Booze News: Distilled in Room 215

A blog about the Baltimore City Liquor Board

What happened at the Liquor Board on October 22, 2015.

Written by Becky Witt

Commissioners Elizabeth Hafey and Douglas Trotter with (Alternate) Commissioner Harvey Jones held hearings on October 22, 2015. Ms. Hafey acted as chairman, in the absence of Chairman Benjamin Neil.

I. Expedited Items (Transfers):

Applicants Herbert Kerschbaumer & Ronald Singer
Business Name Eddie’s LLC
Trading As Eddie’s
Address 2239 Essex Street
Type of License Class “BD-7” Beer, Wine & Liquor License
Reason for hearing Application to transfer ownership, request to add live entertainment, off-premises catering & outdoor table service
Hearing notes

Mr. Stephan Fogleman, former 7-year Chairman of the BLLC, represented the sellers of the license. He said that his clients had been periodically closed for months, while they were looking for an investor. BLLC Executive Secretary Michelle Bailey-Hedgepeth characterized the bar’s status has having been “periodically open,” not periodically closed. Fogleman noted that there had been some community complaints about an unsightly appearance to the building, including high weeds. These issues, said the attorney, have been taken care of and were related to the periodic closure.

The Canton Community Association declined to meet with the new applicants or take a position on the transfer.

Mr. Kerschbaumer stated that, as soon as he receives BLLC approval to transfer the ownership, he will get a mortgage and loan and rehab the inside of the property. Kerschbaumer testified that he has owned several bars and restaurants in Washington DC and is quite familiar with the business.

The licensees are not asking to add live entertainment and outdoor table service, since they already received authorization for those items in 2010. But they are asking that those privileges transfer along with the ownership of the license to the new owners.

Zoning R-8
Neighborhood Canton
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 Bethesda, MD
One applicant reside in Balt for 2 yrs? No.
Pecuniary interest of Baltimore City resident 0%
Attorney for licensee Former Chairman Stephan Fogleman
# in support 2
Attorney for community None
# of protestants 0
# of inspectors/police officers 0
Result of hearing Approved
Vote tally Unanimous
Portions of state law cited in decision None
Other reasons given for decision None
Issues raised in audit present in this case or other issues observed

Insufficient Application: Article 2B section 9-101(c) states that, if an application is made for a liquor license by a Limited Liability Company (LLC), “the license shall be applied for by and be issued to 3 of the authorized persons of that [LLC], as individuals, for the use of the [LLC], at least 1 of whom shall be a registered voter and taxpayer of the … city … and shall also have resided there at least 2 years befor the application.” Mr. Kerschbaumer is not a resident of Baltimore City, though he is a taxpayer, because he owns real property in Baltimore City. Mr. Singer is also not a resident of Baltimore City, and he is not a taxpayer, either. On the application line which says to fill in the “[a]ddress on which personal property tax is paid in your individual name,” Mr. Singer wrote “227 West Chase Street, Baltimore, MD 21201.” SDAT shows that this property is owned by an LLC, not by Mr. Singer in his own name. This inconsistency was pointed out to the BLLC more than two weeks before the hearing but was not addressed or raised during the hearing.

Applicants Phillip Weinberg & Meghan Jillson
Business Name Ovations Food Services of Maryland, LLC
Trading As Maryland Science Center
Address 601 Light Street
Type of License Class “B” Beer, Wine & Liquor License
Reason for hearing Application to transfer ownership; requests for live entertainment and outdoor table service
Hearing notes

Ms. Leanne Schrecengost represented the applicants in this transfer and proffered testimony on her client’s behalf. There was a letter of support in the file from the Waterfront Partnership. Schrecengost explained that Aramark had been the food and beverage manager at the Science Center, but had lost the contract when it was up for renewal. The Science Center is now changing its contractor to Ovations, a company that does food service for minor league baseball stadiums, among other establishments. Most employees are staying on, and all employees involved in alcohol sales are alcohol management certified.

