A plan to add 15 more liquor licenses in Waltham, a prospect that has drawn complaints from a number of restaurant owners in the city, is the latest example of a community trying to use the licenses to bolster economic development.
The additional licenses in Waltham would be leased to large restaurant chains to keep pace with commercial development in certain areas of the city.
Current restaurant owners say the plan would give the new businesses an unfair advantage, but Waltham officials disagree, pointing out that none of the licenses would be in more competitive areas such as Moody Street.
In Needham, Town Meeting voted to ask the state Legislature for permission to issue licenses that would allow stores to sell alcoholic beverages for consumption off site. Six licenses would be awarded initially, with another two possible by 2018, if the proposal is approved by Beacon Hill and a subsequent townwide election.
Six of the licenses would allow sales of all alcoholic beverages, while two would be limited to beer and wine, but officials could make all the licenses for beer and wine. There are no package stores in Needham, but local restaurants can sale alcohol to patrons.
Arlington officials discussed last fall allowing the sale of liquor in the town's three beer-and-wine stores, and both Natick and Wellesley approved measures last year aimed at attracting small businesses by relaxing requirements such as the number of restaurant seats needed for a license.
In March, Governor Deval Patrick signed Natick's proposal into law after it was approved by the Legislature.
“The town is essentially trying to make this a more welcoming place for restaurants to open up,’’ said Natick Selectman Joshua Ostroff. “Dining is complementary to a thriving downtown, and by allowing restaurants to serve alcohol, they can be viable in their business."
The state assigns restaurant, bar and hotel liquor licenses to municipalities — except for Boston — based on a formula that takes population into account; cities and towns are not allowed to go over the allotted quota.
However, communities are allowed to opt out of the state's quota for restaurant liquor licenses, usually to allow more local control over the license requirements, but also sometimes to go over the allotted number.
There is no penalty for rejecting the quota, and communities can adopt the state's population-based formula at any time.
Among area communities, 25 have opted out of their quota, and eight towns are completely dry. But Waltham has opted into the state quota system, which allows the city to issue 104 licenses — 78 for restaurants and 26 for package stores. All but two of the restaurant licenses have been issued.
The proposal for more licenses in Waltham is different than in other communities because it would not require restaurants to buy liquor licenses — which can cost over $100,000 — but would lease the licenses to the businesses. The licenses would be tied to specific locations, meant to generate more business in those spots. The theory is to make it easier to attract large restaurant chains to these locations while making sure that the business can’t pick up and use the license somewhere else in town.
The city wants to offer 10 full liquor and five beer-and-wine licenses for developing mixed-used properties, like the Watch Factory along the Charles River and certain areas of Totten Pond Road.
The Waltham licensing board would have to get City Council's approval to submit a home rule petition to the state Legislature and the governor.
City officials could not provide a solid time frame for the next meetings, discussions or decisions regarding the issue.
Local restaurant, tavern and bar owners are railing against the proposal, which was brought up by Waltham licensing commissioners last year, citing fears of unfair competition and depreciation of their own licenses, which they were required to buy upfront.
Nathan Sigel and Erin Barnicle, owners of Tempo Bistro on Moody Street, said that since the new restaurants would lease the licenses, their owners would not have the thousands of dollars in additional start-up costs faced by those required to purchase their liquor licenses.
“Every person opens a restaurant with a large amount of debt,’’ Sigel said. “But these big restaurants wouldn't have extra loans to pay off.’’
Bill Honeycutt, owner of John Brewer's Tavern on Main Street, said at a public hearing May 14 that when he prepared to open his restaurant in 1998, he paid $140,000 for his liquor license.
“Businesses coming to Waltham won't pay anywhere near that’’ under the new licensing proposal, Honeycutt said. “These will be large chains who can certainly afford to spend that kind of money, whereas I had to struggle many years to pay that debt.’’
Restaurant owners also said that Waltham's population can only support the city's 65 existing licenses for on-premises alcohol consumption.
Bob Perry, owner of the Elephant Walk on Main Street, said adding 15 chain restaurants would take away business unfairly.
“If the population does not increase, the average sales in the city will go down — that's economics,’’ Perry said at the hearing. “If you add dining seats without more dining public, do the math — that's what will happen to these established licensees.’’
The restaurant owners also said that adding liquor licenses would diminish the value of their licenses.
Residents also voiced concern at the hearing.
Nicole Franchi, who lives on Rose Hill Way, said she is worried that the additional licenses would start a domino effect, shuttering lively, locally owned restaurants and changing the character of the city.
“I grew up in Newton, but I chose to raise my family here because I love the character of Waltham,’’ Franchi said. “I’m concerned that by oversaturating the market, you’ll lose the character of Main Street and Moody Street, and I want to ask you to think about it.’’
However, not all testimony was negative.
Steven Cuccinati, representing the developer building 1265 Main Street, a 280,000-square-foot, mixed-use complex on the former Polaroid site off Route 128, said restaurants prove key to the sustainability of retail projects.
“For us to create something special there, it's imperative to have restaurants that bring a sense of gathering and community,’’ Cuccinati said. “The fact is that we've had an overwhelming response from local and national restaurants to become part of our project. I can't speak to how many licenses should be issued, but we're looking to create something special up there for the community.’’
The Board of License Commissioners chairman, Wayne Brasco, said the proposal's intention is to restrain further development on Moody Street and Main Street, leaving alone the established restaurants.
Brasco also said leasing licenses to the chain restaurants would not be as advantageous for their owners as buying them would be.
“If you want Tempo’s license, you have to go buy it from him,’’ Brasco said, using the Moody Street bistro to illustrate his point. “But these have no value, and the city will charge you rent. It would be better off if the restaurant owned the license after a certain time."
Mayor Jeannette McCarthy said she supports additional site-specific alcohol licenses, but said the city might whittle down the number proposed.
McCarthy said while the city does not intend to intentionally hurt small business owners, she sees the need for development along the Route 128/Interstate 95 corridor.
“People are coming to me investing millions of dollars, and above the economic impact, they are solving problems that haven't been solved in years, and they're not asking anything in return but a competitive process,’’ McCarthy said.
The City Council’s vice president, Kenneth Doucette, said he thinks the proposal is too broad, and he could not make a decision on the issue until it is narrowed down and rewritten more clearly.
“I definitely have great concerns about 15 additional licenses — I don't know if there's a need for that many,’’ Doucette said, adding that the proposal does not name the specific locations where the licenses would be used.
“Now you see the emotion that's come out, and it might be unnecessary emotion in the end. It's frustrating business owners and the council at this point.’’