Booze News: Distilled in Room 215

A blog about the Baltimore City Liquor Board

What happened at the Liquor Board on February 20, 2014.

Written by Becky Witt

Chairman Fogleman and Commissioners Smith and Jones present.

1:00 pm docket

Applicant Young Bok Kim
Business Name B and S Restaurant, Inc.
Trading As New Seoul Restaurant
Address 1910-16 N. Charles Street
Type of License Class “B” Beer, Wine & Liquor License
Reason for hearing Application to transfer ownership
Hearing notes

Transfer of ownership: Former BLLC Executive Secretary Mr. Samuel Daniels represented the applicant as a consultant. He explained to the Board that the application before the Board is a transfer of ownership only in that one licensee, who had no financial interest in the license, is choosing to remove him- or herself from the license. The other licensee who has always had a 100% financial interest in the license is remaining on the license.

Live entertainment: The Board had previously scheduled the hearing, but the licensee had requested a postponement in order to meet with the Charles North Community Association (CNCA). The licensee and the CNCA came to an agreement, which they submitted in the form of a signed Memorandum of Understanding (MOU). Mr. Daniels pointed out that the owner of the building had not yet signed the MOU because he lives in Virginia, but they are planning on getting his signature. The MOU has been signed by the President of CNCA and the remaining licensee. Mr. Mlinarchik from CNCA was present to submit the MOU, dated February 19, 2014, to the Board.

Chairman Fogleman, through an interpreter, asked the remaining licensee if he understood the terms of the agreement and their implications. He responded that he did.

In conclusion, Mr. Daniels submitted a letter in support of the transfer from the licensee who wanted to be removed from the license. He also introduced a certificate of occupancy for live entertainment from zoning. Mr. Brendan Sullivan was present at the hearing as the day-to-day operator and general manager of the establishment.

Zoning B-5-2
Neighborhood Charles North
Area demographics 53% White, 32% Black, 8% Asian, 3% 2 or more races; 4% Hispanic ethnicity; 6% households have children under age 18; median household income: $38,331; 5.5% households live below poverty line.
Does corp entity exist, in good standing? Yes; yes.
Location of entity’s principal office 1910 N. Charles St, Baltimore, MD 21218
Attorney for licensee None
# in support 3
Attorney for community None, but Mr. Sam Daniels (former longtime Executive Secretary of the BLLC for Baltimore City) represented the community as a consultant.
# of protestants 1, who presented the executed MOU between the licensee and the community
# of inspectors 1 – John Howard
Result of hearing Approved
Vote tally Unanimous
Portions of state law cited in decision Article 2B section 10-202(a)
Other reasons given for decision Approved subject to the restrictions in the MOU
Issues raised in audit present in this case or other issues observed None
Applicant Edward Atwater & Paul Anderson
Business Name Atwater’s Café, LLC
Trading As Atwater’s
Address 3601 Boston Street
Type of License Class “B” Beer, Wine & Liquor License
Reason for hearing Application for a new Class “B” Beer Wine & Liquor restaurant license under the provisions of Article 2B Section 6-201(d)(vii), requiring minimum capital investment of $500,000, seating capacity for a minimum of 75 and a maximum of 150 persons, 51% average daily receipts of food; request for outdoor table service and live entertainment
Hearing notes

Ms. Caroline Hecker, of Rosenberg Martin Greenberg, spoke for her clients, the applicants, both of whom were present for the hearing. This will be a second liquor license issued to Mr. Atwater, who has been a licensee at his Belvedere Square location since last fall. Atwater’s is opening a new location at the Canton Crossing development, where they hope to serve a limited menu of beer and wine; they do wish to retain the option of serving liquor: for example, for cocktails at brunch. The location will have 54 seats at tables and 24 seats at counters. The Atwater’s model is a lunch counter dining concept, so, at the Belvedere Square location, the Board considered all of the seats (even the counter seats) to be “regular seating,” not “bar seating.”

