Should Boston buy back some liquor licenses? City Council considering ways to help ailing restaurant industry

Single malt scotch bottles were displayed at Wink & Nod, a speakeasy-like bar in Boston.Charles Krupa/Associated Press

Boston city councilors are considering ways to help a floundering restaurant industry decimated by the coronavirus pandemic, including the prospect of the city buying liquor licenses from struggling establishments and authorities placing a temporary cap on third-party delivery fees.

A proposal by Councilor Lydia Edwards
calls for the city to look at what can be done with liquor licenses. Her ideas include the buyback of certain licenses, the lease of such licenses back to restaurant operators, changing the licenses so that they are non-transferable, and attaching them to the addresses of current eateries and bars.

“It’s a way in which we can hopefully save a lot of restaurants,” said Edwards during Wednesday’s council meeting, which was conducted virtually via Zoom.

Councilor Michael Flaherty called it an “interesting concept” the city should strongly consider.

“It is a commodity,” said Flaherty of a liquor license. “Unlike any other license, it’s borrowed on, it’s pledged, and it can be seized to satisfy a debt or a lien, so banks absolutely need a seat at the table.”

Earlier this month, a council committee held a hearing to discuss whether to issue new liquor licenses.

Dining in at restaurants throughout Massachusetts has been banned since mid-March. The ban was among the slew of restrictions instituted in an attempt to mitigate the spread of the outbreak. In the state, 211,000 restaurant jobs have already been vaporized, and $2.3 billion in revenue could be lost in March and April, according to the Massachusetts Restaurant Association. Citing the association, Edwards, in her proposal, suggested that as many as 40 percent of restaurants may not reopen once the public health emergency is over.

Edwards pointed out that some Boston neighborhoods are underserved by bars and restaurants. The pandemic provides Boston an opportunity to own newly available licenses and to redistribute them in a more equitable manner, she said.

Additionally, city councilors are also pushing for local authorities to examine placing a cap on third-party deliver fees for restaurants. With some restaurants relying more heavily on delivery orders in the age of COVID-19, the amount they pay in delivery fees for such vendors as UberEats, DoorDash, and Postmates is increasing. according to city authorities. The fees per order can range between 10 percent and 30 percent, officials said.

The fees, said Flaherty, are an “increasingly contentious point of discussion during this pandemic.”

“Exorbitant commission fees on each and every order, quite frankly, feels a little exploitative,” said Flaherty.

Flaherty hoped the delivery companies and the restaurants can connect and “come to terms on something that just makes sense.”

Councilor Matt O’Malley said sit-down restaurants that previously relied on third-party delivery services for a small slice of their business have become burdened as the importance of delivery for revenue has grown.

“It is absolutely crippling many of these restaurants now,” O’Malley said of the fees.

Other American cities have wrangled with the issue. San Francisco recently placed a cap on such fees at 15 percent during the public health crisis, while Baltimore’s mayor has asked the four largest food delivery apps to cap their fees at 15 percent.

In other news, councilors are pushing for an examination of how the city has allocated economic relief amid the pandemic, including the Boston Resiliency Fund, and rent and small-business relief funds. Specifically, a trio of councilors — Michelle Wu, Julia Mejia, and Ricardo Arroyo — want to know about the mechanisms for disbursement of the funds, the demographics of recipients, and plans for future disbursements, according to a City Council order.

Jon Chesto and Jess Bidgood of Globe staff contributed to this report.