Is Boston Heading Toward a Liquor License Collapse?

Over the past few weeks, countless restaurants and bars in Boston have closed for at least the time being

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Over the past few weeks, countless restaurants and bars in Boston have closed for at least the time being, and the possibility of many of them never reopening could lead to a serious problem for dining and drinking spots that do plan to open back up.

Before the coronavirus outbreak led to restrictions where restaurants and bars could only offer takeout/delivery, the dining and drinking scene in the city had been booming for many years and the value of liquor licenses have been skyrocketing, with some purchases of full liquor licenses on the secondary market approaching a half million dollars. Now it appears that there could be a serious devaluing of licenses if even some of the lower estimates of permanent closures came true because those licenses might flood the secondary market, causing a possible collapse in prices.

Furthermore, as The Boston Globe indicates, the Boston City Council is currently looking at the possibility of issuing new nontransferable licenses with the focus being on underrepresented neighborhoods within the city, which, while helping bring new restaurants and bars to places such as Mattapan, Charlestown, Roxbury, East Boston, and Hyde Park, could come at a time when a huge number of licenses are also available on the secondary market due to the potential closings of so many spots. The Globe mentions that  Mayor Marty Walsh is hoping to get 184 new licenses issued over the next three years, with Councilor Frank Baker initially proposing 150 new licenses over that time frame, though he has subsequently looked at a compromise of 33 new licenses in response to concerns that Bob Luz of the Massachusetts Restaurant Association brought up at a hearing this week.

While the nontransferable licenses wouldn't flood the secondary market because they would go back to the city in event of the closings of restaurants, Luz does have concerns that there could be a scenario in which restaurants that are trying to get back on their feet could also be competing with new restaurants with new licenses. It isn't known exactly how big an issue it might be because the new licenses would be going to neighborhoods that have relatively few dining and drinking spots, and as Josh Weinstein of the Quiet Few in East Boston says in the Globe article, the issuing of more licenses to neighborhoods could help create more jobs once the restaurant industry begins its recovery from the pandemic.

For now, the lifting of the restaurant restrictions is planned for early May while more hearings on the issuing of new licenses will surely be coming, so stay tuned.

by Marc Hurwitz (Also follow us on Twitter at @hiddenboston)

[A related post from our sister site (Boston's Hidden Restaurants): List of Restaurant Closings and Openings in the Boston Area]

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