A South Carolina administrative law judge's ruling that a Five Points late-night college bar didn't serve enough food to get a liquor license could shutter bars and clubs across the Palmetto State, experts say.
The closures could have a rippling effect on the state's tourism and hospitality industries and put a big dent in the state's tax base, Robin DiPietro, a professor of hospitality at the University of South Carolina, said.
"This is going to create havoc in many areas of South Carolina," she said. "There are probably a hundred of these bars within driving distance of my house (in Columbia). . . . And this could change the whole landscape of places like Myrtle Beach."
Judge Deborah Durden ruled Wednesday that the state Department of Revenue should not extend the liquor license for the Five Points Roost, a late-night college bar in Five Points that was formerly known as Pour House. The bar reopened under its new name last year after being closed by its owner under pressure from Columbia police.
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Durden ruled that the Roost did not serve a "substantial" amount of food, which is required until state law to get a liquor license for on-premise consumption.
Durden ruled that the establishment could not continue to operate under a temporary license offered to all new businesses that sell liquor by the drink.
The judge also said that the bar at 800 Harden St. strained the resources of local law enforcement, contributed to underage drinking and would be a "nuisance" to the community. She added that ownership of the bar was murky.
But it was Darden's ruling on the absence of food sales at the bar that is sending ripples through the state's hospitality industry. The vast majority of the nearly two dozen late-night bars in Columbia serve little or no food.
Statewide, the number of bars affected could be in the hundreds.
"If enforced, it's going to cause heartburn for a lot of people, that's for sure," said Brook Bristow, a Charleston attorney who helps craft breweries and distilleries with license issues. "This should put a lot of bar owners on notice. This is a very important decision, for sure."
What's a meal?
The Roost's license was challenged by residents of neighborhoods adjoining Five Points, an urban village near USC. Durden cited state law by chapter and verse when issuing her decision.
She ruled that the Roost "is not primarily and substantially engaged in the preparation and serving of meals and thus does not qualify for" an on-premises beer and wine permit or a liquor by the drink license.
The judge noted state law says that in order for a "bona fide" business to receive a liquor license for on-premise consumption, it must be "engaged primarily and substantially in the preparation and serving of meals."
Those meals must be served "upon the demand of guests and patrons during the normal mealtimes that occur when the licensed business establishment is open to the public, and that an adequate supply of food is present on the licensed premises to meet the demand,” she wrote.
She also said that "sandwiches, boiled eggs, sausages, and other snacks prepared off the licensed remises but sold there are not a meal.”
The business must also:
▪ Provide seating for no fewer than forty persons
▪ Have a separate kitchen with a stove and 21 cubic feet of refrigerated space for food
▪ Provide menus and menu boards
The root of the evil
Durden ruled that The Roost "does not have an oven or a stove other than a microwave, and there is no evidence that menus are provided to customers."
She cited a previous S.C. Supreme Court ruling that denied a bar a liquor license because it only netted 10 percent of its sales by food. The Roost, she said, only generated 5 percent of its sales through food.
Scott Linaberry, a veteran Five Points bar manager and owner who subleases space for several late-night bars in Five Points, said that enforcing the restaurant rule would backfire if the intent was to limit bars selling cheap, late-night booze to college students.
"Cheap booze is the root of this evil," he said oflate-night drunkenness, vandalism and violence in Five Points. "This will cause (owners) to drop their liquor prices even more to try to bring up the food (percentage) and keep their licenses," he said.
And the fact is, Linaberry said, college kids don't go to bars on a Saturday night to eat.
"You would have the Herculean task of selling something to someone that they don't want," he said.
A very heavy lift
USC's De Pietro said the cost of installing kitchens would be prohibitive to not only college bars, but to tiki huts, roadside honky tonks, small-town taverns and big city dive bars, from Pawley's Island to Pumpkintown.
"They are not going to have the money or space to make the modifications," she said. "We can't get rid of those locations. The taxes that the state would lose would be prohibitive. And do we want empty buildings standing there instead?"
Should the appeals court uphold Durden's ruling, and the S.C. Department of Revenue and State Law Enforcement Division enforce it, the issue could land at the feet of the legislature, either to change the law or augment SLED's 45 liquor enforcement officers, Bristow, the Charleston lawyer, said.
"When you consider that around the state there are thousands of liquor license holders, it’s a very heavy lift to enforce everything," he said.
The S.C. Restaurant and Lodging Association, which represents the state's hospitality industry, said it is evaluating the decision.
"Clearly this is a matter of potentially statewide impact which entails interpretation," the association said in a statement to The State.
The decision will be discussed at the group's board of directors meeting on April 17, according to the statement.
Dick Harpootlian, the attorney for neighbors who challenged The Roost's license, said the revenue department and SLED need to enforce the law or the General Assembly needs to change it.
"Don't point to this judge," Harpootlian said. "We have bars operating illegally in our neighborhood that are causing a nuisance. If that has a negative impact, so be it. Everybody has stuck their heads in the sand for the last 20 years."