Laws Are For The Little People

Once upon a time (Oct. 20, 2010), Princess Megan McArdle decided to exhibit a twinge of regret.

So having finally closed on the house, we're living in what is euphemistically known as a "mixed" neighborhood, where poor black residents who have lived there for a generation or more exist somewhat uncomfortably side-by-side with more affluent whites who are drawn to the relatively cheap rents and lovely Victorian housing stock. The tensions thus built up are played out in many places, notably local politics, where a recent attempt by a local cafe to get a liquor license triggered many of the arguments that we heard after Adrian Fenty's loss in the mayoral race.

Yesterday, I rode the bus for the first time from the stop near my house, and ended up chatting with a lifelong neighborhood resident who has just moved to Arizona, and was back visiting family. We talked about the vagaries of the city bus system, and then after a pause, he said, "You know, you may have heard us talking about you people, how we don't want you here. A lot of people are saying you all are taking the city from us. Way I feel is, you don't own a city." He paused and looked around the admittedly somewhat seedy street corner. "Besides, look what we did with it. We had it for forty years, and look what we did with it!"

As related here, the blogosphere collectively coughed bullshit! in response. McArdle went on (and on and on) to say that while it was regrettable that the black middle class was pushed or moved further from the city's center, it was either her or them.

I didn't know quite what to say. It's true that for a variety of historical reasons--most prominently, the 1968 riots that devastated large swathes of historically black DC--our neighborhood has more in the way of abandoned buildings than retail. And I'm hardly going to endorse the gang violence about which he presently discoursed at length. But the reason we moved into our neighborhood is that we want to live in a place that's affordable, and economically and racially mixed. We don't want to take the city from them; we just want to live there too. Perhaps I should have said that.

Oh, I'm quite sure that there are white people who are impatiently waiting for all the black residents to be forced out (except for the affluent ones), just as a few neighborhood old timers have been known to throw bottles at hipsters. But at least in my hearing, that has been far from a majority sentiment, on either side. It seems as if there ought to be some way to make it work.

But then, I am largely in agreement with a perceptive essay by Benjamin Schwartz that appeared in our pages a few months ago, arguing that the neighborhood I want to live in doesn't exist--or at least not for long:

[snipped quote]

When I say I'm in agreement, I mean empirically, not philosophically. I watched the process in the mixed-income neighborhood I grew up in, which was liberally dotted with housing projects, old tenements, and lots and lots of stores that served poor people. Eventually, only the housing projects were left, marooned on little islands amid a tidal wave of affluence that had even swept the residents out of the seventh-floor walk-ups built when Victoria was still on the British throne. There was virtually nowhere for the residents of the housing projects to shop or eat, as all the markets and restaurants had at least doubled in (real) price and changed their mix of goods to cater to investment bankers, not single mothers making $28,000 a year. The financial crisis temporarily halted the process, leaving some lower-income retail on Amsterdam Avenue. But I'm sure that as Wall Street gets its groove back, that too will go.

I have no idea how you could stop this process. To keep our neighborhoods the way Jacobs and I liked them would involve massive coercion not just of real estate owners, but of merchants, food vendors . . . everyone in the network of service providers that supports a neighborhood. The more people like me who move into my current neighborhood, the more services the neighborhood will attract--and those, in turn, will bring further waves of gentrifiers who will use their higher incomes to drive up rents, home prices, and the assessed values upon which property taxes are based.

I want the services, but I don't want this to price out all the people who already live there. Unfortunately, it's a package deal.

As proof of her desire to retain some of the more modest characteristics of her new neighborhood, McArdle is now irate that a "gastropub," a gourmet bar and restaurant, is unable to open its doors close enough to her so she can walk home after becoming inebriated.

The residents of my neighborhood have been very excited to watch construction progress being made on Shaw's Tavern, a gastropub located at the intersection of Florida Avenue NW and 6th street. There aren't a lot of sit-down dining options in the area--a couple of Thai places, a bar and a bar/coffee shop, and one kebab place with great kebabs but glacial service and no atmosphere. Don't get me wrong--residents are grateful for even this small number, given that it is approximately 400% more places to eat than we had a few years ago. But we are still eager for a restaurant where you can sit down and order a drink and a full meal, all at one time.

