Hearing notes

Former Liquor Board Chairman Stephan Fogleman represented the Fells Point Community Organization (FPCO) in opposing the application to expand. There were approximately ten residents present in opposition. Mr. Melvin Kodenski represented the applicants, with about twenty-five people in support of the expansion. Mr. Kodenski first called Mr. David Martz, President of the Fells Point Residents Association (FPRA) to testify about the Memorandum of Understanding that FPRA negotiated and signed with the applicants. Kodenski told the Board that the Douglass Place Neighborhood Association has joined in to support the project, under the conditions in the MOU, but DPNA has not yet signed the agreement. Mr. Martz testified that FPRA has 85 paid members and supports “what was promised to [them]” by the licensees: an upscale steakhouse. Right now, there is a vacant lot at the site, on the corner of South Broadway and Eastern Avenue. Under questioning from Mr. Fogleman, Mr. Martz agreed that the original agreement between the community group and the licensees did not contain mandatory food to alcohol ratios. Fogleman asked, “wouldn’t you have preferred a restaurant license?” Mr. Martz said, “personally, yes.” Martz admitted that there are no terms in the agreement to describe what would happen in case of a breach of the agreement. The food to alcohol ratio in the MOU would only apply to the steakhouse portion of the licensed premises (500-02 S Broadway). Fogleman asked, with a single license, in a single building, and a single entity, how is anyone to know what food was sold in which part of the premises? Mr. Martz said that he would rely on the Liquor Board as the regulating agency to help figure that out. Fogleman asked what would stop the licensee from transferring all food receipts over to the steakhouse premises? How is that going to be policed effectively? Martz replied that he did not know how that would be calculated. Fogleman pointed out that hours of operation and valet parking are not specified in the agreement. Martz did not know what the capacity of the Ritz Gentleman’s Club currently is or what its expanded building would be. Mr. Andrew O’Connell, attorney for the property owner at 500-02 S. Broadway, testified next. The property owner of that vacant lot is an LLC, which he has represented in two lawsuits against the City. One lawsuit has concluded and one is ongoing. The City sued the property owner for housing violations; the vacant property formerly at that address collapsed, leaving “an open hole” in the ground, which is a code violation. The City and the property owner entered into a settlement agreement to resolve the lawsuit. Under the agreement, the LLC who owns the property has agreed to build something on the lot. Permits must be pulled for the project by December 2014, and construction must begin by March 2015. The LLC owner has put up a fence around the vacant lot. Commissioner Moore asked Mr. O’Connell whether there is any legal relationship between the current licensees and his client, the LLC that owns the property at 500-02 S Broadway. O’Connell replied that one of the managing members of the LLC is also a member of the entity that owns the liquor license at 504 S. Broadway. Moore said that it does sound like there is a relationship, then. Moore asked, why should this Board care about the LLC’s consent agreement with the City of Baltimore? O’Connell replied that the property owner is in “a Catch-22.” The City has required the owner to build something. The property owner wants to build something. Some of the community members want the owner to build something and some of them don’t. Mr. Fogleman asked Mr. O’Connell, “are you aware that the LLC is forfeited?” O’Connell was not aware of this. Fogleman then asked O’Connell why it has taken four and a half years to begin construction on replacing the collapsed building at 500-02 S. Broadway. O’Connell said that his client was suing the City during that time for mistakenly knocking down the building. According to O’Connell, the City was supposed to have knocked down one building and they knocked down both. Mr. Ian Sokoloski, architect for the applicants, submitted drawings of the proposed building. He told the Board that there has not yet been a hearing before the Commission for Historical and Architectural Preservation (CHAP) or the Board of Municipal Zoning Appeals (BMZA) for the project. The Planning Department, however, has recommended approval. The proposed structure will require a variance from BMZA, because it will need to cover 100% of the lot. The commissioners asked whether the two buildings will have any doorways between them; Mr. Sokoloski replied that building codes will not permit a door between them. The buildings will be independently constructed, with no openings or communication between the two structures. Mr. Abraham Hurdle then testified as a witness. He met with four community organizations, including Douglass Place Neighborhood Association, Fells Point Residents Association, Fellls Point Community Organization, and the Broadway Area Business Association. Mr. Kodenski then submitted letters of support from business owners in the block where the expansion was being sought as well as a petition in support from residents. Fogleman requested a few minutes’ break to look at the addresses of the petitioners. During the break, as opponents were looking at the petition, they noticed a line at the bottom of the petition that read: “every attendee to the hearing will recieve [sic] $50 Ritz bar tab.” To view a photo of the petition page, click here. When the hearing reconvened, Fogleman pointed out the $50 bar tab promise, to which the applicant/licensee had no answer. Fogleman also said that 242 of the signatories to the petition submitted signatures that were outside of Fells Point. Mr. Kodenski then submitted a copy of the licensees’ proposed menu. Fogleman pointed out that the menu had not been submitted for the file, though it was provided to the community associations during meetings. Mr. Omid Ilkhan testified next. He, through his LLC, owns all of the property in question: 500-02 S Broadway (the vacant lot) and 504 S. Broadway (the Ritz Gentlemen’s Club). Ilkhan did not know whether the lots would be consolidated at some point. Ilkhan asked, “what is wrong with having a steakhouse?” He testified that the lot is a perfect place for a steakhouse, because the gentlemen can go to the strip club, then they can go next door and have a steak. He plans to spend between $800,000 and $1.2 million on the project. The commissioners asked him why he doesn’t form a new corporation and open the steakhouse under a Class B license. Ilkhan replied that he wants both businesses to be run by the same corporation, because of tax