Few thousands lost to outdated rules is terrible, but compare it with fortunes cost by license con
Now that the City Council has updated Cambridge’s retail table of land uses and home occupations zoning – a process that began in 2015 – is it getting any closer to remembering the businesses victimized by buying worthless alcohol licenses?
Here’s what vice mayor Alanna Mallon said Monday as she brought home an update to decades-old rules that say what kind of retail can go where, and which can be run out of a home:
“On average, our outdated table of land use could cost a business looking to open $3,000 and a delay to opening of three to six months. We have also heard anecdotally that those costs and length of delay can be much higher and longer,” Mallon said. The entrepreneur behind “a restaurant that’s opening soon in Observatory Hill told us recently that getting her restaurant up and running under the old table costs $6,000 – funds that she could have used to help her burgeoning business get up and running.”
Those amounts are pocket change compared with what’s been taken from the businesses who were convinced to buy liquor licenses by our License Commission up until a few years ago, though they could have had them for free.
For example: The owners of Finale, the one-time Harvard Square dessert restaurant, said its license cost $450,000 in 2002, or nearly $664,000 in today’s dollars.
Bonnie Bouley, who ran the former T.T. the Bear’s Place, paid $60,000 in 1973, which means she paid the equivalent of $362,517 in today’s dollars. Though the quota she bought under ended in 1981, the city hid this reality. Never realizing the con that began that year, Bouley expected to retire on the proceeds of a license sale. When she was forced to shut down her nightclub in July 2015, she couldn’t even get a broker to try to sell her license for a tenth of its supposed value. Over at the restaurant River Gods, also in Central Square, Jackie Linnane set up shop in 2001 with a required investment of $320,000 – of which $240,000 was an approved bank loan requiring a License Commission hearing for a pledge of the license against the loan. Today, that bank loan would be worth $362,960 she could have put into buying her business’ home so she wasn’t put out of it in July 2016.
It’s the same argument as the restaurant owner now setting up in Observatory Hill, but times 40.
This is something councillors expressed concern about in June 2017, when they passed an order for the city manager to “provide relief and fair compensation” for the victims. (Mallon joined the council in November 2017.)
In fact, councillors were shocked by the situation, and deeply sympathetic. Tim Toomey, author of the order, said the business owners were “individuals who played by the rules over the years and did what they were told to do and invested substantial, substantial [amounts of money because of rules] promulgated by the city.”
“If what the folks are telling us is true,” said Marc McGovern, who was mayor at the time, “and the city unintentionally or whatever gave them the wrong information and it cost them hundreds of thousands of dollars … They were duped, and that is a huge problem … And it does put the responsibility squarely on us.”
Things went silent shortly thereafter.
But if we’re on some kind of six-year cycle for supporting business owners, might we hope that the con perpetrated on our business community – and being defended in court by the city – might soon be due some attention?
This post was updated June 14, 2021, with additional information from Jackie Linnane of River Gods.
I am the attorney representing River Gods, T.T. the Bear’s Place, and numerous other businesses in the lawsuit against the city to recover the lost equity in their liquor licenses, and other losses, due to the city’s deceptive practices.
Not only were business owners “duped” into purchasing liquor licenses for hundreds of thousands of dollars that should have been free (as former Mayor Marc McGovern stated) but some of them were also duped into building and running and costly kitchen operations in their bars, that were also not required by law.
The reason “things went silent” after the city council expressed interest in compensating these plaintiffs in this matter, is because it appears that city solicitor Nancy Glowa has failed to provide the council with information about the case, and an opportunity to settle, over these many years since the initial claim was filed with the city in 2017.
In fact, city ordinance 2.26.040 – Negligence claims – requires the case to be submitted to the council for review and potential settlement. I have reviewed the public record, and this does not appear to have happened. I also requested records from the city of this case being submitted to the council for review, and got the standard canned response that no documents exist.
In 2014, the Cambridge license commission, in their own meeting, watched as I pledged my liquor license against a business loan with a local bank for $350,000. They allowed this KNOWING that my license had zero monetary value. It destroyed me financially and ruined my personal life.The fact that all of this has been happening and it STILL hasn’t been brought before the city council is outrageous. The Cambridge License Commission ruined people’s lives. It’s time for accountability.
I heard about this scandal years ago and am shocked (but not surprised) that there is no resolution. Now it sounds like there is obfuscation and a cover-up from the city. I urge the city councilors to do whatever they can to bring some measure of justice to those whose businesses were destroyed.