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Apr 25

When The Liquor Was Gone, The Fun Was Gone

Comments (0) 4:15 PM posted by admin |

At one of my competitor’s web sites, there is a thread discussing the process of awarding downtown redevelopment liquor licenses in Depot Town. Unfortunately for the reading public, it has devolved into a bunch of name-calling and bitching about the French cartel, the McKeevers, as well as the age old cliched debate of who’s more blue-collar — Depot Town or Downtown.

The original question that set off this nonsense was “What’s it going to take to get a redevelopment liquor license in Depot Town?” This question was raised specific to Andy Garris of the Elbow Room’s desire to open up a 150 to 200 seat music venue in the Thompson Building in Depot Town.

The answer to that question couldn’t be simpler.

In order for Mr. Garris to be awarded a downtown redevelopment liquor license, he needs to apply for it to the City.

DDAs have absolutley no say to whom they are awarded. None. Only City Council has that power — power that can easily go to one’s head. But I kid. DDAs can attempt to set criteria for awarding these redevelopment liquor licenses based on State statutes, but City Council needs to adopt them in order form them to be valid.

At this past Wednesday’s Depot Town DDA meeting, there was discussion about setting criteria as well as discussion on a resolution of support for Mr. Garris applying for a redevelopment liquor license. Truth be told, it was all for naught because they are trumped by the City and State.

The State created a new statute intended to bring liquor licenses to downtowns on the verge of revitalization. To be awarded these licenses, cities need a designated a district and someone with $20K for the license fee. The number of these licenses that can be awarded is based on investment. Cities may be awarded one license for every $200K of development in private and public funds over the past five years. Ypsilanti doesn’t know how many licenses it is eligible for because they haven’t run the numbers yet. The Ann Arbor News ran an article a week or two ago mentioning over 800 available licenses for the city of Ann Arbor.

It’s important to understand that liquor licenses are issued to local units of government. To be eligible, businesses must be either in a development district or a city redevelopment project area. It’s also important to point out these licenses are not transferable (i.e. cannot be sold). If a business goes out of business, the license is surrendered back to the LCC, but the unit of government may reapprove the license to an applicant in the same business district provided said business meets the same requirements.

The requirements for being awarded a redevelopment liquor license, a business must meet the following conditions:

  • Be engaged in dining, entertainment or recreation
  • Be open to the general public
  • Have a seating capacity of at least 50 people
  • Demonstrate they attempted to purchase a readily available license within the municipality that they want to operate, and that one was not available
  • Pay a $20,000 fee for the license

Currently there are two standard liquor licenses for sale in the City of Ypsilanti. There is King Crab and Louis’ Cafe. There is a lot of discussion whether or not King Crab is tied up in litigation, but Louis’ Cafe is definitely for sale in the neighborhood of $70K. The liquor license for the Wooden Nickel recently sold for around $80K. Using a sample size of one, that might suggest that the license for Louis’ Cafe is being offered at fair market value.

The fact there is at least one liquor license for sale in Ypsilanti could be a stumbling block for Mr. Garris.

There you have it. If Mr. Garris wants chance at a redevelopment liquor license, he needs to apply to the City for it.

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