A Way Forward

Now that the Government Services Committee of the St. Charles City Council is again discussing the issue of bars in our downtown and potential liquor license ordinance changes, I am encouraged that our Aldermen finally seem ready to act to make some common-sense changes.  In the spirit of good public discourse, I would like to submit to this virtual public square some thoughts on the matter. 

To be clear, I do not have a problem with the idea of bars in our town; pubs and bars have always served as a valuable place in our society to gather and socialize.  People who want to patronize them can and those who wish to abstain can do so, hopefully without the problems that sometimes accompany bars intruding into their neighborhood.  Thus, bars themselves are not inherently bad, so the source of our town's problem with bars must lie elsewhere.  I would like to suggest that most of our alcohol-related problems that give the reputation of our fine town so many black-eyes stem not from the fact that there are bars in our town, or that there are too many bars in our town as a whole, but rather from the simple fact that we have too many bars packed into our downtown.  If we took all the establishments that the 20-something set from all over Kane County thinks of when they say "Let's go party in St. Charles tonight!" and spread them evenly across the entire City, I do not, for a minute, believe that we would have nearly as many problems as we currently do. 

I believe that the source of our problem is the concentration of these establishments in our downtown, specifically in a very small area known as the "Third Street Entertainment District."  Have you ever stopped to notice how so many of alcohol-related calls for Police service originate from within one or two blocks of the intersection of Third and Main Streets?  While the "Third Street Entertainment District" may not have been a formal policy goal for the City, the City must shoulder the responsibility for the current situation, as they are the ones who approved all those liquor licenses in such a compact area of our town.  They created the mess with which we are currently living; it it up to them to now clean it up.

Some towns have the good sense to prohibit two bars from being located within one or two blocks of each other; St. Charles apparently actually thought that packing many bars into a small area was a good idea.  Honestly, what did they think would happen?  Please click  here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here, if you need just a small sampling to remind you of what this lack of vision has brought us.  The environment we have created is designed to fail, and that is exactly why some municipalities have ordinances to prohibit exactly what we did.  When bars are located so close to each other, it encourages a culture of bar-hopping, which, while good for business, also makes it nearly impossible for even the most principled bar owner to follow the letter of the law.

When bars are not packed together, people tend to go to one, stay put, and then call it a night.  The staff at the establishment has a good handle on when to cut off service to patrons, as they know exactly how much they have consumed that night.  When many bars are located in a very small geographic area (like our downtown) a culture of bar hopping exists, and the bar owners at the end of the circuit have no idea how much, or how long ago, their patrons consumed alcohol.  As such, a patron can rapidly consume a large amount of alcohol at one establishment, walk quickly into the next establishment before their body has a chance to absorb the alcohol, and then purchase more alcohol, pushing them well over the legal limit.  The staff at the last establishment, having no reason to believe that they should have refused entry or service to the patron, is now guilty of "overserving."  Once the mistake is recognized, they are also guilty of "harboring an intoxicated individual" if they do not quickly move to throw them out.  This can bring them in front of the Liquor Commissioner for disciplinary action if the Police are called in for any reason.  Our government has created an environment that is designed to fail, spectacularly, at all levels.

Recognizing that our past course of action was a disaster, we must now find a way to right the ship in a manner that stabilizes and helps our downtown, and is also not unfair to the bar owners we attracted to our downtown during our years of being lost in the wilderness.  To be clear, my argument is not with the bar owners; my argument is with the governmental decision-making that brought us to our currently disgraceful state.  We need to learn from our mistakes, but we also need to move on.  What are we to do?  I've given this a lot of thought across the past several years, and I would like to offer up this path forward to our newly-minted Mayor and City Council, in the hopes that they will at least give it fair consideration.

1.)  We must re-write our current liquor licensing ordinance, as it is currently completely dysfunctional and has played an active role in our Aldermen losing control of our downtown, due to a lack of clarity in our current code. For example, as it stands right now, a person can appear before our City Council, talk a good line about how they want to open a restaurant with liquor service in our downtown, and the Aldermen, having no reason to doubt the applicant, will issue them a B-class liquor license in return.  Once this new establishment is up and running, if it turns out that it makes 98% of its sales in booze and 2% of its sales in food (provided that they have a kitchen and offer the required menu, during the required hours), there is absolutely nothing the City can do about it, provided the business does not do anything that would result in their liquor license being taken away for disciplinary reasons.  Our current code frees them to operate as a bar, despite the fact that their B-Class license says they are to be "predominantly food."  This is a travesty, and the lack of clarity in our code has thwarted our Aldermen from having any control of the character of our downtown.

This lack of clarity and control must not be allowed to continue any longer.  The code must be amended to clearly delineate between bars (a place where people go to drink, and maybe have some food) and restaurants (a place where people go to get some food, and maybe have a drink).  Geneva does this by simply stipulating that if an establishment is licensed as a restaurant, they must make at least 50% of their gross receipts from the sale of food.  If an establishment wants to have more than 50% of its gross receipts from the sale of alcohol, it must be licensed as a bar.  Because of this stipulation, Geneva knows exactly what type of establishment is going to receive a newly-issued license.  We should have discussions about where that break point falls (is it 50/50? 60/40? 40/60?), but whatever we do, we must know, with far more certainty than we currently have, if new applicants will operate as a bar or a restaurant before we issue the license, because after we issue the license, we have precious little recourse.

