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Wine stores pioneer fringe areas

<i>Specialized licenses in the city increase, but new owners face hurdles</i>

Along with starting coffee shops and founding gourmet bistros, entrepreneurs trying to take that perfect ride up the gentrification arc are taking
a chance on an increasingly popular retail item: wine.

Over the last few years, stores specializing only in wine have been sprouting up across the city. According to the New York State
Liquor Authority (SLA), there are 24 stores in the five boroughs with wine-only licenses, compared to just eight in 2003.

Conversely, licenses for new liquor stores in the city, which allow the sale of both
spirits and wine, are up less than 10 percent, to 1,066 compared to 972 in 2003.

Retail brokers and wine store owners say opening a wine store poses unique, and sometimes costly, challenges.

“Getting a license means going through a rigorous process including a background check, and applicants have to be squeaky clean,” said Tim King, a senior partner with Massey Knakal and an expert in retail real estate. “This may sound draconian, but the process of getting a permit to sell alcohol is like the process of getting a gun permit.”

Restrictions also exist on where a wine store can open: The SLA prohibits stores that sell alcohol from opening within 200 yards of either schools or places of worship. Also, in order to determine if there is demand for another wine or liquor store, the SLA performs a public convenience and advantage review, wherein the SLA reviews the sales receipts of the four nearest potential competitors to determine if there is enough local demand for another store.

A hearing is also held where those competitors are allowed to weigh in before shops are granted new licenses. Sometimes, their objections can delay wine store openings by months.

It took Brian Robinson, the owner of Gnarly Vines, a wine store in the Fort Greene/Clinton Hill area, more than three years to bring his dream of an independent wine shop to life due to the arduous process of getting a license. According to Robinson, resistance from another Fort Greene store initially prompted the authority to deny his license. In the end, Robinson sued the state for unfairly denying it and won.

Delays in waiting for a business license can also make leasing space quite expensive. As with anyone who applies for a
state liquor or wine license, Robinson was required to sign a lease for his space at the outset, which meant he was liable for
rent on the space long before he opened
his business.

Robinson’s landlord gave him a break on his lease payments while he was fighting to get his liquor license; he eventually subleased the space while waiting for approval. “But it still took a pound of flesh from me,” he said.

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Other wine shop owners similarly have to plan for how to pay for a space months before the doors open for business.

In place of an already-leased space, the liquor authority will accept a “letter of
intent” stating that a lease will go into
effect once a license is granted, but it’s
almost impossible to get such a deal in
New York. Few landlords would hold open a retail vacancy and not collect payments while waiting to see if a hopeful shop
owner gets licensed.

However, being the first wine shop in an area undergoing rapid change puts a
retailer at an advantage, because it can
argue against later license applications.

These factors are one reason why the strongest growth in boutique wine stores hasn’t been in well-heeled areas like the Upper East Side or Tribeca, but in emerging neighborhoods like Bushwick and Clinton Hill, places where oenophiles were few and far between a decade ago.

For instance, the neighborhoods of Fort Greene and Clinton Hill in Brooklyn are now home to at least four shops. The Greene Grape on Fulton Street was the
first to open, in 2004; it was followed by Thirst Wine Merchants on DeKalb Avenue, Olivino Wines (also on Fulton) and Gnarly Vines on Myrtle Avenue, which just opened in November.

In Harlem, meanwhile, Harlem Vintage on Frederick Douglass Boulevard and
121st Street, which opened in 2004, was
the first boutique vintner in the neighborhood. Co-owner Jai Jai Greenfield admitted that opening the shop was “risky,” but
with new developments in the neighborhood and the affluence of new residents, she said she and her partner felt Harlem was “primed” for a proper wine shop. The shop, she said, also benefits from steady business from Columbia University, which receives deliveries for university functions.

Greenfield and her partner, Eric Woods, have seen revenue growth every year they’ve been open and plan to launch a wine bar next door to their shop this spring.

Sometimes, shops inspire more shops: After watching Uva Wines on Bedford Avenue in Williamsburg grow and prosper along with the neighborhood it served, four partners decided East Williamsburg was ready for a specialty wine shop.

Co-owner Dave Danzig said the shop, Vino Verde, will likely open within three months at 638 Grand Street on the east side of the Brooklyn-Queens Expressway. As with Gnarly Vines, Vino Verde is taking longer to open than Danzig and his partners had hoped.

They’re moving into an area where
six condo projects with about 130 high-end units are under construction within
a four-block radius — and where, so far, their only close competition is liquor stores where bottles are exchanged for money
with a cashier sitting behind bulletproof glass.

“We knew going into it that the best-case scenario would be four months,” said Danzig, who added, “We’ve already waited more than seven.”

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