The New York State Liquor Authority adopted a proposed Advisory today that dispenses with the requirement to have a Certificate of Occupancy, or Temporary Certificate of Occupancy, in order for a new on premises liquor license to be issued. Previously, having a C of O or TCO, or in some cases, a Letter of No Objection issued by the Department of Buildings, was an absolute requirement to obtain a license. However, due to delays at the Buildings Department, the SLA adopted this new policy on a temporary basis. If a license is issued without the proper C of O, the SLA will require that the C of O be obtained prior to the first renewal of the license. This is an important development for new hotels and restaurants that are ready to open but delayed due to backlogs at the Department of Buildings.

Legislation was just signed into law last night allowing for the issuance of temporary retail permits for new liquor license applications in New York City. Prior to this law, temp permits were only permitted within the city on a transfer but not a new application. There are significant restrictions, however. The permits in the city on new applications apply to beer and wine applications, or those where the 500 foot rule does not apply. Where the 500 foot rule does apply, which is the great majority of the time, then the temp permit may only issue if the premises have been licensed within the past two years and was not suspended or revoked, and the State Liquor Authority Administrative Law Judge after conducting a 500 foot rule hearing finds that it is in the public interest to approve the license. If those conditions are satisfied on a 500 foot rule matter, there are restrictions on the method of operation while operating under the temp permit that are imposed by the law. Hours are restricted to a midnight closing, background recorded music only, and no dancing. Please keep in mind that the approval and issuance of a temporary permit is not an assurance that the final application will be approved. Feel free to speak with us regarding any questions on this new and important law.

During 2020, emergency temporary regulations were issued by the State and City allowing for outdoor and street seating under the Open Restaurants program. This allowed seating on public sidewalks and streets, including areas that had not been zoned for outdoor use.  Now the City is in the process of a permanent successor to the Open Restaurants program which involves environmental review and hearings. However, in October, a group of 22 residents filed a lawsuit against the City. They claim that in issuing a negative environmental impact report the City “ignored profound environmental effects wrought by the temporary open restaurant program which effectively ceded substantial swaths of precious public space to the interests of a single industry and created profound externalities which adversely affected the quality of the daily lives of petitioners.” Specifically, the residents complained about noise, litter, vermin and congestion, claiming that the outdoor seating has grown out of control and is a public health hazard. The suit claims that the West Village, for example, has become “lawless and sometimes downright dangerous.” The lawsuit asks the court to annul and set aside the negative environmental impact declaration and require the City to conduct a full impact statement.

Effective as of July 7, 2021, the New York State Liquor Authority issued a new Guidance for Use of Outdoor Municipal Property. For those holding a liquor license and operating outdoor space under a municipal permit granted pursuant to the Executive Order issued in June 2020, they may continue to operate such outdoor seating provided that on or before October 5, 2021 such licensee notifies the SLA (email to municipalexpansion@sla.ny.gov) with their main license serial number in the subject line, which email should include a copy of the municipal outdoor seating permit (issued by DOT in the City of New York), and a block plot diagram showing the municipal property incorporated into the licensed premises. No SLA response is required.  If you do not have municipal permission prior to July 7, 2021, then you are first required to notify the municipality (community board in the City of New York) on a form available on the SLA website, and after 30 days have passed, or if the municipality has waived the notice, the licensee must email the SLA and include the items referred to above as well as proof of receipt of the municipal notice or waiver thereof. If the SLA does not disapprove within 5 days, the application to use municipal space is deemed approved.  Please contact our office with any questions.

The New York State Liquor Authority issued a revised draft Advisory today labeled “Contracts That Compensate A Third Party Provider (“TPP”) Of Good Or Services With a Percentage of The Licensee’s Sales, Profits or Revenues.”  The draft is available at:

https://sla.ny.gov/system/files/documents/2021/05/proposed_advisory-_contracts_that_compensate_a_third_party_provider-.pdf.

Replacing the failed draft Advisory issued in late 2019, this new version intends to cover all situations where a TPP shares revenue with a retail licensee, such as landlords, managers, delivery services, e-commerce, and internet platforms that provide advertising or accept or forward food and beverage orders, promotion companies, fulfillment centers, and others similarly situated. The draft confirms that in most cases a flat fee arrangement is compliant with the law and would not require any notice or filing with the SLA if it is commercially reasonable in the view of the SLA. Payment to the TPP of 10% or less also does not require any filing. All other TPP percentage agreements require the license holder to co-license the TPP. It contains a number of other notice and filing requirements. This Advisory, if passed, would be retroactive and apply to TPP percentage agreements already in place. The public has two weeks to comment on this draft, and it will be discussed by the SLA at its full board meeting on May 26, 2021.