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

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.

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:

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 Krevor-Weisbaum asserted FHNA’s position that the liquor license at 12-14 Cross Street is no longer valid as a matter of law, under the provisions of Article 2B of the Maryland Code.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.

[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.

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:

Watch the video of the decision phase of this hearing: