Most people know that Somerville has become a dining hotspot for everything from tiny taquerias to nationally renowned gourmet restaurants. What’s less well known is that successful local restaurants do more than expand our dining options—they help revitalize and stabilize our neighborhoods. Busy cafes and dinner spots mean more people are on the streets, other businesses benefit from that foot traffic, and opportunities for street crime decrease—new jobs and new tax revenues follow as well. In short, when restaurants thrive, our neighborhoods thrive. But this local economic engine is threatened by Beacon Hill’s antiquated liquor license cap.
Our ability to award liquor licenses is a powerful economic tool, helping improve the likelihood of success for restaurant owners while sparking neighborhood vitality and creating jobs. But we’re running low on licenses—just at the time that significant commercial development is both underway and in the planning phases. We’re running short because Massachusetts still has a Victorian-era cap in place that keeps control on Beacon Hill over the number of licenses in each community. Instead of giving control to the cities and towns that know their communities best as most states do, in Massachusetts we’re hamstrung by a 1900s law that was essentially designed to keep Irish immigrants from drinking. It’s clearly time for an update, but in the meantime, we still have to ask the state Legislature whenever we need licenses. So last week, I testified on Beacon Hill in support of our petition to the state for more licenses.
The economic data make the case. Restaurants are an important part of our economy today: 2,800 people in Somerville work in the hospitality industry, which is more than 6 percent of our total workforce—and a number that has risen by 24 percent since 2011—with approximately $137 million in annual sales. At the same time, since 2011 Somerville’s unemployment rate has dropped from 5.2 percent to 3.7 percent. Our growing restaurant industry has played a part in that. Meanwhile, since Assembly Row opened, Somerville’s meals tax revenue has risen 33 percent, and is projected to rise another 11 percent in fiscal 2016, providing critical revenue that helps us fund education, public safety, and the infrastructure investments our community needs.
Local jobs, increased tax revenue to fund the services we all rely on, and a boost to neighborhoods and surrounding businesses—these are the benefits that come from having a thriving restaurant industry in our community. But opening and maintaining a successful restaurant is no easy task, especially if the owner cannot obtain a license to serve beer, wine or cocktails. With a license, a restaurant can mark up the price on alcoholic beverages to subsidize its food offerings, reducing the owner’s risk. Without it, a restaurant operates on a razor-thin operating margin, all while competing with other restaurants that can already serve alcoholic beverages.
The price of becoming a dining destination though is increasing because we are almost out of City licenses. We have just five city-wide liquor licenses left and no beer and wine licenses. Meanwhile, local entrepreneurs are waiting in line for them, be they long-time mom and pop eateries looking to expand their business or newcomers seeking to fill open spots at Assembly Row or elsewhere. The City has targeted areas in need of an economic boost, such as East Somerville, and we’ve been able to assist small, locally-owned and immigrant-owned restaurants such as Aguacarte Verde, Some’ting Nice and Oliveira’s obtain their licenses helping to secure their success. But without more City-owned licenses, which cost $5,000 if awarded, other hard-working and aspirational local entrepreneurs will have to try and find a private-owned license on the market, at exorbitant costs of $200,000 or more—a financial hurdle many can’t overcome.
Available liquor licenses were vital in making the first stages of Assembly Row successful, creating a sense of place and vitality that led to considerable growth in the near-term and even greater growth in the future. Assembly Square had 12 licenses designated specifically for that area, and 11 have been awarded so far, even though only the first phase of Assembly Row is open. On the near horizon, the Partners HealthCare building will have approximately 50,000 square feet of first floor restaurant and retail space, while Block 6 is under construction and Block 5 is fully approved, representing another 60,000 square feet of ground floor space that could be filled in part by restaurants. And with plans being drafted for Union Square and Boynton Yards, the expectation of new mixed-use districts in Brickbottom and Inner Belt, and growth in other commercial districts around future Green Line Extension stations, the need for licenses will only grow.
Boston was recently granted approval for 75 new licenses. Somerville’s success shows that we deserve the ability to grant more licenses as well. The licenses are integral to our growing economic vibrancy, increased employment, more revenue for our City and the state, and to our long-range planning process. It’s also a commitment to support local businesses and local economies. The antiquated cap has got to go. In the meantime, the state needs to support our planning and our growth by approving our petition for more licenses.