Would this be cumbersome and unwieldy for the bars and restaurants in town (or, for that matter, the City) to figure out just how much of their sales are from food or liquor?  In a word, no.  All anyone would have to do is to look at the tax receipts that every liquor-license holder in town already submits to the City on a regular basis.  We have a Home Rule tax that is a 1% tax on everything sold in this City, including alcohol, and we also have a 2% tax that is imposed only on the sale of alcohol.  A compliance check (to see if they are operating in a manner that their liquor license stipulates) would be no more complicated than to look up two numbers in a ledger book that the City keeps, and then run a 4th grade-level math problem as a check for compliance.  We could check for compliance at whatever frequency we choose.  Checking gross tax receipts quarterly seems reasonable to me.  Does this mean that every party dining at a restaurant must spend more on food than wine at a meal?  No, it most certainly does not mean that.  All it means is that the business owner must craft their business model to sell more food than alcohol for the restaurant as a whole, if they want to have a B-Class liquor license.

As for enforcement, if an establishment is licensed as a restaurant, but operating like a bar (not making sufficient gross sales in food), we could write the ordinance to give them however much time we deem appropriate for them to get their act together, issue a warning after that, maybe fine them after another period of time of non-compliance, and possibly pull their license after an additional period of non-compliance.  In this way, the current uncertainty that goes hand-in-hand with the City having absolutely no control over the type of establishments operating in the City can be put to rest.  If we issue a restaurant-class liquor license, but the establishment operates as a bar, we will have remedies available to us, and thus maintain control over the character of our town, which is one of the most basic purposes of local government.

2.)  Once the license classes are redefined by changing the ordinance, we should offer every liquor license holder in the City a chance to be grandfathered into the new classes of liquor license, without regard to our current "caps" on the number of allowable licenses in town for each liquor license class.  If they were originally licensed as a B-Class restaurant, but have always operated as a bar, let's be honest about it and issue them a new C-Class license, no questions asked.  While we're at it, let's significantly lower the cost for a restaurant-class liquor license, to encourage that kind of development in our town.

3.)  Because the problem with bars in this City is only in our downtown, we should establish a downtown district that will be regulated differently than the rest of town where C-Class licenses are concerned.  I would propose that our current CBD-1 zoning district would work well for this purpose.  New B-Class liquor licenses can and should be issued in this zoning district to encourage economic growth in our downtown (Geneva places no limit on the number of restaurant-class liquor licenses they will issue; I do not hear many reports of public drunkenness or drunken street brawls coming out of Geneva, so there does not seem to be much to fear from such a policy approach as this), but there should be no new C-Class licenses issued in the CBD-1 district.  This is a vitally important step, and there is nothing currently in front of the Government Services Committee to address this point.  Remember, our main problem is that we have too many bars in our downtown.  Without some sort of cap for our downtown area, if a bar outside of downtown fails and "frees up" that license for a new establishment to open, there is currently nothing that would prohibit them from opening up that new bar in our downtown, which would only increase our woes.  If we truly want to fix our problem with bars, we must address, specifically, the downtown area.

4.)  Once we finally know how many bars we have in our downtown area (they will have self-identified, back in step #2), we should limit, by ordinance, the number of C-Class licenses we will allow to exist in our CBD-1 downtown district at fewer than currently exist.  This does not mean that we will pick the winners and losers.  This clause would merely prohibit the issuing of new C-Class licenses in our downtown district until after the number of C-Class licenses in our downtown has fallen, through natural selection, to below whatever number we select.  

How will this reduce the number of bars in our downtown?  By attrition, not by coercion or outside force of any type.  Some bars will be poorly managed and will fail.  Some bars will break our laws and have their licenses stripped from them; natural selection and market forces will decide who stays and who goes.  I believe a reduction in the number of C-Class licenses in our downtown is an appropriate response to the growth of bars in our town across the past ten years.  Yes, I know, I know; Whiskey Corner; always been a bar town; yada, yada, yada.  The truth is that in 2003, we had 26 liquor license holders in our downtown area, and about  9 of them were what I believe most folks would think of as a bar.  Something must have been working well back then, because I do not remember alcohol-related problems back then being the embarrassment to our City that they currently are.  By 2011, we had 30 liquor license holders in our downtown, and I think that 10 or 11 of them were what most folks would think of as a bar.  While the increase in the number of bars is not spectacular, when one considers the increase in sheer capacity (square feet/number of bar stools/Fire Marshall's maximum capacity ratings/use whatever metric you want) that the new establishments brought to our downtown, I would not be surprised at all to find that the increase over the past ten years has been more on the order of 40% or more.  Think about some of the former license holders (Vi's Last Call, Hoops), replace them with some of the new large establishments, add one or two new establishments to the mix, concentrate most all of that growth in one small area, and you can start to see why we have a problem now.

5.)  We sit back and wait. Well-managed businesses will thrive, and I will applaud them for doing so.  Poorly-run businesses will self-select themselves for elimination.  As time marches on, order will slowly be restored to our downtown.  Merchants thinking about locating a new business in our downtown will face a stable future, unlike now, where they have no idea in what condition they might find their shop when they go to open up on Monday morning (Vomit on the stoop?  Urine on the door frame?  Planters ripped from the face of the building?  Empties and cigarette butts everywhere?).  Stability and order make for a good business environment; let's try to foster more of that, and less of the vomit-stained, urine-soaked, public drunkenness, public brawling atmosphere that we have spent the last several years actively fostering.

Enough with what we have just put ourselves through; let's move forward.