On appeal from Final Decision of the Director, Division of Alcoholic Beverage Control.
Deighan, Havey and Muir, Jr. The opinion of the court was delivered by Muir, Jr., J.A.D.
This appeal focuses on the authority of the Director of the Division of Alcoholic Beverage Control (Director) to overrule a municipal denial of an application to relocate an inactive or "pocket" plenary retail distribution license (D license).
The Council of the Borough of Point Pleasant Beach (Council) denied the application of the Great Atlantic and Pacific Tea Company, Inc., (A & P) to locate its D license in a shopping center on Route 35 (Richmond Avenue). A & P filed an appeal with the Director. Thereafter the Council enacted a 1500-foot distance-between-licensed-premises ordinance. The ordinance disqualified the proposed A & P site as a liquor store. An Administrative Law Judge (ALJ) upheld the denial. He also held the transfer barred by the distance-restriction ordinance. Subsequently, the Council amended the ordinance, creating exceptions to the 1500-foot minimum distance requirement. The exceptions applied only to liquor licenses operating from existing licensed premises.
Then, after the Director remanded to the ALJ to consider applicability of the amended ordinance, the Director, ex parte, decided to hear that remaining issue, whereupon he granted the A & P application, holding the distance-restriction ordinance inapplicable.
After filing of the appeal, we remanded, requiring the Director to consider the four days of testimony before the ALJ previously not considered by the Director. The Director, in a supplemental opinion, affirmed his original holding.
The Mayor and Council of the Borough and a Borough licensee appeal. We affirm.
The Borough of Point Pleasant Beach is a trapezoidal-shaped community fronting on the Atlantic Ocean. It is approximately two miles across the shore front and a mile deep. It has 5500 permanent residents. It has 21 issued liquor licenses. Only one of those licenses, the A & P license, has no assigned or licensed premises. The A & P lost its former licensed premises due to a refusal of the landlord to renew its lease. The former 15,000 square foot A & P supermarket, 700 square feet of which were devoted to liquor sales, is now a bank.
Of the remaining licenses, fourteen are plenary consumption licenses (C licenses); four are "Broad C" (combined consumption and package stores) and two are plenary distribution or package store licenses (D licenses). All licenses have the privilege to sell package goods.
A & P spent approximately two years searching for a new site. Finally it selected the proposed site on Richmond Avenue, some nine blocks from its former location, in a shopping center serving full-time residents of the Borough. The proposed site contained 10,000 square feet.
On May 24 and June 8, 1983, the Council held a hearing on A & P's relocation application. The hearing opened with the reading of four letters from objectors. Two letters came from liquor licensees. The remaining two letters came from persons who argued there was no need for the license.
The Council then heard from Richard Barkalow, intervenor on appeal. Barkalow owns Bar Car Liquors, a package store located 320 feet, as the pedestrian would walk (the legal basis for measuring distances between licensed establishments), from the proposed A & P site. Barkalow gave as his reasons for opposition: "I do not believe that I can survive economically;" "I would be in bankruptcy;" and ". . . it would run me into the ground."
The Council then heard from other objectors, some of whom worked for or were owners of licensed premises or were customers of Barkalow. Their objections related essentially to economic competition and lack of need for another liquor store in the Borough.
A & P then had the opportunity to present its application. The first A & P witness described the difficulty in finding a location. He then described the plans to renovate the "eye sore" vacant building, a former Food Fair Supermarket, proposed for its new store. He denied any plans to utilize predatory pricing to put economic pressure on other liquor stores.
At the conclusion of the testimony of the first A & P witness, Councilman DiCorcia, who voted to deny the relocation application, stated it was his understanding there was currently no ordinance to protect "our mom and pop stores; specifically in this case, Mr. Barkalow and his liquor license from being infringed upon by other applicants." DiCorcia then asked Barkalow's attorney, ". . . if we did have a proximity ordinance in the Borough of Point Pleasant Beach, do you feel this would be beneficial in this particular case to your client?" [Emphasis added.] Counsel responded in the affirmative. The Mayor then stated that he was concerned over a "liquor store alley" developing and that he did not want the town to become the liquor store capitol of Monmouth and Ocean Counties with price competition.
Another A & P representative testified regarding the advantages the proposed store would have over other existing liquor stores in serving the public. A real estate expert then testified to the unsuitability of other proposed sites. He stated A & P's presence in the area would enhance it and benefit the area generally.
Prior to voting on the application, several members of the Council spoke for denial. They noted as grounds for denial the "plethora of licenses" in the Borough, that Borough residents'
needs were met by existing licenses and that the store presented traffic hazards.
The Mayor, who could not vote on the resolution, stated there were enough liquor stores in the Borough and that A & P had not shown any benefit to community welfare arising from the transfer.
The resolution of denial provided:
a. The transfer of plenary retail distribution license # 1525-44-008-001 to 1205 Richmond Avenue would not serve the public safety and welfare since the transfer of said license to said area would allow too great concentration of 'D' licenses in this portion of the municipality.
b. That the creation of a 'liquor alley' in this area of Point Pleasant Beach will occur as a result of the installation of this large scale 'Supermarket' type of liquor store contrary to the public good and welfare of the residents of Point Pleasant Beach.
c. That there are currently too many alcoholic beverage licenses located in the Borough of Point Pleasant Beach and the reactivation of this license after a period of three (3) years would be contrary to the best interests of the community in light of the fact that said license will be going from a previous 700 square foot operation to an approximate 10,000 square foot operation. Such an operation would be contrary to the public health, safety, and welfare of the municipality.
During the hearing before the ALJ, the Council added community sentiment against the transfer as an additional reason for denial, relying on Lyons Farms Tavern v. Mun. Bd. Alc. Bev., Newark, 55 N.J. 292 (1970) and Fanwood v. Rocco, 33 N.J. 404 (1960).
The ALJ heard testimony from the Mayor, a councilman, a former councilman, Barkalow, a local minister, a local resident and friend of Barkalow who sells Barkalow insurance, and a local hardware store owner in support of the denial. The ALJ also received two petitions against the transfer, one of which had been placed in Barkalow's store after the initial hearing. The second was offered by the resident and friend ...