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Restaurant economics in Boston: Why a Roslindale restaurant is selling its beer and wine license
By adamg on Wed, 05/18/2016 - 12:03pm
Seven Star Street Bistro on Belgrade Avenue might seem like the exact sort of place the creation of "neighborhood" liquor licenses in Boston was meant for - a small, entrepreneurial effort by a young chef in an outer neighborhood.
But the legislation that created the new licenses limited them to Roxbury, Mattapan and Dorchester - and the city's "main street" districts. Roslindale has one of those districts, but Seven Star is several blocks outside its borders and so ineligible for one of the new licenses.
Owner Chris Lin went into the open market to buy one of the older, non-restricted ones - from Estragon, an established "South End" restaurant that is just inside the city's boundaries of Roxbury, which let it sell its beer and wine license and get an all-alcohol "neighborhood" license.
Tomorrow, the Boston Licensing Board decides whether to let Lin sell his beer-and-wine license to a proposed veggie restaurant on Boylston Street in the Back Bay. In response to a query about the proposed sale, Lin writes:
It was a huge financial commitment for us to "buy" the license in the first place, when we started construction, I was really hoping we would be able to get a free non-transferable license. When that was not possible due to funny zoning, kind of thought we would be at a major disadvantage by not having one and decided to take the plunge and buy one. After a year and a half of waiting for construction and licensing to pass in order to get dining room open it really put us in a hole, and we need that capital back. We also cannot afford to own a commodity that will slowly devalue over time with free licenses being slowly added. I believe we will apply for an upcoming liquor license if there are free ones available in the fall for "all city" although I am not confident in the process from past experience and would settle for byob when that passes. It's been a rough year for us, and the system is really not designed to help small restaurants.
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Comments
It's been a rough year for us
Of course not. Small restaurants can't afford to buy favorable legislation.
It must be very frustrating
It must be very frustrating to be an independent chef/restaurateur, especially in an outer neighborhood, when you see the dozens of generic steakhouses in the Seaport getting full liquor licenses or the endless amount of Sysco microwaving crap holes in the North End who don't even try to put out quality products and together have a large percentage of the licenses in the city.
Lin sounds like a very level
Lin sounds like a very level headed guy.
The Seven Star owners are
The Seven Star owners are great people and it was really disheartening to see what the city had them go through to open the small side of their restaurant.
I personally would prefer to see even more great businesses like SSSB in that area and not empty store fronts. I guess the pols think otherwise?
System is broken
This just shows how unfair and unnecessary the current system is. We need to ask questions like What's our rationale for limiting the number of licenses in the first place? Is it serving that purpose?
The problem is that anyone who has purchased one of the existing non-free liquor licenses now has a financial incentive to prevent any new licenses from being issues, and certainly an incentive to prevent us from moving to a system where any qualified restaurant can get a license. Personally, I think the best solution would be to slowly add new free licenses over the next 20 or so years. This would ease the strain on current license holders while ultimately getting rid of this unnecessary and pernicious system.
Think stock split
I think the best way to manage dilution while still trying to preserve some value for existing license holders is make liquor licenses split, giving the existing license holder a new license that they can sell to recoup some of their capital. Have them split every 2-5 years or something.
That said, I feel little sympathy for businesses built around exploiting a bad regulatory system. If you don't price in the risk that the regulatory environment might change, well, too bad.
Interesting idea
Though I think a 1 time split would work. I doubt there's currently enough demand to satisfy doubling the amount of full liquor licenses in the city, but current holders who decide to sell could recoup some of their paper losses, or they could open another location.
THE STATE REALLY NEEDS
to step in and stop the Boston liquor licence shennanigans. Its been like a hundred years, we get it, the "natives" didn't like an Irishman as mayor of their capital, but the Irish/Catholics pretty much run everything now, its over, the WASPs lost Massachusetts, now can the city get sensible licencing back?
Jebus....
Other way around
The State is already "in". In the way.
The Brahmin days brought us a State House that worried it was being surrounded by the proles. So they sought to put an end to it by enforcing numerous restrictions on the city of Boston that made it beholden to the Governor and the Commonwealth for a lot of its decisions as a means of keeping control.
The State needs to step OUT not in. It can't be much further in than it already is.
well no we're just
arguing semantics. I know the state has the say over the liquor licencing in Boston, THEY are the ones who can end this madness. And they put those rules in place when an Irishman was elected mayor of Boston, my point stands on that.
