NYC DOT Accepting Applications For Permanent Outdoor Dining

In accordance with Local Law No. 121 of 2023, the New York City Department of Transportation released its final rules relating to its Dining Out NYC Program for permanent sidewalk and street seating.  As of today, March 5, 2024, DOT opened its portal to accept applications under those rules. These rules replace the 2020 temporary Open Restaurants program, and all restaurants that have permits under the COVID-era program are required to file with DOT for new permits by no later than August 3, 2024.  All new applicants who have ground floor interior space are eligible and may file an application with DOT. The application must include a petition which is available on the DOT website, a site plan showing all required clearances, photographs, property owner consent and certification from the applicant that they have entered into a contract for pest control for the outdoor area. Applicants must also have a Health Department permit. Once DOT receives an application, notice is given to the local community board which has the right to comment. If they oppose the application, DOT will conduct a public hearing.  Unenclosed sidewalk and roadway cafes may only operate until midnight, and alcohol may be served only if permitted by the New York State Liquor Authority.  No music or smoking is permitted in the outdoor space. Roadway cafes must be dismantled between November 30th and March 31st.  Sidewalk cafes must have a perimeter demarcation, such as a base wall, planter, fence, or stanchions with ropes. It may not be erected on any platform or flooring. The code has specific required measurements and clearances to curbs, tree beds, subway grates, fire hydrants, and other objects. DOT estimates that approval times for applications will be approximately six months.

Proposed Rules Issued for Outdoor Dining

In August, New York City Mayor Adams signed a bill to create a permanent outdoor dining program, called “Dining Out- NYC,” which grants the Department of Transportation authority to issue permanent licenses for roadbed and municipal sidewalk seating.  DOT just issued proposed rules for the Dining Out-NYC program with notice of a public hearing to review those rules before they are adopted.  Here is a copy of those proposed rules:  DOT Outdoor Dining Proposed Rules.pdf (nyc.gov)

DOT will be conducting a public hearing on the proposed rules online on November 20, 2023 at 10:00 am. Participants can join the Zoom meeting via the link above.  Written comments can also be submitted to rules@dot.nyc.gov.  Anyone wishing to speak at the meeting must register to do so by November 17th.  Once final rules are enacted, DOT will launch an online application portal and applications will be accepted in early 2024.  Operators who have temporary permits under the Open Restaurants program may continue to use those permits through the remainder of 2023, and then must apply under the new program within three months.

Restaurant Law Webinar

Bernstein Redo & Savitsky, P.C. senior partner, Donald M. Bernstein will be participating in a panel webinar at the Bar Association of the City of New York on Wednesday, May 10, 2023, from 9:00 am to 1:00 pm. The webinar will include presentations by various speakers and discussions on restaurant leases, retail liquor licenses, labor/employment law, and corporate issues.  It is being sponsored by the Bar Association’s Hospitality Committee, of which Mr. Bernstein is a member. Registration is available on the Bar Association website.

Changes in New York Licensing Requirements

On August 31, 2022, the New York State Liquor Authority adopted a number of advisories that change licensing requirements. The intent of these changes is to remove requirements that are deemed unnecessary, and to help streamline the application process.  The advisories are all posted on the SLA website.  Some of the more significant changes are as follows:

1.  An applicant is no longer required to provide the SLA with a certificate of occupancy, temporary certificate of occupancy, letter of no objection, or place of assembly permit for the premises to be licensed. This change, however, does not affect the requirements of the municipality with respect to the need for certificates of occupancy or place of assembly permits.

2.  An applicant that is a corporation or limited liability company need only disclose those direct or indirect owners with an interest of 10% or more. Any owners, members, or investors with less than 10% do not have to be disclosed. This is a significant change. The prior rules required all owners and investors to be disclosed and complete personal questionnaire forms, regardless of their percentage ownership, if there were 10 or fewer owners. The 10% threshold only applied if there were more than 10 direct or indirect owners. Directors of a corporation do not have to be disclosed, and the only officers required to be included in the application are president, secretary, treasurer, and CEO if there is one.

3.  Applicants will no longer be required to provide copies of bank statements showing the source of funds.  The SLA does, however, reserve the right to request such documentation during the review process.

4.  The SLA will no longer scrutinize deeds or leases, other than confirming the name of the applicant, the premises, and whether there is a percentage rent provision.

5.  Outdoor space on private property must be a part of the application if it is to be licensed and must be contiguous to the indoor space. Municipal space is not to be included in the application as part of the licensed space. The applicant must, however, have a permit from the municipality to use that space. It does not have to be contiguous to the indoor space. Any licensee that has a condition on its license prohibiting the use of outdoor space may no add that space unless it has an application for a change in method of operation filed and approved.

6.  Importer Licensees are now permitted to use Marketing Permits.  Additional restrictions have been placed on the use of Marketing Permits in unlicensed spaces – upper tier entities may use Marketing Permits in unlicensed spaces (i) a maximum of times at a given unlicensed location per year, (ii) on no more than two consecutive days at any unlicensed location, and (iii) on no more than two consecutive weekends at any unlicensed location.

Please contact us if you have any questions regarding these important changes.

Opening a Restaurant in New York City

The New York City Bar Association is hosting a program, “Opening a Restaurant in New York City: Legal Issue Bootcamp,” on Thursday, June 1, 2022 from 9:00 am until 1:00 pm. Donald Bernstein of Bernstein Redo & Savitsky, P.C. will be one of four presenters/panelists, and will be speaking on the subject of New York liquor licenses. Other topics will include corporate formation, restaurant leases, and labor and employment issues affecting restaurants. The program is sponsored by the Hospitality Committee of the Bar Association.

