Township awards liquor license to Palm Palace

By: Nico Rubello | Fraser - Clinton Township Chronicle | Published May 22, 2013

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CLINTON TOWNSHIP — A restaurant’s request for a free liquor license prompted debate among the Clinton Township Board of Trustees, but a majority ultimately opted to dole out the license.

The township board voted 5-2 to award one of four liquor licenses to the Palm Palace restaurant at 15750 Hall Road in Clinton Township, with the mutual agreement that should the business close, the license would come back to the township.

The license allows the restaurant to serve alcohol once the license is processed by the Michigan Liquor Control Commission, which Palm Palace CEO Mustafa Dakroub said he expected sometime this summer.

While some, including Supervisor Robert Cannon, said the liquor license would help keep the business open, township Treasurer Bill Sowerby and Trustee Paul Gieleghem opposed awarding Palm Palace the liquor license because the restaurant had been delinquent on its taxes up until this past March.

At that time, the restaurant paid more than $97,200 worth of back taxes owed on the Hall Road property around the same time it requested the township’s approval to fill out an application for the license.

Sowerby said awarding a free liquor license to a business that hadn’t been paying its taxes sends a bad message to businesses that have been paying their taxes on time, despite their own economic struggles.

But Dakroub said having the liquor license is “vital” to an establishment like Palm Palace, helping level the playing field to allow them to compete with other restaurants. Potential customers have walked out of the restaurant after finding out it didn’t serve alcohol, he said.

Every 10 years, the Michigan Liquor Control Commission distributes the quota of liquor licenses to municipalities to dole out to businesses.

The number of licenses awarded is based on Census-related population growth. In 2010, the township received two new quota liquor licenses, and had two additional licenses left over from the 2000 Census.

As in the case of any liquor license, Township Police Capt. Bruce Wade performed a financial and character background check on the business, and found that it passed the threshold to submit its request to the township board.

Without the free liquor license from the township, the restaurant could have purchased a license on the open market, which township board members estimated might cost $30,000-$50,000.

Resident Roger Holtslander noted that the business would return the license to the township, should the license go unused for any consecutive 90-day period at any time in the future.

“We’re loaning them a liquor license so they can make their business work,” he said. “A hole in Hall Road is not what we want.”

Much of the debate at the May 13 meeting centered on whether the township should use the financial situation of related businesses in other communities — in this case, Palm Palace restaurants in Auburn Hills and Pittsfield Township — when deciding to award a license in Clinton Township.

Sowerby and Gieleghem maintained that the financial viability of the two other Palm Palace locations, both of which are delinquent on their taxes, financially affected the Hall Road restaurant.

For Trustee Kenneth Pearl, on the other hand, the taxes owed on the other properties weren’t a factor, he said. Pearl said the license hopefully would help the business stay open.

“I think we have the right formula for getting it back (if the business closes),” he said. “It’s a win-win situation and I’m hoping they do well.”

Dakroub said the non-payment was not intentional, and when a flux of capital became available from the liquidation of another property, the restaurant opted to pay off the Clinton Township back-taxes, not knowing whether the township would allocate the liquor license.

“We understand when you accept a license to serve and sell alcohol, you also accept the public trust (to) sell alcohol in a responsible manner,” he said. “They (township board members) have every right to ask questions. They have every right to criticize.”

In the meantime, Gieleghem said, three township trustees, including him, Sowerby and Clerk Kim Meltzer, are working to more clearly define the process of receiving the quota liquor licenses. He said the committee is reviewing things like the application fee, the application questionnaire and what types of covenant agreements should be associated with receiving a liquor license.

“We have a responsibility to the community to ensure, if we’re going to award this economic development tool, it’s been done a responsible way and (goes) to a business that has demonstrated financial viability,” Gieleghem said.

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