FL: A license to POUR (excerpt)
Liquor licenses can cost hundreds of thousands of dollars
By Roger Williams
September 23, 2021
IT’S THE NECTAR OF THE GODS TO some. A toxin to others. And a legal over-the-counter, the bar or the-table drug to all who reach the age of 21 — one of the most carefully regulated widely available products in the United States: alcohol, defined by the state of Florida and its 67 counties as beer, wine or distilled spirits.
Here, Florida Weekly glances at the alcohol sales business in the Sunshine State from a regulatory perspective, which may only appear a maze at first glance.
Those who wish to sell alcohol in retail businesses, merely transport it or even make it require a license. Or to be more precise, they require any one or several of 41 different state licenses, depending on what’s being sold, and where, and how.
You might not think of some licensing opportunities, but the state has. There’s beer, beer and wine, or beer, wine and distilled spirits sold in sealed containers to be drunk off premises, as they say. Or to be “consumed on premise” — various COP licenses.
There are special hospital licenses, horse breeder licenses, licenses for boats, bowling alleys and airports.
There are county commissioner licenses, which may suggest why some local-government decisions seem, well, a little loopy. “Beer, Wine and Liquor for consumption on premises only; license issued to county commissioners for facilities which are owned and operated by the county,” the regulation reads. Cost: $858, $1,300, $1,560 or $1,850, depending on the county population, for a year — a standard licensing fee.
There are licenses for golf clubs, symphony orchestras, live theaters, fairs, lodges, fraternal or benevolent organizations, cruise ships, tennis clubs, cabanas, race tracks, bottle clubs — even a sacramental wine permit (no fee, drink for free. Little wonder religion is sometimes seemingly so attractive).
Some licenses require only a small expense: a nonprofit organization selling beer from a tent in a park for a day or two or three, for example, can get a state permit for $25. Or beer and wine package sales from a convenience store could require an annual licensing fee of less than $200, paid to a county.
A complete list of licenses and their annual fees for renewal by the state may be found here: www.myfloridalicense.com/dbpr/abt/documents/LicenseSeriesTypesABT2004_ table.pdf.
But some licenses are as costly as some houses, held and traded as assets by business owners for prices ranging from $50,000 to almost $750,000, brokers say, then subject to standard qualification rules and licensing fees by the state no matter who owns them.
Those “quota” licenses to sell beer, wine and spirits are limited in number by state law to one quota license permitted for every 7,500 residents. Quota license holders can include chain stores such as supermarkets, packages stores, or restaurants and bars. Once a qualified owner with no criminal background holds such a license, the state’s annual licensing fee will run $1,850 per year.
But it’s not quite that simple and maybe, for a lucky few, not that expensive.
For businesses that take in 51% or more of their profits from food and non-alcoholic drink sales, the licensing requirements appear relatively benign and simple. Owners do not have to enter the annual quota drawings of the state to receive an SRX license, which comes with zero front fees and the standard $1,850 per year licensing fee.
“Our revenue is about 65% to 35% food and wine, so this has never been an issue for us — not like Connecticut where there are some very old-fashioned blue laws,” says Rich Rosenthal, a co-owner in a restaurant group that includes the upscale Cooper in Palm Beach Gardens and nine restaurants in Connecticut.
For Harold Balink, chef and owner of Harold’s in Estero between Naples and Fort Myers — a winner of Florida Trend’s coveted Golden Spoon award — a similar experience has unfolded over the years.
“Fortunately I’ve never had to go through the experience of fighting for or purchasing a full liquor license,” he explains. “There are many types for on-premise, sealed-container consumption and they vary depending on population and the county restrictions. Mostly for control of bars.
“I have always had a 4COP-SRX. The SRX designation is for restaurants that serve mostly food, over 51%. There are also other limitations on that license as far as size of bottle, and so on.”
And as in most counties, there is no limit to the number of SRX licenses granted, especially since there aren’t many of them if the county requires a minimum square footage, as well — say 2,500 — or at least 100 rooms in the case of hotels.
“They’re fairly easy to acquire,” says Mr. Balink. “The local ATF (Alcohol, Tobacco and Firearms) and the Health Department have always been very helpful to me with putting together the package and permitting for that specific license. So, many of the horror stories I haven’t had to go through.”
Best of all, perhaps: “My license costs me zero to buy, and $1,850 a year to maintain.”
Quota fun
But quota licensing is still not quite that simple; there is one more opportunity to gain a quota license without paying hundreds of thousands of dollars.
Every year the state does a population count in each county and, when the numbers merit such an action, officials offer new quota licenses in a lottery drawing — nowadays not an infrequent occurrence in a state where roughly 1,000 newcomers arrive each day to take up new lives.
Qualified winners can get a quota license for just over $10,000 with the annual licensing fee of $1,850.
Last year, according to the state’s Department of Business and Professional Regulation, its Division of Alcohol and Tobacco held the lottery, after “a total of 62 quota alcoholic beverage licenses were determined to be available for issuance across 30 counties.”
Those counties included both Lee and Palm Beach. Winners had 45 days to apply after being announced. This year’s drawing is now underway, with no winners announced yet, a press release said.
Once people have a quota license, they may hold on to it, start using it, or sell it, explains Barry Rosayn, an officer and industry specialist at Beverage License Specialists, based in Fort Lauderdale but operating statewide.
The business is one of a handful of brokers in Florida who work together, he explains.
“Quota licenses since the pandemic have been extremely high in demand, and demand has gone through the roof,” he says.
“About 30 years ago, quota licenses were issued based on increases in population of 2,500. Then it went up a thousand, and then jumped to quota licenses issued for every 7,500 residents. If a license is revoked, that goes into the mix of what’s available from the state in the coming year, too.”
While the supply is limited, the pandemic changed that for a brief time — at first by freeing up valuable licenses.
“In March and April last year, when Florida was closed down, the hospitality industry was in terrible shape. So much so that if you were in the hospitality business and had a monthly rent to pay — plus employees and insurance — and you had no income, and there was no light at the end of the tunnel, many licensees said, ‘get me out of here, I want to sell the license. I can’t pay the bills.’”
He points to Naples downtown, where rent is high and “even if some landlords gave them a break, a lot of places couldn’t stay in business. So they bailed, and (quota) license values are a matter of supply and demand.”
Then suddenly things began to change.