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Liquor License Residency Requirement A Hurdle To Some

By Aaron Kraut

Thursday - 1/23/2014, 1:10pm  ET

Bethesda Row, Flickr pool photo by AmyMarieMoore

In Montgomery County’s push for a more lively nighttime economy, some feel one key liquor license requirement is being left out of the discussion.

Like many counties in Maryland, Montgomery requires at least one applicant for a new restaurant liquor license to be a resident of the county. It also requires the person, known as the resident agent on the license, to have lived in the county for at least two years at the time of application.

That can be a significant hurdle to new business, especially for D.C.-based restaurants or first-time restaurateurs who happen to live in D.C. or Northern Virginia, said Bethesda liquor license lawyer Sean Morris.

“It’s tricky, especially in this metro area where you have D.C. residents, Virginia residents and their lives and businesses all overlap in these three jurisdictions,” Morris said. “A lot of times, it’s beating the bushes or racking your brains, trying to come up with someone you know who’s lived in Montgomery County and who’s willing to jump through the hoops necessary to be a liquor license holder. Sometimes, they have nothing to do with the operation of the restaurant.”

The law is meant to encourage local small business owners who are responsive to the local community. But Morris said it’s made things difficult and even stalled some D.C. or out-of-town restaurant owners from opening up in Bethesda.

The Liquor Control Board in Harford County recently petitioned that county’s state legislators to do away with its liquor license residency requirement.

According to The Baltimore Sun, the Harford County Liquor Control Board members agreed with an attorney for a local business who said the requirement — which also says the resident licensee must own at least 10 percent of the business — is obsolete.

There’s been no similar movement in Montgomery County, Morris said. Each set of local liquor laws is the territory of that jurisdiction’s state legislators. Unlike in Virginia or New York, where state liquor agencies enforce uniform rules, Montgomery County legislators must get county liquor laws changed in Annapolis.

This year, the Montgomery County Delegation is pursuing nine alcohol law changes, including a bill that would allow beer festivals, a bill that would allow alcohol to be served in beauty salons and one that would remove the restaurant requirement for obtaining a microbrewery license.

A few of those bills come out of the county’s hopes for a more vibrant and business-friendly nighttime economy. The county’s Nighttime Economy Task Force debated the county’s role in providing beer, wine and alcohol to all private retailers and restaurants. Its recommendations included the creation of a “social venue” license to allow new bars freedom from a Depression-era requirement that restaurants sell at least as much food as alcohol.

“I wonder if it’s the barrier that places so much administrative headache on the business owner that it outweighs what marginal usefulness it has,” said Morris, who has represented local and national chains in liquor license applications. “I’ve had people put things on hold.”

For restaurateurs, it can be a challenging search. Business owners must find a resident willing to serve as the primary license holder, which Morris said usually requires a previous relationship and a certain level of trust.

Many national chains, such as the Aroma Espresso Bar that opened last year in Westfield Montgomery, choose to have restaurant managers or assistant managers serve as the resident license holder, which requires a short knowledge test of basic alcohol law at a Board of License Commissioners hearing.

Fortunately, Bethesda is enough of a draw that businesses usually follow through with searches for resident license holders.

“There is enough of an incentive to open up here, that in my experience, people find a resident agent and it gets done,” Morris said.

But it’s not easy.

“It’s the single biggest thing that causes them headaches,” Morris said.

Flickr pool photo by AmyMarieMoore