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Roslindale restaurant to close; owner blames two city councilors
By adamg on Mon, 06/18/2018 - 7:07am
Charlie Redd announced this morning that he'll be shutting Redd's in Rozzie in about a month.
And he blames an effort by City Councillor Ayanna Pressley (at large) to get more liquor licenses for Boston's outer neighborhood's, which he says will devalue his main asset - his liquor license.
This restaurant is closing because the largest asset of this business, the liquor license, is going to be devalued tremendously by a Boston City Council initiative led by Ayanna Pressley and supported by Roslindale councillor Tim McCarthy to flood Boston with free liquor licenses. This initiative is popular politics meant to drum up image for the individual city councillors' next political ambition, not change neighborhood licensing in a healthy manner. These type of drastic changes in restaurant licensing in neighboring areas have wiped out the value of licenses and I refuse to let that happen to my life savings. The license has been sold and will be moved out of Roslindale. I have invested all I have into this restaurant, but I will not consciously lose everything because these city politicians wish to change how restaurants work without listening or considering the restaurants that made this square what it is.
Among the areas that would be eligible for Pressley's proposed 153 licenses would be Roslindale Square. 753 South opened a couple years ago with a similar license, obtained under an earlier set of neighborhood licenses the legislature approved in a law proposed by Pressley. Her proposal this time would also include an "umbrella" provision to let large new malls issue an large number of new licenses.
At their peak, Boston liquor licenses could go for well over $300,000 on the open market, due to scarcity caused by state restrictions on their number. That caused a number of bars and restaurants in outer and minority neighborhood's to shut after their owners sold the licenses to downtown and waterfront outlets of national chains.
Pressley said her goal was to help bring entrepreneurial restaurants back to these neighborhoods.
Neighborhoods:
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Comments
So he's not interested in competing without a local monopoly?
Redd's only draw is that it serves alcohol while no one else can? And he doesn't think the quality of his food and bar are good enough to compete with newcomers despite being already entrenched in the neighborhood? I've only been there once myself and thought it was a decent place but if that's his attitude as an owner, then good riddance.
That's not what's happening -
That's not what's happening - he spent hundreds of thousands of dollars on a liquor license and is selling it while he can still get the value (or close to).
Look at another way
Why should Mr. Redd lose 300K for the privilege of running a low-margin business? Any businessman can only do business as long as he is making money.
Curious
How much did he pay for the liquor license initially? I'll bet it's nowhere near $300,000 All I see is that he's cashing in on an artificially scarce asset while he still can. Fine for him, but don't get all pissy about it to the city officials who are trying to right a wrong.
It might have been
He opened up shop in the aughts, so that might have been peak value.
Not that I agree with his screed on somehow "losing" $300K on his license. The idea is that the value of the license comes with the money earned using it. There are two ways to look at this. He could run his restaurant for as long as it makes money, which could range as long as decades (how long as the Pleasant been around) to a few months. How much booze has the Pleasant sold over the years? Conversely, he actually does not care about the restaurant business and was holding the license as an investment in of itself, with the hope that while the value of the license appreciates he doesn't lose money in the restaurant side of things. With a parting shot like what Adam shared with us, it does look like the latter is true.
Cashing in?
Cashing out would be more accurate. I can't tell you what he paid for his license, but it's public record that the restaurant opened at the end of April 2011. I see references to price of liquor licenses from 250K to 450K in that time period. So it's fair to guess that what he invested for the liquor license is in that ballpark, whether it's in cash or as a loan.
The city officials might be thinking of righting a wrong, but at whose expense? Why begrudge Charlie Redd for saying it should not be at his expense? What gives you or any of us the right to tell a hard-working guy that he should just give up the money he might be counting on for his retirement or his kids' education?
don't hate the player hate the game
sell the license for over $100k then apply for a free license later on. makes perfect $ense to me.
Are the new licenses free?
Why can't the City charge market value for the new licenses, and then buy them back at a fair price? I assume the City would make a lot on just interest if they sold them at market value. The whole purpose of this new system is so people aren't selling license to other parts of the city right?
Not really
I think the idea is that a mom and pop local place should be able to get a liquor license without having to find someone willing to sell and then paying hundreds of thousands of dollars to buy the license. Having the city charge market rates simply perpetuates the same broken system.
It's like Topps
selling fake Mickey Mantle rookie cards at market price and buying back the originals at the same price.
The price set by the city is fair enough that any entrepreneur can afford to get one, the artificial scarcity brought on by the state inflated the secondary market price. People dealing in that market have as much right to a "protection on their investment" as someone who bought truckloads of Beanie Babies in the 90s.
