It’s all about “protection”

The thing I love about insurance companies is that they are like the mob now. Ever since we allowed them to stop being mutuals and they became faceless corporations- they’ve been allowed to run a racket where they get rich no mater what- and you pay through the nose if you don’t purchase their services.

Ever notice how every time there is a “disaster” – the fed jumps in and covers for them? Did AIG go bellyup? Nope.

Well, we seem to have the same mobster mentality in Dayton City Hall- that government is going to protect us from “irresponsible owners” of liquor licenses. If you don’t play our game- you won’t have a license- never mind that there are already rules in place at the State complete with a department of enforcement.

Mayor Gary Leitzell seems to miss the point that being business friendly (that thing they spend our tax dollars on in the name of “economic development”) means not adding extra hoops to jump through at every step- but, his approach to the long-running liquor permit issue in the Oregon District is more hoops:

The residents of Oregon have no protection if a license is sold to an irresponsible owner which is why they cling to the saturation ruling. If all additional liquor licenses were “Agreed Orders” (also called cooperative agreements) and written in such a way that would prevent the license from transferring if the business were sold and the nature of the business were changed it would give the residents some protection.

via Three-minute thinking.

What right of oversight should the residents have? And how is it going to be enforced? Will the question be put on the ballot- or run in a kangaroo court like the Priority Boards? Who gets to vote? The Oregon District belongs to all of us- not just the people who live within 3 blocks of E. Fifth Street. Would it be a precinct vote- or a citywide vote? What happens when the BOE redraws the precincts?

How does an “agreed order” or a “conditional use” or any of these other zoning type of restrictive covenants really protect people? Or does it just diminish the rights of owners by the government writing itself into the operation without compensation?

My business is in a residential neighborhood. The building was originally built as a commercial grocery store. However, the city has restricted the type and nature of business that may occupy the building- to include making it illegal to actually put a corner grocery back in it. Do I receive a tax break for the diminished opportunity value of my business? Of course not. Does it limit the resale value of my business? Absolutely. This “Agreed Order” rule is just another example of a government run extortion scam.

What we really need protection from is the pedantic potentates we elect. Can I buy insurance for that?

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27 Comments on "It’s all about “protection”"

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Gary Leitzell
What would D.E. (David Esrati) do? Mr. Smith and his partner Mr. Jones buy a building on 5th and want to turn the place into an upscale lounge complete with crooner music and a martini selection that would be the talk of the town. They get their liquor license approved with an agreed order that basically limits them to following their business plan as was presented to the various concerned citizen groups that have members who have spent 30 years of their lives gentrifying the Oregon District and slowly eliminating all the scummy neighborhood bars that attracted a less desirable customer base. Mr. Smith and Mr. Jones are killed in a car accident on their way back from a wine tasting event and Mr. Smiths wife sells her interest in the bar to Mr. Jones’ nephew who is the sole heir to his estate. The nephew wants to open “Joe’s Bar” complete with topless waitresses (they will be wearing little stickers over the part that no child should be permitted to view) after all he does have a liquor license that came with the property! It was fortunate that there was an agreed order that limited the location to being an upscale martini bar so Joe’s Bar” had to become “Joe’s Martini Lounge” and no topless waitresses were mentioned in the original business plan. It was still a success and Joe made a lot of money. He traded his overalls for suits and ties and is now a part owner in a building development downtown that will attract an under 40 crowd. The uncontrolled issuing of liquor licenses in this particular district that is establishing a reputation as an arts and entertainment district could have had an adverse effect if a standard liquor permit were issued. As it currently stands, saturation 17 will stop any new liquor permits from being issued. If a new one is applied for, the community will fight it. Do you think David is right by wanting the saturation ruling removed so any kind of liquor establishment can be opened in the OD or do you… Read more »
Allison

How many OD residents have lived there for 30 years or more, compared to the total OD population? I grew up in Englewood and have lived in Vandalia for the past 10 years. If I didn’t want to live with airport noise, I probably should have chosen a different community.

