CA Legislature Backs More SF Neighborhood Liquor Licenses for Economic Boost

Thursday, September 14, 2017

(SACRAMENTO, CA) – The California State Legislature passed a bill authored by Assemblymember Phil Ting (D-San Francisco) creating 25 new neighborhood-restricted liquor licenses for San Francisco restaurants along underdeveloped commercial corridors.

Assembly Bill (AB) 471 passed the Assembly 61-0, following a 38-0 Senate vote.  The bill now awaits the Governor Jerry Brown’s signature or veto.

“We want to spur economic development.  Successful restaurants create jobs, fuel foot traffic for small businesses, and provide social spaces for neighbors to gather,” said Ting.  “Restaurants in our outer corridors require a liquor license to compete with downtown establishments but need relief from affordability challenges.  By signing this bill, the Governor can give our outer communities a boost and enable folks to grab a drink in their own neighborhood.”

Last year, former Senator Mark Leno authored legislation to create the neighborhood-restricted license category and direct the state to issue five of them this year in San Francisco.  AB 471 adds 25 additional licenses so that, if signed into law, five licenses would be issued a year in San Francisco for the next six years.  They will be available to restaurants along commercial corridors outside the city center, including Third Street in the Bayview, Outer Mission in the Excelsior, San Bruno Avenue, Ocean Avenue, Noriega Street, Taraval Street, and Visitacion Valley.

The licenses are non-transferable on the secondary market.  When a license holder sells or closes their business, the license returns to the state’s Department of Alcoholic Beverage Control for issuance to another eligible restaurant.  Furthermore, applicants for such licenses must conduct local outreach, including a community meeting, before submitting a license application.

The application period for the five licenses Leno created is ongoing, from September 11-22, 2017.  When issued by the state later this year, they will be the first new licenses to be available in San Francisco in over 70 years at a cost of $13,800 each, which is a fraction of the cost for a liquor license on the secondary market.

AB 471 was amended in the Senate to also provide new liquor licenses for restaurants in Napa County.  Here is what supporters of AB 471 are saying:

“San Francisco is committed to ensuring that every commercial corridor within the City has all the elements of a healthy and vibrant neighborhood, including successful neighborhood restaurants.  One of the biggest challenges for neighborhood restaurants is the high cost of a full liquor license.  Because state law capped the number of liquor licenses available in San Francisco, licenses can only be purchased on the secondary market at incredibly high prices that are out of reach for small business owners and entrepreneurs.”

--Edwin M. Lee, Mayor of San Francisco

"AB 471 is a win for our small mom and pop restaurants, and creates economic opportunities in our neighborhoods.  San Francisco’s vibrant restaurant and entertainment industry generates $6 billion dollars in annual consumer spending and includes over 60,000 jobs citywide.  AB 471 will increase the availability of affordable liquor licenses for small business owners to open and expand into full service restaurants in targeted neighborhood corridors.  I want to thank Assembly Member Ting for championing this important legislation to support San Francisco merchants and residents.”

--Todd Rufo, Director, San Francisco Office of Economic and Workforce Development.

"Unfortunately, it can be challenging to attract and sustain restaurants in San Francisco’s outer neighborhoods.  One barrier facing restaurants in these neighborhoods is the high cost of a full liquor license.  Because these licenses are only available on the secondary market for prices in excess of $250,000, they are inaccessible to neighborhood restaurant owners and entrepreneurs in San Francisco.”

--Gwyneth Borden, Executive Director, Golden Gate Restaurant Association

It’s without a doubt that the City of San Francisco has a strong economy thanks to the technical, financial, and tourism industries.  However, despite this fact, some neighborhood commercial corridors are still struggling to support existing restaurants and attract new restaurants to reduce storefront vacancies.  This is mainly due to the prohibitively high cost of obtaining a full liquor license….”

--Matt Sutton, Senior Vice President for Government Affairs and Public Policy, CA Restaurant Association

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Contact: Anthony Matthews, tel. (916) 319-2019