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Crackdown on New Year's Eve All-You-Can-Drink Deals Mean Fewer in 2014

By Alisa Hauser | December 17, 2014 5:37am | Updated on December 18, 2014 10:09am
 Many bars are ditching the open bar in favor of a set number of drinks as part of their New Year's Eve packages.
Many bars are ditching the open bar in favor of a set number of drinks as part of their New Year's Eve packages.
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Getty Images (New Years Eve); DNAinfo/Alisa Hauser (Tickets)

CHICAGO — A city crackdown on violations of Illinois' Happy Hour Law has resulted in fewer open-bar New Year's Eve specials at Chicago taverns and restaurants this year.

In a little-noticed action, after last New Year's Eve, the city combed advertisements and fined bars for violating Illinois' Happy Hour Law, which prohibits open-bar deals. Bar owners were threatened with losing their licenses and hit with fines, most between $1,000 and $5,000, an industry source said.

"They hit us as hard as they possibly could," said one bar owner who reached a settlement of a few thousand dollars with the city because his New Year's Eve 2014 dinner and open-bar package violated the state law.

Alisa Hauser explains why some think the city is cracking down:

Mika Stambaugh, a spokeswoman for the city's Department of Business Affairs and Consumer Protection, confirmed that the city "reviewed online advertisements that violated the Happy Hour Law and called in violators for pretrial conferences" after New Year's Day.

Enacted in 1989, "the Illinois Happy Hour Law only allows an open bar during a set period of time for a private event, such as a wedding," said Stambaugh. The amount of the fines "depended on many factors, such as history of the establishment and egregiousness of the violation," she said.

According to city records, 81 Chicago bars and restaurants were accused of violating Illinois Happy Hour Law on Dec. 31, 2013, including Girl and the Goat, RM Champagne, Epic, Hub 51, Pony Inn, Chicago Children's Museum (which hosted a New Year's Eve charity benefit), The Wit, Debonair Social Club, Sound Bar, The Anthem and The Fifty/50.

Bar and restaurant owners attended remediation conferences, presided over by the city's Liquor Commissioner Greg Steadman and John Mariane, a city revenue collector. In addition to fines, revocation of liquor licenses were possible consequences of failure to respond, according to a summons letter.

"Fines were offered in lieu of license suspensions and forced closings. You had to go in and talk over the violation, and then they make the offers [for the fines]," said Tom Carroll, an attorney who said he fought the city and won a case for The Frontier, 1072 N. Milwaukee Ave., in Noble Square. 

Frontier's 2014 New Year's Eve package, which included open bar, a full buffet and a champagne toast, was a private party and not open to the public, so it won its case after going to trial, Carroll said. Carroll still has another pending case from January that has not been resolved.

Daniel Rubinow, a lawyer who previously worked as a prosecutor for the city, said, "Going after people on New Year's Eve for happy hour violations is low-hanging fruit."

In years past, the Happy Hour Law was enforced by the Illinois State Liquor Commission, but Rubinow said the state did not enforce it "because they could not cite everyone," since most bars offered open-bar packages on New Year's Eve.

Attorney Timothy Fitzgerald, who represented six bars charged with New Year's violations, and five more in connection with St. Patrick's Day, claimed the city's efforts were motivated by cash.

"It's the red light cameras all over again: They are using statutes intended to protect the public safety for the purpose of generating revenue," Fitzgerald said.

Pat Doerr, executive director of the Hospitality Business Association of Chicago, said the Happy Hour Law is "an important tool for promoting responsible service and moderation" but needs further clarification because "all-inclusive meal packages, particularly for events like New Year's Eve, are expected by both residents of, and visitors to, Illinois, and are a critical marketing tool and source of regional tourism to Chicago."

Doerr said the prosecutions that have been taking place throughout this year have "upended" years of "largely consistent Happy Hour Law interpretation and enforcement" and created "needless confusion and expense for dozens of small Chicago businesses."

Bar attorney Carroll said many tavern owners who had been offering all-inclusive New Year's Eve packages for several years "found it tricky to interpret the law because meal packages and what constitutes them is an object of dispute."

"There is a nebulous concept of what a meal package is, anything from a buffet to appetizers and hors d'oeuvres to a tasting menu. What is sufficient to constitute a meal package is not clear based on my reading of the statute," Carroll said.

To address the Happy Hour Law for 2015 celebrations, most bars are offering a set number of drink tickets as part of their drink-and-food New Year's Eve packages. The Drake Hotel specifies the number of drinks in its New Year's Eve 2015 package and cites the Illinois Happy Law in its fine print.

Some are trying to get a Public Place of Amusement, or PPA, licenses, which allows bars to charge a cover for open-bar packages that include drinks and entertainment.

The city, which offered workshops to liquor license holders about the Happy Hour Law over the summer, would not reveal how much revenue the city has made from happy hour fines in 2014.

When asked whether the city has stepped up efforts to prosecute violations of the Happy Hour Law, Stambaugh of the city's Business Affairs Department said the city "monitors business activity to ensure licensed establishments are operating legally."

For the average reveler, the impact of the behind-the-scenes crackdown could mean fewer people buying New Year's Eve packages at bars that are also open to the public.

Cathy Moran, a local bartender for Pint in Wicker Park, said she thinks people would be less likely to spend money on a drink package if there were a limit placed on drinking.

"If they do [buy the package] they are just going to do a ton of pre-drinking," Moran said.

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