A License To Pour – Florida Weekly

Liquor licenses can cost hundreds of thousands of dollars.

IT’S THE NECTAR OF THE GODS TO some. A toxin to others. And a legal over-the-counter, the bar or the-table drug to all who reach the age of 21 — one of the most carefully regulated widely available products in the United States: alcohol, defined by the state of Florida and its 67 counties as beer, wine or distilled spirits.

Here, Florida Weekly glances at the alcohol sales business in the Sunshine State from a regulatory perspective, which may only appear a maze at first glance.

Those who wish to sell alcohol in retail businesses, merely transport it or even make it, require a license. Or to be more precise, they require any one or several of 41 different state licenses, depending on what’s being sold, and where and how.

You might not think of some licensing opportunities, but the state has. There’s beer, beer and wine, or beer, wine and distilled spirits sold in sealed containers to be drunk off premises, as they say. Or to be “consumed on premise” — various COP licenses.

The liquor licenses he uses are “fairly easy to acquire,” says Chef Harold Balink, of Harold’s Restaurant in Estero. “The local ATF (Alcohol, Tobacco and Firearms) and the Health Department have always been very helpful to me with putting together the package and permitting for that specific license.” Best of all: “My license costs me zero to buy, and $1,850 a year to maintain.” PHOTO BY STEFANIA PIFFERI

There are special hospital licenses, horse breeder licenses, licenses for boats, bowling alleys and airports.

There are county commissioner licenses (which may suggest why some local-government decisions seem, well, a little loopy). “Beer, Wine and Liquor for consumption on premises only; license issued to county commissioners for facilities which are owned and operated by the county,” the regulation reads. Cost: $858, $1,300, $1,560 or $1,850, depending on the county population, for a year — a standard licensing fee.

There are licenses for golf clubs, symphony orchestras, live theaters, fairs, lodges, fraternal or benevolent organizations, cruise ships, tennis clubs, cabanas, race tracks, bottle clubs — even a sacramental wine permit (no fee, drink for free. Little wonder religion is sometimes seemingly so attractive).

Some licenses require only a small expense: a nonprofit organization selling beer from a tent in a park for a day or two or three, for example, can get a state permit for $25. Or beer and wine package sales from a convenience store could require an annual licensing fee of less than $200, paid to a county.

ROSENTHAL

A complete list of licenses and their annual fees for renewal by the state may be found here: www.myfloridalicense.com/dbpr/abt/documents/LicenseSeriesTypesABT2004_table.pdf.

But some licenses are as costly as some houses, held and traded as assets by business owners for prices ranging from $50,000 to almost $750,000, brokers say, then subject to standard qualification rules and licensing fees by the state no matter who owns them.

Those “quota” licenses to sell beer, wine and spirits are limited in number by state law to one quota license permitted for every 7,500 residents. Quota license holders can include chain stores such as supermarkets, packages stores, or restaurants and bars. Once a qualified owner with no criminal background holds such a license, the state’s annual licensing fee will run $1,850 per year.

ROSAYN

But it’s not quite that simple and maybe, for a lucky few, not that expensive.

For businesses that take in 51% or more of their profits from food and non-alcoholic drink sales, the licensing requirements appear relatively benign and simple. Owners do not have to enter the annual quota drawings of the state to receive an SRX license, which comes with zero front fees and the standard $1,850 per year licensing fee.

“Our revenue is about 65% to 35% food and wine, so this has never been an issue for us — not like Connecticut where there are some very old-fashioned blue laws,” says Rich Rosenthal, a co-owner in a restaurant group that includes the upscale Cooper in Palm Beach Gardens and nine restaurants in Connecticut.

For Harold Balink, chef and owner of Harold’s in Estero between Naples and Fort Myers — a winner of Florida Trend’s coveted Golden Spoon award — a similar experience has unfolded over the years.

QUINTERO

“Fortunately I’ve never had to go through the experience of fighting for or purchasing a full liquor license,” he explains. “There are many types for on-premise, sealed-container consumption and they vary depending on population and the county restrictions. Mostly for control of bars.

“I have always had a 4COP-SRX. The SRX designation is for restaurants that serve mostly food, over 51%. There are also other limitations on that license as far as size of bottle, and so on.”

And as in most counties, there is no limit to the number of SRX licenses granted, especially since there aren’t many of them if the county requires a minimum square footage, as well — say 2,500 — or at least 100 rooms in the case of hotels.

“They’re fairly easy to acquire,” says Mr. Balink. “The local ATF (Alcohol, Tobacco and Firearms) and the Health Department have always been very helpful to me with putting together the package and permitting for that specific license. So, many of the horror stories I haven’t had to go through.”

