Newark’s law that penalizes unruly bars by suspending their special-use permits to sell alcohol is “completely illegal,” Delaware Alcoholic Beverage Control Commissioner John Cordrey alleged at a recent hearing.
The statement came during a hearing for Caffé Gelato, which was required to appear before the commissioner after a third violation for serving an underage customer, an incident that occurred in September.
Caffé Gelato was among five establishments that failed an inspection by the Newark Police Department and Delaware Alcohol and Tobacco Enforcement in September.
NPD routinely sends underage cooperating witnesses into bars, accompanied by undercover officers. The witnesses cannot lie, and if asked for identification, they show their real driver’s license indicating they are under 21.
Through Newark’s point system – which was rolled out in 2016 as a way to hold accountable unruly bars and restaurants – establishments that serve liquor can accrue different amounts of points for violations such as pedestrian issues, noise complaints and disorderly conduct, as well as more serious offenses like serving minors.
If an establishment reaches 10 points, the Newark Police Department can make a recommendation to city council to suspend its special-use permit for 30 days, meaning the establishment can not serve alcohol during that time.
Caffé Gelato was the first to go through a city council hearing, and council voted to suspend the restaurant’s special-use permit for 30 days in January. Caffé Gelato has since completed the suspension and resumed the sale of alcohol.
Cordrey said that the city’s revocation of Caffé Gelato’s special-use permit triggered his office to suspend the restaurant’s liquor license for 30 days.
“I had no choice but to suspend your alcohol license in that same period of time,” Cordrey told Caffé Gelato owner Ryan German at the hearing. “So essentially, I have suspended the license for 30 days. It’s not something related to this sale. It was something that was required by the City of Newark’s decision, which, as I say, in my mind, is completely illegal. They don’t have the ability to do it, but they’ve done it anyway. And until someone takes them to court, I guess they’ll continue to do it.”
During the state hearing, which is separate from Newark’s proceedings, Cordrey declined to add more days to the restaurant’s suspension.
In a separate interview, Cordrey said that under Delaware law, a city or county can’t charge a fee to sell alcohol.
To get a special-use permit in Newark – for a zone other than residential – an applicant must pay a fee of $650.
“I think that the entire special-use permit procedure is inappropriate,” Cordrey said. “The General Assembly provides that the commissioner’s office is the entity that determines whether or not alcohol can be sold at the premises, not the city of Newark.”
He continued that neither Newark nor any other city would be able to ban the sale of alcohol.
“That would be unconstitutional,” he said. “If they are charging fees, even small fees for the privilege of selling alcohol, that is contrary to the constitution and contrary to that statute. So if they can’t charge a fee for the permit, then revoking the permit is somewhat meaningless.”
Newark officials, however, believe they are on solid legal ground.
“Essentially, alcohol sales are not allowed in certain zonings, absent a special-use permit. So it’s not a permit to serve alcohol, it’s a permit to allow alcohol to be served in the zoning district,” City Manager Tom Coleman said.
Newark’s zoning code requires special-use permits for a number of different uses, besides alcohol sales. For example, in the central business district, businesses such as fast-food restaurants, motels, apartments and grocery stores larger than 5,000 square feet all require special-use permits.
Coleman added that, under Title Four, Section 561-F in Delaware code, the city can justify the permit process.
Under that section, it indicates exactly what happened in the case of Caffé Gelato: should a city indicate that an entity’s permit has been suspended, then the alcohol commissioner will suspend the license until the commissioner receives notice from the city that the permit has been reinstated.
“So it sounds like it worked. It worked how it was intended. It worked relatively quickly and in accordance with state law,” Coleman said.
Coleman also cited another section of state law, which indicates that the alcohol commissioner won’t grant a new liquor license of any type unless a city approves “that the premises where the license is to be used is properly zoned for the applicant’s intended use, that all necessary permits have been approved and that the applicant has complied with all other applicable licensing requirements” of a city.
“So it’s pretty clear in there that municipalities have the ability to put licensing requirements on properties, and properties have to be properly zoned to get a license to serve alcohol,” Coleman said.