Cocktails to Go Are Now Legal in New York

Last week, New York State amended the Alcoholic Beverage Control Law to allow for cocktails to go. Under the new law, any retail licensee may sell any product it sells at retail for take-out or delivery. Liquor or wine to go must be accompanied by a “substantial food item.” The alcoholic beverage must be packaged in a container with a secure lid or cap sealed in a manner designed to prevent consumption without removal of the lid or cap by breaking the seal. Take out and delivery may only occur during the licensee’ permitted hours of operation. The price for the to go drink must be the same as if it was consumed on the premises. No bottles of wine or liquor may be sold to go. Delivery must be to a residential address and to a person 21 years of age or older as shown by legally acceptable ID. In furtherance of this new law, the New York State Liquor Authority issued a new Advisory effective today, “Guidance on Sale of Wine and Liquor to Go by On Premises Retail Licensees.” That Advisory defines what the new law means by “substantial food item,” which is “sandwiches, soups or other foods, whether fresh, processed, precooked or frozen.” Wings, salads and hot dogs are also sufficient. The Advisory states, however, that a bag of chips, bowl of nuts, or candy alone are not sufficient. The Advisory also warns that an “unreasonably small portion of soup, a serving of canned beans, a handful of lettuce, or charging a small extra fee for an alcoholic beverage in lieu of a food item not actually ordered or delivered will be treated as a violation of the law.” The Advisory also reiterated that bottles of liquor or wine remain prohibited. Obvious efforts to circumvent that law, such as transferring the contents of a bottle to the same or equivalent bottle will be treated as a violation of the law. The new statute also states that open carry laws are not changed. The SLA Advisory can be viewed here:

https://sla.ny.gov/system/files/documents/2022/04/advisory_2022-2_-_sale_of_wine_and_liquor_to-go_by_on_premises_retail_licensees.pdf

News on Certificates of Occupancy

The New York State Liquor Authority adopted a proposed Advisory today that dispenses with the requirement to have a Certificate of Occupancy, or Temporary Certificate of Occupancy, in order for a new on premises liquor license to be issued. Previously, having a C of O or TCO, or in some cases, a Letter of No Objection issued by the Department of Buildings, was an absolute requirement to obtain a license. However, due to delays at the Buildings Department, the SLA adopted this new policy on a temporary basis. If a license is issued without the proper C of O, the SLA will require that the C of O be obtained prior to the first renewal of the license. This is an important development for new hotels and restaurants that are ready to open but delayed due to backlogs at the Department of Buildings.

New Law on Temporary Liquor Permits in New York City

Legislation was just signed into law last night allowing for the issuance of temporary retail permits for new liquor license applications in New York City. Prior to this law, temp permits were only permitted within the city on a transfer but not a new application. There are significant restrictions, however. The permits in the city on new applications apply to beer and wine applications, or those where the 500 foot rule does not apply. Where the 500 foot rule does apply, which is the great majority of the time, then the temp permit may only issue if the premises have been licensed within the past two years and was not suspended or revoked, and the State Liquor Authority Administrative Law Judge after conducting a 500 foot rule hearing finds that it is in the public interest to approve the license. If those conditions are satisfied on a 500 foot rule matter, there are restrictions on the method of operation while operating under the temp permit that are imposed by the law. Hours are restricted to a midnight closing, background recorded music only, and no dancing. Please keep in mind that the approval and issuance of a temporary permit is not an assurance that the final application will be approved. Feel free to speak with us regarding any questions on this new and important law.

Court Challenge to Open Restaurants Program

During 2020, emergency temporary regulations were issued by the State and City allowing for outdoor and street seating under the Open Restaurants program. This allowed seating on public sidewalks and streets, including areas that had not been zoned for outdoor use.  Now the City is in the process of a permanent successor to the Open Restaurants program which involves environmental review and hearings. However, in October, a group of 22 residents filed a lawsuit against the City. They claim that in issuing a negative environmental impact report the City “ignored profound environmental effects wrought by the temporary open restaurant program which effectively ceded substantial swaths of precious public space to the interests of a single industry and created profound externalities which adversely affected the quality of the daily lives of petitioners.” Specifically, the residents complained about noise, litter, vermin and congestion, claiming that the outdoor seating has grown out of control and is a public health hazard. The suit claims that the West Village, for example, has become “lawless and sometimes downright dangerous.” The lawsuit asks the court to annul and set aside the negative environmental impact declaration and require the City to conduct a full impact statement.

New Requirements for Outdoor Seating

Effective as of July 7, 2021, the New York State Liquor Authority issued a new Guidance for Use of Outdoor Municipal Property. For those holding a liquor license and operating outdoor space under a municipal permit granted pursuant to the Executive Order issued in June 2020, they may continue to operate such outdoor seating provided that on or before October 5, 2021 such licensee notifies the SLA (email to municipalexpansion@sla.ny.gov) with their main license serial number in the subject line, which email should include a copy of the municipal outdoor seating permit (issued by DOT in the City of New York), and a block plot diagram showing the municipal property incorporated into the licensed premises. No SLA response is required.  If you do not have municipal permission prior to July 7, 2021, then you are first required to notify the municipality (community board in the City of New York) on a form available on the SLA website, and after 30 days have passed, or if the municipality has waived the notice, the licensee must email the SLA and include the items referred to above as well as proof of receipt of the municipal notice or waiver thereof. If the SLA does not disapprove within 5 days, the application to use municipal space is deemed approved.  Please contact our office with any questions.