In a recent article entitled “Restaurateurs Exasperated With Long Liquor License Delays,” The Spirit, a self-described local paper for the Upper West Side, captures the post-pandemic frustration within the restaurant and nightlife industry throughout New York with respect to the unusually long process to obtain approval for a liquor license:
The result is one of the biggest nightmares of entrepreneurs in the New York Hospitality industry – imagine paying NYC rent for up to one year without the ability to sell liquor.
As the article explains, restaurant owners are often forced to prematurely open serving only food and suffering financial losses in the process:
In some cases, restaurant owners have sent in applications for liquor licenses that remain unfulfilled over a year later. This presents them with a difficult dilemma: delay opening, causing them to lose money, or opening without a liquor license. For some who choose the latter, the loss of revenue without alcohol sales is prohibitively great; they end up forced to pay staff out of their own pocket.
To make matters worse, most leases require the tenant to start paying rent as soon as they sign a lease and therefore long before they can open their doors.
Upon receiving the application receipt on a new application, the notice clearly states that processing times are taking an estimated 24-26 weeks. Nevertheless, even this estimate is often incorrect with the process taking upwards of one year, specifically in cases that do not qualify for a temporary operating permit such as those that require a 500-foot rule hearing and where the determination is made that the license would not serve the public convenience and advantage. Unfortunately, the mere presence of a DJ has been sufficient to deem an application as not serving the public convenience and advantage.
The Solution?
The Restaurant and Nightlife Industry was optimistic at first with the release of the amendments to the rules regarding the issuance of temporary operating permits beyond the purchase of an active licensee. Nevertheless, in practice, there are too many establishments that have not qualified for the temporary permit resulting in catastrophic outcomes and crippling the nightlife side of the industry in particular. Andrew Rigie of the NYC Hospitality Alliance is correct in calling for an amendment to the temporary liquor license law to make more new businesses eligible for a temporary permit to place NYC on par with the rest of the state. Under current law, NYC continues to have a more restrictive set of laws to qualify for a temporary permit.
Interestingly, Governor Kathy Hochul had signed into law an additional $2 million for the SLA to hire 39 more employees, with 30 of them earmarked to help reduce the waiting time for applications. But attorneys and restaurant/bar owners have not noticed any improvement. It remains unclear whether more examiners have been hired and trained. We must recognize that it takes time to properly train examiners. Hopefully, we see the fruits of this increased budget soon.