How the permitting process works
To legally sell alcoholic beverages in North Carolina, a business must obtain the appropriate permits from the North Carolina Alcoholic Beverage Control Commission. But to do business in the city of Durham, the retailer who hopes to sell beer and other alcoholic beverages will also need a beer and wine privilege license. Here’s how the process works:
The applicant submits a completed application for a retail permit with the commission.
Upon receiving a temporary permit from the ABC Commission, the applicant may legally sell alcohol. During the 90-day term of the temporary permit, officials from Alcohol Law Enforcement (ALE) in the North Carolina Department of Public Safety will conduct an investigation of the business to verify information contained in the application and that the business is operating in compliance with ABC law.
To obtain a permanent permit, the applicant is required to submit a Local Government Opinion form to the designated municipal office for consideration. (In Durham, that’s the Durham Police Department.) The local government office has 15 days to process the form, which includes zoning compliance, fire code and criminal background checks of the applicant. It also has 15 days to object to the issuance of a permanent ABC permit.
Once the permit is obtained, the City of Durham requires that businesses apply for the beer and wine privilege license with the city’s Business License Unit. The license applications are processed by the city’s finance department and usually approved en masse by the Durham City Council.
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To Doris Ridgle, they’re “jitterbugs.” That’s how she refers to some patrons of Mosha’s Express Mart, the convenience store at the far end of her block in East Durham. Ridgle is 87 years old, and her eyes have weakened. But from her porch, on a recent cloudless summer day, she can see the jitterbugs walk by in the relentless midday heat. She is confident in her prediction of their destination. More often than not, on the walk back, they’ll carry a telltale brown paper bag. “It’s that liquor,” she says.
Ridgle, a widow, has lived in the same house for 20 years. She jokes that feeling insecure is a symptom of aging. Living near the corner store isn’t lessening her anxiety. “You wouldn’t catch me in there for anything in the world,” she says. “The police stay up there. Too many drug dealers.”
Police records seem to back her up. Between January 2011 and June 2012, Durham police made three arrests for aggravated assault, two for driving while intoxicated and eight for narcotics possession, all within 500 feet of Mosha’s. In 2010 alone, police reported 11 arrests for narcotics possession and two for driving while intoxicated, also within 500 feet of the store.
Mosha’s is one of seven convenience stores operating in the same 1 1/2-mile stretch in East Durham. Each of them holds a state permit to sell beer and fortified wine. And each has trouble with criminal activity occurring either near or on its premises.
Mosha’s changed owners in 2011. But given the opportunity to object to the owner’s application for a new permit, Durham officials balked. They often do. Since 2008, the city has objected to only four of 75 applications for Alcoholic Beverage Control Commission permits that allow convenience stores like Mosha’s to sell potent and cheap beer and wine.
A monthlong investigation by the Indy of the permitting process, including a review of hundreds of ABC commission records, shows that although city officials can consider factors such as the density of these stores in a neighborhood and the proximity to criminal activity, they rarely do.
In practice, most municipalities defer to the state ABC commission in the regulation of alcohol outlets. Indeed, the commission has the sole authority to issue or deny a permit, based on several factors, including input from local governments. ABC officials say that they rely heavily on cities and towns to provide details about the neighborhoods and their issuesinformation the state would not otherwise have.
Now the Durham City Council is exploring the feasibility of a new ordinance that would restrict the density of stores and other outlets that sell alcohol. It expects to take up the issue in August, when it reconvenes after summer break. Support has been lukewarm thus far. But Mayor Bill Bell says that both he and other officials are open to addressing the issue. “If there’s a problem, we’ll look at it,” he says. “It could be that we either haven’t established the right criteria, or that we haven’t looked at it closely enough.”
There are 222 businesses in Durham that hold active retail permits. That’s 222 groceries, gas stations, bottle shops and mini-marts that hold at least one of the three types of state-issued permits: malt beverage off-premises, fortified wine off-premises and unfortified wine off-premises.
With a population of 228,330, Durham County has one alcoholic-beverage retailer for every 1,028 residents. Compare that figure to Raleigh, a city with nearly double the population at 403,892. For every permit holder, there are 1,097 residents.