Ms. Hecker submitted an estimate of costs for the project that showed a budget of $541,000, but she explained that these were just the tenants’ costs. The landlords for the project are planning to invest at least an additional $500,000 beyond the estimate submitted. She added that Atwater’s is is primarily a food destination, so the licensees plan to serve more than 50% food. They do not plan to offer live entertainment. Their proposed hours are 10am-8pm, but they may later decide to stay open until 10pm, depending on demand. Atwater’s plans to open on or about April 1, 2014.

Mr. Anderson is a Baltimore City licensee and a manager of the new establishment. Mr. Atwater has taken alcohol management training, and Mr. Anderson will complete the training this week.

The Canton Community Association is in support of the project.

Watch the hearing on YouTube:

Zoning B-2-2
Neighborhood Canton Industrial Area
Area demographics 86% White, 4% Black, 3% Asian; 5% Hispanic ethnicity; 9% households have children under age 18; median household income: $82,130
Does corp entity exist, in good standing? Yes; yes.
Location of entity’s principal office 2905 Whittington Ave, Baltimore, MD 21230
Attorney for licensee Ms. Caroline Hecker and Mr. Eric Kunimoto, Rosenberg Martin Greenberg
# in support 2
Attorney for community None
# of protestants 0
# of inspectors 0
Result of hearing Approved
Vote tally Unanimous
Portions of state law cited in decision Article 2B section 10-202(a)
Other reasons given for decision None
Issues raised in audit present in this case or other issues observed None
Applicant Joshua Foti & Brett Austin, Contract Purchasers
Business Name N/A
Trading As N/A
Address 12-14 E. Cross Street
Type of License Class “BD7” Beer, Wine & Liquor License
Reason for hearing Public hearing to determine the status of the license under the provisions of Article 2B §10-504(d)
Hearing notes

The Board did not hear any testimony from any neighbors for the hearing on the validity of the license at 12-14 Cross Street. Rather, the attorneys for each side gave an oral argument to the board (and had submitted written memoranda to the Board ahead of time).

Sharon Krevor-Weisbaum, of Brown Goldstein & Levy LLP represented the Federal Hill Neighborhood Association (FHNA). Ms. Krevor-Weisbaum asserted FHNA’s position that the liquor license at 12-14 Cross Street is no longer valid as a matter of law, under the provisions of Article 2B of the Maryland Code. She walked the Board through the history of the license, from the first application for the transfer of ownership in June 2009 to the present. She stated that there has been no establishment serving alcoholic beverages at that location since the summer of 2009. The fire permit for the establishment expired on July 11, 2009. The Board approved the transfer on July 23, 2009. She noted that 180 days after July 23, 2009, some kind of hearing or meeting was held with Mr. Sam Daniels granting an additional 180 days to the licensees. She stated that it was unclear from the file exactly what happened during that meeting. The BLLC staff sent several letters to the applicants during this time, reminding them that they have not completed their transfer of ownership. The applicants’ LLC’s charter was forfeited on October 1, 2012. The Board gave more and more extensions throughout this time.

Ms. Krevor-Weisbaum noted that even if all of the extensions given by the Liquor Board had been validly given under Article 2B, the transfer had to be complete by January 14, 2013, at the very latest, which it was not. She pointed out that the licensees have been completing this license transfer for 1673 days, which works out to 4.5 years. Obviously, 1673 days is many more days than the 180 days provided by the statute.

Ms. Krevor-Weisbaum noted that FHNA believes that the Board’s actions are way outside the parameters of the statute that governs all Baltimore City licenses. She added, “The Board cannot ignore the 180-day rule that the AG’s office has recently opined is a mandatory provision. And your staff kept reminding them. Letters from your staff say, “you know, you’re late.” We contend that the law mandates that you find this license invalid based on the failure of the licensees to complete the transfer.” Any other decision, she warned, would be struck down on appeal.

Mr. Joseph Woolman, attorney for the applicants, replied in his argument that “that was quite a history lesson just given. But it is history.” He noted that the license has been renewed every year and that his clients interpret Article 2B to say that a license renewal stops the 180-day clock. In caselaw, the Maryland courts, according to Woolman allow the Board discretion and authority in interpreting Article 2B. He emphasized the $2 million financial investment that the licensees have made in the project as a whole and in the continual payment of fees to the Liquor Board for license renewals every year. He asked, “why would someone spend $1300 per year if there is not a transfer pending?” He noted that his clients relied on the communications from the Liquor Board staff and followed their directions.

