The state Senate and Assembly are close to finalizing what is being termed a death knell to local business owners in East Rutherford who want their liquor licenses to keep their worth. Weeks ago the Assembly amended a bill regulating special concessionaire licenses in Smart Growth areas to specifically exclude Xanadu and the New Jersey Sports and Exposition Authority (NJSEA).

The bill passed by the Senate without the exclusion in June and will now have to be sent back to the Senate and amended before going to the governor’s desk.

Both the municipality and local restauranteurs are contending they lost out on a windfall of funds due to the amendment that will exempt NJSEA from purchasing liquor licenses at market rate. A bill introduced in June 2006 would have required any smart growth developer wanting a liquor license in a town where one was not up for sale, to apply to the ABC director for a license at two and a half times above the average cost of the last three plenary retail consumption licenses sold in the borough. 25 percent would have been paid to the municipality, 25 percent to the state and 50 percent would have been divided among the current holders of liquor licenses.

For the developers of Xanadu who have appealed to the state and were given approval for 21 special consessionaire licenses at just $2,000 a year per a license, the amendment made to the bill on Nov. 19 could save the developer millions of dollars. The last two licenses sold in East Rutherford for $650,000 each. Borough Clerk Danielle Micci did not respond to requests for the third license sale price. However, if the average were $650,000, each license would have cost NJSEA $1.625 million. The borough would have received $406,250 and each of the 19 license holders at the time of the sale would have received $42,760.

"The Sports and Exposition authority was given the right to issue these special permits for things like beer vendors at Giants Stadium and they were able to license it with special licenses for state land. That’s what it was designed for. It was not designed to compete with other consumption licenses. It was designed for special venues," said Legislative Affairs Committee and New Jersey Restaurant Association member Tom Budd.

License holders in East Rutherford, which holds 19 consumption licenses, are worried the special concessionaire licenses will depreciate the value of their licenses, thereby affecting their retirement plans.

"Really, it is honestly something we are not happy about," says Nella Cicchino, owner of Landmark, a catering facility in East Rutherford for over 30 years. "Any business that owns a liquor license considers it an asset. It is taking an asset we have and making it worth nothing. We were all in a position to have to buy the licenses. We didn’t have any special treatment or special licenses. It is not only taking away the value of our licenses but this will be an entity we will be competing with. We feel it is terribly unfair because we have been here for many years and given to the community for many years. We’re not a multi-million corporation and we can’t afford to lose an asset like that."

"It is totally absurd what they are trying to do," says Dominick Anfuso, owner of Tredici Corp. in East Rutherford. "They are trying to change the law. We bought a license which value is dependent on supply and demand and the number of licenses in each town and municipality. It is as if you bought gold at $7 an ounce. You don't want it to go to $2 an ounce overnight."

The bill in question (No. 3280) was amended Nov. 19 by the Assembly Law and Public Safety Committee and is now awaiting its second hearing on the Assembly floor.

The amended bill would change the initial issuance fee to two and one-half times the appraised value amount, which many current liquor license holders fear would be low because of the special concessionaire licenses in the first place. The amended bill also wants to reaffirm the authority of the director to issue the special concessionaire licenses at the NJSEA’s Meadowlands Complex.

"As of yet we're trying to keep the bill moving because we believe a global answer to some of the issues to how we're creating or amending existing licensing procedures is something we need to have a solution to so we don't continue to come back and make special exceptions," says Assemblyman Guy R. Gregg, Assemblyman of District 24 and co-sponsor of the bill.

When asked about any future amendments to the bill or the future of the bill itself, Assemblyman Gregg said he could not comment on those situations right now because he is still discussing it with Assemblyman Joseph Cryan, Assemblyman of District 20 and co-sponsor of the bill.

"They are just like us," says Budd. "We are competing for business and they’re going to have a free liquor permit. It is inappropriate use [of special concessionaire licenses] to benefit a private enterprise that is taking place as a form of the Xanadu project."