By Emma Silvers
By Gary Moskowitz
By Alee Karim
By Ian S. Port
By Ian S. Port
By Derek Opperman
By Emma Silvers
By Alee Karim
The livelihood of San Franciso's best-known all-ages venues is under siege based on issues that have nothing to do with public safety, but rather on archaic views of how a nightclub should operate.
The state Department of Alcoholic Beverage Control, or ABC, has spent the last year citing Bottom of the Hill, Slim's, Great American Music Hall, and Café du Nord for such minor offenses as changing their opening hours or not making enough income from food sales. These crackdowns come with the threat of severe consequences, ranging from hefty fines to temporary suspensions to lost liquor licenses — all for alleged infractions that have little to do with hosting safe shows for underage kids.
It would be one thing if these establishments were breaking state liquor laws by serving minors. But that isn't the case here. ABC says the venues are being investigated based on claims that they're operating outside their initial business plans. The owners and their attorneys counter that they're being penalized by overzealous ABC agents. "They're just doing a power grab," says Mark Rennie, an attorney for Great American and Slim's.
ABC officials won't comment on these specific cases, but director Steve Hardy issued this statement: "The Department hopes to reach a resolution on the licensing issues involving some entertainment venues in San Francisco."
A resolution should extend beyond the parties involved here, though, to prevent this state agency — that doesn't even recognize nightclubs as a type of business — from micromanaging operations in a way that doesn't serve the public good.
Since 2008, actions by ABC have drained these small businesses of tens of thousands of dollars in legal fees, causing them to take substantial financial hits during a recession. It's a process Rennie calls "Death by 1,000 legal fees." The clubs have had to freeze pay raises, postpone flyering for shows, and put off general maintenance for roofs and bathrooms as their reserves go to their attorneys. Dawn Holliday, general manager at Slim's and Great American, says those clubs spent $152,000 fighting ABC in 2008 and another $56,000 already in 2009.
As the big four work through their ABC hearings, some owners worry that they'll lose their liquor license completely — making it impossible to stay open. It's such a serious issue that State Senator Mark Leno and Supervisor Ross Mirkarimi have met with ABC, intervening on behalf of the all-ages venues.
But the fight is far from over.
A major problem stems from the fact that live music venues are classified as restaurants, in the language of the ABC. "We don't license nightclubs," says ABC spokesman John Carr, who clarifies that his agency licenses bars (21+) and restaurants (no age limit). "A lot of people use the term nightclub, but it's not a term we like."
This is a ridiculous attitude that gets to the heart of the matter: There's a big difference between a restaurant (where people go with a meal in mind) and a club (where people go with music in mind). They are not one and the same; one shouldn't have to jump through the hoops of the other.
There isn't a specific liquor license for all-ages music venues. Under current state law, places like Great American are licensed as a "bona fide public eating place" because restaurants are the only public businesses that can serve alcohol with minors present. Leno says it's currently up to the ABC to deem what percentage of these businesses' sales should come from food. "They could say 40 percent or they could say 60 percent," he says. "They get to make the determination, and it's pretty much up to the establishment to take it or leave it."
When Bottom of the Hill added a new business partner eight years ago, ABC tacked on the requirement that 50 percent of the club's income had to come from the kitchen. The owners say they've never previously had a problem with ABC — or the neighbors, or the police, for that matter — since first opening in 1991. But last year ABC suddenly started investigating their kitchen sales, citing Bottom of the Hill for not hitting its contractual mark even though it serves meals to customers and bands every night that it's open (hard to miss that giant neon "Eat" sign over the kitchen). Bottom of the Hill's Ramona Downey says that no nightclub could reasonably make half its money off food sales. Leno backs up her claim, adding, "They've done nothing wrong. They're trying to be something they're not so they can have their license."
The situation with Café du Nord, Slim's, and Great American is slightly different. The owners of these venues claim that ABC is coming after them based on misinterpretations of operating hours (nitpicking about door times versus the hours when the staff starts work, for example) and holding them to conditions for food sales that were never on their original licenses. All three clubs offer dinner menus. "They're writing their own rules," Café du Nord's co-owner Guy Carson says. "These aren't laws; they're trying to strongarm people into agreeing with them."
ABC has remained mute about what instigated these venue investigations, but its critics blame overly aggressive agents. "I've been practicing law for 30 years, and I've never seen anything like this," Rennie says.