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New Jersey municipalities looking to revitalize Downtowns and Main Streets could use some new tools. Thus, the League of Municipalities supports A-2452, which would create new liquor licenses for restaurants meeting certain criteria. There is no doubt that these licenses would represent an important economic development or redevelopment tool for many municipalities, and give an economic boost to neighborhood restaurants and to other businesses located in proximity to those establishments.

This bill creates a restricted restaurant license (R1) which permits the holder to sell any alcoholic beverages for consumption on the premises of certain restaurants.  In addition, the bill creates a restricted beer and wine license (R2) which permits the holder to sell only beer and wine by the bottle or can.  These licenses would only be available to restaurants that meet certain square footage requirements, and that maintain a full-service kitchen. The bill provides that alcoholic beverages could only be sold in connection with the service of food at a table by an employee of the restaurant. A license holder would be prohibited from providing a bar area for customers of the restaurant to congregate and consume alcoholic beverages.

The bill establishes a fee schedule for the initial issuance and annual renewal fee for the restricted restaurant license and restricted beer and wine license based on the square footage of the restaurant. The first $2,500 of the initial and renewal fee for the restricted restaurant license and the first $1250 of the fees for the restricted beer and wine license would be paid to the municipality where the restaurant is located, and if the restaurant is located within the boundaries of two or more municipalities, the fee is to be divided equally among those municipalities. The remainder of the fees would go to the Division of Taxation to be used solely for the purposes of offsetting the costs associated with issuing tax credits provided under the bill.   A-2452 provides for a OLS (Office of Legislative Services) certified compensation mechanism for any party that feels that they may have been adversely impacted by the enactment of of this bill After the Division of Taxation is reimbursed for costs associated with issuing tax credits, the full fee is to be paid to the municipality.  In addition, the bill requires licensees to pay to the Director of the Division of Alcoholic Beverage Control any applicable renewal fees that the holder of a plenary retail consumption license is required to pay under current law.

The bill imposes certain penalties on the holders of the restricted restaurant license or restricted beer and wine license who violate the law.  Any fine money collected is to be paid to the Director of the Division of Taxation to be used solely for the purposes of offsetting the costs associated with issuing tax credits provided under the bill.  After the Division of Taxation is reimbursed for up to 75 percent of the projected estimated cost associated with issuing tax credits, the full fee is to be paid to the municipality.

The League’s Liquor License Task Force carefully studied this proposal and recognized the benefits such licenses could provide to many municipalities throughout the State.  We also identified some problems in the bill.

Our paramount concern was that this legislation would preempt municipal discretion regarding the issuance of these new licenses. For instance, as introduced, the bill gives a ‘dry town’ the option to permit the issuance of ‘restricted restaurant licenses’ and/or ‘restricted beer and wine licenses.’ Specifically, only those municipalities are given the opportunity to opt into the program, via ordinance or resolution. No other municipalities have such an option. In fact, the bill states, “The governing board or body of the municipality shall not limit the number of … (such licenses) …within the municipality …”

From our perspective, A-2452 needed to be amended to allow locally elected and locally responsive governing bodies to determine whether the issuance of these new licenses will benefit their local businesses and their neighbors and constituents. Issuance of these licenses should be restricted to municipalities that, by ordinance, authorize such licenses.

Assemblyman (and former Mayor) John Burzichelli, has indicated his willingness to accept many of our recommendations.   In particular, the Assemblyman agreed to our suggestion to allow an “opt-in” provision for all municipalities.  We sincerely appreciate his eagerness to involve us in discussions on the bill and to consider our concerns.

We have no doubt that a significant number of municipalities, if given the opportunity, would take affirmative action to make such licenses available to local restaurateurs. The bill is referenced to the Assembly Regulatory Oversight Committee, which held a “for discussion purposes only”  hearing on February 27.  We hope to see the bill advance soon.

We suggest contacting your Assembly representatives and ask for their support of A-2452.

Click here to see the NJTV segment on this bill.

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