Friday, April 12, 2024

River Gods closed in 2016 with a $120,000 liquor license that was discovered to be worthless. (Photo: River Gods via Yelp)

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“On average, our outdated table of land use could cost a business looking to open $3,000 and a delay to opening of three to six months.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.