NC Bars finding their permits have been canceled without notice

Permit cancelation is another hit to private bars essentially closed since March 2020

Sugar House bartender Shelby Minnix creates a Lavender Lemonade cocktail in a to-go bottle, Thursday, Aug. 13, 2020, in Detroit. At least 33 states and the District of Columbia are temporarily allowing cocktails to-go during the pandemic, up from around three before the coronavirus struck. Dave Kwiatkowski, who owns the Sugar House was able to reopen July 10 for carryout service. Kwiatkowski normally employs a staff of 16, but for now, it's just him at the door and a bartender making drinks. (AP Photo/Carlos Osorio)

RALEIGH — Bar owners across North Carolina report finding out that many of their establishment permits have been canceled by the state’s alcohol beverage control division with no notice.

In a press release issued by the NC Bar Owner’s Association (NCBOA) on Jan. 14, around 120 private bar permits were canceled by the N.C. Alcohol Beverage Control Commission (ABC) as of Jan. 4 with no notice to the owners and some owners report local and state law enforcement ordering them to close their bars immediately or they will be issued charges and penalties.

“Yet another detrimental action aimed at private bars in the state, which have taken the greatest burden of the pandemic and economic restrictions,” the NCBOA press release reads. “We call for immediate action from Gov. Roy Cooper, NC legislation and the NC ABC Commission to take whatever action necessary to reinstate these bars’ permits and save thousands of jobs and livelihoods that have been, and continue to be, destroyed by these restrictions and discriminatory treatment from the other 6000 plus alcohol permitted establishments in the state.”

Logan Martin, the lobbyist hired by NCBOA, tweeted the release which received a response from Sen. Jim Perry (R- Lenoir), who tweeted “Insult to injury! Legislation will be filed.” Perry tagged House Majority Leader Rep. John Bell (R-Wayne) on the tweet.

There’s a lot of confusion about the cancelations, with some questioning if they should have even happened.

On July 13, 2020, a bill signed into law by Gov. Roy Cooper gave bars prohibited from operating under executive order 141 a deferment window for the payment of fees or permit renewals until 90 days after the order was rescinded.

“Notwithstanding G.S. 18B-903, payment of the fee for renewal or registration of an ABC permit held by an ABC permittee that is prohibited from operating pursuant to Executive Order No. 141, Easing Restrictions on Travel, Business Operations, and Mass Gatherings, shall not be required until 90 days after the date the Governor signs an executive order rescinding the prohibition on those permittees’ operation, provided the ABC permittee notifies the ABC Commission in writing, including by e-mail or other electronic means, of its intent to delay payment.” – Session Law 2020-94, Senate Bill 226

It was not until Oct. 2, 2020, that Cooper issued executive order 169 allowing private bars to operate but only at 30% of outdoor occupancy. Indoor operation remained closed and the outdoor seating allowed by order 169 did not help most bars. Owners cited they either did not have an outdoor space or the space wasn’t large enough to produce enough revenue to warrant opening.  Additionally, winter weather has made most outdoor spaces unusable.

NCBOA believes that executive order 169, which expired on Oct. 23, appears to be the date the ABC is using to start the clock ending the deferment on paying permit fees. If so, ABC appears to have begun their clock on permits too soon as the 90-day window wouldn’t begin until Jan. 21.

John “Beau” Tate owns two bars in Winston-Salem which have been closed since Mar. 17, 2020. He says permits for those two establishments, Tate’s Craft Cocktails and Bar Pina, costs around $4,400 or $2,200 each.

“I don’t think it really registered that the ABC would start the clock for renewing that day,” said Tate about the Cooper’s Oct. order allowing 30% outdoor only seating. “There was also no communication from ABC to permit holders that that clock began to tick.”

Tate said he’s in a unique situation as he owns two bars, but others who own a single establishment have been “blindsided” by this.

The restriction on private bars indoor spaces and the 30% outdoor seating allowance were repeated in Cooper’s order 181, which was issued Dec. 11, 2020. That order was set to expire Jan. 8 unless replaced and it was by the governor’s modified stay-at-home order 188. Order 188 does not expire until Jan. 29.

Arguably, the governor’s replacement orders continue to run through Jan. 29 and therefore still prohibit bars and clubs establishments from operating. A possible argument to be made from the governor’s orders being extended is the 90-day permit deferment window should not have been enacted by ABC.

Tate says it isn’t “financially viable” to open an outdoor space that allows for only 7 people per 1,000 feet. He added it was even less viable now that winter is here and the governor’s alcohol curfew dictating last call at 9 pm.

“It seems like such an outlandish thought that ABC would a) start the countdown for renewing permits and b) not letting anybody know about it and just cancel their permit without any notification,” said Tate.

North State Journal reached out to the ABC for comment and clarification and received a response after the original report was filed. Jeff Strickland, the public affairs director for the ABC, said that the canceled permits for the bars were being moved into “inactive status” and will be moved to active when the bars are ready to reopen.  Strickland said they would work with the bars through the process as things progress.

On Friday, Jan. 15, the ABC published a legal announcement which included a letter about the cancellations. The letter was specifically addressed to Jay Ruth, one of the members of NCBOA. The letter makes no mention of the deferment granted through the General Assembly and claims the cancellation of the permits is “part of the standard process required by state law and that the ABC Commission follows each year.”

“While these permits show “canceled” on our website, we have moved them to an inactive status for the time being,” the two-paragraph long ABC letter reads.

Board members of NCBOA have filed a lawsuit against Gov. Roy Cooper over executive orders which have kept private bars closed since mid-March of 2020. Currently, private bars and clubs are the only business in North Carolina which remain closed 11 months later.  The suit is the second of its kind, the first was filed by Pacific Legal Foundation in late December of 2020.

This article has been updated to include a response from the N.C. ABC.
About A.P. Dillon 448 Articles
A.P. Dillon is a North State Journal reporter located near Raleigh, North Carolina. Find her on Twitter: @APDillon_