The 20 new liquor licenses Mayor Lurie is dropping on Union Square are getting predictable blowback from downtown bar owners, who are still struggling from the pandemic and not particularly keen on having 20 new competitors.
As Governor Gavin Newsom has been on his annual bill-signing spree over the last month or so, one bill he signed that really caught our eye was the bill that granted 20 new liquor licenses to Union Square. The new liquor licenses were actually Mayor Daniel Lurie and state Senator Scott Wiener’s idea, and Wiener pushed the bill through the state legislature in Sacramento.
The licenses are available at a base price of $20,000, a fraction of what many downtown bars paid for theirs on the secondary market. “Creating new, more affordable licenses will allow new businesses to open and attract tourists and locals alike to our amazing downtown,” Wiener said when he introduced the bill.
But Wiener apparently did not ask any current “amazing downtown” bar and restaurant owners whether they appreciated the idea of 20 new competitors getting liquor licenses at a discount price. SFGate did ask that question, and found that many downtown establishment owners do not support the 20 new liquor licenses.
“The thought of 20 additional licenses coming into the marketplace in a concentrated area like Union Square and Yerba Buena — that’s a dangerous approach to take,” Brian Sheehy, CEO of Future Bars (Bourbon & Branch, Local Edition, Pagan Idol) told SFGate. “The pie is only so big. And if we’re going to be slicing the pie into 20 more slices, many people are going to go hungry, and not many are going to be able to survive.”
Sheehy is not the only one who feels this way.
House of Shields and Sentinel owner Dennis Leary told SFGate, “It reminds me a bit of when SF decided to auction taxi medallions and screwed over a whole generation of cab drivers who had saved for years to purchase one.”
The Lurie administration argues that these new licenses are structured to not hurt current license owners. They’re site-specific licenses that are canceled if the establishment goes out of business, and cannot be resold on the secondary market.
“Our goal is for both new and long-standing hospitality businesses to succeed, and we are pursuing a range of strategies to make that possible,” Lurie’s business development director of the Office of Economic and Workforce Development Laurel Arvanitidis said to SFGate. “Additional liquor licenses are key to transforming Downtown into a vibrant 24/7 neighborhood. They open the door for new restaurants and nightlife to take root, attract more foot traffic, and create the kind of energy and activity that supports both new and long-standing businesses.”
Okay, point taken. If a new bar or (liquor-serving) restaurant opens, some people will go to that neighborhood just to try it out. But whether increased competition helps current bar owners over the long-term is highly questionable, at best.
SF Bar Owner Alliance founder and Tonic Nightlife Group co-founder Ben Bleiman was careful to emphasize both sides of the coin in his remarks.
“You have existing operators who have gotten through COVID and blood, sweat and tears to survive in that area, and the idea that there’d be a lot of new competition around them is both scary and potentially could be detrimental to them,” Bleiman told SFGate. “But on the other side, we have this designated hospitality zone, and it is nowhere near living up to its potential. If we really want that area to go off and become something big, we have to do big things.”
Though remember, Bleiman is a sitting SF commissioner (and president of his commission at that). We have seen what happens when sitting SF commissioners publicly disagree with Daniel Lurie. Of course the politically connected Bleiman is going to mute any potential criticism of this mayor's policies.
We should note that the 20 new liquor licenses will not all come in one fell swoop. Once this legislation goes into effect, the state department of Alcoholic Beverage Control (ABC) would issue 10 of these new licenses in the first year, and as many as five new licenses in each successive year.
Some of these licenses might also get snapped up by existing restaurants or wine bars that currently only serve beer and wine, or don't serve booze at all.
And the legislation does not go into effect until the SF Board of Supervisors draws specific boundaries determining where these licenses can be issued. But the wording of Lurie’s press announcements has already telegraphed that these will be issued in the Union Square and Yerba Buena areas.
Image: Steven K via Yelp