Side note: McDonalds and CBCB both get their burgers frozen out of a box, and neither is great.

djw
I see where the Mayor is coming from, and I’m not dogmatic in my views about this and could be potentially be persuaded to adopt a position more along the lines of his thinking, but I’m inclined to side with David Esrati. If there is a major problem with “irresponsible owners” of liquor licenses, but their “irresponsibility” doesn’t involve breaking any currently existing laws, then we need to have a collective democratic discussion, in which the advocates of that notion of “irresponsibility” make the case that their view the proper boundaries of legal behavior of bar owners be enshrined into law. (On the other hand, if the city is unable or unwilling to actually enforce existing laws, and the “irresponsible behaviors that OD residents fear is, in fact, illegal behavior, I have some sympathy. But the solution there lies in actually enforcing existing laws, not empowering a small group of people to guess which ‘kind of people’ are going to follow the law). What I fear, and what the Mayor’s example illustrates, is that his proposal will lead to, essentially, is a situation in which the aesthetic preferences of the most active members of the Oregon District’s neighborhood association will be the key factor here. That should trouble us–a vibrant urban life needs these kind of community leaders, but they must be leaders and not dictators. Our Mayor is concerned about protecting the progress our city has made, particularly with respect to the positive changes in the OD. This is a legitimate concern. However, it seems to me that empty storefronts are a greater threat to that progress than the Mayor suggests–both in terms of what they say about the neighborhood to visitors, and what they don’t contribute to the cities tax base (which, of course, can pay for things that can make this city better!). Furthermore, if David E. is correct that the neighborhood association fought against the liquor licenses for Pacchia and Thai9 (I’m a newcomer so I don’t know the backstory here, I”m just assuming Esrati’s version is more or less accurate), both of which came to… Read more »
Jesse

How about we try private property?
 
Have “we” been successful in authoritarian city planning in this country? Has any country ever been? Have “we” been able to correctly anticipate the consequences of our dictatorial behaviors?  Aren’t “we” all injured by these mistakes?  Why do “we” continually expect that: The next planner will be better? the next regulator will have all of the information and make a better decision? Why can’t we say that private property exists, regardless as to the whims of 51% of the people in a state, or a city, or a neighborhood, and provide services that protect private property?
Let Joe make a fortune on the 4th floor of the building with “Joe’s bar”.  Who is he harming? Are we seriously saying that tax-payers who would rather get their drinks from “Joe’s bar” shouldn’t be allowed to engage in that behavior because you find it distasteful?  And that those who prefer “Joe’s Martini Bar” have the right to tell the others that they should have to go somewhere else because the Martini Bar Crowd control the votes and the government?  That is what freedom means now?  If the mayor finds it distasteful, we can’t get served a drink by a man dressed in a giant panda suit or is it If 51% of people vote on it statewide?  What does private property mean to you?

