THE 500-FOOT RULE: What It Means for Hoboken’s Bar & Restaurant Business

(ABOVE: Capacity Images photo)

By now you may have heard of the “500-foot” rule.

As it stands, Municipal Code 68-7 currently stipulates that:
“No plenary retail consumption license, except renewals for the same licensed premises and transfers of license from person to person within the same premises, shall be granted or transfer made to other premises within a distance of 500 feet from any other premises then covered by a plenary retail consumption license.”

The move was made to prevent an overabundance of bars in one area—with existing establishments obviously grandfathered in.

Hoboken currently has 143 liquor licenses, which are granted by the State of New Jersey. An easing of the 500-foot rule, which has been proposed by City Councilmen Michael Russo (3rd Ward) and James Doyle (At-Large), will NOT allow for more liquor licenses (Last week, hMAG.com erroneously reported that the 500-foot rule limited the number liquor licenses here in town—that is technically incorrect, as the limit has been capped by the State). What the proposed lifting of the code would do is allow liquor license holders more freedom as to where they may open venues.

Most bar/restaurant owners pay rent to landlords. Landlords, fully aware that their tenants are bound by the 500-foot rule, are given an advantage over their commercial tenants when it comes to negotiating rents, leases, etc.

“The system right now is the opposite of rent control,” says one bar owner. “The building owners have all the leverage, and they know it. It really limits our flexibility.”

For example, maintenance—routine or otherwise—typically falls on the business owner rather than the building owner.

“My building wasn’t safe anymore since Sandy and I don’t own the place,” says another bar owner, “so it wouldn’t make sense for me to spend hundreds of thousands of dollars repairing it whilst my landlord sits in Florida doing nothing except raising my rent!”

In extreme cases, like that involving Northern Soul, when the tenant/landlord relationship becomes irreconcilable, the 500-foot rule can further complicate the issue. Despite paying rents on time, a series of issues between owner Marc Russell and his landlord eventually came to a head.

“I was massively restrained on finding a new location,” says Russell, “even in the 4th ward, which has one of the lowest concentrations of bars in all of Hoboken.”

Yet the fear exists that a lifting of the 500-foot rule will result in concentrations of hospitality venues throughout Hoboken.

In a public statement posted on facebook, Councilwoman Tiffanie Fisher (2nd Ward) looks at the potential ramifications of eliminating the ordinance:

“If the 500 ft. rule is repealed outright, then restaurants and bars could consider locations ANYWHERE in Hoboken. In most cases, zoning board or planning board approval would be required. However, in the following areas, Bars and Restaurants are permitted uses and require NO APPROVAL TO OPEN:

– The Central Business District (Washington south of 4th, east and down to the PATH)
– The Planned Urban Developments in the I-1(W) zone – Shipyard, Maxwell and Hudson Tea complexes
– Select redevelopments areas within the western I-1 zones.”

As Fisher explains:

“That means if you live in or adjacent to any of these areas, although the ABC conducts a public hearing relating to the transfer of a liquor license, you would not get the benefit of receiving notice before a new restaurant or bar opens, and the ABC’s approval is based upon statutory requirements not input from neighbors. And in these locations, demographics are business friendly, barriers to entry are low, and therefore the risk is higher that we would see an increase in bars and restaurants in these areas.”

According to Councilman Russo, who co-introduced the ordinance that would lift the rule, “The city is very different from the 1990s.”  In speaking with the Hudson Reporter, he added, “It was a very collegiate town where people got into fights and sloppy drunk. And now people want to go out with their spouses to a nice restaurant.”

Northern Soul has recently announced that it will move into the Sky Club, replacing an existing venue.

“I personally would welcome more bars and restaurants by me,” says Russell. “it helps everyone thrive, competition is healthy for everyone involved. There are no more liquor licenses coming to town, there are just more opportunities for relocations of current bars and restaurants.” He adds, “There are so many cool unique buildings that have been laying dormant for years that would make great bar/restaurant locations, but because of the 500ft rule they are going to waste.”

Councilwoman Fisher agrees, but is apprehensive about an all-out lifting of the rule:

“I am wholly supportive of trying to find ways to facilitate more restaurants in emerging areas of Hoboken, but I believe an all-out repeal of a 50 year old rule that was put in place not once, but twice, due to the community risks relating to concentrations of liquor licenses in our tiny, densely populated town is not the right path. And actually I believe will have the opposite of the hoped for effect in the emerging areas of Hoboken as restaurants and bars will have unfettered access to the busiest business friendly locations in Hoboken which will be more attractive. I think a better path is a combination of a more robust public process, select zoning changes and AMENDING the 500 ft rule (vs. appealing outright) to potentially create areas with special needs.”

Hoboken City Council President Jennifer Giattino (6th Ward) has called for a Special Meeting of the City Council TONIGHT (Monday, September 26, 2016 at 7:00pm) in City Council Chambers at 94 Washington Street. A vote on the ordinance will not be taken at this meeting, however, the meeting will allow the Council to hear the community’s perspective as they consider the proposed legislation.