WEPEMAC

August 5, 2009

Liquor License NEW YORK

Filed under: drink, food, lifestyle — wepemac @ 1:04 pm

ORHAN CAKIR, the owner of Pierre Loti Cafe and Wine Bar in Manhattan’s Gramercy Park, absolutely knew that his two-year-old establishment was quaint enough, romantic enough and popular enough to engender a sibling. Et voilà: his dream was realized last month, when he opened a second diminutive restaurant six blocks west that is also — of course! — slyly named after an Istanbul-smitten French novelist who was elected to the Académie Française in 1891.

But it is likely to be six months before Mr. Cakir can secure a liquor license for the new 36-seat Pierre Loti Restaurant on West 15th Street, given current realities at the New York State Liquor Authority. 
“We had to open our doors to pay the rent,” he said, “but we won’t really make any money until we get the license.” 
Over the river and into Brooklyn, Felipe Mendez opened his 32-seat taqueria, La Superior, in Williamsburg last year and has been waiting seven months for his license. “Sometimes people sit down, order, realize they can’t get a beer, and leave,” he said. “We lose a lot of customers.” 
Across the city and the state, rising cries of pain are being heard from restaurateurs and bar owners facing the lengthiest liquor license application delays in memory. Adding to the frustration, the state has renewed its efforts to enforce penalties on the time-honored custom of patrons’ bringing their own bottles while a license is pending. As a result, restaurateurs say they face additional financial risks in an unforgiving economy. 
Critics blame the fiscal crisis and understaffing at the State Liquor Authority, which has also been hobbled by the aftermath of a bribery investigation. 
“They are taking longer than they ever have to approve new applications,” said Warren B. Pesetsky, a lawyer who represents many applicants and was the authority’s general counsel from 1976 to 1981. “When things were working at their best several years ago, it took three months.” 
New York is not the only city where restaurateurs say the gears of bureaucracy are grinding more deliberately than ever. In San Francisco, it wasn’t until mid-July, five months after he applied, that Larry Bain finally got his wine and beer license for Let’s be Frank, his grass-fed beef hot dog emporium in the Marina District. 
“I have applied for seven licenses during the last 15 years and never waited longer than 10 weeks,” said Mr. Bain, the proprietor. “This was a direct impact of California’s cutbacks and mandatory furloughs.” 
He added: “Now the governor has announced steeper cuts and the licensing process is just going to slow down even more.” 
In Chicago, restaurant licensing can take four to six months and cost $10,000; applications for taverns, given neighbors’ objections, can take longer. In Boston, the number of liquor licenses has traditionally been more strictly capped than in New York, and restaurants can wait up to a year. 
Customarily, alcohol could generate 10 to 30 percent of revenue at a restaurant and 40 to 50 percent of the profit, and owners are losing not only money but also potential customers who recoil from a dry establishment. For years, New Yorkers waited out the approval period by bringing a bottle of wine or a six-pack of beer, but the liquor authority recently sent letters to all license applicants reminding them that the practice is illegal under state law and can be grounds for rejecting an application. 
Mr. Mendez, of La Superior, has had to hand customers a copy of the letter, “because people get very annoyed at us when we tell them.” He sighed. “But they still think it’s me saying no.” 
For states, cities and counties, the licensing slowdown means lost tax revenue from establishments that are treading water. 
Furthermore, the delays have become job-killers, critics say. “The new-license situation is a crisis,” said Robert S. Bookman, legislative counsel for the New York City chapters of the New York State Restaurant Association. “In this economy, we need more licenses, and more jobs. It should be government policy to get these businesses open.” 
Mercat Negre, a 74-seat restaurant that has been unable to open on Grand Street in Williamsburg because of a seven-month licensing logjam, employs a skeleton crew. 
“We had hired a whole group of people, then lost a lot of them because there is no way of knowing when it will be approved,” said Andy Egelhoff, a spokesman. 
 