Gary Leitzell
Please realize too that Joe can sell the Smith and Jones Martini Bistro to someone who wants to keep the place a martini lounge, take the proceeds and buy any one of 17 other liquor establishments in the same district and open “Joe’s Bar Tiki Polynesian topless Ale House” and there is nothing that can prevent him from doing that. There is nothing to stop Joe from setting up “Joe’s Topless Wine Gallery” two blocks up the street from the Dublin Pub or next to the South Park Tavern. Those neighborhoods don’t have an established saturation level. The fear in the neighborhoods is not the business start ups that apply for variances or permits. It is who will come in after they go out of business. It is a whole lot easier to limit a liquor license at inception than it is to get it revoked after it is issued. Generational dynamics are at play here. The Oregon District Pioneers remember what they went through over the last 30 years to get the district to where it is today. They got regulations passed so that no one in the district would ever have to go through what they did. Some of those pioneers have left, some have died. New people arrive who don’t know the trials of the predecessors. They don’t see the blight and figure that times have changed enough that regulation no longer applies. Eventually they deregulate and one really bad business owner gets hold in the neighborhood driving 5 responsible owners out because it is just too hard to fight the bad guy. This opens the door for more sloppy business owners to get in because the property values drop. In 20 more years it is like 1975 all over again. Lets keep the discussion going. There are many sides to this argument. What we as leaders have to do is make FAIR decisions. Not necessarily the right decision for either side but a fair one that all can live with. A fair decision is always better than NO decision. For those unfamiliar with the term “Generational… Read more »
Robert Vigh
Robert Vigh
Dear Mayor Leitzell, After reading Jesse’s post (brilliant), I hope you would also consider how damaging this idea can be if we change the story a hair: Mr. Smith and his partner Mr. Jones buy a building on 5th and want to turn the place into an upscale lounge complete with crooner music and a martini selection that would be the talk of the town. They get their liquor license approved with an agreed order that basically limits them to following their business plan as was presented to the various concerned citizen groups that have members who have spent 30 years of their lives gentrifying the Oregon District and slowly eliminating all the scummy neighborhood bars that attracted a less desirable customer base. After 6 months in the business and significant capital investment, the partners cannot make a profit. They see an opportunity to change the direction of their business, but there is an attached “agreed” order by the city. The partners cannot make the change fast enough as they are losing money. They approach the city about changes, but the increased bureacracy cannot seem to make a decision. They discuss putting it to a vote sometime next quarter. In the mean time the partners being lawful individuals try to make due, but continue to lose funds. They cannot sell their business because no one wants to make this purchase unless at a significant discount because of the attached order. The losses have come to the point that the partners die of hyper tension and stress. Mr. Jones wife is only able to sell the property at a significant loss, but she has to do it because Mr. Jones lost the majority of their savings losing money while waiting on someone else to decide what do to with his property. We can speculate about the nephew from this point, but I hope you get the idea. I hope you understand that this idea is essentially attaching Bureacracy to entreprenuers. Profitable decisions about market demand, employment and services to offer that partners could make in a day are now going to… Read more »
djw

There’s a big difference between understanding where longtime OD community leaders are coming from and respecting their accomplishments and advocating for giving the most vocal among them this kind of powerful veto power over economic development in a city that badly needs more of it.
 
I’m very appreciative of you willingness to participate in a forum like this, Mayor: I’ve never lived in a city where political leadership would have done anything like this. But since you’re here and taking questions, I’ll pose the question again: Were OD residents correct to fight against liquor licenses for Pacchia and Thai9? If you feel (as I do) they were wrong to do so, what evidence to you have that their judgment has improved?

Gary Leitzell
@ Robert, In my version there was no Mrs. Jones which is why the nephew was the sole heir. Agreed orders limit things like hours of operation, types of alcohol served and occupancy I believe. I don’t know how one would go about amending an agreed order since I don’t believe we have ever had to do it. Government is not stopping Mr. Smith and Mr. Jones by issuing and agreed order. Mr. Smith and Mr. Jones have agreed that they are willing to limit themselves in order to get that particular location because there are no other traditional liquor licenses available that they can afford to acquire. Government is not responsible for their success or failure. Government is responsible for providing a decent environment around their business so that people would want to come into the area. By not issuing an agreed order and holding on to saturation 17 we are in fact denying them opportunity at that location. Not necessarily anywhere else in the city though. By issuing unlimited liquor licenses to the district we are preventing the other established businesses from succeeding if one derelict bar owner gets a foothold and it takes five years to revoke the license. Mr. Smith and Mr. Jones could jump on a current trend and open a tea room if that is all the rage at the time and give up liquor altogether and keep their doors open. Nothing prevents them from doing that. @djw, The licenses for Pacchia and Thai 9 were objected to by the community based on saturation 17 at the time of the application. I’m sure Pacchia and Thai 9 would have been willing to consider an agreed order if that was on the table at the time. Nothing prevents them from trying to later acquire one of the 17 “Golden Licenses” through a transfer of ownership if one of those 17 businesses fail. Restaurants and bars are two of the hardest businesses to get start up loans for because most fail in the first three years. The question becomes, should those liquor permits be allowed to… Read more »
joe_mamma

“Government is responsible for providing a decent environment around their business so that people would want to come into the area.” – Gary Leitzell
 
Government should also be providing a level playing field  and not playing favorites.  What do the businesses with liquor licenses in O.D. think about this?  Do they want more licenses or do they want them restricted?  Interesting discussion.

