Social Distancing and the Utilization of Extension of Premises Permits in the Reopening of the Restaurant and Licensed Beverage Industry

Helmer Legal is Here to Help Restaurants and Bars as They Manage New COVID-19 Regulations 

We are all aware that coming out of the pandemic and the havoc it has caused to the economy is going to present unique issues for the bar and restaurant industry.  Social distancing will no doubt be a major component of the reopening of the State.  Unfortunately, social distancing will necessarily cause a reduction in seating capacity that, in turn, will result in an inability to seat customers and will translate into a loss of desperately needed income.  The pressures on the industry are going to be tremendous.  From conversations with the Division of Alcoholic Beverage Control, it is clear the Director recognizes the direct impact social distancing is going to have on the industry.

Extension of Premises Permits

One mechanism available to the Director is the issuance of a Special Ruling authorizing a new class of extension of premises permits intended to address the reduction in indoor seating, caused by social distancing.  These permits, if the Division decides to make them available, will, most likely, be issued for a period through September, consistent with the Director’s prior Ruling extending the current license term through September 30^th.  And, while we do not know the exact terms or conditions associated with these permits, we expect the Division would expand on the current requirements associated with obtaining an extension of premises permit for a single event.

It is not unreasonable to believe the Division will require preparation and implementation of a security plan.  While these plans typically focus on preventing “handoffs,” underaged consumption, and over service, we should not be surprised if the Director requires the security plans to comment on the handling of traffic and parking on the site, as well as the lighting of the extended premises and the utilization of tents.  It is going to be imperative that licensees discuss these issues with the local police departments and municipal officials.  Remember, under current NJABC procedures, local approval by both the Chief of Police and the municipality is required before a permit can be issued.  We can also anticipate a requirement that licensees explain how they propose to provide alcoholic beverages in the expanded area.  Again, under the existing extension of premises permitting rules, licensees are required to identify the type and size of the alcoholic beverages to be provided. 

The municipal approval process is going to be the more challenging aspects of any long term extension of the licensed premises.  Single events utilizing an extension of the licensed premises seldom raise concerns about the impact of the event on the long term use of the property, whether that be in a strip center, a pad site or a standalone store.  The reduction in parking or the impact on traffic circulation on the property is of relatively short duration.  Here, the extension of the licensed premises is going to be a daily occurrence.  Local officials, whether the Police Department, Zoning Officers, Code Enforcement Staff or Municipal Administrators, are going to be concerned with how the property is being used and the extent to which this daily extension impacts local zoning, and previously approved site plans governing parking, noise, and lighting.  Of paramount concern will be how the expansion of the premises impacts surrounding neighborhoods.  You should expect to discuss with local officials the permitted hours of operation; especially, if the license is sited in or adjacent to a residential area. 

What New Jersey Restaurants and Bars Need to Keep in Mind

We believe licensees should begin to review their individual situations to better prepare for operations under an extended premises permit, should the Division move in that direction.  Among the questions to be asked or steps you should be taking are:

1. Review of your pre-shutdown operations as to patron visits and overall operations;
2. Evaluate your probable seating capacity based upon a 50% reduction to accommodate social distancing;
3. Review a survey of your property, if available;
4. Review an aerial photograph of your site and the surrounding area;
5. Walk your site, and in conjunction with Items 3 & 4, decide what area provides the best possible location to serve as an outside seating area;
6. Review the existing lease and, for those licenses sited in a shopping center, the extent to which there is shared parking;
7. Review of any decisions or resolutions by local land use boards as to the use of the property and conditions imposed on that use;
8. Consideration as to how you propose to:
   1. Secure the area;
   2. Provide covers or tents;
   3. Provide for food or beverage service (Will you require a portable service bar?);
   4. What additional lighting will be required to support nighttime operations;
   5. How will you manage noise generation; and
   6. How the expansion will impact your liability insurance coverage?

We recognize that many licensees are going to face challenges in identifying additional space for expansion. In those situations, licensees should consider adjacent or other nearby properties or locations that may provide an opportunity for expanded service.  As we know, the typical expansion of premises permit covers adjoining/contiguous space, such as the parking lot.  However, given the unique circumstances confronting the industry, there is a possibility that the Division will ease the on-site component to permit the utilization of adjacent, non-licensee controlled spaces. Of course, if permitted, the licensees will have to negotiate a short-term lease, governing rent payments and insurance coverage. 

Contact Our Law Firm to Learn How We Can Help You Stay Compliant 

Each licensee’s situation is going to be different coming out of the crisis and proceeding through the reopening of society.  We recognize that one size will not fit all, and that success will require flexibility by all concerned:  licensees, the Division, and municipal officials.  Should you have any questions, or if we can provide any assistance, please do not hesitate to contact me. Our law firm has assembled a team of experienced business, licensing, and land use attorneys whose mission is to support restaurants and bars in this uncharted process.