Six months ago, the state issued the city of Ann Arbor 807 new liquor licenses in an effort to stimulate downtown development, but so far these licenses have gone unused due to red tape surrounding the city’s previous policies.

The hundreds of new developmental licenses are part a state-wide initiative intended to stimulate economic growth in struggling downtowns.

In May, City Councilman Leigh Greden (D-Ward 3) told the Michigan Daily that, although the new licenses would help the city, Ann Arbor already has vibrant downtown and may not have been one the cities the state had in mind when drafting the initiative.

Ann Arbor City Councilman Stephen Rapundalo (D-Ward 2), who chairs the city’s Liquor License Committee, said in an interview yesterday that the reason no new licenses have been awarded is because the city must first award its remaining Class C licenses, which are more costly and difficult for business owners to obtain.

“The factor in all of that is none can be handed out if the Class C quota hasn’t been met,” he said.

In Michigan, if a business can’t get a new license from the city, they must purchase an existing license in the open market from another business.

A Class C license typically costs about $75,000 on the market, compared to the new, more restricted licenses, which cost $20,000.

To qualify for one of the new licenses a business must have at least 50 seats and be open five days a week, for 10 hours a day.

“Now that we have filled Class C we can go back and reconsider,”
Rapundalo said.

But the city only has about a half dozen applicants so far for the new developmental licenses so far, he said.

“I doubt we will hand out that many — not in my lifetime,” he said.
One problem with the new licenses has been community concern about having so many liquor licenses in a small college town.

“No one ever envisioned there would be so many available,” Rapundalo said. “Communities are up in arms and I think legislation is going to start modifying (the licenses).”

Before the city can begin distributing the new developmental licenses, the issue of Class-C licenses up for grabs must be resolved.

Subhash Patel, co-owner and manager of Salsarita’s Fresh Cantina, a Mexican restaurant on East Liberty Street, applied more than a year ago for a Class C license. Although the city granted the restaurant permission to obtain a license this past August, Patel is still waiting to hear from the state before their license can become official.

Having a license to serve liquor is especially important to the Charlotte, North Carolina-based chain because its restaurants usually boast a full bar.

“It’s part of our menu,” Patel said. “It’s much easier to get a liquor license in the South than in the North.”

Although Patel said the liquor license would bring in more revenue, he acknowledged that it opens the door to new issues.

“Our biggest challenge is not serving to minors, making sure we do the right thing and card everyone,” he said.

Patel said he expects to get the final seal of approval sometime in the next few months.

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