Ask Chicagoist: Limited Liquor Licenses?

By Thales Exoo in Miscellaneous on Mar 15, 2006 3:19PM

hey ask chicagoist:

is it true that we only have a limited number of liquor licenses and once that number is hit, they won't give out any more? is it true that once someone loses their liquor license, the commission or whomever doesn't necessarily add another one to the availability list?

The mere idea that there's a potential end to the number of liquor licenses up for grabs is enough to drive Chicagoist to drink. We've heard plenty about how difficult it is to get a liquor license in Chicago (there are nine major classes of licenses, for starters), and we've proudly brought-our-own to many fine restaurants as a result. So as a result of our, um, close relationship with the product being licensed, we were happy to discover that the answer to all of your questions is "no."

Well, sort of. In the city of Chicago as a whole, there is not a finite number of liquor licenses that is depleted but never replenished. However, there are Liquor Moratorium Districts, passed by Chicago City Council, where no more licenses can be issued. These moratoriums can apply to entire wards or just portions of a street.

Liquor license transfers in those areas are heavily restricted as well. According to the Citizen's Guide to the Liquor License Application Process, transfers in these districts are only allowed between spouses, parents and children, a shareholder from before the moratorium, and a person "acquiring less than five percent of the shares of a corporate licensee." If you don't fall under any of those categories, the transfer can be approved if you get the consent of 51% of the legal voters within 500 feet of the establishment.

Historically speaking, prior to Prohibition, City Council passed an ordinance called the Harkin Ordinance that did limit the number of liquor licenses allowed to be issued in Chicago. The 1906 law backfired, naturally, as people bought so many licenses before the law went into effect that there were actually more licenses issued than before the law. Not only that, but the investors who held all the licenses were able to sell them for a profit well over the $1000 purchase price.

Cheers!

Forget where you put your drink? Need some advice? Email ask(at)chicagoist(dot)com