Atlanta to crack down on nightclubs posing as restaurants to bypass liquor laws
By David Pendered
Atlanta is poised to investigate nightclubs and close those that masquerade as restaurants in order to get and retain a license to sell alcohol.
The Atlanta City Council is slated to approve the measure at its meeting Monday.
The pending crackdown is to be citywide and goes to the heart of the city’s nightlife scene.
Nightclubs that pose as restaurants, and get a license as a restaurant, receive exemptions that provide them with the legal right to sell alcohol on Sundays, admit guests under age 21, and operate near homes, schools, churches, libraries and hospitals.
Nightclubs that get a license as a nightclub do not receive these exemptions, under city code.
The loophole being exploited by scofflaws involves the reporting of sales of food and drink.
Businesses qualify as a restaurant if they, “derive at least 50 percent of gross annual food and beverage sales of prepared meals of food,” according to the pending legislation.
Until now, the city’s alcohol licensing system has been all about trust with no verification. It was an honor system.
The city accepted the statement of applicants for alcohol licenses regarding their food and beverage sales. Businesses that didn’t tell the truth generally weren’t caught.
Atlanta has issued about 2,000 licenses to sell alcohol, according to Atlanta’s chief financial officer, Roosevelt Council, Jr. About 20 licenses a year are to be audited.
Buckhead is the site of so many suspected violations that auditors are lined up to work for free, to review business records for compliance with alcohol licenses, said city Councilmember Howard Shook, who represents the Buckhead area.
“My folks are on fire,” Shook said.
And it’s not just Buckhead, Councilmember Joyce Sheperd added at the Dec. 2 meeting of the council’s Finance/Executive Committee.
“We’re having these problems all over the city,” Sheperd said.
Sheperd said suspected lawbreakers operate in her district, located south of Downtown Atlanta; in Midtown, represented by Councilmember Jennifer Ide; in Southwest Atlanta, represented by Councilmember Marci Collier Overstreet; and in the Mall West End area, represented by Councilmember Cleta Winslow.
“You could go all over the city and you have this problem,” Sheperd said.
The response plan slated for a vote Monday calls for a joint effort of the city’s Finance and Police departments. The approach is three-pronged:
- The License Review Board is to identify establishments that are the subject of complaints that suggest they are licensed as restaurants but behave as nightclubs. The board oversees alcohol permits on behalf of the Atlanta Police Department.
- The License Review Board is to submit its list of suspected lawbreakers to the Finance Department. City auditors are to review the financial records of these establishments to ensure their compliance with alcohol regulations.
- Establishments that were licensed as restaurants but don’t meet the criteria are to have their restaurant sales license administratively revoked by the License Review Board. The potential penalties for lying on an application do not appear to be addressed in the legislation. License revocations can be appealed to Fulton County Superior Court. The legislation provides for businesses to reapply immediately for a new alcohol license under the proper category.