Hank's: Analysis of a Liquor License Protest

Frequently, on here and elsewhere, we delve into discussions about liquor licenses; specifically, the frequent protests that are brought by ANCs and other citizens groups in an attempt to regulate the licensee through the voluntary agreement process. In the majority of instances, both the licensee and the protesters are able to reach an agreement that is satisfactory to both.

There are instances, unfortunately, when an agreement cannot be reached amicably. Sometimes, this is the result of one party believing that it will prevail in a hearing before the ABRA Board. In other instances, it is simply a case of a group of protesters abusing the protest process. Such is the case with the current protest of expansion plans by Hank's Oyster Bar.

The timing here is interesting, as the status of Hank's liquor license will be addressed at an upcoming meeting, on October 13, at ABRA (scroll to the bottom of the page for information on Hank's).

First, a bit of background. Hank's opened in their location at 17th and Q streets in 2005, the recipient of a single license expansion of the liquor license moratorium in place along 17th Street. The license was protested furiously--not by the Dupont Circle ANC, but rather by a group of residents who live near the intersection of 17th and Q streets. Nevertheless, Hank's prevailed, and chef-owner Jamie Leeds' establishment was quickly cemented as one of the area's most popular eateries.

Fast forward to 2010, and Leeds announces plans to expand to the adjacent space and add 20 outdoor seats. Fans of Hank's applauded the long overdue move, which well help alleviate some of the long waits for those attempting to dine in the crowded space. However, some of the residents, many of whom were among the original protesters, were not amused. And, in spite of the fact that ANC2B voted not to protest the expansion plans, nor to protest Leeds' request to vacate her VA (on the grounds that her license includes all of the stipulations in the VA, making it redundant), they filed a protest anyway.

At this point in other posts, I might say a few words about the dangers of abusing the liquor license protest process, or about the reflexive opposition that seems to rear up from time to time around here. Instead, I'm going to let the protesters' words speak for themselves, so that readers can see--and judge for themselves--the merit of the arguments made by the protesters. As ANC2B commissioner Jack Jacobson noted recently, this seems to be a case of a group of protesters singling out a business without cause. Not only that, I might add, but the protest they have filed is completely baseless. Thus, below, I'm providing a point-by-point analysis of the specific issues raised by the protesters in their protest which was filed with ABRA on July 26.

First, a word about the protesters. The two lead protesters, David Mallof and Alexis Rieffel, do not live along the same block as Hank's. In fact, none of the protesters do. Most live along the 1700 block of Q, with some living as far south as 17th and Massachusetts. Why someone who lives at 17th and Massachusetts would be provoked to such a degree of outrage over an additional 20 outdoor seats at a restaurant 2 1/2 blocks away, I can only imagine. Anyway, onto the Re: line:

Re: Protest of Substantial Change Request to Dramatically Increase Seating and Use of Public Space within the Already Overconcentrated East Dupont Moratorium Zone at the Hyperconcentrated (sic) Street Corner of 17th and Q Streets, NW

Note the creative use of adjectives and adverbs: "dramatically increase," "overconcentrated" "hyperconcentrated". The intersection of 17th and Q features Trio, Hank's, the Java House coffee shop, and Floriana, along with a valet service and a residence. "Hyperconcentrated" doesn't mean what it used to, I guess. Moving on...

1. THE REQUEST IS PROHIBITED BY AN IN-FORCE, VALID AND CONTRACTUAL VOLUNTARY AGREEMENT

Actually, Hank's request is not "prohibited" by the Agreement, it simply isn't included in it. Hence Leeds' request to amend her license to include the adjacent building and outdoor seating area.

2. THE BOARD LACKS AUTHORITY TO FURTHER INCREASE MYRIAD CONCENTRATION AND ITS MYRIAD IMPACTS IN THE FACE OF RECENT FINDING OF OVERCONCENTRATION THAT RESULTED IN RENEWAL OF THE EAST DUPONT EMERGENCY MORATORIUM

There's a lot to parse through in this one, not the least of which is the use of a phrase--"myriad concentration"--for which I am unable to discern a definition. No matter. The gyst of what is being argued here is that because the 17th Street "emergency" moratorium is in place (now going on 19 years), by default ABRA should not approve Hank's expansion plans, because it would seem to be in contradiction to the purpose of the moratorium. There is one small problem with this position: it ignores the ruling by ABRA on the moratorium, published just this past May. Remember, Hank's is seeking to expand its operations, not obtain a new license. From ABRA's ruling:

"Public comment received by the Board reflects that there is a need for more than the two (2) lateral expansion applications requested by ANC 2B. Specifically, there are establishments with significant neighborhood support, who would not be able to file if lateral expansions were limited to only two (2) applications. As such, the Board now finds that it is appropriate to grant four (4) lateral expansions, rather than the two (2) that were originally requested."

In other words, what Leeds is requesting is entirely permissible under the adoption of the moratorium by ABRA earlier this year.

A. We appreciate the ambiance, diversity and positive externalities created by the ABC licensing, as well as the community benefits of allowing responsible licensees the use of scarce public space for ancillary sidewalk cafes.

