.

That said, artificially rare liquor licenses seem like a bad idea. If we can get rid of them we should.

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Boston has it, but not very common

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I think the city's only issued 3 or 4 of the licenses (and the first place to get one closed a couple months ago). They're limited to small restaurants outside the basic downtown/waterfront area.

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False value

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We need to stop turning business licenses into commodities. There needs to be a set, achievable (for new businesses) costs for any given license, and they should be non-transferable. Boston should also tell the state to GTFO and decide for itself where/how many liquor licenses should be awarded.

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Agreed

A license should be a certification of competency, contingent on maintaining that competency and following appropriate rules.

Funny how the same system that gets jacked out of shape when Jaxon and Emily borrow their brother or sister's drivers license thinks that selling licenses is okay.

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I agree, a license to operate

I agree, a license to operate should never be an asset that is hoarded and sold. This is why there are few restaurants in outlying neighborhoods. This depresses business overall. It would be great if a chef could open a hot new restaurant in area that needs development.

We cannot entirely protect existing license owners from something that loses market value.

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My problem with the "market value"

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argument is this: WHAAAAAA! you have a fucking licence to PRINT MONEY basically. You are a legal drug dealer! If you got the sads cuz you paid 200k for your licence guess what? You got TAKEN. You probably bought it from some hole in the wall out in Hyde Park and stripped an entire neighborhood of a place to go drink or have a meal WITH a beer (gasp!). Then you put your bar in a hotel or in the South End, where you are overpaying for rent as well. So then what? You overcharge for DRINKS now! Woo, lets all ride the train to BS-ville together! Its ALL garbage! NO ONE wins! YAAAAY!
I say flood the market with licences and let these social leeches lose on their "investment"
God typing that makes me sick. So many folks would love to open a small restaurant or bar and work for themselves at a small business. These folks complaining probably have 3 or 4 bars, eateries, cafes etc and see these licences as "investments" for them to capitalize on. Its disgusting....

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Are These Restaurants

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also going to give back the additional revenue they gained by being one of the few liquor serving establishments? They got their value from paying for the liquor licenses already, by taking advantage of this government sponsored monopoly. If they didn't benefit enough from this advantage to justify the high price paid for the license, that's the fault of their calculus.

It's not everyone else's fault that they priced these licenses as if the good times would go on forever. It's part of the risks of any market.

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No Government License Should Be An Investment

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I'll echo many other comments here - no government license should be seen as an investment. The government is under no obligation to help your investment make you money - that's why you're running a restaurant.

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Let's make one clear point

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Let's make one clear point here: more often than not, government regulation of business serves the interest of business. That is, those already in business. There is no laissez-faire, free market economy in the world. As Adam Smith pointed out, businessmen will always conspire to co-opt competition and game the marketplace. And that includes co-opting government to help them do so. So the next time you come out in favor of a government regulation of business - for a good cause, of course - stop and ask yourself: who benefits?

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Meh

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Caveat is, only if people let them. Business like low turn out, as they can stack government and laws with their own supporters.

Like the different branches of government being a balance on each other, government is supposed to be a balance on unfettered capitalism. But when only the titans participate, they rent seek once they're entrenched.

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Bar Owners

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What are "RENTIERS/?"

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Make any changes based on capacity

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I'm open to smart changes in liquor licenses but it's ridiculous that a quaint, five seat bar pays the same as the TD Garden for an All Alcohol License. That's where the issue differs from cabs as each taxi requires a medallion while a family run mom and pop bar in Brighton pays the same as a huge venue with numerous bars under the same license. Of course with lobbyists involved, not much will change.

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