Ordinarily, an application for an on-premises liquor license must be approved unless the Authority finds there is good cause not to issue the license. The Alcoholic Beverage Control Law, however, contains restrictions on the approval of certain on-premises liquor licenses if the location is within a 500 foot radius of certain other establishments with on-premises liquor licenses. The restrictions apply only in cities, towns or villages with a population of 20,000 or more. The restrictions are commonly referred to as the “500 foot rule.”
ESTABLISHMENTS SUBJECT TO THE 500 FOOT RULE
Applications for licenses under Section 64, 64-a, 64-c and 64-d of the Alcoholic Beverage Control Law are all, to some degree, subject to the 500 foot rule. These statutes provide for “full” (liquor, wine and beer) liquor licenses for the on-premises license.
A license under Section 64 can only be issued to a restaurant, hotel with a restaurant, catering establishment, club, vessel or aircraft. Establishments obtaining a license under this section must have a kitchen, with a chef, serving meals.
Section 64-a provides for the “special” on-premises license. The statute allows certain establishments to obtain an on-premises license without meeting the restaurant/kitchen requirement of Section 64. These establishments fall into two categories: 1) nightclubs, bars, taverns, etc, that do not have kitchen facilities and primarily serve alcoholic beverages rather than food; and 2) theaters and other entertainment facilities. Establishments obtaining a license under Section 64-a are not required to have kitchen facilities, but must regularly keep food (sandwiches, soups, etc.) available for sale to customers.
Section 64-c provides for the “restaurant-brewer” license. In addition to allowing the licensee to brew a limited amount of beer on the premises, the licensee must operate a restaurant at the establishment.
Pursuant to Section 64-d a “cabaret” license is required for any on-premises establishment that: (1) permits musical entertainment, singing, dancing or other forms of entertainment; and (2) has a capacity of 600 or more persons. This section primarily addresses large nightclubs. It should not be confused with the cabaret permit issued by the City of New York, which is required for certain establishments regardless of whether alcoholic beverages are served.
EXCEPTIONS TO THE RULE: PUBLIC INTEREST
If the location is subject to the 500 foot rule, and no other exception applies, the license cannot be issued unless the State Liquor Authority makes an affirmative finding that it is in the public interest to issue the license. This clearly creates a presumption that the license should not be issued. There is, however, no “public interest” exception for applications for a cabaret license.
The 500 foot rule requires that the Authority consult with the municipality or community board and conduct a hearing to gather facts to determine whether the public interest would be served by issuing the license. This is commonly referred to as the “500 foot hearing”. When considering whether it would be in the public interest to approve the application, the Authority may consider the following:
- The number, classes and character of other licensed premises not only in the area where the proposed establishment will be located but also in the particular municipality (or subdivision of the municipality);
- Whether the applicant has obtained all other necessary governmental licenses and permits;
- The effect on vehicular traffic and parking in proximity to the location;
- The impact on the existing noise level;
- The history of ABC violations and reported criminal activity at the location; and
- Any other factor specified by law or regulation that would be relevant to deciding whether public convenience and advantage, as well as the public interest, would be served by approving the application.
The hearing required by the 500 foot rule is conducted before designated staff in the Authority’s four offices. The Members of the Authority have delegated to specific licensing staff the ability to approve applications when, after the hearing is conducted, there is no community opposition and no other reason for disapproval. In cases where the application is opposed by the community, the matter is referred to the Members of the Authority for determination. However, the fact that the community opposes an application does not mean that the Authority must disapprove the application. Conversely, an application may be disapproved even if the community supports it.
When such matters are referred to the Members of the Authority, the applicant may come to an agreement with the “community opposition” on stipulations concerning the operation of the establishment. In such cases, the Members of the Authority may incorporate those stipulations into the approved method of operation of the licensed premises. These stipulations essentially become conditions of the license privilege. Failure to comply with those conditions subjects the licensee to disciplinary action.
The “Grandfather Clause”
The 500 foot rule specifically excludes any licensed establishment that was licensed when the rule went into effect on November 1, 1993. If an application is received for an establishment at a location that has been continuously licensed since that date, it is not subject to the rule. “Continuously” means without interruption. If the location was not licensed for any period of time, it has not been continuously licensed. To obtain the protection of this exemption, it does not matter what kind of license was issued for the location, or whether it had been licensed to the same person or corporation.
A renewal of a license cannot be denied because of the 500 foot rule. In addition, applications to approve corporate changes (new individuals taking over the existing licensed corporation) are not subject to the 500 foot rule since the corporation continues to hold the license.