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NY Palm Tree, Inc. v. New York State Liquor Auth.

Other Lower Courts

December 5, 2007

In the Matter of the Application of NY Palm Tree, Inc., Petitioner,
New York State Liquor Authority, Respondent.

Editorial Note:

This case is not published in a printed volume and its disposition appears in a table in the reporter.


Joan Madden, J.

In this Article 78 proceeding, petitioner NY Palm Tree Inc. seeks an order annulling the determination of respondent New York State Liquor Authority ("the Authority") denying petitioner an on-premises liquor license for the premises located at 4 East 28th Street, New York, NY ("the premises"). The Authority opposes the petition, which is granted to the extent of annulling the determination and remanding the matter to the Authority for further consideration.


In or about early 2006, petitioner entered into a contract with Orchid Entertainment Inc. ("Orchid") in which it paid Orchid $12,000 for the transfer of Orchid's on-premise liquor license to petitioner for the premises, and the lease for the premises. As part of the application process, petitioner notified the local community board, Manhattan Community Board Five ("the community board") of it application for the transfer of the on-premise liquor license.

On March 10, 2006, following a meeting on the previous day, the community board passed a resolution recommending the denial of petitioner's application, indicating that the premises was located between two residential apartment complexes, that ever since receiving its liquor license in 2005, Orchid, under the guise of operating the establishment as a restaurant, operated the premises as a club with loud music and dancing five to six days a week sometimes until 10:30 am. The community board cited quality of life concerns raised by the operation of the club, including noise, double/triple parked cars, sidewalk debris, complaints to the police involving the premises, lines on the streets, violence involving a bouncer, and urination on the sidewalk. The community board also noted that the premise lacked a cabaret license or proper certification of occupancy to permit a dance club, and also did not have a place assembly permit. Notably, the conditions cited by the community board were in connection with the operation of the club by Orchid. With respect to the petitioner, the community board stated that petitioner did not have a lease (this was subsequently remedied) and had provided certain unspecified inconsistent information.

After petitioner took possession of the premises, it obtained a place of assembly permit for the premises as an eating and drinking establishment. The permit does not allow dancing. The application indicates that petitioner plans to use the lounge for corporate events three or four times a month, and the papers indicate that its regular hours of operation will be Monday or Thursday [1], Friday and Saturday from 6:00 pm to 3:00 am, and that the form of entertainment will include a live deejay playing fusion, jazz and pop music. [2] The lounge, which has a 150 person capacity, has ten tables with forty seats and a thirty foot bar. The lounge will serve food and its menu includes ten appetizers and five salads.

On July 11, 2006, petitioner applied for an on-premise liquor license for the premises, and tendered the required licensee fee and bond, together with the lease and contract with Orchid. As part of the application process, petitioner applied for a temporary retail permit so that it could conduct business and sell alcoholic beverages on the premises. The initial permit was for 90 days and expired on November 30, 2006. Subsequently, the Authority approved the temporary permit and issued 11 renewals of the temporary permit to petitioner, the last of which expired on October 31, 2007.

In the meantime, by letter dated April 24, 2007, petitioner requested that the community board reconsider its resolution, noting that the place of assembly violation, which had predated its possession of the premises, had been cured. The community board, however, declined to reconsider the resolution. In June 2007, petitioner again requested, and the community board denied, plaintiff's request for reconsideration.

By notice of disapproval dated August 16, 2007, the Authority denied petitioner's application, without prejudice, based on a violation by Orchid of subdivision 5(a) of section 126 of the Alcoholic Beverage Control Law which forbids a licensee to hold a liquor license when another liquor license of the same licensee has been revoked. As indicated above, following this disapproval, the Authority continued to issue temporary permits to petitioner until October 31, 2007. The Authority subsequently decided that a proscription against the premises would not be issued as a result of Orchid's violation and thus would not preclude petitioner from obtaining a license.

On October 31, 2007, the Authority heard petitioner's application at a meeting of Authority's members and voted to disapprove petitioner's application for a license. The decision stated that "after reviewing and considering all relevant evidence, including the strenuous opposition by the local community board as well as applicant's arguments in support of the application, [the Authority] finds that granting the license would not be in the public interest."

In support of this conclusion, the Authority relied on a provision of the Alcoholic Beverage Control Law, which provides that it may not grant a license if the premises sits within 500 feet of three or more existing premises with liquor licenses (ABC Law 64-a [7][a]) unless if, after consulting with the community board, the Authority determines that the granting of the license is in the public interest, after a hearing held (ABC Law 64-a [7][d]) . In this case, the Authority noted that such a hearing was held on August 1, 2006 (hereinafter the "500-foot hearing") and that it decided to deny the application after considering the relevant factors under ABC Law 64-a (6)(a-f), including the opposition submitted by the local community board, the adverse criminal history and violations at the premises, the increases in noise levels, as well as the effect on vehicular and pedestrian traffic.

The Authority also indicated that after petitioner took possession of the premises, complaints about vehicular and pedestrian traffic and lines outside the premises and noise complaints have continued, and that petitioner has failed to provide a sufficient plan of supervision to correct the problem since the lounge is open until 3:00 am "with a focus on patrons consuming alcohol and listening to music until early morning." It further found that neither of the owners, who were managing the lounge part-time, had any experience in managing the type of operation, and that they had not ...

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