Statewide, 2,073 licenses were pending as of last week, including renewals; 873 of them for longer than three months. In New York City, Westchester and Long Island, 1,480 licenses were pending, 604 of them for longer than three months. 
William Crowley, a spokesman for the liquor authority, said that “we are sympathetic to the fact that there are hardships, and there isn’t anyone who wants to see these applications processed more than we do.” He added of the staff: “They are working as hard as they can.” 
The authority, with its budget of $17 million, is profitable, taking in some $55 million from licensing fees and fines. But among its statewide staff of 156 — down from 224 full-time employees in 1996 — the liquor authority has only 20 examiners who handle applications, renewals and permits. There are only nine in the Harlem office that serves New York City, Westchester and Long Island, regulating 65 percent of the state’s operating licenses and permits. 
In April, after a yearlong corruption inquiry, the New York State inspector general raided the Harlem office. Investigators suspected that employees had taken bribes to expedite liquor licenses. So far there have been no arrests in the investigation, which is still before a grand jury. 
The inquiry “has made a bad situation worse,” Mr. Bookman said. “Everyone there is afraid if they cough, they might get investigated.” Examiners were also interviewed by the investigators, reducing the amount of staff time available to process licenses. 
Restaurant and bar owners are to blame for some of the delays. “Ninety percent of the applications are incomplete when submitted,” Mr. Crowley said. 
The authority’s 26-page “on-premises” application requires owners’ detailed financial information, prior employment experience, proof of citizenship and floor-plan details, and it also entails fingerprinting and background investigations. It asks whether music will be played (and if so, what kind) and whether dancing is planned. 
Even seemingly straightforward applications can be delayed by a required hearings process, particularly when they fall afoul of the authority’s 200-foot rule (governing the proximity to schools, churches, synagogues and mosques) and 500-foot rule (which applies when three liquor-license-holding businesses are within 500 feet of each other). 
Applicants have also being stymied by increasingly empowered community boards that raise objections, both substantive and persnickety. And owners can also be held hostage to reviews by the city’s Department of Buildings, since a certificate of occupancy is an application requirement. 
Such an approval delayed Montenapo, a $4 million Italian restaurant on West 41st Street, overlooking the birch trees in the atrium of The New York Times building. It won its liquor license in six months, “something we had anticipated,” said Jozef Juck, a managing partner. But he had not expected that a disagreement with the Department of Buildings over required documents would delay the building’s certificate of occupancy, stalling the opening for another two months. Mr. Juck lost 25 of Montenapo’s original 60 employees, and a formidable sum of money he declined to reveal. “We are just happy to be open,” he said. 
And after a five-month wait Joaquin Baca, the chef and owner of The Brooklyn Star, a 40-seat restaurant in Williamsburg, won an initial approval in March for a license to serve wine and “some nice frosty beers,” he said. Then he learned that he needed a new certificate of occupancy, and has been waiting, alcohol-less, for the city to issue one. 
For owners, life in red-tape hell can go from frustrating, to infuriating, to totally “Waiting for Godot.” 
“If you’re starting a place and you need a liquor license, you need to put half a million dollars in the bank and be prepared to wait for months and months,” said Steve Chahalis, 47, a fourth-generation barkeep who is the proprietor, with his father, Tom, 73, of the P&G Bar on the Upper West Side. 
Such was the complexity of the application process that “I visited the office so many times, it got to the point where the guards stopped asking me for identification,” Steve Chahalis said. 
The licensing uncertainty keeps owners from hiring and training staffs well ahead of time, so “restaurants don’t have it together for the first two months,” Mr. Pesetsky said. Delays can also affect early word of mouth. 
Gov. David A. Paterson of New York has supported two pending bills that would enable new applicants to be issued temporary alcohol permits until their licenses are approved. 
“This is an acknowledgment that Governor Paterson sees that there is a problem here, and wants to see something done about it,” said Morgan Hook, a spokesman. 
Despite the delays, Mr. Pesetsky said, “I am handling the same number of license applications as last year.” 
He added: “People are always going to eat and drink.”

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