NJ Developer: Liquor-License Laws Crippling State’s Shopping Centers
TRENTON — Maybe a glass of wine could help revive New Jersey's plethora of vacant storefronts and abandoned strip malls.
It's the excessive cost of liquor licenses in the state, and the limited number of licenses available, that are forcing restaurants to quickly go out of business or never set up shop in the first place, according to real-estate developer George Jacobs, whose company handles about 1 million sq. feet of strip centers in the Garden State.
"The inability to get licenses where they're needed is crippling us and it's crippling the shopping centers," Jacobs told a New Jersey Assembly panel. "There's a lot of restaurants who will not come into a location without a license — just off the table."
For decades, the state has restricted the maximum number of restaurant liquor licenses within a municipality based on population. In turn, Jacobs said, licenses have become "financial assets," selling for as much as $2 million in Short Hills.
"A 15-hundred square-foot restaurant might cost $200-$300 thousand to build out," he said. "Most of the time, in many of the towns ... the license itself will equal the cost of the build-out of the restaurant."
Alcohol represents anywhere from 30 to 60 percent of sales where it is available, Jacobs said. Smaller operations that can't afford a license aren't able to cash in.
When asked by a member of the Assembly Oversight, Reform and Federal Relations committee whether he'd like to see every restaurant be permitted to obtain a license, Jacobs said he "wouldn't mind that in the least."
But committee members voiced their concerns about the potential impact on current license-holders.
Reintroduced for consideration this legislative session is a measure that would create two new types of restricted licenses, allowing restaurants to serve only to customers dining at tables. The bill also provides tax credits to compensate existing license owners for the expected loss in value.
An unlimited number of these licenses could be distributed by a municipality, the bill states. License fees would range from $1,500 to $10,000 per year, depending on the size of the restaurant and the type of alcohol served.