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 Although he’s successful today, when Rob Zeller started out as a bar owner in 1996, business was a struggle. He spent five years working 100 hours a week before he made his first nickel of profit. “It was quite a challenge,” he says.
These days, he and other Gainesville bar and nightclub owners are once again in a struggle. This time, the fight is against city rules that aim to punish them if they serve underage drinkers. Both sides feel they’re in the right.
“I’ve probably spent well more than a million dollars trying to prevent underage drinking, and I’m being punished because customers commit a crime against my business by presenting fraudulent IDs,” says Zeller, who owns the Grog House bar and the Copper Monkey restaurant and is co-owner of Gator City Sports Grill.
Not so, says City Commissioner Jeanna Mastrodicasa. Gainesville is not trying to punish owners or shut down local bars and restaurants, it just wants to “control the handful of businesses that step over the line.”
Rite of Passage
Both bar owners and city officials say dealing with the underage drinking issue is frustrating because it is never-ending. “Gainesville never gets any older! Every graduation, the 21-year-olds leave and they are replaced by 18-year-olds,”says Lieutenant Keith Kameg, public information officer for the Gainesville Police Department.
Those young people are constantly testing the system. In an issue of the Independent Florida Alligator last year, a student op-ed piece recommended underage drinkers head to “house parties,” where there is little, if any, supervision. And if a student is still having trouble getting drinks he or she should head to a bar, “go to the busiest part and hold out money with your unmarked hand, since the bartender is usually too busy to notice.”
It’s all part of the college culture, says Ernest Bordini, a licensed psychologist who is executive director of Clinical Psychology Associates in Gainesville. “Here, thousands of young people are learning to drink, hopefully responsibly, at one time. And student concepts are often colored by their drinking peers. They are often surprised, for instance, that blacking out as a result of drinking too much is a serious problem. In the fraternity, people do it all the time! They think it is normal.”
While bar owners are aggravated by underage drinkers, they don’t want those under 21 banned entirely because they are a substantial part of their clientele. Jason Rockhill, co-owner of Common Grounds, the music venue and bar, says customers under 21 can represent as much as 50 percent of the audience on a busy night.
Of course, Rockhill sees his establishment as a live music venue that also sells alcohol rather than strictly a bar, which may have fewer underage customers. Regardless, patrons younger than 21 are a major source of revenue for local bars and clubs since they pay cover charges to get inside, then (hopefully) buy nonalcoholic drinks and meals or snacks.
City officials acknowledge these young people are an economic force and say they don’t want to damage a business category that contributes substantially to the local economy. (See sidebar.) But they say they need to control a potentially dangerous activity.
“I want our businesses to succeed,” says Mastrodicasa, who also serves as assistant vice president of student affairs at the University of Florida. “Our night life is a very important part of Gainesville.” Still, she championed the new regulations that penalize businesses caught serving minors. (Full disclosure: The Business Report’s parent company publishes several magazines that accept advertising from some of the companies affected by the new rules.)
Controversial Rules
In clamping down on underage drinking, City Commissioner Lauren Poe argues Gainesville has taken a “very moderate measure.”
The ordinance, which was approved February 5, enacts penalties only if an establishment is caught serving underage drinkers more than a certain number of times. A business with an occupancy rate less than 201 people will incur the penalty if it has five or more infractions in a calendar quarter. A business that can handle more than 201 people will face the penalty if it has more than ten incidents per quarter. That means a relatively busy bar that is serving 1,000 customers a week would face penalties if less than one-tenth of one percent of its customers were underage over the three months.
On first offense, a bar would be subject to the under-21 prohibition for 90 days. Repeated citations could extend the prohibition up to a year.
Once a business enters the penalty phase, it cannot admit anyone under the age of 21 between the hours of 9am and 2am. Each violation carries a $500 penalty. So, if one week the city finds 20 underage patrons in a bar—even if they are not drinking illegally—the bar faces a fine of $10,000.
Gainesville attorney Jim Gray represented Rob Zeller when the city was debating under-21 regulations. Gray says a key concern is this paragraph in the ordinance: “The lack of actual knowledge of, acquiescence to, participation in, or responsibility for any Underage Drinking Incident … on the part of the owner or agent shall not be a defense by such owner or agent.” In other words, if underage drinkers use fake identification to get into an establishment or someone over 21 buys a drink and gives it to someone under 21, the bar owner is still liable.
