N.J. Liquor-License Reform Brewing For New Year

The New Year may ring in with long-awaited liquor-license reform, with yet another effort at an overhaul brewing.

Assemblyman John Burzichelli, D-Gloucester, chairman of the Assembly Appropriations Committee, aims to introduce legislation this month that would update the state's current liquor-license laws, which critics charge are arcane and the most restrictive in the nation. In New Jersey, such licenses can cost businesses from $50,000 to more than $2 million apiece.

The measure will likely create a new category of liquor licenses that would be issued strictly to restaurants, mom-and-pop and chef-owned types of establishments, said one real estate executive who's participated in talks with Burzichelli about the bill. But the lawmaker said it is premature to discuss any details of the legislation, which he described as a work in progress with “a lot of moving pieces still.”

Burzichelli has been meeting with various stakeholders, such as restaurateurs and real estate developers, to devise a compromise bill. Current license holders want to be compensated if any change in the law devalues their licenses. The negotiations have taken longer than expected, as Burzichelli originally looked to introduce his legislation in September.

“It is one of those issues that's just required a lot of attention to detail and listening to a lot of people,” he said.

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George Jacobs, a principal of Jacobs Enterprises Inc. of Clifton, is one of the real estate businesspeople, along with the trade group NAIOP New Jersey, who's been working with Burzichelli on the bill. Most recently, Jacobs said he took part in a conference call earlier this month on the proposed law.

“It's creating a whole new category of licenses,” said Jacobs, while not eliminating the existing kinds of liquor licenses.

Only restaurants within a certain size limit, with only a small portion of their space devoted to a bar area, will be eligible for the new restaurant liquor license, Jacobs said.

“I'm safe to say that the new license will not carry the same powers or rights as existing restaurant licenses,” he said. “There will be limitations on size, on transferability. It's very much geared to supporting a restaurant and will not be applicable to basically a bar.”
The goal is to support downtowns and redevelopment projects, because small local restaurants need liquor licenses in order to survive, Jacobs and NAIOP have argued. Smaller eateries often can't afford licenses, or there are none available in their towns to purchase.

“It's [the bill] not intended to promote highway chains,” Jacobs said. “They all do fine. The mom-and-pop suffers, the chef-owned restaurant suffers for lack of a license.”

The New Jersey Restaurant Association also has been working with Burzichelli on the bill, and the group's president, Marilou Halvorsen, credited the lawmaker with reaching out to the industries that would be impacted. She also said there was talk of the legislation creating a restaurant-only liquor license, for establishments to serve alcoholic drinks with meals.

Halvorsen, who said she needs to see a final draft of the bill, said the long-term ramifications of any change have to be well thought out.

“I have concerns about any kind of expansion of liquor licenses, only because of those people who have already invested in licenses,” she said. “Any kind of liquor-license reform would have to come with some sort of compensation to existing licensees, acknowledging the investment that they put in.”

Jacobs said the proposed legislation addresses that issue. “There's a real understanding that those who were damaged should get compensation,” he said. “There's no consensus that there will be damage, but nobody wants to do the wrong thing. There's been a number of ideas floated about.”