E.L. City Council keen on removing '50-50' requirement
At Tuesday's discussion-only meeting, the East Lansing City Council held debates on an ordinance that would effectively end the city's requirement for alcohol-serving restaurants to make at least 50 percent of their revenue from food.
The ordinance would remove the requirement for establishments to report their food-to-alcohol ratio, with a mutual agreement that the city would not enforce it, director of planning, building and development Tim Dempsey said.
Since this "50-50 requirement" would technically still be in place, Dempsey said he didn't want anyone to think the city would tell restaurants they didn't have to report, just to turn around and punish them for not reporting.
The Peanut Barrel, P.T. O’Malley’s, Rick’s American Café and The Riv are exempt from the requirement because they have not relocated since the rule’s inception.
The move to simply not enforce the 50-50 requirement would be easier than removing it altogether, councilmember Ruth Beier said. Beier called the proposed ordinance a fine compromise between changing the city charter and continuing with the current setup.
City Manager George Lahanas said current regulation forces bars to not only offer, but promote their lunch and dinner menus. He said the ordinance was enacted so that local restaurants wouldn't solely focus on alcohol sales, which would lead to fewer quality food options for city residents.
"If they didn't have that obligation, would they want to serve lunch?" Lahanas said. "It might roll back the sort of gains we've had with those businesses. That's just a possibility."
Mayor Mark Meadows suggested placing requirements on offering food in general, rather than requirements on where restaurants' revenues come from — for example, requiring them to offer a minimum of 10 food items on the menu.
Aaron Stephens, councilmember and MSU political science senior, said he didn't believe allowing establishments to sell more alcohol than food would be the end of diverse dining in East Lansing.
He said restaurants weren't going to lose their lunch and dinner crowds because of a change in city policy.
"(The original ordinance) was a well-meaning thing, but I don't think that it's really getting the effect that was intended," Stephens said. "Restaurants are going to be restaurants."
Beier noted the 50-50 requirement could actually increase alcohol consumption, as establishments may be pressured into offering cheaper alcohol and more expensive food.
On the flip side, Dempsey touched on the current trend toward more expensive craft beers and how that may make it challenging for establishments to meet the requirement. If customers order a $6 burger and an $8 beer, that can quickly throw the alcohol-to-food revenue ratio off balance, Dempsey said.
Dempsey also noted the city has a quota on Class C liquor licenses and has currently assigned its maximum.
Class C licenses allow an establishment to sell beer, wine and hard liquor, like at Harper's or Dublin Square. The only way for a prospective business to get a Class C license right now is to acquire one from someone else, buy one out of escrow or receive prior approval from the Downtown Development Authority, Dempsey said.
He said officials who crafted the original regulations recognized the need to provide both bars a thirsty student crowd and "true restaurants" for diners. Yet other considerations, like public safety concerns around bars and the economic investment in downtown, have changed over time and made the rule less applicable.
"The Downtown Development Authority and other entrepreneurs have looked at 50-50 as a challenge to operate the types of facilities they want to operate," Dempsey said.
Beier, despite her stated belief that the city already has too many bars, said there are already a lot of controls on the sale of alcohol in East Lansing restaurants.
Highlighting Dempsey's statement that the city had already assigned the maximum amount of Class C licenses, Beier said she sees the newly proposed ordinance as a solid transition from the restrictions created nearly 30 years ago.
"Going from what we have now to (the proposed ordinance) seems like a reasonable thing to do," Beier said. "There's no evidence in my mind that (the 50-50 requirement) has actually achieved what we wanted."