2017-02-16 / Front Page

Decision on Liquor License Transfer Postponed

Councilors concerned that litigation could remove a license from circulation
By Olga Enger

Plans to open a Mediterranean restaurant on the waterfront of Lower Thames are on hold pending a complaint filed in Superior Court by abutters.

After hearing lengthy arguments from attorneys, Newport councilors unanimously voted on Feb. 8 to postpone a decision on an application for a liquor license transfer from Willy’s restaurant at 599 Thames Street to the proposed Ciro’s Pomodoro Italian Restaurant and Bar at 10 Brown and Howard Wharf. For 30 years, the building was formerly home to Eastern Ice Co., which provided ice blocks to fishing boats and consumers. That business was sold in 2007.

The applicant, Johannes Floe of Cumberland, told councilors he is offering a “perfect brand” to suit the Newport market, comparing his concept to fine dining options such as 41 North, 22 Bowens and The Mooring. He said his menu would include cuisine from the “eastern side of Turkey to the western side of Spain.”

“The area is an almost untapped marketplace,” said Floe. “It needs something more to offer.” The investor purchased nine of 13 condominium units, with hopes of converting the first floor into the restaurant that would operate nine months or more out of the year, explaining that as many local restaurants he would close for a period of time to allow for annual clean up, interior modifications, and respite for staff.

When the investor bought the units, the bylaws did not allow a restaurant, so in December, he used his majority share to request a modification to the declaration to suit his plans. However, the owners of the other four units are challenging that in court, arguing a change in use requires unanimous consent under state law. The other owners operate commercial businesses above the proposed restaurant.

With a limited pool of 56 full liquor licenses available, councilors were concerned that the pending litigation would create a floating liquor license, removing it from circulation.

One beer and wine license is already out of Newport’s license pool, since a former business, Area 22, has had pending litigation in Superior Court for years. Additionally, three full liquor licenses are in good standing but not operating, including those for the Boat Yard, Hope and Rhumbline.

Floe’s attorney, Michael Richards, told council he is confident that his client would prevail in court as the majority share-owner, representing 71 percent of the association votes. To amend the declaration, 67 percent of the association must approve most changes.

However, in certain circumstances, the state condominium law requires a unanimous vote, clarified Newport City Solicitor Chris Behan.

“I just don’t want council to be led too far astray on that,” Behan said.

Unanimous consent is required to “create or increase special declarant rights, increase the number of units, change the boundaries of any unit, the allocated interests of a unit, or the uses to which any unit is restricted,” under Chapter 34-36.1 of the Rhode Island General Laws.

Notwithstanding that provision, Richards argued the objections should not impact council’s approval of the transfer, claiming the dispute is a “private concern.”

“This should absolutely be a 100 percent routine transfer of a liquor license,” said Richards. The attorney added that his client was willing to move forward despite the pending litigation, but councilors were not as confident.

“It is not a risk the council is willing to take,” said Mayor Harry Winthrop.

Arguing against the transfer was attorney Turner Scott, who said he represented over 30 neighbors in addition to the three other unit owners at 10 Brown and Howard. Scott pointed to errors in a preliminary plan for the restaurant and Floe’s presumed neglect in keeping a communal bathroom clean in his role as property manager as reasons the council should question the investor’s suitability to run a business.

After over an hour of debate, councilors voted 7-0 to continue it's decision until after the dispute was resolved in court.

“This whole thing is way out of whack,” said Councilor Jeanne-Marie Napolitano. “I’m certainly not going to support an application pending a court case."

Newport's Current Liquor Licenses

Each October the Newport City Council reviews all liquor licenses and throughout the year they deal with transfers of licenses.

The following is the breakdown of the liquor license fees:

Class A- Liquor Store- $1000
Class BV-56 licenses
Annual Newport Fee–$2,380
includes vitualing license fee.
Class BL-11 licenses
Beer and Wine-$1,500
Class BT-1 licenses
Jane Pickens-$500
Class D (Club)-$800
Class C-1 license
Salvation Café- $800
Class K-1 license
White Horse Tavern- $2000
BYOB no licensing fee.

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