News

Lose the Booze

What’s up with Alderman Craig Schmid’s liquor moratorium?

By Mike Seely 

When Luke Reynolds purchased Molly's on Geyer Avenue and South Ninth Street in April 2004, the Soulard bar's interior was charmingly shabby in the way that the nearby Shanti is charmingly shabby. A little grime on the rail or wobble in the stool didn't make a difference to its regulars, who sat content so long as cheeks flushed red, beer stayed cold and banter remained salty.

But Reynolds had loftier plans for the space, which he's since transformed into a sleek haunt whose turntable proclivities run more Oakenfold than Allan Coe. Through the grit, cracks and rusty nails, Reynolds saw potential. And when he stumbled across a vacant two-story property near the corner of Broadway and Chippewa that had previously housed a soul-food catering company, he felt a similar tug of intrigue. As images of an upscale nightclub danced in his head, Reynolds agreed to purchase the property from realtor Tim Crimmins for $130,000.

"It was going to be an electronic music venue with an artsy side," recalls Reynolds. "Kind of like [Washington Avenue nightclub] Lo used to be, but maybe without the Asian theme — that was what I was trying to re-create."

Reynolds was prepared to dump up to $200,000 on top of the sticker price to renovate the space. But after a brief telephone conversation with Alderman Craig Schmid, in whose Twentieth Ward the vacant property lies, all bets were off — owing to a liquor-license moratorium Schmid enacted by ordinance in the late 1990s.

"I said I was looking at buying the building, but it couldn't happen without a liquor license," recounts Reynolds. "He said, 'It's an ordinance; it's not open to negotiation.'"

Reynolds acknowledges that Schmid informed him that, because of a loophole in the ordinance, he could obtain a full-drink license (i.e., permission to serve more than just beer and wine) if at least 50 percent of his establishment's sales came from food. In other words, Schmid won't even entertain a full-drink license application if plans call for anything short of a restaurant — all of which has compelled Reynolds to undo his deal with Crimmins.

"I've had to drop the price 9 or 10 percent since Luke pulled out in order to compensate for the fact that it would have to be 50 percent food sales," says Crimmins, who acquired the property a couple of months ago with the intent of turning it. "I projected it to be more valuable than it was, so it's frustrating. Hopefully I won't lose money on it."

When asked if he'd prefer to see the building at 3756 South Broadway remain vacant rather than welcome an establishment such as Reynolds', Schmid answers in the affirmative.

"In particular locations, absolutely," the alderman says. "What happens is that your good residents go somewhere else, and you can't attract people to take their places. We're planning some new homes right to the north of [Crimmins' property], and we can't have that next door. Quite frankly, we want to have our cake and eat it too."

Shirley Wallace, who works at nearby Haffner's Antiques and is the former president of the Cherokee Station Business Association, says Crimmins and Reynolds should have done more research before pursuing the property.

"A lot of people buy these buildings and think they can do whatever they want," says Wallace, who has led efforts to tightly control liquor sales in Cherokee Street's burgeoning Mexican neighborhood west of Jefferson, a portion of which lies in Schmid's ward. "[Liquor licenses] add nothing to the community except problems. If you can't run a business and make it without selling liquor, maybe the problem is with your business.

"There's a direct correlation between fewer places to drink and neighborhood problems," Wallace adds. "As some of these corner bars have closed down over the years, we've had less problems."

Such was the explanation for enacting the ordinance in Schmid's ward, as well as in ten others which have passed similar moratoriums. Reynolds isn't buying any of it.

"Liquor licenses are so vital to the economic development and youthfulness of communities," he counters. "Take Soulard, Lafayette Square and the Central West End — they probably have the highest concentration of drinking establishments in the city, and they're also the most sought-after neighborhoods in St. Louis."

Reynolds might be onto something. The Seventh Ward, composed of major chunks of downtown and Soulard, has the most full-drink licenses in the city with 139. Runner-up with 49 is the Twenty-Eighth Ward, which extends west from the Central West End to the Delmar Loop. And third is the Seventeenth Ward, which includes the gay-friendly Grove and parts of the Central West End, with 46 permits. (Schmid's ward has twelve.)

None of these three wards have liquor moratoriums in place — and they're all teeming with new residents and commerce.

Developer Pete Rothschild agrees that the correlation between tippling and urban vitality is no coincidence, and calls into question the constitutionality of ordinances such as Schmid's.

"I think that liquor moratoriums are a mistake and are probably illegal," says Rothschild, who owns a slew of properties in the Central West End and Soulard. "It's a legitimate business, and the marketplace should tell you how many licenses you should have. Until then, moratoriums ensure that folks who have these licenses aren't going to be terribly worried about improving their prices, service or anything else, because there's no competition coming in."

Clayton attorney Bevis Schock concurs: "Behind these types of limitations on economic activity is an inherent assumption that the Board of Aldermen knows the correct number of bars that should exist."

Schock, who views Schmid's moratorium rationale as tantamount to Prohibition, adds, "The critical thing is that, very commonly, a law like this benefits those who have the existing licenses to the harm of those who wish to enter the field and compete. So it's really a protection racket." What's up with Alderman Craig Schmid's liquor moratorium?