Easing a pinch, city set to issue 55 liquor licenses
Boston officials plan to issue the first of 55 new liquor licenses to restaurants next week, ending a logjam that has driven the cost of existing licenses to record levels, stalled some restaurant ventures, and hurt sales at others.
The Legislature granted the city the authority to issue more liquor licenses, raising the cap to 1,025 and breaking an 18-month-long stalemate with Beacon Hill.
The new licenses are unusual in that they are not transferable, and most of them are restricted to four specific areas in the city. Boston licensing officials, however, say they have the flexibility to issue licenses across most of the city.
Mayor Thomas M. Menino said the battle to raise the cap on the number of liquor licenses will pay huge economic dividends. "It's great for the small mom-and-pop restaurants in the neighborhoods," Menino said. "It's really part of the economic growth of our city."
Daniel Pokaski , chairman of the Boston Licensing Board, said he expects to begin issuing new licenses next week, specifically mentioning Salvatore's and Potbellies Kitchen in South Boston and Seiyo in the South End. Some of the restaurants have been waiting close to a year for a license.
Peter Irving , the owner of Potbellies, a 20-seat restaurant serving American comfort food , said he had applied twice for a wine and beer license. He said it was "scary" opening without one on Nov. 18, but now he hopes to get a license next week.
"It's going to double my business right off the bat," he said.
Joe Hanley , an attorney who represents the 40-seat Himalayan Bistro in West Roxbury, said the restaurant has applied three times for a license over the past year and will refile again now. He said the bistro couldn't afford to purchase an existing license.
"It's critical to the operation," Hanley said. "Patrons stay longer, they return more frequently, and you're going to have more revenue as a result."
The law, signed by Governor Mitt Romney last week, authorizes 55 new licenses -- 25 all-alcohol licenses and 30 wine and beer licenses. The city currently has 970 licenses -- 650 all-alcohol and 320 beer and wine licenses.
The new licenses, unlike the existing ones, cannot be sold to another owner or transferred to another establishment. They must be returned to the city if they are revoked or no longer in use.
Of the 55 licenses, 40, including all of the beer and wine licenses, are restricted to areas designated by the Boston Redevelopment Authority as "main streets districts, urban renewal areas, empowerment zones, or municipal harbor plan areas."
Pokaski said the only areas of the city off-limits for new licenses are the North End and Back Bay, although he said the board will probably arrange license swaps to satisfy the needs of restaurants in some of those areas. He said Panificio in the Back Bay, for example, is likely to receive a beer and wine license as part of a swap with a restaurant trading up to an all-alcohol license.
Pokaski said the city could also assign a license to a restaurant outside the areas designated in the legislation by having the BRA enlarge one of the covered zones.
Beacon Hill has regulated the number of liquor licenses Boston can hand out since 1906, a vestige of a time when Yankee lawmakers held strong puritanical beliefs and distrusted Boston's Irish elected officials. In most other cities in the state, the number of licenses is tied to population growth, triggering automatic increases.
Boston restaurants have been clamoring for liquor licenses since the spring of 2005, when the city reached its previous 970-license limit. The shortage has driven the cost of purchasing a license from another restaurateur to record levels, with an all-alcohol license going for $200,000 to $300,000, and beer and wine licenses selling for as much as $70,000. The new licenses will cost $200 for the application, plus an annual fee of $1,500 to $2,000.
Charlie Perkins , owner of the Boston Restaurant Group Inc., a commercial real estate broker specializing in the sale of restaurants, said he didn't think the higher cap would dampen demand for licenses.
"Boston is a super-hot market," he said.
Pokaski said the 55 new licenses should be enough for the next one to two years, but Perkins and other industry officials said they expected the new licenses to be gobbled up quickly.
Boston's new liquor licenses didn't come easy. The city revised its legislative proposal numerous times, starting out with 60 transferable beer and wine licenses in any part of the city. But Senator Michael W. Morrissey of Quincy wanted any new license to be nontransferable and tied to specific locations to protect the value of existing licenses. In addition, he wanted to include some licenses to sell hard liquor to accommodate the expected development along the South Boston waterfront. The senator could not be reached for comment yesterday.
"There was an incredible amount of give and take on both the city side and state side," said Patricia Malone , Boston's commissioner of consumer affairs and licensing.
Legal Sea Foods purchased a liquor license from Jimmy's Harborside restaurant several months ago for about $200,000 for a new bar and grill, according to Rick Heller , senior vice president and general counsel for the chain.
Heller said he's not worried about Legal's purchase because the new licenses are not transferable and therefore worth considerably less. "We don't lose the value of that asset," he said.
Bruce Mohl can be reached at mohl@globe.com and Donovan Slack at dslack@globe.com. 
