Controversial 50/50 Law May Go, Ending Monitoring of Alcohol Sales

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Monday, March 19, 2018, 8:22 am
Jessy Gregg

Above: Interior of HopCat on Albert Avenue.

The East Lansing City Council looks likely to soon pass an amendment to the City Code which could spell the end for the controversial 50/50 law, a law which most downtown bars and restaurants have been required to follow for the last 34 years. At their non-voting meeting last Tuesday, four members of Council specifically expressed interest in doing away with 50/50, a rule originally established in the hopes of keeping East Lansing from becoming a town of college bars with few "grown-up" restaurants.

Proponents of 50/50 have said they believe that it provides more food options in East Lansing, including for lunches, and that it prevents a town full of nothing but cheap bars. But critics have said the rule paradoxically leads to the sale of cheap alcohol and cheap food and prevents the influx of high-end alcohol-serving establishments, like wine bars and jazz clubs.

Under current City code, unless an establishment was grandfathered, at least 50% of a restaurant’s revenue must come from food sales, rather than alcohol sales (with some variance for smaller restaurants which have been open more than two years and which provide "a variety of food options at all times," including lunch). Grandfathered businesses include Rick’s, The Riv, P.T. O’Malley’s, Harrison Road House, and the Peanut Barrel (below).

Prior to 2001, there was no mechanism for enforcing this rule, but then the City strengthened the ordinance by requiring mandatory quarterly reporting of alcohol and food sales from restaurants required to follow the law.

During last Tuesday's meeting, Councilmember Ruth Beier questioned the accuracy of these reports, which she noted are not audited. “Basically you can get [a quarterly report],” she said, “but I wouldn’t use it for anything other than wrapping fish.”

Mayor Pro Tem Erik Altmann and City Manager George Lahanas expressed concern that restaurants which are currently staying open for lunch to boost the food-side of the ratio might decide to close for lunch if they were no longer required to meet that standard.

Altmann said that he would like to look at the quarterly reports to see which restaurants were operating close to the cut-off point, and might therefore be likely to close for lunch if the 50/50 rule were withdrawn. “I would like to go down the list and assess places where I want to go to lunch not offering lunch,” he said.

Beier commented that she felt if a restaurant were only staying open at lunch to boost their food numbers, that restaurant wouldn’t be worth going to for lunch. “When you force a company to serve food to meet a requirement,” she said, “you’re not getting the kind of food you want to eat.” She said she was “looking forward” to withdrawing the 50/50 rule.

Councilmember Shanna Draheim said she thought that if a restaurant saw a profit in offering lunch, it would offer lunch. She added, “If a fancy wine bar [comes in] and they’re not open for lunch, who cares? We won’t see a mass exodus” of lunch options.

Mayor Mark Meadows agreed, saying that essentially requiring businesses to stay open for lunch when it is not profitable for them is “not a good policy for us to have.”

Altmann asked about the original purpose of the policy and proposed looking at the question, “Why doesn’t that apply now?” But Beier responded that she thought the question should be “Was it effective in meeting its goal?”

Planning Director Tim Dempsey said that he thought the ordinance was meant to “temper” the restaurant offerings which catered to students with more diverse restaurant options. Beier remarked that other college towns that don’t have a 50/50 requirement have more diverse dining options than East Lansing, naming Ann Arbor and Madison specifically.

“No other city has done this in the history of man,” Beier commented. She suggested that meant it was not a winning idea. Dempsey confirmed that he was unaware of any other city with a 50/50 requirement.

Draheim proposed that a relaxation of the rules could be tried temporarily and “revisited” if there were indications that it was not a positive change. Dempsey clarified that the enforcement could be suspended for a period of time if the Council were interested in trying out the change, but that if the amendment as proposed passed, Council would not be able to easily reverse that decision at a later date. If the Council were to reverse the ruling and then decide in the future to reinstate it, the policy would only affect new businesses.

Because of the way the City Charter reads, all alcohol-serving establishments would still need to provide “restaurant” seating for at least 50 patrons, and Dempsey said all would still have to serve at least 10 food options, though Meadows noted this could be “ten different kinds of French fries.” Additionally, Council could limit the establishment of new bars to some degree through the Special Use Permit approval process required by Council for all new alcohol-serving establishments.

Indicating which way he is likely to vote, Meadows said, “I don’t have a problem getting rid of this” law. He said he had trouble having a law that “forced” establishments to follow a particular food/alcohol ratio “as part of their business model.”

Beier, Draheim, and Stephens also seemed strongly to support getting rid of 50/50. When Altmann asked, “What’s the best reason” to keep 50/50, Beier responded, “Inertia.”

In response, the City Manager said he was concerned about reversion to “bars and jello shots” but also recognized that 50/50 “does also limit you.” He speculated that getting rid of it could lead to “cool jazz bars or tapas bars.”

The Downtown Development Authority's (DDA's) Business and Market Development Committee and Project Development Committee have both now expressed support for elimination of the 50/50 rule. On Thursday this week, the DDA as a whole will take up the issue for a likely vote. A public hearing on the proposed code amendment is set for City Council's April 10 meeting.


You may also be interested in:

Diversifying Dining Options Downtown: What Are the Challenges?

Why So Much Vacant Retail Space Downtown?

EL City Council Willing to Revisit 50/50 Ordinance (March 2017)
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