SLA Slowly Reducing License Backlog Under New Chair But Months Long Delays Persist

The State Liquor Authority is slowly cutting the backlog for new restaurants and bars seeking to get a first-time liquor license while the agency is also taking measures to speed up renewal applications by—gasp gasp—accepting renewals online for the first time. The move to online renewals comes after many government agencies did the same in response to the COVID-19 pandemic four years ago.

Lily May, a former member of Community 7 board in Manhattan, replaced Vincent Bradley in a major shakeup by Gov. Kathy Hochul in June 2023 that was triggered primarily by the choking delays in processing liquor applications and there have been other reforms enacted since she came to power.

“It has been our long-standing intention to seek changes to our statute that would allow us to better support our applicants and licensees,” Fan said in a statement accompanying the release of the new budget for fiscal 2025 this past April. “We wholeheartedly thank the Governor, her team, and our partners in both Houses for approving and delivering this package of improvements that will help members of our industry operate better. We look forward to continuing to support the modernization effort in the future while ensuring public safety, health, and welfare.”

In January, she formed a committee specifically aimed at cutting the license backlog and appointed four examiners and one supervisor to the New York City division. Straus News reached out to David Stoler, Regional Director for Zone 1, for information regarding the unnamed four examiners and one supervisor. But he was unable to provide the basic information. “Let me check in with counsel on this–it may take a FOIL request,” he said, referencing a Freedom of Information Law that is supposed to make government agencies more transparent. He then connected us to Public Information Officer, Patrick Garrett, who had not returned a call by presstime.

The online renewals are in response to businesses not always receiving their renewal advisories in a timely manner went sent through postal services, which then leads to further issues and in worst case scenarios, liquor licenses could get suspended or cancelled if the snail mail did not reach the applicant.

The main SLA board is supposed to consist of three members, the chair and two commissioners. But Fan had been elevated from commissioner to be chair of the job that paid former Chair Vincent Bradley $123,118/yr in 2023, according to seethroughny.net. She’s pulling down an annual salary of $200,000. A new commissioner was only appointed the final commissioner in June when John Maya, a former Utica lawyer, who records show has dealt with a number of civil cases, was appointed. He joined Fan and the existing commissioner Edgar De Leon, on the three-person board which must approve each new liquor application.

Little is known about Maya and there is no bio on the SLA web site. He is known to be a Republican since the board by law cannot have three members of the same party and both Fan and Mr. De Leon are Dems.

Allowing renewal by mail is a small step in the right direction, say Robert and Max Bookman, members of NYC Hospitality Alliance’s general and legislative counsel. “SLA has traditionally sent these notices via snail mail, directly to the business address,” according to a notice posted on the thenycalliance.org web site when the new renewal rule took hold. “The notices routinely get lost in the mail, misplaced, or erroneously returned undeliverable, all of which contributes to businesses not renewing their licenses on time, sending urgent requests to SLA for reprints, or paying the wrong fee.”

One new change, the Gov. Hochul, as part of reforms to the Alcohol Beverage Control laws, recently signed a law that allows movie theaters to sell beer and wine for the first time adding a new round of applications to the system. And Hochul, as part of changes to the 90-year-old SLA statues also signed legislation allowing a five-year extension that will allow for the current “drinks to go” provision to continue through 2030.

And she also signed a bill into law that allowed outdoor dining enacted in the COVID era to be a permanent part of the landscape, subject to local jurisdiction. But as the recent Open NYC Dining regulations and their Aug. 3 deadline demonstrated, about 75 percent of the restaurants in the city that were operating dining sheds on city streets during the pandemic opted to not apply for a new permanent license. They must now take down their sheds. For those who did apply, the new street sheds must come down on November 29 and can be put up again next April. The city DOT that administers that program did not have an update on how many new street shed applications it will grant, but said it has received about 3,200 applications by the Aug. 3 deadline, a big drop from the 12,000 street sheds that are estimated to have been erected during the pandemic.

