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Patrick proposes lifting cap on liquor licenses

And not just in Boston, but everywhere, the State House News Service reports.

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Free at last!

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the underserved(no pun intended)neighborhoods thank you.And yes these neighborhoods do have an ample amount of liquor stores but lack establishments that serve alcohol.

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Put a bunch of violent, potentially armed rival gangbangers in a crowded bar, get them drunk, see what happens...

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Lock the doors first?

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"We have to compete with those damn conservative Republican socialist liquor stores up in New Hampshire." -Haverhill Mayor James Fiorentini

Now that's a quote.

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Maybe I'm a conservative socialist!

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That's pretty amazing. I'm looking forward to similarly-bizarre accusations from rent-seeking businesses opposing this plan (who all own liquor licenses and use them as investment vehicles). Socialism! Free markets! Alcoholism! It's all going to come tumbling down if we stop artificially constraining the numbers of bars!

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I am totally in favor of this as I am sick of seeing licenses from dive bars that close going downtown rather than towards a decent full service restaurant in the same neighborhoods (e.g. ups/downs & Peabody Tavern). The one obstacle that I see is opposition from current license holders who could see the value of that asset drop from $200,000+ down to a more reasonable number (somewhere in the five figures I would imagine).

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The article quoted no officials skeptical or hesitant to make that change. Everyone is strongly in favor of removing the cap. So why has it taken so long? They managed to revise the "underskirt photo" law in a few hours so what's the hold up on this?

I know the answer to the question but still....

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I would guess the state legislature does not want to give up the power.

But let's guess who will quickly come out against this reasonable change first and present it as destroying our quality of life.

It will be either MADD, local police officers, some ministers, nieghborhood groups, any other ideas?

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simply issue an executive order eliminating the quota.

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Mothra Croakley will once again demonstrate her undying love for her campaign contributors and find ways to illegally undermine it, just like she has with mail order wine (despite court orders to knock it off).

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Abuse of the AG's consumer protection powers which the legislature foolishly left without oversight means you will not be buying any (listing the most infamous) wine, ammo, caffeinated alcohol, traditional Chinese medicines, some collectible coins, or anything else the AG doesn't like via mail order despite their being no law on the books banning any of those items.

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You already know the answer to this. Everyone who has shelled out six-figure sums for a grey-market liquor license, or who is holding onto theirs as a retirement plan, opposes this plan. Remember what happened when we tried to lift the "3 stores from a chain can have a liquor license" law on a ballot question, and suddenly a bunch of money showed up to pay for a "public awareness campaign" telling us that it would cause a surge in drunk driving, and ruin our neighborhoods with alcoholics shuffling into Market Basket?

Those folks also own most of our legislature, so...

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Remember what happened when we tried to lift the "3 stores from a chain can have a liquor license" law on a ballot question, and suddenly a bunch of money showed up to pay for a "public awareness campaign" telling us that it would cause a surge in drunk driving, and ruin our neighborhoods with alcoholics shuffling into Market Basket?

Well, I voted for keeping the limit, but not because I was worried about drunk driving. I think that the limit tended to support local businesses. All else being equal, I'd rather see money going to a packy than to Walmart or whatever. Hopefully we can retain the three store limit while otherwise opening up the number of licenses issued.

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Nobody wants to come out publicly saying that he or she benefits from the political patronage generated by the enormous fees people pay for these licenses.

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Looks like they're getting ready for all the liquor licenses needed for the casino.

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We may be a world class city yet!

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It's about time.

I would support this. This cap on liquor licenses represents a huge expense to anyone starting a restaurant in Boston.

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While writing on comment boards supporting this or saying it won't get done because someone is going to complain is fine, if you really want the license quota lifted, write to your state reps. They don't read comment boards, but someone in their office reads letters and that can make a dent.

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One of the arguments out there for not allowing a casino repeal referendum is that the casino people have already paid hefty application and/or license fees to even get to this point, and that repealing the law that allowed casinos would be an impermissible taking of their "interest" under the law (which would presumably require "just compensation", which is arguably a lot more than just the license fees (e.g., lawyer fees, the costs associated with land acquisition, etc.)).

The facts may not be congruent (i.e., there may very well be a difference between a re-ban of casinos and the removal of a liquor license cap), but the existing liquor license holders will almost certainly sue to block the lifting of the cap using a similar argument - that their property interests in the liquor licenses have been deprived of all value by removing the cap.

I can see all kinds of ways that the Appeals Court and the SJC could differentiate between the two situations so as to find a taking in one case and not the other. But the legal niceties are pretty much irrelevant. The bottom line is that the lifting of the cap on liquor licenses isn't going to happen soon because there will be drawn out litigation (which by the way, will have all the money on one side - that of the current holders and their industry reps). Accordingly, I wouldn't get too excited about an explosion of new restaurants, bars and/or liquor retailers coming soon.

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A similar argument was made against companies like Uber, that they don't have to pay the medallion licenses and that those that did would see the licenses devalued, but Uber was allowed. I know they are technically livery vehicles, but the cabbies still sued, and in places like Miami Uber riders have to wait an hour to pickup someone to protect the taxis, so MA got that right and could get this right if enough people actually make it known that they want the change (not in comment forums but at hearings and to their representatives.)

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The face value of a liquor license is not that great. The value is market value, which exists independent of what the government charges or charged for it.

Here's my take. Ending the cap on liquor licenses would be akin to allowing municipalities to issue hackney medallion at will, based on a registration system that does not cap the number. I'm not saying it's a good thing, just that the value of a medallion would go down. The municipalities might be on the hook for the initial value of the medallion, but not what the poor sap at the end paid for it. Same thing with liquor licenses. The government is not saying that they cannot use the license, just that all these other people can do the same thing you are without having to incur the debt they did on the secondary market.

