Comments on License Application Protests Procedures

Comment received during the week of June 23, 2024 to June 29, 2024

Late Comment #1

To Whom It May Concern:

The Independent Hospitality Coalition (IHC) supports the proposed rule and procedure changes for application protests. The IHC is a coalition of California hospitality businesses. We represent just over 1,200 independently owned restaurants in Los Angeles County. On average, each restaurant has 40 employees, each with their own families that rely on them. We feel strongly that the Alcoholic Beverage Control procedure surrounding protested applications must be revised. Many of our members have been victims of protests that were “false, vexatious, frivolous, invalid or unreasonable, or without reasonable or probable cause.”

When an application is protested, our members are advised to personally contact the individual or group to answer their questions and assuage their concerns. In these efforts, they have found that many protests were filed by:

  • People who used addresses where they were not residents,
  • Short-term residents who lived permanently in other states,
  • People who lived up to 6 miles away from the licensee’s site,
  • Verified residents who misread the notice and assumed that all notices were for bars, not restaurants
  • Verified residents who claimed they had signed a protest only because they were pressured to do so by a canvasser.

Because these protests are fraudulent and are only filed to harass the licensee, the named party rarely responds to letters from Hearings and Legal. However, these protests still inflict substantial harm on applicants. License Representatives and their supervisors must conduct three additional site visits and write additional reports when protests are filed on an application. They must wait for Hearings and Legal to verify the protests, adding to
the processing time. Many protests are filed by verified residents, but for reasons that are under the jurisdiction of other agencies. For example, AB 2097 waived parking requirements statewide for many businesses. In areas where AB 2097 does not apply, parking is still regulated by the local zoning code, not state law. However, a lack of parking remains a common claim for protestants. Loitering, noise, trash, and other nuisance activities are cited as a justification for protests- even when the application is for beer and wine at a restaurant closing before midnight.

Other protestants have told members that their protests were not personal, but were political in nature. They file with the intent to send a message to decision-makers and elected officials that there are upset about land use policy. Still others cite a need to combat gentrification- something that is well beyond the abilities of the ABC and the restaurant community to solve. The worst of these openly state that their protest is based on race and class differences between the neighborhood and the applicants. All of these protests delay applicants from selling alcoholic beverages by 2 – 12 months.

Because most restaurants must pay rent and employees as soon as their construction is completed, they must open without an ABC license. It takes the average restaurant years to get out of debt, with the first one being the most critical for its survival. With 5%—50% of revenue on hold, many restaurants cannot withstand the delay. Those who wait to open until their interim permit is issued lose, on average, $2,000 per day.

Thank you for your leadership in addressing this crucial rulemaking decision. We encourage the Department to find ways to make this process more transparent and resolve it faster, which will benefit the restaurant community and surrounding areas.

Eddie Navarrette
Independent Hospitality Coalition

ABC Response

Comments will be addressed at the end of the comment period.

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