Booze News: Distilled in Room 215

A blog about the Baltimore City Liquor Board

What happened at the Liquor Board on August 18, 2016.

Written by Becky Witt

11:00 a.m.

Chairman Matricciani began the hearings by announcing that he and alternate Commissioner Harvey Jones had been sworn in for the renewal of their two-year terms. He added that his fellow commissioners had re-elected him as chair of the board for the foreseeable future. The Alcoholic Beverages Article provides for staggered terms of two years for each of the commissioners; the terms end on June 30 of alternate years.

I. Regular Items (Hardships, Transfers, Expansions and New):

Applicants Stephen Demby and Alice March
Business Name DEMBCO, Inc.
Trading As Knotty Pine Inn
Address 801 S. Conkling Street
Type of License Class “BD7” Beer, Wine & Liquor License
Reason for hearing Application to transfer ownership, request for outdoor table service.
Hearing notes

Mr. Shawn Harby proffered the case for his two clients that the license is being transferred from Ms. March’s corporation to Mr. Demby’s, but Ms. March will remain on the license as a 5% shareholder. Ms. March, according to her attorney, has had no violations in the seventeen years of her ownership and operation of the business. Mr. Douglas Paige, Acting Executive Secretary of the agency, corrected Mr. Harby that in 2005, there was an illegal gambling violation at this location. Harby continued, saying that his clients had reached out to the community association, and the association had approved the transfer of ownership. The building is owned by Norino Properties, LLC. Mr. Denby intends to keep things mostly the same as his predecessor.

Zoning B-2-2
Neighborhood Brewers Hill
Area demographics 66% White, 9% Black, 3% Asian; 20% Hispanic ethnicity; 17% households have children under age 18; median household income: $60,484; 15% households live below the 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 5%
Attorney for licensee Mr. Shawn Harby
# 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

Chairman Matricciani stated that he would approve the transfer, based on what was presented by Mr. Harby. Commissioner Moore agreed, saying that she believed that the applicant is well prepared to step in and has put thought and care into the transition. Commissioner Greenfield also agreed and thanked the applicant for meeting with the community.

Issues raised in audit present in this case or other issues observed

Mr. John Zorzit, owner and member of Norino Properties, LLC, who signed this application, owns a video gambling machine corporation, Nick’s Amusements, which has been found responsible for money laundering. The Comptroller of Maryland ordered Mr. Zorzit and his corporation to pay $5 million in back taxes, fees, interest, and penalties in 2015. The Court of Appeals of Maryland notably quoted Stringer Bell, a character from “The Wire,” in its July 2015 opinion upholding the Comptroller’s $5 million charge. Footnote 2 of the opinion says that, “of the approximately forty to fifty bars and restaurants where Nick’s had placed video poker machines by 2009, Mr. Zorzit and a business partner owned the building at thirty through a separate company.” It is not particularly surprising, then, given the connection to Mr. Zorzit, that this particular licensee had an illegal gambling violation at this location.

Applicants Andrew Lasinski and Tyler Stanek
Business Name Listy, Inc.
Trading As Shipyard Café
Address 3500 O’Donnell Street
Type of License Class “BD7” Beer, Wine & Liquor License
Reason for hearing Application to transfer ownership.
Hearing notes

Mr. Melvin Kodenski, for his clients, told the commissioners that the license in question had been at the location since Prohibition. It is located in a residential area, outside of Canton Square. Mr. Lasinski has five or six years of alcohol experience. The hours of operation will be 10am to 2am, and the business will hire up to five employees.

Kodenski noted that, since the license is so old, it has decades-old restrictions on it. The license reads: “no go go girls, dancing, or live entertainment permitted. Franklin John Hartman barred from premises in any capacity.” Kodenski noted that Franklin John Hartman is dead, so his clients don’t have to worry about breaking that restriction.

Mr. Andrew Lasinski testified that he met with surrounding neighbors to talk about any concerns, including those closest to the property. He himself lives only four blocks away. Mr. Stanek also testified briefly about his alcohol management experience in Baltimore City.

Commissioner Greenfield asked whether the bar is currently in operation. Mr. Lasinski replied that Mr. Lear, the current licensee, is in poor health but is operating the business when he can. The applicants are planning improvements to the building, fixing up bathrooms, upgrading restaurant equipment, redo the bar and floor, improve the facade, replace the Formstone, etc.

Chairman Matricciani asked, “you’re not going to stop serving Natty Boh, are you?” Mr. Lasinski replied that he could “pour a beer out of [his] shoe and it’d taste the same. No offense.” Chairman Matricciani jokingly suggested that Mr. Lasinski might need to retake his alcohol awareness course.

