HOUSTON - Bars are one of the few businesses that must remain closed, per Governor Abbott's orders. However, the Texas Alcoholic Beverage Commission says since June, they’ve issued hundreds of new permits to bars, so they can operate as restaurants.
Some bar owners say playing by the rules so far, has not worked in their favor.
Bobby Heugel owns several of Houston’s most popular and prominent bars like Anvil, Penny Quarter, Pastry Wars, Tongue Cut Sparrow, and Better Luck Tomorrow. Over the last several months, per Governor Abbott’s executive order, Heugel’s kept them all closed.
"Any of our bars that don’t have a kitchen, we can’t do business in," Heugel said. "The governor's put us in a position where if we’re a good actor, we’re not allowed to open. But if you’re a bad actor, you might be. It doesn’t mean every bar that you’re going to is a bad actor, but the problem is that bars are impersonating restaurants to be open. We could do the same thing but we don’t feel like that’s being compliant. Bars that are lying about it and manipulating their pricing to look like a restaurant, which really only puts the public at risk more," Heugel continued.
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In fact, according to Chris Porter, a spokesperson for TABC, since the governor’s first executive order at the end of June, 1,759 bars across Texas have applied for a new license that would reclassify them as a restaurant. To date, 1,101 of those permits have been granted.
Porter says most of the remainder are pending. Only a few applications have been denied for minor errors and bars can always reapply, according to Porter.
Bars also don’t have to have a kitchen on-site to be considered a restaurant.
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The primary requirement is simply filling out the paperwork and forking over $776 for a new two-year-permit.
"The primary requirement as the governor has pointed to several times, is their alcohol sales must comprise less than 51% of their gross receipts. So the remainder can come from food. They can partner with a food truck. They can find a distributor that can provide pre-packaged commercial food for them, or they can partner with a catering service. Really, the goal of the commission was to lower that high cost and barrier of entry for businesses," Porter said.
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Ultimately, TABC says the pricing structures are left up to individual businesses to decide, so customers may see manipulated itemized receipts.
Heugel says this loophole feels slightly unethical.
"We want to make sure that our financial needs don’t circumvent what the community needs. And we understand there are risks associated with restaurants and bars and we don’t want to ignore those. It’s just really hard for us to handle that professionally on our side when we’re not getting that same treatment from government and we have no way of predicting policy," Heugel said
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TABC says they received well over 1,000 applications this July, compared to July 2019, where the commission received just over 250 food and beverage applications.
Bars reclassified as restaurants will still have to abide by state capacity rules, which means operating at 75% capacity starting Monday.
TABC says the commission's goal is to help businesses stay open and afloat.