Customers trickled into Josephine Lounge, enticed by heavy promotion on a hip hop radio station and free admission for women before midnight.
They scattered around in dimly lit booths and browsed LED menus. Only a few ordered the tacos, sliders and wings offered. But drinks flowed while a DJ in an elevated booth spun the latest hits.
Josephine says it is a restaurant that provides a lively atmosphere, and until recently Brookhaven allowed it to operate as such. But an overhaul of the city’s Alcohol Code means places like Josephine — any venue with either a DJ, a stage or a dance floor — is now designated as “entertainment venue.”
That new category also comes with a huge financial impact. A liquor license for restaurants to pour alcohol, beer and wine is less than $6,000. Entertainment venues must pay $100,000 and aren’t allowed to serve adult beverages on Sundays. Josephine is one of the 12 establishments put on notice that they needed to pay up or stop pouring.
Four venues, including Josephine, were denied alcohol licenses in February because the city said they erroneously categorized themselves as restaurants and didn’t pay the required new fees. The four asked the city’s Alcohol Board to reconsider, but the decision to revoke their licenses was upheld. Now they have filed appeals in state court.
Eight others were notified last week that their liquor licenses are being suspended in May unless they pay the $100,000 and submit new paperwork as entertainment venues.
The establishments include Pegasus, where a DJ often provides sounds while patrons select from a fusion menu with African and West Indian inspirations. And Acapulco Tropical, where reggaeton blasts from the stage and margaritas flowed much more frequently than snacks on a recent evening.
There could be more places added to the list if the city determines they fit the definition of an entertainment venue.
In addition to the appeal, Josephine and two of the other businesses notified in February have also filed a lawsuit in the U.S. District Court accusing Brookhaven of targeting restaurants that cater to black patrons. Their attorney Cary Wiggins said the city has not justified the drastic changes or enforced them fairly across the city.
“To stem what it perceives as an influx of ‘hip hop’ restaurants, the City of Brookhaven has adopted and enforced a set of confusing, content-based ordinances that it believes will cripple the City’s restaurants which cater to African Americans,” Wiggins wrote.
All 12 establishments that Brookhaven says are fraudulently operating as restaurants instead of entertainment venues are located along Buford Highway on the city’s southern edge, an area known for being a haven for minorities and immigrants. Brookhaven has targeted Buford Highway for redevelopment and, in recent months, has cracked down on nightlife there.
Brookhaven city council members said they overhauled the Alcohol Code in late 2017 after reviewing crime data focused on 10 late-night venues that serve alcohol and were responsible for the most calls for service, as well as citywide DUI statistics.
The report showed that most incidents at the locations occurred between the hours of 2 a.m. and 4 a.m., and most people charged with driving under the influence lived elsewhere.
Council members said that data justified charging certain places that serve alcohol — mainly nightclubs with DJs and dancing — more money to operate. They said the increase in revenue will cover the costs of the services that Brookhaven Police provide at these locations.
“Under the new fee structure, Brookhaven residents are providing less of a subsidy for police to an area around a handful of entertainment venues which have a disproportionate amount of criminal activity,” city spokesman Burke Brennan said.
In its response to the appeals in state court, the city denies wrongdoing in how the Alcohol Code was overhauled or enforced. There is no middle ground in the new law, Brennan said. If there is a DJ playing music, a dance floor or a stage, then the place is an entertainment venue that must pay the higher costs for its liquor license. There are no exceptions, he said.
Brennan denied that race has anything to do with the restaurants that have been cited. He said the Brookhaven Police Department prides itself on outreach to minority communities.
The four clubs that filed suit remain open — and pouring — while their appeals circulate through the courts. The eight that received letters recently can also appeal, which would allow them to also continue operating pending a ruling.
All of them are already abiding by other portions of the Alcohol Code overwrite, including a rollback of the hours bars can serve liquor from 3 a.m. to 2 a.m. most nights.
Wiggins said Brookhaven’s new regulations would essentially shut down his clients.
‘Without seeking any input from the restaurants the city deems a drain on resources, the city has eliminated one of two weekend days from their allowable operation, and it has levied a $95,000 increase for their annual alcohol license,” he said. “It’s sticking a fire hose in their mouths while they’re drowning. Yes, the $100,000 fee is a death sentence.”
Wiggins and attorney Alan Begner, who represents the LGBT-friendly Rush Lounge, both argue that Georgia law says municipalities cannot charge more than $5,000 for a license to sell spirits. They believe this is proof Brookhaven overstepped its authority because half of the $100,000 fee is for the right to pour liquor.
The city says that part of the Georgia Code applies only to package stores, not nightclubs.
Brookhaven has not yet responded to the accusations in the federal lawsuit that civil rights, due process and free speech laws have been violated.
Brookhaven revoked alcohol licenses for four nightspots it says did not properly register as entertainment venues or pay the new $100,000 fee for liquor licenses. They appealed in state and federal court.
Last week, Brookhaven sent letters to eight more establishments accused of miscategorized themselves as restaurants instead of entertainment venues. Their liquor licenses will be suspended in May unless they pay the $100,000 and submit new paperwork.
The lawsuits filed on behalf of the four venues are pending. The eight establishments that received letters last week must decide whether they will pay up or appeal.
How much does a liquor license cost?
Municipalities set their own rules for how much they charge restaurants and nightclubs for licenses needed to serve beer, wine and spirits. Here is a breakdown of the costs:
Brookhaven: $100,000 for entertainment venues, $5,200 for most restaurants
Chamblee: $5,000 plus $1,700 for Sunday sales for all venues
Atlanta: $5,000 for all venues
Doraville: $4,000 plus $1,000 for Sunday sales for all venues
Unincorporated DeKalb County: $4,000 plus $1,100 for Sunday sales for all venues