City Strikes a Deal on South Bar's Liquor License, Decides Not to Revoke

After months of debate, the Birmingham City Commission decided not to move forward with a plan to revoke the now-closed South Bar's liquor license.

Instead, at their Monday night meeting, city commissioners unanimously approved a Memorandum of Understanding that would preserve the liquor license but place strict controls over any business looking to move into the now-empty space at 210 S. Old Woodward Ave.

The City Commission was originally , during which they would have considered asking the Michigan Liquor Control Commission (MLCC) to revoke South Bar's liquor license after a series of public safety incidents at the former downtown bar and restaurant.

After a second shooting by bar patrons on July 16, the . The first shooting occurred on April 2, when a in the midst of a fight outside .

Under new agreement, no new nightclubs allowed in that space

However, before the hearing could begin two weeks ago, Kelly Allen — the attorney for South Bar — brought a Memorandum of Understanding before the commission, urging them to consider a new proposal from the building's landlord and current owner of the liquor license, Jim Esshaki.

What does that deal include? According to Allen, the liquor license is currently owned by Woodward Tap, Inc., which is co-owned by South Bar's former owners Steve Puertas and Joseph Spadafore.

However, the original contract stipulated that if South Bar defaulted on its lease, the license would be transferred to James Nicholas Enterprises, an organization owned by Esshaki.

Since South defaulted on its lease under those terms, Allen said the liquor license went into escrow as of Aug. 9 and began the transfer process from Woodward Tap to James Nicholas Enterprises.

Under the Memorandum of Understanding, Esshaki would move forward on bringing in a new tenant under the following conditions:

• South Bar can not return
• Any new business would not be allowed to operate a nightclub
• Any new business would be subject to a Special Land Use Permit (SLUP)
• Any new business that wants an entertainment or dance permit would have to come before the city commission for approval
• The landlord or tenant will be able to divide the leased space to possibly incoporate more than one concept using the same liquor license

Deal puts city 'in the driver's seat' for regulating liquor license

According to City Manager Bob Bruner, who recommended approving the memo early in the evening, the memo is a win for both the city and the licensee.

Should the MLCC ultimately revoke South's liquor license, Bruner said the city would likely be entrenched in a lawsuit.

"(Revoking a liquor license) has real financial consequences for the licensee," Bruner said. "Litigations would probably ensue and it may end anyway in an agrement like the one before us."

Bruner said even if the liquor license was revoked, Esshaki could always bring another nightclub to the space. Under the memo, however, Esshaki is bound to strict regulations.

"The remedies afforded by the memo exceed that which we would expect from going through a revocation hearing with the state of Michigan," said City Commissioner Scott Moore. "This memo fits with the goals as established by our city regarding the ."

Bruner agreed. "(The conditions in the memo) exceed what is required by our local ordinances. This is a big win for putting the city in the driver's seat."

'The hope was to send a very strong message,' commissioner says

Still, there were many at Monday's meeting who weren't happy that South Bar slipped through without a public hearing.

"It's like going to confession, like all your sins are forgiven," said resident James Mack. "It's not right. Who's paying for all the police we have on duty? All the people who might not have come downtown? ... It's not fair in my mind."

City Commissioner Stuart Sherman said he supports the memo but with some reluctance.

"The hope was to send a very strong message," he said. "That message was we were not going to allow a business person to come into this community, use the resources we have here and then take advantage of the situation ... It's not what we expect. It's not what we want."

Sherman said he believes Esshaki to be culpable in the situation as well, noting he wants to see Esshaki come before the commission and apologize.

"I haven't seen him. I haven't heard from him. I find that a little embarrassing," he said.