COURT HOUSE – A presentation to Middle Township Committee Oct. 21 on the repurposing of the former Rio Mall, as a public/private space for county services and retail activity, started as a discussion of the planned renovations. It quickly turned into a controversy over a proposed liquor license, with two holders of existing full plenary licenses objecting to the plan.
Part of the redevelopment of the property involves an entertainment venue at the west end. The entertainment area will be developed by Stone Harbor Theater LLC, the entity that owns Harbor Square Theater in Stone Harbor, along with several other combined entertainment and movie venues.
The County Commons plan calls for a movie theater, bowling alley, arcade, restaurant, and beer garden. The issue at the meeting was the use of a state option that would allow the sale of liquor without the purchase of a liquor license.
County Counsel Jeffrey Lindsay explained that state law allows for the use of a concessionaire permit in an instance where the land and building used for liquor service is owned or under the control of a state, county or municipal governmental entity, in this case, Cape May County.
“The county does not purchase the permit,” Lindsay said. “We authorize the tenet to apply to state Alcoholic Beverage Control (ABC) for it,” he added.
The permit allows the sale and service of alcoholic beverages for immediate consumption on the premise on an annual, renewable basis. The holder of the permit has no equity stake and can’t take the permit if the entity vacates the space, nor can it sell it.
The permit renewal is at the discretion of the ABC. Lindsay said the yearly cost is $2,400.
The cost is what led to the objections raised by current owners of a full plenary license, which a holder must buy at market price through a competitive bidding process. Five plenary licenses exist in Middle Township. Prices paid are in the range of $750,000 per license.
Lou Altobelli, who recently purchased and is remodeling the former Atkinson’s Restaurant, is one of the owners of a plenary consumption license. For Altobelli, the county’s action with the concessionaire permit devalues his investment.
“How do we allow a tenant to serve liquor essentially for free?” he argued. “They pay $2,400 a year and can serve the same drinks as a license holder who paid $750,000 for the right.”
Altobelli, along with Richard Rutherford from Rio Station, another plenary license holder, asked why the municipality and the county were not protecting the value of the existing licenses. “It is your duty to do that,” Altobelli said.
Mayor Timothy Donohue explained that the municipality has no authority in the process. Freeholder Director Gerald Thornton was in attendance, but did not speak.
Altobelli argued that a sixth plenary consumption license was put out for bids in June, with a required minimum bid of $750,000. “You had no takers,” he said.
In September, the municipality reissued the request for bids, lowering the minimum to $600,000. That bid process has not yet closed, and there is no word on whether it has attracted bidders.
Altobelli said the use of the concessionaire permit would devalue the sixth license. “Why would someone pay that kind of money for a license when they see what is being done here?”
Another issue he raised had to do with the LLC that would be seeking the permit. “This is not a national chain with deep pockets,” he argued. He pointed to what he saw as excess liability that would accrue to the county.
Altobelli asserted that in the case of a liquor-related injury, the LLC would not have the resources to fight it. “The county will end up being dragged into litigation when the LLC’s insurance coverage is exhausted.”
Lindsay countered the assertions, explaining that the lease agreement indemnified the county above the level of the tenant’s insurance coverage.
While many spoke in favor of what was being done with the space, Rutherford and Altobelli continued to see the plans as a threat to the value of licenses they own.
Responding to a question, Lindsay said that the winning of a concessionaire permit was a condition of Harbor Theater LLC’s lease. “If they don’t get it, they can walk away from the agreement,” he said. This commits the county to authorize the permit application to the state, objections notwithstanding.
Lindsay said all three parties interested in reviving the movie theater complex required the ability to sell liquor.
To contact Vince Conti, email vconti@cmcherald.com.
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