Five Points landlords and bar owners are starting to pull out of the village near the University of South Carolina as state Sen. Dick Harpootlian, representing USC neighbors, challenges their liquor licenses in court.
Harpootlian is representing University Hill and Wales Garden residents who say drunken, rowdy students, many under-aged, are trashing their yards, endangering themselves and others and causing mayhem, generally. The neighbors blame a dozen or so college bars, which generally open only at night, that cater to USC students and advertise and serve the cheapest booze, called “the race to the bottom” in the hospitality industry.
The neighbors so far have challenged the liquor license renewals of eight bars, resulting in four closings, three voluntarily. Now, more closings are expected, according to bar owners, landlords and commercial real estate agents interviewed by The State..
“Everybody in Five Points is jumping ship because of the Harpootlian thing,” said Alex Waelde, a commercial real estate broker with Trinity Partners, who is representing the owner of the building which housed Five Points Roost.
He added that while many transactions will not be listed, advertised or negotiated in public, “pretty much every (bar that caters mainly to USC students) is for sale, changing owners or closing.”
Also, the owners of two buildings on Harden Street that host college bars said they are selling their property.
“There are going to be a lot of empty buildings down there,” said Jimmy Knight, who owns the building at 734 Harden St., the former location of The Parthenon restaurant that now houses Thirsty Parrot, which is only open at night from Thursday through Saturday.
“We’re going to put that building on the market,” he said. “We don’t want to wait around until all these places go dark and everything gets dumped on the market at the same time.”
Jon Sears, who operates seven bars or restaurants in Columbia, including three late opening college bars — Pavlov’s, Bird Dog and Cotton Gin — said he is selling the former Five Points Theater building at 632 Harden St., which houses Cotton Gin. Asking price? $1.2 million.
“We have too much going on,” said Sears, who also owns Jake’s, a bar and grill in Five Points. He also recently opened the upscale Hendrix restaurant on Main Street and purchased The Gourmet Shop in Five Points with Amy Beth Franks, the former executive director of the Five Points Association.
“We decided to put it out there and see what we can get for it,” he said of the former Five Points Theater. “We would love somebody to come in and do something different, like turning it back into a theater, a venue. We’re not married to somebody who wants to do a bar.”
Harpootlian and the residents are challenging the licenses of the college bars as the licenses come up for renewal. The basis for their challenge in part is a lack of food sales.
According to South Carolina law, only hotels and restaurants that “primarily and substantially” sell food are allowed liquor licenses. Most college bars get the vast majority of their revenue from alcohol sales, not food.
One college bar, Cover 3, withdrew its request for a license renewal last month during a contentious hearing that focused in part on food sales.
Until that case, the S.C. Department of Revenue had not considered food sales when issuing licenses. However, after a meeting between Gov. Henry McMaster, Harpootlian and revenue Director Hartley Powell, the department said it would consider food sales in the Cover 3 Case.
Once the department said food would be a factor in awarding the license, Cover 3 pulled it applications during a renewal hearing.
Manager Connor Hobbs had testified that the bar, which doesn’t open until 8 p.m. and usually stays open until 2 a.m., took in $1.4 million in gross sales in 34 months and had only $8,500 in food sales, mostly Chick-fil-A sandwiches purchased from a nearby Five Points store and resold for $5. That’s a percentage of 0.06 in food sales.
It was a dramatic change in policy for the department, said Chris Kenney, an attorney with Harpootlian’s firm who argued the Cover 3 case.
“The acid test now is are they really a restaurant,” he said. “When you have no food sales it’s going to make it tough to get a license.”
A department spokeswoman said that Kenney is overstating the policy change.
“There is no new policy,” spokeswoman Bonnie Swingle said in an email.
Since a 2009 case, the department “has not requested information about the percentage of food sales versus alcohol sales from applicants,” Swingle said.
But the department recently learned that food sales made up less than 1 percent of Cover 3’s business.
“For this case, it is the Department’s position that if a business’s food sales are less than one percent of its total sales, then those food sales do not constitute a ‘regular source of business,’” she said. “In other words, food sales of less than 1% are not enough to satisfy the state’s restaurant requirements.”
Waelde, the Roost’s listing agent, said the change could have stunning ramifications statewide. He also runs the Twitter feed “Drinking Ticket” that focuses on Five Points bars and has 79,000 followers.
“There is no statute for a bar in South Carolina,” he said “There are a lot of people who are at risk,”
In addition to Cover 3, Five Points Roost, at 800 Harden St., closed last August when an state administrative law judge denied a liquor license renewal for a variety of reasons, including a lack of food sales..
The 2,483-square-foot space is now listed with Trinity Partners for $5,500 per month.
Also two other college bars, The Horseshoe and The Barn, didn’t apply for a liquor license earlier this year. The 5,500-square-foot Horseshoe space is now listed for rental with Colliers International.
Taylor Wolfe, the Colliers International listing agent for both the Horseshoe and the former Five Points Theater, said the paradigm shift in Five Points is an opportunity for new businesses and concepts to come into the village.
“But it’s going to take committed building owners reinvesting in their properties,” he said. “Because you don’t know what the viability of (college bars) are for the long term. You don’t even know if they can get open in the first place.”