Ms. Krevor-Weisbaum was given time to respond to Mr. Woolman’s argument. She pointed out that there is nothing in Article 2B that would suggest that renewal of a license would stop the 180-day transfer clock. The licensees never filed a hardship extension request in this case, so it is unclear why the Board would have given the licensees an extension at all. She argued against the idea that a private party would get to benefit from a government’s mistake.

Zoning B-2-3
Neighborhood Federal Hill
Area demographics 80% White, 12% Black, 4% Asian; 3% Hispanic ethnicity; 11% households have children under age 18; median household income: $78,578.
Does corp entity exist, in good standing? None provided in docket.
Location of entity’s principal office No entity provided in docket
Attorney for licensee Mr. Joseph Woolman
# in support N/A
Attorney for community Ms. Sharon Krevor-Weisbaum, Brown Goldstein & Levy
# of protestants N/A
# of inspectors 0
Result of hearing

Chairman Fogleman announced the decision for the Board after a short recess. He noted that the Board, on appeal from their previous ruling in the summer of 2013, did volunteer for a remand on the validity of the license so that the Board could give a longer look at the validity issues. He noted that there is no dispute about the timeline, that the license was approved on July 23, 2009 and that extensions were given along the way by the Board, which the licensee relied on. He agreed with Ms. Krevor-Weisbaum that even with an extension, legal or otherwise, the license at 12-14 Cross Street would have been considered “dormant” after October 17, 2011.

[Note: The only provision in which Article 2B contains the word “dormant” is in section 9-203, which only applies to Anne Arundel County, and says: “(4)(i) An alcoholic beverage license may not be renewed or transferred unless the licensee has actively engaged in the sale of alcoholic beverages as authorized by the license within one year prior to the date of application for renewal or transfer. Any attempted renewal or transfer of a dormant license not in accordance with the provisions of this section is null and void.”]

The Chairman went on to say that the licensees’ counsel’s arguments center around estoppel. The applicants have renewed and paid fees to the Liquor Board every year for 4.5 years. He noted, “We are left pondering the idea of estoppel. The idea that our actions or failure to act as an agency may play some role in what we do here today. … The only question that we would have to answer – did our acceptance of renewal fees – does that preclude us from declaring license invalid as of today. It’s obvious that significant sums of money have been invested in reliance [on what Board staff told the licensees].”

Based on estoppel arguments, the Board held the license to be valid as a matter of fairness to the licensees.

Vote tally Unanimous
Portions of state law cited in decision None
Other reasons given for decision See above
Issues raised in audit present in this case or other issues observed

Finding 6 of the 2013 Legislative Audit stated that the BLLC did not ensure that license transfers were completed within 180 days of receiving Board approval. In this case, over 4 years passed between license approval and license transfer. A recent Attorney General’s opinion confirmed this 180-day requirement that the Board must finish a transfer within 180 days.

Applicant Joshua Foti & Brett Austin
Business Name 18 Cross LLC
Trading As Cross Bar
Address 12-14 E. Cross Street
Type of License Class “BD7” Beer, Wine & Liquor License
Reason for hearing Application for transfer of class BD7 license at the location 12-14 E. Cross Street and application amended to include expansion of 16-18 E. Cross Street as part of the licensed premises.
Hearing notes

The Federal Hill Neighborhood Association (FHNA) requested a postponement from the Liquor Board (and had requested a postponement in writing earlier in the week). They explained to the Board that the neighborhood had not had any notice that the hearing would occur, since the last time that the property was posted was in August 2013. Chairman Fogleman asked whether they could really argue that they did not have notice of the hearing, since the neighborhood and the applicants had lately been engaged in extensive negotiations regarding the expansion. The FHNA representative replied that FHNA of course had notice that the applicants wished to expand but they did not have specific notice of the particular hearing, which, she argued, Article 2B requires in section 10-202(a). FHNA also argued that the applicants submitted their application prematurely, because the application was submitted within six months of a prior denial. Mr. Woolman, for the applicants, noted that BLLC Rule 2.11 states that applicants shall not be permitted to apply for the SAME transfer within six months, and he argued that the applications submitted was for a different transfer.

