How To Get A Liquor License

[rpavideo caption= “In this video Jason Kostura reports on how the new bar, Secret Cellar, received it’s liquor license. The story offers a unique way to understand the basics about the difficult process of being legally allow to sell and serve alcohol.”]Kostura_NewBar_PKG[/rpavideo]

It’s easy to walk down town to have a drink, but it wasn’t as easy for those bars to obtain the right to serve the drinks. Reporter Jason Kostura shows you how downtown Kent’s newest bar received its liquor license and shares a general breakdown of the process to obtain a license. Reporter Rachel Campbell explains the TREX” system and how the state of Ohio is allowing the city of Kent to expand the number of liquor licenses it was given initially.

TREX: The Liquor License Loophole

The Secret Cellar is one of the newest businesses in downtown Kent, but if it wasn’t for TREX, they may have never been able to open their doors to the public.

The Economic Development Transfer, or TREX, was developed through Legislation in order to help areas of Ohio that had run out of liquor licenses allotted for their city, according to Ohio’s Department of Commerce Division of Liquor Control.

New businesses, such as the Secret Cellar, that are unable to receive a liquor license due to the lack of one being open for obtainment have the option of using TREX to transfer the ownership and location of someone else’s permit as long as they follow the guidelines and fit the criteria required.

“It’s time consuming and you definitely have to make sure all your ‘T’s’ are crossed and your ‘I’s’ are dotted,” Amy Bragg, owner of the Secret Cellar, says of the TREX process.

The Secret Cellar’s Unique Approach

The Ohio Department of Commerce requires you to confirm each of the following before beginning the TREX process: 1. You must follow Ohio Administrative Code 4301:1-1-14, which states that you must pay a purchase price established by the owner in order to solify the transfer 2. The location where the permit is being transferred to may not have any available permits or a quota of permits available with appicants in the waiting list exceeding the number of openings. 3. A letter must be obtained from the city, village or township signed by the mayor, a city council member or someone else of authority in the area in which you are transferring the permit to that states the person acknowledges the transfers is aiding in an Economic Development Project. 4. At least $750,000 must be invested in the physical structure that will be using the liquor license. 5. The physical structure must have at least 4,000 square feet of dining space. 6. Alcohol sales can’t exceed 25 percent of total retail sales. 7. City council must approve all TREX transfers.

The city of Kent is currently out of liquor licenses, so in order for the Secret Cellar to obtain their liquor license, Bragg had to let city council know where the license was going to be used, present a business plan, fill out paper work and get the state to approve the license transfer.

“They don’t want to over saturate anything here in Kent,” Bragg says. “They want to make sure that everybody has a fair chance of creating their own unique business.”

Bragg believes that there are tons of cliché college bars, and downtown Kent lacked “mature places where people aren’t out to get hammered,” which didn’t allow the older crowd to patronize much after 9 p.m. Her unique business plan offered a fresh perspective on a Kent bar, which Bragg believes aided in her liquor license approval.

Just like Secret Cellar, Laziza would not exist without TREX or alcohol for that matter, which obviously go hand-in-hand.

“We’d be pretty much out of business [without a liquor license],” Laziza owner Michael Awad says. “That was very important to have a liquor license. You cannot open a restaurant, this caliber type of restaurant, without a liquor license.”

Like Bragg, Awad had to go through the same process, which he added starts with having an establishment that is at least 7,000 square feet, serving the right ratio of food to liquor, having a background check and proving that you’re worth at least $750,000 in order to even qualify for TREX. Awad agreed with Bragg on the extensiveness of the process and said it took him six months from beginning to end to obtain a license.

Laziza operates with D5 and D6 licenses. A D5 license, which runs $2,340, allows “the owner or operator of a retail food establishment or a food service operation…operate as a restaurant or night club…to sell beer and any intoxicating liquor at retail, only by the individual drink in glass and from the container, for consumption on the premises where sold…,” until 2:30 a.m. according to the Ohio Revised Code’s Chapter 4303. Awad’s additional D6 license permits him to also sell alcohol on Sundays between 10 or 11:00 a.m. and midnight.

The food to liquor ratio that Awad mentioned must be at least 80 percent food with 20 percent liquor, which he believes “is about right for this type of restaurant.”

Safekeeping and Competition

In order to prevent recent businesses or forthcoming ones from buying their liquor licenses, some businesses in Kent have taken the action of putting them in safekeeping. Putting a license in safekeeping is usually the route for those who have had their premises destroyed or made unusable, the owner is unable to continue business operation due to illness or injury and many other reasons.

The Division of Commerce does not allow the public to search for licenses for sale, but licenses in safekeeping can be searched. The search shows that in Portage County, Gene Veronesi put a D5 and D6 license registered to 1655 SR59, or the location of Cleopatra Herbal Hookah Lounge, in safekeeping in January 2012. James Tribuzzo also put his liquor license for JB’s, the concert venue located under his other property, Brewhouse, in safekeeping in April 2013. This protects both license owners from being obtained through the TREX system unless they want to receive the payment for them from a business that needs one.

Bricco is going to be an upcoming restaurant in search of a liquor license in the near future. Building C will house both the restaurant and four floors worth of apartments on the corner of South Depeyster and Erie streets directly across from Laziza, and is expected to open in the spring of 2014.

Awad doesn’t think new businesses such as Bricco or the Secret Cellar offer any negatives to the health of Laziza because downtown Kent “has become a destination.”

“People don’t want the same type of food every single night, so [Bricco’s] customers are going to see me, my customers are going to see them,” he said. “They’re going to try both places and the same thing with the [The Secret] Cellar and everything else coming in.