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New South End complex could get cocktail bar thanks to law intended to spur new restaurants in outer neighborhoods

The Boston Licensing Board decides tomorrow whether to let the new owners of a bar in Dorchester Lower Mills transfer their liquor license to the bar they want to open in the South End's new Ink Block complex.

But fans of the former Lower Mills Pub shouldn't fret: The board also decides tomorrow whether to grant its new owners one of its fresh supply of neighborhood liquor licenses, which can only be granted in Dorchester, Mattapan, Roxbury and a number of "Main Street" districts in neighborhoods that aren't the South End, downtown or the waterfront.

The move makes the South End bar possible by saving the owners the $300,000 or so it would otherwise cost to buy a full liquor license on the open market.

A state law that went into effect in 2014 has meant 50 new liquor licenses for Boston - with another 25 to come next fall - as a way to encourage food entrepreneurs to start up restaurants, bars and liquor stores in areas that had seen their liquor licenses snapped up by well funded chains in areas such as the South Boston Waterfront and downtown. The focus of the law - first proposed by at-large City Councilor Ayanna Pressley - was Dorchester, Mattapan and Roxbury, although the licenses are also available in "Main Street" districts in other neighborhoods outside Boston Proper.

At hearings today, one of the new owners, Brian O'Donnell, said the new Scofflaw would be a small cocktail bar and restaurant that would cater primarily to the residents of 300 Harrison Ave.

His attorney, Dennis Quilty, said the "public need" for an establishment there is that the once dormant area hard by the Expressway is now seeing "hundreds, if not thousands of new residents," who would like more eating and drinking options.

Both proposals were supported by the mayor's office and the offices of at-large City Councilors Michelle Wu and Michael Flaherty. City Councilor Bill Linehan's office supported the Scofflaw request; City Councilor Frank Baker supported the Lower Mills Tavern request.

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Comments

This does not sound like it is keeping in the spirit of why the new licenses were created. They have a license in Lower Mills and now want to transfer it downtown and take one of the local non-transferable licenses. Are there other establishments that are seeking the local licenses that won't get one due to this license hogging?

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I had the same reaction, but it's sort of "jobs saved" versus "jobs created". Before the new licenses, there was nothing to stop the transfer of an existing license from Lower Mills to the South End. Now at least there's no net loss.

As for other establishments - so far they've been very slow to apply for them:

https://www.bostonglobe.com/metro/2015/05/30/neighborhood-based-licenses...

Explanations vary.

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This is like the third time people have done something like this, although the previous instances haven't been the same owner or both establishments. I agree it seems counter to the spirit of the law, but can't blame anyone, since the artificial cap on licenses in the city limits is patently ridiculous to start with. Boston is the only town that has to go begging to the state legislature, which hates us, to serve beer at dinner? Bullshit.

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What exactly was the spirit of the law?

To create new establishments in these neighborhoods that serve could alcohol, or was it to ensure that establishments could exist in these neighborhoods that could serve alcohol?

If you believe the former, yes, this sort of thing is against the spirit of the law, however if you believe the latter, the law is working. If this law didn't exist, there are many scenarios where the neighborhood loses such a liquor serving establishment; the owner could be offered an above market price for their license by someone who really wants it, or the owner could decide to close this establishment to transfer their license to their new South End location. Either way, without this law, one of the neighborhoods it aims to serve would lose the establishment.

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My impression was it was designed to spur development in currently underutilized but ripe for growth 'main streets' areas / squares in less popular and thus less profitable areas. It was an acknowledgement that, say, opening a new bar in Hyde Park is going to be a bigger uphill climb to get to the same level of profitability as a new bar in the seaport, because there's less foot traffic and the demographics of the area are different. Ergo, someone willing to take that chance and invest in the community should get a break on the absurd cost of a liquor license.

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The problem is not that somebody in Hyde Park has more of a profitability hill to climb than somebody in the Seaport but that there's no hill at all to climb in Hyde Park because all of the city's licenses were being sucked into a vortex surrounding the harbor, basically.

The number of liquor licenses in Boston is fixed by the state legislature, which, in a booming city like ours, has led to a shortage of licenses for people who want to open restaurants and bars, with the result that full liquor licenses on the "gray market" now go for upwards of $300,000 (I think the record is $425,000, which some rich guy paid so his kids could open a restaurant across from Quincy Market).

Legal Seafood can afford $350,000 for a liquor license. Some couple in Hyde Park with a ten-table storefront can't.

Ayanna Pressley came up with the idea of neighborhood-specific licenses to help restaurant entrepreneurs get a start - and in doing so help the surrounding neighborhoods, given the increased foot traffic restaurants can bring. Yes, liquor sales can help make a restaurant profitable, but the impetus was not because it's harder to make a profit in Hyde Park than on Northern Avenue.

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They didn't call this area (inkblock) "blighted"

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At the point where you're flagrantly ignoring the purpose of the new licenses, and naming your bar after your nose-thumbing, this kind of represents a watershed moment, yeah? If the council lets this happen, it's open season on yet another grey-market license exchange.

(Fun thought experiment: you own a restaurant in the North End, which doesn't have a liquor license. Buying one on the grey market will cost you $300,000. But the licensing board has tacitly agreed to look the other way if you buy one from another establishment for some privately-negotiated fee. How much do you think it will cost you to convince the owner of a restaurant out in Mattapan that they should sell you their license for $1, and then apply for one of the new "Main Street" licenses to replace it for free? Think it's less than $300K?)

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Would the Mattapan liquor license owner sell it to you for any less than $300k if they can get $300k on the open market? Your hypothetical only works when you already own the license in Mattapan (like the owners of the Lower Mills Pub) and want to transfer it to your North End restaurant.

I do agree that this isn't what they had in mind when they drew up these neighborhood-specific licenses, but if this one goes through, anyone who owns a full transferable liquor license in any of those neighborhoods should be selling theirs and applying for a new one. I don't see how the licensing board could shoot them down if they approve this (unless of course they were foolish enough to not hire Dennis Quilty as their attorney).

In the end, Boston ends up with a new restaurant, so I'm for it, but it does seem silly.

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I think the writer meant $1 on the books and the rest would be off the books.
The state controls liquor licenses for all towns which is bogus. Like the medallions for taxes this has created an underground economy of licenses where the state and towns lose out. A license should go back to the city/state and not be allowed to be sold on the private market. The process has made it difficult for new business to jump into the market.

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Sure, it's a little convoluted, but it's still a net win for the city. We get a new bar in the South End in an area that could use it. And we keep an existing bar in Dorchester that might otherwise have been shut down to transfer its highly valuable license to a more profitable location.

And theoretically, each one of these transfers drives the price of everyone else's unrestricted, transferable license down a little bit more since we are helping to match supply and demand. Not the most efficient way to do it, but I'll take what I can get.

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