By Joshua Burd
State lawmakers have approved a bill that could expand the number of available liquor licenses in New Jersey — largely by targeting inactive retail licenses — in a move that would bring key changes but fall short of the broad reforms long sought by many stakeholder groups.
The measure, which is awaiting Gov. Phil Murphy’s signature, would limit the time that a retail license can be inactive before it must be sold to another operator or transferred to another municipality. Those that are dormant for two consecutive years would expire, subject to a one-year extension by local officials, meaning owners of so-called pocket licenses could no longer hold them indefinitely.
The bill would also address the hundreds of retail licenses that are currently inactive, requiring them to be transferred within one to four years under the direction of state regulators. Meantime, it would allow a municipality to solicit an inactive retail license from a holder in a contiguous town, provided it’s used as part of an economic redevelopment plan or a redevelopment, improvement or revitalization area.
Both the Senate and Assembly voted unanimously on Monday to approve the measure, S4265 — which would also ease restrictions for craft and farm breweries and allow for special licenses for large shopping malls — as part of the lame-duck legislative session. Published reports have described the bill as a compromise between Murphy and lawmakers, but note that it’s a far cry from the sweeping, ambitious reforms outlined by the governor last year.
Murphy’s calls echoed what has been a long-held priority for New Jersey’s commercial real estate industry and other proponents who say the state’s antiquated, Prohibition-era liquor laws stifle economic development. As Murphy noted during last year’s State of the State address, “the old rules have purposely created market scarcity and driven up costs to the point where a liquor license can draw seven figures.”
The second-term governor subsequently unveiled a plan to expand a system that currently allows local governments to issue just one consumption liquor license for every 3,000 residents, in part by phasing out the population cap over five years and by establishing a tax credit for existing retail license holders impacted by the expanded supply. Yet lawmakers resisted major changes during nearly a year of discussions, reportedly citing concerns about flooding the market.
“I think you heard us loud and clear from the beginning,” state Sen. Paul Sarlo, one of four sponsors in the chamber, speaking Monday in Trenton. “There was no need to open up the door and just blanket the state with more licenses … and I think I was steadfast on that as well as many members on both sides of the aisle were steadfast on that.
“Today is a good compromise that addresses some of the issues that have been hanging around for the last few hours, so I want to thank everybody involved in this area for your efforts to weigh in on this bill.”
Last year’s negotiations included Murphy’s conditional veto in November of a bill that largely focused on breweries, wineries and other physical manufacturers, in which he included a series of recommendations for inactive retail licenses. The measure passed by the Legislature on Monday incorporates both sets of policies, but will be unlikely to satisfy calls for additional reforms.
“We support the passage of this bill solely for the benefit to (New Jersey’s) craft producers,” Downtown New Jersey, an advocacy group and part of a coalition known as the NJ Liquor License Reform Alliance, wrote in a statement Monday. “But when it comes to plenary license reform, we expect the results will be marginal at best in opening licenses to new entrepreneurs and the bill does nothing to address the affordability issue that makes (New Jersey’s) current system so inequitable and puts us at a competitive disadvantage to our neighboring states.”
The group, which thanked Murphy and lawmakers for their support of the craft industry, added: “We hope the bill’s imminent and eventual adoption isn’t checked off as a victory that closes the discussion on liquor license reform for another 10 to 20 years. During the next legislative cycle and the final years of Governor Murphy’s administration, Downtown New Jersey and the NJ Liquor License Alliance will keep pushing for more progressive reform to address our equity and access concerns for small and minority-owned businesses.
“We hope the legislature will consider a special license for downtowns and diverse entrepreneurs, and/or reconsider a beer and wine table service-only permit. We think there could also be interesting opportunities to link small business eateries with (New Jersey’s) burgeoning craft production industry in a way that is a win-win for both. We look forward to pushing the needle a bit further in the next legislative session.”
Murphy calls for expanding liquor licenses in New Jersey, making pitch for long-stalled reform