I am probably mis-understanding the situation but I thought most licences that WILL become available under the councilors proposals are neighborhood/main streets district specific and non-transferable. So if the owner of Redd's has a transferable licence he could still have a nice payday when some hotel needs a licence in Seaport. The transferable licences will still hold value so long as the State doesn't pull it's head out of it's ass anytime soon. In he meantime the guy has a licence to print money in Roslindale. There's no markup like the booze markup. If you can't turn a profit with a liquor licence you are just bad at business, bottom line.
I have no sympathy for these people claiming a loss on investment. Hopefully something even better takes its place. Blasting these councilors is class-less. If they were making the identical proposals when this guy was trying to establish his business they'd be his heroes. Now they're his villans cuz....? He is STILL making a bundle? Low blow guy.
Why should we continue to allow
government-issued licenses to be bought and sold on the open market for grossly inflated prices? That's the real issue here.
And nobody FORCED Mr. Redd
to purchase a government issued license on the secondary market for an exorbitant price in the first place. Why wasn't he making a stink about that at the time?
He doesn't have a local monopoly
There are at least three restaurants with liquor licenses a short walk away (753 South, Birch Street Bistro and Village Sushi, don't know about Delfino and Sophia's Grotto).
Sophia's
has a full liquor license, at least as of the time of my brother's first wedding...
Can confirm - Sophia's has
Can confirm - Sophia's has full. Delfino is beer & wine, no liquor.
Village Sushi?
I'm not sure they have a full license. Do they sell anything other than wine, beer, and cocktails derived from the two? I always thought they had the wine and beer only license, but then I only ever order beer and sake there, so could well be I've missed noticing what else they might have.
Monopoly part's over...
It was a monopoly regardless of how much the license cost and leveling the playing field just isn't in his model. Bollocks. Good riddance to bad business.
Confused
If the restaurants largest asset (at the time of resale) is the liquor license shouldn't it be reclassified as a bar, not a restaurant? It sounds like the only reason he owns the restaurant is to eventually sell the liquor license. Not a great priority for the longevity and quality of the business.
I sympathize with him in that the value of the license will be made worthless due to policy change but at the same time I don't when your main asset is always a risk with the whim of politicians. ( Same with taxis)
Careful Charlie
Sounds like you've been sampling too many bitters...
Redd's is a quality establishment that could serve its community and make its owner and staff a healthy profit, but if the goal is to make a killing and retire rich, you've chosen the wrong business. Sad to see you deteriorate before you go.
Lousy businessman
This is the same guy who wrote a screed about having to close Sundays because of staffing shortages. He couldn't figure out then that the issue was his substandard wages and he can't figure out this one because he's a clueless business person.
Yeah. I've met him a few
Yeah. I've met him a few times and he is a self-described "Randian capitalist" which explains that, but is obviously in conflict here.
Funny how beliefs can change when it hurts the bottom line.
That's overly simplistic
There;'s a huge boom in restaurants in the city which is outstripping the supply of restaurant workers. So the workers of course follow the money and it's tough on neighborhood places to compete when they can't charge downtown pricing for their food. Purely speculation but I'd guess that's also why Masona closed up shop. You can probably do better running a place like Tres Amigos (lower staff levels, higher turnover) than a place like Redd's and Masona.
I think a distinction should be made between running a restaurant for the love of cooking and blindly tying your financial future to a rapidly devaluing asset. To argue otherwise seems to be arguing that you shouldn't worry about your equity in your house as long as you can cover your monthly mortgage. He's not wrong that if he moves his operation to say Brookline, Milton or Newton, he can worry about the yearly costs of running a restaurant without carrying the legislature dictated huge burden of a full liquor license. This is also why 7 Star folded - let's not pretend it's only because a greedy restaurant operator only cares about money or some other tidy narrative.
Thank you. The comments here
Thank you. The comments here show you how easily people are ready to get their pitch forks out to a person that did a lot of good for the square.
More than License?
Seem to remember there were issues obtaining and maintaining staff / help on certain days which resulted in closure of some days / evenings in a prior posting ? I always found that a rather odd item but then I am not in that line of work.
Then there were the changes in the construction of the building which they occupy by a local developer to install apartments overhead. That caused the meat market to move after a generation-plus in that location.
One has to wonder if there are more issues here than a liquor license. Is there enough patronage? The prior restaurant there seemed to only last a few years as well.
