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

Commissioner Moore had concerns about the financial breakdown of the capital investment of $700,000 required for the application for this new Class B license. Hecker explained that the restaurant will be restoring the inside of the building, including architectural adornments. They will also be spending money on new kitche and dining equipment. Moore replied that, since the restaurant is renting the building, they don’t get credit for the value of the building itself, but they would get credit for the value of the improvements to the existing building. Moore said that, to the extent that furnishings and adornments are already present, that’s not an investment, under the meaning of the code.

Mr. Shaffer told the Commissioners that the restaurant will be paying $4,000 per month for ten years under their lease agreement, plus a 5-year option. He explained to the Board that the existing building has been damaged and covered up by previous tenants, and his business plans to bring the space back to what it looked like in the 1920s.

Ms. Hecker noted that the Shaffers should get credit for their investment in the building itself, because if they were buying rather than renting the building, that money would be included in the capital investment breakdown. Moore corrected Hecker and told her that the cost of the building is not included under the required capital investment in Article 2B.

Ms. Hecker then argued that the lease agreement with the owners of the building contemplates all of the interior updates that the applicants will make. She said that the Shaffers are paying a premium for the space. Moore replied that a lease is not an investment; the Code requires an up-front capital investment of $700,000, and a lease over 10 years does not qualify. Mr. Shaffer then said that he was trying to use the existing adornments, rather than pulling them out and putting in new adornments, which would qualify as a capital investment. Moore reponded that she appreciated the use of the old adornments, but, in terms of qualifying for the license, at most the Shaffers have an investment of $324,800. Hecker responded that the intent of the law is that there be a significant investment in a building, so that corner stores are not being given new licenses. Chairman Ward told Hecker that he agreed with Moore. Hecker then requested that the hearing be continued to a new date, so that she could revisit the budget with her clients. Executive Secretary Michelle Bailey-Hedgepeth said that the soonest available docket would be on February 12, 2015.

Ms. Joanne Masopust, on behalf of the Fells Point Community Organization, was present to tell the Board that the community strongly supports the transfer of ownership. The applicants have signed an MOU with the community organization, which regulates the number and location of outdoor tables and prohibits outdoor speakers.

Commissioner Moore asked Mr. Prevas about the current status of the license under Article 2B section 10-504(d). Mr. Prevas told Moore that the existing entity with an ownership interest in the license was in Chapter 11 bankruptcy, which then converted to Chapter 7. Bankruptcy law generally trumps state law so that assets and debts can be properly accounted for. Prevas said that the business closed on August 7, 2014, and the Doerings hope to complete renovations by March 1, 2015.

In response to Commissioner Moore’s question of when the license as last used, Kodenski confirmed that the license expired on April 30, 2014. (He did not state when the business was last open; all licenses expire on April 30 every year.) Mr. Boozer, on behalf of Ms. Fox, submitted a hardship extension request on May 7, 2014. That hardship extension request was never scheduled for a hearing. Mr. Kodenski, then, submitted a followup hardship extension request on September 15, 2014, on behalf of his client, secured creditor Russell Schaeffer. Moore expressed confusion about why the hardship extension request was submitted so early, but she applied the Board’s logic from a previous case to this one and said that the licensee could have the full 360 days.

Violation of Rule 4.01(a): Minors – October 25, 2014 – At approximately 1:00 AM the Baltimore Police Department in conjunction with the Loyola Police Department conducted an underage alcohol investigation at the establishment. Upon entering the establishment officers observed approximately 125 individuals in the bar. Officers were able to identify 105 of those individuals as Loyola students, who were under the age of 18, and who admitted being served and consuming alcohol from the establishment.

Violation of Rule 4.01(a): Minors – December 4, 2014 –While conducting an underage alcohol investigation, Baltimore Police Officers observed four (4) individuals, who they suspected as being underage, enter the establishment at approximately 10:00 PM. Approximately 45 minutes later officers entered the establishment and were able to identify the 4 individuals who they suspected as being underage seated in the bar. All four had alcoholic drinks either in front of them or in their hands. All admitted to being students at Loyola University, all admitted and showed proof of being underage, and all admitted having purchased and consumed alcoholic beverages at the establishment.

Mr. Akras moved to amend the second charge, which had a typographical error. The charge said that the students were under the age of 18, when they were really under the age of 21, the legal drinking age in Maryland. Kodenski agreed to this amendment.

October 25, 2014

Assistant Director of Public Safety for Loyola University of Maryland Sean Kapfhammer testified that he was present at the October 25, 2014 raid at Favorites Pub. The Loyola Police and Baltimore City Police Department did a joint enforcement effort and inspection at Favorites due to past experience with the bar and previous raids conducted there. According to Kapfhammer, there were 19 incidents in 2014 in which the students involved had been drinking at Favorites. Kapfhammer said that it was hot and crowded on October 25, with well over 100 people inside. There was a lot of spilled alcohol on the floor inside and on the bar. Scene was chaotic, took Loyola IDs and drivers licenses. Kapfhammer went on to testify that many of the students were glassy-eyed, had slurred speech or were otherwise visibly intoxicated. Officers asked the students who were not visibly intoxicated whether they had been drinking at Favorites, and they all testified that they had been drinking.

Kodenski objected at this point that the students involved had not been summonsed to the hearing by the Board, and, therefore, hearsay uttered by these students could not be testified to by other witnesses. Mr. Akras responded that the cases that Mr. Kodenski had provided to Akras ahead of time did not support this interpretation. Akras said that all of the cases cited say that hearsay is allowable in administrative proceedings, if the testimony is (1) sworn under oath, (2) close in time to the incident, (3) corroborated by other witnesses, and (4) probative to the charges at hand. Kodenski’s objection was overruled. When Kodenski noted that the Loyola police report about the incident did not include the names of any of the 105 underage students, making it impossible for Kodenski to cross-examine any of the students, Akras responded that the Family Educational Rights and Privacy Act (FERPA) prohibited Loyola from providing the Board with the names of the students involved. Kodenski disagreed. Chairman Ward overruled Kodenski’s objection.

