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New Asian Restaurant Runs into Liquor License Problem

Owner of new Shorewood sushi bar could have to swallow a $10,000 cost for license.

The plan is to offer customers a full liquor bar when Asian restaurant and sushi bar opens its doors on North Oakland Avenue in October.

Owner Nick Zheng's only problem: It could cost him as much as $10,000 for the liquor license.

Zheng’s new venture at 4511 N. Oakland Ave., a few storefronts south of , is one of the many new shops, restaurants and bars that have revived the village’s business district, and many are seeking a Class B liquor license, which allows an establishment to serve hard liquor, beer and wine.

When opened May 17, it was issued the village’s 14th and last $600 Class B license. State law allots municipalities a set number of Class B licenses for issuance and some reserve Class B liquor licenses based on its population, which are required to be sold for no less than $10,000.

So, if NaNa wants to open with a full bar, it would have to purchase one of Shorewood's eight reserve licenses. The $10,000 cost of the license is a one-time charge and the license can be renewed annually for $600.

It might well be Zheng’s fault, as he should have researched the issue prior to signing a lease and starting construction on the interior of his new restaurant, village officials said at a Community Development Authority meeting Friday.

"As much as we want to encourage businesses, it's not our place to take care of people's mistakes," said Trustee Jeff Hanewall.

Zheng told Patch Tuesday he plans to pay the $10,000 for the license, but said village officials told him there is a chance he could be reimbursed.

At the CDA meeting, officials discussed pocketing the $10,000, but also kicked around some ways of softening the blow to Zheng and his new sushi bar.

In the past, some villages and cities have waived the fee or provided economic development grants in the amount of the license, Village Clerk Sherry Grant said. Mimicking what other municipalities have done could help protect Shorewood from ligation, CDA member John Florsheim said.

Village Manager Chris Swartz said staff would have to work on a new policy, which could take months, before it would issue any grants. 

With no policy in place for this issue, Hanewall said his knee-jerk reaction is Zheng has to play by the rules of today.

"If we could clearly justify (a grant), maybe I'd go along with it," Hanewall said.

Shorewood also has three wine-only licenses available and while it has issued all of its beer-only licenses, the Village Board has the authority to add some licenses through an ordinance.

"If we want to increase beer licenses so that businesses can combine with the wine, we can do that as part of our overall policy," Swartz said.

However, Zheng would have to exclude hard liquor from this bar, which Plaisted argued is a large part of the alcohol market nowadays.

Trustee Ellen Eckman said this is a broader issue than just NaNa's because this could adversely affect how prospective business developers and owners view Shorewood.

That point was also made by Business Improvement District Executive Director Jim Plaisted.

“We need to address this if we want to continue to bring attractive, quality restaurants here to Shorewood,” he said.

Zheng and co-owner Ka Bo Wong are the third generation of restaurant owners in their family. Their relatives have opened various types of Asian fusion restaurants in New York, California and Florida including a chain called Wild Ginger.