The attorney explained that, when the license was originally issued in 2004, the Liquor Board did not regulate outdoor table service and live entertainment separately from the license. The Science Center has always had outdoor tables and live entertainment, so they’re not looking to “add” it, but the law requires that the Board specifically approve those privileges. She also explained the ownership of the license: the two licensees own 50% each of the Class B ownership; a parent company owns 100% of the Class A ownership.

Zoning B-5-1
Neighborhood Inner Harbor
Area demographics 80% White, 12% Black, 4% Asian. 3% Hispanic ethnicity. 11% households have children under age 18. Median household income: $78,578. 12% households live below poverty line.
Does corp entity exist, in good standing? Yes; yes.
Location of entity’s principal office Baltimore, MD
One applicant reside in Balt for 2 yrs? Yes
Pecuniary interest of Baltimore City resident 50% of Class B stock
Attorney for licensee Ms. Leanne Schrecengost
# in support 2
Attorney for community None
# of protestants 0
# of inspectors/police officers 0
Result of hearing Approved
Vote tally Unanimous
Portions of state law cited in decision None
Other reasons given for decision None
Issues raised in audit present in this case or other issues observed None

II. Regular Docket (New applications and hardship extension):

Applicants Sheila Bowyer-Natale & Deborah Myers
Business Name 743 S. Montford, Inc.
Trading As The Montford Bar
Address 743 S. Montford Avenue
Type of License Class “BD-7” Beer, Wine & Liquor License
Reason for hearing Request for a hardship extension under the provisions of Article 2B section 10-504(d)
Hearing notes

Mr. Melvin Kodenski appeared on behalf of his clients, the Contract Purchasers, who were not present at the hearing, due to a car accident. He proffered that his clients are requesting a hardship extension in order to find a buyer for the license. Kodenski said that the last date of business was June 15, 2015, so he asked for an extension until 360 days after June 15, 2015. The last Liquor Board inspection of this establishment was April 7, 2015.

Zoning R-8
Neighborhood Canton
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; no.
Location of entity’s principal office Baltimore, MD
One applicant reside in Balt for 2 yrs? N/A
Pecuniary interest of Baltimore City resident N/A
Attorney for licensee Mr. Melvin Kodenski
# in support 0
Attorney for community None
# of protestants 0
# of inspectors/police officers 0
Result of hearing Approved
Vote tally Unanimous
Portions of state law cited in decision None
Other reasons given for decision None
Issues raised in audit present in this case or other issues observed

Article 2B section 10-504(d) requires that the Board find that an “undue hardship currently exists causing the closing or cessation of business operations.” Mr. Kodenski explained that the cessation of business operations was caused by the death of the licensee. However, it is unclear why the death of the licensee would lead to an “undue hardship” for the contract purchasers. Each administration of the BLLC has treated the hardship extension provision as an automatic right, rather than how it is described in Article 2B: an option for licensees who are experiencing a truly undue (meaning excessive or disproportionate) hardship.

Applicant William Stevenson
Business Name Waverly Brewing Company, LLC
Trading As Waverly Brewing Company
Address 1625 Union Avenue, Unit C
Type of License Class “B” Beer (Brewery) License
Reason for hearing Application for a new Brewery License
Hearing notes

Ms. Kerri Smith represented the applicant in his request for a new Class B brewery license. The applicant has support from the Hampden Community Council and the Hampden Village Merchants’ Associations. Ms. Smith submitted letters of support from those organizations at the hearing. She proffered that he is a qualified applicant who lives in Hampden. He does not have experience working with alcohol, however.