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Best of all, perhaps: “My license costs me zero to buy, and $1,850 a year to maintain.”

Quota fun

But quota licensing is still not quite that simple; there is one more opportunity to gain a quota license without paying hundreds of thousands of dollars.

Every year the state does a population count in each county and, when the numbers merit such an action, officials offer new quota licenses in a lottery drawing — nowadays not an infrequent occurrence in a state where roughly 1,000 newcomers arrive each day to take up new lives.

Qualified winners can get a quota license for just over $10,000 with the annual licensing fee of $1,850.

Last year, according to the state’s Department of Business and Professional Regulation, its Division of Alcohol and Tobacco held the lottery, after “a total of 62 quota alcoholic beverage licenses were determined to be available for issuance across 30 counties.”

Ken McCoog, co-owner of The Belgian Monk in Punta Gorda, says rules streamlining licensing and allowing businesses such as his to sell alcohol to go, saved businesses like his. Gov. Ron DeSantis “helped our industry immensely, and we were able to do business through the whole thing.” COURTESY PHOTO

Those counties included both Lee and Palm Beach. Winners had 45 days to apply after being announced. This year’s drawing is now underway, with no winners announced yet, a press release said.

Once people have a quota license, they may hold on to it, start using it, or sell it, explains Barry Rosayn, an officer and industry specialist at Beverage License Specialists, based in Fort Lauderdale but operating statewide.

The business is one of a handful of brokers in Florida who work together, he explains.

“Quota licenses since the pandemic have been extremely high in demand, and demand has gone through the roof,” he says.

“About 30 years ago, quota licenses were issued based on increases in population of 2,500. Then it went up a thousand, and then jumped to quota licenses issued for every 7,500 residents. If a license is revoked, that goes into the mix of what’s available from the state in the coming year, too.”

“Once you hit the Bible Belt, it’s more restrictive — and I include Florida in that,” Brian Hill, owner of Brian’s Barbecue in DeLand and past chairman of the board for the Florida Restaurant and Lodging Association, said of liquor laws. COURTESY PHOTO

While the supply is limited, the pandemic changed that for a brief time — at first by freeing up valuable licenses.

“In March and April last year, when Florida was closed down, the hospitality industry was in terrible shape. So much so that if you were in the hospitality business and had a monthly rent to pay — plus employees and insurance — and you had no income, and there was no light at the end of the tunnel, many licensees said, ‘Get me out of here, I want to sell the license. I can’t pay the bills.’”

He points to Naples downtown, where rent is high and “even if some landlords gave them a break, a lot of places couldn’t stay in business. So they bailed, and (quota) license values are a matter of supply and demand.”

Then suddenly things began to change.

“In August when things started back up, a lot of entrepreneurs — including from New York, California and other places — were looking to open venues in Florida. Florida’s business is open. And that created a huge demand.”

While that was happening, Mr. Rosayn adds, “package stores were the segment of the industry that flourished. They need quota licenses, too. They had banner years and were looking to expand, buying more licenses.”

All of it is a matter of no more than supply and demand for quota licenses, he said, which are sometimes held by chains such as Walmart or Costco or Winn-Dixie or ABC stores, and won’t be sold by the chains, he says. But the rest can sometimes come on the market.

“In Lee County during the pandemic, a number of quota licenses were available,” Mr. Rosayn said. “It’s Economics 101. Prices in Lee were in the low- to mid-$200s then. But today they’re roughly $350,000.”

“I sold a license in Collier just prior to the end (of restaurant and bar closings) for $210,000, and I know of one that recently went under contract for $355,000.

“In Palm Beach County, they were in the neighborhood of $130,000 in the early stages of the pandemic, and now they’re running $285,000 to $300,000.”

And everybody in the country seems to know about it. This advertisement, for example, appeared online last week from Liquor License Auctioneers, based in Woodland Hills, California: “Palm Beach, Florida, 4COP/3PS. This license is transferable anywhere in Palm Beach County. Current price: $285,000.”

Mr. Rosayn calls Charlotte County, however, “an anomaly.” And not because there are great deals for wouldbe entrepreneurs of precious drink.

“Charlotte had never been a county of great demand — it was principally Punta Gorda and Port Charlotte with maybe a little bit of Englewood. Quota licenses there had been in the vicinity of $200,000 to $225,000, but if you could find one today, it would be north of $400,000.”

And good luck finding one. State records show 49 quota licenses in Charlotte, 19 of them held by chain stores.

Business, beer, wine and history

As businesses, package stores seemed to ascend robustly while so many others in the world of hospitality and leisure either remained grounded or they collapsed during the long first months of the pandemic, when diners and drinkers stayed home.

