Dozens of new liquor licenses could be issued in Detroit if approved by City Council, state

Dozens of new liquor licenses could soon be issued in the city of Detroit.

City Council is expected to refer the item Tuesday to the Planning and Economic Development Committee to review Thursday a resolution allowing 20 businesses to secure special licenses that let them sell alcohol for on-premises consumption. The city says a total of 63 such licenses could be issued, with more every three years, if the state approves the licenses in a "City Redevelopment Area" established by the city late last year.

The licenses would be above and beyond the city's maxed-out quota of Class C liquor licenses, the most common — and coveted — type for restaurants and bars. They would also cost one-fourth the price of a typical license.

"Liquor licenses are very expensive at the moment because of a high demand and a limited supply," according to a summary of the proposal provided by the city. "To mitigate this high expense for small and medium size businesses, we are proposing to establish a City Redevelopment Area, which would allow for businesses to purchase a liquor license, straight from the State Liquor Control Commission."

The proposal is being spearheaded by Mayor Mike Duggan's administration as a tool for spurring economic development. It has caused worry for some small business owners who believe that injecting more liquor licenses into the market could lower the value of their own and saturate the market — already home to the highest number of liquor licenses in the state.

The proposed licenses are categorized as "redevelopment liquor licenses," which were established through provisions of Public Act 501 in 2006, according to the Michigan Economic Development Corp. The law allows for a city to add one new liquor license for every $50 million invested in real and personal property in the redevelopment area.

The redevelopment area, drawn out in a document from the city clerk's office, includes downtown and Midtown, as well as many other areas spread across the city that Duggan is targeting for redevelopment, from the Livernois Avenue of Fashion corridor in northwest Detroit to Jefferson Chalmers on the east side.

According to the city's assessor's office, the city saw $3.15 billion of investment in its main commercial corridors and targeted areas from 2014 to 2016. That would make it eligible for 63 new licenses. Every three years, more licenses can be issued depending on investment in the redevelopment zone, according to state law.

City Council unanimously approved in September the establishment of a redevelopment area. It now must OK the licensees before going to the Michigan Liquor Control Commission for final approval.

"… The availability of escrowed on-premise quota licenses for new businesses to purchase in the County of Wayne has significantly decreased, and the price for such escrowed on-premises licenses has increased more than 100 percent over the past year," according to the city clerk's document.Continue Reading