Salem Beer Works opened its doors on Derby Street 15 years ago with a license to sell beer and wine. Ownership decided years later that the restaurant would be better suited serving liquor as well, but there were no all-alcohol licenses available, so they applied for, and were granted, a seasonal all-alcohol license.
Like a number of others in Salem, the establishment remains open year-round, serving beer, wine and liquor from April to January, while only selling beer and wine in the three-month span from January to April.
The practice has the Salem Chamber of Commerce and some merchants crying foul, and on Wednesday night the City Council Committee on Ordinances, Licenses and Legal Affairs passed a motion to re-establish the subcommittee that examined the problem years ago to finalize criteria for seasonal licenses.
The meeting was prompted by Chamber of Commerce Executive Director Rinus Oosthoek, who in an email to Ward 2 Councilor Michael Sosnowski, chairman of the committee and liaison to the licensing board, blasted the practice of granting seasonal all-alcohol licenses on top of annual beer and wine licenses as "a smack in the face" to the restaurateurs who own annual all-liquor licenses.
The current market-value price for an annual beer and wine license in Salem is around $20,000, while an all-alcohol license will run a business anywhere from $60,000 to $80,000. Once these licenses are purchased, they become an asset to the company, which is allowed to transfer (sell) them.
A seasonal license has no base cost associated with it, because it must be applied for each year to remain valid, and is tied to the specific location it was granted.
"Everything in the recent history totally puts us at a significant competitive disadvantage," said Dirk Isbrandtsen, who opened the Capt's Waterfront Restaurant eight years ago. "[Other restaurants] are now operating at a cost 50, 70, 80 thousand dollars below what my cost for opening my business was because they're being granted the ability to operate as if they had a full liquor license."
In 2009, the city agreed not to entertain requests for seasonal licenses if an annual license is available for sale at a reasonable market value. Ultimately, the purpose of the licensing board, according to chairman Robert St. Pierre, is not to "balance" business in the city.
"Some of the most successful businesses today began with seasonal licenses," St. Pierre said. "My view of the licensing board is that we're supposed to hold people accountable to Chapter 138 [of Mass. General Law]...we have to make sure that their application is in accordance with 138 and that they are able to manage a license...I don't see where it requires us to then regulate business."
The city currently has no definition as to what is considered a seasonal business and what is not. The subcommittee will report back to the city council on the issue by June 30, hopefully with some idea of how to define seasonal businesses, and how the city should go about entertaining requests for seasonal licenses in the future.
But what the council ultimately decides to do will be dependent on state law, and what they have the authority to do.
"One restaurant is in Location A and pays $60,000 for a license, the next door restaurant gets a seasonal a week later and pays nothing," Oosthoek said. "Our approach has been from the start...to get a definition of what is a seasonal license.
"Our view, if you go through the 354 cities and towns in Massachusetts, all of them it's obvious what is a seasonal license...if you're on the beach you get a seasonal license, if you're a golf course, you get a seasonal license."