- The Washington Times - Monday, December 4, 2000

There are a lot of reasons why the District of Columbia's business community is watching the D.C. Council's work on liquor licensing closely and owning a liquor license is not the most important one.

Two years into the Williams administration, the mayor and D.C. Council have had some success in making the city's current motto "Washington: Open for Business" a reality for the high tech start-ups and financial services outfits we so urgently wish to attract.

The question is, does the D.C. government have the will to extend this enlightened approach to its dealings with the city's "old economy" the low-tech and no-tech corporate citizens who for years have paid taxes, created jobs, and provided services here?

One obvious old economy candidate for this kind of careful treatment is the city's hospitality sector. The eating and drinking establishments which help us attract more than 20 million visitors each year are a $15.6 billion a year industry, paying $156 million annually in sales tax alone, and employing more than 24,000 people the vast majority of them D.C. residents.

Unfortunately, judging from the approach to liquor licensing taken by D.C. Bill 13-449, the answer to the question about Council readiness to take the same care of current corporate citizens as it offers the sexy newcomers appears to be: not yet.

The bill treats business people at least those applying for liquor licenses as though they all harbor criminal intent, and their businesses as though they were a burden on, not an asset to, the city. It inhibits investment in the city, creates a penalty system custom-made for abuse, violates even minimal due process protections, and allows city agencies to slide out on their responsibility for making and enforcing policy.

The bill's so-called "appropriateness" standards, carried over from current regulations, mean that issuance or renewal of a license hinges not on applicable zoning and land use policies, or even the qualifications of an entrepreneur to run a successful establishment, but rather on whether the business can prove to the city that it is "appropriate" for its locality. In the case of new license applications, this "standard" is purely speculative. The same provision also permits the city to knock out a license i.e. destroy someone's business anytime it determines there are "too many" other licenses in the area. Doesn't matter if your code compliance record is squeaky clean. Doesn't matter if you've been in business 50 years.

When it comes to penalties and enforcement, Bill 13-449 uses a draconian "close not cure" approach. Nothing in the bill suggests that it is the role of government to partner with the business community to ensure successful service delivery and public safety. The bill offers but one response to infractions under Alcohol Beverage Control (ABC) code, and that is license revocation. Seven violations in a period of five years no matter how minor and your license is yanked. The law gives the ABC Board no discretion in the matter. Together with the sweeping scope of the ABC Board's jurisdiction, this means that any licensee can be shut down at any time. The bill creates a framework for abuse.

Hostility toward business is also seen in the bill's disregard of due process protections, particularly ironic in a jurisdiction which is so (appropriately) solicitous of the civil rights of individuals. In one of several sections flagged by the ACLU, the bill permits the ABC Board to revoke the license of a person who violates any law of the District of Columbia. In the words of the ACLU, over-broad provisions such as this can "give rise to arbitrariness, favoritism, and even corrupt practices." Another section subjects a licensee to summary revocation if a "patron" of the establishment assaults a government official within 1,000 feet that is to say three football fields of the establishment. The bill nowhere defines "patron," nor sets a time limit on licensee liability, nor requires any showing of a connection between the establishment and the assault by the patron.

One of the more troubling examples of the law's failure in this area of due process is its referendum procedure another unfortunate carry-over from previous law. This provision, also identified by the ACLU as inappropriate permits neighbors to decide whether a local business may have a liquor license or not. This is a thoroughly inappropriate delegation of government authority to an interested party in an adversarial proceeding.

The proposed referendum procedure highlights another serious weakness in the law: it allows the D.C. government to sidestep its responsibility for creating intelligent land use and economic development policy. Not only the referendum procedure, but even the bill's basic licensing procedures, force land use and economic development policy to be made for the city on a block-by-block basis. This ensures that key decisions affecting neighborhood revitalization and the overall economic health of the city will be parochial and self-interested. It makes comprehensive policy impossible.

Ultimately the question raised by deliberations on Bill 13-449 is whether the D.C. Council will be able to identify and to exploit on behalf of the city the economic and community development opportunities which hospitality industry resources offer. To date, the language of the bill has continued an unfortunate D.C. tradition of pitting neighborhood and business against one another. Lawmakers should instead be building a framework that encourages appropriate business investment in neighborhoods, investment that contributes both to neighborhood quality-of-life and to the success of the District of Columbia as a city.

Elizabeth Farrow is Chairman of the Board at the DC Chamber of Commerce, Eric Peterson is President of the Restaurant Association for Metropolitan Washington, and Frederic Harwood is Executive Director of the DC Association of Onsite Retailers.

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