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Bizs face hurdles to liquor licenses

Jule Pattison-Gordon

In 2013, customers looking to sit down and savor glass of wine over dinner were hard-pressed to find options in areas of Roxbury, Dorchester and Mattapan, while local business owners were watching an opportunity pass them by. Together, these neighborhoods held 33 percent of the city’s population but just 7 percent of its liquor licenses. The costs of acquiring licenses were prohibitive, keeping them out of the hands of many restaurants lacking financial capital.

To level the playing field and bring costs of licenses back within the range of small businesses, City Councilor Ayanna Pressley pushed for release of a new batch of neighborhood-restricted, unsellable licenses granting restaurants the right to serve alcohol.

This is the final year of the program, which has distributed 50 licenses since 2014 — including full liquor and beer and wine only — and hearings began this month on application for the final 25.

New businesses and existing ones have taken advantage of the more affordable access to alcohol authorization — full-liquor licenses could go for $200,000 to $500,000 on the market in 2013; this new batch offers them for about $3,000.

“We’ve brought new restaurants online and existing restaurants have had business opportunities enhanced and bottom lines strengthened and improved,” Pressley said in a Banner phone interview. “We’re closer to eliminating disparity that has plagued the city when it comes to procurement and distribution of liquor licenses.”

Some restaurants may struggle to earn a profit without serving alcohol, Pressley said. And neighborhoods may suffer from this, as restaurants can act as community anchors and enliven streets, she said.

But as the license’s price barrier drops, other barriers emerge that are stopping some entrepreneurs from reaching the point of application. One striking indicator: over all three years, not one application has been submitted from Mattapan.

Would-be-restaurateurs face challenges to acquiring space and funding to set up and build out their establishment and in some areas, despite resident demand for dining-with-drinks options, businesses struggle to draw a sufficient customer base, Main Street District leaders said.

Neighborhood-restricted liquor licenses

The rollout of neighborhood-restricted licenses in 2014 marked the first new licenses in eight years.

The licenses being issued this year include 15 full-liquor licenses that may only go to an establishment in Dorchester, Mattapan, Roxbury, Hyde Park, East Boston, Mission Hill, Jamaica Plain or a Main Streets District. Once sold, the license is locked to that neighborhood — for instance, if Tasty Burger leaves Dudley Square, its beer-and-wine license stays in Roxbury.

Unlike traditional licenses, which can be sold for profit by the owner, these return to the city for redistribution should the holder no longer need theirs.

Grove Hall’s space struggle

While residents of Grove Hall are interested in a sit-down restaurant with drinks, entrepreneurs struggle to get to the stage where they can sell food, before they can even think about scaling up to serve alcohol.

Grove Hall’s challenge lies in finding enough space for a restaurant at a cost that will not drive up prices untenably, Ed Gaskin, executive director of Grove Hall Main Streets, told the Banner. Most of the district’s storefronts are sized for retail — convertible to a take-out Chinese food venue or pizzeria but too small for tables with seating and a large kitchen, he said.

This problem recently resulted in the lost chance to bring in Golden Krust, a Jamaican food restaurant, which is due to open a location in Dudley Square this fall.

“Golden Krust also wanted to open in Grove Hall,” Gaskin said. “But we couldn’t get the space and price to work out right.”

To recoup the expense of acquiring or renting enough floor space, a sit-down venue would need to charge prices out of sync with what residents can afford, Gaskin said. Prices of $15 or $20 find little, if any, traction, in an area where lunch is typically $5.

Drawing a customer base

Another hurdle for Grove Hall’s aspiring restaurateurs: while traffic flows through the district, few drivers stop to patronize, limiting its customer base. A study conducted by the Grove Hall Main Streets found that although the area has sufficient parking — spots are rarely all claimed — few are willing to stop if they cannot park within two to three spaces of their destination, Gaskin said. In a place like Cambridge, walking a few blocks and taking in the stores is part of the experience, but walks in Grove Hall are less attractive, making even traveling a few blocks or crossing the street feel too far for some, he said.

“If you’re in Grove Hall, walking past an empty lot with grass grown up and beer cans, a building or two, another store that’s closed, and going past some condos, it’s not the same kind of shopping experience,” Gaskin said.

The area also struggles from not having destination businesses, such as entertainment or unique dining options, that might draw more customers to the district and pave the way for further similar upscale offerings.

Similarly, Pressley said many restauranteurs show disinterest in opening in Mattapan because of a prevailing view that there is insufficient demand.

Dudley Square

Although Dudley Square has been more able to take advantage of the new licenses — with Suya Joint and Tasty Burger each utilizing one when they opened — its restaurateurs face a more existential struggle: Holding on to a storefront.

As landlords redevelop properties, several long-term businesses are losing their spots, and most nearby locations they might seek to move to are tied up in other development projects, Joyce Stanley, executive director of Dudley Main Streets, said.

Drain House of Style and Silver Slipper are due to leave their building by November as the owner either rehabilitates or tears down and rebuilds, Stanley told the Banner. Another 13 stores could be displaced from Warren Street as owners make needed repairs or rebuild to accommodate higher-rent tenants.

Currently, few opportunities remain for displaced businesses to rent new venues, let alone for new restaurants to open and take advantage of liquor licenses.

“We don’t have a lot of vacant and ready-to-rent space now,” Stanely said. “If everybody’s going to do a new development, there’s no space to put anything.”

Even if space can be found, rent may be too high. Silver Slipper currently pays $12 per square foot, but the average area rent is $24 to $27 per square foot. Keeping the business in Dudley could require city or landlords help, Stanley said.

Liquor licenses

Another barrier, Pressley said, is that information on the neighborhood-restricted licenses and apply process was slower to get to fledgling business owners, who may not be plugged into the relevant information sources.

That’s why she said she is promoting the creation of a city “restaurant czar,” who can work to connect restaurateurs with information, mentorship and other resources.

With the restricted-license program winding up, Pressley and several other legislators seek for the city to be assigned control over the number and kind of licenses they issue as well as their allocation and distribution. The current program demonstrated higher demand for the licenses than is being met — with demand expected to grow as the population does — and that much work remains to bring greater economic equity to Boston’s neighborhoods, Pressley said.