This year, 2013, was a year of mostly new highs for NJ restaurant license pricing. Prices along the Route 9 Corridor, have remained static through the year. North to south, Old Bridge remains tight, Marlboro and Manalapan, have remained static (few have traded), and past Freehold into Lakewood, down from previous years.
The Township of Hamilton in the County of Atlantic was incorporated February 5, 1813, and is the largest municipality, in size, in the State of New Jersey: 115. Liquor License For Sale In Hackensack Nj Public Schools. And home value estimator for zip code 0. East Orange, NJ residents, houses, and apartments details.
Prices in most of the major markets of NJ held firm and in very tight supply. From the Northern Jersey town of Ramsey, thru Paramus, prices have increased. Throughout the other towns of upper and lower Bergen County prices for plenary retail 33 consumption licenses have remained the same. Along the waterfront in Edgewater, licenses are in short supply. The supply and the pricing seem to loosen, the further south along the waterfront into North Bergen, Union City, Weehawken.
In Hoboken, prices for liquor licenses have remained stable and available, although more expensive than their neighboring cities. Jersey City is higher than 2012 because of the limited supply and availability. Further south, Bayonne is still the weakest of the waterfront cities of New Jersey. Quaker Bridge Mall in Lawrence Township has added Cheesecake and Brio, replacing older concepts. Chevy’s is gone from the area, replaced by a new concept. License availability is pricey and tight.
Bridgewater Mall in the Bridgewater market has matured. Restaurant leasing activity has slowed. Many down towns in NJ have enjoyed a renaissance.
Westf ield, Red Bank, Ridgewood and the college town of Princeton, both Borough and Township, have nurtured the downtown area over the years and it seems to have rewarded the participating restaurants with outstanding volumes. License availability is very tight now in these areas. Restaurant liquor licensing in the urban centers of NJ is still plentiful. These towns include Paterson, Newark, Trenton, Clifton, Camden, Perth Amboy and Atlantic City The issue is that cities issued licenses far in excess to what the population needed. In 1948, the Legislature promulgated the a new law restricting towns to issuing licenses based ONLY on their population and subsequent growth.
The above referenced towns were grandfathered and were allowed to keep the licenses that they had issued in excess of the mandate. Supply is available and cheaper when compared to the Mall areas. Development is restricted in these towns because of a lack of available acreage for shopping centers and their chain restaurant pad sites. Chains have traditional avoided downtown areas, choosing to expand in the car driven markets of NJ.
This too has added to the depressed pricing in urban areas. Just as an aside, it is my view that the urban areas of the state afford the enterprising restauranteur the largest upside in the state of New Jersey. I say this for several reasons: 1.
Population density of the cities 2. Pricing of the liquor licenses 3. Urban transportation network. Restaurant licenses prices in the central Jersey areas have remained flat or declined.
East Brunswick, South Brunswick, and New Brunswick, lack of development has contributed to the fall off in demand for licenses. Independents have not taken up the slack. To sell a plenary retail consumption 33 license in this area of New Jersey, it must be priced aggressively.
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South Central Jersey has seen some upward pricing pressure. License availability is very tight in this market, with upwards pricing pressure. Hamilton Township and West Windsor are tight markets for liquor licenses. South Western Jersey has seen some tremendous price swings. Cherry Hill sold a license for $1.5 million dollars.
In October 2011, the price of a 33 restaurant license at auction was $500,000. Recently several have traded and the inventory has again become low.
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Pricing is accelerating. Evesham Township aka Marlton and Deptford, are among the highest priced. South Eastern Jersey Shore communities have trended higher through 2013. Toms River has seen expansion of its Ocean County Mall, but license availability has tightened considerably. Brick has added several exciting concepts, again the prices trending higher. Speculators of restaurant licenses beware. Check out this to another blog of mine.
Financing New Jersey Liquor Licenses by John Newman, Esq. The following was written by a New Jersey Liquor License attorney. I receive many calls about how to finance a liquor license in New Jersey. This article is specifically on point.
Should you have questions about New Jersey liquor license financing, I encourage you to contact Mr. Newman for specifics to your situation. LIENS ON New Jersey LIQUOR LICENSES By John Newman, Newman and Simpson 32 Mercer Street Hackensack, NJ 07601 Phone – 201-487-0200 Email at info@newmansimpson.com For over seventy years New Jersey law has prohibited a borrower from granting a security interest in a liquor license. New Jersey’s Alcoholic Beverage Control statute specifically precludes a licensee from utilizing a liquor license as collateral for a loan. Courts have recognized that a liquor license is a privilege, not a right, and is analogous to a temporary permit. The rationale behind these decisions was to defer to the State’s regulatory authority in issuing and monitoring liquor licenses.
Of course lenders do give financing to bars and restaurants. In giving such financing it has been the practice to effectively obtain a lien on the license by taking a pledge of the stock in the licensee. This is done by obtaining a stock pledge agreement from all shareholders in the corporation.
If there is a default, the lender can take control of the stock and the Board of Directors, and elect new officers who can then sell the license (and pay down the secured debt). Usually this procedure is sufficient to protect the lender, but not always.
If there is a federal or state tax lien, the holders of the lien can levy on the license and “prime” the lender. In addition, if there is a bankruptcy, the proceeds of a sale of the license by the bankruptcy trustee may be used by the trustee for administration expenses, and for the benefit of creditors generally, including unsecured creditors. Thus, it has always been incumbent upon a lender who is relying on its “lien” on a liquor license to be sure that its borrower is paying its taxes and is solvent. A recent case has turned the long-settled principles set forth above on their head. This past summer the New Jersey Bankruptcy Court held that the 2001 amendments to the New Jersey Uniform Commercial Code overrode the seventy-year-old provisions of the Alcoholic Beverage Control Act, declaring that a lender with a lien on “general intangibles and the proceeds thereof” held a valid, perfected security interest in a liquor license. This is revolutionary development in the world of lending to bars and restaurants.
The case dealt with a bankruptcy where the trustee sold the liquor license. The court held that 100% of the proceeds went to the secured creditor due to its perfected security interest, priming a subsequent judgment by the State of New Jersey and, of course, unsecured creditors and administration expenses. The court held that because of the Alcoholic Beverage Control Act and the State’s paramount interest in controlling liquor licenses, although the lender did have a valid perfected security interest in the liquor license, it could not foreclose on the license nor compel its sale. The lender’s only remedy was to wait for a sale by the borrower, a receiver or trustee, and then assert a lien on the proceeds of the sale. For a lender, this position is far better than only having a lien derived through a stock pledge. The lender cannot be primed by a subsequent tax lien or by creditors in a bankruptcy. In addition, a lender is usually in a position to force appointment of a receiver or to force a bankruptcy once there is default.
There is one large caveat: the case is on appeal to the United States District Court and potentially from there to the Third Circuit Court of Appeals. We will keep you advised. In the interim, lenders to bars and restaurants are well advised to obtain their liens both ways: through the old stock pledge and through a security interest in general intangibles including, specifically, the liquor license. This publication is intended for general information purposes only and does not constitute legal advice.
The reader should consult legal counsel to determine how the law may apply to specific situations. Original post here.