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East Dupont Alcohol Moratorium Renewed; Restaurants Exempted From Ban

The Alcoholic Beverage Control Board (“Board”) not only voted to renew the 20 year old alcohol moratorium, which capped the number of alcohol licenses in the area, but it also voted to extended it approximately 600 feet in all directions from the intersection of 17th and Q streets, N.W.

The Board’s decision adopted the recommendations made by Advisory Neighborhood Commission (“ANC”) 2B and lifts the restrictions on licenses for restaurants, multipurpose facilities and off-premise retailers in the neighborhood, but maintains a two license cap for taverns and a prohibition on the issuance of any nightclub licenses.

This decision renews the moratorium for an additional three years.

ABC Board finds U Street Alcohol Moratorium ‘Not in the Public Interest’

The Alcoholic Beverage Control Board (“Board”) unanimously voted against a petition for a moratorium on the issuance of new liquor licenses in the District’s 14th and U Street corridor.

In December 2012, the Shaw-Dupont Citizens Alliance (“SDCA”) petitioned the Board to impose a moratorium on the issuance of liquor licenses for an area extending 1800 feet in radius from 1211 U Street, N.W.  SDCA claimed that the revitalization occurring on 14th Street had resulted in an over concentration of alcohol licenses which was affecting the quality of life for neighborhood residents.

In May 2013, the Board held a public hearing and heard over three hours of testimony from Advisory Neighborhood Committees (“ANCs”), citizen associations, neighborhood residents, property and business owners.  Notably, all of the ANCs (1B, 2B,2F, 6E) affected by the moratorium voted to oppose the Petition, as did the majority of the witnesses testifying at the hearing.

In rejecting the moratorium, the Board stated that “[it] does not find that the neighborhood suffers from an over concentration of licensed establishments or that additional establishments will adversely affect this area. Rather, there is a revival of economic development that is attracting businesses and residents alike to the U Street Corridor.  Indeed, rising real property values reflect the growing appeal of this neighborhood.”

You can find the Board order here.

D.C. Food Trucks Are Here to Stay

On June 18th, 2013, the District of Columbia Council voted unanimously in favor of a set of regulations that outline how and where food trucks are allowed to operate within the city proper, signaling what is likely to be the end of a mercurial four-year debate over the legality of street-operated food truck vendors. According to media sources, the current provisions seem to satisfy the demands of both bricks-and-mortar restaurant owners and food truck operators, who have been in fierce competition with one another over the district’s bustling and hungry clientele.  Though certain non-controversial aspects of the legislation had been passed by the council as early as June 5th, several key changes to the mobile vending rules were introduced through the amendments passed on the 18th.

The first of these changes is a reduction of the buffer zone around city-designated “mobile roadway vending zones” from the previously proposed 500 feet to 200 feet.  This amendment eases the restrictions placed upon food truck vendors who are not able to acquire vending zone permits, which are doled to applicants monthly on a lottery basis, allowing them to sell their products in closer proximity to the high-traffic vending zones than previously allotted.

The second amendment allows food trucks outside of the vending zones to park in spaces with a minimum of six feet of unobstructed sidewalk space as opposed to the ten feet-requirement what was originally proposed.  The amendment also clarifies that parking meters are not considered to be obstructions.  Under this change in the legislation, food trucks are given slightly more freedom in terms of where they can park in the city, allowing them to sell in a greater range of locations and alleviating some owners’ fears of being blocked entirely from much of the downtown area.  Lastly, a third amendment reduces the fine for expired parking meters from $2000 to $50, though the fee will double for repeat offenders.

While not quite the “status-quo” proposal that many food truck vendors lauded and not quite the crackdown that restaurateurs anticipated, the regulations nevertheless appears to settle the ongoing conflict between the mobile and immobile food vendors.  The finalized version of these regulations currently awaits the signature of Mayor Vincent Gray, who is reviewing the revisions.

For more information about the regulations, please contact Rosemarie Salguero at rsalguero@dbmlawgroup.com or Andre Barlow at abarlow@dbmlawgroup.com.