In denying FHNA’s postponement request, Chairman Fogleman said the following: An amended applciation was filed early this month, and no one has ever heard of posting being done for an amended application. That’s just not something the Board has ever engaged in. He added that the license viability issue has been talked about for a long long time. He concluded that FHNA was very much constructively aware that this hearing is going to take place, because they had gathered a lot of people in the audience.

Mr. Woolman, attorney for the applicants, called Mr. Peter Auchincloss as his first witness. The applicants hired Mr. Auchincloss to be a community liaison and to negotiate with the neighborhood associations. Mr. Auchincloss reached an agreement with several of the neighborhood associations, including the South Baltimore Neighborhood Association. Some of the terms of the agreement include: a maximum capacity of 155 people, a 50%-50% food-alcohol ratio, earlier closing times, a city valet plan, and a higher elevation of the front wall of the establishment. Mr. Auchincloss stated that he had had eleven meetings with three community associations since the previous hearing in 2014. Mr. Woolman also submitted letters of support and petition signatures from community members. SBNA voted in favor of the agreement, 23-11, at their last meeting.

Mr. Foti, one of the two applicants, described the concept of the proposed establishment. The place will have a 155-person capacity and will include a German-style outdoor beer garden (enclosed by four walls) serving high end beer and food. The average beer from the menu will cost $8, and they will also sell pretzels, weinerschnitzel, and other German food. Mr. Austin has owned and operated many restaurants and has almost forty years’ experience in the restaurant industry.

FHNA residents then presented testimony about why the community still doesn’t want or need an additional liquor license in Federal Hill. One resident expressed concerns that three of the largest bars in the city started as much smaller operations, which grew over the years through expansions. Another said that the bar scene in this area is getting out of control. Judy O’Brien, Founding President of the Downtown Baltimore Family Alliance testified about drunkenness in the middle of the day, which is difficult to explain to her children. She asserted that Baltimore cannot be a great city of only revolving twenty-somethings, which was met with general applause.

Many of the residents expressed sincere concerns about the enforceability of the capacity limits in the Memorandum of Understanding between CrossBar and South Baltimore Neighborhood Association. The applicants are keeping their floor plan more or less the same as their original plan. Essentially, according to the community, the applicants are building a 300-person restaurant but agreeing to fill it only halfway.

Two Baltimore City police officers described the nightly chaotic scene in Federal Hill at closing time. Chaotic scene. The community showed the Board a video of a typical Saturday evening in September on Cross Street at closing time. The video showed a large number of intoxicated, boisterous people filling the street. The police officers confirmed that the video showed a typical Saturday night.

Chairman Fogleman went through letters of opposition from individuals and community organizations in the file. He noted that one of the letter writers stated that he would rather have a crack house open in Federal Hill than another bar.

Watch the decision phase of this hearing on YouTube:

Zoning B-2-3
Neighborhood Federal Hill
Area demographics 80% White, 12% Black, 4% Asian; 3% Hispanic ethnicity; 11% households have children under age 18; median household income: $78,578
Does corp entity exist, in good standing? Yes; yes.
Location of entity’s principal office 18 E. Cross St., Baltimore, MD
Attorney for licensee Mr. Joseph Woolman
# in support ~5
Attorney for community None
# of protestants ~25
# of inspectors 2 – Joann Martin and Mark Fosler
Result of hearing Transfer and expansion request approved
Vote tally Unanimous
Portions of state law cited in decision Article 2B section 10-202(a)
Other reasons given for decision

Chairman Fogleman noted that the MOU between the applicants and the SBNA is one of the most restrictive in Federal Hill. He said that it will be glaringly obvious if the applicants are not following the capacity restrictions. He noted that, under Article 2B section 10-202(a), CrossBar will provide a uniqueness of services, since there are no other German beer gardens in the vicinity. The Chairman noted that the Board does not want to discourage all economic development in Baltimore City.

Watch the video of the decision phase of this hearing:

Issues raised in audit present in this case or other issues observed None.

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