Absolutelyfabulous September 14, 2011 at 10:35 AM
How about possibly pro-rating the fee over time vs using taxpayers monies to subsidize yet another business venture in Shorewood. What is the next possible scenario/mistake someone will make and Shorewood will come to the rescue in the form of a "grant" to help it move forward. The reason restaurant operators want the hard liquor license along w/ wine & beer is because that is where the $$$$$ is. Mr. Zheng would not be willing to pay $10,000 for a liquor license if he did not understand how much extra revenue that would mean for his business by people just wanting drinks or w/ their meals. Is this in anticipation of restaurant spaces possibly wanting to come into thge Ravenna development? It is the owners/operators responsibilities to understand all ordinances that apply to their business.
Absolutelyfabulous September 14, 2011 at 10:44 AM
This is a prime location w/ top notch demographics to target vs some hole in the wall off the beat path. Though, if the food is good, people will come out the woodwork and drive from as far as Chicago to experience fine dining. All you have to do is check out Crawdaddy's on ~66th & Greenfield. They are slammed w/ patrons and wait times can be up to 2-2.5 hours of a Friday/Sat eve as they do not take reservations. (or at least last time I was there) I can only imagine what kinds of tips the bartenders take home since they can't pour the drinks fast enough. It is not the taxpayers responsibility to pick up the tab because a business owner did not do their homework. Liquor adds a whole new dimension to the money stream a restaurant can generate and increase it's patronage quite a bit. Let the owner pay, but just get creative on how to soften the blow vs all at once if that is possible.
Absolutelyfabulous September 14, 2011 at 10:52 AM
Sorry for the 3rd post, but a couple of additional things. Mr. Zheng is a 3rd generation restaurant operator which means he is not new to this and should have known what to ask. 2nd-It is the tenants responsibility to not only read the lease before he signs it but understand all the ins/outs and if this means hiring an attorney to assist then you do what you gotta do. Once you sign it, you are obligated to follow everything that is stated. A lease will or should state that it is the operators/tenants responsibility to follow all codes/ordinances that apply in the municipality that they are to operate as well as secure all necessary permits and pay any/all fees associated w/ their business. Mr. Zheng dropped the ball.
Absolutelyfabulous September 14, 2011 at 11:17 AM
I wouldn't do this 4th if I didn't think it would add to the equation. I'm surprised Mr. Zheng was not made aware of the hard liquor license issue beforehand by Jim Plaisted at the BID. Jim is there to facilitate the process for new businesses and should be on top of how wine/beer/liquor licenscing works in Shorewood and what's necessary and available in obtaining those licenses. Any potential business operator has to pass it by Jim about their intent to seek a liquor license and Jim would have/should have all the info. available as to how things work in Shorewood and what was available. Unless Mr. Zhang brought this up after he signed the lease and no one was aware of his intentions or was Mr. Zheng possibly aware of the situation and was told "We can work around it and just go forward and we'll get you your $$$ back somehow via a grant because we can do whatever we want w/ taxpayers $$$"
Bob McBride September 14, 2011 at 12:29 PM
Let him pay in installments. It's kind of a hard hit to take upfront like that (regardless of whether or not he should have expected it). As AF said, that's where the money is in the restaurant business - he'll make it back fairly quickly. I guess I'm of a mind that the state shouldn't be dictating this to localities. If Shorewood wants to allow a liquor serving restaurant or pub on every corner and the populace is okay with that, they should be able to do so and charge whatever they want for the liquor license. But for now, it seems fair to give this guy a break in terms of making him pay it all up front.
Missy September 14, 2011 at 01:05 PM
I doubt Mr. Plaisted informed Mr. Zheng of anything... Talk about a waste of taxpayer money.
CowDung September 14, 2011 at 02:47 PM
It wouldn't be the worst if the $10k was paid (at least in part) with a grant from Shorewood. If it isn't, those of us who plan to patronize the business will end up paying it through higher prices. We end up paying for it either way.
Absolutelyfabulous September 14, 2011 at 03:03 PM
CowDung- There is no logic for your sentiment. Do you honestly think that if this business receives a taxpayer subsidy in the form of $10,000 they are going to cut you or anyone else a break on their offerings? Did you by any chance come across one of those baggies of weed that the police always seem to find on some unsuspecting motorist/student? Just kidding or maybe not.. Seriously, they will charge as much as they can for anything. The market will determine the price and they are in business to make $$$. How about North Star Bistro and the $150-175,000 that was given to them? Have they lowered their prices outside of recessionary necessity for customers/residents? What about Alterra and all the monies they received? Are their prices for goods any lower for the exact same product at any of their other locations. This business is possibly only getting a $10,000 subsidy from taxpayers. Though, nothing has been mentioned about possible other monies they have received. ie buildout per sq ft grants +/or just a flat out $50,000 like all the businesses in the Cornerstone received. If you go by your logic/thought process then North Star Bistro and Alterra who each got $50,000 right off the bat and then $3-4 additional per sq ft for buildout all in grants would be selling their products at a little bit of a discount than what they currently are.
Absolutelyfabulous September 14, 2011 at 04:10 PM
Cowdung- Memories run short. Remember that North Star Bistro was given ~$150-175,000 by the good decision makers in Shorewood to pick up & move & buildout across the street. They then proceeded to take over the restaurant operations of Milwaukee & Grafton Ale House months after they opened in the Cornerstone. I wonder if all the monies they saved from the grants they received and not offering any types of discounts to the residents who subsidized them allowed for them to move forward and take over the restaurant operations of the Ale House restaurants. Maybe some of the regular patrons of North Star could chime in to see if there was a drop in prices from the old location and the long haul across the street to the new location. Doubt it.
