West Cape Liquor License Sales May Trim Taxes for a Decade

WEST CAPE MAY — A Nov. 4 ballot question in this borough is asking voters if they favor the borough selling two liquor licenses which could raise $1.4 million to provide tax relief for the next eight to 10 years.
The ballot question asks if the borough should sell one restaurant liquor license, sell one retail liquor license that would allow package sales, and should 100 percent of the money be placed in a dedicated trust fund for long-term tax relief for residents?
West Cape May has been a “dry” town since its inception.
The last time the borough held a referendum on selling liquor licenses was in 1976 when the question was on the ballot along with presidential candidates Jimmy Carter and Gerald Ford. Carter won but liquor licenses lost.
A longtime resident said the license issue lost by one vote in 1976, 169-168.
A town meeting was held in Borough Hall Tuesday Oct. 15 with a panel comprised of Borough Solicitor Frank Corrado, Cape May Police Chief Diane Sorantino and Borough Auditor Leon Costello.
Mayor Pamela Kaithern, who moderated the meeting, said the restaurant liquor license minimum bid would be set at $650,000 while the retail store minimum bid would be $750,000. She said the licenses would not be sold for less than the minimum bids.
The mayor said borough commissioners set the minimum bids based on the prices of liquor license sales in Cape May. The restaurant liquor license could be sold to an existing eatery or for a new one to be constructed.
Kaithern said while the voter referendum is non-binding and the borough could legally sell the liquor licenses without voter approval, Borough Commission chose not to take that route.
Costello said if voters approve selling the two liquor licenses, a public auction would be held. Depending on how much money the sale brings will determine how many years the tax relief will last, he said.
Costello said the intent is to shave 2 cents of the tax rate each year as long as the funds last.
Corrado said if the ballot questions are approved, Borough Commission will adopt an ordinance authorize the issuance of liquor licenses.
The state regulates the amount of licenses that can be issued by population. For up to every 3,000 residents, one premises license can be sold and one off-premises license for up to each 7,500 persons, said Corrado.
“The borough has the full authority to regulate those licenses,” he said. “It can set terms and conditions, it can set hours of operation, it does this all by ordinances….”
Zoning ordinances make sure an establishment selling liquor fits in with the surrounding neighborhood, said Corrado.
He said the successful bidder for a license must undergo an extensive check from the state Alcoholic Beverage Control and a police background check.
Sorantino addressed the impact on law enforcement from two establishments in West Cape May selling liquor. She said a borough resident asked her if it would produce an influx of drunk driving.
Sorantino said neighboring Cape May has 21 consumption liquor licenses and one distribution license.
“Over 90 percent of drunk drivers that are arrested in West Cape May are coming out of Cape May,” said the chief.
She said she expected “little to no problems,” if the licenses are sold in West Cape May.
Sorantino said restaurant patrons in the borough were currently consuming wine in a bring your own bottle scenario.
Kaithern said borough commissioners have discussed limiting hours of operation for restaurant liquor sales from 10 a.m. to 10 p.m. Monday through Saturday. For retail sales, 9 a.m. to 10 p.m. Monday through Saturday and noon to 10 p.m. on Sunday.
The mayor said a final decision has not been made on operating hours. Annual fee to renew the license would be $2,500, she said.