Zoning M-2-1
Neighborhood Hampden
Area demographics 77% White, 12% Black, 5% Asian; 4% Hispanic ethnicity; 18% households have children under age 18; median household income: $54,278
Does corp entity exist, in good standing? Yes; yes.
Location of entity’s principal office Baltimore, MD
One applicant reside in Balt for 2 yrs? Yes.
Pecuniary interest of Baltimore City resident 58%
Attorney for licensee Ms. Kerri Smith
# in support 1
Attorney for community None
# of protestants 0
# of inspectors/police officers 0
Result of hearing Approved
Vote tally Unanimous
Portions of state law cited in decision None
Other reasons given for decision None
Issues raised in audit present in this case or other issues observed

During this hearing, the commissioners accepted letters from the applicant which had been written by community association representatives in favor of the project. However, at the October 8 hearing for Lil’s Place, at 1909 N Pulaski Street, the commissioners had loudly rejected letters from community representatives submitted for the first time at the hearing, as a matter of “fundamental fairness.” This inconsistency in the application of an imaginary rule is difficult to understand.

Applicants Donald Kelly & Justin Dvorkin
Business Name 901 Hamden, LLC
Trading As Trade name pending
Address 901 W. 36th 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 Rule 2.08 requiring $200,000 in capital investment in restaurant fixtures and facilities and seating capacity for a minimum of 75 people, requests for live entertainment, outdoor table service and off-premise catering (moved from 10/15/15)
Hearing notes

Mr. Abraham Hurdle represented the two applicants. He submitted documents to show a planned $875,000 capital investment in the building and fixtures. Hurdle submitted a Memorandum of Understanding which had been agreed to by community groups, but which had not yet been signed by all who wished to sign. Hurdle said that his clients already have zoning approval for a restaurant for this building, but they have not yet applied for a conditional use for live entertainment. Hurdle explained that he was trying to avoid coming back to the Liquor Board for live entertainment approval after his clients go to the BMZA.

The applicants have owned Pratt Street Ale House, with locations in Howard and Anne Arundel Counties as well as Baltimore City. There will be no take-out liquor, but they may sell craft six packs and growlers of beer. Their food percentages at their other restaurants tend to run in excess of 60%, said Hurdle.

Commissioner Hafey asked whether the applicants will need a security plan for such a large space. Hurdle responded that the restaurant is on “The Avenue,” which is “not a dicey neighborhood” so the applicants won’t need much security, except on an as-needed basis. They will have valet parking and a plan to deal with trash.

Zoning B-2-2
Neighborhood Hampden
Area demographics 77% White, 12% Black, 5% Asian; 4% Hispanic ethnicity; 18% households have children under age 18; median household income: $54,278
Does corp entity exist, in good standing? Yes; yes.
Location of entity’s principal office Baltimore, MD
One applicant reside in Balt for 2 yrs? Yes.
Pecuniary interest of Baltimore City resident 30%
Attorney for licensee Mr. Abraham Hurdle
# in support 2
Attorney for community None
# of protestants 0
# of inspectors/police officers 0
Result of hearing Approved, subject to zoning approval of the conditional use for live entertainment, outdoor tables
Vote tally Unanimous
Portions of state law cited in decision None
Other reasons given for decision None
Issues raised in audit present in this case or other issues observed

Completeness: Article 2B section 10-202(a)(4)(iv), part of the alcoholic beverages reform act of 2014, states that an application for the issuance, transfer or renewal of a license is not complete unless the applicant has obtained zoning approval or verification. In this case, the applicants had zoning approval for a restaurant, but they did not yet have zoning approval for live entertainment and outdoor seating. In fact, they had not yet even applied for zoning approval for these privileges. The plain language of Article 2B addresses issuances, transfers, and renewals, not live entertainment or outdoor table service privileges, so it is not particularly clear whether what happened in this hearing was correct or incorrect. However, there was no real discussion of the issue at all, of this section of Article 2B and whether it applies to this situation. This failure to spot and discuss the possible issue (even if what the BLLC did in this case is defensible under the law) is what is most concerning. There is no evidence, during hearings, that the commissioners are at all familiar with any section of Article 2B.