The casino thing would seem to me to be akin to the government selling a chunk of land at fair market value to a company to build something, then later saying that they cannot build on the land. Might there be a way to compensate, say, Plainridge for whatever they had to pay to get the slots license, as that was a transaction between them and the Commonwealth directly, plus costs incurred in good faith relating to the license? I don't think that is in the current referendum, so if they fail at the SJC and want to continue, the casino opponents might want to think about that.

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There is precedence for raising the number of medallions (Boston did to help fund the Convention Center) and has added liquor licenses to help the Squidport, so removing the cap entirely is just more of the same.

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Lawyers can claim anything they want -- and they will. But fact is, government actions affect the value of items in the private market, on a regular basis.

My perennial bugaboo of "zoning" is a classic example of this. Government stepped in and banned certain kinds of development of land, with parameters based on arbitrary rules. That regulation was a severe taking of property value (a transfer in some cases, from one set of owners to another). As far as I know, zoning has really never been treated as a "takings" issue that led to compensation.

Now, zoning law was created here in the 1950s when the government was screwing people left and right, so maybe you could claim that things have changed. But, for example, when later rezoning squeezed allowable floor area down even further, I don't think anyone got a dime out of the city for compensation then either.

Personally, I think that liquor license holders have even less legal claim than land owners who get screwed by zoning. Liquor licenses were not intended to become tokens of trade, and actually have to go back through the Board every time they get "traded." That's much different from land, which everyone understands to be an asset for purchase and sale.

But hey, money talks, and although I disagree, I can believe that liquor license holders might want to flex some political muscle to keep out competition. It's unfortunate but true that our system caters to the powerful and screws everyone else.

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I can tell you right off the top of my head that there was a case from within the last 10 years out of Clark County, NV (Vegas) wherein a landowner sued over restrictive zoning (a height limitation because of nearby McCarran Airport) and won. The county and state had argued all the traditional reasons that zoning was legal and was not a taking. They lost (now, I realize, this is Nevada we're talking about, but still, there were some chunks that were relevant elsewhere).

The case really turned some heads - particularly in the airport community (keeping buildings around airports low, and thereby reducing hazards to air navigation are paramount concerns of airport operators, and those who have zoning or other authority to regulate height around their facilities are obligated by their FAA grant assurances to do so). As I recall, the holding put a lot onto the fact that the zoning had essentially prevented the landowner from doing any development (the height restriction was severe) and thereby reduced the economic value of the land to essentially zero (which, IMHO, and that of many others, was complete rubbish because the land still could have been used for, among other things, mineral production, grazing, solar energy production, etc.).

Also, although I don't have time to get into it now, when zoning was initially begun in the early 20th century (significantly earlier than the 1950s) , there were many cases in which it was struck down as a taking. As it often does in our common law tradition, the law evolved over time to address perceived societal needs (no matter what those strict constructionists tell you!).

In case you are interested, and again, off the top of my head (no time to look up cites, sorry), some Supreme Court cases around this issue are: Nollan, Dolan, Penn Central and Mahon.

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Thanks for the heads up on that case, but I think it also shows that it was considered an exception to the rule that government can manipulate your property value through regulation and not compensate you.

In the nineteenth century, as well as early 20th, zoning-like regulations were often struck down as takings, it wasn't widely accepted until Euclid v Ambler in which the Supreme Court essentially let the floodgates open on use-segregated zoning (a.k.a. "Euclid-style zoning"). Massachusetts enabling legislation for zoning dates to the 1950s, but there are records of the Boston City Planning board and other such committees getting together as early as 1910 - 1915. Mostly they focused on trying to decide which city blocks to bulldoze in order to widen roads (I shit you not).

Without getting all "strict constructionist" on you (which I am not) I will just point out that the "perceived societal need" of early zoning codes was mostly about segregation, if not blatantly then implicitly. Racial and economic. I would like to think that we have "evolved" away from that kind of despicable behavior (what with the Fair Housing Act, equal treatment under the law, etc). There are some legitimate (read: non-racist) justifications of some aspects of zoning, certainly, but to what extent is it really needed, and what constitutes a "taking" and what does not, I cannot answer. I will check out those other cases when I get a chance.

But returning to the original question, if in most cases, zoning does not constitute a "taking" then how could liquor license reform be construed as such?

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..dates back to the Hatch Wetlands Act, circa 1965.

http://en.wikipedia.org/wiki/Francis_W._Hatch,_Jr.

It was intended to recognize the value of wetlands and their role in flood control, as recharge aquifers, habitat and so on.

I watched it evolve over my lifetime. One element was the creation of conservation commissions in all cities and towns.

The main thing a commission does is review development permits.

And it led to impressive open space preservation everywhere in the Commonwealth save some of the cities that were too nuked to have much left and even they are trying.

The various cities have always been the hotbeds of politicized zoning manipulations but the burbs and towns can be surprisingly honest.

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I'll believe it when I see it. Its nothing more than hot air. We've had this discussion many many times before and it always gets squashed, either by voters or special interests paying off politicians.

Sorry, Not holding my breath on this one. We've been this way for so long, I doubt a change like this would happen this easy.

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I'd be putting it on the market today, because tomorrow it won't be worth squat.
Thanks Deval.

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I know, right? How dare he encourage the free market!

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The license shouldn't be worth anything; the liquor that it enables you to sell should be. The inflated value of licenses is entirely artificial and a byproduct of this planned scarcity

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