CA: Governor signs bill for 25 new S.F. liquor licenses
By Katie Burke
October 3, 2017
SAN FRANCISCO, California – It has been a long-time coming, but getting a liquor license is about to get a bit easier for San Francisco businesses thanks to a new bill that creates 25 additional licenses.
Governor Jerry Brown signed AB 471 today that will generate and issue five new liquor licenses per year for the next six years. The bill was drafted by San Francisco Assemblyman Phil Ting, and follows State Bill 1285, recent legislation that already created five new liquor licenses for the first time in nearly 80 years.
The number of licenses has remained stagnant for 78 years despite increasing interest from prospective restaurateurs.
The two pieces of legislation differ from typical liquor licenses in that they are restricted to restaurants located in areas the city has already designated as underserved commercial corridors. The neighborhoods were chosen as part of the city’s Invest in Neighborhoods Initiative, and include areas along Noriega and Taraval Streets in the Sunset as well as Ocean Avenue, Mission Street in the Excelsior, Leland Street and Bayshore Avenue in Visitacion Valley, San Bruno Avenue in the Portola, and Third Street in the Bayview. All are eligible for the new liquor licenses.
The licenses also differ in that they will cost a mere $13,800 — a price tag far lower than the $300,000 some restaurants pay on the secondary market. The new legislation is focused on addressing what Phil Ting has called a “competitive disadvantage,” since many smaller operators often can’t afford to buy the transferred licenses.
However, the newly created licenses come with one caveat — they can’t be redistributed or sold once a restaurant gets its hands on one. Instead, they would be required to return it to the California Department of Alcoholic Beverage Control to be sold back at the $13,800 price.
Todd Rufo, the director of San Francisco’s Office of Economic and Workforce Development, said in a statement AB 471 is “a win for small mom and pop restaurants,” and will help create economic opportunities in neighborhoods that otherwise couldn’t afford them. It will also help smaller operators expand into full-service restaurants, which would help boost culinary scenes for neighborhoods on the outskirts of the city’s bigger foodie hubs.
The number of restaurants that serve hard alcohol has been regulated by the state since a 1939 law tied the number of available liquor licenses to a county’s population. ABC allows only one license to be available for every 2,000 residents in a county. Based on its population, the city should have 432 licenses in circulation, however, San Francisco had more than 1,000 licenses when the law was passed nearly eight decades ago, all of which have been grandfathered in.
A raffle was held to secure the first of five new liquor licenses associated with State Bill 1285. It’s unclear whether the recipients of licenses created by AB 471 will be determined the same way, but the legislation is slated to go into effect Jan. 1, 2018.
“Unfortunately, it can be challenging to attract and sustain restaurants in San Francisco’s outer neighborhoods,” Gwyneth Borden, the executive director of the Golden Gate Restaurant Association, said of the news. “One barrier facing restaurants in these neighborhoods is the high cost of a full liquor license. Because these licenses are only available on the secondary market for prices in excess of $250,000, they are inaccessible to neighborhood restaurant owners and entrepreneurs in San Francisco.”
Not everyone was on board with the two pieces of legislation, however, and it got pushback from various local alcohol watchdog groups.
State lawmakers rejected a bill last month that would have extended local bars’ last call times to 4 a.m. — two hours later than the city’s current curfew. It was redirected to a task force, however, with a report due back in 2019.