Speliotis: Misconceptions Cloud Special Legislation for Liquor Licenses

It turns out there are a few misconceptions about how the home rule petition process works in regard to liquor licenses, according to state Rep. Ted Speliotis.

Speliotis, who represents West Peabody along with Danvers and part of Middleton, says it's a one-time deal and the city never regains control of the license after it's initially issued.

Peabody officials will be forwarding a home rule petition to the legislature to create 10 new liquor licenses for the city. All the existing licenses for restaurants, with the exception of two the city will be deciding on very soon, are in use and city officials want to add some new ones to stimulate growth downtown and allocate some more for the mall.

Mayor Ted Bettencourt told city councilors last week his understanding is that licenses created this way by special legislation return to the city if the license holder goes out of business rather than be sold as a business asset for a hefty sum, as happens now.

The scenario Bettencourt and councilors envisioned was a permanent set of liquor licenses the city could hold to spur economic development in two areas and maintain at an affordable price. They were half right.

Speliotis said what actually happens -- and he should know since he chaired the committee in charge of hearing license petitions -- is if a license were issued and the restaurant closed its doors within three years, the license would disappear back into thin air.

If a business, however, survived beyond three years, the special license would become an asset just like a regular liquor license and could be sold on the market.

The only restriction, Speliotis said, is that the license would have to remain at that location.

"This is not a loan, this a gift we're giving," he said. "They're [cities and towns] not competing with anyone to get these."

He said the legislature's intent is to prevent people from flipping licenses, which would be worth tens of thousands of dollars, in the short term. Another goal is transparency in an environment where political patronage over liquor licenses is a real concern.

He said the end goal of the law is to protect business interests while helping a municipality grow at the same time.

A city or town has two initial options in seeking an "over quota license" (liquor licenses are otherwise determined by population). The first option is to request a site location for a specific business entity, which is commonly how municipalities petition for additional licenses.

Speliotis said a license approved that way locks it in at that site for perpetuity, assuming again the business lasts more than three years.

The other option is to request a set amount of licenses, which is what Peabody wants to do. The licenses could be site specific or not, but they would be tied to those sites permanently if identified that way in the legislation, rather than having more of an open application process.

Speliotis was instrumental in crafting the language for that second option a couple years ago as some communities were struggling to keep local eateries in their downtowns while competing with nearby malls.

He added that the law also doesn't allow for special districts or zones. The city can just ask for 10 licenses and determine where they should go after the fact.

If the legislature were to approve the petition, the licenses would be granted by the state Alcoholic Beverages Control Commission. The city would still get a one-time fee per license and its annual license fee.

Speliotis said he'll definitely offer input on the final language of the petition and expects the legislature will receive the bill in next year's session. It could take several months from there before a vote is taken.

He doesn't foresee any major obstacles to the legislation passing, regardless of what other North Shore communities have or have not received. Each petition is taken on its own merit.

"Each community has its own unique history and that has to be factored in," he said.