U Street Neighborhood Torn Over Alcohol Issue

The ongoing dispute over alcohol licenses between businesses and disgruntled Washington, D. C. residents looks primed to escalate once again as the Shaw-Dupont Civic Association pushes a moratorium on new license acquisitions in the U Street area. If approved, this moratorium will be the fifth alcohol license freeze to be imposed in the District of Columbia in recent memory, following in the footsteps of similar moratoriums in Dupont Circle, Georgetown, Glover Park and Adams Morgan. Advocates have been vocal on both sides of the argument, highlighting a clear split in opinions regarding the issue within the community.

Proponents of the moratorium assert that the recent expansion of the highly lucrative bar scene into the U Street neighborhood has had a direct, adverse effect on residents’ quality-of-life, citing late-night clamors, scarcity of parking spaces and littering as key grievances. Furthermore, many claim that the steady inflow of alcohol-serving establishments in the neighborhood has come at the cost of displacing more traditional daytime businesses like retailers and small arts venues. Complementing this list is the citation of a letter from District of Columbia Police Chief Cathy Lanier that claims that four times the usual amount of police manpower is required in city blocks with ten bars or more.

Opponents of the moratorium, however, claim that the recent popularity of the U Street area owes itself to the dense concentration of bars, which draws in a large pool of customers eager to indulge in the city’s nightlife. The restaurant scene has revitalized the community and made it much safer for residents and raised property values in the once blighted neighborhood. Moreover, local bar owners have expressed doubts on the effectiveness of imposing a moratorium. They argue that a license freeze would stagnate the hospitality industry and make existing alcohol licenses expensive commodities, similar to what has occurred in other moratorium zones, like Adams Morgan and Georgetown. These two factors combined could result in bar owners selling off their licenses and moving out of the neighborhood, taking their business and popularity with them. Among the litany of individuals who have spoken out against the moratorium is District of Columbia Mayor Vince Gray, who has expressed concern over the well-being of the U Street and how the moratorium is likely to impede further development in the area.

At the Alcoholic Beverage Control (“ABC”) Board hearing held for the proposal on May 22nd, sentiments toward the issue appeared to be split as well.  On one hand, several board members including Mike Silverstein clearly demonstrated opposition to the moratorium by questioning the wisdom of restricting competition in the marketplace.  . On the other hand, the rest of the board, including ABC board chairwoman Ruthanne Miller, played devil’s advocate but fell short of rejecting outright the need for the moratorium.

In terms of support, the Shaw-Dupont Civic Association alleges to have amassed the signatures of  400 locals who purportedly back the moratorium.  Prior to the hearing, ABRA held community listening sessions to discuss the moratorium, where the majority of attendees opposed the ban.  There is also a Change.org online petition opposing the ban, which has approximately 1200 signatures.  At the hearing, the civic association requested that the ABC Board disregard the online petition because there is no way to verify whether the individual signatures were District of Columbia residents.

The ABC board has 90 days to issue a decision regarding the moratorium.

For more information about the alcohol moratorium, please contact Rosemarie Salguero at rsalguero@dbmlawgroup.com or Andre Barlow at abarlow@dbmlawgroup.com.

How do changes to the District of Columbia’s alcohol licensing laws affect your business?

On May 1, 2013, D.C. Law 19-310 the “Omnibus Alcoholic Beverage Regulation Amendment Act of 2012” (Act), which amended Title 25 of the D.C. Code will take effect on a permanent basis.  The Act was previously adopted on an emergency basis on January 14, 2013. Below, we have summarized the major changes to Title 25, according to license classes.

Retailer Class C/D Licensees:

On-premise Class C/D licensees are full service restaurants with food sales accounting for at least 45% of all gross sales receipt.