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 Baltimore, MD
One applicant reside in Balt for 2 yrs? Yes
Pecuniary interest of Baltimore City resident 50%
Attorney for licensee Mr. Melvin Kodenski
# 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

Chairman Matricciani voted to approve based on the evidence presented, the testimony of the applicants, the proffers by Mr. Kodenski, their familiarity with the business, the applicants’ ownership of the real property, their engagement with the community, and their investment in the business.

Issues raised in audit present in this case or other issues observed

The renewal of this license was protested in 2014, under former licensee Mr. Lear’s management. The licensee was given a thirty day suspension on April 17, 2014, but the license was renewed. The licensee requested reconsideration of the punishment and the Board reversed itself on May 8, 2014. The Board’s printout of license details for this address does not contain any mention of the renewal protest.

Applicants Ana Cushing and Anthony Cushing
Business Name Cat’s Eye Ltd.
Trading As Cat’s Eye Pub
Address 1730 Thames Street
Type of License Class “BD7” Beer, Wine & Liquor License
Reason for hearing Request to add live entertainment.
Hearing notes

Former Liquor Board Chairman Stephan Fogleman represented the two applicants, who have owned the business in Fells Point since 1975. According to Fogleman, they have been exemplary licensees. Recently Jim Belushi stopped by the bar and gave an impromptu performance. The attorney noted that this year, Baltimore Magazine had deemed the Cat’s Eye Pub the “best place for hip bumping in Baltimore.” The bar does have one violation on its record for selling alcohol to an underage police cadet in 2008.

Fogleman noted that the bar had held live entertainment for years, but no liquor board inspector had noticed that the Cat’s Eye did not have permission from the Liquor Board to have live entertainment there. He excused the oversight by saying that the inspectors “operate by triage.” If a place doesn’t get complaints, it might slip through the cracks. One unnamed inspector, however, presumably on a routine inspection, was kind enough, according to Fogleman, to let the owners know that they needed to apply for permission for live entertainment, which they didn’t know they needed. After the decision of the commissioners, Fogleman concluded that this shows that the inspectors are doing their jobs.

Zoning B-3-2
Neighborhood Fells Point
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 Baltimore, MD
One applicant reside in Balt for 2 yrs? Yes
Pecuniary interest of Baltimore City resident 100%
Attorney for licensee Former Liquor Board 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

Long history of successful operation.

Issues raised in audit present in this case or other issues observed

According to the Liquor Board’s records, in 2013, a 311 complaint was submitted to the Liquor Board for excessively loud music at the Cat’s Eye Pub. Inspector Jeff Ray filled out an inspection report which observed: “music level at a high pitch, live band playing, music heard upon entering intersection at Ann & Thames Street. Club notified of complaint, advised to lower sound level.” There was no mention of the fact that the Cat’s Eye did not have live entertainment approval from the Board; the inspector does not seem to have checked this. In the 2013 and 2014 inspection reports available on the Liquor Board’s database, inspectors were inconsistent about whether there was live entertainment or not at this establishment. There were no 2015 reports available in the online database. These reports (or lack thereof) seem to contradict Mr. Fogleman’s closing remark.

Applicant David Morgan
Business Name 3626A Falls Road, Inc.
Trading As David’s Restaurant
Address 3626A Falls Road
Type of License Class “B” Beer, Wine & Liquor License
Reason for hearing Request for a hardship extension under the provisions of Article 2B Section 10-504(d)(3).
Hearing notes

Mr. Morgan appeared before the board, with a consultant. He testified that his building was sold and his lease was canceled. He wants to remain in Hampden but is still deciding which location he will relocate to.

Commissioner Moore asked when David’s closed. Mr. Morgan replied that it was March or April of 2016. Moore replied that his initial 180 days during which his license remains unexpired will come to an end soon, and he is requesting an additional 180 days, to which he is “almost entitled to as a matter of law.” Commissioner Greenfield agreed that the licensee was entitled to the extension as a matter of law but counseled the licensee to find a new location as soon as possible, so as not to run out of time due to unforeseen delays.

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; 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 None
# 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

Neither Article 2B nor the Alcoholic Beverages Article allowed a hardship extension “as a matter of law.” The newly rewritten and reorganized Alcoholic Beverages Article states in subsection 12-2202 that, the “Board may grant the extension if the Board finds after a hearing that existing hardship caused the closing or stopping of business operations.” In this particular case, the existing hardship that caused the closing or stopping of business operations could be that the new landlord canceled the licensee’s lease. If the Board finds that to be a hardship, it may give an extension. It is not required to give an extension, under the plain meaning of state law.

