Taking Back Your Bar: Settlement Agreement Termination

Many DC bars have settlement agreements with their ANC, so-called citizens’ associations, or
gangs of local NIMBYers. These agreements can restrict hours, operations and create onerous
standards as a condition of liquor licenses. What many owners don’t know, is that SA’s don’t
have to be forever. After four (4) years, if you follow the procedure, you can petition the Board
to terminate or modify your SA.

Even if you are not sure that you can prove termination is appropriate, filing the paperwork can
level the playing field and correct the inequities of the initial application process. I’ll explain:

As you know, opening a new establishment is a race against the clock. You have to get your
doors open before your cash burns off and the business dies in the womb or limps out of the
gate with no chance of success. ANC’s and other protestants, with no actual skin in the game,
know this, and file protests to drag the process out. They use the delay to force you to agree to
concessions that you would never accept without duress.

Although you can fare better at renewal time because you are actually operating, there is no
meaningful incentive for protestants to re-negotiate terms. Even if you beat back additional
conditions, it does nothing to address the existing SA.

HOWEVER, if you petition to terminate the SA, the protestants have something to lose. If you
win in a hearing the SA can be eliminated or diluted. Without an economic gun-to-your-head
you can bargain on equal footing or simply put your case on before the Board.

To be eligible to file a petition to terminate or modify your SA, it must be at least 4 years old,
and you must make a diligent effort to contact the other parties and negotiate a resolution in
good faith.

Your petition must be filed with your renewal application or the Board will reject it. ABRA
publishes a form petition with instructions to guide you through the process. Once submitted,
your termination petition proceeds in lockstep with your renewal and is disclosed on the posted
placards and neighbor notification.

If you are not able to negotiate a resolution with the opposing parties, you have to prove two things at a hearing:

(1) The need for the amendment or termination is caused by circumstances beyond the control of the licensee or due to a change in the neighborhood where the establishment is located; and (2) The request for amendment or termination will not have an adverse impact on the neighborhood. Like any litigation, the strength of your case depends on the facts and circumstances of your individual situation. However, by simply filing, you improve your bargaining position substantially. So even if you ultimately can’t prove that you meet the standard, there is a benefit.

Renewals only come around every three (3) years. All restaurant licenses expire in March 2022
and tavern licenses follow in September 2022. Remember, you are required to make diligent
and good faith efforts before filing the petition, so make sure you have enough lead time. For
restaurants, with the renewal applications only a few months off, you need to get your ducks in
a row now.

My goal in this post is to help you understand the potential benefits of a termination petition
and to lay out the basic framework of the legal process. Obviously, you will want to do some
serious thinking and planning before deciding to move forward. We are here to answer any
questions that you might have about whether this is the right move for you. Please contact us
or use our online scheduling tool to book an appointment for an initial call to discuss your
needs.