San francisco restaurants

San Francisco restaurants flock to affordable liquor licenses

San Francisco will once again pay affordable liquor licenses to neighborhoods struggling to generate commercial development.

This is the second phase of a plan for the city in which 30 neighborhood-specific licenses will be distributed over six years.

The licenses, called Type 87, are for underserved commercial corridors along Bayview’s Third Street, Excelsior’s Mission Street, parts of the Visitacion Valley and several neighborhoods on the city’s west side, such as rue Taraval, rue Noriega, avenue Ocean and Avenue Saint-Bruno.

Priced at around $15,000, Type 87s are significantly cheaper than the more traditional licensed Type 47s, which, due to their limited supply in San Francisco, can fetch upwards of $250,000 on the city’s secondary market. . Both licenses allow the sale of hard liquor in restaurants. Only type 87 is neighborhood specific.

Type 87 licenses exist because of a law written by assemblyman Phil Ting, D-San Francisco. The law, passed last year, required five new licenses to be added to the city’s total each year through 2023.

Until last year, San Francisco had not issued a new liquor license in over 80 years. New bars and restaurants have purchased liquor licenses from other businesses that have recently closed or sold their license.

One of the recipients of the first five licenses was the Dark Horse Inn, a bar in the Excelsior. The bar previously operated with a Type 41 license, allowing the sale of beer and wine but not hard liquor. Two Bayview restaurants that opened last month also operate Type 87s: Tato, a new Mexican restaurant, by Kristin Houk, who also owns All Good Pizza nearby, and Cafe Envy, a neighborhood bar by April Spears, also from Aunt April.

“Licensing isn’t just about opening a business and being able to sell alcohol,” Spears said. “These Type 87s can basically help build a community from the ground up.”

One of the first five licenses has still not been claimed, according to the city’s Office of Economic Development and Workforce, after a company that was supposed to get it withdrew.

The recent application window for the next Type 87 licenses was Sept. 10-21, and while the city doesn’t yet have a complete list of all companies that submitted applications, according to the California Department of Alcoholic Beverage Control, at least five local businesses have applied. If there are more than five, a draw will take place in October.

Licenses cannot be transferred once assigned. If a business closes or moves, its license will be canceled and a new one created in its place.

New entrants include Java Beach Coffee Roasters and La Puesta De Sol Cantina, both located in the Outer Sunset. Kat Stewart Anderson, owner of a Bayview cafe named Word, also applied.

“It will definitely help to have one of these licenses,” she said. “I mean, for me, I can open just with coffee and tea, but licensing can complement a business by expanding what’s available to customers.”

Paula Heitman, who with her husband Tim Heitman ran Society Cabaret at the Rex Hotel in Union Square at 562 Sutter St. for about five years, is looking for a standalone space in Outer Sunset. His company also applied for a Type 87 license.

“The Type 87 is nice because it encourages people to go to other parts of San Francisco outside of downtown or areas like this,” Heitman said. “I would have never watched the sunset outside before, but now I found a few places that I really like and it would be good for us.”

Justin Phillips is a writer for the San Francisco Chronicle. Email: jphillips@sfchronicle.comTwitter: @JustMrPhillips