With all of the vacancies in the business district now in Roslindale one also has to wonder if the concept of small business (read: anti-corporate chain) is still working? In the last decade many businesses have come and gone. Some closed. Some sold. Some forced out due to increased rent because... after all... Roslindale is now
quirkytrendy? One need only look at the rape of valued old homes that are demolished with multi-cracker-boxes installed in their place to fit more people in. As this continues, the face of the community continues to devolve.Before you blame Charlie or the City Council, we may have to look at other factors here.
the face of the community continues to devolve?
What on earth does this mean? Sorry to hear housing isn't expensive enough for you...
Talk about an undignified exit
Is this guy kidding? If he must cast blame instead of just thanking the customers and accepting responsibiliity, how about blaming the system that required him to pay so much for the liquor license in the first place instead of people trying to modify it?
No sympathy. My friends Fred and Carrie
waited for hours, never got in, missed the pancakes and mimosa. They went next door for a cup of joe and a side of dough.
Roslandia!
n/t
The problem the council is
The problem the council is trying to fix is that liquor licenses are leaving the neighborhoods and going to the seaport, etc. The new licenses are restricted to stay within the area that they are issued.
I don't blame him for selling, but he is not very self aware if he is going to whine about it. He is not factoring that during the period of time while his restaurant was one of a few local bars left he made more money.
I'm curious, is there a
I'm curious, is there a reason why Mr. Redd can't sell his non-restricted liquor license and apply for a new neighborhood license in the future? Redd's on Rozzie is a great dining asset to the Square/Village.
There's even documented
There's even documented history of other businesses doing this (RIP Seven Star). The new licenses aren't going to the high end areas where chains are dictating these 300k prices, so there's still going to be a secondary market, it's just not going to keep increasing at unsustainable pace.
This reminds me of people who are against new housing because it'll "affect the value" of their own homes, which have increased over 300 % in the last decade, but god forbid a handful of condos open and suppress growth for six months.
More licenses is a good thing. Decreasing barriers for independent business people who want to take a risk on running a restaurant is a good thing.
Wait this guy DID'NT
Blame Trump, or just not yet.
https://www.universalhub.com/2017/donald-trump-not-welcome-roslindale-re...
Risky Business
Who told him buying a liquor license was a risk-free investment? That's the person he should really blame. Didn't he know the value of his liquor license wasn't guaranteed to go up? Did he also buy a home in a Florida swamp for no money down in 2006? I feel bad that the rules changed on him (or are proposed to changed) and he should do everything he can (lobby, make campaign contributions, petition other counselors, organize his restaurant biz friends, etc.), but this is life buddy. And the restaurant biz is a particularly risky business.
Like Uber?
This sounds a bit like the Uber issue. Cabbies are pissed because they had to pay for a license and these folks come in and under cut them. True for the most part Uber's services and prices are better. I empathize with both these situations, but I think it comes down to survival of the fittest. If you want to compete you have to appeal to your customer.
I always struggle
With the idea that a government license can be monetized.
Cabbies didn't pay for those medalions
In most cases, they are held by large owners who throw weight around and stiff people on fares and insurance payouts.
Most of Uber's appeal is the unrealistically low prices
Uber prices are so low that Uber loses money on most (every?) ride. They just have rich investors hoping that either autonomous cars or some other miracle will make them profitable.
https://www.cbsnews.com/news/uber-valued-at-62-billion-still-loses-money...
How on earth can they lose money?
What are their costs? Uber corporate doesn't have to do much of anything as far as I can tell, at least once the app was developed. The driver provides everything except the app itself (equipment, labor, gasoline, etc), and the app doesn't really change too much. Yet Uber collects 50% of the cost of every ride. It's hard to imagine where all the money is going.
Interesting....
Neither sides seem to understand each other’s business. But this is what happens when you have these City Councilors, who spent their entire life in the public sector, making critical decisions that impact small businesses, education, public safety, etc. Take a look at O’Malley, Ayanna, Zakim, McCarthy, etc, who have never worked in the private sector nor have they managed a business. Even better, take a look at their campaign expense reports and look at the restaurants they frequent. Or more importantly, look at which big Seaport restaurant owners are filling their campaign chests. If you don’t play the game with these councilors, you’ll see how quickly they don’t pick up the phone. But don’t worry, consider this just another opportunity to cut a ribbon for a new restaurant or dollar store for your local city councilor.
Finally, let’s admit the facts, Redd’s wasn’t really that great. The service sucked and the food was average. Time to go sell some more PBR and shitty biscuits while ranting about Trump in Somerville.
Life savings
How does he have no other life savings when he's been selling grilled cheese sandwiches for $15?