In a pro-business state, a pro-business governor saved some of those smaller businesses by cutting away some of the state’s regulations. Gov. Ron DeSantis freed up businesses relying on bar or restaurant alcohol sales to sell take-out drinks, owners said.

“When the COVID thing started last year, Gov. DeSantis made it possible for us to sell growlers — that’s a 32-ounce jar you put beer into. Everything had to be to go,” explains Ken McCoog, owner of The Belgian Monk, a pub that sells only imported Belgian beers and Belgian food in Punta Gorda.

“He helped our industry immensely, and we were able to do business through the whole thing.”

A bar and restaurant, The Belgian Monk was given a package license, without having to jump through hoops.

“When our license was renewed in February,” Mr. McCoog adds, “we had to pay the (package license) fee, but we didn’t have to get fingerprinted again, and it was only like $200 for the year. DeSantis did a huge favor for us small places to stay open. And we did.”

A license to sell alcohol is considered a privilege, not a right in Florida, so anybody obtaining one must first pass a background check, be fingerprinted and have a record with no felonies.

“In my opinion, the reason for these regulations is to protect the majority of the community, so those getting licenses have to go through the background checks and prove they will handle the license with responsibility,” explains Stella Quintero, instructor and special projects coordinator in Florida Atlantic University’s

College of Business Hospitality Program.

“You have to earn it, it’s not a given. And you have to do what it takes to maintain it. That’s probably in the best interests of all consumers.”

State and county laws regulating alcohol may go back to Prohibition, when alcohol sales were banned in the nation from 1920 to 1933, and they differ from region to region, notes Peter Bergerson, professor of public affairs at Florida Gulf Coast University.

“A number of factors are involved in this cafeteria-style approach, a regulatory approach that always tried to incorporate the Puritan values of prohibition and accommodate local interests as well as business interests, urban interests and rural interests,” he explained.

“Those against prohibition were urban, and often immigrants — the European immigrants, Italians, Irish, Germans. Drinking was part of their way of life. But in rural areas (where puritanical protestant notions often rejected alcohol) and in the genesis of the women’s movement, abolitionists often times were women who saw the excesses of alcohol lead to disintegration of families.

“So the essence of politics is a compromise,” Mr. Bergerson said — “the compromise you see across all of the states in this hodgepodge of regulations that are cumulative over time.”

When out is in

Brian Hill, owner of Brian’s Barbecue in DeLand and past chairman of the board for the Florida Restaurant and Lodging Association, points out politics and industry money has been part of it, too.

“For a long time, Florida was a Budweiser state — they had five breweries in the state and they had politicians who passed a law that you could only sell beer in Florida in certain amount increments — 10 ounces, 12 ounces and 32 ounces. That kept out all the metric accounts. And it kept out Miller at the time — they wanted to come out selling 8 ounces.”

A native Floridian, Mr. Hill has held a number of different licenses to sell alcohol, including in New York State, where he owned a craft brewery with friends that ultimately distributed beer to 18 states.

“You learn about these liquor laws as you open in different states, with different rules,” he said.

“In general, the northern states are typically alcohol friendly. I think it fits with the heritage — there are a lot of Catholics and people (from immigrant traditions) that are OK with alcohol. But once you hit the Bible Belt, it’s more restrictive — and I include Florida in that. Out west, you can brew, distill, grow pot — you can do whatever you want.

“So, as a businessperson, you play the hand you’re dealt.”

For him, that’s worked well selling beer and wine with barbecue, without having to worry about distilled liquor, just as it helped for Mr. McCoog, at The Belgian Monk.

“We don’t have the space to put spirits,” he said. “And people who drink too much Crown can get a little crazy … we don’t need that. Granted, Belgian beers can be like 12% alcohol, but it’s not the same kind of drinker.”

Or seller, it seems.

And for the state of Florida, none of the many licenses is about money.

“They’re not moneymakers for the state or counties,” Ms. Quintero points out — although some familiar with the history of state regulations suggest that in times of revenue distress, alcohol has sometimes been taxed more heavily. Taxes, however, are a different matter.

While few appear to object strenuously to the state regulations, “a big push to change how we do things has come from the pandemic,” Ms. Quintero says.

“Restaurants were allowed to sell alcohol to go. And now the Legislature passed a bill allowing that change of rules to extend beyond the pandemic. It’s a tremendous opportunity both for consumers and for the businesses. I have a friend with a daughter, and he can do an evening out by having friends in. He’s able to give them the same food and margaritas they’d have at El Camino, a very fine Mexican restaurant in Delray Beach, at home with children.”

If the new regulations lead to “going out drinking” by staying home and drinking, they can’t be all bad, perhaps even for opponents of any drinking, in or out. ¦