III. Violations:

Licensee Luis Cabrera
Business Name L. Cabrera, Inc.
Trading As Lauraville House
Address 4528-30 Harford Road
Type of License Class “B” Beer, Wine & Liquor License
Reason for hearing

Violation of Rule 4.15 Gambling: July 7, 2015- At approximately 9:00 pm, Baltimore City Police executed a Search and Seizure Warrant at the establishment. In executing the search warrant Baltimore City Police Officers identified three (3) video poker machines that were the target of an undercover investigation. Prior to july 7, 2015, Baltimore Police di rectly observed payouts being made from the poker machines, which served as the basis for the search warrant. Recovered through the execution of the search warrant were three (3) Toggle Switches, three (3) Power Packs, and three (3) Memory Boards – all of which were recovered from each of the three (3) video poker machines. In addition, Baltimore Police recovered one payout slip with an employee’s name of “Shelly,” later confirmed as Shelly Dunn, and $1,373.00 in U.S. Currency.

Violation of Rule 4.18 Illegal Conduct: July 7, 2015- At approximately 9:00 pm, Baltimore City Police executed a Search and Seizure Warrant at the establishment In executing the search warrant Baltimore City Police Officers identified three (3) video poker machines that were the target of an undercover investigation. Prior to july 7, 2015, Baltimore Police directly observed payouts being made from the poker machines, which served as the basis for the search warrant. Recovered through the execution of the search warrant were three (3) Toggle Switches, three (3) Power Packs, and three (3) Memory Boards – all of which were recovered from each of the three (3) video poker machines. In addition, Baltimore Police recovered one payout slip with an employee’s name of”Shelly,” later confirmed as Shelly Dunn, and $1,373.00 in U.S. Currency.

Hearing notes

Mr. Frank Boozer represented the licensee, who admitted responsibility for both violations.

Baltimore City Police Detective Abraham Gatto, member of the Vice Unit of the police department, then testified about the matter. He explained to the commissioners that he believed this violation was due to a “rogue employee.” Gatto went inside, undercover, and watched people playing the poker machines. In Maryland, it is illegal to pay out money for points won on a poker machine; instead, people are just supposed to play the machines for fun. One customer accrued some points on the machine, got the attention of the bartender, drew her over and showed her the points he had accrued. She went to the cash register, removed currency and paid the customer. Gatto explained that usually the people involved in these deals are more secretive, but, in this case, it was easy to see what happened. The licensee was not present at the time, but Gatto testified that he had dealt with Cabrera in the past and he has always been a very coooperative person. Gatto was not at the bar on assignment or following up on a complaint; he just happened to be there to watch the Orioles.

Under questioning from the commissioners, Mr. Boozer told them that his client owns his own poker machines, which have since been removed. Boozer also said that, in this case, the employee was able to manually reset the machine with an illegal toggle switch, which wiped out previous information stored in the machine. The bartender’s employment was terminated. Criminal charges were filed, but the charges were placed on the stet docket, after Mr. Cabrera forfeited the video poker machines and the money in them. The machines are worth $2,500-$3,000 each, and the police also retrieved $1,373. Boozer concluded that Mr. Cabrera will not replace the poker machines, and he is actively looking for a buyer for his business.

Zoning B-3-2
Neighborhood Lauraville
Area demographics 36% White, 58% Black, 1% Asian; 2% Hispanic ethnicity; 32% households have children under age 18; 5% households below poverty line; median household income: $58,085.61.
Does corp entity exist, in good standing? Yes; no.
Location of entity’s principal office Baltimore, MD
One applicant reside in Balt for 2 yrs? N/A
Pecuniary interest of Baltimore City resident N/A
Attorney for licensee Mr. Frank Boozer
# in support 1
Attorney for community None
# of protestants 0
# of inspectors/police officers 1
Result of hearing Responsible for two charges. $750 fine.
Vote tally Unanimous
Portions of state law cited in decision None
Other reasons given for decision

Executive Secretary Michelle Bailey-Hedgepeth informed the commissioners that the licensee had been found responsible for one charge of a sale to a minor in 2014.

Commissioner Trotter noted that the licensee has already lost about $10,000 from this incident and suggested a $500 fine. Commissioner Jones disagreed and said that the fine should be higher, since he has had a prior violation within two years. Jones said that the community deserves better from Mr. Cabrera. He suggested $750, and the other two commissioners, after some discussion, agreed.

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

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