Gray calls this element “fundamentally unfair” and notes that it is pre-empted by state civil liability law. Zeller, whose businesses are among those that have been cited for underage drinkers in the past, is now suing the city to overturn the ordinance.
This new regulation marks the city’s second attempt in five years to put a stopper in the city’s bar and nightclub business. In 2005 the city council took on the issue of drink specials at the urging of University President Bernie Machen, who was concerned because six students had died in separate alcohol-related incidents between 2004 and 2005. The city commission requested that the state pass a law that would allow municipalities to regulate or ban drink specials. The state legislature declined to take up the issue.
After that effort failed, Gainesville decided to tighten regulations on underage drinking as a way to exert some control over the issue.
Commissioner Mastrodicasa says she doesn’t see the new ordinance as onerous. “I think we can have most of our clubs be 18 and up and do just fine,” she says.
Licensed to Sell
Alcohol is big business in any US city, but even more so in a college town like Gainesville, where more than 1,200 businesses sell beer, wine or hard liquor. But that doesn’t make it any easier to succeed in the bar and nightclub business. Owners need to go through innumerable steps just to get started, and then constantly work to maintain their profitability.
Before a business owner can sell hard liquor, beer or wine in Florida, he or she must be licensed. There are two basic types of licenses:
1. A “quota license” applies to full-service establishments, meaning businesses whose primary revenue is from the sale of alcoholic beverages. By state law, only a set number of quota licenses are allowed in each county. A few new licenses are offered once a year in random drawings. Additional licenses may occasionally become available as population increases. A quota license is good anywhere within the county for which it is issued. It is also transferable and has real market value. License broker Tom Garrison of Ormond Beach says quota licenses are very much in demand for Alachua County and that the market value ranges between $130,000 and $140,000.
2. A limited SRX license applies to businesses which derive 51 percent or more of their sales from food. A business may apply for an SRX license at any time of the year. These limited licenses are not transferable and have no real market value outside of the property to which they are affixed. (A beer/wine-only license is also available, and it also has limited “street value.”)
Of course, obtaining a license is only step one in what is frequently a million-dollar gamble to make money selling alcohol. A potential business owner must then comply with a knot of codes and ordinances, obtain a site and building lease, develop a business relationship with suppliers, furnish the building, hire and train staff and market the business.
Frank Villante is co-owner with Ron DeFilippo of The Swamp Restaurant, which has operated in a prime location across University Avenue from UF for the last 15 years. He says the amount of work required to succeed in the bar or restaurant business is extensive and never-ending. “We still work really hard. It’s like Groundhog Day. We get up every morning and do the same thing we did the day before because if you don’t, you’re going to lose business,” Villante says.
Commissioner Mastrodicasa says Gainesville recognizes the hard work bar and restaurant owners put in. And she says the city is not trying to make life more difficult for them. It just wants to bring some order to a chaotic situation.
“Most bars do a great job preventing underage young people from drinking,” Mastrodicasa says, “but there are some that abuse the privilege of having 18- to 21-year-olds in their establishment. And the promoters who work with these bars, I bet most don’t pay taxes or even have a business license.”
Bar owner Zeller has a different point of view. He feels bars like his are being unfairly singled out for prosecution, even though he says he already takes these significant steps to prevent underage drinking:
• Before admitting a patron to drink, his establishments require two forms of ID: a credit card or UF student ID with the person’s name on it and a driver’s license with a picture.
• Guests also are required to wear wristbands. Those 21 and up wear one color that is one-inch wide. Those who are not 21 must wear differently colored ½-inch bands that are made of a different material. “I’m spending upwards of $50,000 a year just on wrist bands,” Zeller says.
• He also maintains security to watch for under-aged drinkers. During busy hours, “We have six people at the doors, just at Gator City: two in front, two at the rear and two at the emergency access door. I have another 12 people that I pay $8 to $10 per hour to walk around and make sure underage kids aren’t drinking.”
“I’m trying really hard,” to prevent underage drinking, Zeller says. “I’m doing all I can. I don’t see there’s anything else I can do. This new ordinance could drive me into bankruptcy.”
Zeller is also disturbed that the bars owners are being penalized while the young people who lie about their ages to drink at businesses like his are not.