Relevant changes include the following:

  • Citizens associations who have met the requirements of § 25-601(3) and have registered with ABRA, shall be notified of new restaurant license applications at least 30 days before the Board’s receipt of the application;
  • Voluntary Agreements will now be called Settlement Agreements, and there are explicit provisions that are prohibited from appearing in these agreements.  Click here for a list;
  • Restaurants may purchase alcoholic beverages from Retailer’s Class A licensees (liquor stores) when District wholesalers are closed;
  • It is a now a primary tier violation for failure to comply with the 45% statutory food requirements, meaning penalties shall be no less than $1,000 for the first violation, $2,000 for the second violation within 2 years , and $4,000 for the third within 3 years.
  • Restaurants may now store books and records on the premise electronically, as long as they are easily accessible for inspection by ABRA investigators;
  • A protest hearing for a new license application must be within 75 days of the end of the protest period;
  • ABRA must maintain a noise complaint line and track noise complaints; and
  • Brew pubs may sell resealed containers of beer to consumers for off-premises consumption.

Retail Class B Licensees:

Off-premises Class B retailer licensees are primarily grocery stores.   A grocery store is defined as having its primary business purpose as the sale of a full range of fresh, canned, and frozen food items, and the sale of alcoholic beverages is incidental (sale of alcohol does not exceed 15% of its total volume of gross receipts on an annual basis).

Relevant changes include the following:

  • The law now permits the issuance of additional retailer’s class B licenses if the total number of retailer’s class B licenses is less than 300;
  • Full service grocery stores may sell resealed containers of beer (growlers) for off-premises consumption; and
  • Licensees may now also sell wines with an alcohol percentage of 15%.

Retail Class A Licensees:

Off-premise Class A licensees are mainly liquor stores.

Relevant changes include the following:

  • It is now a secondary tier violation to knowingly allow a patron to exit an on-premises establishment with an open container of alcohol; and
  • Liquor stores may now sell alcoholic beverages on Sunday.

The following provision applies to ALL licensees:

The Board may now fine a licensee up to $30,000 and suspend a license for 30 consecutive days for a 4th primary tier violation within 4 years and revoke the license after the 5th violation.

If you have any questions about the new changes, please contact Rosemarie Salguero at rsalguero@dbmlawgroup.com or Andre Barlow at abarlow@dbmlawgroup.com.

District of Columbia Alcohol License Renewals for Restaurants begin Feb/March 2013

Every three (3) years, alcohol licenses in the District of Columbia come up for renewal.  The renewal period begins in March of 2013 for CR/CX/DR/DX licenses, and September of 2013 for CT/CN/DT/DN licenses.

In order to renew a license,  all licensees must submit the following documents to the Alcohol Beverage Regulation Administration (ABRA):

  • Certificate of Good Standing from DCRA – this form demonstrates that the licensee is properly registered with the District of Columbia and has submitted all of its 2 year reports;
  • Business Clean Hands Form from OTR – this form certifies that the licensee does not owe the District any outstanding taxes (sales & use taxes, unincorporated business tax, etc);
  • Individual Clean Hands Forms from OTR – this form certifies that the owners of the entity do not owe the District of Columbia any outstanding taxes; and
  • Annual License Fee – Please refer to the chart below to determine the license fee that applies to your particular license.

During the renewal period, all establishments (licensees) will be re-placarded, and the ANC Commissions as well as neighbors will have an opportunity to review the license.  Because all licensees will be placarded, it is a good time for you to consider requesting substantial changes to your license (i.e., increase hours or seating occupancy) or changes to your Voluntary Agreement, if you have one.

If your Voluntary Agreement has been in effect for at least 4 years, you may request that the ABRA board terminate the Voluntary Agreement.  To do so, however, you must first negotiate with your ANC to request this change.

Please let us know if you need any assistance with renewals or negotiations with you respective ANC for any changes to your Voluntary Agreement.