The funny part is that as soon as McArdle has children she will become irate that she is surrounded by neighborhood bars, with their traffic, street urination and noisy fights, loud music, and ear-piercing shrieking constant laughter, as their liquored-up denzions indulge in their God-given right to drink in public.

Then Shaw's Tavern opened, and the excitement fizzled. There was a hold up on the liquor license, due to two charity events that the tavern had held prior to securing their liquor license. Apparently, they had failed to get the special one-day liquor license that DC requires for people without a permanent license to serve booze; allegedly, the manager (now fired) forged documents to get liquor distributors to provide him with booze. At first, the delay was only supposed to be for a week; then we were told that the restaurant wouldn't be serving booze until at least September 15th, when the Alcoholic Beverage Regulation Administration meets again.

Well, that was stupid, as well as dishonest. They couldn't bother to get a liquor license, a fundamental requirement for a bar? It's like not getting a building permit for remodeling or a dba. It's a major, major error. And then committing fraud to cover up the bad decision just reveals the lack of judgement and morals of the pub's owners and staff. They could have bought some time and covered their asses by getting the one-day permit but wouldn't even do that. But instead of taking into account the actions of the owner(s) and the law of consequences, McArdle's knee jerks and kicks the nearest government office.

Unfortunately, there are few dry Baptists living in the Bloomingdale/Eckington/Ledroit triangle; most people who want a meal, want to be able to get a drink to go with it. On Friday, Shaw's announced via Facebook that they would be shutting down until they get their liquor license:

Shaw's Tavern is closing its doors from Saturday 27th of August. We could not survive without a liquor license. We will re -open when we are allowed to serve alcohol. To all of our 936 plus loyal fans and 30 dedicated employees, we thank you for your amazing support and understanding.

Unfortunately, this may well be a death sentence. Despite the lack of competition on the fine-dining front, the restaurant was at best operating at 60% capacity most days. The longer this stretches out, the less likely it is that they'll be able to reopen: the chef will have to get another job, the servers will go elsewhere. As Matt Yglesias notes, in DC

There's plenty of demand for bars and restaurants. There's plenty of space where bars and restaurants could open. There are plenty of people who need jobs. What's more, there are plenty of people who could use the increased social services that higher tax revenue would provide. Instead, we're doing this. Not just one restaurant shut down, but a sign to would-be entrepreneurs everywhere that their potential investments are much riskier than a superficial read of market conditions would suggest.

Damn you regulations, that won't permit people to serve alcohol to the public without following strict rules! How are entrepreneurs supposed to entrepreneur if they are required to follow silly rules? Or laws and regulations aimed at maintaining a safe environment for the neighborhood's residents? Surely McArdle would be thrilled if noise regulations vanished? Traffic laws? Or maybe just the rules that happened to inconvenience her at any given moment. She can keep the noise and traffic laws since they benefit her but jettison the alcohol laws since they momentarily inconvenience her.

When a number of us lamented the shutdown on Twitter, we were met with people saying, in effect, that ABRA had to send a strong signal about following the rules. I don't condone forging documents, if this indeed occurred. But I don't see why ABRA has to send this particular signal about following the rules--or what terrible harms would follow if they didn't.

Now, you must admit that McArdle is just being fair here. If she didn't care that mortgage companies and banks were forging documents, why should she care if one little old restaurant was forging documents?

A couple of commenters mention that the government (meaning Americans) want liquor laws to prevent underage drinking. They must not realize that the Pensylvania Liquor Board had the nerve to implement underage drinking laws when McArdle wanted to drink while underage and arrested and fined her, putting her through multiple inconviences. To make matters worse, McArdle ignored some of the provisions of her release and never sent in the paperwork regarding the suspension of her (then hypothetical) driver's license, and so had to clear up the matter years later.

