Baltimore City liquor license

Talbot County, on the eastern shore of Maryland, is one of only a handful of places in America that prohibits the selling or providing of alcoholic beverages on an election day during the hours when the polls are open.

The picturesque waterfront county is named for Lady Grace Talbot, the sister of Lord Baltimore and wife of Sir Robert Taylor, whose family was an owner of Sean’s in Athlone, the oldest pub in Ireland (that was purchased by Boy George in 1987). And while the founding date of Talbot County is lost to history, it existed before February 12, 1661, when then is record that a writ was issued to its sheriff.

The rural jurisdiction does not appear to have any history of election day carousing or the like.

But since the repeal of prohibition, an alcoholic beverages licensee may not sell or provide any alcoholic beverages on an election day during the hours when the polls are open in any election district or precinct where an election is being held.

A person who violates the provision is subject to a fine of between $50 and $100 for each offense. However, on the day of an election, a restaurant that holds an alcoholic beverages license may provide alcoholic beverages for consumption only on the licensed premises.

This vestige of 19th century corrupt political bosses trading votes for free booze, which seems strikingly unsuitable post Citizens United, was also the law in the City of Annapolis until the Maryland legislature repealed it for that city in 2015, after it was noticed that the statewide repeal of many years before had failed to include that capitol city.

Of note, in Allegany County, Maryland a licensee may not sell or provide any alcoholic beverages on the day of any election during the hours the polls are open if the licensed premises is used as a polling place. But that appears to be a modern compromise to allow rural polling places in retail establishments.

The economic impact, if any, of this law is not clear, but Talbot County residents do consume more than their share of alcoholic beverages. In fact, the 37,512 County residents consumed 5.89 gallons of wine each, the highest per capita consumption of any Maryland county. Residents could buy their wine before the polls open or drive to Queen Anne’s County to the north?

Apparently none of the County’s 137 liquor licenses sought to have the prohibition added to the 2015 repeal for the City of Annapolis.

 

But with election day 2018 approaching, there has been discussion led by a group of liquor licensees in Easton, the cosmopolitan County seat, about repealing the antiquated election day booze ban in the legislature next year.

One of the most common questions asked by callers to the local liquor boards is whether a liquor license is available for a particular location? The answer varies depending upon the local jurisdiction governing alcoholic beverage licenses.

But Baltimore County is typical of many locales. The maximum number of alcoholic beverage licenses in each of the 15 Election Districts within Baltimore County is limited to one On Sale License for each 2,500 of population of each Election District and one Off Sale License for each 4,000 of population of each Election District.

Population reports are updated annually by the County Department of Planning. The County’s population is growing, so many years there are new licenses available on a first come basis in some but not all Election Districts.

No license is transferable from the Election District in which it was originally located.

Of course you can purchase a license from an existing license owner within the Election District and the price of licenses varies greatly. In fact most licenses are purchased from a third party, some in prime Election Districts for hundreds of thousands of dollars.

But the real action in Baltimore County and many other locales are in the Exception Licenses that are generally available from the government without cost. There is an exception from the population requirements for an office building having at least 60,000 square feet of leased commercial office space (down from 75,000 square feet last year) allowing one Class B (On Sale) beer, wine and liquor license.

Hotel and motels having a minimum of 100 rental units are entitled to one On Sale beer, wine and liquor license.

Shopping Centers having a minimum of 200,000 square feet of leased store space (down from 250,000 square feet last year), a minimum of 10 tenants having existing leases for remaining terms of not less than one year each and parking facilities to accommodate a minimum of 400 automobiles are entitled to one Class A (Off Sale) beer, wine and liquor license and one On Sale beer, wine and liquor license.

One additional Off Sale beer, wine and liquor license and one additional On Sale beer, wine and liquor license are available in any shopping center having a minimum of 400,000 square feet of leased store space (down from 500,000 square feet last year) and at least 20 tenants having existing leases for terms of not less than one year each and contiguous off street parking facilities to accommodate a minimum of 800 automobiles.