  Class       Type                   Capacity           Fee

CR-01    Restaurant          99 or fewer         $1,000

CR-02    Restaurant        100 to 199             $1,300

CR-03    Restaurant          200 to 499          $1,950

CR-04    Restaurant          500 or more       $2,600

CX         Multipurpose    facility                      $1,950

DR-01    Restaurant          99 or fewer         $600

DR-02    Restaurant          100 to 199           $780

DR-03    Restaurant          200 to 499          $1,170

DR-04    Restaurant          500 or more       $1,560

DX        Multipurpose    facility                       $650

Arlington Treasurer Frank O’Leary to Publicize Tax Delinquent Restaurants in Media; Lobbying for Power to Shut Restaurants Down

Arlington County Treasurer Frank O’Leary announced today that he intends to acquire the power to seize and shut down restaurants that have large meals tax debts.  Arlington County imposes a 4 percent food and beverage (“meals”) tax on restaurants in addition to Virginia state’s sales tax.  O’Leary asserts that restaurants owe more than $900,000 in unpaid meals taxes to the county.

O’Leary’s first step in targeting delinquent restaurants will be to send a letter to owners warning them that their tax delinquencies will be publicized in the media and on the county’s web site if they do not pay their tax bill or enter into a repayment plan.  Simultaneously, O’Leary is meeting with the county’s state delegates to gain support for a bill to be introduced to the Virginia General Assembly that will grant him the authority to close down severely delinquent restaurants.

Click here to read the complete interview with O’Leary.

Application Available for Extended Alcohol Serving Hours for Inauguration Week Celebrations

The District of Columbia’s Alcoholic Beverage Control Administration (“ABRA”) is accepting applications from alcohol licensed establishments to sell or serve alcoholic beverages until 4 a.m. and to operate 24 hours a day during Inauguration Week, from Monday, January 14, 2013 through Monday, January 21, 2013.

To be eligible for the extended hours, a licensee registering with ABRA either: (1) must not have a voluntary agreement, or (2) possess a voluntary agreement without any closing hour restrictions.  Nightclubs are also required to submit a public safety or security plan.  This extension of hours does not extend the permitted hours of entertainment for the establishment nor does it alter the requirement that restaurants maintain their kitchens open at least two-hours prior to closing.

There is a registration fee based on the license class.  The daily license fee is $250 for nightclubs, $100 for restaurants and taverns, and $50 for hotels, multipurpose facilities and other license classes.  The deadline to apply for this license is Monday, January 7, 2013.

ABRA is also accepting extension of hours applications for certain holidays in 2013, including New Year’s Eve and New Year’s Day.  Applicants must submit an application and safety plan no fewer than 30 days prior to the holiday that the licensee wishes to extend its hours of service and operation.  The deadline to extend hours for New Year’s Eve is Monday, December 3, 2012.

In the last quarter of 2012, 49 bars and restaurants extended their hours until 4 a.m. on Columbus Day and Veterans Day.  Here is the complete list: 1) Haydee’s Restaurant; 2) Haydee’s 2000; 3) Boundary Stone Public House; 4) Old Ebbitt Grill; 5) U Street Music Hall; 6) 18th Street Lounge; 7) K Street; 8 ) Eye Bar/Garden of Eden; 9) Café Asia; 10) Taste; 11) Mova; 12) Sabor Latino; 13) Toledo Lounge;  14) Phase I of Dupont; 15) Rock N Roll Hotel; 16) Ziegfeld’s Secrets;  17) Jimmy Valentine’s; 18) Current Sushi;  19) Midtown;  20) Dangerously Delicious DC; 21) The Argonaut;  22) Jr’s Bar and Brill; 23) Dupont Italian Kitchen;  24) Cobalt/30 Degrees/Level One;  25) Bachelor’s Mill/Back Door Pub;  26) Dirty Martini Inn Bar/Dirty Bar;  27) Little Miss Whiskey’s Golden Dollar;  28) Jackie Lee’s Lounge;  29) Phase I (SE);  30) Lux;  31) Ultrabar/Chroma; 32) Cities; 33) Barcode; 34) Opera Ultra Lounge; 35) Lima Restaurant and Lounge; 36) Tattoo; 37) Lotus; 38) Camelot; 39) Portico; 40) Marnon Café; 41) Josephine; 42) Music and Arts Club; 43) Redline; 44) Sesto Senso; 45) Johanna’s Restaurant;  46) Stadium; 47) Red Palace; 48) Café Dupont, and 49) Bravo Bravo.

