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The whiter the Boston neighborhood, the easier it can be to find a restaurant with a license to serve booze, report shows

A new report states that there is an “undeniable pattern of well-capitalized businesses buying out independent operators in the neighborhoods and closing their bars.”Charles Krupa/Associated Press

As the Boston City Council debates efforts to get more liquor licenses in the hands of entrepreneurs of color, a new report is putting hard numbers behind what many Boston politicians and restaurateurs have known for years: Generally speaking, the whiter the Boston neighborhood, the easier it is to find a restaurant with a license to serve booze.

The city’s four neighborhoods with the highest number of white residents — at least 75 percent for each — hold eight times as many liquor licenses per person as Boston’s four most diverse neighborhoods, where the population is at least 75 percent people of color, according to the report, which was published by OFFSITE, a firm that focuses on training and development for those in the bar and restaurant industry.

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There are other damning stats: Just 2 percent of on-premise liquor license holders identify as Black, according to the report, in a city where Black residents make up 24 percent of the population.

A key problem: Boston doesn’t control its own destiny when it comes to its liquor license cap. The process of expanding the number of liquor licenses throughout the state is controlled nearly exclusively on Beacon Hill, an antiquated vestige of an era when Protestant state legislators feared that, if left to their own devices, Irish Catholic leaders in Boston would flood the city with whiskey.

There is an “undeniable pattern of well-capitalized businesses buying out independent operators in the neighborhoods and closing their bars,” the report says. In other words, because of the cap on on-premise liquor licenses in the city, many restaurants are currently playing a zero sum game in Boston. Every new hotel or steakhouse slinging drinks in the Seaport usually means that elsewhere in the city a neighborhood watering hole or mom-and-pop restaurant has perished. The new spots had to get their transferable liquor licenses from somewhere.

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“Liquor licenses are just another government controlled commodity that follow a familiar pattern of Boston’s history, where the City and Commonwealth have actively participated in — or, at the very least, were complicit in — divesting and stripping resources from neighborhoods of color,” the report concludes.

The report’s findings come as some city councilors are pushing Beacon Hill to allow them to distribute hundreds more licenses in the city, specifically in neighborhoods of color, in an effort to address this very inequity.

The councilors want to grant up to 200 nontransferable all-alcohol licenses over a three-year period; all of them would be distributed in Dorchester, Mattapan, Roxbury, and Hyde Park. Their proposed home rule petition, which needs Beacon Hill approval, also calls for the overall number of licenses in Boston to increase 10 percent over a decade’s time.

The proposal, which could change in upcoming council working sessions, would eventually have to be sent to Beacon Hill in order to become a reality. There, state authorities are often slow to act, if at all, on Boston home rule petitions.

Another council proposal calls for four additional liquor licenses be granted for the Bruce C. Bolling Municipal Building in Roxbury’s Nubian Square, the heart of one of Boston’s most diverse communities, and one for the historic Strand Theatre in Dorchester’s Uphams Corner.

On Thursday, councilors and advocates chewed over those ideas during a virtual hearing, during which Nick Korn, an OFFSITE partner, gave a broad-strokes overview of his firm’s findings in the new report.

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OFFSITE offers a slew of suggestions about how to remedy the imbalance, including increasing the cap for licenses and empowering the city’s Licensing Board to grant restricted licenses in neighborhoods until that threshold is reached.

For instance, setting a target of one license per 750 people would yield 367 more licenses in 11 neighborhoods, and one per 1,000 people would yield 217 more in 10 neighborhoods.

OFFSITE also asserts that restricted licenses do not cannibalize the market for transferable licenses, a chief criticism by some restaurateurs who in the past feared they would undermine the value of their own licenses, for which many of them forked over hundreds of thousands of dollars. The report claims restricted licenses, which cannot be sold from restaurant to restaurant, have not appreciably affected prices for transferable licenses. The latter, anecdotally, currently hover around $400,000 to $450,000 in the city. But those are an imprecise numbers, and the report recommends the Boston Licensing Board require actual purchase-and-sale prices to be entered into public record.

R.C. Smith, owner of District 7 Tavern in Roxbury, grew up in the city and said the report’s findings are “nothing but a reflection of the lived experience I’ve had” in Boston.

“These findings are what everyone knows. You can walk through the city and see it,” said Smith, a cofounder of the Boston Black Hospitality Coalition.

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The problems featured in the report are deep-rooted, said Smith, and it would take a “real express train for equality” to solve them. He was not optimistic, saying government at every level failed him as a business owner during the COVID-19 pandemic. He wants to see the restaurant and bar industry become more diverse, but also says Boston needs to concentrate on keeping the few Black-owned restaurants it has.

Too many Black-owned businesses, he said, operate as a “desert island,” noting that there are four vacant storefronts and a dollar store near his restaurant. Black entrepreneurs, said Smith, oftentimes suffer from lack of access — to real estate, to banking relationships, to technical assistance.

“Navigating the city of Boston to open a business is not the easiest, and then you throw being Black on top of that,” Smith said. “We don’t have have people in the system to help us navigate the system. And I’m not coming at anyone. That’s just the reality.”

The Wu administration supports expanding the number of liquor licenses to help rectify the city’s racial wealth gap, Segun Idowu, Boston’s chief of economic opportunity and inclusion, said in a statement. He said ensuring that a diverse array of entrepreneurs have access to liquor licenses is a crucial part of creating opportunities and building generational wealth in Boston.

Stephen Clark, chief operating officer for the Massachusetts Restaurant Association, said in a statement that, “It has been clear for some time that there are certain areas in the city that need access to more alcohol licenses, while there are other parts of the city that do not need any additional licenses.”

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City Councilor Brian Worrell, one of the members pushing the proposal for more licenses in certain neighborhoods, said it “will allow local owners to achieve economic mobility that addresses racial gaps, breaks systemic barriers, and gives real opportunities to Black- and brown-owned businesses.”

“We want to equip them to be successful where the distribution of liquor licenses has been historically inequitable,” he said in a statement.

A sponsor of both license-related initiatives before the council, Councilor Ruthzee Louijeune, said in a phone interview that the OFFSITE report was more evidence “the system is broken,” with roots of the problem grounded in the reality that the city only has so much control over its liquor licenses. If it wants more, it must seek state approval.

“Structural racism is baked into every part of our society,” she said.

Korn, the OFFSITE partner, said in an interview he believed Boston’s liquor license cap discourages would-be, first-time operators from entering the industry and curbs diversity and equity in the restaurant scene.

“We’re hitting this sort of artificial ceiling that’s imposed by liquor licenses,” said Korn.

Simply put, without alcohol, turning a profit becomes more complicated for sit-down restaurants. “There are people who want to open restaurants in some of these neighborhoods who can’t,” said Korn.

For Korn, collecting and organizing the liquor licenses data was arduous, but he hopes the findings bring more transparency to the process. With those numbers, the city can face the current reality, assess it, and make data-driven decisions to rectify it, he said.


Danny McDonald can be reached at daniel.mcdonald@globe.com. Follow him on Twitter @Danny__McDonald.