Beer and wine licenses tend to be cheaper and easier to acquire than all-alcohol, but with many customers preferring cocktails these days, restaurateurs have sought ways to upgrade their existing permits.
Boston Mayor Michelle Wu said she plans to introduce legislation to the City Council in the coming weeks so that Boston can become the first municipality to allow establishments to upgrade. She made the announcement Thursday at Chinatown’s Dynasty restaurant, whose owner, Jeffrey Yu, is seeking to trade in his beer-and-wine license.
“A liquor license is more than just a piece of paper, it’s a game changer,” said Wu. “It can double a corner shop’s revenue. It can help the family build wealth. It can turn a restaurant with an empty back room into the newest open mic stage.”
The trade-in provision is part of a broader effort to reform liquor licensing and make the permits more accessible and affordable. For more than two decades, as Boston brimmed with new restaurants, the demand for liquor licenses outstripped supply.
And when the city doesn’t have licenses to give out, restaurateurs have to grab them from another business that’s closing. That has driven the cost of an unrestricted all-alcohol license on the resale market to $600,000.
Last year, the state created 225 new liquor licenses in the biggest expansion of alcoholic permits in Boston since the end of Prohibition. The new licenses are free and being distributed over a three-year period. Most are tied to 13 ZIP codes that could benefit from the economic boost that restaurants serving alcohol can bring to neighborhoods.
Almost all of the licenses are restricted, which means they cannot be bought and sold and must be returned to the city when no longer needed.
So far, the Boston Licensing Board has approved 61 licenses out of the new batch, doling them out to restaurants and community organizations from Mattapan to Hyde Park. That means the city has plenty of licenses left to give out.
Allowing beer-and-wine license holders to upgrade to all-alcohol license upgrades across Boston neighborhoods also solves a political problem for both Wu and Michlewitz, who are close allies.
North End restaurateurs — who have been among Wu’s most vocal critics — have been clamoring to upgrade their beer-and-wine licenses, but last year’s legislation did not set aside any of the new all-alcohol licenses for the neighborhood.
Frank DePasquale, who owns multiple restaurants in the North End, including Bricco and Mare, plans to turn in his four beer-and-wine licenses for restricted all-alcohol permits.
“I’ve been waiting a lifetime for this,” said DePasquale. “Everybody wants cocktails today … it’s the right thing to do.”
Still, it might not be the right decision for every restaurant. Some owners may be reluctant to give up their unrestricted beer-and-wine license, especially if they plan to sell their restaurant soon. A restaurant’s worth is often tied to that license, which can cost more than $100,000.
“What’s important is that the restaurant owner can make that decision,” said Steve Clark, president of the Massachusetts Restaurant Association, which supported the policy change.
Michlewitz, whose district encompasses both the North End and Chinatown, said the upgrade option builds on the progress made last year in lowering barriers and leveling the playing field in the restaurant industry.
“This was the next step,” he said, in providing “another tool to give the local restaurants.”
Shirley Leung is a Business columnist. She can be reached at shirley.leung@globe.com.
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