At the age of nineteen, way back in 1992, I purchased a beer in a Philadelphia bar.

No, I hear you cry, it cannot be true! I know, readers. You are hurt. You are shocked. You never thought I could be capable of such depravity. Well, frankly, I didn't either. Little did I suspect when I bundled off to the University of Pennsylvania in the fall of 1990 that I had stumbled into a den of iniquity where underaged drinking sometimes took place.

I cannot excuse it. I allowed myself to be led astray. Yes, one sultry July evening, I allowed myself to be persuaded--by a malefactor or malefactors who shall remain nameless--to enter one Murphy's Tavern on 45th and Spruce and purchase, to quench my thirst, a Rolling Rock.

Not that! Nay, never that! Believe me, your wailing and gnashing of teeth wounds me as deeply as it wounds you. In my defense, I can only say that I had no idea PBR was going to win the hipster coolness wars.

While consuming my one (1) beer, I was apprehended by agents of the Pennsylvania Liquor Control Board. They called my parents, fined me, and made me attend a class on the horrors of underaged drinking (did you realize that drinking can lead to uncontrollable vomiting?) It was during that class, with the errors of my ways now readily apparent, that I made a pledge to myself to quit underaged drinking with all due speed. And on January 29th, 1994, I honored that pledge.

The government paid no attention at all to McArdle's wants and needs. They just got in her way! Don't they know that rules are for other people? That underage drinking is bad when other people do it but it's just fine when Ivy League students do it? That punishments are for other people who do bad things, not for nice, white, college students who went to expensive prep schools?

Now for the painless segue from idiotic bureaucratic snafu to moral: this just goes to show why ironclad bureaucratic rules are such a bad idea. The federal law is meant to protect dangerous drivers whose licenses have been suspended from getting a license in another state--an excellent program. It is not, or so I mote, intended to allow the Commonwealth of Pennsylvania to suspend my license for an underaged drinking conviction that took place 16 years ago. Indeed, I don't think that even the Commonwealth of Pennsylvania law was intended to do something so moronic--it isn't as if I deliberately (or even accidentally) failed to comply; I simply didn't have a driver's license for them to confiscate. Since I didn't get one until I was well over the legal drinking age, I'm pretty sure that a moment's consideration would lead any reasonable bureaucrat to dismiss this idiocy.

But of course, we don't have reasonable bureaucrats. We have rules. Rules that Must Be Followed No Matter What. Neither Pennsylvania nor DC can, apparently, do anything at all to prevent the Wheels of Justice from punishing me for a long-past transgression that did not even involve a motor vehicle.

Damn you again, rules! Any reasonable person would have let a important person of quality like McArdle off with a wink and a nod, like in the good old days. Now everyone is supposed to follow the rules, even the upper class! And it's all the fault of those stupid, useless liquor laws.

Punishing a restaurant owner for a liquor license violation with an open-ended maybe-we'll-give-you-a-license-maybe-we-won't delay is equivalent to giving someone the death penalty for a parking violation. Moreover, it punishes the neighbors and the employees right along with the owner.

There should be special rules for Friends Of McArdle, thank you very much.

I've seen commenters and others suggesting that if they would forge liquor license paperwork, they might fake the health inspection data or other information. But does this really follow? The regulation in question is, not to put too fine a point on it, anti-competitive BS.

Note the Randian dog-whistle, from the woman formerly named Jane Galt who in no way, shape or form is a Randian.

We wanted to get a friend to bartend for our wedding in order to save money (and have a friend bartend our wedding!), but doing so would have required us to get a one-day liquor license, as well as to buy the liquor from an authorized DC liquor distributor. The cost of the license and the expensive DC booze would have ultimately cost us as much, or more, than using a caterer--which I've no doubt is exactly the point. This is pretty clearly rent seeking designed to protect caterers and local liquor distributors from competition, not a service to the citizens of DC, who might otherwise be served out-of-state poison at weddings.