State ABC Commission officials say the majority of permit holders operate legally. But owners who fail to obey state liquor laws are part of the problem, say some local activists. The other issue is the clustering of these permit holders in neighborhoods, particularly low-income areas.
Academic researchers and private think tanks have spent years documenting the connection between convenience and liquor store proliferation and social and public health issues including obesity and violent crime. A 2007 Rand Corporation study confirmed what a drive through the urban core of most cities already does: nationwide, residents of low-income neighborhoods have greater access to alcohol retailers than their more affluent counterparts.
The permitting process has several steps (see sidebar at right). It starts with an application to the state ABC Commission, which has the sole authority to approve or deny it. But in order to obtain a permanent permit, the application must also be reviewed by an office in local governmentin Durham’s case, the police.
Durham police submit what is called a local government opinion on an applicant, based on several factors, including density. Yet there is no consensus within city government on which factors to take into account. It’s clear that density is not one of them.
Durham City Manager Tom Bonfield says the city defers to the police department. “I can’t tell you what they take into account and what they don’t,” he says.
For the local government opinion, Durham police do use factors such as criminal background checks and public input.The public input portion is completed via email, says officer John Massimo, who compiles information for the form. According to Massimo, details of the pending application are sent to the public through neighborhood email listservs and Partners Against Crime groups.
The public input is compiled for the consideration of yet another police officer, who, after being presented with all of the information, decides whether the department objects to the application. Durham police then submit this local government opiniona three-page formto the commission. If police object to the application, they must provide evidence backing up their stance.
The form lists factors that the commission is legally allowed to consider when determining the “suitability” of an applicant and the business location. But despite their current reluctance to do so, police have previously taken into account the full range of those factors in objecting to permit applications, including nearby criminal activity.
In 2011, city police objected to a permit application that would have allowed the Adam Mini Mart on Lakeland Street, a building adjacent to the McDougal Terrace housing project, to serve alcoholic beverages. The file is thick with missives from police and residents asking the Commission to deny the application. Granting the request would, as one officer put it, “create this focal point again for the drug trade, which will affect the renovated park across the street, Burton Elementary School which is just up the street from the store, McDougal Terrace residents, and be a burden on police and EMS when calls for service go up.” The commission ultimately denied the application.
“We are not given any specific guidance from the city,” says Durham Police Deputy Chief Larry Smith, via email.With the retirement of Deputy Chief Steve Mihaich, it’s now Smith’s duty to sign the local government opinion forms. “Primarily what is looked at is the criminal history of the applicant, the calls for service at the location and citizen input,” he writes.
But not density?
“The number of permit holders in a particular area is not considered,” he adds.
Michael Herring, ABC Commission chief administrator, says there are no legal obstacles preventing Durham or other municipalities from basing objection on density or any other factors on the state’s list. But he and other officials are quick to point out rejected applicants can appeal the commission’s ruling to the state Office of Administrative Hearings.
“We have to be able to defend the decision before a judge,” ABC Commission spokesperson Agnes Stevens says.
In the past 10 years, the commission has rarely denied a Durham application. Between January 2002 and June 2012, the commission reviewed 573 new applicants for malt beverage, fortified and unfortified wine permits in Durham. It denied just five applications.
In Doris Ridgle’s neighborhood, two convenience stores are separated by a 1.3-mile stretch. The quickest route between them is North Alston Avenue, which juts through the heart of the Cleveland-Holloway district, one of the oldest and poorest neighborhoods in Durham.
It’s a stretch dotted with faded single-family homes, a sprawling elementary school and yet more convenience stores. In the 10 or so minutes it takes to drive from Mosha’s on Juniper Street to Durham Convenience on Main Street, you pass five more mini-marts.
According to 2010 census tract data, the poverty rate in these neighborhoods ranges from 44 to 58 percent.
That’s not all the stores have in common. Each bears at least one of the hallmarks of inner-city convenience stores: shelves stacked with boxes of snacks and dry goods; clerks sitting behind panes of Plexiglas waiting to conduct the next transaction through small windows; refrigerators stocked with sodas and 40-ounce bottles of malt liquor.
But more than the criminal activity that may be associated with convenience stores, some local activists are concerned with their influence on neighborhood kids.