Jesse

“…have agreed to limit themselves… because there are no other traditional liquor licenses available that they can afford to acquire. Government is not responsible for their success or failure.”

Liquor licences are natural phenomena, unrelated to government.   They are scarce resources, like gold or diamonds. I never knew that before.

By the way, derelict bar owners need not be stopped by government revocation of their license.  They are stopped by the “invisible hand” of the market.  Essentially, people stop patronizing they business, because they are dirty, or dangerous, etc.  The business loses money, is purchased by another business owner, and operated differently.  This process continues until the derelicts have all failed.  We, the consumers, are better able to determine the derelict bar owners than are you, the government.  We can do it faster and more efficiently.  We make better decisions.  Your job is to protect individuals and their private property from coercion or force.  We don’t need you deciding the merits of drinking establishments or the merits of their owners.  We can do that.

Jesse

Mayor,
 
The answer to your last question is, it is better to have more freedom than less freedom.  The way to achieve that, however, is not capitulating to the angry door banging group.  Stand up for freedom.  I, and many others, will support you.  We just need someone willing to stand-up for us and for freedom.  More of us exist than you may think.

Robert Vigh
Robert Vigh
@MGL, You stated ‘Government is responsible for providing a decent environment around their business so that people would want to come into the area. ” My contention is your definition of decent and mine may be vastly different and if all Daytonians opinions were polled you would see a vast difference. I contend that: Government is responsible for providing a lawful environment around their business so that people would want to come into the area. I am also confused by Derelict bar owner. Is derelict someone that is not profitable or someone that is not decent (see Jesse’s post)? My primary contention is with saturation 17. This should be lifted as it is the major impedence to new development. The addition of limited licenses sounds appealing at first to open up more opportunities, but the unintended consequence is the creation of the situation that government knows best. That they will get to play favorites. That over time, it would certainly be possible to convert the golden licenses into “agreed” licenses. ****** So in answer to your question, I would rather have no new licenses. The perversion that could result in the future from the new type of license seems something to be wary of. So, here is the point. You have not limited Mr. Jones and Mr. Smith because their current interests aligned with the governments. What you did limit is the other investors and entreprenuers from taking interest in the property. Since our discussion is about the vibrancy of the city, the more interested people the better. By limiting interest you limit investment. The existing establishments are going to fight tooth and nail to not lift Saturation 17. They have an asset on their books of a very pricey liquor license which would immediately plummet if lifted. Since they are already established they may see additional companies as a burden of competition and not as a boon to vibrancy and attendance. This of course does nothing for the Dayton consumer other than limit choices and increase prices. Since my primary concern is with freedom and by extension citizenry, I would have to… Read more »
Dave Poliquin
Dave Poliquin

If I can recall there was also some issue regarding parking when the 17 liscense limit was imposed. Adding more liquor license to OD would not neccesarily drop the value of the existing ones. Many times the existance of variuos similar retail firms adds to the value of the location. For example as DE cited “The Greene” and several districts in Columbus, “Short North”  “Arena” etc. Adding addition food and liquor stores would eliminate some empty store fronts which would inhance the appeal of the “entertanment district”

Anne Moore

I have to disagree with the idea that “The Oregon District belongs to all of us- not just the people who live within 3 blocks of E. Fifth Street. “.

Yes, we all may enjoy hanging out there, but we don’t have to live there. The people who live there day in and day out should have more say than the rest of us about what is allowed there. It is their neighborhood.

bobby

An issue that has not been addressed is the city’s investment, via CityWide development, in the businesses that have the existing liquor licenses in the OD. When the city is holding notes on the businesses and the real estate occupied by many of these businesses, are they not conflicted in approving more competition that may diminish the probability of payment?

truddick

Bobby, this is another point that Esrati has made again and again; governments should get out of the habit of subsidizing certain businesses, either through “economic development incentives”, tax breaks, infrastructure that’s dedicated to particular business, or other ways of playing favorites.
I don’t mind if a government puts aside a certain pool of funds as grants and allows all businesses to apply if qualified–provided that the grant proposals are reviewed blind by a committee of experts.  My objection is to government giving a sweetheart incentive to a business based on personal relationships.

