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More liquor licenses could be coming to Detroit, but getting one may still be complicated

Written by Zana Tomich on May 22, 2019 Category: Detroit Land Use and Zoning, Land Use and Zoning, Michigan Land Use and Zoning, Restaurants

A total of 63 new Detroit liquor licenses could be issued, according to a recent article by Crain’s Detroit Business. I had the pleasure of chatting with reporter Kurt Nagl about the development.

While this is good news for bars and restaurants hoping to attain a liquor license in Detroit, it does not mean that the process will necessarily be easy. Detroit liquor licenses have long been hard to come by. I cover the process and the challenges involved in my video on how to obtain a Detroit liquor license and in my blog on acquiring an on-premises liquor license in Michigan.

The news this week was that the Detroit City Council had referred to the Planning and Economic Development Committee a review of a resolution allowing 20 Detroit businesses to secure special licenses to sell alcohol for on-premises consumption. The article notes the total could climb to 63, with more issued every three years, if approved by the State.

Nagl explains some of the criteria on which the initial 20 businesses were selected:

To be eligible for the redevelopment license, a business must be “engaged in dining, entertainment or recreation” with seating for at least 25 people and open to the general public at least 10 hours per day for five days per week, according to the MEDC. In addition, it must have spent $75,000 or more on the rehabilitation of the building where it will do business in the five years before the license is issued. A total of at least $200,000 must also have been invested in the past five years in the district where the business plans to operate.

The new licenses will be classified as “redevelopment liquor licenses” and will cost about a fourth of the going rate of a Class C liquor license, the most common and sought after classification of licenses in Detroit. As I told Crain’s, the market rate varies from around $70,000 to $100,000 for a Detroit liquor license, depending on the neighborhood.

Securing a liquor license is often one of the most challenging components of a plan to open a new bar or restaurant in Detroit. Those looking to secure a liquor license for a Detroit restaurant or bar can explore the option to purchase one from an existing license holder, or one held in escrow. This can be a complicated process that requires professional legal counsel. The same is true for those looking to sell or transfer an existing license.

I have assisted many Detroit restaurants and bars with issues related to liquor licenses and would be happy to discuss the matter with you if you have an interest in buying, selling or transferring one.

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