The Oyster Bar Grille on Circuit Avenue in Oak Bluffs has operated year-round without the required license to serve alcohol, according to town officials. Oak Bluffs police have told the financially troubled restaurant’s owners that the establishment cannot reopen as scheduled tonight, February 10, without proof of a valid year-round alcohol license.
The restaurant had been closed since New Year’s Eve. Wednesday, a sign on the door said the bar would reopen Thursday night.
Police said they told manager Michael Gillespie that if he opens for business, he will be subject to arrest.
Town administrator Michael Dutton said the town is tightening enforcement of the bylaws, since the Oyster Bar Grille’s violations have come to light.
“He shouldn’t have been allowed to operate,” Mr. Dutton said. “It has highlighted a little bit of miscommunication between the police department, the selectmen’s office, the ABCC, and the applicants.”
The state Alcohol Beverages Control Commission (ABCC) denied the Oyster Bar Grille’s application for a year-round license in February 2008, but the Circuit Avenue bar and restaurant has been open for business during parts of the past two winters, violating state and local laws. Neither the state nor the town took enforcement action against the restaurant.
The Oyster Bar holds a valid seasonal alcohol license, which permits the sale of alcohol, only from April 1 to December 31.
This week, the ABCC again denied an application for a year-round alcohol license. The commission dated its disapproval February 4. The ABCC cited “failure to comply with Massachusetts tax laws,” as the reason for the rejection.
MAD Corporation, the limited liability corporation which operates the Oyster Bar Grille, filed for Chapter 11 bankruptcy on January 14, according to federal court records.
The beginning of bankruptcy proceedings came on the same day that an auction was scheduled to sell the building at 57 Circuit Avenue, along with all the furniture and fixtures. The filing halted the auction and all other actions by the creditors.
The bankruptcy filing lists the Internal Revenue Service, The Massachusetts Department of Revenue, and the Oak Bluffs tax collector as creditors.
According to a motion filed by Edgartown National Bank, the largest creditor, MAD Corporation’s debts total $1,587,658, including $742,832 owed to the bank. The filing shows the company owes the town of Oak Bluffs $108,700.
Under Chapter 11, a business usually proposes a plan of reorganization to keep its business alive and to extend the time to pay creditors all or part of what is owed.
A CD release party is scheduled for Sunday evening, February 13 according to a calendar listing submitted to The Times. But, the Oyster Bar Grille does not hold a valid entertainment license, according to town officials.
The Times made several attempts over the past three weeks to contact Oyster Bar Grille manager Michael Gillespie and his bankruptcy attorney. Neither responded to messages requesting comment.
The board of selectmen is the local authority responsible for issuing alcohol licenses. The selectmen, or the ABCC, may enforce regulations covering alcohol licenses. The town can impose fines and suspend or revoke the license if the applicant violates the regulations.
In 2007, Oyster Bar Grille manager Michael Gillespie, who is a signer on the mortgage along with Wyman Shaw, asked the board of selectmen to change from a seasonal alcohol license, to a year round license. Because of the regulatory process, the request is treated as an application for a new license. After a public hearing, selectmen approved his request.
The ABCC received the application for review on December 10, 2007. On February 29, 2008, the ABCC denied the application for failure to comply with state tax laws and sent notice to the town, according to ABCC executive director Ralph Sacramone.
Licensing issues were a point of contention in December 2010, when Mr. Gillespie asked the Oak Bluffs selectmen for an entertainment license. The board approved the license, after asking whether Mr. Gillespie understood the entertainment license was only valid until the early morning hours of January 1, 2011, and that he would have to apply for a new entertainment license in the New Year. Mr. Gillespie said he understood.
The restaurant opened for business on New Year’s Eve with a DJ and a buffet. According to town officials, Mr. Gillespie did not collect his approved entertainment license and did not pay the $500 fee.
Mr. Dutton said the town recently learned of licensing issues at Jimmy Seas, a restaurant on Kennebec Avenue. Mr. Dutton said that restaurant operated during the summer of 2009 without any valid alcohol sales license. Selectmen approved the restaurant’s application for a seasonal license, but the ABCC denied the application, according to Mr. Dutton. He said the ABCC has since approved the license, and the restaurant is now in compliance with state and local regulations.
Fair playing field
Lax enforcement of alcohol regulations has upset other Oak Bluffs bar and restaurant owners.
“We’re all playing by the rules,” Season’s Pub owner Mike Santoro said in a telephone conversation with The Times. “When someone else doesn’t, it hurts all of us that are open year-round. I’m upset about it. It bothers me that someone is operating without a license. That’s not right.”
Enforcement of the regulations covering seasonal alcohol license also attracts criticism from local restaurant owners. The owners who stay open all year say they often do so at a loss, or barely break even during the slow winter months. By operating in the off-season, they keep their staffs employed. The benefit, they say, is that employees remain loyal and provide reliable help during the extremely busy summer months, when profits are higher.
According to town bylaws, seasonal alcohol license holders must stay open from April 1 to December 31. Selectmen must approve any closing beyond 48 hours. In its practical application, the bylaw means an establishment must close from January 1 to March 30, and cannot close for more than two days at a time, during the rest of the year.
Some seasonal license holders have traditionally closed for business in the fall, a technical violation of the license. Mr. Dutton said the town has been lenient in its enforcement of that provision of the bylaw, because of the seasonal nature of the resort community.
But last month, Mr. Dutton sent a letter to all license holders, telling them that the town will begin strictly enforcing the 48-hour closure provision of the bylaw. Licensees can no longer open only for special occasions or only on weekends during the late fall and winter months.
“Once you’re closed, you’re closed,” Mr. Dutton said.
The letter also prohibited license holders from opening for private events, once they close for the season.