ABC Law 64(7)(b) states that no retail liquor license for on-premises consumption may be granted for any establishment within five hundred feet of three or more existing liquor licenses.  However, ABC Law 64(7)(f) provides a discretionary exception to this rule stating that the SLA may grant an on-premise liquor license for an establishment which violates the 500 foot rule if after consultation with the municipality or community board, it determines that granting such a license would be in the public interest.  The SLA is required to conduct a hearing, popularly known as a 500 Foot Hearing and must state and file the reasons why granting said license is in the public interest.

So what exactly does it mean for the issuance of a liquor license to be “in the public interest?” Under ABC Law 64(6-a) (a)-(f), the SLA may consider several factors in determining whether public convenience and advantage and the public interest will be promoted by the granting of licenses and permits for the sale of alcoholic beverages including: (a) the number, classes and character of licenses in proximity to the location and in the particular municipality; (b) evidence that all necessary permits have been obtained from the state and all governing bodies; (c) the effect of granting the license on vehicular traffic and parking in proximity to the location; (d) the existing noise level at the location and any increase in noise level that would be generated by the proposed premises; (e) the history of liquor violations and reported criminal activity at the proposed premises; (f) any other factors specified by law or regulation that are relevant to determine the public convenience and advantage and public interest of the community.

Example: Flatiron Community Association v. Venture 12 LLC

    On April 24, 2004 the SLA granted an on-premises liquor license to Venture 12 LLC (Venture) to allow it to open a nightclub at 12 West 21 Street in downtown Manhattan.  The Flatiron Community Association, consisting of local residents, community organizations, a New York State Senator and a member of the New York City Council, petitioned the New York Supreme Court for an order overturning the SLA’s determination because the neighborhood was already oversaturated with bars and nightclubs.

    Venture proposed to open a nightclub with a capacity to accommodate 300 to 400 people, which would serve food, and feature both live and recorded music. The nightclub would open Wednesday through Sunday from 9:00 PM to 3:30 AM.  The establishment would be located at the former Cheetah, a gentleman’s club described as notorious for its excessive noise, milling crowds, honking taxis, drug trafficking, and violent episodes including a shooting.  Moreover, there were three nightclubs operating on the block at the time.

    It was undisputed that the vicinity within 500 feet of the premises already included 21 establishments licensed by the SLA to serve alcohol, including three nightclubs, 13 restaurants, and other venues including a pizzeria, a lounge, and a gentleman’s club.  Therefore, a 500 Foot Hearing was held to determine whether granting a liquor license to Venture was in the public interest.

    On March 2, 2004, the Flatiron Community Association presented 13 witnesses against the granting of the license, including residents, a representative of the community board, elected officials, and a traffic expert, who testified as to the detrimental effect another club would have on the traffic and parking situations on the block.  The residents testified to to the constant disturbances, violence, fighting, crime, noise, litter, public urination and vomiting associated with the previous establishment Cheetah, as well as other nightclubs on the block.

    Venture did not provide witnesses at the hearing, but instead submitted two affidavits into the record – one from each member of the LLC.  One affidavit emphasized that the club would be a first class nightclub featuring popular food selections, would be smallish by traditional New York nightclub standards, that there was ample parking, and that there would be no notable impact on parking or traffic.  Patrons would not be allowed to loiter, and that cars would not be permitted to park illegally in the street in front of the premises.  The other affidavit stated there would be a heavy security presence in and outside the club, promised that the noise level would be negligible due to extensive soundproofing and limits on volume,  the street out front would be cleaned regularly throughout the night.  Most notably, the affidavit emphasized that the proposed club was not Cheetah, would not be like Cheetah, and should not be compared with it.

The Court Overturns the Issuance of a Liquor License to Venture 12

    On April 24, 2004, the SLA issued Venture a liquor license reasoning that such action furthered the public convenience and advantage and promotes the public interest.  The court disagreed, finding that the determination granting Venture their liquor license was arbitrary and capricious.  The SLA, despite overwhelming community opposition and the testimony of numerous witnesses speaking out against the granting of the license, accepted as true every statement made by the principals of Venture in their affidavits, to come to the conclusion that the new club would not be a club like Cheetah, and would be more upscale, safer and cleaner.

The court relied heavily on a case in which a determination made by the SLA granting a liquor license to a restaurant was overturned where the SLA merely found that the applicant would operate the establishment as a bona fide restaurant featuring Cuban cuisine.  The court found that this mere recitation failed to comply with the statutory requirement that the SLA state its reasons for concluding that it would be in the public interest to grant the license.  Matter of Waldman v. New York State Liq. Auth., 281 A.D.2d 286 (1st Dep’t 2001).

According to the court, the SLA made no effort to define public interest under the circumstances, or to explain why the overwhelming resistance to the proposed club expressed by the neighborhood was overbalanced by the value or utility of a new nightclub.

Consequently, the court overturned the SLA’s grant of the liquor licence finding it to be irrational, arbitrary and capricious.

Citation: Flatiron Commun.  Assn. v. New York State Liq. Auth., 6 Misc.3d 267 (Sup. Ct., New York County 2004).