There may be 20 new bars coming to Union Square, or maybe existing restaurants given the newfound right to serve booze, as Governor Newsom granted Mayor Lurie and Scott Wiener their wish for 20 new liquor licenses for Union Square.
Back in the early days of the Mayor Daniel Lurie administration, Lurie and state Senator Scott Wiener hatched a scheme this past February to add 20 new liquor licenses to the Union Square neighborhood. This was consistent with SF City Hall’s ongoing strategy that giving people more opportunities to buy alcohol in new places would somehow jumpstart the sluggish downtown economy. And that strategy does seem to be working with those nighttime street fair and block party events that are still drawing pretty good crowds a year and a half into that experiment.
But Lurie and Wiener cannot simply pull 20 new liquor licenses out of their rear ends. Liquor licenses are a state matter, and a highly regulated one at that. But Lurie and Wiener have at last gotten those 20 new liquor licenses, as Mayor Lurie’s office announced in a Tuesday morning press release that Governor Gavin Newsom signed Wiener’s SB 395 bill that would hand SF’s Union Square 20 new liquor licenses.
“San Francisco has made great progress toward recovering from the pandemic, and these new liquor licenses will continue that progress in our downtown,” Wiener said in Lurie’s press release. “Small businesses are the lifeblood of our economic recovery, and SB 395 will help many new businesses get low-cost liquor licenses to boost our recovery around Union Square and Yerba Buena."
Liquor licenses are based on population (roughly one license per 2,000 people in each county), and previous reporting in the Examiner notes that San Francisco hit that threshold "nearly 80 years ago." The technical cost of a liquor license is $20,000, which is what these 20 new ones will cost businesses. But since there haven’t been any new liquor licenses granted in SF in 80 years, a liquor license up for grabs from a closed or closing establishment can fetch up to $200,000 on the secondary market.
These new licenses will only be available in Union Square, or in the words of Lurie’s press release, “around Union Square and Yerba Buena.”
That sounds like a clearly defined area, but it’s actually not defined at all yet. The SF Business Times explains that the Board of Supervisors will have to establish a “downtown retail district,” near Union Square, and these licenses would only be available in that geographically defined district.
And the new liquor licenses won’t all drop at once. Per the Business Times, “The state Alcoholic Beverage Control authority would then issue up to 10 of the new licenses in the first year after the district’s creation, and up to five new licenses in each subsequent year.”
Maybe this will all be a runaway boozy success that supercharges Union Square. But it seems like there’s also a very high risk of unintended consequences.
I’m not saying that Union Square would turn into a drunken Santacon every day. But a concentration of too many new bars in Union Square might make things tougher on existing Union Square establishments. And flooding the market with new liquor licenses could crash the market for current liquor licenses, just as Uber and Lyft made those once-costly taxi medallions almost worthless.
And have you ever heard the complaint that there are “too few bars in Union Square?” I have not. At a time when even the most beloved nightclub destinations can’t draw enough people, a flood of new liquor licenses might not be the right tonic for the staggering SF nightlife industry.
Image: Steven K via Yelp
