By Chas Sisk • THE TENNESSEAN • June 24, 2010
A decades-old law meant to discourage bars in Tennessee may quietly fall by the wayside, as Gov. Phil Bredesen is set to sign legislation that reduces how much food restaurants have to sell to get a liquor license.
In one of the side debates spurred by the battle over whether to let guns into places that serve alcohol, the state legislature has approved a bill that would let bars register as "limited service restaurants" with the Alcoholic Beverage Commission.
The measure sets the minimum amount of food they have to sell to qualify for a liquor license to at least 15 percent of their revenues. Existing law doesn't have a numerical standard, but says selling food has to be primary purpose of an establishment. State law does recognize bars
The new standard is meant to take pressure off establishments — including many of the honky-tonks and nightclubs along Lower Broadway — that have struggled to sell enough food to liquor-drinking patrons to satisfy regulators.
"It's a step in the right direction," said Ruble Sanderson, co-owner of The Stage, Legends Corner and two other downtown music venues. "The whole thing has been absurd for years."
The new license would go into effect as soon as the bill is signed by Bredesen, who said Wednesday that he supports the measure.
"There has always been an issue in Tennessee that we're a little cute by half in the way we define bars," he said. "So I think the notion of recognizing that there are restaurants and there are things you call bars that people go into to get a drink … is the right thing to do."
The bill passed the legislature June 9, hours before the General Assembly adjourned for the year. It drew little attention, and some groups that favor tight liquor regulation said this week that they were unaware it was under consideration until it came up for debate.
Supporters include the Tennessee Hospitality Association, the Nashville Area Chamber of Commerce and downtown tourism groups. They said the bill will bring Tennessee law in line with reality, eliminating a legal threat that could have shut down some popular Nashville establishments.
"We're recognizing what's going on, and we're also recognizing that these businesses have a significant impact on our economy," said Dan Haskell, a restaurant lobbyist who worked on the bill.
The measure centers on a clause in the 1967 law that authorized sales of liquor by the drink in Tennessee for the first time since Prohibition. It says serving meals must be "the principal business conducted each day the restaurant is open."
Many Nashville bars and clubs routinely run afoul of the requirement, paying a fine of about $1,500 a month to stay in business.
In 2009, the ABC board collected $84,000 in fines statewide from establishments failing to meet the minimum food-service requirement. Big Bang, Tootsies Orchid Lounge, Lipstick Lounge and Hollywood Disco were among the places that failed to derive most of their income from the sale of food.
Earlier this year, the ABC appeared to clamp down on the food-service requirement more firmly, voting to suspend the license of one Second Avenue bar, Buck Wild Saloon, for 90 days for repeated violations. ABC also stepped up audits, telling establishments that they needed to derive at least half of their income from food sales to meet the law, according to some owners.
Danielle Elks, the ABC's executive director, could not be reached this week for comment.
The ABC appeared to step up enforcement amid the debate over whether to let people with permits to carry handguns take their weapons into any restaurant, not just those that do not serve alcohol.
Some lawmakers sought to write a law that would preserve the ban on guns in bars while allowing them into restaurants, but a Nashville judge ruled last year that state law makes no distinction between the two.
This bill would appear to open the door to drawing such a line between the two, but supporters said that was not their goal. They doubt lawmakers would be willing to restrict gun owners after voting to allow handguns into all places that serve alcohol. "There's no going back," said Haskell.