The emphasis on the phrase "public space" was their's, ostensibly to remind us that Hank's is seeking a permit to place tables and chairs in a space that resides within the public domain. Which is true. But this isn't so much a legal argument against Hank's as it is a fantasy devoid of 17th Street reality--the space Leeds is seeking to expand into is vacant, and has been for years. The "public space" Hank's would be utilizing is not currently being used by anyone, nor are there any plans for it to be used by anyone. Basically, this is an argument that the neighborhood is better served with a vacant property than by allowing a popular--and well-run--neighborhood eatery to expand into it. How many people are honestly buying that argument?

B. It is because of the overcontration's negative impacts that moratoriums are critically important and specifically authorized under Title 25.

This is another appeal to the intention of the moratorium. But, as we've already demonstrated, the intention of the moratorium was to allow the expansion of up to four licensees--precisely what Leeds is seeking to do.

As to these perceived "negative impacts," the protesters go on to list things like "property values," "peace, order and quiet," and the ever-mysterious "and more." The mind reels at what "more" negative impacts Hank's could be imposing upon the Dupont citizenry. The issue of property values is a complete non-starter, as anyone who has watched property values climb over the last decade would attest. (In fact, I'm more inclined to believe the counter-argument: that property values are enhanced by the proximity to establishments such as Hank's.) And to the "peace, order and quiet" argument, as Commissioner Jacobson noted, he represents the residents who live directly across the street from Hank's, and has never once received a complaint about the restaurant.

C. The Board has never found that any of these impacts are in remission, which would be the only reason to allow any expansion of impacts, seats or licenses.

Yet again, it should be pointed out that the moratorium allows for the expansion of an establishment such as Hank's--there is no burden upon the licensee to show that "peace, order and quiet" has been somehow recaptured to a greater degree than it was five years ago.

D. Further, the Board had no data whatsoever in hand, rather pro or con, regarding property values.

To this, we are obliged to point out that whether the Board possessed any evidence of a decline or rise in property values is irrelevant to the question of whether Hank's expansion plans are appropriate and within the bounds of the law. There is no obligation for a licensee to provide an enhancement of property values, nor is there a requirement for the Board to consider such a thing when the moratorium stipulates that expansion is permitted. The protesters, for their part, are unable to present any data that their property values have declined, and they have certainly been unable to present data to show that their property values declined as a result of liquor licensees such as Hank's. (For what it is worth, median home sales prices in Hank's zip code have increased by 15% since 2005--peaking at a rise of 42.8% in 2007.)

Any further expansion of seats in the moratorium zone cannot be consistent with existing laws, or compatible with the broad interests of the District of Columbia, in the absence of factual, empirical, quantitative evidence that it will not result in greater overconcentration or yield some compensating benefits to nearby residents.

Notice the slippery-slope tactics employed here: Hank's request for an additional 20 outdoor seats is now a matter of sufficient concern for residents throughout the entire District! Mr. Mallof already presented a similar version of this argument when he, along with another Q Street resident, urged ABRA to reconsider its position on expansion--specifically, he requested that ABRA limit expansions to interior spaces only, which ABRA declined to do. And again, there is no burden that the licensee present "compensating benefits" to nearby residents, although it could be argued that providing additional seating at one of the brightest restaurant stars amongst an otherwise lackluster corridor constitutes a "compensating benefit".

In the face of repeated findings of overconcentration, we question whether the Board has the authority to grant an increase in net ABC seats in the face of the obvious negative externalities.

To begin, the Board does indeed have that authority--for if not them, then who? Secondly, the existing rule governing the moratorium permits just such an expansion. And it is certainly a matter of opinion as to whether the so-called negative externalities are indeed "obvious".

G. Title 25 makes it clear that the greatest weight must always be accorded to the most proximately affected and impacted residents, including abutting commercial property owners.

On this we agree, and it makes the absence of any of Hank's immediate neighbors--nay, any residents or businesses along Hank's entire block--from the protest all the more interesting.

If the tone here sounds harsh, it's only because I view this as a clear example of a flat-out abuse of the protest process. Leeds has implied in the past that, if things get too difficult for her in Dupont, she'll pack up and head elsewhere. I would not take that as an idle threat.

The thing to keep in mind here is that these protests, no matter how frivolous, have very real consequences for the business owners, who must employ legal counsel, use up vast amounts of time, and defer operating plans until the protest can be resolved. This case is particularly egregious, as it includes protesters who have protested Hank's before, largely regarding the same issues. If the issues were not valid before, what makes them valid now? And why must Leeds, and similar business owners, face down protests such as this time and again?

These are questions that should be asked, as not only can situations like this adversely impact good local business owners, but it also threatens the ability of residents to reasonably address legitimate issues with the business operating in their neighborhood. In this instance, Hank's immediate neighbors may in fact be well-served by the execution of a reasonable, balanced voluntary agreement--only the behavior of the protestants in this instance has been so abysmal, it's no wonder Leeds doesn't want any kind of agreement with them.

Ultimately, there are few who believe that Hank's expansion plans will not be approved, largely because they are reasonable and within the bounds of the law. But that simply makes us question the purpose of engaging in this protest. District law, rightly or wrongly, permits it--but to what end?