Wanda Boone is one of the city’s most outspoken watchdogs of alcoholic beverage retailers. At a May meeting of the Durham City Council, she and other concerned members of Durham Together for Resilient Youth helped to delay what would have been the routine approval of applications for a city-issued beer and wine privilege license.
“The first step is to make sure that these places are in compliance,” Boone says. “It’s how you help ensure that children are not gaining access to alcohol. That should be the focus rather than the number of stores.
“It’s what we’re concerned about right now more than the number of stores; it’s because the city may not have anything in place to limit them for a while.”
As it turned out, one of the applicants had a history of breaking state liquor laws.
Yet, council members eventually approved that application and 27 other new ones, as well as 275 renewals for existing businesses. But the council also requested that City Manager Tom Bonfield direct his staff to examine regulations recently developed by the city of Wilmington.
The story of Wilmington’s density policy sounds familiar: too many bars and not enough distance between them. At one time, it was a great problem to have, says Wilmington City Councilman Kevin O’Grady: Hundreds if not thousands of people flocked into the city’s Central Business District each weekend.
In a 30-block radius of downtown Wilmington, 35 restaurants and 37 nightclubs held alcohol permits, O’Grady says. Some of those clubs could accommodate upward of 600 patrons. At last call, the bars emptied into the streets. Fights erupted. Nearby businesses were vandalized. The police, O’Grady says, were outnumbered. “If you were being nice, you’d call it lively.”
Two years later, the town has established, within the framework of current ABC law, a policy that restricts the size and density of clubs in the city’s Central Business District.The policy also establishes a process by which stakeholderspolice, city administrators, residents and nightclub ownerscan create a joint opinion of new applications for state liquor permits. Along with aggressive prosecution of nuisance laws by the city attorney, O’Grady says the policy has helped curb the problem.
So why can’t this happen in Durham? “I think that the city rightly feels that it is secondary to the state in the enforcement and formulation of alcohol regulations,” says City Councilman Steve Schewel. (Schewel is president of Carolina Independent Publications, which owns the Independent Weekly.)
In May, Schewel questioned the City Council’s routine approval of beer and wine privilege licenses, thereby reigniting the debate over the density of alcohol outlets.
Council approval is one of the last hurdles prospective operators have to clear before they can legally sell alcohol in Durham.
Density of ABC permit holders, Schewel says, is an issue of concern, but he’s cautious. “I don’t want to have us create something that puts people out of business when they’re operating fine under the [ABC] law.”
In the next few months the council will examine the feasibility of a density-based restriction. What that restriction might entail is uncertain.
The city’s trepidation about such a density-based restriction is justifiable. In Wilmington, “you’re talking about bars and nightclubs that are within a few hundred feet of each other,” Bonfield explains. “Here, you’re talking about convenience stores that are thousands of feet apart.”
In other words, defining density for the entire city, and persuading the state ABC Commission to support that definition, would be difficult. But without a policy that defines density, rejections based on proximity to other retail outlets are difficult to defend on appeal, says Renee Cowick, assistant counsel for the commission.
That might explain why the commission doesn’t often reject permit applications, and why cities without density regulation policies don’t make objections based on that criteria.
“In my nine years here, I don’t think we’ve ever presented that kind of case before an administrative judge,” Cowick says.
In developing those density restrictions, cities and other municipal governments are on their own. North Carolina, says Cowick, has no density guideline for alcohol permit holders in the state. The General Assembly would have to pass a law establishing those guidelines. It hasn’t. Without a statewide statute, a rejection based on density is “near a guaranteed lose,” Cowick says. “Legally, there has to be a reason for why you’re saying you need to limit density in this area as opposed to that area.”
Back in East Durham, Doris Ridgle is preparing to run errands. The nearest grocery store is more than a mile away, and she no longer drives. A friend from Greater St. Paul Baptist Church, located kitty-corner to Mosha’s, is coming to pick her up. Ridgle fixes her hair while waiting for the familiar honk of her friend’s car. “I hope it doesn’t take too long,” says Ridgle. “I want to be back home. The jitterbugs come out after six.”
This article appeared in print with the headline “An inconvenient truth.”