One additional Off Sale beer, wine and liquor license and one additional On Sale beer, wine and liquor license are available in a shopping center for each additional 200,000 square feet of leased store space (down from 250,000 square feet last year).

Mixed use development licenses may be obtained in addition to other licenses available and the square footage used in calculating mixed use development Exception Licenses shall not also be considered for purposes of determining other Exception Licenses. No more than 5 On Sale Exception Licenses of any type may be issued for use at any location or mixed use development.

And there are also Club licenses that are excluded from the population and numerical requirements.

Again, a major advantage of obtaining a new license from the government, be it by population or an exception beyond its actual availability, is that it can be had at no cost, that is, beyond an application fee it does not have to be purchased.

As one might imagine, the availability of liquor licenses is actually quite elastic and not just in Baltimore County. If you have questions about the availability of an alcoholic beverage license or if we can otherwise assist you in obtaining a license so not hesitate to give us a call.

It is not surprising that in Maryland the determination as to whether the liquor license is owned by the individual applicants, or by a corporation that operates the business, depends on the circumstances of the particular case.

That said, Maryland law has been and continues to be that liquor licenses issued to individuals for the use of a corporation, which is the most common situation, are owned by the corporation.

The Baltimore County alcoholic beverage license that was the subject of the court challenge in 2001, in the widely discussed case of Rosedale Plaza Limited Partnership v. Lefta, Inc., et al., over who owned the license read, in pertinent part:

THIS IS TO CERTIFY, that Andreas Pitsos, Maria Papadimitriou, Irene A. Pitsos, Lefta, Inc., t/a Hillbrook Station Raw Bar & Grill/Chesaco Liquors, 1703–09–11 Chesaco Avenue, Baltimore, MD 21237 is licensed by the State of Maryland to keep for sale, and to sell all alcoholic beverages at retail at the place herein described, for consumption on the premises or elsewhere.

In that case and despite a statute (.. that no longer exists), then Article 2B Section 9-101(a), which provided in pertinent part:

License issued to individuals; application for partnership.—A license may not be issued to a partnership, to a corporation, or to a limited liability company, but only to individuals authorized to act for a partnership, corporation, or limited liability company who shall assume all responsibilities as individuals, and be subject to all of the penalties, conditions and restrictions imposed upon licensees ..

The appellate court found that liquor license was owned by the corporation. And that has been Maryland law.

Note, Maryland is a minority jurisdiction in this regard and most other states hold to the contrary. But at least 38 states have a Dram Shop Act (but not Maryland) which raises the stakes on who is strictly liable to anyone injured by a drunken patron.

Consistent with the decision is Lefta, in another instance, the Court of Appeals held that a state tax lien of a corporation could be enforced by a writ of execution upon a liquor license issued for the benefit of that corporation. Similarly, in another case, the Court of Appeals accepted that a writ of execution that had been entered against the liquor license to satisfy a personal debt of the licensee arising from his divorce would be improper if the license was owned by a corporation.

Subsequent to all of that and if it were not already clear how Maryland courts will addresses this issue, there are now new sections Maryland Alcoholic Beverages Article of the Annotated Code (the recodified Article 2B), specifically entitled,

Section 4-103 Application on Behalf of Partnership

Section 4-104 Application on Behalf of Corporation or Club

Section 4-105 Application on Behalf of Limited Liability Company

While the current codes expressly provides, “[T]his section is new language derived without substantive change from the second sentence of former Art. 2B, § 9-101(a)(1) and the second sentence of (b)(2), as it related to partnerships,“ .. it is a substantive change in the statute to be consistent with the accepted interpretation.

None of this precludes an individual from doing business in his own name, as a sole proprietorship, and having the liquor license is his name.

There is now no question in Maryland liquor licenses issued to individuals for the use of a partnership, a corporation or an LLC, are owned by the that legal entity and, absent some express agreement to the contrary, the persons named on the liquor license as a licensees have no individual ownership interest in the liquor license.