DCRA Announces Business License Amnesty Program to Run Through December 31, 2012

On October 31, 2012, District of Columbia’s Mayor Vincent Gray announced a temporary amnesty program that will allow businesses operating without or on an expired business license (expired prior to August 1, 2012) to obtain one without receiving $2,000 in penalties, from November 1 through December 31, 2012.

The amnesty program, which will be administered by the Department of Consumer and Regulatory Affairs (“DCRA”) mostly targets delis, restaurants, grocery stores, beauty salons and barber shops, all of which have the lowest compliance rates of businesses in the city for obtaining proper business registrations and licenses.

Additionally, any corporate entity with expired or missing corporation filings, and businesses operating without current registration of their UPC scanners, commercial weights or scales, produce scales or gas pumps may also take advantage of this amnesty program.

The program comes in the wake of the controversy that arose this summer between DCRA and a group of six businesses that sell used records, furniture, clothing, and jewelry.  DCRA investigators visited these stores and required them to obtain secondhand business licenses, which have more requirements than a general business license.  The secondhand business license costs nearly $700 every two years and comes with strict inventory-reporting and background-check requirements as checks against the receipt of stolen goods.

After intense lobbying by the Adams Morgan Business Improvement District (“BID”) and a group called “Save Our Shops”, DCRA published new regulations exempting used and vintage stores from obtaining a secondhand business license, as long as certain requirements were satisfied.  To read the full text of the regulations, click here.

No Compromise: Food Truck Association Continues Campaign Against DCRA Regulations

The D.C. Food Truck Association (“DCFTA”) activated its public relations and lobbying campaign to oppose the District of Columbia’s Department of Consumer and Regulatory Affairs’ (“DCRA”) second attempt to update the vending regulations in the District.  On October 5, DCRA published proposed regulations to update the 30-year-old regulations which provide health and safety guidelines for sidewalk and roadway vendors but currently do not include food trucks.

In a continuous effort to encourage food truck owners to operate in designated areas and avoid overcrowding city streets, the Government’s most recent legislation establishes Mobile Roadway Vending (“MRV”) zones, wherein up to three food trucks may park from 11:00 a.m. to 3:00 p.m. so long as the individual trucks hold operating licenses.  Outside of these zones, food trucks are still permitted to park in metered parking spaces as they have been, provided they pay for the meter.

In spite of the flexibility that this legislation gives to food trucks while also clearing up traffic in otherwise crowded streets, the DCFTA vehemently opposes the newly proposed regulations.  In particular, the DCFTA cites the need for dense concentration of food trucks during certain planned events as a primary incentive to turn down the Government’s proposal.  DCFTA also objects to the requirement that an MRV may not be established “[w]here the adjacent unobstructed sidewalk is less than ten feet (10 ft.) wide in the Central Business District or seven feet (7 ft.) wide outside the Central Business District.”

Sidewalk vendors currently have a similar restriction, which requires vendors to maintain ten feet (10 ft.) and seven feet (7 ft.) walkways where they vend.  Restaurants with sidewalk cafes must also follow strict regulations that maintain unobstructed walkways.  Food trucks claim they are being unduly burdened by these long established rules for maintaining clear walkways for pedestrians.

DCFTA is lobbying the D.C. Council, which ultimately must vote on these regulations, and is asking food truck supporters to petition Mayor Vincent Gray to rewrite the rules.  The public can still make comments on these regulations until 5pm on November 13th.

Comments may be sent to Helder Gil, Legislative Affairs Specialist, the Department of Consumer and Regulatory Affairs at 1100 Fourth St. SW, Room 5164, Washington, D.C. 20024. Comments may be e-mailed to DCVendingRegs@dc.gov.