Gov. Brown Signs Bill Creating More Liquor Licenses to Boost SF Neighborhood Restaurants

Tuesday, October 3, 2017

(SACRAMENTO, CA) – Governor Jerry Brown signed 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 79-0, following a 38-0 Senate vote.

“It is gratifying to see this support for neighborhood businesses move forward.  Successful restaurants are an anchor for commerce because they create jobs, fuel foot traffic for other businesses nearby, and provide social spaces for neighbors to gather,” said Ting.  “This will provide opportunity to a new generation of restaurateurs who previously couldn't afford a license.  As we enjoy the delicious dividends, we will also help revitalize commerce in communities that need a boost.”

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 five licenses will be issued a year in the city for the next six years.  Altogether, they will be the first new licenses to be available in San Francisco in over 70 years.

These licenses differ from regular liquor licenses in three key ways:

  • First, they are restricted to restaurants located along underserved commercial corridors that were chosen in collaboration with the city’s Invest in Neighborhoods Initiative. Restaurants along Noriega and Taraval Streets in the Sunset as well as Ocean Avenue, Mission Street in the Excelsior, Leland Street and Bayshore Avenue in Visitacion Valley, San Bruno Avenue in the Portola, and Third Street in the Bayview are eligible for the new liquor licenses;
  • Second, these licenses will cost about $13,800 instead of the nearly $300,000 that conventional liquor licenses cost on the secondary market.  Restaurants in outer neighborhoods typically lack the revenue to recoup such a large investment, placing them at a competitive disadvantage; 
  • Third, these licenses cannot be sold to a restaurant in another neighborhood.  When a license holder sells or closes his or her business, the license returns to the state’s Department of Alcoholic Beverage Control to be sold to a similarly eligible restaurant.

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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Contacts: Anthony Matthews and Jessica Duong, tel. (916) 319-2019