2,900 Texas bars are classified as restaurants. The state hardly checks for compliance
With COVID patients taking up more than 15% of North Texas’ hospital beds for seven consecutive days, area bars must close per regulations set by Republican Gov. Greg Abbott. Not that you’ll be able to notice. The Stockyards, Sundance Square and W. 7th will still have plenty of open watering holes this weekend (many of which will be filled with National Finals Rodeo attendees).
Throughout North Texas, 718 bars, distilleries and breweries have legally become restaurants since June, allowing them to stay open. In the state, the number is around 2,900. “It’s funny to say something like this: We don’t understand how there could still be licensees operating as bars,” said Michael Klein, the president of the Texas Bar and Nightclub Alliance.
And for those bars operating as restaurants, the state has largely not examined whether they have abided by a key rule that legally makes them a restaurant.
That rule is to earn less than 51% of revenues from liquor sales. Since June, state officials have audited just a fraction for compliance. As of last week, according to the Texas Alcoholic Beverage Commission, the statewide number of bars-turned-restaurants audited for sales data was 429. Not one of the audited establishments had been penalized for failing to meet the less than 51% threshold, said Chris Porter, who is a spokesperson for the TABC.
He said the purpose of the audits was to examine long-term sales trends. Businesses, he said, would only be punished for consistently showing an inability or an unwillingness to keep alcohol sales below 51% of revenues.
In Texas, before the COVID-19 pandemic, the difference between a bar and a restaurant hardly mattered. Many of them held the same liquor permits from the TABC. But when Abbott started closing and then reopening Texas, he separated the two types of establishments based on revenue. Businesses that had previously reported liquor sales of less than 51% of total sales to the TABC were restaurants. By late June, they were allowed to have 75% occupancy. Businesses that had liquor permits and had not reported liquor sales less than 51% of total sales (bars) were originally reopened in late May, closed again in late June and allowed to reopen once more in October.
The state made two exemptions for them to open as “restaurants.” The first was through an alcohol sales affidavit. Bar owners had to sign a sworn statement saying that alcohol sales represented less than 51% of revenue starting in April and would continue to stay below 51%. The second was through a food and beverage certificate, which also required liquor sales of 51% or less.
To prove they serve food, all the bars need is a food truck near the premises or at least two entrees, made onsite or brought in from elsewhere. Almost every bar that has applied has gained restaurant status.
The TABC warned bars its audit staff could request their books and that failure to comply with the 51% rule could result in administrative action. As mentioned above, zero have been punished for failure to reach the needed balance of food and alcohol sales, according to the TABC (as of last week some 650 had been sanctioned for other things, like failing to enforce social distancing and mask wearing).
The picture of every Texas bar turning into a thriving restaurant doesn’t jibe with what Fort Worth code compliance director Brandon Bennett has witnessed. He’s been visiting the city’s biggest party districts on weekend nights. “What we don’t see in traditional bars is anybody really eating any of these entrees,” said Bennett, who estimates 90% of Fort Worth’s bars applied to become restaurants. “That’s not across the board, but it is significant enough.”
The city can cite establishments for failing to meet social distancing and mask requirements. It cannot enforce the rules about liquor sales. That’s up to the TABC. From “a global health perspective,” Bennett said it would have been ideal for local jurisdictions to have more say.
Tarrant County Judge Glen Whitley has also made clear his issues with the restaurant exemptions and lax regulation. Last month, he said a few bars abusing the process had “driven through the loophole with an 18-wheeler.” Public health director Vinny Taneja has regularly warned residents to avoid bars (and, more recently, indoor restaurants).
Klein, the president of the trade organization for bars, compliments the TABC for making the restaurant classification process easy. He believes bars and nightclubs have faced unfair restrictions from Abbott, given the governor’s decisions to keep restaurants, gyms and many other establishments open.
“There’s only one set of businesses that he put the death penalty on,” Klein said.
This story was originally published December 3, 2020 at 7:00 PM.