liability reasons. Mr. David Hitchner testified next as one of the current licensees and applicants for the expansion. He told Commissioner Moore that women can go to the Ritz too, if they want. He estimated that 30% of his customers at the Ritz are women. Mr. Fogleman asked Hitchner why the application for the expansion said that the expanded premises will provide “snacks,” which does not seem consistent with a steakhouse concept. Hitchner said that “snacks” was put on the application before they developed the menu. The applicants created the menu by going to different high end steakhouses in the area and taking ideas that they saw on other menus. Hitchner said, “we typed it up on a computer, it wasn’t like we hired a firm to put together a menu.” Commissioner Moore asked Mr. Hitchner about the $50 bar tab promise at the bottom of the petition. Mr. Hitchner said that he didn’t know about it, but he guessed he would have to honor it if people came in to claim it. Moore became stern and said, “you understand that the atmospherics of this are all wrong.” Hitchner agreed. Moore noted that she had looked carefully through the petition, and it looks like a lot of the signatures are in the same handwriting, all signed by the same person. Hitchner agreed that it looked that way to him, too. Moore replied that it calls into question the value of the entire petition. “It’s very bad,” she said. Moore then asked Mr. Hitchner about the letters of support from area businesses. She said that these letters do not go into any detail about the type of license or the specific project. She said that she assumed that the signatories were given a form letter. She was not impressed by the menu submitted by the licensees, saying that all they did was go to a few restaurants and pick their favorite meals. The licensees have not hired a chef and are asking for permission to open in a property “that looks like a meteor hit it.” She concluded, “sometimes the easier path is the path that should be taken. Y’all have chosen a difficult path.” She pointed out that the community organizations have already agreed to support a restaurant license. She asked Hitchner, “why are you choosing the far more difficult path?” Hitchner replied that, according to Article 2B, the same licensees cannot own a BD-7 license and a B license at the same time, and he doesn’t trust anyone else to be on the license for the steakhouse. He said, “we want to keep everything in-house.” Hitchner explained that the Ritz is involved in a “cash business,” which means that the owners need to be able to trust each other. “It’s an honesty thing. Joe and I want to stay on the same license.” Mr. Fogleman asked the supporters of the application to raise their hands if they are current employees of the Ritz. Of the nineteen that were in the room, thirteen raised their hands. At the end of Mr. Kodenski’s case, Mr. Fogleman moved to dismiss the licensees’ application. He said that the petition in support of the application was the worst he had ever seen. The supporters present at the hearing were mostly employees at the Ritz, and none of the supporters reside within five blocks of the licensed premises. Mr. Kodenski has shown no public need or desire for this new business, and, according to Fogleman, the Board is being asked to craft an unusual expansion. Fogleman said that the application was slapped together and very premature. The Chairman responded that Mr. Fogleman’s concerns would be considered and the Board would give the applicants’ testimony the weight it deserves. He denied the motion to dismiss. Mr. Liam Davis testified for the opponents, on behalf of City Council President Jack Young. Mr. Young has received many emails and letters of opposition and is opposed to the application. Next, State Delegate Luke Clippinger testified that he, along with State Senator Bill Ferguson and Delegates Pete Hammen and Brian McHale are also opposed to the expansion. Democratic candidate for Delegate Brooke Lierman also submitted a letter of opposition. Clippinger said that the expansion of one license to cover multiple buildings would defeat the intent of the statutory ban on new BD-7 licenses. Kodenski objected to this testimony, saying that Clippinger is not an authority on Article 2B. Denise Whitman testified next in opposition to the expansion. She testified that the two buildings that used to stand at 500 and 502 S. Broadway were allowed to deteriorate by Mr. Ilkhan until one of them collapsed. She said that, because the two structures were interconnected, they both came down. She stated that she is very concerned that bars are getting too big in Fells Point and are consolidating in order to have more and more patrons. Chairman Ward said that he couldn’t tell the community members how many times people had come to him with their properties having been torn down accidentally by a negligent Baltimore City. Ms. Joanne Masopust, President of the Fells Point Community Organization, read a prepared statement as her testimony. She was concerned by the applicants’ adamant resistance to obtaining a restaurant license for their restaurant. FPCO would support a restaurant license application, because a restaurant license offers more protection to the community than a BD-7 tavern license, even with an MOU in place. Masopust pointed out that, if the steakhouse concept fails, the licensees will have a gigantic BD-7 license, with square footage of 7,680. She said that this might make the Ritz the largest BD-7 tavern in Baltimore now that Voltage is closed. Mr. Kodensi had suggested Pazo and the Latin Palace as other large bars, but those two have B restaurant licenses, not BD-7s. Masopust told the Board that from Eastern Avenue south to the water between the east side of Caroline and the west side of Washington, there are twenty-give existing BD-7 establishments. The previous Board allowed a Class A liquor store to become a BD-7 establishment by “adding five bar stools and a TV.” Mr. Victor Corbin, of the Fells Prospect Community Association, agreed with Ms. Masopust, saying that Fells Point has enough licenses. Corbin did not think that the MOU signed by FPRA was good enough to allay his concerns. He said that in his experience, MOUs have to be enforced by the community members themselves, so it is difficult to make sure that licensees follow the rules unless there are vigilant community members keeping track of violations. Chairman Ward said that he has heard so much about the oversaturation of liquor licenses in Fells Point, “I’m about to shoot myself. … And I never miss.” He agreed with Masopust, however, that the liquor inspectors do not have the capacity to enforce food restrictions in a private agreement. Several more community members testified and reiterated testimony already presented.