Restaurateurs and bar owners are furious with the New York State Liquor Authority for its long delays in processing liquor licenses, which they say have led to big losses in potential revenue.
Sources familiar with the State Liquor Authority say that, while there was a backlog of around 3,000 NY State liquor license applications in 2009, the problem at that time was resolved by 2014. For a time, the waiting period was brief and the licensing process efficient. While the SLA like many government agencies on the state and local level is blaming COVID, sources say the waiting times started ballooning between 2017 and 2019, before COVID set in.
In some cases, restaurant owners have sent in applications for liquor licenses that remain unfulfilled over a year later. This presents them with a difficult dilemma: delay opening, causing them to lose money, or open without the liquor license. For some who choose the latter, the loss of revenue without alcohol sales is prohibitively great; they end up forced to pay staff out of their own pocket.
And while some landlords would grant short grace periods if a new bar or restaurant was open on the premises, most leases ask the business owner to start paying rent as soon as they sign a lease and long before they can. open their doors.
”I’m paying rent,” said one would-be tavern owner, who said there is nothing he can do as he tries to takeover a bar that shuttered several years ago. Without an acknowledgement from the liquor authority of a time frame as to when--or if--he will get a liquor license, he is reluctant to commit to costly renovation. He said he thought after the community board had given him an ok, that he would have the license in hand by March. Now, he’s been told the backlog means he won’t have the license until at least September. He declined to give his name for fear the SLA would slow down the application process even further.
Some places open with food only. Some try to skirt the law with a B.Y.O.B policy [bring your own booze]. But one source said the SLA frowns on that and if someone blows the whistle, it could make it harder still to get a full license because technically even th Selling food only is not lucrative either.
“Restaurants make money on the bar, that’s where the real money is made,” says R. Couri Hay, a publicist who works with many restaurants and bars. “Every day, people come in, they hear there’s no liquor, they walk out.”
“Unfortunately, there is a major backlog and delays processing liquor licenses in New York City, which poses a lot of burdens for new small business trying to open,” says Andrew Rigie, executive director of the NYC Hospitality Alliance.
“To speed [up] the process the state legislature must amend the temporary liquor license law to make more new businesses eligible for a temporary license like they are allowed to get in the rest of the state, so they can open faster,” Rigie continues.
Some are particularly frustrated because the delay forced them to miss the lucrative Christmas holiday season, when food and drink revenue tends to be high. Smith & Mills, a restaurant in Rockefeller Center, applied for their liquor license this past June but according to the SLA web site, still does not have a license and was recently hit with a failure to comply on its application, which will mean more delays as it unravels the red tape. The hard-to-find restaurant known as The Rink Lounge requires one to go through the ice skating rink. The Rockefeller Center outlet could not be reached, but a person who picked up the phone at the Tribeca establishment said reservations could be made through RESY app–and he insisted Rockefeller Center had a beer and wine license. But not according to the SLA web site.
Hay also stated that some restaurateurs were frightened to speak publicly about the issue out of fear of retaliation or further delays.
“It’s very discouraging. A lot of small businesses can literally go out of business while waiting for their liquor license,” says Hay. “I think it’s a sad state of affairs that the mayor and the governor can’t run this liquor authority in a way that helps encourage restaurateurs to open businesses.”
Julie Menin, who heads the city council’s small business committee, says the delay in processing applications is “unacceptable” but there is little that can be done on the city level because the SLA is a state agency.
“Every day I get calls from clients asking about it,” says a lawyer who has experience with the SLA situation but who asked not to be named.
“You can sign a ten-year lease and spend the first year just waiting for a liquor license. 10% of your term can just be gone while you’re waiting for your liquor license.”
The SLA’s hard to navigate web site recently appears to have gotten even more complex. The “public query” portion of the web site has been “decommissioned for security reasons” according to the SLA web site.
“With the State Liquor Authority’s Public Query site now decommissioned for security reasons, license information can be found on our LAMP site and through New York’s Open Data site. We realize that there are certain gaps with this transition, and we are working to remedy those. In the meantime if something is not currently searchable, you may submit a FOIL request online.”
And of course a FOIL [Freedom of Information Law] request can takes months to process because it has to be vetted by an SLA lawyer.
Governor Kathy Hochul recognizes the problem and a year ago signed into law an additional $2 million for the SLA to hire 39 more employees, with 30 of them earmarked to help reduce the waiting time for applications. But bar owners said they have not noticed any improvement.
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“I think it’s a sad state of affairs that the mayor and the governor can’t run this liquor authority in a way that helps encourage restaurateurs to open businesses.” - R. Couri Hay.