Loosening liquor laws

The Baltimore Sun

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.

Randallstown in Baltimore County has long suffered from a lack of restaurants despite a large middle-class population. County leaders blamed the situation, in part, on lack of liquor licenses. Two years ago, legislation passed raising the number of licenses a restaurant owner could have in the county from three to four. It allowed a fifth for the Liberty Road area in Randallstown.

While the legislation hasn't created a boom in restaurant development, restaurants are considering the county unlike before, officials said. Ruby Tuesday will open a restaurant near a new Home Depot at Brenbrook Plaza, said Kenneth Oliver, a Baltimore County councilman who represents Randallstown

"It was so difficult before to get the more established chain restaurants," said Dena Jackson, executive director of the Liberty Road Business Association. "With the law being passed, it made it a lot easier of a process."

There is still resistance to changes in the liquor laws, particularly from small restaurants that say the competition from chains will put them out of business. Besides continuing opposition in Howard County to wiping out the limits, an effort in Harford County to double the number of licenses allowed from two to four failed this year. In 2001, Harford's law was changed to allow two licenses instead of one.

Some smaller establishments in Anne Arundel County were more open to easing the limits on licenses this year because they couldn't keep up with the need for new restaurants.

"Small restaurants and family restaurants weren't going to be able to keep up with the void," said Chuck Ferrar, president of the Anne Arundel County Licensed Beverage Association, which represents restaurants, taverns and other establishments. "In the malls, the projects are too big and expensive for the independents. We tried to give balance so the little guy would survive, but the public would be served too."

Joe Barbera, owner of Aida Bistro in Columbia, said Howard County's new laws will enable him to open another location; his restaurant isn't large enough to qualify for two under the old rules. But he said he opposes laws that eliminate any limits on liquor licenses.

"There's a lot more risk in that situation," said Barbera, who is also president of the restaurant association in Howard County.

Diners in Anne Arundel County said recently that they are pretty happy with the dining choices. Michelle Thompson, an Annapolis office manager, said the selection has improved.

"I don't necessarily think we need more franchises," she said.

Paul Bryant, who lives in Deale and works for a septic tank company, said the selection in restaurants is good, but that the lines are often long.

"We sometimes go to the Outback in [Prince George's] County because we can never get in the one here," he said

Economic development officials said there is room for a variety of restaurants.

"We're trying to attract them all," said Aaron Greenfield, president and chief executive of the Anne Arundel County Economic Development Corp. "The mom-and-pop restaurants, the chains outside of the county. There is room for everyone."

andrea.walker@baltsun.com

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