Not in this particular case, but in plenty of other hardship extension requests before the Board, the licensees often don’t even bother giving a reason for the extension. Oftentimes, the “hardship” reason given was not the cause of the closing or stopping of business operations, either.

It is rather troublesome that the Board describes this process as an entitlement to the licensee, as long as they have applied in a timely way, because this entitlement is nowhere found in state law.

II. Remand/Transcript and Evidentiary Review Items:

Licensees Shelley Gordon and Dolores Reicher / Ernest Hatmaker and Bradley Simmons
Business Name Silverlud, Inc. / Chez Joey, LLC
Trading As Circus Bar / Chez Joey
Address 427 E. Baltimore Street / 415 E. Baltimore Street
Type of License Class “BD7” Beer, Wine & Liquor License/Adult Entertainment
Reason for hearing Remand of Cases from Circuit Court, Transcript and Evidentiary Review in light of Kougl
Hearing notes

Both the Circus Bar and the Chez Joey cases were called at the same time, since they hinged on identical questions of law, which were addressed at the Circuit Court appeal level.

Chairman Matricciani read from a prepared statement that in each case listed, the Board, under previous administrations, had found violations of sexual solicitation. In the case of the Circus Bar, the Board issued a $1,000 fine and a three day suspension. For Chez Joey, the Board issued a $500 fine and a three day suspension. The Circuit Court issued an order on February 10 remanding the cases to the Board, because the commissioners had failed to make the required findings of fact. In the interim, there was a change in the composition of the board. Because these commissioners were not the ones who heard the original case, Chairman Matricciani instructed the Board’s appeals counsel, Ms. Alice Pinderhughes, to file a motion to ask the court how to proceed. This motion was not timely, however, so it was thrown out. Judge Geller, however, appended a footnote to his orders, saying that, since the Board could not make findings of fact about what they had not seen in person, they might function like an appellate court in this case and look through the record from the hearing. The commissioners each reviewed the transcripts and evidence presented.

Matricciani continued, saying that there was substantial testimony and evidence in the record. However, the recent Kougl case from the Court of Special Appeals held that, as the Adult Entertainment Rules and Regulations were written, a licensee can’t be held accountable for suffering, permitting, or allowing the commission of an illegal act on his premises if he didn’t know about it. There was no evidence presented in either of these cases to show that the licensees knew or should have known that their employees were soliciting patrons for prostitution in their adult entertainment establishments. Matricciani decided that the case should apply retroactively to these earlier violations; because of that change in the law, these charges were vacated.

Commissioners Moore and Greenfield agreed, reiterating and restating the arguments that the chairman had made.

Zoning B-5-2
Neighborhood Downtown
Area demographics 39% White, 37% Black, 16% Asian, 3% 2 or more races; 5% Hispanic ethnicity; 9% of households have children under age 18; Median Household Income: $38,146; 18% households live below poverty line
Does corp entity exist, in good standing? Yes; yes / 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 1
Attorney for community None
# of protestants 0
# of inspectors/police officers 0
Result of hearing Previous charges vacated.
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

There is a strange inconsistency between solicitation charges, which come up relatively regularly for adult entertainment clubs, and every other kind of illegal activity that regular bars are charged with under the Alcoholic Beverages Rules and Regulations. For example, in the La Rumba case on August 11, the previous week, the licensee was held responsible for a fight that occurred between two of his patrons, which may have started inside but definitely ended outside of his bar, on the sidewalk. The license was suspended for ten days and a $1,500 fine was issued. In this matter, an employee of this establishment solicited an undercover police officer for prostitution, completely inside the bar, and the licensee is not held responsible, because he did not have any actual or constructive knowledge of the solicitation. Is this logically consistent? Why is there such a more stringent requirement for prostitution solicitation than there is for every other kind of illegal activity that happens inside a licensed establishment? Does this not incentivize adult entertainment licensees to learn as little as possible about what goes on inside their businesses? It seems as though the language of the rule that the Court interpreted in Kougl is not sufficient to cover the illegal activity that is taking place inside these adult entertainment establishments. Luckily for the citizens of Baltimore City, the Liquor Board’s rules and regulations are not written in stone. They can and should be updated immediately in order to capture all of the illegal and dangerous activities that the Board wishes to hold adult entertainment licensees responsible for. Otherwise, the city remains in a strange situation in which a licensee’s ignorance of illegal activity absolves him, but only in prostitution cases.

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