Absolutelyfabulous September 14, 2011 at 04:11 PM
Previous Post left out link & info Cowdung- Memories run short. Remember that North Star Bistro was given ~$150-175,000 by the good decision makers in Shorewood to pick up & move & buildout across the street. They then proceeded buy out the Grafton Ale House location and take over the kitchen operations of the Milwaukee Ale House months after they opened in the Cornerstone. I wonder if all the monies they saved from the grants they received from those decision makers and not offering any types of discounts to the residents, who subsidized them, allowed for them to move forward buy out 1 location and and take over the restaurant operations of the the other Ale House restaurant? Maybe some of the regular patrons of North Star could chime in to see if there was a drop in prices from the old location and the long haul across the street to the new location. Doubt it. "Joint venture for Milwaukee Ale House, North Star Bistro" http://www.bizjournals.com/milwaukee/news/2011/04/25/joint-venture-for-milwaukee-ale-house.html
CowDung September 14, 2011 at 05:05 PM
I think that there's a difference between chain restaurants and 'single location' restaurants when it comes to pricing. If Mr. Zheng has to cover an additional $10k in costs, that money has to come from somewhere--most likely by charging higher prices than he was planning.
Absolutelyfabulous September 14, 2011 at 05:49 PM
CowDung- North Star Bistro had 2 locations. That doesn't make a chain. No business is going to charge less than what they can get. They may run a promotion ie Groupon but it would only be to generate more business and gain exposure..Not out of goodwill or because they received some sort of taxpayer funded subsidy. Remember the $$$ is in the liquor and Mr. Zheng has already agreed to pay the $10,000. I don't know why the Village would even offer to cover costs unless they are setting the stage for when The Ravenna comes in w/ their restaurant proposal and they can take advantage of a thinly veiled grant. Unexpected's always come up. You make your budget and then add 10-20% for the mistakes/surprises. That's reality.
Bob McBride September 14, 2011 at 06:02 PM
If I lived in Shorewood I'd be hacked off that the Village gave NSB that much money to open a new a restaurant that's inferior in terms of service and food quality to the one they ran across the street previously.
CowDung September 14, 2011 at 06:40 PM
Two locations is certainly more of a 'chain' than a single location. What determines 'how much one can get' when it comes to restaurants? Prices are going to be set with the owner's fixed costs as a major factor in the absence of any customer history for that restaurant in that location. I imagine that the $10k would factor into that somewhere. The village collects taxes based on the profits of the business--if Zheng decides to not get the license or if paying the added cost of $10k puts a dent in the profits, then that would result in lost tax revenues to the village. I don't know how quickly that $10k can be balanced by increased tax revenues, but it makes sense to at least look into the possibility. That said, if the guy already offered to pay the $10k, then it's likely that it is covered in Zheng's contingency budget and Shorewood probably has no need to extend an offer to pay it for him.
CowDung September 14, 2011 at 06:48 PM
I have had no issues with their service in the new location, but I agree that the food quality is way below what it was at the west of Oakland location. I guess that just goes to prove that the Westies are just superior to us East Siders...
David Tatarowicz September 14, 2011 at 06:51 PM
It is laughable and sad that Shorewood Officials want to lay all the blame on the restaurant owners for this license mess. Of course it is the restaurant owner's responsibility to make sure that they get the license --- but Shorewood has been bragging about how they are "business friendly" and want to bring new business to the Village. The BID's mission is partly to do that -- and the CDA is also a part. In my experience in running a business in Shorewood and owning business property, the Village lacks any co-ordination within its operations to properly assist businesses in getting established. There is NO one center of information or help --- you have to bounce around between the Building and Permit Dept, the Clerk's Office, the Health Department, the Police Dept, possibly the Planning and Design Board,............................. And none of those departments tell you if you are missing or need something from one of the others. There should be an Ombudsman assigned to any and all new businesses, and existing businesses that want to expand -- to make sure they know what is required and help them through the process. A reasonable person might think that the BID would already be doing that --- but a reasonable person would be wrong -- the BID mainly serves as a revenue source for its director, in my opinion.
Absolutelyfabulous September 14, 2011 at 06:57 PM
It's interesting to hear about the decline of the food quality. I had a Groupon for the Milwaukee/Grafton Ale House and headed to Grafton. This was after NSB took over operations. I couldn't believe that this was supposed to be an improvement over what the Ale House owners had been serving out of the kitchen. The portions were ridiculously small/ food was extremely bland/Ravioli seemed like it was pre-frozen/pasta-dried/salad consisted of greens + 2 grape tomatoes cut in 1/2 + a few slivers of carrot and cucumber. Complete joke all around, though the server was very nice and courteous. The food was ridiculous, but the space was great and since I don't drink I couldn't speak for the beer/drinks but the place was hopping on a friday eve over looking the brown Milwaukee River. I took Groupon up on their offer of being 100% satisfied or money back. They refunded my money very promptly. No questions asked and we very nice about it. Used a Groupon the other day for Pasta Tree. What a world of difference. Loved what I had and the servers couldn't have been nicer w/ the restaurant swamped and lines out the door. Once you have fresh made pasta and home made bread/soups..there's no turning back.
Gregg September 14, 2011 at 07:08 PM
Why not differentiate licenses based not on what is served, but what kind of business it is. If it's simply a liquor store or just a bar with no food, then sure I see the merit on limiting those licenses, but if it's a restaurant I don't see why we should limit liqour licenses for them.
Bob McBride September 14, 2011 at 09:34 PM
I think you just made Lyle's and Joe's day there, Cowdung.

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