From Tom Hay. Questions for Tom? Send him an email at Tom[AT]borderstan.com. You can follow him on Twitter @Tomonswann.
The hearings on the widely reported Hank’s Oyster Bar saga got underway Wednesday afternoon and were still proceeding well into the evening as this story is written. The final outcome could be weeks away for Hank’s ever-patient chef and owner Jamie Leeds, who thought her troubles were behind her when she successfully expanded her popular Dupont Circle restaurant in 2011, despite a protest from a group of six neighborhood residents.
The November 2010 Alcoholic Beverage Control Board (ABC Board) decision allowing the termination of a neighborhood voluntary agreement (V.A.) and ultimate expansion of Leeds’ restaurant was appealed to the DC Court of Appeals by two of the six original protesters (David Malloff and Lex Rieffel). The Court ruled that the ABC Board erred in its order allowing termination, so the case was remanded the back to the Board. The Board now has 90 days to issue an order. The uniqueness of the case and public outcry in support of Leeds’ situation raises hope for faster action from the ABC Board.
Things began to heat up this past weekend when the ABC Board ordered the restaurant to close half of the venue’s outdoor seating, reducing the outdoor dining space from 40 seats to 20. The Friday shutdown occurred without prior notification on a the review of an ABC Board decision approving termination of the Voluntary Agreement (V.A.) with six area residents. Two of the six residents, David Malloff and Lex Rieffel, appealed the V.A. termination and the District of Columbia Court of Appeals kicked the case back to the ABC Board.
At that point Leeds went public, asking the community for support by emailing and calling DC councilmemers, the mayor and the head of the city’s Alcoholic Beverage Regulation Administration. In response, several local organizations supported Leeds.
Criteria for Termination of the V.A.
At issue in the case are the criteria for termination of a V.A. The appellate court decision said the ABC Board must meet three statutory subparagraphs for termination of a V.A. The original ABC Board order only met criteria (C). The three criteria are:
(A) The applicant (Hank’s/Leeds) seeking the amendment has made a diligent effort to locate all other parties to the voluntary agreement; or (ii) If non-applicant parties are located, the applicant has made a good-faith attempt to negotiate a mutually acceptable amendment to the voluntary agreement;
(B) The need for an amendment is either caused by circumstances beyond the control of the applicant or is due to a change in the neighborhood where the applicant‘s establishment is located; and
(C) The amendment or termination will not have an adverse impact on the neighborhood where the establishment is located as determined under § 25-313 or § 25-314, if applicable.
Early in the hearing ABC Board Chair Ruthanne Miller made it clear that on remand from the Court of Appeals the Board must make findings on paragraphs (A) and (B) and any effort to have the case dismissed would be inconsistent with the decision of the Court of Appeals. At the time of the 2010 order the ABC Board had been chaired by Charles Brodsky.
Dupont East Liquor License Moratorium
Leeds’ representative, Andrew Kline, first called Advisory Neighborhood Commissioner (ANC) Jack Jacobson (2B04) as a witness. Jacobson detailed the 2009 ANC review of the Dupont East liquor license moratorium and its recommendation to allow for two lateral expansions. Later Jamie Leeds was called as a witness and detailed the timeline of how she saw the opportunity to expand her operation. Kline argued that this easing of the moratorium, the rezoning of adjacent space next to Hank’s and the restaurant’s success met the conditions of subparagraph (B).
For the criteria in subparagraph (A), Kline presented a letter and email correspondence from February 2010 to his last witness, David Mallof, one of the original signatories to the V.A. The correspondence stated that Leeds desired to expand her business and wanted to meet with the protesters.
Under questioning by Kline about efforts to reach out to the parties to the V.A., Mallof argued that the email chain had been “cherry-picked” and that he had several phone conversations with Kline about Hanks’s. Mallof also explained that he was somewhat confused about the expansion plans and thought perhaps Leeds wanted to expand into the Trio space at the corner of 17th and Q Streets NW. He further explained that he wanted some sort of proposal or Powerpoint presentation with “meat on the bones” before coordinating a meeting — and had concerns with a suggested weekday meeting during business hours when residents might not be available. ABC Board members questioning of Mallof suggest they did not fully understand why a meeting did not occur despite overtures from Leeds.
Leeds has previously stated, and did so again yesterday, that she felt compelled to sign the V.A. in order to open her restaurant, noting that she would otherwise have had to wait approximately six months for a hearing to resolve the original demands by the protest group; the wait would have been extremely costly for Leeds. At the time she agreed to the terms of the V.A., the liquor license moratorium on 17th Street prevented Leeds from potentially expanding her business. However, when the Dupont East Liquor License Moratorium was later amended to allow for a limited number of “lateral expansions” for existing restaurants; Leeds said she then initiated a request to review the restrictions in the V.A. with the group of six protestants with whom she had signed the V.A.
(Note: I was unable to stay until the end of hearing, which began at 4 pm and did not conclude until 8:30 pm.) According to additional sources who stayed for the entire hearing, witnesses for the protestants who appealed the termination of the V.A. said that their reluctance to meet with Leeds was due to her failure to detail in advance of their agreeing to meet exactly what changes she hoped to make to the business, i.e., the expansion into the adjoining space to the east.
Mallof, plus one of the original protestants, conceded in their sworn testimony that they understood that Leeds hoped to expand to an adjoining space, as informed by correspondence at the time from Leeds’ attorney, but claimed to be confused as to whether this meant an expansion to the adjoining vacant space rezoned for commercial use or whether Leeds planned to take over the Trio restaurant building next door. They also acknowledged their understanding that the expansion would naturally require an increase in the capacity for the restaurant, necessitating a change to the seating limit specified in the V.A.
The big question now is when will the ABC Board reach a decision? Will Leeds and Hank’s Oyster Bar have to operate under the original V.A., or will the ABC Board be able to rule that its original decision to release Leeds from the V.A. was valid, based on the presentation of new evidence at the Wednesday hearing? The Board has up to 90 days to reach a decision.