You will not be surprised to see that McArdle changes the goalposts on this story when confronted with facts, or that her facts are wrong. From the comments:

Robert Rutledge 21 hours ago
Are you kidding? Look, I'm a Truxton Circle resident who was really looking forward to Shaw's -- and a liquor rep who was really looking forward to selling to them -- but these accusations are not insignificant. Regardless of how you feel about regulation in general, forging an ABRA license shows a HUGE lack of integrity and foresight. Not only were they putting themselves in danger here (which is now obvious), but the distributors they fleeced could also have been in deep trouble, even though they did their due diligence.
I find their claim that this was ALL Steve May's doing to be highly dubious, and am not shedding a tear for the owner. Incidentally, he closed the place down on Friday with no warning to the staff, five minutes before service, and the chef quit in protest.

Oh, and incidentally, a one-day ABRA permit is like a hundred bucks, and DC distributor prices are WELL below retail, or what a caterer is likely to charge you. If you actually put the effort in, it can actually be a good deal cheaper to cater one's own event.

McMegan 17 hours ago in reply to Robert Rutledge
When I looked into it, it was more like $500-700, and I would have needed to hire at least a couple of pourers to help my friend since we had more than 100 guests. When we ran the numbers, it would have cost the same or more. We gave up and went with an all-inclusive venue. I know when you're running a business, saving $500 may seem trivial, but it was big money for us--which is presumably why the fee is so high, to prevent people from cheaping out.

And while the distributor prices here may be cheaper than retail, they were not cheaper than the prices that we could have gotten by getting our friend to bring liquor from a cheaper state. Which is what we would have done, except that DC's licensing regime prevented us from doing so. I'm sure this is great for DC liquor distributors, but it's pretty hard to argue that DC residents need to be protected from dangerous out-of-state hooch.

RobertVonRankeGraves 14 hours ago in reply to McMegan
As ever, Megan, you lie like a carpet remnant.

The fee for a class F beer and wine event license is laid out in DC Regulations 23-208.12: $130/day.
The fee for a class G beer wine and spirits license is also there: $300/day.

Considering the potentially large cost externalities of public alcohol consumption, including law enforcement expenses and personal injury and property damages in tort, a little fee as a practical bar to casual beer blasts seems like a good idea to limit social costs from excessive alcohol consumption and to ensure that event planners take the consequences of alcohol consumption seriously.

McMegan 2 hours ago in reply to RobertVonRankeGraves
Yes, but I had to get the license through a caterer in order to get the caterer to work with me, and they charged $500-700. Perhaps I could have threatened them with legal action, but I don't really want someone preparing my food under threat of lawsuit.
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Or McArdle could have put the free market to work and found a caterer who would accept the arrangement, but she chose to not do so.

In my humble opinion, in fact, all liquor licensing is useless; it mainly functions as either backdoor zoning control, or as a way for existing bar owners to protect themselves from competition. But this rule is particularly egregious.

No, it isn't. You forge liquor permits, you lose liquor permits.

If you find out that someone you know parks illegally in their alley, do you really think that it's a short step to murdering their neighbors?

She does love her non-sequiturs.

Health regulations have an obvious rationale that liquor licensing lacks, and there are also clear financial downsides to violating them openly (customers do not like seeing vermin running around your restaurant, or eating spoiled food.) They're also vulnerable to detection on visual inspection: expired packaged goods or rat droppings will be seen by inspectors. Obviously, most restaurants do violate health regulations in small ways, and some do so flagrantly.

Actually, most don't. I waitressed for years and every restaurant was a stickler regarding health regulations. They had no desire to get shut down and end up on the local nightly news. The wait staff and kitchen staff all cleaned their areas daily and a cleaning company came in to handle the heavy or specialized work.

But I'm not sure how closely that's correlated to . . . soft opening with unlicensed charity gigs, even with dodgy paperwork.

Once again, fraud=dodgy paperwork. Her sense of morality and legality leave a lot to be desired.

