Portland city councilors have rushed through a liquor license for a local brewery despite a warning from the city attorney that doing so would violate the city’s zoning rules and code of ordinances, and go against precedent it set in dealing with a competing brewery.

Councilors voted 5-2 to grant a Class A liquor license to Rising Tide Brewing Co., a brewery owned by Democratic state Sen. Heather Sanborn and her husband that helped pioneer a resurgence in East Bayside.

The license allows the brewery to become a full-blown bar, though Sanborn said that’s not their intent. She only wants to continue serving wine and cider, along with their own beers.

“I’m not asking – and have never asked– for permission to pour spirits,” Sanborn said before Monday’s vote. “I’m asking that the food requirement be removed from my license so I can go forward with the exact operations we have had for the last year and 30 days.”

The situation highlights how local regulations are struggling to keep up with the rapidly evolving business model of craft brewing companies. Three years ago, the city created a special license for breweries and allowed them to sell ancillary items, such as T-Shirts, pint glasses and even prepackaged snacks. It came at a time when smaller tasting rooms were giving way to bar-like experiences, where brewers were selling full pints of beer, rather than only offering small samples.

The City Council’s move also reflects a conflict between city and state rules for liquor licenses. That conflict is the focus of emergency legislation to allow municipalities to place conditions on state liquor licenses. The bill will receive a public hearing Friday.

Unlike other Class A liquor licenses, Rising Tide’s request was not listed on the council’s agenda and the public was not notified it was being voted on. No public information was disclosed before the vote and councilors were not even presented with a full application. And the approval is contrary to the council’s previous handling of a similar application by Austin Street Brewing Co. for its new tasting room next to Rising Tide on Fox Street.

Heather Sanborn, co-owner of Rising Tide Brewing, poses in January with labels for some of the company’s beers. The brewery got approval this week for a license that allows it to operate a full bar, but Sanborn says it only wants to continue serving wine and cider, along with beer. Press Herald photo by Gregory Rec

The hurried nature of the council’s action made some councilors and some members of the public uncomfortable – including two regular council watchers who accused the council of doing a special favor for a prominent political ally.

“The only reason you are taking this up is because she is a state senator – it’s totally clear that’s the reason,” said Steven Scharf, a regular council critic who usually advocates for business-friendly decisions. “If I came to you with this same problem, you’d have said ‘No’ to me.”

The vote came after Corporation Counsel Danielle West-Chuhta warned that the council was embarking down a “slippery slope.” She said the city’s zoning code does not permit such licenses in the industrial zone and a city ordinance requires a public notice before granting a Class A license.

Even if it did, an application for such a license must be received three weeks before the council meeting, so staff can review it and the public can receive at least seven days notice of the hearing, said Jessica Hanscombe, the city’s licensing and registration coordinator.

“This is a council decision where you’re directly going to be in violation of two or three of your different ordinances,” West-Chuhta said. 

Although several councilors expressed concerns about the process, they approved the license.

“I do think, in the end, though, this is the right end place that we will ultimately be anyway,” Mayor Ethan Strimling said. “And it is the right thing for this business and the right thing for this community.”

Rising Tide has been operating its Fox Street Brewery under a Class III & IV liquor license, allowing it to sell gluten-free drinks, such as cider and wine, in addition to the beer it produces on site. However, that license requires that 10 percent of Rising Tide’s revenue be generated through food sales. Sanborn said she was unable to get her state license renewed because food sales are only 9 percent of revenue.

That prompted the last-minute decision for Rising Tide to receive a Class A liquor license, which has a low food sales requirement and allows people to run full-service bars.

Portland has worked to prevent both full-service bars and restaurants in East Bayside, which has some of the last remaining industrial spaces in the city. Portland officials feared that introducing those uses would increase rents and drive out artists, brewers and other makers.

The city held fast to that decision in December, when Austin Street Brewing Co. was preparing to open its new tasting room. At the time, Austin Street’s Will Fisher said he hoped to offer the same gluten-free options as Rising Tide but was advised by the city staff that he should apply for a Class A license.

City Councilor Belinda Ray called out the fact that such licenses were prohibited in the zone. After a long debate, the council granted only a brewery license, so Austin Street could open the following Saturday. But it was only allowed to sell its own beer.

Portland has worked to prevent full-service bars and restaurants in East Bayside, for fear that they would increase rents and drive out artists, brewers and other businesses. Now, Rising Tide Brewing has a license that allows a full-service bar. Press Herald photo by Gabe Souza

The brewery appeared before the council two months later and received a Class III & IV license, even though Fisher was concerned about food requirements.

Fisher could not be reached for comment Thursday on the council’s vote on the Rising Tide license.

The Legislature is considering an emergency bill to help resolve the situation. L.D. 1619, “An Act Regarding Licenses for the Sale of Liquor for On-Premises Consumption” would allow municipalities to place conditions on state liquor licenses, which they cannot do now.

City Councilor Kim Cook, who works as a lobbyist in Augusta for health care and agricultural interests, expects the bill to be quickly approved after a public hearing before the Veterans and Legal Affairs Committee on Friday. As an emergency measure, the bill would need two-thirds support from the Legislature, she said.

“I suspect it will get moved very quickly through work session and be on the governor’s desk within a couple of weeks,” Cook said. 

If that happens, a city spokesperson said the city would add a condition to Rising Tide’s license, prohibiting it from selling spirits.

City Councilors Nicholas Mavodones and Jill Duson voted against the measure Monday.

“I don’t like the precedent,” Duson said. “The fix we’re talking about is a piece of legislation that is still pending. We don’t know if it’s going to be approved. If it isn’t, we have now violated our own rules.”

Sanborn pushed back on the notion that the council gave her special treatment because she is a state senator. She said the city was looking to change the license administratively. When that was not possible, it was added to the council’s agenda at the last minute, she said.

“I think they would have gone to bat for any business owner in an untenable situation,” she said. “I think the timing about how everything has been shaking out has been unfortunate.”

Randy Billings can be contacted at 791-6346 or at:

rbillings@pressherald.com

Twitter: randybillings

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