Loosening liquor laws

Counties find easing limits on licenses is good for economy

September 19, 2006|By Andrea K. Walker | Andrea K. Walker,Sun reporter

Economic development officials hope to lure new restaurants to Baltimore-area jurisdictions by loosening Prohibition-era liquor laws that have limited entrepreneurs from selling spirits in several establishments.

County and state officials during the past two years have worked to allow restaurateurs to obtain multiple liquor licenses to encourage more development in areas such as Glen Burnie, Randallstown and parts of Howard County. Anne Arundel County officials, for example, began a marketing effort this summer highlighting recent liquor-law changes in hopes of snaring a few dozen new restaurants.

The change in the laws comes after years of opposition from smaller restaurants that feared changing the liquor laws would bring in too much competition, particularly from large chain restaurants. Some business owners also believe that allowing too many liquor licenses in a jurisdiction diminishes the value of a license.

The state's population growth has added families with large disposable incomes who expect more options in their shopping and dining choices, local leaders say. Also, businesses want restaurants nearby where their employees can go for lunch and they can take clients.

But decades-old restrictive local liquor laws have been a roadblock to restaurant development in many counties. The laws, designed to protect independently owned restaurants, often prevent merchants from opening multiple restaurants by limiting the number of liquor licenses a company can own.

The laws, and efforts to change them, are so divisive that the Maryland Restaurant Association refuses to take a stand on them. Looser laws might help larger restaurants, but some owners of smaller eateries fear they could mean too much competition.

The laws apply to all restaurants but have proven particularly restrictive to chain restaurants. For example, Florida-based OSI Restaurant Partners Inc., which owns seven restaurant chains including Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill and Fleming's, could open only one or two restaurants in some counties under the laws.

"The way that it's structured, it really protects the local merchants," said Geoffrey Mackler, a principal with H&R Retail, a Towson brokerage that represents restaurants, such as Ginza Steakhouse and Longhorn Steakhouse.

Many restaurants have long waits to seat customers and want to open second and third locations to accommodate the demand but have been prevented by the laws.

"Maryland has been a great growth area for us," said Rick Johnson, a spokesman for Ruby Tuesday. "But certainly the opportunity to serve alcoholic beverages in more locations opens more opportunities for us."

Members of the Maryland General Assembly eased liquor license laws in Anne Arundel and Howard counties this year.(Liquor laws are under state jurisdiction.) In Baltimore County, state lawmakers agreed two years ago to loosen the restrictions particularly in the Liberty Road corridor of Randallstown in an effort to expand economic development.

Howard County's law was changed during this year's legislative session to allow an owner five licenses - two Class B restaurant licenses and three "luxury" licenses that require at least a $750,000 investment in the business. The previous law had limited larger restaurants to two licenses, and small restaurants to one.

Attempts to lift the license limits altogether were opposed by area liquor stores. But Howard's economic development agency says it plans to keep pushing for no restrictions.

"We want to let the free market prevail," said Richard W. Story, CEO of the Howard County Economic Development Authority. "As an amenity to the community, fine dining is what we're after. And to be able to sell Howard County, we need to have a full array of restaurants to which business people are accustomed."

In Anne Arundel County, the number of licenses allowed per restaurant owner was increased from one to two in 2000. This year, lawmakers bumped the limit up to six as long as the restaurants open in areas where the county wants to steer growth. They include the Glen Burnie renewal area; the Annapolis Towne Centre at Parole and the Odenton Town Center shopping centers; and the area around Baltimore-Washington International Thurgood Marshall Airport.

Anne Arundel economic development officials said they were prompted to change the law after a study showed that the county could support nearly 40 new restaurants. Officials said residents were traveling to Columbia in Howard County or other neighboring jurisdictions to eat out.

Since the legislation took effect July 1, restaurants such as Outback Steakhouse, Bennigan's, TGI Friday's and Ruby Tuesday have shown interest in expanding in the county, officials said.

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