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Restaurant owners struggling during pandemic seek cuts in liquor license fees

Baramor owner Arpit Patel talks with customers using outdoor seating at his Newton Centre restaurant.
Baramor owner Arpit Patel talks with customers using outdoor seating at his Newton Centre restaurant.Baramor

Restaurant owners in Newton hoping for additional financial relief during the pandemic were thrust into further uncertainty this month when a vote to halve liquor license fees was delayed until October after the city’s law department raised legal concerns.

“Restaurants specifically have been told to pivot, pivot, pivot,” Arpit Patel, owner of Baramor, a restaurant in Newton Centre, said in an interview. “At some point you look at all these bills piling up and [ask,] is it worth operating a business?”

Patel spoke in favor of the fee reduction at the city’s Sept. 15 Board of License Commissioners meeting, but the law department advised that the measure would violate the Anti-Aid Amendment of the Massachusetts Constitution.

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City Council President Susan Albright — who had made a request for the one-time fee reduction to the board last month with support from 16 other city councilors — requested a postponement on a vote due to the law department’s concerns.

“We are all looking for ways to help restaurants stay open,” Albright said in an interview.

Cutting the liquor license fee in half for one year would save restaurants about $1,700, Albright said. That amount probably wouldn’t make or break a business, she said, but it would provide some relief and could convince restaurant owners they can make it through the winter.

Seven restaurants in Newton have closed and at least three new ones have opened in 2020, Ellen Ishkanian, the director of community communications for the city, wrote in an e-mail. This is lower than the rate statewide, in which about 1 in 5 restaurants have closed since the pandemic.

The Anti-Aid Amendment prevents the use of any public money to create, maintain, or aid a religious or private institution. In other words, Maura O’Keefe, an attorney for the city, said at the meeting, the city cannot give any aid to private businesses without legislation such as the CARES Act, which Congress passed to provide relief amid the pandemic.

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Fees also are intended to be an accurate financial reflection of the work that goes into providing the license, O’Keefe said in the meeting. She advised that changing the liquor licence fee for the purpose of providing relief to restaurants would be setting a bad precedent.

“These are not meant to be malleable variables,” O’Keefe said. “It is not something that should be targeted like this as something that can be instantaneously increased or decreased to suit a particular need.”

The town of Needham passed a liquor license fee reduction in July and has had no legal challenges and no complaints from businesses, Needham Select Board member John Bulian said in an interview. Revere’s City Council also requested its Board of License Commissioners make the same fee reduction.

“Why would anybody challenge it?” Albright said. “It’s in everybody’s best interest to give the restaurants a break and let them keep going.”

The Newton-Needham Regional Chamber is looking for legal assistance to understand the Anti-Aid Amendment and see if there’s a way to go forward with the fee reduction, said the chamber’s president, Greg Reibman.

Reibman said in the meeting he was “disappointed” the law department hadn’t disclosed its concern about the Anti-Aid Amendment earlier than the scheduled vote. In an e-mail, Ishkanian wrote no one in the mayor’s office had discussed the law department’s views ahead of last week’s meeting and “advice and legal analysis of City of Newton lawyers is confidential attorney-client material.”

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The mayor’s office also opposed the fee reduction because it would cost the city $200,000, which would need to be made up with cuts in city personnel or services, and officials are concerned about equity with other segments of business in Newton, Chief Operating Officer Jonathan Yeo said in the meeting.

Instead of a reduction, the mayor proposed splitting the liquor license fee into two installments — one in November and one in May 2021. While inspections slowed down during the initial lockdown, Yeo said, the fee is justified because no staff were laid off and a rush of inspections followed. He said he expects inspectors to be “quite busy” for the next year.

Baramor owner Patel said his restaurant had to close for three months and is now open at half capacity, so it is getting much less benefit than usual from its liquor license.

“It’s a different landscape, we can’t have a bar, I can’t feed people at the bar,” Patel said. “It doesn’t make sense for my liquor license fees to be what they used to be.”

Seana Gaherin, co-owner of Dunn-Gaherin’s Food & Spirits in Newton who also spoke at the meeting, said in an interview her liquor sales are a fraction of what they used to be. She said her liquor license has joined her cable TV subscription, newspaper deliveries, and internet access as an expense that provides less benefit to her business and customers during this time.

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“We work every minute in our business and nurture every relationship with every customer we have and micromanage every cost,” Gaherin said. “We have some of the smallest margins of most industries.”

Gaherin recently bought a canopy and space heaters to provide outdoor seating as the weather cools down. She said the fee reduction would help offset unexpected costs like those.

The Board of License Commissioners will hold a special meeting Oct. 6 to vote on the fee reduction.

“I’ve been on the commission for 23 years, and I don’t think we’ve ever had a situation where the mayor’s office was on one side of the equation, and the city council was on the other,” Commissioner Kathleen McCarthy said at the meeting. “It’s obviously something that is important and critical and historical.”

Albright said she has sympathy for the mayor’s position but believes restaurants have faced a higher burden in the pandemic than other businesses and need additional relief. Without it, she said, the city might face budget shortfalls anyway, with restaurants looking at mounting bills and deciding it’s not financially feasible to stay open another year — paying no license fee at all.

“I know things are tight but I believe in a $400 million budget we can balance helping restaurants stay alive which benefits our village centers with the potential loss of revenue,” Albright wrote in an email. “The loss of restaurants in village centers would be a financial blow to the whole village.”

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