A momentous vote last night at Community Board 3: they voted, in effect, to curb the trend of commercial real estate speculation that has been decimating local-serving businesses and speeding up yuppie gentrification, which, unlike family-gentrification, creates neighborhoods of upscale transients displacing community without replacing any community at all. CB3 voted to phase out automatic liquor license transfer approval. It may be the most significant policy vote they've ever made.
Under the old dispensation, when a bar owner decides to sell the business, a new owner of that business can 'buy' the liquor license. The CB, treating the bought license as if there were no change in management, effectively guarantees the financial value of the license. That sends a message to prospective bar owners everywhere that a license is guaranteed -- insured -- in this community district. You don't have to face the community, you don't have to face the Board members. If the street on that business has over time filled with new bars, you don't have to worry about increased community objections. You are guaranteed, as long as you don't violate the law by selling to minors or sell cocaine there (sorry, I mean get caught selling cocaine) or, say, murder the residents above you.
Of course, bar owners on the CB lobbied for automatic transfer so that they could sell their licenses at the highest value to new owners. It was a kind of municipal corruption: the CB would insure the value of the license against change in the community, in particular, against the proliferation of local bars. The State Liquor Authority recognizes that bar density (defined as more that three within a 500 foot radius) is a reason to deny a new license, if the bar can't demonstrate some public benefit. So guaranteeing transfer approval was a way for the bar owners to get CB approval despite greater density.
You can see the effects in our neighborhood. The 500-foot rule is flouted all over the EV/LES. And because bars can pay higher rents than most businesses, this bar program has choked out local-serving small businesses in favor of non-local-serving trendy bars. The bars in turn bring a transient young, single, professional clientele to the local residential stock. They gentrify the neighborhood, raising local rents; gentrification in turn encourages landlords to harass older, stable, more long-term lower-rent tenants, and the new upscale transients don't create any new community of their own.
The CB vote last night will eventually pull back that trend. If prospective bar owners know that they must face the community to get license approval, they will be less likely to buy that business, especially here in areas of bar density, where there will be the most community objection. If bars are reluctant, landlords can't count on high-rent bars for their commercial spaces, and will have to settle for lower-rent businesses. That will lower commercial rents and bring commercial diversity.
The next battle is to prevent chain stores and banks from filling in the place of the bars. That's a difficult struggle, though not impossible: special zoning can limit types of commerce, though with chain stores it can be tricky.
One note: the vote last night was a compromise. The policy doesn't apply to current bar owners. Their licenses will be guaranteed for their sale (as long as they don't violate the law). It's only the new buyers who will not have that guarantee. In other words, the bar owners on the Community Board will be protected, insured and underwritten. Such is the virtue of being a community board member. Makes me almost want to become a CB member so they can guarantee my personal rent against any local raises.
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