Boston’s Liquor License Expansion Could Change The Role Developers Play In The Market

Small-business owners are popping bubbly and celebrating the future of Boston's restaurant and nightlife scene after the state expanded the ability to serve alcohol across the city.

Gov. Maura Healey signed a bill last week giving Boston 225 more licenses to boost economic development and bring more restaurants and bars to historically underserved communities like Hyde Park, Roxbury and Mattapan. 

The move signifies a new chapter for restaurant and bar owners who want to create a modern nightlife scene in Boston, a city that has been held back for decades by strict caps on liquor licenses that made them expensive to obtain.

The expansion is also expected to change the role property owners play in obtaining liquor licenses. With the cost barrier too high for many smaller-restaurant operators to enter Boston on their own, they have flocked to landlords and developers who have acquired licenses for their properties. However, the expansion will likely shake up that dynamic by targeting smaller businesses in underserved neighborhoods.

"This specific change relieves that pressure," Downtown Boston Business Improvement District President Michael Nichols told Bisnow. "We're in conversation right now with numerous BIPOC entrepreneurs interested in locating a new concept downtown, a new offering, something we don't have already."

There are around 1,200 active liquor licenses in Boston. For decades, the city hasn't been allowed to allocate new licenses, creating a secondary market for purchasing them that has caused prices to skyrocket into the hundreds of thousands, putting a strain on the city's nightlife scene.

The new bill would create 225 new licenses across the city, with 195 of them restricted to 13 ZIP codes in Roxbury, Dorchester, Hyde Park, Mattapan, Jamaica Plain, Roslindale, Charlestown, East Boston and the South End.

Richard Taylor, the developer of the 365K SF mixed-use Nubian Square Ascends project in Roxbury, said developers and landlords aren't the ones these new licenses are targeting — it is the small businesses and bars looking to come into these neighborhoods.

"Before there were local licenses, were larger developers anxious to buy the commercial competitive licenses? Probably so," Taylor said. "What this did was level the playing field in a significant way for small-restaurant owners and business owners and neighborhoods who don't have a half-million dollars to pay for a commercial liquor license."

Taylor's development is in the heart of Roxbury's Nubian Square, one of the neighborhoods targeted for the new licenses. The area is seeing a transformation as new developments are going up, and the licenses are making the dream of a truly mixed-use community come true.

"Nubian Square opens today at 7:30 and closes at 3:30," Taylor said. "These local licenses can be available to create evening and weekend business activity. It's a plus for the neighborhood, and it's a plus for residents."

As part of state law written after Prohibition, cities and towns in Massachusetts can grant one full liquor license per 1,000 residents. However, Boston was granted 665 full licenses and 320 partial licenses for the sale of wine and malt beverages only.

The city hit its liquor license cap more than two decades ago, although it has been updated a handful of times, most recently in 2014 when the state granted 75 new, nontransferable licenses to certain areas of the city.

For business owners who have wanted to serve alcohol, there have been few licenses available, with some buying licenses from closing businesses at prices as high as $600K.

"The way that liquor licenses are allocated and regulated in Boston is not of this era and is not helping the Boston of today be what it wants to be," Nichols said. "There are categories of offerings in Boston that are not possible because of the steep price of liquor licenses, and that really does hold us back from modernizing the entertainment concepts and the tourism draws and the nightlife offerings that we should have as a first-rate city."

Neighborhoods like Hyde Park have seen even less traction as smaller-business owners in the area can't afford the steep prices for a liquor license.

"For the average mom-and-pop [shops] who want to open up a restaurant, it's daunting," Hyde Park Main Streets Director Thien Simpson said. "Applying for permits is daunting enough, but trying to get any kind of alcohol license to help your business is even scarier."

Under the new expansion, Hyde Park and the other eight neighborhoods listed in the bill will receive five nontransferable licenses — three full liquor licenses and two partial licenses — each year for three years.

It has been so difficult for business owners to obtain liquor licenses in the past that many have relied on landlords who have paid to secure them.

Hyde Park restaurant Park 54 moved into 81 Fairmount Ave. in 2021. The restaurant owners, Tasha Hull and Andre Walker Sr., didn't have to file for a liquor license because the landlord had already obtained one, Simpson said.

"It made it easier because you didn't have to wait and try to find one in the market," Simpson said. "But it's not like a main street license or neighborhood license where it was considered, you know, 'free.' They're paying top dollar for that license, even though they're leasing it."

Landlords have fought to secure these licenses, as they see how owning them can help attract restaurants in the competitive market. But now that dynamic is changing.

"For groups in areas like the Seaport, where there were large landlord contributions to newer developments, this wasn't as much of a cost barrier," CBRE associate Tyler Coady said. "That's where I think that this bill is trying to get at, trying to essentially spread the wealth and foster more restaurant openings across the city, as opposed to them being confined to just a few neighborhoods."

There have been several special licenses enacted that have made it possible for well-connected restaurants and deep-pocketed landlords to obtain the right to serve alcohol.

The Speedway in Brighton opened its doors in 2020 with a special liquor license that would cover all of the smaller operators that open businesses in the complex, The Boston Globe reported. Retail landlord Edens also secured 15 liquor licenses for the expansion of its South Bay mixed-use development in Dorchester after then-City Councilor Frank Baker filed a home rule petition for those licenses to be distributed just to the project.

Boston-based firm Rockpoint secured a $425K liquor license in 2019 from Uno Pizzeria & Grille for its High Street Place food hall, placing an umbrella license over all of the restaurants that operate out of the establishment, the Globe reported.

Developer Boston Global Investors nabbed a $600K liquor license for its 17-story 10 World Trade development in the Seaport. John Hynes IV, who is leading the development, bought the license from the closed Silvertone Bar & Grill on Bromfield Street downtown.

Hynes told Bisnow the license was crucial for the project, as it lowers the barrier to entry for restaurants looking to come into the space.

"We wanted to be commercially attractive to as many restaurant tours and tenants as possible," Hynes IV said.

"The economic reality, especially post-Covid, is that most restaurant operators cannot afford the cost of a liquor license," he added. "And it's not just the cost of the liquor license which is extravagant — it's the team of lawyers and the time and the patience and the documentation and everything that goes into it."

The developer said he hopes to bring a fast-casual food hall experience to the 555K SF office and lab building, which is expected to deliver in the fourth quarter. Hynes said it was difficult to get the license even as a well-established developer.

"No matter how deep the pockets are, nobody throws around half a million dollars or $600K without careful consideration," he said.