Lift the liquor license cap and help local economies grow

On August 8, 2014, in Latest News, by The Somerville Times

mayor_webBy Joseph A. Curtatone

(The opinions and views expressed in the commentaries of The Somerville Times belong solely to the authors of those commentaries and do not reflect the views or opinions of The Somerville Times, its staff or publishers)

Last week, the Legislature passed a bill that would grant Boston 75 new liquor licenses and give Boston the power to appoint its own liquor licensing board instead of vesting that power in the governor. The Legislature should be commended for taking this small step that supports job creation, small businesses, and economic development in growing neighborhoods. Yet this bill begs the question: If the state realizes that more licenses are required to support growing local economies, why have they neglected to lift the archaic cap on liquor licenses? Why do they hang on to an antiquated system that keeps control over the number of licenses on Beacon Hill, instead of giving that control to the people who know those communities the best—the cities and towns themselves?

The revitalization of struggling neighborhoods often starts with restaurants. Restaurants are often the first investors in a previously neglected neighborhood, acting as linchpin businesses that bring greater vibrancy and employment to newly thriving areas. But the liquor license cap often blocks the opportunity to create that spark in neighborhoods that need it the most. Our current system adds unpredictability and long delays to what should be a simpler, locally managed process.

Our local economy has reaped great benefits from the growing restaurant culture in Somerville. Since 2010, we have seen 119 net new small businesses open in the city, with much of this revitalization anchored and spurred by restaurants. Our innovation economy entrepreneurs are locating in Davis Square and Union Square, among other Somerville neighborhoods, because their employees want to be near amenities like transit and restaurants. Restaurants not only bring service industry jobs to our city, but also attract high-tech, life sciences, small businesses, and more. But this growth could and should have been greater.

Somerville asked for the liquor license cap to be lifted in 2011 through a home rule petition unanimously approved by the Board of Aldermen, but the Legislature denied it, and instead gave us a few more licenses based on the obsolete system in place With the cap still in place, we have been forced to turn down would-be entrepreneurs seeking licenses because not enough licenses were available, losing out on new potential business and the revitalizing effects of those businesses because of an arbitrary cap. As Somerville and Massachusetts as a whole strives to grow into a 21st century economy, we are hindering our own economic growth with this antiquated system.

Opening and maintaining a successful restaurant is hard enough as it is. Liquor licenses, however, can improve the likelihood of success. The mark-up on alcoholic beverages to subsidize food offered by restaurants has long been a foundation of the restaurant business model. It reduces risk for would-be restaurants owners, which in turn encourages entrepreneurship, leading to more jobs, more local businesses, and more people investing in our communities. Restaurants that cannot get a license to serve alcohol, often because of the cap, are at a great disadvantage, leading to less competition and fewer restaurants overall, as diners often choose restaurants where they can have a glass of wine, a beer, or cocktail with their meal.

If the belief is that maintaining state control over liquor licenses is a better system than local control, why is Cambridge authorized to set its own cap, effectively allowing it to issue unlimited on-premises licenses for all licenses? Cambridge’s population is only 36 percent greater than Somerville’s, but that city has issued over four times as many wine and malt licenses as we have and more than double as many all-alcoholic beverage licenses. Cambridge has issued 158 all-alcohol licenses, well above the 105 licenses it would have if subject to the quota system, and has issued 66 wine and malt licenses, triple the amount of licenses it would have under the quota system.

And this is working fine in Cambridge. What was a desolate urban office park in Kendall Square has been transformed into an increasingly active neighborhood filled with an array of dining choices, with companies filling the office space above these restaurants, and now more residences are being built in the neighborhood. Cambridge isn’t the only example. Arlington and Medford, both next door to Somerville, are allowed to issue more wine and malt licenses and the process works. A number of other communities are authorized to issue unlimited on-premises licenses for wine and malt, full liquor licenses, or both. The point is: Local control works.

Together through SomerVision and more community-driven processes over the past decade, we have undertaken diligent, patient planning efforts carefully setting a framework for future economic development. Our collective vision for that growing local economy is threatened by this obsolete cap system. The Legislature can help not only Somerville, but also every community in Massachusetts realize more jobs, more small businesses and a stronger economy by lifting the liquor license cap. Our local officials working with residents, who know our neighborhoods best, are best equipped to make responsible decisions and use discretion to determine where a liquor license should be issued and to whom. We should be allowed to determine what’s best for our communities. If we can move our laws into the 21st century, our economy will follow.


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