Liquor Is Quicker

February 23, 2007
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GRAND RAPIDS — Downtown Development Authority Executive Director Jay Fowler said board members will get their first look at a new policy to approve requests for liquor licenses next month.

The approval process could be faster and the cost for one is certainly lower than those on the market.

Fowler said he has been putting the new policy together since lawmakers passed Public Act 501 last year, which gives the state Liquor Control Commission the authority to issue new on-premise licenses to selected local governmental units. These units can issue a license to a qualifying business within the unit’s boundary.

Known as the Redevelopment Liquor License, these licenses are exclusively targeted for businesses in development districts such as DDAs and city redevelopment project areas. A Tax Increment Financing Authority, like the one in the Monroe North Business District, qualifies as a city redevelopment project area.

The DDA qualifies as an issuing district because the total amount of public and private investment made in the sector has easily exceeded the state’s required minimum of $200,000 over the past five years. With all that has been invested downtown over those years, Fowler said the DDA could qualify for a “couple thousand licenses.”

“It’s a low bar for us to meet,” said Fowler of the state requirement.

Those interested in a license must be in the dining, entertainment or recreation business; be open to the public; seat at least 50 customers; and prove that they couldn’t purchase an available license on the open market, or that one wasn’t available on the market.

Then a business must verify it has invested at least $75,000 in its building over the last five years or that it will invest $75,000 in its building over the next five years.

The requirements to obtain a license in a city redevelopment project area differ from those for businesses in downtown districts.

But an RLL will only cost an approved applicant $20,000, or about a quarter of the going rate to buy an existing Class C license, regardless of an applicant’s address. The RLL, though, has less market value than a Class C, as it can’t be transferred to another location.

Unlike the special downtown liquor licenses the DDA was involved with a decade ago, the new RLL isn’t limited to 50 statewide. In fact, there isn’t a maximum on how many can be issued across the state.

Fowler told board members he would be back next month with the RLL policy and he said it might contain a provision that would restrict the number of licenses they can issue.

“I think it would be damaging to downtown to saturate it with licenses all at once,” he said.

The DDA meets on March 14.    

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