At any rate, the manager who allegedly did these things has been fired, and the owners have already lost a lot of money. This seems like adequate punishment. It's hard for me to believe that ABRA needs to kill viable establishments in an area that badly needs them, in order to save us from the scourge of . . . unlicensed cocktail parties. It seems widely out of proportion to the potential harm.

So what if the owners were incompetent and dishonest? McArdle wants a gastropub and she wants it now, goddammit! A commenter remonstrates McArdle:

The people opening the bar in your neighborhood presumably knew all of this and still went ahead with the investment. The fact that they had so much riding on this license makes their failure to properly supervise this 'rogue' manager all the more astonishing. A competent businessperson would have familiarized themselves with the reality of the regulatory environment, recognized the high stakes of this license, and made sure that they did absolutely everything in their power to secure it. This was indeed a life or death situation, but the owners seem to have mistaken it for a parking ticket dispute.

It's not like the board made an arbitrary or surprising ruling here: "we don't like your face, so you can't do business in DC." And It's not like the tavern did everything right but forgot to dot the "i" on a form or something. Maybe other restaurants are denied their license for bogus reasons. But that's not the case here. If the forgery thing is true, they flagrantly broke a law directly related to their liquor license application (!). How should the board have responded to the forgery of their own documents? There's no way any responsible regulator could approve a license immediately after that. So the tavern had to fire the manager and wait until the next meeting (or should the board scheduled a special session to expedite this errant restaurant's request?). If you want to help reform the liquor license process, you should describe an example where a business was denied a license for a more arbitrary or corrupt reason. If, as you say, there are stories of gross incompetence or unexplained delays (or bribes) then tell those. That will generate momentum for reform more than the story of a business that genuinely screwed up.

Yes, it is very difficult to understand why McArdle is getting worked up over an unsuccessful restaurant, considering the circumstances. Yet another commenter:

cbar1980 21 hours ago
The author glosses over and omits some pretty salient points in order to fit the narrative she wants to believe. This establishment is one of two the same owner is trying to open within the same neighborhood, the other being an "Engine 12" restaurant. The other concept's construction has been shut down numerous times for failure to obtain building permits, and is embroiled in a similar liquor license ordeal - much of it their own making. In the case of Shaw's Tavern, they opened without a license, without a Certificate of Occupancy, forged their liquor license for both government inspectors and the wholesale companies. When caught red-handed, they then embarked on a PR campaign decrying the oppressive, anti-business slant of the DC government.

If they followed the rules which are in place for a reason, they'd probably have a license right now. The rules which the author finds so onerous, are the same ones that prohibit an illegal club from opening up next door to her in a residential neighborhood - legally speaking, what here upscale gastropub did is no different than such an operation. The owner of the business has demonstrated a track record for obviating the laws, and may not fit the suitability criterion for owning a liquor license(which honestly is not a high bar in DC).

The world needs ditchdiggers too, and just because someone wants to open a restaurant, doesn't mean their qualified - similarly, just because someone writes a blog, it doesn't mean that they're also well-informed.

RustBeltModerate 20 hours ago in reply to cbar1980
Written like a person who has never built anything or operated a business.

McMegan 18 hours ago in reply to cbar1980
Actually, no. The zoning regulations are what prevents an illegal pub from opening up next to me . . . but being a libertarian, I frown on the notion of illegal pubs.

Actually, not always. In this case, lack of a liquor license prevented an illegal pub from oopening next to her. McArdle seems to think that the restaurant just made an oopsie, but forgery is a deliberate decision and serious business. Why didn't the pub's owner just get the license?

McMegan 3 hours ago in reply to thomasrhys
In order to make it as a restaurant with no alchohol, you need to serve extremely cheap food that can be produced in volume. There are very few fine dining establishments that thrive without it--probably Kosher places get by with thin liquor sales (but their food is more expensive for the quality you get), and maybe places in Mormon areas. But in most places, above the level of cheap-and-cheerful fried-things-with-carbohydrates places, no booze, you lose.

Which makes that decision to ignore the liquor license a spectacularly bad business decision, and it is no surprise that the people who made it lost their restaurant.