If you would like to open a bar or restaurant that sells alcoholic beverages on the Liberty Road corridor in Baltimore County, a liquor license will run you $2,000. About a 20-minute drive away, Joe's Crab Shack, a chain restaurant that's moving into the Hunt Valley Towne Centre, just paid $225,000 for its liquor license. The reason? An antiquated system that allots licenses by population in districts drawn decades ago and allows those licenses to be bought and sold on the open market. In Randallstown, an inexplicable dead zone when it comes to dining options, there are plenty of licenses for the taking. In Timonium, Cockeysville and Hunt Valley, those pieces of paper are worth far more than their weight in gold. Whatever purpose this once served has long since disappeared.
County Executive Kevin Kamenetz took aim at Baltimore County's liquor laws, seeking a clean sweep that would remove the perverse incentives of the convoluted system and encourage economic development. He didn't succeed, but he got much closer than anyone has before. A bill that passed in this year's General Assembly session gradually but significantly loosens the current quota system in a way that is likely to depress some of the excessive prices paid for liquor licenses and encourage their use in the parts of the county where they are needed most.
Decades ago, Baltimore County was divided into 15 election districts. They no longer have any real function in elections, but they remain the basis for apportionment of liquor licenses. In general, one "on-sale" license — that is, a bar or restaurant license — may be issued for every 2,500 people. Randallstown is the only part of the county that is undersubscribed when it comes to licenses, and because of grandfathering, one district, on the county's east side, is vastly oversubscribed. The Dundalk area, by population, should have about 42 licenses, but it actually has 125. Licenses can be bought and sold within a district (provided that the county liquor board approves of the new owner), but they cannot be sold across district lines without a special dispensation from the General Assembly, which controls county liquor laws.
Mr. Kamenetz pushed for reforms that would eventually have eliminated the districts or the population controls entirely and would have phased out the private market in liquor license sales. But the liquor lobby balked, and the county's General Assembly delegation made clear that they would not support legislation unless license owners were on board. Eventually, the Kamenetz administration and the Baltimore County Licensed Beverage Association came to a compromise that easily passed in the General Assembly.
It allows the transfer of as many as five licenses a year from the county's East Side to other districts, provided they presently have less than 25 percent more licenses than population quotas would allow. (That strikes out the Arbutus and Towson areas but leaves the rest of the county open.) Over the five years the program will be in effect, that should theoretically depress prices and make licenses available where they're needed.
Current liquor license holders get something out of it, too. Those who have spent huge amounts of money to buy licenses won't see the value of their investments totally wiped out, and East Side bar and restaurant owners might actually see the value of their licenses go up temporarily.
In the long term, two other concessions Mr. Kamenetz secured will be even more significant. If fewer than five licenses transfer in any given year, the county will be allowed to create new service bar licenses — that is, for table service of beer and wine in a restaurant — without regard to the population quotes (though, again, not in Towson or Arbutus). And any new licenses created that way or by population growth would not be eligible for sale from one establishment to another. Those two reforms, at least in a small way, begin to transfer control of the system back to the local government, where it belongs.Copyright © 2014, The Baltimore Sun