Joe Mama

This is really all about class, and providing a higher level of protection, both legislatively and culturally, to a small minority neighborhood of mostly upper income residents, of whom many are placed high in power positions and institutions.

Go see how much protection and going out of their way not to offend people that the City of Dayton achieved in the Santa Clara District. All we get is more Jim Crowe via hordes of white men with crew cuts terrorizing our neighborhoods and sending young black men to prison to feed the corporate prison industrial leviathan.

Joe Mama

http://www.daytondailynews.com/blogs/content/shared-gen/blogs/dayton/opinion/entries/2010/11/21/ellen_belcher_oregon_districts.html?cxtype=feedbot

Why must Ms. Belcher continually trash the old Southern Belle? If Dayton had anyone in the media or city leadership with any functioning brain cells, they would know that the old Southern Belle was a hangout for artists, musicians, poets and other legendary characters of Dayton. Sure, there were a couple of good greaser fistfights that happened over the span of many years, but the trashing of a place that hatched worldwide music stars like Guided by Voices, The Breeders (there is a much larger list), numerous writers, and bohemians of all stripes, could only come from a crew of nitwits as incredibly dumb and numb to their community as the trio of barely apes residing in the editorial offices of the DDN.

Mike Ervin’s disgustingly overblown tribute to himself in the form of lame contemporary blah architecture and yuppie blah contemporary art gallery welfare recipients is not an improvement over the old Southern Belle. It’s a monument to a rich douchebag who thinks he has all of the answers.

He is a boring man who doesn’t connect with the whole picture of what is due to his self-imposed cultural isolation.

Civil Servants Are People, Too
Civil Servants Are People, Too

This is very interesting, with good points to be made on both sides.

One point I haven’t seen much, is that EVERY community has the right to control liquor permits.   There are ‘dry’ districts in Montgomery County, just as in other places across the country.    Whether it be for crime prevention or a simple moral objection to drinking, this is an old debate for sure.

So how is 17 any different than Zero or 100?   The community made a decision they felt was in their best interests.   The economics seem to indicate that it was a reasonably good choice, since Oregon has continued to thrive.

Would 19 be better?  How about 15?    How about 25?    I don’t know the answer, but I think the community should continue to have a voice in the process.

PS.   Perhaps some of the undeveloped treasures are empty because the owners think they are worth more than the market will bear?   The city is not always to blame, even if that is the easiest answer in most communities.

bobby

CSAPT, decisions by desparate quasi publics made many years ago enable the current behavior you abhor.  A case study  is a junkman/ reuser that paid the city a dollar or so per building for his business he operated for many years. A first class ball park was built tha t required some of his property. He publicly acknowledged he “rang the bell” for environmentally damaged property he sold back to his dollar sellers.  When the ballpark was built, he thought his building that overlooked the ballpark was now worth between 6-9 milliion dollars. The County Auditor, Karl Keith thought so too.  He raised property taxes significantly. They were appealed and reduced to under700k. ….. CSAPT if you want to change this behavior here is a suggestion: Prop[erties that are listed for two years that exceed the appraised value by 100% lose their right to appeal taxes for ….pick your poison…………The Auditor is your key to unlock redevelopment

bobby

David, I stand corrected.

Civil Servants Are People, Too
Civil Servants Are People, Too

Assessing taxes at the sale price makes sense.  
Taxing the asking price, which is a bargaining position, does not.

As a property owner, I can ask for any price I want.  However, any trained appraiser will tell you that a property is only worth what someone else will pay for it.  Price means nothing without a buyer.

The County auditor, under state law, is required to estimate that value for the purpose of taxation.  When you consider the thousands of diverse properties across a regional urbanized environment, it is easy to see why it is difficult to do.

I don’t know what that has to do with a liquor license….

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