It's important semantics
The City has to convince a body run by a guy from Winthrop, then a body run by a guy from Amherst, then a guy from Marblehead, that Boston can do the same thing the other 350 municipalities already can do- decide on liquor licenses.
He opened
in a horrible location, not shit business is slow. Your restaurant is the size of a broom closet and located Belgrade Ave.
Should have hired a genius
Should have hired a genius like yourself to manage his business, I'm guessing.
Yes
because large, spacious real estate in desirable locations is affordable for an independent business owner, right?
Just about as doable as that liquor license.
He should have just bought a
He should have just bought a Del Frisco's franchise. What an idiot!!!
Is business really slow?
Or did they just spend a lot of money expanding the dining room?
Where did you read that
Where did you read that business was slow? That's not necessarily what a "tough year" means. They're bustling with takeout and eat-in folks all the time. Tough year is a city with bad policies messing up their progress, unanticipated costs, personal stuff, who knows. But businesses shouldn't have to exist only in a 4 block radius, and their seating / size is commensurate with the resources they have to apply to it. Go open your own if you're so smart.
Wrong
You must be operating on old information--the restaurant more than doubled in size several months ago, see http://www.universalhub.com/2015/roslindale-chinese-restaurant-closes-on... . It's intimate but certainly not a broom closet.
The location is also fine. Thousands of people live in walking distance, and whenever I walk by there are people dining in as well a brisk take-out business. That part of Roslindale is becoming increasingly activated with new development and old storefronts attracting new businesses, and has some competitive advantage insofar as it is slightly more accessible to West Roxbury.
Ultimately, we as a community should push to increase activation along all of Belgrade Avenue. There is a solid case for taller structures and more street-level retail along that corridor, as well as investment in trees and other aesthetic elements. Given the width, it would also be a great candidate for a protected bike lane. These changes will help restaurants like Seven Star Street Bistro thrive.
Belgrade Ave development
Any suggestions as to how "we as a community should push to increase activation along all of Belgrade Avenue?" It's a great idea and has potential to really improve the community. Sure lots of us would be willing if we knew where to start!
Thanks!
Some ideas
Certainly frequenting the existing businesses (like Seven Star Street Bistro, Busted Knuckle, the yoga studio, etc) and doing word-of-mouth and social media promotion for them is a low-activation energy first step. If those businesses experience good foot traffic, it will encourage others to move in, creating a virtuous circle.
More globally, we need people to turn out and support developments when they are proposed and encourage density and pedestrian/transit-oriented design. One of the biggest drags on development is community insistence on more free/off-street parking with every project. Mandatory "free" parking makes development more expensive/less profitable, and coupled with resistance even to 4- or 5-story buildings (many of those on Belgrade now are only 2 stories!), high labor and materials cost in Boston, as well as a Byzantine licensing and permitting system, keeps many areas from achieving vibrancy. And of course when developments do get built, the more free parking they include, the more traffic they induce. We need people to stand up at these community meetings and rebut the voices calling for more parking.
Back to the topic of this thread, we can also call our state government representatives and urge them to make liquor license reform a priority.
Belgrade should be part of
Belgrade should be part of the Roslindale Main Streets...not just Rozzie Square. It's not even a 1/2 mile from the square. Belgrade could be a great go to location and all within walking distance for so many people.. I would love to see small business, restaurants, shops, etc.
A big problem as well is all the shuttered business fronts. They have been shuttered for years; some decades and that does not help the community either.
Nothing is stopping residents
Nothing is stopping residents and business owners along Belgrade from applying for main streets designation. Jamaica Plain has 2 districts. Expecting RVMS to expand it's territory when it has many vacancies and struggling businesses is not realistic. Here's how to get started: http://www.preservationnation.org/main-street/about-main-street/getting-...
Ugh
I hope this does not signal the end for them. The food is amazing and they have always had a huge take-out business, which is big in Roslindale to begin with what with all the families with small kids. That location was fine for that kind of a business, but it seems like it has been tough for them to fill their dining room in that location and I can imagine that they are just not getting the ROI on the license that makes it worth it to carry the costs. It is absurd that it took the City a year to issue permits to this place to allow them to open a seating area, much less that they had to buy a liquor license because they are 1/8 mile from the "border" of the main streets area.