The backlog problems are a long festering problem stretching back years. Between 2017 and 2019 there was a wave of liquor license applicants that found themselves waiting much longer than expected for the lucrative license. For most restaurants, liquor is more profitable than food, putting another obstacle to a profitable business in what is already a punishing business environment. And bars without drinks simply have no way to generate any revenue.

This can be extraordinarily problematic for new would-be restaurant and bar owners who don’t have a “get-out clause” in their new lease, as they’re essentially paying rent for a business that isn’t operating. Restaurant and bar leases in NYC typically run for ten years.

A common patch up for this issue while awaiting a permanent liquoreis allowing diners to bring their own alcoholic beverages, or promoting one’s establishment as B.Y.O.B. [Bring Your Own Booze].

While it is widely used as a stop gap measure, it is technically illegal under SLA rules and regulations. If someone files a complaint with the SLA over the practice, such as a cranky neighbor who doesn’t want a new restaurant or bar in his or her neighborhood, it may prompt the SLA to deny or delay the granting of a license.

And the SLA has no qualms about cashing the check for a license application immediately, even if the actual granting of a license is still many months away, sources say.

An interim solution for this is a temporary license, which was enacted as part of the ABC reforms signed by Hochul. It is supposed to take around 30 days to get, and is valid for 90 days once granted. Businesses have found themselves having to renew their temporary licenses due to not receiving their official license in the timeframe in which the temporary license lasts. Like the official permanent license, there have been significant delays for temporary licenses as well. It’s stated on the SLA website that this can be caused by a number of “deficiencies” on one’s application. But one former insider confided that applicants aren’t necessarily told that they’ve made a mistake. Instead, they’re left waiting longer than expected, just to be eventually denied. Although application “deficiencies” are the common reason given for delayed licensing, those who did everything right are still susceptible to delays.

A source close to the matter said the problems with business-choking delays stretch back at least fifteen years. “[There was a report in] 2009 that went through all the problems with the SLA. There were 3,000 applications in the backlog, taking a year. Some people were getting theirs faster. They did an investigation, the FBI went in there and took everything. Turns out there was no corruption, but they were just totally incompetent,” he said.

“Guys were doing things for their friends; they weren’t getting paid for it. They would issue a license in two weeks, another would take a year. They had no system.” Over the next six years, he said the backlog was gradually eliminated. “By 2015 there was no backlog, things were running smoothly. You could get a license within 2-3 months.”

But in ensuing years, long delays again became the norm. Part of the delay problems simply stems from the way the understaffed agency replaces workers. A post can’t be filled until the current occupant moves on. “Say we had 10 examiners in the office,” said the former insider. “So we lose 2, they replace those 2, but they don’t know anything. It takes like six months” to get the new inspector up to speed. And meanwhile, the backlog starts growing. “They started to backlog again in 2017.” And it worsened once COVID hit and workers were operating remotely.

While the SLA is strictly a state operation, Mayor Eric Adams, when he came into office, established a NYC Office of Nightlife, to help the small business restaurants, pubs and clubs. We’re not sure how helpful the office has been to the small business operators, but the latest appointee is a hard man to reach. Straus News reached out to Executive Director of NYC’s Office of Nightlife, Jeffrey García, and his office multiple times and were not met with a response.

As the backlog has not been eliminated, the SLA recently voted to authorise the committee that is looking to cut backlogs through November 2024. “The first item called was 05/15/2024-070, a review of the Delegation of Power with respect to the committee to address the backlog of license applications. The Chair described the progress made by the committee and the members voted to extend the delegation for six more months,” according to the minutes of the Aug. 6 board meeting.

New York State Senator James Skoufis, chair of the Investigations and Government Operations Committee, acknowledged there is still much work to be done at the SLA. “We should be doing everything in our legislative capacity to ensure small business owners get the support they need,” he said in a statement. “Though there is much more work to do and many important updates were dropped during negotiations–I am gratified to see positive and useful reforms to the antiquated ABC law included in the final state budget.”