Officer Jeff Lamb of UF’s Police Department says an underage student found with alcohol is typically issued a “Notice to Appear,” which may result in a criminal charge, as possession of alcohol under the age of 21 is a “nonviolent misdemeanor.”
Attorney Gray says typically, “Kids who are caught pay a fine that is $293 now, fill out form, promise not to do it again and adjudication is withheld. A charge simply goes away.”
In addition to civil penalties, if the underage drinker is a student at UF, he or she will also be referred to Judicial Affairs, the university’s student court, which may require the offender to attend a class and perform community service, Lamb says.
Whether or not the university itself is serious about policing students who drink is arguable. While UF officials discuss drinking during freshmen Preview sessions and the Student Affairs Web site “supports the strict enforcement of Florida’s liquor laws,” statistics on the UPD site indicate that Arrests for Liquor Law Violations are miniscule on or around a campus of 50,000 students. In 2005, there were 212 arrests; in 2006, 239 arrests and in 2007, 261 arrests. During those years, UF officials or other law enforcement agencies arrested an ever-decreasing number of underage drinkers: in 2005, 530; in 2006, 273; and in 2007, 63.
A Broader Problem
At The Swamp Restaurant, Villante says, “I don’t want the under-21-age in here drinking, but I don’t want the city dictating what we can or cannot do, either. They’re not doing it at any other stores or business in town.
“They say we are the problem, but that’s because we’re right on the street and visible.”
And there is the greatest point of frustration for bar and nightclub owners. Since the city’s ordinance applies only to bars, clubs and restaurants—not to grocery stores, liquor stores or other places that sell alcohol—bar and nightclub owners say they are being singled out for penalties when they are only one small source of the drinks people imbibe.
Villante argues that most drinkers “pre-party” at less expensive locations then show up at businesses like his around 11 to 11:30 pm. “Many first drive to the grocery or liquor store and buy a liter of vodka or case of beer and drink it and then they come to us,” he charges. “We sell them one or two drinks for $4 to $5 apiece and if they get busted, the police don’t go to the grocery store and ask about the case of beer they drank before they went out. We get the blame because we served them last!”
Jeff Laake, assistant manager at the Publix located at Southwest 34th Street and University Avenue, said his store conducts the usual checks to confirm the ages of people purchasing wine and beer, but he would not say more because Publix discourages employees from speaking with the media.
At Gator Spirits & Fine Wines, located across 34th Street from Publix, employee Dan Eddy says they too do their best to stop underage consumers.
“We check the IDs of everyone in the group—if anyone in the group isn’t 21, we won’t sell to them—and we have a scanner that reads the magnetic strip on a [driver’s license]. Still, kids get by every now and then.”
Gator Spirits owner Harold Monk remembers his days as a UF student, fraternity brother and football player and says, “Students are going to find a way to drink.” But if they’re caught, Monk says, “I feel the responsibility needs to be placed on the individual himself, not the establishment. Should we be required to babysit the kids at the U?”
Summing up the bar and nightclub owners’ position, attorney Gray says,
“No one wants underage drinking.” But if someone younger than 21 is caught, why should the establishment be punished? he asks. “It’s like penalizing General Motors following a traffic accident, and it just doesn’t make sense.”
Does Alcohol Fuel City’s Economy?
It’s hard to find data that precisely defines the impact that beer, wine and hard liquor sales have on the local economy, but it appears to be significant.
According to figures from the state Department of Business & Professional Regulation for 2004, the most recent year available, 1,297 businesses in Alachua County sold alcohol in one form or another. Those businesses employed 35,885 workers and generated $412,718,000 in payroll.
Not all that revenue or all those employees’ jobs were attributable to sales of beer, wine or hard spirits, but alcohol did have an impact on local jobs and the economy.
As one example, Rob Zeller, who owns the Grog House bar and the Copper Monkey restaurant and is co-owner of Gator City Sports Grill, says he employs more than 100 people in his three establishments and pays more than half-a-million dollars a year in sales tax alone.
Statewide, the impact of beer, wine and liquor sales is also clear. Florida's alcoholic beverage industry generates roughly $800 million in liquor tax revenues and provides or supplements 103,000 jobs, according to Eric Criss, executive director of the Beer Industry of Florida, a lobbying organization and trade association in Tallahassee.
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