Loyola Police Lieutenant Joe Jefferson testified about his involvement with the Favorites Pub raid on October 25, 2014. He was stationed in the rear to keep students from running out the back door, jumping over the back fence and hurting themselves. He also drove the Loyola 15-passenger bus, in about ten trips, to bring the intoxicated underage students back to Loyola’s campus. Students vomited at least three times on the bus and at least twice back on campus. Jefferson testified that each Loyola student was identified three times: once when Kapfhammer took their ID at Favorites Pub, once when the student got on the bus and the IDs were given to Lieutenant Jefferson, and once at Loyola when the IDs were finally handed back to the students.

Baltimore City Police Officer Douglas Gibson testified next about the October 25, 2014 raid; he works in community relations at the police department. When asked why the police did not write any citations for the underage students, he replied that “the primary objective [of the raid] was mostly education.” He corroborated the previous testimony of the Loyola police officers.

December 4, 2014

Detective Abraham Gatto testified that, on December 4, 2014, at 10pm, he and Detective Akinwande were sitting in an unmarked police car, in plainclothes, across the street from Favorites Pub. They observed a taxi pull up and four young men get out and enter Favorites Pub. Gatto was using an “eye enhancement device” (binoculars) and saw that the boys looked underage. The detectives waited in the car for 45 minutes, giving the bar a chance to turn the boys away. Then they put on their police gear and entered the bar. They saw three of the four boys sitting together, with drinks in front of them. Gatto approached the three, while Akinwande approached the one who was in a different part of the bar. The young man that Akinwande approached said (loud enough that Gatto could hear), “oh shit!” and threw his gin and tonic on the ground. The four boys went outside with the detectives and were cooperative; they gave the police their valid IDs and told the officers that they were underage. Detective Gatto used his discretion in choosing not to cite the boys for underage drinking. Detective Akinwande corroborated Gatto’s testimony.

The four underage Loyola students had been summonsed, since their names and dates of birth were in the police report, and they were present during the hearing. Only one of the three was called to testify, but the Commissioners decided that since it was obvious that the boys were underage, and the licensee agreed that they were, they did not need the boys’ testimony.

After Mr. Akras had finished his case with his witnesses, Mr. Kodenski called his client, Mr. Jeffrey Evans, the licensee at Favorites Pub since 2000. Evans told the Board that he had recently (sometime in the summer of 2014) purchased an ID scanner to help his door staff check IDs against state registries. He brought the scanner with him to demonstrate its use to the Commissioners. Evans said that his door staff turn away underage people “en masse” before they even check the ID in the scanner. On October 25, when the police found over 100 underage students inside the bar, Evans said that he had already turned away dozens of underage students. Under cross-examination, Evans admitted that he did not keep the scans from the October 25, 2014 raid night, and it was one of his worst oversights. The licensee told the Board that underage people have very good fake IDs that they can easily purchase online. Kodenski then called two of Evans’ employees who were working both nights in question, October 25 and December 4. The door employee testified that the students all have very good fake IDs, and she demonstrated how she uses the ID scanner to check them. The bartender testified that the bar collects a $1 “entertainment fee” from each patron at the door to cover the satellite radio charge.

Chairman Ward ruled, after all of the testimony as to the specific dates, that the licensee was responsible for all three of the charges. The community members who wanted to testify about their experience living near the bar were then called up. Councilman Bill Henry testified that the bar had been a “true blight on the commercial corridor.” Joan Flynn, Assistant Vice President for Administration at Loyola University, also testified that the bar had been a significant problem for their students in her eleven years working at Loyola; Robert Maglia, Investigator for Loyola Campus Police testified that students who drink at Favorites sometimes have to be taken to the hospital for alcohol poisoning and are sometimes perpetrators or victims of assault. There were nineteen incidents in the 2014 calendar year where police were involved in situations where students had been drinking at Favorites. Four community members testified about underage students leaving trash, vomiting, urinating, committing vandalism, and having sex on or around their properties. One community member noted that at 2:00am, when the bar closes, large groups of students return to campus through the neighborhoods of Homeland and Radnor-Winston and cause loud noise. The police sometimes set up cones and barricades to keep the cars on York Road from hitting drunk students who stumble into the street, and it causes chaos for the community.

Mr. Kodenski called former Executive Secretary Samuel T. Daniels to testify in favor of the licensee. Mr. Daniels testified that, though he had received community complaints, he was never able to substantiate the complaints. He never found underage drinking or other nuisance issues at the bar. The owner of the building at 5804 York Road also testified that Mr. Evans was a good tenant who paid his rent on time.

Commissioner Jones said that it would seem to him that if he were up against these charges, he would collect and bring evidence to defend himself (presumably, like the information from the scanner which the licensee could have downloaded after the raid and the December 4 incident). Jones said that he also would have created a corrective action plan of some kind to present to the Board to show the Commissioners that the licensee would be changing course in the future. The licensee did neither of those things. Jones said that Evans’ bottom line is how much money he can make by pushing alcohol into young kids.

Commissioner Moore agreed with Ward and Jones. Moore noted that the licensee’s attorney had not asked for a stay of the punishment, but if he were to ask, the Board would deny his request, because there has been such harm done to the community. She believed all of the community and police testimony, and she said that it was clear that the business model of this bar is to pack in as many Loyola students as possible and sell them as much alcohol as they can buy. The impact to the community is severe. Moore said that the community testimony was “shocking to the conscience and … unconscionable. … No one should have to live like this.”