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East Village Restaurant Sues Over 'Illegal' Liquor License Agreement

By Elizabeth Barber | April 15, 2013 10:28am
 Boukies filed a lawsuit against the State Liquor Authority in early April 2013.
Boukies filed a lawsuit against the State Liquor Authority in early April 2013.
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EAST VILLAGE — A year-old Greek restaurant claims in a new lawsuit that it was strong-armed into an illegal agreement with the power-hungry local community board to never serve a full menu of booze.

According to legal documents filed April 3 against the State Liquor Authority, the SLA's decision not to grant a full liquor license to Christos Valtzoglou’s East Village restaurant Boukiés was based on an agreement between Community Board 3 and Valtzoglou that the board did not have the authority to make.

Valtzoglou, a native of Greece who formerly managed upscale Greek restaurant Phylos in the East Village, had appeared in front of CB3’s liquor licensing committee in January 2009 hoping to get a full liquor license for his new German eatery Heartbreak Restaurant at the same address, 29 East Second Street, the suit says.

That’s when he was told that the board would only grant him a beer-and-wine license for the new venture — and would do so only on the condition that he enter an agreement never to apply to upgrade to a full liquor license in the future, according to legal documents.

“CB3 had no authority to enter into such an agreement,” the lawsuit says. The restaurant “reluctantly accepted the agreement illegally imposed on it, as it was clear that CB3 would vote to disapprove the application without such an agreement,” the suit adds.

Valtzoglou opened Heartbreak in August 2010 with a license to serve beer and wine. He shuttered the eatery after it failed to attract and keep customers, according to the suit, which argues that Heartbreak’s original business model had depended on a full bar.

“Customers repeatedly ordered mixed drinks but were told that only wine and beer were available and many of the customers left the restaurant or did not return after that night,” said the suit, which also emphasizes that the business was a restaurant, not a bar, and should not be counted as rowdy neighborhood establishment.

In the summer of 2011, Valtzoglou reopened the restaurant as Boukiés. After collecting 150 signatures in support of a full liquor license for the place, he appeared again in front of CB3 that September, the suit says. But his application for a full license was again denied, after three unnamed people at the meeting cited the agreement into which had entered in 2009, according to the lawsuit.

The following summer, Valtzoglou took his case to the full board of the State Liquor Authority, which has final decision-making power in liquor license applications. Community boards are only authorized to make recommendations to the SLA.

Susan Stetzer, District Manager of CB3, appeared at the meeting to voice opposition to Valtzoglou’s application, according to legal documents alleging the board was interested more in asserting its power than in acting in the community interest.

“CB3 was motivated more by its interest in keeping its authority intact rather than representing the interests of its community members,” according to the lawsuit.

Stetzer, who said she was not aware of a lawsuit, declined to comment.

The State Liquor Authority voted to deny a full liquor license to Boukiés, citing the 2009 “binding agreement” between the community board and Valtzoglou as one of its reasons, according to legal documents.

The authority also cites “a lack of character on the applicant’s part,” since Valtzoglou applied for a full liquor license one year after agreeing with CB3 never to do so, according to the documents.

The case also involves a dispute about whether or not Valtzoglou properly notified the State Liquor Authority when he changed his business from Heartbreak to Boukiés, according to the documents.